VALQUA,LTD.

Business Details

The core business of the Group, manufacturing and selling Plant & Equipment-Related Products, Elastomer Products, Automotive Parts, and other sealing products. It operates globally through domestic and overseas manufacturing and sales subsidiaries (VALQUA AMERICA INC., Taiwan Valqua International Co., Ltd., VALQUA VIETNAM CO., LTD., etc.). It is the most important segment, with sales of High-Function Sealing Products (for Advanced Industries) targeting the advanced industry market (semiconductor-related) driving overall performance.

Recent Overview

An error was identified in the SG&A breakdown disclosure in the FY2026 (ending March 2026) financial results summary, and a correction was announced. No impact on profit and loss.

In the financial results summary for FY2026 (ending March 2026) announced on May 15, 2026, an error was identified in the breakdown disclosure of selling, general and administrative expenses in the consolidated statement of income, and a correction was announced on May 19, 2026. Following correction, the breakdown for the fiscal year under review (FY2026, ending March 2026) is as follows: officers' compensation and salaries and allowances ¥7,586 million, provision for bonuses ¥393 million, retirement benefit expenses -¥252 million, R&D expenses ¥1,394 million, and other ¥8,682 million (total ¥17,883 million). There is no impact on total selling, general and administrative expenses or operating profit, and no correction of segment-level performance figures is included in this PDF.

Key Products

Growth Drivers

• Recovery and expansion of demand for High-Function Sealing Products (for Advanced Industries) targeting advanced industry markets (semiconductor manufacturing equipment, etc.)
• Enhanced production capacity through construction of new plants in Tahara City, Aichi Prefecture and in Vietnam
• Expansion of segment assets and business foundation through the consolidation of Torque System Co., Ltd. as a subsidiary
• Utilization of the global sales network (U.S., Taiwan, Vietnam, Thailand, Singapore, etc.)
• Progress in monetizing AI/IT digital solutions for plants

Risks

• Downward pressure on sales due to a decline in the number of equipment maintenance jobs for the plant market
• Risk of delayed full-scale recovery in the semiconductor-related business climate
• Supply chain disruption due to geopolitical risk (U.S.-China tensions, East Asian situation)
• Reduced Asian market coverage following the downsizing of China operations (transfer of Valqua Seal (Shanghai) Co., Ltd.)
• Cost pressure from rising raw material prices and labor costs

Business Details

A segment engaged in the manufacture and sale of functional resin products, centered on fluororesin products (processed products, special tanks, valves, etc.). The main manufacturing companies are Valqua Mikawa Frontec Co., Ltd. domestically, and overseas, VALQUA NGC, INC. (currently undergoing liquidation procedures) and Taiwan Valqua International Co., Ltd. Fluororesin Special Tank products for the advanced industry market (semiconductor-related) and the plant market are the mainstay, responsible for supplying high-function fluororesin products for semiconductor manufacturing equipment and factories. In FY2025 (ended March 2025), the segment recorded a significant decline in sales and profit due to an adjustment phase in capital expenditure by major customers.

Recent Overview

Demand adjustment for fluororesin tanks continued, resulting in a significant decline in sales and profit for the cumulative nine months as well.

For the cumulative nine months of consolidated FY2026 (ending March 2026) (April-December 2025), net sales were ¥10,585 million (down 14.9% year on year), and segment profit was ¥163 million (down 63.5% year on year). In addition to a significant decline in sales of Fluororesin Processed Products and tanks for the advanced industry market, demand adjustment for Fluororesin Valves and tanks for the plant market continued. Costs related to the review of the business structure and production sites were also recorded. The company has explained that, in the full-year earnings forecast, a full-scale recovery in the Functional Resin Products Business is expected from next fiscal year onward. Additionally, the entire 100% equity interest in the Chinese subsidiary Valqua Seal (Shanghai) Co., Ltd. was transferred as of December 10, 2025 (recording a gain on sale of ¥83 million).

Key Products

Growth Drivers

• Recovery in demand for Fluororesin Special Tanks and processed products accompanying the recovery of the semiconductor-related market (expected from next fiscal year onward)
• Expansion of production capacity for advanced industries through construction of new plants in Tahara City, Aichi Prefecture and in Vietnam
• Strengthened resource allocation to the semiconductor-related market and supply chain reinforcement based on the medium-term management plan NF2026
• Promotion of higher value-added business through the use of digital services

Risks

• Risk of prolonged adjustment phase in demand for fluororesin tanks for the advanced industry and plant markets
• Impact on the global supply chain from heightened geopolitical risk (restructuring of the supply system following the sale of the Chinese subsidiary)
• Risk of additional costs associated with the review of the business structure and production sites
• Risk of delayed full-scale recovery in the semiconductor-related business climate
• Impact of business downsizing associated with the liquidation procedures of VALQUA NGC, INC.

Business Details

A segment engaged in the manufacture and sale of other products, centered on Silicon Wafer Recycling and Solar Power Generation, etc. The main constituent companies were Kyushu Valqua Co., Ltd. (domestic) and Valqua FFT Co., Ltd. (all shares transferred as of March 21, 2025). The segment had also been promoting customer acquisition in the Digital Solutions business, but development costs were incurred ahead of monetization, and profitability was not achieved. In line with the policy of optimizing the business portfolio, the main business was sold as of FY2025 (ended March 2025), and following the results for that fiscal year, the segment was excluded from reportable segments.

Recent Overview

The business was wound down through the transfer of all shares in the main subsidiary. The segment has been discontinued from FY2026 (ending March 2026) onward.

At the Board of Directors meeting held on February 26, 2025, a resolution was passed to transfer all shares of Valqua FFT Co., Ltd., and the transfer was executed as of March 21 of the same year. As a result, the Silicon Wafer Recycling Business and Others segment was discontinued from the first quarter of FY2026 (ending March 2026), and the reportable segments were consolidated into two categories: 'Sealing Products Business' and 'Functional Resin Products Business.' Net sales for FY2025 (ended March 2025, the final fiscal year) were ¥3,161 million (up 5.3% year on year), but a segment loss of ¥172 million was recorded (expanded from the prior-year loss of ¥34 million) due to development costs for Digital Solutions being incurred ahead of monetization.

Key Products

Growth Drivers

• Steady demand for the main Silicon Wafer Recycling business (net sales for FY2025, ended March 2025, up 5.3% year on year)
• Progress in customer acquisition in the Digital Solutions business (adoption of systems for plants)

Risks

• Expansion of segment loss (-¥172 million) due to advance recognition of Digital Solutions development costs
• Risk of segment disappearance due to the transfer of all shares of the main subsidiary Valqua FFT Co., Ltd. (already discontinued from FY2026, ending March 2026)
• Sharp decline in segment assets from ¥2,590 million in the prior fiscal year to ¥314 million (impact of the sale of the main subsidiary)
• No business continuity for this segment due to selection and concentration based on the business portfolio optimization policy

Business Details

'Other' is not a business segment, but rather a corporate asset category established to adjust for the difference between the total of reportable segments and the amounts recorded in the consolidated financial statements. Its main components are cash and deposits and investment securities held by the head office that are not attributable to reportable segments, and no net sales or segment profit are recorded. Corporate assets at the end of FY2025 (ended March 2025) were ¥10,644 million (down from ¥11,619 million in the prior fiscal year), a decrease of ¥975 million.

Recent Overview

Corporate assets decreased by ¥975 million year on year to ¥10,644 million.

Corporate assets at the end of FY2025 (ended March 2025) were ¥10,644 million, a decrease of ¥975 million from ¥11,619 million at the end of the prior fiscal year (end of FY2024, ended March 2024). The main factor was a decrease in investment securities included in investments and other assets (a decrease of approximately ¥19,556 million on a consolidated basis). No net sales or profit are allocated to this category, and there has been no recorded impairment loss. As of the third quarter of FY2026 (ending March 2026), the status of head office assets is reflected in the consolidated balance sheet as cash and deposits of ¥7,370 million and investment securities of ¥4,319 million, among other items.

Key Products

Growth Drivers

Risks

• Investment securities, the main component of corporate assets, are subject to market price fluctuation risk, and asset value may be impaired during stock market downturns
• Cash and deposits held by the head office are managed centrally through group financing, but there is a risk of reduced liquidity when demand for funds increases across the group as a whole