27/3 Q1 results: Profits down sharply on higher costs and lower volumes, particularly in US: Quick Note

Research evidence excerpt

27/3 Q1 results: Profits down sharply on higher costs and lower volumes, particularly in US: Quick Note

Global Markets Research

31 July 2026Sanwa Holdings

5929.T 5929 JP / EQUITY: JAPAN HOUSING & REAL ESTATE

27/3 Q1 results: Profits down sharply on higher Rating Neutralcosts and lower volumes, particularly in US

Target price JPY 3,950Quick Note

Closing price

31 July 2026 JPY 3,442First impression negative: Operating profits undershoot our forecasts in US and

Europe (Note: Quick Note reports are not a

Sanwa Holdings released 27/3 Q1 results at 11:30 JST on 31 July, posting operating vehicle for changes to ratings, target

profits of ¥5.9bn (down 41% y-y) versus our forecast of ¥9.9bn and the 31 July QUICK prices, or earnings forecasts)

consensus forecast of ¥8.3bn. Profits beat our forecast by ¥0.4bn in Japan but undershot

our forecasts by ¥3.4bn in the US (ODC) and by ¥0.9bn in Europe (Novoferm). The

company attributed the deterioration in earnings at ODC in Q1 (Jan–Mar) to: (1) ongoing

sluggishness in the housing market because of stubbornly high interest rates amid

Research Analystsinflation; (2) deteriorating productivity at two plants because of operational issues; and (3)

slow progress with fixed cost savings as a result of lower volumes. It is looking for Japan construction

operating profits of ¥10.0bn (down 4% y-y; preliminary basis) at ODC in Q2 (Apr-Jun) on Sho Sakabe - NSC

the expectation that earnings will improve from Q2 onwards thanks to cost savings and sho.sakabe@nomura.com

efforts to return production to normal. The company retained its 27/3 operating profit +81 3 6703 1221

guidance of ¥81.0bn (versus our forecast of ¥80.0bn) in view of strong performance in

Japan and forex effects, but we still see a risk of lower-than-expected volumes because of