A ¥5.31 Billion Subsidy, Not the Operating Business, Produced Himeji Rika's ¥3.86 Billion Half-Year Profit

Read the two halves of this result separately

Himeji Rika Co., Ltd. (TSE: 322A), which makes quartz-glass parts for semiconductor production equipment, published consolidated results for the six months to June 30, 2026 on August 10, 2026 under Japanese GAAP. Net sales rose 15.6% to ¥8,131 million, and every profit line turned positive: an operating profit of ¥451 million against a ¥451 million loss, an ordinary profit of ¥418 million against a ¥737 million loss, and a net profit of ¥3,859 million against a ¥584 million loss, for earnings per share of ¥486.74 against a loss of ¥73.66.

The net line is nine times the ordinary line, and the reason is a single item. The company booked ¥5,309 million of subsidy income as extraordinary income, which together with ¥81 million of a property-tax refund and ¥0.3 million of a fixed-asset sale gain took extraordinary income to ¥5,390 million against extraordinary losses of ¥1 million. Pre-tax profit was ¥5,807 million; ¥1,948 million of tax — almost all of it a ¥1,896 million deferred-tax charge — left ¥3,859 million. Strip the subsidy out and this is a company that earned ¥418 million before tax on ¥8,131 million of sales, which is the operating recovery, not the headline.

The operating recovery is real, and it is an AI story

The turn at the operating line is genuine and both segments contributed. Quartz Glass, the core, grew revenue 14.5% to ¥6,663 million and profit 78.0% to ¥933 million. Its products are quartz-glass components used as key parts in semiconductor production equipment, and the company reports that orders increased as capital spending in that market continued, led by AI-related products.

Heaters, Lamps & Equipment grew revenue 21.5% to ¥1,477 million and swung to a ¥147 million profit from a ¥2 million loss. Lamp demand from semiconductor makers recovered and consumer lamps stayed strong; the equipment business, mainly ultrasonic cleaning systems, started the period slowly as expected and stayed at a low level. Behind both, the company describes a semiconductor market where generative AI and data-centre investment have kept demand firm for AI, high-performance logic and memory devices.

A balance sheet transformed on paper, and revised guidance

Total assets rose 5.3% to ¥40,856 million, but net assets nearly doubled — up 79.8% to ¥8,701 million — because the whole of the half-year profit dropped into equity. The equity ratio jumped to 21.3% from 12.5%. It is worth being plain that this improvement is the subsidy arriving on the balance sheet, not eight percentage points of trading. Within assets, work in progress rose ¥1,109 million and cash ¥1,022 million, while raw materials fell ¥689 million; liabilities fell ¥1,812 million to ¥32,154 million even as deferred tax liabilities rose ¥1,897 million.

Guidance for the full year to December 2026 was revised with these results: net sales of ¥18,481 million (+27.6%), operating profit of ¥988 million, ordinary profit of ¥906 million and net profit of ¥4,590 million, all three profit lines against prior-year losses, for earnings per share of ¥578.91. The half has therefore delivered 45.6% of the full-year operating-profit target and 84.1% of the net-profit target — the gap between those two numbers being the subsidy again. The company pays no dividend, and forecasts none for the full year.

JapanStockPulse provides informational content only and does not constitute investment advice. Figures are taken from the company's published earnings short report and may be subject to subsequent revision.