COSEL Co., Ltd.

President’s Message

We sincerely thank our shareholders and investors for your continued support.

The global economy during the fiscal year ended May 2026 remained resilient, supported by growing demand for semiconductors driven by AI-related investment. At the same time, however, uncertainty persisted due to factors including U.S. tariff policies, geopolitical risks, and the slowdown of the Chinese economy. In Japan, capital investment remained solid, although the overall business environment continued to require a cautious outlook.

In the electronics industry, demand for semiconductors for AI applications and data centers continued to expand, and recovery in the semiconductor manufacturing equipment market became increasingly evident. Inventory adjustments in the FA market also progressed, resulting in a gradual improvement in overall market conditions. Against this backdrop, the COSEL Group's orders began to recover from the fourth quarter, providing encouraging signs for future sales growth.

Under these market conditions, the COSEL Group strengthened collaboration between its sales and development teams and continued to focus on proposing new products to key customers. We also expanded our strategic collaboration with LITE-ON TECHNOLOGY CORPORATION ("LITE-ON") across sales, development, and procurement, further strengthening the foundation for future growth.

Despite these efforts, net sales declined year on year due to the continued impact of customers’ inventory adjustments. Lower profitability, together with the recognition of an extraordinary loss associated with the decision to transfer shares of Powerbox International AB, resulting in a net loss attributable to owners of the parent.

We believe that this business restructuring represents an important step toward concentrating management resources on growth markets and transforming our business structure into a more profitable one. From a medium- to long-term perspective, we will steadily implement these measures and work to enhance corporate value.

Looking ahead, demand growth is expected in key growth markets, supported by continued investment in AI-related fields and recovery in the semiconductor manufacturing equipment market. However, uncertainty surrounding the global economy is likely to persist.

Under our 11th Medium-Term Management Plan, which commenced in the fiscal year ending May 2027, we have established the vision of "With products and services that capture customer-centric needs, become an indispensable presence in a smart energy society. " To achieve this vision, we will steadily execute three key strategies: reorganizing our business portfolio, strengthening our overseas business strategy, and reforming our earnings structure. At the same time, we will further deepen co-creation with LITE-ON and create new value through initiatives including our jointly developed brand, “COSELSYNC.”

Guided by our corporate philosophy of "Responding to society’s trust through our unwavering commitment to quality," we will continue to build on the trust we have established in the standard power supply business while actively investing in growth areas. Through these efforts, we aim to achieve sustainable growth and further enhance our corporate value.

We look forward to the continued support and understanding of our shareholders.