F3/26 2H Results: Strong Business Profit

Research evidence excerpt

F3/26 2H Results: Strong Business Profit

Update

July 31, 2026 11:45 AM GMT

Morgan Stanley MUFG Securities Co., Ltd.+MAir Water (4088) | Japan Ryoichi Watanabe

Equity Analyst

F3/26 2H Results: Strong Ryoichi.Watanabe@morganstanleymufg.comTakato Watabe +81 3 6836-8929

Takato.Watabe@morganstanleymufg.com +81 3 6836-5436

Business Profit Kayoko Shoji

Research Associate

Kayoko.Shoji@morganstanleymufg.com +81 3 6836-5437

AlphaSignals Earnings Reaction Kano Fujita

Unchanged Meaningful shortfall Meaningful revision lower Kano.Fujita@morganstanleymufg.com +81 3 6836-8932

Impact to our thesis Financial results versus consensus Direction of next 12-month

consensus EPS

Source: Company data, Morgan Stanley Research

Key Takeaways

F3/26 results came in at an op loss of ¥37.2bn, below guidance for OP of Air Water (4088.T, 4088 JP)

¥14.0bn. BP, which better reflects actual trends, was a strong ¥74.5bn (+6% Fine Chemicals | Japan

YoY). Stock Rating Equal-weight

Industry View In-Line

F3/27 guidance calls for BP of ¥76.4bn (+3% YoY). Price target ¥2,700

Shr price, close (Jul 31, 2026) ¥2,517

Mkt cap, curr, basic (bn) ¥576.9

On Jul 31, Air Water announced that its F3/26 annual securities report received a Avg daily trading value (bn) ¥3.0

qualified opinion from its auditor. Given the qualified opinion for F3/26, the earliest

timing for obtaining an unqualified audit opinion is expected to be the F3/28 annual

securities report, which will include both F3/27 and F3/28 results. F3/26 business

profit, which better reflects underlying earnings, came in at ¥74.5bn (+6% YoY),

exceeding the ¥73.3bn figure discussed at the interim results briefing. For F3/27, the

company is guiding for BP of ¥76.4bn (+3% YoY). The largest non-recurring item in

F3/26 was a goodwill impairment loss of ¥108.0bn.