Tokyo, Nov. 6 (Jiji Press)–Companies listed on the Tokyo Stock Exchange that close their books in March are expected to post a combined net profit of 19,745.1 billion yen in the April-September first half of the current business year, up 43.2 pct from a year earlier, according to SMBC Nikko Securities Inc. The profit growth is being driven by growing demand related to artificial intelligence and semiconductors across a wide range of industries amid expanding investment in data centers. The companies are forecast to post double-digit profit growth for the full year to March 2027 as well, despite continued negative effects from turmoil in the Middle East. SMBC Nikko compiled the estimates based on the financial results of 431 companies that announced their first-half earnings by Thursday, out of the 1,106 firms with March book closings that are components of the TSE’s TOPIX stock index. Electrical equipment manufacturers are benefiting the most from AI- and semiconductor-related demand, with their combined April-September net profits doubling. Chemical makers, including producers of semiconductor materials, are seen posting a 22.9 pct profit increase, while machinery makers are likely to see a profit rise of 20.8 pct, supported by strong demand for defense equipment and construction machinery. Wholesalers are expected to log a 33 pct profit increase, as trading houses with energy interests have been aided by higher crude oil prices amid the prolonged conflict between the United States and Iran. Meanwhile, airlines will see their profits plunge 26.1 pct due to higher fuel costs. The transportation equipment sector is returning to profit growth, at 20.8 pct, led by Toyota Motor Corp. The listed companies are projected to post a combined full-year net profit of 67,592 billion yen, up 16.9 pct from the previous year. “AI data centers will continue to be a driver of profit growth,” said Hikaru Yasuda, a senior equity strategist at SMBC Nikko. Yasuda said that political developments in the United States will be a key factor going forward, amid concerns over the sustainability of data center investment following Tuesday’s U.S. midterm elections, in which the opposition Democratic Party scored a major victory. Speculation is growing that tighter AI regulations will be introduced in the United States following the election results. END [Copyright The Jiji Press, Ltd.]
