ENVALITH
矢作建設工業株式会社 logo

YAHAGI CONSTRUCTION CO.,LTD.

1870・Prime Market・Construction

Official website
矢作建設工業株式会社 logo
YAHAGI CONSTRUCTION CO.,LTD.1870

Business

Yahagi Construction is a general contractor founded in 1949 in Aichi Prefecture, listed on the TSE Prime Market and Nagoya Stock Exchange Premier Market. It operates three business segments: a Construction segment centered on building contracting work (logistics facilities, offices, condominiums, etc.), a Civil Engineering segment handling civil engineering and railway construction, and a Real Estate segment covering industrial land development and real estate leasing. The company has an affiliate relationship with the Nagoya Railroad group and counts major developers such as Nomura Real Estate and Mitsui Fudosan among its key clients. Consolidated net sales for FY2026 (ending March 2026) were ¥169,399 million. In April 2026, the company transferred its condominium sales business, accelerating its focus on selecting and concentrating resources in industrial land development and construction businesses.

Business Model

The main revenue source is contracting for building and civil engineering construction, with the construction segment accounting for 88.6% of net sales. The ratio of negotiated (non-competitive) orders is high at 87.9% for building construction, characterized by stable order intake based on long-term relationships with major developers. In the real estate segment, the company combines development and sale of industrial land with rental income, also generating synergies with the construction business (securing construction contracts for its own developed properties). The carried-forward construction backlog for the next fiscal year of ¥155,490 million enhances visibility of future sales.

Company Strengths

The specially-negotiated order ratio for construction work reached 87.9% (FY2026, ending March 2026), with Nomura Real Estate alone accounting for 32.8% of net sales (¥55,620 million). With Nomura Real Estate, the company has built a strategic partnership that goes beyond simple subcontracting, including integrated contracts covering both industrial land sales and logistics warehouse construction work.

As of the end of March 2026, the backlog of construction work carried forward to the next period totaled ¥155,490 million, comprising ¥99,497 million in building construction and ¥55,993 million in civil engineering. This includes large-scale, long-term projects such as work for the Nagoya Expressway Public Corporation scheduled for completion in March 2034 and work for Nagoya Railroad scheduled for completion in December 2030, securing a multi-year sales base.

The civil engineering segment achieved a high segment profit margin of 15.8% (FY2026, ending March 2026). The company holds proprietary reinforced soil construction methods such as "Pan Wall" and "Cab Wall," and further expanded its technical foundation in April 2026 by making Kaisho Co., Ltd., a specialist in slope construction, a subsidiary. Technical accumulation through its railway technology training center and participation in the Construction RX Consortium also supports its competitive advantage.

ENVALITH's Perspective

In FY2026 (ending March 2026), the company achieved net sales of ¥169,399 million (up 20.4% year on year) and operating profit of ¥13,742 million (up 58.8% year on year), marking a substantial profit increase in the final year of the medium-term management plan. However, for FY2027 (ending March 2026), as several large-scale construction projects move into their early construction phases, the company forecasts net sales of ¥150,000 million (down 11.5% year on year) and operating profit of ¥9,000 million (down 34.5% year on year), a significant profit decline. Investors should continue to monitor the large swings in performance driven by the construction-progress cycle characteristic of the construction industry.

Operating cash flow, which had been a cash outflow of ¥17,191 million in the previous fiscal year (FY2025, ended March 2025), turned into a cash inflow of ¥9,849 million in the current fiscal year. The company advanced debt repayment (a net decrease of ¥3,100 million in short-term borrowings and ¥4,700 million in long-term borrowings), improving the equity ratio from 47.7% to 51.5%. Meanwhile, it will be necessary to continue monitoring the impact on finances of cash flow management amid the expected decline in revenue and profit in FY2027, as well as investment burdens such as the acquisition of Kaisho (¥2,500 million).

The annual dividend for FY2026 (ending March 2026) is ¥100 (a 25% increase from ¥80 in the previous fiscal year), with a payout ratio of 50.8% and a dividend-to-net-assets ratio (DOE) of 6.0%. The company's dividend policy calls for a DOE of 5% or more and progressive dividends, and it plans to maintain an annual dividend of ¥100 for FY2027 as well. While maintaining the dividend level despite the forecasted profit decline demonstrates stability in shareholder returns, the payout ratio is expected to rise to 52.7% (forecast), meaning that a recovery in profit levels will be a prerequisite for continuing dividend increases over the medium to long term.

Growth Strategy

Advancing deeper construction capabilities, industrial land development, and technological innovation toward becoming a 'company that solves problems and creates value' by 2030

Continued to secure large-scale construction orders and improve profitability by leveraging long-term relationships with major developers and government agencies. In FY2026 (ending March 2026), the company achieved building construction sales of ¥112,339 million (up 29.8% year on year) and civil engineering order intake of ¥54,343 million (up 25.8% year on year), exceeding the targets set for the final year of the medium-term plan.

Transferred the condominium development, sales, and management business, which is subject to significant earnings volatility, to the Meitetsu Group through a company split, thereby concentrating management resources on industrial land development and corporate-focused real estate business. A gain on transfer of approximately ¥1,000 million related to the succession of the Yahagi Building & Life business is expected to be recorded as extraordinary income in FY2027 (ending March 2027).

Acquired Kaisho Co., Ltd. (wholly owned parent company: Aquarius Invesco Co., Ltd.), which handles the design and construction of the SD method in the slope construction field, for ¥2,500 million, making it a subsidiary. The company aims to strengthen its mid- to long-term competitiveness by expanding technical capabilities and the business foundation in the civil engineering business. Details such as goodwill have not yet been finalized at this time.

As the Medium-Term Management Plan for FY2021–FY2025 reaches its final year, the challenge is to formulate and promote the next Medium-Term Management Plan toward realizing the envisioned FY2030 goal of becoming a 'company that solves problems and creates value.' Based on the new business portfolio following the transfer of the condominium sales business and the acquisition of Kaisho as a subsidiary, the company plans to continue growth investments such as technology development and capital expenditures.

Last updated: July 19, 2026