Message to Investors

Dear Shareholders,

On behalf of the Soken Group, I would like to extend my sincere gratitude for your continued patronage and support

In the fiscal year ended March 31, 2025, the economy as a whole continued to recover gradually. However, uncertainty remained due to the economic slowdown in China, price and monetary policy trends in major countries, unstable exchange rates, and concern over the impact of heightened geopolitical risks associated with the ongoing problems in Ukraine and the Middle East.
To address these circumstances, the Soken Group has worked tirelessly to expand our stable earnings base and improve profitability. This has improved overall competitiveness and expanded our share of the Chinese market, where demand related to liquid crystal displays (LCD) is on the rise. We have captured new use cases and customers in the automotive, information technology and electronics, and other growth fields. We have also taken steps to create new business domains to transition to a business structure that is more resilient to changing circumstances by developing and selling non-acrylic products, building underlying technologies for biomass material and product development, and exploring new overseas business regions.
Both sales and profits substantially exceeded last year’s figures thanks to the growth in sales of adhesives in the Chinese market amid the ongoing consolidation of LCD industry production in the country.

The gradual economic recovery is expected to continue in the fiscal year ending March 31, 2026. However, uncertainty remains due to concern over the future of U.S. trade policy, the intractability of problems in Ukraine and the Middle East, and the ramifications of unstable foreign exchange rates and raw material prices.
The Soken Group will strive to expand our stable earnings base and improve profitability by strengthening our technical readiness to further increase our share of the LCD segment of the Chinese market and exploring and capturing new demand in the automotive, information technology and electronics, and other growth fields. We will also take steps to reform our business structure to create next-generation business domains with growth investments aimed at developing and capturing new use cases for non-acrylic products, establishing a technological foundation for biomass material and product development, expanding into new overseas business regions, and developing new businesses.
In terms of business performance, we expect net sales to increase, but operating profit to decrease. We anticipate an increase in construction revenue in the equipment and systems business. Despite firm demand in the chemicals business, we expect a decrease in foreign currency translation from our Chinese subsidiaries due to the stronger yen. We also anticipate an increase in expenses in research and development, technology development, and new businesses.

Once again, we would like to thank our shareholders and investors for their continued understanding and support as we move forward.