NIHON HOUSE HOLDINGS CO., LTD.

Business Details

This segment undertakes contracted construction work for detached and multi-unit housing, contracted renovation work, and sales of built-for-sale housing and residential land. It offers high-quality housing built around three pillars: use of domestically produced Japanese cypress (hinoki) for pillars, foundations, and interior materials; earthquake resistance achieved through the New Wooden Strong Construction Method along with high-insulation, high-airtightness, zero-energy specifications; and long-term after-sales service through the "Kansha Homon" (Home Doctor System) visit program. The company contracts directly with customers, procures housing components from group subsidiaries, and has designated subcontractors handle construction and supervision. This is the core business, accounting for approximately 85% of consolidated sales.

Recent Overview

Sales fell 18.0% year on year due to a decline in beginning order backlog, but order intake rose 3.2% year on year, indicating a recovery trend.

In FY2026 (ending April 2026), housing business sales were ¥25,316 million (down 18.0% year on year), and operating profit was ¥3,331 million (down 5.1% year on year). The main cause of the sales decline was a reduction in the beginning order backlog. Meanwhile, order intake rose to ¥26,362 million (up 3.2% year on year), exceeding the prior-year level, led by the construction division, which grew 4.2% year on year to ¥24,235 million. In February 2026, the company launched the new "Nihon House Hinoki Hyakunen Jutaku" product and realigned its product lineup. Despite the decline in sales, the operating margin improved from 11.4% to 13.2%, reflecting the effects of cost reduction.

Key Products

Growth Drivers

• Expectation of a sales recovery in the next fiscal year, supported by a 3.2% year-on-year increase in order intake (¥26,362 million for full year FY2026, ending April 2026)
• Enhanced customer appeal through strengthened product proposals centered on the new "Nihon House Hinoki Hyakunen Jutaku" product launched in February 2026
• Monetization of the existing customer base through expansion of the renovation business
• Maintaining long-term customer relationships and capturing renovation demand through the Home Doctor System (Kansha Homon visits) and the 60-year structural frame warranty
• Focus on improving profitability and enhancing corporate value as the final year of the medium-term management plan "Revised Leap Forward: Three-Year Future Plan"
• Improvement in operating margin (from 11.4% in the prior period to 13.2% in the current period) through cost reduction and expense savings

Risks

• Continued decline in new housing starts (owner-occupied) year on year, driven by rising housing construction costs and price inflation dampening consumer sentiment
• Structural time lag risk inherent in the completed-contract accounting method, whereby a decline in beginning order backlog directly reduces sales in the current period
• Increased burden of mortgage payments due to rising interest rates, negatively affecting customer purchasing intent
• Supply and price volatility risk for raw materials and components stemming from US trade policy (tariff policy) and Middle East conditions
• Sluggish trend in built-for-sale housing and land sales, as reflected in the 7.4% year-on-year decline in real estate division order intake (¥2,127 million)