CLUSTER TECHNOLOGY CO., LTD.

Business Details

Other Businesses consists of operations utilizing the Company's core technologies (resin composite material technology, molding processing technology, measurement and analysis technology, etc.). The mainstay is the foreign matter inspection business for medical and pharmaceutical containers, which is a non-core business not included in the reportable segments. Its share of consolidated net sales is minor (approximately 0.8% for the full year of FY2026 (ending March 2026)). Segment assets represent an extremely small, asset-light service business.

Recent Overview

Net sales decreased significantly by 35.5% YoY to ¥10 million, but the profit margin improved

Full-year net sales of Other Businesses for FY2026 (ending March 2026) decreased significantly to ¥10 million (down 35.5% YoY). This reflects a reversal decline from the prior year (¥16 million). On the other hand, segment profit increased to ¥3 million (up 51.8% YoY), with the profit margin improving substantially. Despite the shrinking sales scale, profitability improved, likely aided by a decrease in low-margin projects, among other factors. Segment assets remained extremely minor at ¥284 thousand, and the asset-light nature of the business operations continues to be maintained.

Key Products

Growth Drivers

• Demand for foreign matter inspection of medical and pharmaceutical containers (seasonal demand for influenza treatment drugs, etc.)
• Differentiation through the utilization of the Company's core technology (measurement and analysis technology)
• Expansion of microfabrication technology applications in precision parts assembly

Risks

• Risk of sales and order volatility due to seasonality (dependent on factors such as influenza outbreak conditions)
• Extremely small business scale, with risk of dependence on a single customer or single product
• A significant decline of 35.5% YoY materialized in FY2026 (ending March 2026), reflecting high demand instability
• As a non-core business outside the reportable segments, it receives lower priority in management resource allocation

Business Details

This segment develops and manufactures functional resin composite materials based on thermosetting and thermoplastic resins, and sells functional precision molded products made from these materials along with related molds. Main applications include digital cameras (autofocus sensor holding components), industrial inkjet printer heads, barcode readers, and precision dimension measuring instruments. The Pulse Injector® (PIJ), an ultra-fine liquid dispensing device, is marketed to university and corporate R&D departments. This is the core segment, accounting for approximately 82% of consolidated net sales.

Recent Overview

Strong performance across all fields led to significant growth, with net sales of ¥1,063 million, up 29.5% YoY

In FY2026 (ending March 2026), all fields—imaging equipment, OA equipment, industrial equipment, and leisure—recorded increased sales YoY. The industrial equipment field grew significantly, driven by industrial inkjet printer heads and related molds, while the leisure field also performed steadily due to new models. However, the second half showed relative weakness compared to the first half due to differences in the sales product mix, among other factors. The forecast for FY2027 (ending March 2027) is ¥1,026 million, a slight decrease from the current fiscal year (assuming declines in the OA equipment and industrial equipment fields).

Key Products

Growth Drivers

• Continued expansion of the mirrorless camera market (interchangeable-lens digital camera shipments up 5.9% YoY in 2025, with mirrorless up 12.5% YoY)
• Continued expansion trend in industrial inkjet printer heads and related molds
• Steady and expanding trend in sales of new models in the leisure field
• Recovery in the OA equipment field from two years of sluggishness (sharp recovery in the current period)
• Strengthened new business development sales capabilities (visualization of customer visit numbers and progress, combining in-house activities with trading company partnerships)
• Improved gross margin (maintained at 42.1%) through higher factory utilization rates and a product mix with higher profitability
• Steady performance in the imaging equipment field due to new model adoption and expansion of the customer base

Risks

• OA equipment field: FY2027 (ending March 2027) is expected to see a decline YoY as a reversal from the sharp recovery, with only a gradual recovery thereafter
• Industrial equipment field: FY2027 (ending March 2027) is expected to decline YoY, taking into account customer production plans and expected orders
• Fluctuations in digital camera market shipment volumes (2026 interchangeable-lens camera shipments forecast at 97.4% of the prior year, a slight decrease)
• Risk of sales concentration in specific customers (Nagase & Co. at ¥417 million, Kuroda Electric at ¥414 million, and Nagase Electlex at ¥142 million together account for approximately 75% of consolidated net sales)
• Risk of profit margin deterioration due to changes in the sales product mix (seasonality and order fluctuations as reflected in second-half weakness)
• Suppression of customer companies' capital expenditure due to geopolitical risks such as U.S. administration tariff policy and Middle East tensions
• Cost increase pressure from rising raw material and labor costs

Business Details

This segment manufactures functional resin composite materials based on epoxy resin, and sells resin molded insulators and molding materials used in power receiving and distribution equipment for buildings and factories, along with related molds and parts. The Company has a long track record of supply to heavy electrical equipment manufacturers, and as products for infrastructure supporting lifelines, they are less susceptible to economic fluctuations. The Company has established a differentiated position as the only manufacturer in Japan capable of fully integrated production of resin molded insulators.

Recent Overview

Captured capital expenditure demand and renewal demand, achieving significant growth with net sales of ¥225 million, up 21.9% YoY

In FY2026 (ending March 2026), against the backdrop of active domestic capital expenditure and renewal demand for power receiving equipment installed during the bubble era, both resin molded products and resin molding materials continued the recovery trend that began in the second half of the prior year. In addition, mold sales also contributed, resulting in segment net sales of ¥225 million (up 21.9% YoY) and segment profit of ¥59 million (up 17.4% YoY). For FY2027 (ending March 2027), the Company expects sales from newly developed customers and forecasts ¥260 million, exceeding the current fiscal year.

Key Products

Growth Drivers

• Increased demand for power receiving and distribution equipment amid active domestic capital expenditure expansion (demand for labor-saving and digital investment)
• Renewal demand for power receiving equipment installed during the bubble era (aging replacement cycle)
• Expanding demand for resin insulation components due to underground cabling of power lines and high-voltage power receiving and distribution panels (annual volumes of extra-high-voltage and high-voltage distribution panels increased at an annual rate of 5-7% from FY2022 to FY2024)
• Differentiated position as the only fully integrated domestic manufacturer of resin molded insulators: heightened supply chain and geopolitical risks may work in favor of the domestic advantage
• Order acquisition from new customers under the medium-term management plan (FY2025-FY2027 ending March 2027) (sales of ¥260 million expected in FY2027 ending March 2027)
• Long-term increasing trend in capital expenditure by major electric power companies (continuation of stable demand centered on power generation facilities)

Risks

• The forecast for FY2027 (ending March 2027) of ¥260 million assumes a contribution from new customer sales, creating downside risk if order acquisition is delayed
• Although less susceptible to economic conditions, there is demand fluctuation risk due to changes in the domestic capital expenditure cycle
• Cost increase pressure from higher raw material prices (epoxy resin, etc.) and rising labor costs (segment profit margin declined slightly YoY)
• Risk of quarterly performance fluctuation due to timing skew in order receipt
• Indirect impact from uncertainty in the external environment, such as U.S. administration tariff policy and Middle East tensions