• Air conditioners hurt profitability – The company’s Q1-2 FY3/26 operating loss widened to -¥141mn from -¥25mn in the year-earlier period, amid resource allocation challenges related to air conditioner sales and weaker market fundamentals. Sales rose +14.8% YoY to ¥5.43bn. Looking ahead, monthly B2C orders were back above +20% YoY in August and September, auguring well for its busy Q3 period. The company left its full year forecast unchanged, which we think it can meet with a stronger H2. However, we have revised down our more bullish FY3/26 estimate slightly to reflect the slower-than-expected H1. We remain confident in the company’s long-term growth strategy and commend the quick pace at which it is executing its B2B plan.
