TOKEN CORPORATION

Business Details

The company proposes plans for apartments, rental condominiums, retail condominiums, and rental retail properties to landowners, handling everything from construction contract execution to design and construction on an integrated basis. Subsidiary Naslac Co., Ltd. manufactures and sells construction materials and housing equipment, while Token Lease Fund Co., Ltd. supports the business through construction financing for building owners and non-life/life insurance agency operations, forming a vertically integrated business structure. All construction work is privately commissioned (tokumei) work; there is no work for government agencies or through bidding.

Recent Overview

Orders received expanded sharply, up 20.8% year on year, with the order backlog building up to ¥271,083 million

In FY2026 (ending April 2026), consolidated net sales of the construction business were ¥164,106 million (up 8.6% year on year) and segment profit was ¥17,219 million (up 11.8% year on year), representing increases in both revenue and profit. The increase in orders received in the prior period directly contributed to the expansion of net sales of completed construction contracts. On the other hand, while the gross profit margin on completed construction contracts declined due to continued increases in construction material prices and labor costs and the implementation of sales promotion measures, gross profit in absolute terms increased due to the rise in net sales of completed construction contracts. The non-consolidated order backlog remained at a high level of ¥271,083 million (up 18.3% year on year), providing high visibility for net sales in subsequent periods. At Naslac Co., Ltd., external sales revenue centered on plumbing and water-related products also increased.

Key Products

Growth Drivers

• Non-consolidated orders received for FY2026 (ending April 2026) increased substantially to ¥218,759 million (up 20.8% year on year), and the non-consolidated order backlog of ¥271,083 million (up 18.3% year on year) supports an increase in net sales of completed construction contracts in the following period
• The target for non-consolidated orders received in FY2027 (ending April 2027) is set at ¥258.0 billion gross (up 17.9% year on year) and ¥237.5 billion net (up 19.4% year on year), continuing an aggressive stance toward order expansion
• Continuation of an accommodative lending environment in areas with strong rent levels and high land collateral value, mainly in urban areas, and steady demand from landowners to utilize idle land
• Response to diverse landowner needs through expansion of a design-oriented, higher value-added product lineup
• Thorough cost management and cost reduction promotion through consolidation of the purchasing organization at head office
• Complementary earnings contribution to the construction business from expansion of Naslac Co., Ltd.'s external sales revenue

Risks

• Downward pressure on gross profit margin on completed construction contracts from continued elevated construction material prices and rising labor costs (the gross profit margin on completed construction contracts for FY2027 (ending April 2027) is assumed at 29.2%)
• A pullback in demand following the amendments to the Building Standards Act and the Act on the Improvement of Energy Consumption Performance of Buildings, and a decline in newly started rental housing units (FY2026 (ending April 2026): 313,000 units, down 9.8% year on year)
• Risk of deteriorating consumer sentiment and reduced investment appetite among landowners due to declining real wages amid price increases
• Tightening of financial institutions' lending stance toward construction financing for rental buildings in some areas
• Risk of shortages of certain construction materials and construction delays due to the impact of Middle East tensions (a decline in net sales of completed construction contracts has not yet been factored into the earnings forecast at this time)
• Revenue volatility risk inherent in the business model, whereby the time lag between order receipt and construction completion causes deterioration in the order environment to be reflected in net sales with a delay
• Risk that the effects of sales promotion measures implemented in prior fiscal years continue to be reflected in the gross profit margin on completed construction contracts