7525.T

• Business Model and Core Strengths
  • Rix operates a hybrid

• Long-term guidance through fiscal 2030: Target total revenue of 70 billion yen (1.3x current revenue), operating profit of 5.6 billion yen (1.4x current operating profit), original product ratio of 55%, and overseas sales ratio of 20%.
• Medium-term guidance through fiscal 2026: Target original product ratio of 40%.
• Full-year current fiscal year dividend guidance: 146 yen per share (64 yen for the first half, 82 yen for the second half), maintained after the weak first half automotive segment performance.
• Full-year current fiscal year automotive segment guidance: No revisions to full-year targets, management expects continued recovery in the second half to meet full-year targets.
• Flux cleaning device market guidance: Forecast total market size of 1 billion yen by 2028, Rix targets 30% market share.

Detailed absolute financial performance for individual product/industry segments is not fully provided in the transcript. Partial segment updates include: 1) Iron and steel segment: Strong performance in the first half of the current fiscal year, driven by sustained demand for automation, remote operation, and carbon neutrality-related solutions. 2) Automotive segment: Weak performance in the first half of 2025, particularly low demand for hybrid vehicle-related equipment, dragged down overall original product ratio; showed gradual recovery starting from the second quarter. 3) Semiconductor segment: Strong performance, with recovering demand for rotary joints (original core product) driven by data center and AI-related semiconductor investment, and robust demand for cleaning equipment. As of Q2 2025, overall original product ratio was 28.7%. High-profit category A/B original products (in-house and group company products) contribute a gross margin of ~48-49%, compared to the company-wide overall gross margin of 26%.

• Original product expansion faces execution risk: The 55% 2030 original product ratio target is acknowledged as highly challenging, and past medium-term targets for original product ratio were not met.
• Automotive segment demand uncertainty: The BEV market remains weak, and hybrid demand recovery has not fully materialized, creating downside risk to near-term results.
• Overseas expansion risk: Building a manufacturing base in India is high-risk, and meaningful profit contribution from the India factory is not expected until after 2030.
• Foreign exchange risk: Rix does not currently use forward exchange contracts to hedge exposure, leaving profits exposed to yen/dollar volatility.
• Semi-conductor demand cyclicality: While demand is strong currently, sustainability over the long-term is uncertain.

Q: What quantitative impact and timeline are expected for recent growth investments such as the Riks Kyoso Center? / A: The Riks Kyoso Center is focused on long-term R&D, so immediate profit contributions are not expected. Early results are already visible, with new projects like hydrogen-related test equipment and dairy farming robots emerging, targeting at least 2 new developments per year with 1-2 expected to reach commercialization. Profits from high-value-added improvements to existing products fund R&D activities, and the center was created to avoid over-pressuring R&D teams for quick returns. A company-wide integrated IT system for sales and information sharing will launch in April next year, and is expected to significantly reduce low-value administrative work. /n Q: What is the current progress of the original product ratio target, and how do original products impact profitability? / A: As of Q2 2025, the original product ratio stands at 28.7%, which is slightly behind the target plan, primarily due to weak demand for hybrid automotive-related equipment. The 2026 target is 40% and the 2030 target is 55%. High-profit category A/B original products have a gross margin in the high 40% range, far above the company-wide 26% gross margin, so growing this category is the core lever to improve overall profitability. The 55% 2030 target is intentionally ambitious to drive employee cultural change toward focusing on original product development. /n Q: What is the market outlook and sales target for the next-generation flux cleaning device for semiconductors? / A: The device uses patent-pending technology to remove flux residue between interposers and solder on highly integrated substrates, addressing a need that existing cleaning methods cannot meet. Rix is currently working to get the device specified by major semiconductor manufacturers. Management forecasts the total market will reach 1 billion yen by around 2028, and Rix targets a 30% market share, with potential for higher share if this cleaning method becomes the industry standard. /n Q: What are the plans for the new India factory, including expansion and profit contribution? / A: The factory will begin operations in late January next year, and the initial priority is to establish trust by meeting quality, cost, and delivery targets in the Indian market, focusing first on domestic demand from local and Japanese machinery manufacturers. Extra land was reserved for future expansion to accommodate increased production. After domestic operations are stabilized, Rix plans to shift exports to Europe from Japan production to India production. Meaningful profit contribution from the India factory is not expected until after 2030.