Investment Rating - The report does not explicitly state an investment rating for the industry or the company [6]. Core Insights - Panasonic Holdings reported a slight decline in consolidated sales of 0.5% year-on-year, totaling 845.82 billion yen for the fiscal year ending March 31, 2025, primarily due to the impact of the split of Panasonic Automotive Systems and currency translation effects [1][2]. - The operating profit for the fiscal year 2025 increased by 18% to 426.5 billion yen, driven by sales growth and business optimization, despite rising fixed costs due to inflation and strategic investments [2]. - The net profit attributable to Panasonic Holdings shareholders decreased by 18% to 366.2 billion yen, influenced by the special liquidation of Panasonic Liquid Crystal Display Co., which reduced tax liabilities [2]. Summary by Business Segment Lifestyle - Sales in the Lifestyle segment grew by 4% year-on-year to 358.42 billion yen, supported by increased sales of air conditioning and consumer electronics in Japan and Asia [3][4]. - The operating profit for the Lifestyle segment increased by 8.2 billion yen to 127.9 billion yen, benefiting from sales growth and price adjustments in electrical building materials [5][7]. Automotive - The Automotive segment reported sales of 805 billion yen, with an operating profit of 30.1 billion yen, reflecting a decline due to the completion of the share transfer of Panasonic Automotive Systems [8][9]. Connect - The Connect segment saw an 11% increase in sales to 133.32 billion yen, driven by stable sales in avionics and process automation, despite a decline in media and entertainment sales [9][10]. - Operating profit for Connect rose by 38.1 billion yen to 77.2 billion yen, attributed to sales growth across various business areas [10]. Industry - The Industry segment's sales increased by 4% to 108.36 billion yen, supported by sales growth in ITC-related products, despite a decline in sales of automotive and industrial relays [10][11]. - Operating profit for the Industry segment rose by 12.1 billion yen to 43.2 billion yen, aided by price adjustments and sales growth in AI-related products [11]. Energy - The Energy segment experienced a 5% decline in sales to 873.2 billion yen, with significant growth in data center energy storage systems, while automotive battery sales decreased [12][13]. - Operating profit for the Energy segment increased by 31.4 billion yen to 120.2 billion yen, driven by growth in industrial and consumer electronics businesses [13]. Other - Other business activities not included in the main segments reported an 11% increase in sales to 168.94 billion yen, with operating profit rising to 7.98 billion yen [12][13]. Financial Indicators - For the fiscal year 2025, net cash flow from operating activities was 796.1 billion yen, a decrease from the previous year's inflow of 866.9 billion yen [14]. - Total assets as of March 31, 2025, amounted to 93.432 trillion yen, a decrease of 68 billion yen from the previous year, primarily due to the impact of the PAS business split [15]. - The company expects a decline in net sales for the fiscal year 2026, but growth in adjusted operating profit is anticipated due to improvements in Lifestyle, Industry, and Energy segments [16][21].

Core Viewpoint - The article discusses the current state of the Japanese AI industry, highlighting the challenges faced by companies like Preferred Networks in achieving internationalization and the tendency towards a closed-loop system within Japan, which limits global competitiveness [3][6][36]. Group 1: Characteristics of AI Companies - True AI companies possess self-developed models and frameworks, while false AI companies primarily enhance information efficiency without genuine AI capabilities [5]. - Preferred Networks is identified as a true AI company due to its strong technology and product versatility across various industries [5][10]. Group 2: Preferred Networks Overview - Preferred Networks was established in 2014 and developed the deep learning framework Chainer, which initially garnered high expectations within the industry [7]. - The company has a strong patent portfolio with 435 patents globally, indicating its technological strength [9]. - Despite its capabilities, Preferred Networks has shifted towards a more localized approach, focusing on serving major Japanese corporations rather than pursuing international expansion [12][13]. Group 3: Financial Performance of PKSHA Technology - PKSHA Technology, founded in 2012, has shown strong profitability, with revenues increasing from 15 billion yen in 2018 to 169 billion yen in 2024 [21]. - The company has a diverse client base across various sectors, including retail and finance, indicating its robust market presence [21][22]. Group 4: Role of Major Corporations and Government - Major Japanese corporations like NEC and NTT have established AI departments primarily serving government and B2B sectors, contributing to a self-sufficient ecosystem [31][32]. - The Japanese government plays a significant role in AI development through organizations like NEDO, which focuses on funding technology research but often overlooks the growth of individual companies [25][26]. Group 5: Cultural and Structural Challenges - The Japanese AI industry is characterized by a conservative culture that limits open sharing of technology and collaboration, impacting innovation [11][23]. - The reliance on corporate venture capital (CVC) rather than traditional venture capital (VC) restricts the growth potential of startups, as they remain tied to the interests of large corporations [38].