STELLA CHEMIFA CORPORATION

Business Details

This segment manufactures and sells multi-use fluoride products, primarily ultra-high-purity etchants and cleaning agents for semiconductor devices, along with neutron absorbers (concentrated boric acid) for nuclear-related facilities, tantalum production aids for tantalum capacitors, and catalysts for pharmaceutical and chemical intermediates. Its main customers are semiconductor manufacturers in Japan and overseas, with high quality and a stable supply system serving as the source of competitiveness. The main raw material, anhydrous hydrofluoric acid, is primarily sourced from China, exposing the segment to raw material price fluctuation risk.

Recent Overview

Driven by the semiconductor division amid robust AI-related demand, both sales and operating profit posted modest increases

In FY2026 (ending March 2026), the High-Purity Chemicals business recorded sales of ¥31,786 million (up 0.8% year on year) and operating profit of ¥3,592 million (up 1.3% year on year). Against a backdrop of robust AI-related demand, shipment volume in the semiconductor division increased, with sales in the semiconductor division reaching ¥22,204 million (up 5.8% year on year). Shipment volume in the electronic materials division also increased. On the profit side, in addition to the increase in sales, profitability improved as a result of passing on raw material price increases to sales prices. A change in the estimate of asset retirement obligations at a Singapore subsidiary had a negative impact of ¥53 million on operating profit.

Key Products

Growth Drivers

• Increased shipment volume in the semiconductor division driven by robust AI-related demand (semiconductor division sales of ¥22,204 million in FY2026 (ending March 2026), up 5.8% year on year)
• Expansion of overall High-Purity Chemicals business sales due to increased shipment volume in the electronic materials division
• Improved profitability through implementation of sales price pass-through in response to rising raw material prices
• Increased sales in the semiconductor division, mainly overseas (expected to continue in the FY2027 (ending March 2027) forecast)
• Increasing sales expansion opportunities against a backdrop of expanding investment plans by semiconductor manufacturers in Japan and overseas
• Continued growth investment under the 4th Medium-Term Management Plan (FY2026–FY2028, ending March 2026–2028) (capital expenditure of ¥4,006 million in FY2026 (ending March 2026))

Risks

• Risk of rising procurement costs due to increases in Chinese market prices and yen depreciation, as anhydrous hydrofluoric acid, the main raw material, is primarily sourced from China (the FY2027 (ending March 2027) forecast anticipates a rise in anhydrous hydrofluoric acid prices)
• Risk of rising anhydrous hydrofluoric acid prices due to tightening sulfuric acid supply-demand and price surges caused by the Middle East situation (impact of the Strait of Hormuz closure), which is not incorporated into the earnings forecast
• Risk of fluctuations in shipment volume and sales due to changes in semiconductor market conditions
• Country risk arising from concentrated sales to China in the energy sector (concentrated boric acid)
• Impact on demand and the supply chain from uncertainty in U.S. trade policy and geopolitical risk
• Risk of price pressure due to intensifying competition with other companies

Business Details

The Transportation segment, as a chemical-specialized logistics business, provides an integrated service covering the transportation, storage, and customs brokerage of chemicals and related products. Leveraging proprietary know-how developed in special cargo transportation, it plays a role in supporting the stable supply system of the High-Purity Chemicals business from the logistics and raw material procurement side. Total sales including intragroup transactions reached ¥8,681 million in FY2026 (ending March 2026), and operating profit expanded significantly, up 31.6% year on year, due to improved profitability.

Recent Overview

Operating profit expanded significantly, up 31.6% year on year, due to increased transportation volume and improved profitability

In FY2026 (ending March 2026), the Transportation segment saw transportation volume exceed the prior period, with sales to external customers expanding to ¥4,892 million (up 5.5% year on year). As a result of the sales increase combined with improved profitability, operating profit rose significantly to ¥1,045 million (up 31.6% year on year). Intragroup transactions (intersegment internal sales) also increased to ¥3,789 million from ¥3,563 million in the prior period, reflecting continued capture of internal logistics demand linked to the expansion in shipment volume of the High-Purity Chemicals business.

Key Products

Growth Drivers

• Increased transportation volume (FY2026 (ending March 2026): sales to external customers up 5.5% year on year)
• Increased intragroup logistics demand accompanying sales expansion in the High-Purity Chemicals business (intersegment internal sales of ¥3,789 million)
• Linked demand from increased shipment volume of High-Purity Chemicals for semiconductors driven by AI-related demand
• International logistics capability leveraging Asian bases (Singapore and China)
• Continued improvement in profitability (operating profit margin improved from 9.7% in the prior period to a level of 12.0% in the current period)

Risks

• Securing, retaining, and developing human resources is an urgent issue (as stated in the 4th Medium-Term Management Plan)
• Risk of customer and handled-item concentration due to the business characteristic of specializing in chemical transportation
• Impact on earnings at overseas bases (Singapore and China) from exchange rate fluctuations
• Risk of rising transportation costs due to persistently high raw material and energy prices
• Impact on international logistics and risk of rising raw material procurement costs due to the Middle East situation (impact of the Strait of Hormuz closure)
• Impact on international logistics from uncertainty in U.S. trade policy and geopolitical risk

Business Details

The "Others" segment consists of business segments not included in the reportable segments (High-Purity Chemicals and Transportation), comprising the Insurance Agency business and the Automobile Maintenance business. In FY2026 (ending March 2026), sales to external customers were ¥120 million, accounting for only about 0.3% of group sales of ¥36,799 million. Segment assets were also minor at ¥318 million, positioning this segment as a complement to the group's core businesses.

Recent Overview

Increased revenue and profit due to a rise in insurance agency income and related revenue, with profit up 54.7% year on year

In FY2026 (ending March 2026), insurance agency income and related revenue exceeded the prior fiscal year, resulting in sales to external customers of ¥120 million (up 3.5% year on year). On the profit side, the increase in sales contributed to a significant improvement in segment profit to ¥28 million (up 54.7% year on year). Segment assets increased to ¥318 million (from ¥284 million in the prior period). The segment's scale relative to the group as a whole remains extremely small.

Key Products

Growth Drivers

• Potential increase in demand for related vehicle maintenance accompanying expansion of the group's Transportation and High-Purity Chemicals businesses
• Maintenance and expansion of the number of contracts in the Insurance Agency business

Risks

• Risk of fluctuations in insurance agency income (income levels are affected by the external environment and contract trends)
• The extremely small segment scale (sales of ¥120 million) poses a challenge for sustaining profitability over time
• Risk of human resource acquisition and rising costs in the Automobile Maintenance business