Daido Steel [DS] (5471 JP) produced FY25 (March year-end) OP [IFRS basis] of ¥42,081mil (+6.8% YoY) on sales of ¥578,129mil (+0.6% YoY). This performance overshot the revised full-year guidance [OP of ¥36,000mil (-8.6% YoY) on sales of ¥575,000mil (flat YoY). The firm had revised up with the release of its Q3 results, given (1) solid orders, despite higher-than-expected steel scrap prices, (2) the weaker yen and (3) maintaining an optimal GPM amid continued cost reductions. FY25 OP surpassed the revised guidance thanks primarily to stronger-than-expected (1) steel products sales volumes of 1,025K ton, vs forecast of 1,022K ton, (2) price adjustments (approx. +¥1,000mil vs forecast), (3) a recovery in stainless steel demand for SPE (+¥200mil), and (4) cost reductions. Assumptions for FY26 guidance: Daido Steel is guiding for FY26 1H OP of ¥21,000mil (+13.7% YoY) on sales of ¥305,000mil (+7.2% YoY) and full-year OP of ¥40,000mil (-4.9% YoY) on sales of ¥630,000mil (+9.0% YoY) based on the following assumptions: (1) Steel products sales volume remain flattish at 1,042K ton (vs. 1,025K ton in FY25), (2) a FOREX rate of ¥155/USD in FY26, vs the FY25 average rate of ¥150.8/USD, (3) higher steel scrap prices [¥51,000/t vs. ¥42,000/t in FY25], and (4) the impact from the geopolitical risk in the Middle East. The firm assumes some ¥1,200mil increase in costs on the back of rising crude oil prices [Q1 crude oil $90/bbl in Q1 / Q2 onwards $63/bbl].