Industrial power supply leader Cosel Co., Ltd. has revised its full-year ordinary profit forecast for the fiscal year ending May 2027 upward by 55.9% to 2.4 billion yen alongside its Q1 earnings release. Driven by robust demand for generative AI and data centers, a rapid surge in orders for semiconductor manufacturing equipment power supplies and progress in customer inventory normalization have significantly boosted earnings.

Core Highlights: Full-Year Ordinary Profit Raised by 55.9% with a Return to Profitability

On September 18, 2026, Cosel Co., Ltd., a major manufacturer of industrial switching power supplies, announced its financial results for the first quarter of the fiscal year ending May 2027 (May 21, 2026 – August 20, 2026) and released an upward revision to its full-year consolidated earnings guidance. The revised full-year ordinary profit forecast was upgraded from the previously projected 1.53 billion yen to 2.4 billion yen, representing a dramatic 55.9% increase. Compared to the previous fiscal year’s profit of 260 million yen, the year-over-year growth rate is now expected to expand from 5.8 times to 9.0 times. Additionally, the second-quarter cumulative forecast was revised upward, with net sales expected to reach 15.38 billion yen (up 38.1% year-over-year) and ordinary profit projected at 1.03 billion yen (up 8.8 times). The underlying catalyst for this guidance hike is strong demand for semiconductor production equipment power supplies, propelled by global generative AI adoption and data center expansion. Furthermore, the completion of inventory adjustments among factory automation (FA) customers, an order rebound, successful price adjustments, and sales expansion of new products have all contributed to the improved earnings picture. The assumed foreign exchange rates for the second quarter onward remain unchanged at 155.00 yen to the US dollar and 182.50 yen to the euro.

Financial Breakdown: A Dramatic Q1 V-Shaped Recovery

Cosel’s consolidated results for the first quarter of FY May 2027 demonstrated a dramatic V-shaped recovery compared to the struggles of the previous year. Net sales rose to 7.814 billion yen, a 54.0% increase from 5.075 billion yen in the same period last year. Profitability swung back sharply into positive territory, with operating profit turning to a black ink figure of 545 million yen (compared to an operating loss of 389 million yen in Q1 FY2026) and ordinary profit reaching 580 million yen (compared to an ordinary loss of 79 million yen). Net profit attributable to owners of the parent reached 661 million yen (compared to a net loss of 68 million yen in the prior-year period). Please refer to the diagram below showing the Q1 financial performance.

Order trends, serving as a leading indicator, also displayed significant growth. Consolidated orders received in the first quarter jumped 154.9% year-over-year to 13.001 billion yen, expanding the order backlog at the end of the quarter by 94.2% to 17.898 billion yen. By product category, orders for core unit power supplies surged 219.2% year-over-year to 7.357 billion yen, while on-board power supply orders jumped 135.3% to 3.245 billion yen. Revenue growth was similarly led by unit power supplies at 4.307 billion yen (up 77.7%) and on-board power supplies at 1.819 billion yen (up 47.6%). Geographically, recovery was particularly pronounced in the Japanese and Asian markets.

Primary Drivers and Market Environment Behind the Rapid Recovery

Surging Demand in Generative AI and Semiconductor Equipment Combined with Inventory Normalization

The primary engine driving this earnings recovery is the rapid surge in demand for semiconductor manufacturing equipment power supplies, propelled by societal digitization and the expansion of generative AI. Massive global investments in data centers and AI servers continue unabated, accelerating capacity expansion for advanced semiconductors. According to the Semiconductor Equipment Association of Japan (SEAJ), Japanese semiconductor equipment sales are projected to grow 12% year-over-year in FY2026 to 5.5004 trillion yen, providing a powerful tailwind for industrial power supply manufacturers. Please refer to the diagram below showing supply and demand trends in the semiconductor manufacturing equipment market.

Moreover, the prolonged customer inventory adjustment phase in factory automation control equipment and industrial machinery markets has reached a key turning point. As the market shifted from inventory drawdown to active procurement based on real end-demand, order volumes in Asia and Japan experienced a sharp rebound. Although inflationary pressures on raw material costs, labor, and overhead persist, the steep revenue rebound and higher plant utilization rates have fundamentally improved the company’s earnings structure.

New Product Rollouts and Strategic Synergies with Taiwan’s LITEON

The earnings recovery is not merely a product of market tailwinds, but also the result of Cosel’s proactive strategic execution. The company intensified its sales activities through direct customer visits and strengthened collaboration between sales and R&D divisions, focusing on key accounts with new product proposals. Consequently, newly introduced product lines have effectively captured market demand. Notable releases include the “PDW30F/50F” unit-type multi-output AC-DC power supplies designed for FA control equipment and semiconductor manufacturing systems, as well as the compact, high-input-voltage “FDA50F/150F/200F” AC-DC units. Additionally, Cosel expanded its “MU Series” of low-profile, general-purpose DC-DC converters by launching the “MUS15” model, bolstering its capability to meet diverse customer specifications.

In external alliances, the strategic partnership with Taiwan’s electronics giant LITE-ON TECHNOLOGY CORPORATION (LITEON) has borne fruit. Joint promotional activities combining both companies’ technological strengths and sales networks for the new “COSELSYNC.” brand and LITEON products have gained momentum, steadily contributing to top-line growth. This synthesis of product innovation and alliance synergies continues to reinforce Cosel’s market positioning.

Structural Reforms and Long-Term Growth Strategy

Portfolio Restructuring and Enhanced Shareholder Returns

Cosel is steadily executing structural reforms aimed at enhancing profitability and optimizing its business portfolio. During the first quarter, the company completed the divestment of shares in its European consolidated subsidiary, Powerbox International AB (PRBX). This transaction generated a gain on restructuring of subsidiaries of 355 million yen recorded as extraordinary income, furthering balance sheet cleanup and capital reallocation. Capitalizing on improved capital efficiency, Cosel is also taking a more proactive approach toward shareholder returns.

The annual dividend forecast has been raised to 60 yen per share, a 5-yen increase over the previous year. Furthermore, Cosel announced the introduction of a new shareholder benefit program to boost shareholder returns and broaden its investor base. Please refer to the diagram below showing shareholder return initiatives and financial trends.

Under the new benefit program, shareholders owning 3 or more units (300 shares or more) continuously for at least one year as of May 20 each year will receive catalog gifts featuring specialty products from the Hokuriku region, valued at 5,000 yen or 10,000 yen depending on shareholdings. As a special one-time incentive for the initial May 20, 2027 record date, the holding period requirement will be relaxed to “six months or more.” These shareholder return measures aimed at resolving Cosel’s sub-1.0 PBR valuation have been positively received by equity markets.

Future Outlook and Key Factors: The Semiconductor Cycle and Industrial Power Supply Market

Looking ahead, the primary focal points will be the sustainability of demand from semiconductor manufacturing equipment and the pace of broader recovery in factory automation and industrial machinery. The global industrial power supply market is projected to expand at a compound annual growth rate (CAGR) of approximately 6% from 2026 to 2035, with structural demand driven by energy efficiency and miniaturization. In particular, the full-scale commercial adoption of next-generation power semiconductors like SiC and GaN will accelerate, making high-frequency and high-density power design the core battlefield of industry competition.

Conversely, potential risk factors include component supply constraints for memory and printed circuit boards amid rapid demand growth, as well as elevated raw material costs. Geopolitical friction and associated global supply chain disruptions also warrant close monitoring. Cosel’s long-term growth trajectory will depend on its ability to leverage its high reliability and custom engineering capabilities to expand market share in high-value, cutting-edge applications. As Cosel achieves a swift financial turnaround, the market will be watching closely to see if the company can establish a sustainable high-margin operating model as an essential infrastructure provider in the AI era.

References

• [COSEL Co., Ltd. Official Website] https://www.cosel.com/

• [COSEL Co., Ltd. Q1 FY2027 Financial Results Briefing (TDNet Disclosure)] https://www.release.tdnet.info/inbs/140120260917537642.pdf

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