NITCHO CORPORATION

Business Details

A comprehensive commercial kitchen equipment manufacturer whose primary customers are institutional foodservice facilities such as school lunch programs, hospital foodservice, and employee cafeterias. Its main products include Dishwashers, Tilting Kettles / Rice Cookers, Steam Convection Ovens, and Sterilizing Storage Cabinets, manufactured at two plants in Tochigi and Oita. The company is characterized by its integrated offering ranging from consulting to design, construction, and after-sales service. Revenue is generated entirely domestically, and as the company operates a single segment, overall company performance directly constitutes segment performance.

Recent Overview

Revenue and operating profit increased year on year due to a rise in bulk-order contracts in the school lunch segment, while net income declined due to the absence of one-time gains recorded in the prior period

For the first half of FY2026 (ending March 2026) (October 2025 to March 2026), revenue was ¥9,665 million (up 5.2% year on year) and operating profit was ¥502 million (up 0.5% year on year), representing increased revenue and profit. On the other hand, ordinary profit was ¥510 million (down 5.4% year on year) and net income for the interim period was ¥331 million (down 9.7% year on year). The company explained that the decline at the ordinary profit level and below was due to the reversal of a one-time non-operating gain recorded in the previous fiscal year (dividends received of ¥34,957 thousand, etc.), and that performance is otherwise progressing steadily against the initial budget for the current period. The full-year performance forecast remains unchanged, with revenue of ¥19,100 million (up 5.4% year on year) and operating profit of ¥820 million (down 2.9% year on year). The annual dividend forecast is ¥180 (an increase of ¥30 from the prior year's ¥150).

Key Products

Growth Drivers

• Boost to revenue and operating profit from an increase in bulk-order contracts in the school lunch segment
• Continued sales activities aimed at stimulating replacement demand and renewing parts-related equipment
• Expansion of sales into institutional foodservice segments beyond school lunches (hospitals, welfare facilities, hotels, etc.)
• Advancement of product development addressing labor savings and reduced workforce needs for kitchen facilities
• Maintaining profitability through progress in responding to rising material costs
• Strengthening of the financial base through improvement in the equity ratio (56.3% → 60.6%)

Risks

• Seasonal and year-to-year variation in revenue depending on the presence of large-scale projects in the school lunch segment (revenue concentrated in Q2 and Q4)
• Risk of rising cost of sales due to surging material prices (cost of sales ratio: 72.6% in the prior H1 → 72.5% in the current H1)
• Upward trend in selling, general and administrative expenses (¥2,020 million in the prior H1 → ¥2,154 million in the current H1, up 6.6% year on year)
• Continued negative operating cash flow (−¥605 million in the current H1) leading to a decline in cash balances
• Risk of curtailed capital investment by customer facilities due to price increases and labor shortages
• Concerns over economic slowdown stemming from deterioration in the external environment, including US tariff policy, concerns over the Chinese economic outlook, and heightened tensions in the Middle East
• Year-on-year decline in ordinary profit and net income due to the reversal of one-time non-operating income factors