KYOWANISSEI CO., LTD.
1981・Standard Market・Construction
Business
Kyowa Nissin Co., Ltd. is a comprehensive facility construction company founded in 1948. Its core businesses are gas facility construction (indoor piping, water heating and heating systems) and gas pipeline construction (main/branch pipe burial, supply pipes) for the Tokyo Gas group, complemented by building facility construction (water supply/drainage and sanitation, air conditioning, renovation) and electrical/civil engineering work (electrical conduits, irrigation, water supply and sewerage). For FY2026 (ending March 2026), net sales were ¥39,385 million, with 53.9% of sales dependent on the Tokyo Gas group. The company is listed on the Standard Market of the Tokyo Stock Exchange. It holds Kyowa Life Service Co., Ltd. and Gaiatech Co., Ltd. as non-consolidated subsidiaries.
Business Model
A contract-based business model that continuously receives construction orders from major energy operators, power companies, and municipalities including the Tokyo Gas Group, recognizing revenue as completed construction contracts. In addition to stable order intake for gas pipelines and gas equipment, the building equipment business has established a framework for receiving and executing integrated orders covering water supply and drainage sanitation, air conditioning, and electrical work, aiming to raise per-customer unit prices and diversify revenue. The order backlog at the start of the fiscal year (¥20,710 million for FY2026) serves as a leading indicator for the following fiscal year's sales.
Company Strengths
Sales to the Tokyo Gas Group accounted for ¥21,229 million (53.9% of consolidated sales) in FY2026 (ending March 2026), with the company securing stable orders in both the gas equipment and gas pipeline businesses. The trust relationship cultivated since its founding in 1948, centered on urban gas supply network development, forms an entry barrier that competitors find difficult to replicate in a short period.
As of the end of FY2026 (ending March 2026), the equity ratio stood at 66.6%, with zero interest-bearing debt outstanding. Total net assets amounted to ¥19,779 million, and cash and cash equivalents totaled ¥7,182 million. A commitment line agreement is also in place as a liquidity backup, giving the company a high level of financial soundness within the industry.
Sales in the building equipment business expanded sharply to ¥6,132 million in FY2026 (ending March 2026) (up 46.6% year on year), with ordinary profit of ¥337 million (versus an ordinary loss of ¥6 million in the prior period). The order backlog at the start of FY2026 reached ¥5,781 million (up 102.3% year on year), reflecting the tangible results of the initiative to develop this segment into a core business, which has been pursued since FY2019.
ENVALITH's Perspective
Performance Trend
Revenue increased for five consecutive fiscal years, rising from ¥34,244 million in FY2022 (ended March 2022) to ¥39,384 million in FY2026 (ending March 2026) (up 5.3% year on year in FY2026). Meanwhile, operating profit declined 7.7% from ¥1,483 million in FY2025 (ended March 2025) to ¥1,369 million in FY2026, with the operating profit margin falling from 4.0% to 3.5%. The main causes were an increase in the completion of lower-margin construction projects in the gas pipeline business and higher SG&A expenses. Net income attributable to owners of parent came to ¥1,194 million (up 5.4% year on year), securing an increase, but this was largely boosted by a decrease in income taxes and other items (from ¥538 million in the previous period to ¥428 million in the current period). As an external factor, elevated material and labor costs continue to pressure profitability. For FY2027 (ending March 2027), operating profit is forecast at ¥1,480 million (up 8.1% year on year), reflecting an expected recovery in profitability.
Growth Strategy
Under the medium-term plan "Triple S," the company aims to achieve net sales of ¥40.0 billion, an ordinary income margin of 4.5%, and ROE of 6.5% by FY2027 (ending March 2027).
The company is strengthening its capability to take integrated orders covering water supply/drainage sanitation, air conditioning, hot water heating, and electrical work, thereby reducing reliance on the gas pipeline business. In FY2026 (ending March 2026), the segment achieved net sales of ¥6,132 million and ordinary income of ¥337 million, turning profitable. The order backlog expanded sharply to ¥5,781 million (up 102.3% year on year), demonstrating concrete progress toward establishing it as a core business.
The dividend per share for FY2026 (ending March 2026) was raised to ¥50 (a 19% increase from ¥42 in the previous period), with a payout ratio of 44.1%. The company also conducted share buybacks totaling ¥567 million. For FY2027 (ending March 2027), a dividend of ¥52 (projected payout ratio of 45.1%) is planned. The medium-term plan "Triple S" explicitly positions the strengthening of shareholder returns as a key management priority.
To address the aging workforce and worker shortages associated with the "2025 problem," the company is promoting continuous recruitment and training of estimating staff and site managers, as well as the transfer of technical skills from veteran workers to younger employees. Through multi-skilling (enabling workers to handle multiple types of construction work), the company aims to improve construction efficiency and quality. Efficiency improvements through core system renewal are also being pursued in parallel.
The company is strengthening its capability to handle new pipe types and new construction areas in aging pipe replacement work for Tokyo Gas Network. It is flexibly reviewing and restructuring its construction systems in response to changes in demand trends, while thoroughly managing the profitability of each construction project. Net sales for this segment in FY2027 (ending March 2027) are projected at ¥16,485 million (down 2.6% year on year), a slight decline, while the company aims to restore profit margins.
Last updated: July 19, 2026