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Equity Bottom-Up

Restar Holdings Corporation / Equity Bottom-Up

<ul><li>After conducting a business reorganization and accelerating M&amp;A activity, Restar has embarked on a high-impact medium-term management plan.</li><li>This broadly involves 1) around half of ¥90bn capital allocation directed toward growth investments, with the remainder for working capital requirements in existing operations and post-merger integration (PMI) activities</li><li>2) establishing a new high-value-added Engineering business unit, with these efforts reflecting a clear focus on improving overall profitability. </li></ul>

After conducting a business reorganization and accelerating M&amp;A activity, Restar has embarked on a high-impact medium-term management plan.This broadly involves 1) around half of ¥90bn capital allocation directed toward growth investments, with the remainder for working capital requirements in existing operations and post-merger integration (PMI) activities2) establishing a new high-value-added Engineering business unit, with these efforts reflecting a clear focus on improving overall profitability. 

Restar (3156 JP) - Accelerating Growth Through M&A and High-Value-Added Services

<ul><li>Q1-2 FY3/26 results showed signs of stabilisation, which was a positive development.</li><li>Restar showed clear earnings recovery in Q2 FY3/26, with OPM improving to 2.3% from 1.2% in Q1 FY3/26, signalling that earnings momentum is returning after a weak start to the year.</li><li>Adjusting for yen appreciation, underlying sales rose 3.5% YoY. </li></ul>

Q1-2 FY3/26 results showed signs of stabilisation, which was a positive development.Restar showed clear earnings recovery in Q2 FY3/26, with OPM improving to 2.3% from 1.2% in Q1 FY3/26, signalling that earnings momentum is returning after a weak start to the year.Adjusting for yen appreciation, underlying sales rose 3.5% YoY. 

Restar (3156 JP) - Earnings Momentum Regained

<ul><li>Business scaling and transforming – Q1-4 FY3/25 results were in line with our expectations, with a relatively resilient underlying earnings trend YoY despite FX headwinds and difficult macro conditions.</li><li>Restar’s roll-up strategy contributed to a 9.5% YoY sales growth. Profitability declined due to a deteriorating sales mix in the Device business and intensifying competition in the power supply-demand adjustment market in Eco solutions.</li><li>Progress is evident for business transformation efforts to introduce high-value-added services, with the consolidated PCI Group rebranded as the IT &amp; SIer BU (business unit). F</li></ul>

Business scaling and transforming – Q1-4 FY3/25 results were in line with our expectations, with a relatively resilient underlying earnings trend YoY despite FX headwinds and difficult macro conditions.Restar’s roll-up strategy contributed to a 9.5% YoY sales growth. Profitability declined due to a deteriorating sales mix in the Device business and intensifying competition in the power supply-demand adjustment market in Eco solutions.Progress is evident for business transformation efforts to introduce high-value-added services, with the consolidated PCI Group rebranded as the IT &amp; SIer BU (business unit). F

Restar (3156 JP) - Progress Required to Unlock Full Potential

<ul><li>Q1-3 FY3/25 results underlined Restar’s positive sales growth profile (+11.2% YoY) driven by its roll-up M&amp;A strategy, a strong demand environment for cameras and PC-related products in consumer products, and smartphone demand driving EMS activity YoY.</li><li>However, headwinds persist in the form of continued delay in demand recovery from the Industrial sector, a sales mix lowering gross margin, and negative impact from a strengthening Japanese yen.</li><li>We have not seen concrete evidence of cost savings from post-merger integration activities. </li></ul>

Q1-3 FY3/25 results underlined Restar’s positive sales growth profile (+11.2% YoY) driven by its roll-up M&amp;A strategy, a strong demand environment for cameras and PC-related products in consumer products, and smartphone demand driving EMS activity YoY.However, headwinds persist in the form of continued delay in demand recovery from the Industrial sector, a sales mix lowering gross margin, and negative impact from a strengthening Japanese yen.We have not seen concrete evidence of cost savings from post-merger integration activities. 

Restar (3156 JP) - Positioning for Future Demand Upturn

<ul>
<li>Some speed bumps at the Device segment – Continuing positive demand from the smartphone sector and sustained growth at the Eco-Solution segment were overshadowed by a loss in earnings momentum at the Devices segment in Q1-2 FY3/25.</li>
<li>The recovery in demand from the industrial sector remains delayed, together with a sales mix lowering gross margins and FX impact contributing to overall OP falling 3.8% YoY, despite 11.3% sales growth driven primarily by acquisitive growth.</li>
<li>The current outlook for H2 FY3/25 is assisted by the weak Japanese yen, acquisitive growth, and we expect to see a continuation of the positive demand themes from smartphone and alternative energy.</li>
</ul>


Some speed bumps at the Device segment – Continuing positive demand from the smartphone sector and sustained growth at the Eco-Solution segment were overshadowed by a loss in earnings momentum at the Devices segment in Q1-2 FY3/25.
The recovery in demand from the industrial sector remains delayed, together with a sales mix lowering gross margins and FX impact contributing to overall OP falling 3.8% YoY, despite 11.3% sales growth driven primarily by acquisitive growth.
The current outlook for H2 FY3/25 is assisted by the weak Japanese yen, acquisitive growth, and we expect to see a continuation of the positive demand themes from smartphone and alternative energy.


Restar (3156) - Market Challenges but Maintaining Growth Direction

Japan

Restar Holdings Corporation is a holding company which manages operations for its subsidiaries.  Group companies wholesale semiconductors, electronic components and equipment.  UKC Holdings also designs semiconductors and software through its subsidiaries.

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Restar Holdings Corporation (3156 JP)

Restar (3156 JP) - Accelerating Growth Through M&A and High-Value-Added Services

After conducting a business reorganization and accelerating M&A activity, Restar has embarked on a high-impact medium-term management plan.

Astris Advisory Japan

Restar (3156 JP) - Earnings Momentum Regained

Restar showed clear earnings recovery in Q2 FY3/26, with OPM improving to 2.3% from 1.2% in Q1 FY3/26, signalling that earnings momentum is...

Astris Advisory Japan

Restar (3156 JP) - Progress Required to Unlock Full Potential

Q1-4 FY3/25 results were in line with our expectations, with a relatively resilient underlying earnings trend YoY despite FX headwinds and...

Astris Advisory Japan

Restar (3156 JP) - Positioning for Future Demand Upturn

Q1-3 FY3/25 results underlined Restar’s positive sales growth profile (+11.2% YoY) driven by its roll-up M&A strategy, a strong demand environment...

Astris Advisory Japan

Restar (3156) - Market Challenges but Maintaining Growth Direction

Continuing positive demand from the smartphone sector and sustained growth at the Eco-Solution segment were overshadowed by a loss in earnings...

Astris Advisory Japan

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