ENVALITH
神田通信機株式会社 logo

KANDA TSUSHINKI CO., LTD.

1992・Standard Market・Construction

Official website
神田通信機株式会社 logo
KANDA TSUSHINKI CO., LTD.1992

Business

Kanda Tsushinki Co., Ltd. is a Tokyo Stock Exchange Standard Market-listed corporate group founded in 1947, specializing in information & communications and lighting control. In its Information & Communications Business, the company centers its operations on the design, construction, and maintenance of telephone exchange equipment and various network systems, while also handling information equipment sales and software development as an agent for Mitsubishi Electric. In its Lighting Control Business, the company provides lighting control systems for smart buildings adopting the international standard DALI, along with IoT and DX solutions using its proprietary Multi-Gateway. Its primary customers are government agencies, medical and welfare corporations, financial institutions, and private companies, and its mission is to support customers' infrastructure over the medium to long term, leveraging its 24/7, 365-day maintenance system as a key strength. Its consolidated subsidiary, Nikkoh Electronics Co., Ltd., handles the wireless and video communications field, and the group as a whole aims to become an engineering company fusing IT and OT.

Business Model

The core Information & Communications Business generates initial revenue from the design and construction (contract work) of network equipment, then secures ongoing cash flow through maintenance service contracts and usage fee income from the fiber-optic line service Kanda Hikari (Fiber-Optic Line Service), among others. The Lighting Control Business undertakes the design, sales, and construction of DALI Lighting Control Systems on a contract basis, and aims in the future to shift toward service-based revenue leveraging the Multi-Gateway. The Real Estate Leasing Business supplements stable income through the leasing of owned properties.

Company Strengths

Since its founding in 1947, the company has been engaged in customer infrastructure construction and maintenance for 78 years, maintaining medium- to long-term business relationships with government agencies, medical and welfare corporations, financial institutions, and private companies. Through its network of branches covering customers' sales territories (Sapporo, Sendai, Tachikawa, Chiba, Yokohama, Omiya, Nagoya, Osaka, etc.) and a 24/7/365 marketing center, the company has built a customer base that competitors find difficult to replicate in a short period.

The company has established an integrated system in which design, proposal, construction, and maintenance services are provided consistently by its own group. Order intake in the Information & Communications Business for FY2026 (ending March 2026) reached ¥6,462 million (up 11.9% year on year), reflecting a recovering trend, and the structure that continuously captures replacement and maintenance renewal demand from existing customers is functioning well. Certifications such as ISO9001, ISO27001, and the Privacy Mark also underpin the company's reliability.

The company has developed and owns proprietary software, "Multi-Gateway®," which enables the connection of building facilities (lighting, air conditioning, etc.) with IT equipment and cloud systems via various communication methods. It has built co-creation relationships with major general contractors and telecommunications carriers, and has a track record of being selected as a Building OS integration product by the Smart Building Co-Creation Organization. The accumulated technology combining IT and OT has been developed in-house, forming a technological asset that is difficult for competitors to replicate in a short period.

ENVALITH's Perspective

FY2026 (ending March 2026) saw net sales of ¥6,778 million (down 5.6% year on year) and operating profit of ¥438 million (down 29.9% year on year), marking a second consecutive year of profit decline. The FY2027 (ending March 2027) forecast also calls for operating profit of ¥400 million (down 8.8% year on year), implying a third straight year of profit decline, and the fact that profit recovery is not expected even in the final year of the medium-term management plan is a concern from an evaluation standpoint. Rising fixed costs and a sharp sales decline in the Lighting Control Business are significantly weighing on company-wide profit, and the market needs to keep a close watch on the risk of a prolonged investment phase.

Order intake in the Lighting Control Business for FY2026 (ending March 2026) surged 159.4% year on year, and how the accumulated order backlog is recognized as sales will be key to next term's performance. However, in the previous period, the completion of large-scale projects was concentrated near period-end, which resulted in a low order backlog at the start of the current period, so uncertainty over construction progress remains high. External factors such as geopolitical risk and rising raw material prices could also affect construction costs, making it necessary to carefully assess the conversion rate of the order backlog into sales and profit.

Regarding Multi-Gateway, positioned as a pillar of new business, the company has explicitly stated that "a certain amount of time will still be needed before it makes a full-fledged contribution to earnings." Other new businesses such as cloud PBX and video-related solutions are also still in the process of commercialization and have not yet reached a revenue scale sufficient to offset the shrinking Legacy PBX-related (Telephone Exchange Equipment) market. While usage fee revenue is steadily increasing, the unclear timing of the completion of the business structure transformation could be a factor capping the upper bound of the stock's valuation.

Growth Strategy

Business structure transformation driven by expansion of the Multi-Gateway and usage-fee businesses and market development of DALI lighting control

The company continues active sales development and technical R&D for its "Multi-Gateway" software that connects various equipment. While the foundation for expanding orders and sales is progressing, the company itself acknowledges that "a certain period will still be required before it becomes a full-fledged contributor to earnings," and monetization may be pushed back to beyond the final year of the medium-term plan.

Usage-fee revenue from fiber-optic line services, led by Kanda Hikari (Fiber-Optic Line Service), continues to increase steadily. Through the expansion of service menus such as enhanced security offerings, the company aims to build a stable revenue base while offsetting the decline in on-premise PBX maintenance fees. It will also strengthen proposals for migration from legacy PBX to cloud PBX.

The company is promoting DX/IoT solutions combining DALI and Multi-Gateway, along with integration with building facility systems. It aims to expand the market through adoption of DALI products scaled to project size and small-scale solutions for existing buildings. Orders received in FY2026 (ending March 2026) surged 159.4% year-on-year, but revenue recognition is expected to occur in the following period and beyond.

Under the current medium-term management plan, the company had set a target of raising DOE to 3.5% or above by the end of the final fiscal year, but achieved this one year ahead of schedule in FY2026 (ending March 2026) (dividend per share of ¥82, payout ratio of 50.3%). A dividend of ¥85 is planned for FY2027 (ending March 2027). Achievement of the ROE target of 9% is premised on a recovery in profits.

Last updated: July 19, 2026