First-corporation Inc.

Business Details

The company receives orders for and constructs condominium buildings for sale, primarily in the Tokyo metropolitan area (Tokyo, Kanagawa, Saitama, and Chiba prefectures). It mainly employs the reinforced concrete (RC) construction method, and in addition to receiving orders through bidding from condominium developers, it develops a "self-sourced land" strategy (Zochu Hoshiki) as a key focus—collecting and securing its own land information to win exclusive construction contracts. Quality control differentiation is achieved through third-party inspection of structural elements (piles, rebar, ready-mixed concrete).

Recent Overview

Significant increase in both revenue and profit due to steady progress on ongoing construction projects, while order backlog declined

In the Construction Business for FY2026 (ending May 2026), steady progress on ongoing construction projects led to significant revenue and profit growth, with revenue of ¥27,225 million (up 20.2% year on year) and segment profit of ¥3,036 million (up 74.4% year on year). However, as revenue recognition progressed, the order backlog decreased to ¥28,361 million compared to the previous period-end. The next fiscal year's plan anticipates order intake of ¥35.0 billion, and the order environment is said to be progressing favorably. Condominium construction starts in the Tokyo metropolitan area remained subdued at 40,305 units in calendar year 2025 (down 21.0% year on year), and with the group's share at approximately 3%, there is said to be substantial room for growth.

Key Products

Growth Drivers

• Improved profit margins and expanded exclusive order intake through an increased proportion of the Zochu Hoshiki (self-sourced land) method
• Room for growth from the current approximately 3% market share in the Tokyo metropolitan area (condominium supply in calendar year 2026 is expected to recover to around 23,000 units)
• Stable accumulation of completed construction revenue backed by an expected order intake of ¥35.0 billion in the next fiscal year's plan
• Aggressive growth investment and human capital investment based on the medium-term management plan "First VISION 2031" (Phase 1: target of ¥50.0 billion in revenue for FY2028, ending May 2028)
• Improvement in gross profit margin on completed construction contracts (projected at 12% for the next fiscal year) resulting from successful efforts toward appropriate price pass-through
• Diversification of the earnings base through the promotion of joint ventures and redevelopment projects

Risks

• Pressure on gross profit margin on completed construction contracts due to persistently high construction material prices and continuing increases in labor costs
• Constraints on construction capacity due to chronic shortage of skilled labor and the need to comply with overtime work cap regulations
• Risk of reduced order opportunities due to the declining trend in condominium construction starts in the Tokyo metropolitan area (40,305 units in calendar year 2025, down 21.0% year on year)
• Order backlog stood at ¥28,361 million (end of FY2026, ending May 2026), down from the previous period-end, making the accumulation of new orders to secure future revenue a challenge
• Risk of revenue concentration in specific customers
• Risk of economic downturn and reduced construction investment stemming from geopolitical risks such as US trade policy and Middle East conditions