ENVALITH
新日本建設株式会社 logo

SHINNIHON CORPORATION

1879・Prime Market・Construction

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新日本建設株式会社 logo
SHINNIHON CORPORATION1879

Business

Shin Nihon Construction Co., Ltd. was founded in 1964 and is listed on the Prime Market of the Tokyo Stock Exchange as a general contractor. The company is built on two core pillars: the construction business (approximately 60% of net sales), which undertakes building and civil engineering work, and the development business and others (approximately 40%), which handles everything from land acquisition to planning, design, construction, sale of condominiums, and property management, mainly in the greater Tokyo metropolitan area. The group operates through a nine-company structure, including three consolidated subsidiaries (Kenken Co., Ltd., Shin Nihon Community Co., Ltd., and Shin Nihon Real Estate Co., Ltd.). Its main customers are private developers, business corporations, and wealthy individuals, and it also handles some work for government agencies. For FY2026 (ending March 2026), consolidated net sales are projected to reach ¥138,428 million, with operating profit of ¥20,405 million.

Business Model

In the Construction Business, the company secures high-margin projects through proposal-based sales (with a negotiated/sole-source order ratio of 80%). In the Development Business, etc., an integrated in-house production-and-sales system covering everything from land acquisition to sales and management within the group achieves a high segment profit margin of 24.7%. Synergies between the two businesses create a structure that builds up earnings by mutually complementing construction cost management capabilities with real estate development capabilities.

Company Strengths

The specified-order ratio in construction order intake for FY2026 (ending March 2026) was 80.0% (a substantial increase from 54.6% in the previous period). As a result of promoting proposal-based sales grounded in enhancing the added value of buildings, orders received in the construction business expanded to ¥104,179 million (up 15.9% year on year), and the order backlog carried into the next period remained at a high level of ¥125,539 million (up 19.6% year on year).

In the development business, the Group has built a fully integrated in-house structure covering land acquisition, planning, design, construction, sales, management, and after-sales service. In FY2026 (ending March 2026), the segment achieved a profit margin of 24.7% (profit of ¥13,550 million). The company is developing its proprietary condominium brand "EXCELLENT CITY" series, strengthening brand power through the standardization of ZEH-M (net zero energy house - mansion) specifications and solar power generation equipment.

Total net assets at the end of FY2026 (ending March 2026) stood at ¥134,547 million, with interest-bearing debt limited to a negligible amount consisting only of lease obligations. Cash and cash equivalents were ¥54,824 million (up ¥6,170 million year on year). Against total assets of ¥185,296 million, total liabilities were only ¥50,748 million, resulting in an extremely high equity ratio. The company maintains strong financial soundness and retains the flexibility to make agile investments in large-scale projects.

ENVALITH's Perspective

In FY2026 (ending March 2026), net sales reached ¥138,428 million (up 5.1% year on year), operating profit ¥20,405 million (up 11.4%), and net income attributable to owners of parent ¥15,224 million (up 18.8%), with the profit growth rate exceeding the sales growth rate. Gross profit margin declined slightly to 17.0% (17.9% in the prior period), but restrained SG&A expenses (¥5,210 million versus ¥5,239 million in the prior period) and a sharp increase in interest received (¥310 million versus ¥26 million in the prior period) pushed up ordinary profit. The gross profit margin on completed construction contracts in the construction business improved from 8.3% (9.4% in the prior period), and the improvement in the quality of earnings deserves recognition.

The consolidated earnings forecast for FY2027 (ending March 2027) is bullish, with net sales of ¥156,000 million (up 12.7% year on year) and operating profit of ¥25,500 million (up 25.0%). The accumulation of expenditures for development projects, etc. of ¥53,938 million serves as a leading indicator for future sales recognition, while external factors explicitly noted include rising crude oil prices and construction material costs due to the Middle East situation, and the risk of weakening demand for condominium purchases in the greater Tokyo area due to rising interest rates. It should be noted that achievement of the forecast is premised on stability in the market environment.

In FY2026 (ending March 2026), investing cash flow was negative ¥7,555 million, mainly due to ¥42,000 million placed in time deposits against ¥35,000 million in withdrawals. Interest received rose sharply to ¥310 million (from ¥26 million in the prior period), boosting ordinary profit, though this partly reflects the benefit of an external factor—rising interest rates. Operating cash flow improved significantly to ¥17,244 million (from ¥2,654 million in the prior period), but an increase in inventories (expenditures for development projects, etc.) of ¥4,462 million is tying up funds, meaning progress management of development projects will remain a key focus for cash flow management.

Growth Strategy

Sustainable growth through strengthening the integrated construction and development system and diversifying into non-residential and senior markets

Capturing increased capital expenditure demand, orders received in the non-residential segment reached ¥29,081 million (up 19.8% year on year), achieving a higher growth rate than residential (up 12.0% year on year). This has contributed to the expansion of overall orders received in the construction business to ¥93,262 million (up 14.4% year on year), advancing diversification of the revenue base.

The company is promoting ZEH-M initiatives and the installation of solar power generation systems in its proprietary condominium brand, the "EXCELLENT CITY" series. By addressing environmentally conscious housing, it aims to enhance added value, capture demand from affluent customers in the greater Tokyo metropolitan area, and maintain price competitiveness. The maintenance of the segment profit margin of 24.7% in the Development Business and Others segment demonstrates the results of this effort.

In addition to the existing condominium sales business, the company is promoting participation in large-scale redevelopment projects and the development of senior condominiums, aiming to diversify its earnings structure. Expenditures for development business and others have accumulated to ¥53,938 million (up ¥5,039 million year on year), indicating ongoing preparation for revenue recognition in future periods.

In response to chronic labor shortages, the company continues to secure new subcontractors and technical personnel. Through productivity improvement initiatives, it aims to reduce costs and shorten construction periods, thereby improving profitability in the construction business. Gross profit on completed construction contracts for FY2026 (ending March 2026) improved significantly to ¥9,904 million (from ¥6,890 million in the previous fiscal year), reflecting the effects of these measures in the figures.

Last updated: July 19, 2026