CHUDENKO CORPORATION
1941・Prime Market・Construction
Business
Chuden Kogyo Co., Ltd. was established in 1944 and is headquartered in Hiroshima City, listed on the Prime Market of the Tokyo Stock Exchange as a comprehensive facility engineering company. Facility Construction, centered on indoor electrical work, air conditioning and plumbing work, information and telecommunications work, distribution line work, and transmission and substation underground line work, accounts for approximately 90% of net sales. Major customers include the Chugoku Electric Power Group (approximately 20% of net sales), government agencies, and general private companies in manufacturing, real estate, and other industries. In addition to its domestic operations, the company has subsidiaries in Malaysia, Singapore, and Vietnam, and the group as a whole comprises 19 subsidiaries and 9 affiliated companies. It also engages in supplementary businesses such as the PFI school air conditioning business, solar power generation, and renewable energy investment.
Business Model
The equipment construction business is a contracting model in which orders are received from customers and construction is carried out using a combination of in-house construction capabilities and a network of partner companies. The order backlog carried forward to the next fiscal period remains at a high level of ¥191,983 million, ensuring visibility of future sales. The structure aims to improve profit margins through thorough cost control, front-loading, and construction efficiency gains leveraging DX. Financial discipline is maintained by funding capital needs with own funds and investing surplus funds in financial instruments.
Company Strengths
Construction backlog to be carried forward as of the end of March 2026 stood at ¥191,983 million (up 27.2% year on year). The backlog is centered on indoor electrical works of ¥122,024 million and air conditioning/piping works of ¥48,564 million, with a substantial portion of sales for the following fiscal period and beyond already secured. This depth of order backlog reflects an accumulation of sales and construction capabilities that is difficult to replicate in a short period.
Completed construction revenue from the Chugoku Electric Power Group amounted to ¥44,769 million (24.5% of the total), with ¥15,178 million also recorded in the backlog to be carried forward to the next fiscal period. Since its establishment in 1944, the company has continuously undertaken electrical construction and other work for the Chugoku Electric Power Group, giving it a unique customer base that steadily captures demand for power infrastructure maintenance and renewal.
The segment profit margin of the facility construction business improved from 10.6% in FY2024 to 12.5% in FY2026. This reflects the results of company-led construction efficiency measures such as front-loading and diversified subcontracting of construction areas as well as enhanced on-site information sharing, with both sales of ¥227,850 million and operating profit of ¥26,180 million reaching new record highs.
ENVALITH's Perspective
Performance Trend
Sales have been on a five-consecutive-period growth trend, rising from ¥190,690 million in FY2022 (ending March 2022) to ¥227,850 million in FY2026 (ending March 2026). Operating profit bottomed out at ¥8,361 million in FY2023 (ending March 2023) before recovering sharply, reaching a record high of ¥26,180 million in FY2026 (ending March 2026), with an operating margin of 11.5%. Amid tailwinds from steady manufacturing capital expenditure and urban redevelopment as external factors, thorough cost control and improved construction efficiency drove the margin improvement. Meanwhile, net income came to ¥18,482 million (down from ¥19,895 million in the previous period), a decrease of 7.1% year on year. This was mainly due to the reversal of the prior period's temporary decrease in income taxes associated with the dissolution of an equity-method affiliate, combined with a sharp increase in total income taxes in the current period (from ¥2,496 million to ¥8,044 million); underlying earning power has actually improved.
Growth Strategy
Under the "Medium-Term Management Plan 2027," the company aims for sustainable growth by strengthening sales and construction capabilities and promoting human capital management.
The company is promoting various measures including further strengthening of sales and construction capabilities and productivity improvement. The consolidated business forecast for FY2027 (ending March 2027) targets net sales of ¥245,000 million, operating profit of ¥27,000 million, and net income of ¥19,700 million. In the plan's first year, FY2026 (ending March 2026), both sales and operating profit came in above plan.
In FY2026 (ending March 2026), non-consolidated orders received totaled ¥223,775 million (+20.0% YoY), and carryover orders for the next period reached ¥191,983 million (+27.2% YoY), updating record highs. Growth was driven by HVAC/piping work (orders +60.5%) and indoor electrical work (+12.6%), reflecting reinforced order-taking in growth fields such as semiconductors and data centers.
Under a dividend policy targeting a DOE (dividend on equity ratio, consolidated) of approximately 3.0%, the annual dividend for FY2026 (ending March 2026) was revised to ¥135 per share (an increase of ¥15 from ¥120 in the previous fiscal year). For FY2027 (ending March 2027), a further increase of ¥5 to ¥140 per share is forecast. The company also conducted share buybacks (¥6,029 million acquired in the current fiscal year), with total shareholder returns on an expanding trend.
To realize sustainable growth as set out in the "Chuden Kogyo Group 2030 Vision," the company is strongly promoting human capital management. Amid a business environment marked by ongoing labor shortages, the basic capital policy explicitly states the use of internal funds for human resource development and strengthening R&D, among other purposes. Securing personnel to maintain and expand construction capacity has become the most important medium-term challenge.
Last updated: July 19, 2026