GSI Creos Corporation

Business Details

This segment centers on domestic and overseas sales and import/export of raw yarn and fiber raw materials, and also handles the manufacturing, processing, and sales of Medical Fiber Materials & Products. Functional Yarns & Fabrics for Innerwear are the core products, and business performance is heavily influenced by trends in demand for final products. Overseas transactions to Asia (China and Hong Kong) account for the majority of sales, making this the largest segment, representing approximately 62.7% of consolidated net sales. In FY2026 (ending March 2026), net sales grew significantly on the back of expanded demand for final products driven by temperature fluctuations during the winter season, but operating profit growth was limited due to the recording of an allowance for doubtful accounts related to a specific business partner in the first quarter.

Recent Overview

Net sales grew substantially by 19.2% year-on-year to ¥118,301 million, but the recording of an allowance for doubtful accounts limited operating profit growth to 1.1%.

In FY2026 (ending March 2026), transactions in Functional Yarns & Fabrics for Innerwear grew on the back of expanded demand for final products driven by temperature fluctuations during the winter season, and net sales increased by ¥19,043 million year-on-year to ¥118,301 million. However, due to the recording of an allowance for doubtful accounts related to a specific business partner in the first quarter, operating profit increased by only ¥6 million year-on-year to ¥637 million, resulting in the sales increase not being sufficiently reflected in profit. Segment assets increased by ¥7,946 million from the end of the previous fiscal year to ¥43,828 million, due to an increase in trade receivables and other factors.

Key Products

Growth Drivers

• Continued expansion of demand for final products using Functional Yarns & Fabrics for Innerwear (increased demand for functional innerwear driven by factors such as temperature fluctuations)
• Deepening of large-scale transactions with major customers Toray Industries (HK) Ltd. and Pacific Textiles Limited
• Expansion of overseas net sales to Asia (China and Hong Kong) (overseas net sales of ¥119,614 million in FY2026, an increase of ¥20,161 million year-on-year)
• Capturing demand in the Medical Fiber Materials & Products field

Risks

• Risk of credit concentration with specific business partners (an allowance for doubtful accounts was recorded in the first quarter)
• High dependence on sales to two major customers (Toray Industries HK and Pacific Textiles), leading to significant impact if transactions contract
• High proportion of sales to Asia (China and Hong Kong), making the segment susceptible to China's economic slowdown and geopolitical risks
• Risk of decline in overseas net sales upon a shift to yen appreciation (loss of yen depreciation effects)
• Operating profit growth is limited relative to the substantial increase in net sales, making profitability improvement a challenge