Takasago Thermal Engineering Co., Ltd.
1969・Prime Market・Construction
Business
Takasago Thermal Engineering, founded in 1923, is a major HVAC (air conditioning equipment) specialist listed on the TSE Prime Market. The company's core business is facility construction, centered on the design and installation of air conditioning systems (accounting for over 98% of net sales), complemented by the manufacture and sale of air conditioning equipment (Nippon Pmac) and facility maintenance and management services (TMES). Domestically, the company handles semiconductor plants, data centers, and large-scale redevelopment projects, while overseas it operates through 15 consolidated subsidiaries centered on Asia and Latin America. Its major customers are large general contractors and private-sector manufacturing and non-manufacturing companies. Overseas sales for the fiscal year under review reached ¥90,756 million (up 26.8% year on year). Under its Long-Term Vision 2040, the company aims to expand into four business domains: construction, maintenance management, carbon neutrality, and environmental equipment manufacturing.
Business Model
An order-based business model in which the company receives orders for air conditioning equipment work from customers and recognizes revenue upon design, construction, and completed delivery. As indicated by the high sole-source order ratio of 65.0% (in the fiscal year under review), the stability of earnings is supported by nominated orders based on years of track record and technical capability. Many large-scale projects span multiple years from order receipt to completion, and the order backlog of ¥356,812 million (as of the end of March 2026) enhances visibility into future sales. Profit margins have continued to improve through strengthened profitability management at the construction stage.
Company Strengths
In the fiscal year under review, the negotiated-contract ratio in the order-received construction method rose to 65.0% (from 56.8% in the previous fiscal year). The company continues to secure large-scale industrial projects such as Rapidus and Sony Semiconductor Manufacturing (13.9% of completed construction revenue), with an accumulation of technology and track record that competitors cannot easily replicate in the short term supporting this negotiated-order strength.
Order backlog as of the end of March 2026 stood at ¥356,812 million (up from ¥308,674 million at the end of the previous fiscal year). The company holds multiple large-scale projects scheduled for completion in 2027-2028, including Torch Tower and the Otemachi Tokiwabashi redevelopment, ensuring a substantial degree of revenue recognition secured for approximately the next two years. The buildup in order backlog enhances the certainty of earnings forecasts.
Building on more than 20 years of development of hydrogen utilization systems for building equipment, the company has launched small and large-scale (megawatt-class) water electrolysis systems. At the Takasago Thermal Engineering Innovation Center in Tsukubamirai City, Ibaraki Prefecture, it has continuously achieved ZEB status and carbon-free operation. Having invested ¥3,931 million in R&D expenses, the company has a track record of advanced technology development, including selection for JAXA's Space Exploration Innovation Hub.
ENVALITH's Perspective
Performance Trend
Revenue rose for five consecutive fiscal years, from ¥302,746 million in FY2022 (ended March 2022) to ¥423,923 million in FY2026 (ending March 2026), representing a CAGR of approximately 8.8% over the five-year period. Operating profit accelerated sharply from FY2024 onward, reaching a record high of ¥47,745 million in FY2026 (ending March 2026), up 47.3% year on year. While robust capital expenditure demand from manufacturing and non-manufacturing sectors (semiconductors, data centers, pharmaceuticals) provided an external tailwind, the company's thorough profitability management also pushed the operating margin up to 11.3% (from 8.5% in the prior period). Operating cash flow expanded to ¥29,725 million (restated), roughly five times the prior-year level, marking a substantial improvement in cash-generating capacity.
Growth Strategy
Development of four business domains and business transformation through DX based on Long-Term Vision 2040
Thorough profitability management at the order-acceptance and construction stages, with continued acquisition of large-scale industrial equipment construction projects such as semiconductor plants, data centers, and pharmaceutical factories. In FY2026 (ending March 2026), the equipment construction business achieved orders received of ¥408,328 million and operating profit of ¥31,738 million, with margin improvement clearly progressing.
Expanded overseas business centered on Southeast Asia, achieving overseas revenue growth of +21.6% year on year in the fiscal year under review. Business scope was expanded through the consolidation of new subsidiaries such as THS INNOVATIONS CO., LTD. (expenditure of ¥2,295 million for acquisition of subsidiary shares involving a change in the scope of consolidation).
Among the four business domains set out in Long-Term Vision 2040 (equipment construction; environmental equipment manufacturing and sales; energy services; and digital solutions), efforts are underway to monetize the new business domains. At present, the equipment construction business accounts for the majority of earnings, and full-scale earnings contribution from the new businesses remains a medium- to long-term challenge.
Last updated: July 19, 2026