TECHNO RYOWA LTD.

Business Details

The Group operates under a single reportable segment, "Facility Construction Business." It comprises the HVAC and sanitary facility construction business (industrial facility construction and general building facility construction), electrical facility construction business, refrigeration and heating equipment sales business, and other businesses (solar power generation and real estate leasing). Industrial facility construction accounts for approximately 66.9% of net sales, and the ratio of private-sector construction work is high at approximately 84.6%. Backed by strong capital expenditure appetite among corporations, the company won orders for several large-scale projects, and steady progress on its order backlog drove substantial increases in both revenue and profit.

Recent Overview

In FY2026 (ending March 2026), both net sales and operating profit reached record highs, achieving substantial growth in revenue and profit

In FY2026 (ending March 2026) (consolidated), the company achieved net sales of ¥98,681 million (up 17.2% year on year), operating profit of ¥15,760 million (up 63.7% year on year), ordinary profit of ¥16,493 million (up 66.0% year on year), and profit attributable to owners of parent of ¥11,797 million (up 62.6% year on year). Backed by corporate capital expenditure appetite, the company secured orders for several large-scale industrial facility construction projects, and steady progress on its order backlog together with productivity improvements substantially boosted profit margins. The order backlog at fiscal year-end remained high at ¥84,466 million (up 10.6% from the end of the prior fiscal year). For FY2027 (ending March 2027), the company forecasts net sales of ¥100,000 million (up 1.3% year on year) and ordinary profit of ¥16,500 million (flat year on year), broadly unchanged from the current fiscal year. The company revised upward the final-year target of its medium-term three-year business plan, raising the ordinary profit target from ¥12.0 billion to ¥16.5 billion.

Key Products

Growth Drivers

• Continued large-scale order intake for industrial facility construction, driven by strong corporate capital expenditure appetite (orders received of ¥73,822 million in FY2026 (ending March 2026), up 11.6% year on year)
• Improved visibility of future revenue supported by a high order backlog of ¥84,466 million (up 10.6% from the end of the prior fiscal year)
• Improved profit margins driven by DX promotion and productivity improvement initiatives (operating profit margin of 16.0%, a significant improvement from 11.4% in the prior fiscal year)
• Expansion of order intake amid an economic recovery, supported by the high proportion of private-sector construction work (84.6% for the HVAC and sanitary facility construction business)
• Upward revision of the final-year target of the medium-term three-year business plan (ordinary profit target raised from ¥12.0 billion to ¥16.5 billion) and continuation of the growth strategy
• Strengthened human capital investment through the introduction of a Board Incentive Plan (BIP) trust and a stock-granting ESOP trust for officer compensation, aimed at securing and retaining talent

Risks

• Risk of elevated construction costs and unprofitable projects arising from surging construction material prices and rising labor costs
• Impact on securing appropriate construction periods and constraints on construction capacity due to the unresolved labor shortage across the industry
• Risk that sustained high crude oil prices could trigger further increases in construction material costs, leading to weaker corporate earnings and reduced capital expenditure appetite
• Impact of uncertain global economic trends, including U.S. tariff policy, on manufacturers' capital expenditure plans
• Risk of imbalance in order composition, as orders received for general building facility construction and electrical facility construction declined 10.8% and 18.1% year on year, respectively
• Risk of additional provisions for construction contract losses due to estimation errors in total construction costs
• Increased sensitivity to fluctuations in private-sector investment amid reduced reliance on public investment, reflecting a sharp decline in orders received from government and public agencies (down 44.1% year on year to ¥10,707 million)