The Tokyo stock market on the 24th saw active stock-picking driven by earnings announcements and forecast revisions. In the semiconductor sector, a stark contrast emerged as Disco (6146.T) plunged while KOA (6999.T) surged. SoftBank Group (9984.T) also fell sharply, pressured by heightened caution over AI investment that swept through the U.S. market.
Disco and KOA: Contrasting Moves in Semiconductor Stocks
Disco, a major semiconductor manufacturing equipment maker, plunged ¥8,520 (12.3%) to ¥60,890. While the company reported first-quarter operating profit rose 42.2% year-on-year to ¥49 billion (approximately $299.1 million), its July-September plan of ¥55.9 billion (approximately $341.2 million) fell short of the market consensus of just over ¥60 billion, souring sentiment. Although this was seen as consistent with the company's tendency to set conservative plans, the broader weakness in semiconductor stocks that day added headwinds, leading to heavy selling.
In contrast, electronic components manufacturer KOA surged ¥288 (11.5%) to ¥2,782. First-quarter operating profit jumped 70.2% year-on-year to ¥850 million (approximately $5.2 million), a significant increase. Demand for industrial and AI-related equipment in Japan, China, and other Asian regions, as well as industrial equipment demand in Europe, proved stronger than expected. The company sharply raised its full-year operating profit forecast from ¥2.83 billion to ¥5.36 billion (approximately $17.3 million to $32.7 million) and its annual dividend from ¥39 to ¥63 per share.
Shin-Etsu Polymer (7970.T), which specializes in precision molded products, extended its sharp decline, falling ¥220 (8.9%) to ¥2,257. First-quarter operating profit rose 8.6% year-on-year to ¥4.15 billion (approximately $25.3 million), and the company forecast full-year profit of ¥16 billion (approximately $97.6 million), up 14.0% year-on-year. However, the outlook merely met market consensus, and the lack of positive surprises led to selling pressure. The company plans an annual dividend of ¥66 per share, up ¥4 from the previous year.
SoftBank Group Tumbles on U.S. AI Investment Concerns
SoftBank Group fell sharply, dropping ¥418 (7.1%) to ¥5,500. The decline followed a more than 7% plunge in Alphabet (Google's parent company) in the U.S. market the previous day after its earnings release, which dragged down other hyperscalers including Amazon, Oracle, Meta, and Microsoft. Growing caution over the expansion of AI investment spilled over into the Tokyo market, triggering selling in SoftBank Group shares.
Upward Revisions Met with Exhaustion Selling
TES Holdings (5074.T) plunged ¥81 (10.1%) to ¥723. The company raised its operating profit forecast for the fiscal year ending June 2026 from ¥3.6 billion to ¥5.1 billion (approximately $22.0 million to $31.1 million) and its annual dividend from ¥5.80 to ¥8.08 per share. However, since the company had already nearly achieved its full-year forecast by the third quarter, the market viewed the news as largely expected, and exhaustion selling dominated.
Ehime Bank (8541.T) surged ¥286 (11.4%) to ¥2,794. Buying flooded in on expectations of a restructuring premium following reports that the bank is in final-stage negotiations for a management integration with Iyogin Holdings. According to the reports, the integration could take place as early as April 2027, with a structure under consideration where both banks would operate under a holding company. The plan is to strengthen areas such as ship financing, which both banks have focused on. The company was scheduled to present the matter to its board of directors that day.
Nihon Dengi (1723.T) surged ¥318 (14.5%) to ¥2,510, buoyed by a 39.4% year-on-year increase in first-quarter operating profit. Mitsui Matsushima Holdings (1518.T) rose ¥288 to ¥2,241, as the appeal of its yield continued following the announcement of a significant dividend increase. Obic Business Consultants (4733.T) climbed ¥623 to ¥7,638, with momentum building from the evaluation of its earnings announced on the 22nd.
Abalance (3856.T) rose ¥19 to ¥517 after announcing an expansion of its share buyback program, raising the upper limit from 5.25% to 21.02% of outstanding shares. Buying was driven by expectations of enhanced shareholder value. Nihon Nohyaku (4997.T) gained ¥48 to ¥1,085 after announcing the introduction of a shareholder benefit program. Shareholders holding 100 shares or more as of the end of September will receive four rice vouchers (equivalent to ¥1,760).
BayCurrent Consulting (6532.T) and SHIFT (3697.T) rose ¥292 to ¥6,522 and ¥61.2 to ¥807.2, respectively, after Goldman Sachs Securities raised its target prices for both stocks. Sega Sammy Holdings (6460.T) gained ¥89 to ¥2,520 following an upgrade in investment rating by Macquarie Securities. Baudroie (4413.T) rebounded sharply, rising ¥110 to ¥2,934, after SBI Securities raised its target price to ¥6,900.
JAFCO Group (8595.T) fell ¥49.5 to ¥2,270.5 after first-quarter operating profit plunged to ¥627 million (approximately $3.8 million) from ¥2.74 billion (approximately $16.7 million) a year earlier. Kojundo Chemical Laboratory (4973.T) tumbled ¥715 to ¥4,425 on news that first-quarter operating profit fell 66.3%. Kioxia Holdings (285A.T) dropped ¥5,870 to ¥56,010 after it was revealed that Toshiba had reduced its stake. Mobile Factory (3912.T) fell ¥75 to ¥1,050, as first-half operating profit growth slowed to 2.5%, down from 17.0% growth in the first quarter, disappointing investors.
Stanley Electric (6923.T) extended its sharp decline, falling ¥73 to ¥3,433, after Tokai Tokyo Intelligence Laboratory downgraded its investment rating from "Outperform" to "Neutral" and lowered its target price from ¥3,660 to ¥3,560.
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