Nichias (5393): IR group call: SPE components, AI semi materials, nuclear power look promising

Research evidence excerpt

Nichias (5393): IR group call: SPE components, AI semi materials, nuclear power look promising

Nuclear power-related: Nichias expects a favorable business environment over the longer

term, supported by a combination of growing demand for safety construction work on

progress in restarting nuclear power plants, the resumption of suspended construction

projects, and maintenance demand after restarts and construction. Multiple projects are

currently underway. For facilities related to the nuclear fuel cycle, Nichias anticipates

completion of construction works, with subsequent demand for periodic maintenance.

Based on these factors, Nichias expects sales in this business to double from FY3/26

during the next medium-term business plan.

Plant-related (other than nuclear power): Petroleum and petrochemicals are the main

business domain. Demand for addressing aging facilities and extending their lifespan

continues to increase, and Nichias expects demand to remain at the current level for the

next three years. It expects demand to slow in the future, but anticipates overall growth

from accelerating its shift to new energy.

Building materials and auto parts: Building materials are likely to achieve an operating

margin of 10% in FY3/27. Nichias expects contributions from withdrawing from

unprofitable business and improving logistics efficiency. The auto parts operating

margin is also improving, but similar to building materials, profit levels remain low

compared with other segments, and the business weighs on overall profits. Nichias is

discussing whether it should raise the operating margin further or downsize the business

by further reducing unprofitable operations.

Strategic investment: Nichias is mainly considering R&D and M&A that is essential for

longer-term growth.