Shimadzu Corporation (7701): 1Q results: TMP strong, expectations for higher measuring instrument recurring revenue ratio could rise

Research evidence excerpt

J P M O R G A N

Asia Pacific Equity Research

07 August 2026

Shimadzu Corporation (7701)

1Q results: TMP strong, expectations for higher

measuring instrument recurring revenue ratio could rise

Positive: Shimadzu reported 1Q results August 6. 1Q measuring instrument sales

were slightly weak, but the three other segments exceeded guidance, with demand

for turbomolecular pumps (TMP) particularly strong, so 1Q operating profit of

¥14.3 billion (Bloomberg consensus estimate: ¥13.7 billion) beat guidance.

Shimadzu raised FY2026 operating profit guidance to ¥80.0 billion (previously

¥76.0 billion; Bloomberg consensus estimate: ¥77.6 billion) to reflect the strength

of TMP, easing impact of the Middle East conflict, Tescan consolidation impact,

and the weak yen. Tescan consolidation impact (acquired in July) only affects 2H

results in FY2026, so amortization of goodwill and other intangible assets was

below our estimate. We expect a positive share price reaction.

1Q results: Sales and operating profit beat guidance in 1Q. 1Q sales beat

guidance in three segments other than measuring instruments. In particular,

demand for TMP for semiconductor manufacturing equipment in the industrial

machinery segment was stronger than guidance, and the impact of the Middle

East conflict was less than guidance. Factors behind the slight weakness in core

measuring instruments were (1) the delay of a major project at a Japanese

subsidiary from 1Q to 2Q; (2) 1Q India sales falling YoY as Middle East impact

on India was larger than expected; and (3) limited impact from a large-scale

replacement project in 1Q as China government demand was weaker than the

company had expected. However, Shimadzu expects this impact to materialize

in 2H FY2026.

Outlook: FY2026 guidance includes amortization of goodwill and other

intangible assets of Tescan of ¥3.8 billion (tentative) for 2H only, and the

FY2027 preliminary outlook for ¥7.2 billion is in line with our estimate. We

had expected the company to consolidate Tescan from 2Q, so FY2026

guidance for amortization of goodwill and other intangible assets is about ¥2

billion below our estimate. FY2026 guidance for one-off expenses related to

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