As part of our IR consulting services, we publish sponsored research reports on Japanese listed companies to enhance communications with global institutional investors.
We are pleased to announce the publication of our latest report on TESS Holdings(5074) for its financial results for the second quarter of the fiscal year ending June 30, 2026.
Analyst Comment
As the share of renewable energy sources with limited output control, such as solar power, continues to increase, maintaining grid stability has become an increasingly important challenge. This drives demand for stabilization solutions, including battery energy storage systems (BESS). The significant growth in orders received and order backlog, which has continued since the previous third quarter, reflects the company’s success in capturing this structural market opportunity.
The company anticipated changes in the market environment at an early stage and strategically shifted its proposal-based sales resources toward its storage battery EPC (engineering, procurement, and construction) business. This proactive approach has resulted in rapid order growth.
On the other hand, sales growth ultimately depends on the company’s ability to expand its execution capacity through the continued development and organization of subcontractors and partner construction companies. As outlined in the company’s financial results presentation materials, management has made steady progress in strengthening its construction capabilities. Going forward, we believe investors should closely monitor the pace at which the company expands its execution capacity alongside continued order growth in the medium term.
Our positive view of the company remains unchanged. We continue to regard the company as one of the most promising players in Japan’s renewable energy sector, supported by its broad technological base and extensive expertise across renewable energy businesses.