Takamiya Co.,Ltd.

The Group's core business is the development, manufacture, sale, and rental of temporary construction equipment, and its performance tends to correlate with construction investment trends. Because fluctuations in private capital investment and public works budgets of national and local governments directly translate into changes in demand, a significant downturn in construction investment could have a material impact on sales and earnings. No specific countermeasures are currently disclosed, and this is recognized as a structural market-dependency risk.

Because funds for purchasing temporary equipment are raised through borrowings, bonds, and installment payments, the balance of interest-bearing debt stood at a high level of ¥39,061 million (52.4% of total assets) as of the end of FY2026 (ending March 2026). The equity ratio remained at only 30.9%, and if interest rates rise going forward, interest expenses (¥526 million in FY2026 (ending March 2026)) may increase further, potentially adversely affecting business performance and financial condition. Improving the financial structure remains an ongoing challenge.

The Company has entered into syndicated loan agreements with multiple financial institutions, which include financial covenants. If these covenants are breached, at the request of a majority of lenders holding at least two-thirds of the syndicate's total loan amount, the Company could lose the benefit of the term and be required to make immediate repayment. Should this materialize, it could trigger a liquidity crisis with serious implications for business performance and financial condition.

The primary raw material for the temporary equipment handled by the Company is steel products, and purchase prices are heavily influenced by steel raw material market conditions. If market conditions fluctuate significantly and cost increases cannot be passed on through sales prices, profit margins may be squeezed, potentially affecting business performance and financial condition. Specific hedging measures are not explicitly disclosed in the securities report.

While the customer base is centered on more than 3,000 construction companies, providing diversification of trade receivables, a downturn across the construction industry as a whole could result in a simultaneous increase in bad debts. The Group carefully manages transactions with customers whose creditworthiness is uncertain, but the diversification effect may be limited in an industry-wide economic downturn.

The temporary construction works business and agricultural greenhouse construction business are premised on holding specified construction business licenses (such as scaffolding and earthwork construction licenses), and registrations such as the secondhand dealer license and warehousing business registration are also essential to the continuation of core operations. If a legal violation or disqualifying event occurs, the Company could face revocation of licenses or business suspension orders, making it difficult to continue operations. The report states that, at present, no events that would lead to license revocation have been identified.

Temporary equipment used at construction sites carries an inherent risk of accidents caused by product defects or deterioration over time, which could result in large-scale product recalls or damage claims. If insurance coverage proves insufficient, this could directly result in losses for the Group. Specific details of the quality control system and insurance coverage are not disclosed in the securities report.

Natural disasters such as earthquakes and typhoons, or a global outbreak of infectious disease, pose a risk of forcing the shutdown of production sites and rental equipment logistics bases both in Japan and overseas. The Group has diversified its production and logistics bases and implemented early recovery measures, but if damage or supply chain disruption occurs on a scale or scope beyond expectations, it could have a material impact on business operations, performance, and financial condition.

If new vulnerabilities emerge in the IT systems underpinning business operations, or if the Company is subject to a cyberattack, this could disrupt business operations or result in the leakage of personal or confidential information. Although the Group has implemented system redundancy and security measures, it recognizes that the risk of impact on financial condition and business results due to damages or countermeasure costs cannot be eliminated.

Fluctuations in exchange rates affect the translation of overseas subsidiaries' financial statements into yen, and significant fluctuations could impact consolidated business performance and financial condition. Specific hedging measures and the scale and currency composition of overseas subsidiaries are not detailed in the securities report, leaving the quantitative impact of foreign exchange risk unclear.