ENVALITH
工藤建設株式会社 logo

KUDO CORPORATION

1764・Standard Market・Construction

Official website
工藤建設株式会社 logo
KUDO CORPORATION1764

Business

Kudo Construction Co., Ltd., founded in 1971, is a group company centered on contracted construction, civil engineering, and housing work with a revenue base in Kanagawa and Tokyo, and also operates real estate management, leasing, and sales, as well as elderly care services centered on fee-based nursing homes with care services. Consolidated net sales for FY2025 (ended June 2025) were ¥22,497 million, with a business composition of 57.2% construction, 27.2% care services, and 15.6% real estate. The group has been expanding its structure, having made Nikken Kikaku Co., Ltd. a consolidated subsidiary in July 2024 and making Matsushita Koshou Co., Ltd. a wholly owned subsidiary in July 2025. Under its long-term vision of being a "Leading Company Connecting the Future, Environment, and Happiness," the company positions itself as a "life-stage creation company" supporting all life stages of local residents. Listed on the TSE Standard Market.

Business Model

In the construction business, a key feature is highly customer-focused order-taking with an 83% tokumei (negotiated/sole-source) order ratio for building construction, combined with an order backlog of ¥15,621 million that secures future revenue in advance. The real estate business combines recurring revenue from building management and leasing with variable income from the sale of business-use real estate. The nursing care business secures stable, stock-type recurring revenue underpinned by nursing care insurance income (approximately 39.5% of sales via the National Health Insurance Association federations). The structure is such that the differing revenue characteristics of these three businesses complement each other to support overall earnings stability.

Company Strengths

In FY2025 (ended June 2025), the ratio of negotiated (non-competitive) orders in the construction business was 83.0% (up from 73.7% in the previous period). Continued transactional relationships with major developers such as Nomura Real Estate, Tokyu, Kanden Realty & Development, and Nittetsu Kowa Real Estate are confirmed, forming a stable order base that does not rely on competitive bidding. The backlog of construction contracts stood at ¥15,621 million, securing revenue for the next period in advance.

Of total net sales of ¥22,497 million, the construction business accounted for ¥12,871 million (57.2%), the nursing care business for ¥6,116 million (27.2%), and the real estate business for ¥3,512 million (15.6%), reflecting diversification across three business segments. In the nursing care business, long-term care insurance revenue via the National Federation of Health Insurance Societies accounts for approximately 39.5% of sales, functioning as a stable revenue source relatively unaffected by economic fluctuations.

Net sales in the nursing care business increased from ¥5,947 million in the previous period to ¥6,116 million in the current period. Fee-based nursing homes (specified facilities) accounted for 96.2% of sales, and operating profit of ¥312 million was recorded due to improved occupancy rates and enhanced services and fee revisions. Since entering the nursing care business in 2003, the company has developed multiple facilities in Kanagawa and Tokyo, accumulating facility operation expertise.

ENVALITH's Perspective

Cumulative operating profit for the first nine months of FY2026 (ending June 2026) reached ¥824 million, already exceeding the revised full-year forecast of ¥770 million. While Q4 (April–June) tends to see concentrated recognition of completed construction work due to seasonality in the construction industry, the fact that the full-year forecast remains below the cumulative 3Q actual results could be read as conservative. It will be necessary to closely examine the likelihood of achieving the full-year forecast and the potential for upward revision.

Short-term borrowings as of the end of March 2026 stood at ¥4,255 million, up ¥1,934 million from the previous fiscal year-end (¥2,320 million), while total assets expanded to ¥20,329 million (from ¥16,970 million at the previous fiscal year-end). The equity ratio declined from 31.7% to 28.5%. This appears mainly attributable to funding needs associated with making Matsushita Koshou a subsidiary and an increase in accounts receivable for completed construction work (¥5,350 million). However, increased reliance on borrowing could raise financial costs in a rising interest rate environment. Interest expenses reached ¥117 million, up 41.8% year-on-year, warranting continued monitoring.

Elevated construction material prices and rising labor costs remain headwinds common across the industry. Although the cost-to-completed-construction-revenue ratio improved slightly from 85.8% in the same period last year to 84.2%, structural cost pressures persist. In the nursing care business as well, labor shortages and rising personnel costs are cited as challenges, posing risks to the sustainability of earnings improvement in both segments. The effectiveness of the medium-term management plan's initiative to "strengthen human capital" is being tested.

Growth Strategy

Expansion of group earnings capacity and scale through the three pillars of the medium-term management plan and the integration of Matsushita Koshou

The company is promoting the maintenance and improvement of the ratio of sole-source (tokumei) orders and expanding orders for large-scale private building construction. Construction segment sales grew significantly, up 39.4% year-on-year to ¥7,442 million, with the gross profit margin on completed construction contracts also trending upward. Thorough cost management and selective pursuit of highly profitable projects remain ongoing challenges.

Matsushita Koshou (Matsushita Kosho) became a wholly owned subsidiary in July 2025, bringing civil engineering know-how and engineers into the group. Goodwill of ¥680 million (¥680,916 thousand) arose in the construction business segment, of which ¥72 million (¥72,955 thousand) was amortized on a cumulative basis through Q3. This has contributed to the substantial increase in construction segment revenue, and integration effects are now materializing in earnest.

Higher occupancy rates drove nursing care business sales up 2.4% year-on-year to ¥4,685 million, with operating profit up 14.4% to ¥264 million. Key challenges include improving operational efficiency through ICT adoption and the use of next-generation nursing care equipment, as well as continued efforts to secure personnel and improve retention rates. Promoting nursing care DX (digital transformation) is key to medium-term earnings improvement.

Chronic labor shortages remain a challenge in both the construction and nursing care businesses. The company is promoting personnel recruitment and retention improvement through stronger new graduate hiring, wage increases, and better working conditions. While rising labor costs are a factor pressuring earnings, strengthening the personnel base is essential for maintaining order intake and operational capacity over the medium to long term.

As the third pillar of the medium-term management plan, the company is promoting initiatives related to the environment, society, and governance. Specific numerical targets and progress are not disclosed in the financial results summary, but the company continues to build the foundation for sustainable business operations across its construction, nursing care, and real estate businesses.

Last updated: July 17, 2026