TEKKEN CORPORATION

Business Details

Engages in civil engineering contracting as well as survey, planning, surveying, design, supervision, management, and consulting. Serves both public and private sector clients, holding a strong market share in railway construction with the East Japan Railway (JR East) group. In FY2026 (ending March 2026), segment revenue was ¥91,165 million, accounting for approximately 50.7% of total company revenue, making it the core segment. Currently constructing large-scale projects including the new Haneda Airport access line and the Shinagawa Station north entrance plaza.

Recent Overview

Orders received expanded significantly, up 30.7% year-on-year to ¥115,030 million, and the backlog also built up to a record-high level.

In FY2026 (ending March 2026), Civil Engineering Works segment revenue was ¥91,165 million (up 2.4% year-on-year) and segment profit was ¥3,583 million (up 2.5% year-on-year), a modest increase in both revenue and profit. Meanwhile, individual orders received expanded significantly to ¥115,030 million (up 30.7% year-on-year), of which railway orders received were ¥93,152 million (up 36.6% year-on-year). Backlog built up to ¥188,403 million (up 15.8% year-on-year), forming a foundation for future revenue expansion. Large-scale projects such as the new Haneda Airport access line construction and defense-related works contributed. An impairment loss of ¥9 million was recorded at some branch offices.

Key Products

Growth Drivers

• Continuation of a stable public investment order environment against the backdrop of national resilience initiatives and aging infrastructure countermeasures (domestic public sector orders received in FY2026 ending March 2026 were ¥58,732 million, up 59.9% year-on-year)
• Steady construction progress on large-scale railway infrastructure projects such as the new Haneda Airport access line construction and the Shinagawa Station north entrance plaza
• Expansion of market share through strengthened collaboration with the JR East group (revenue from East Japan Railway Company was ¥41,658 million, approximately 23.2% of consolidated revenue)
• Establishment of a foundation for medium-term revenue expansion through railway orders received of ¥93,152 million (up 36.6% year-on-year) and backlog of ¥188,403 million (up 15.8% year-on-year)
• Improved productivity and operational efficiency through DX promotion, including the introduction of ICT construction machinery and utilization of generative AI
• Strengthened cost reduction and profit generation capability through thorough selective order-taking and centralized management

Risks

• Risk of profit margin compression due to continuing increases in construction costs (labor and material costs) (operating margin on revenue remains at a low level of 3.9%)
• Constraints on construction capacity due to labor shortages and tight supply-demand balance, particularly among skilled workers
• Risk of recording allowance for doubtful accounts due to protracted discussions with a JV partner company on a South Asia construction project and referral to international arbitration (¥2,633 million recorded in the current period)
• Continuing risk of impairment loss recognition, as operating income/loss at some branch offices has remained negative on an ongoing basis
• Customer concentration risk due to revenue concentration with East Japan Railway Company (approximately 23.2% of consolidated revenue)
• Decline in overseas business profit contribution due to a shrinking trend in overseas orders received (overseas orders received in FY2026 ending March 2026 were ¥1,368 million, down 42.8% year-on-year)