ENVALITH
日東紡績株式会社 logo

NITTO BOSEKI CO., LTD.

3110・Prime Market・Glass & Ceramics Products

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日東紡績株式会社 logo
NITTO BOSEKI CO., LTD.3110

Business

Nitto Boseki Co., Ltd. is a materials manufacturer founded in 1923 that operates six business segments—Electronic Materials, Medical, Composite Materials, Materials Chemicals, and Insulation Materials—built on its glass fiber technology base. The Electronic Materials segment manufactures special glass cloth for AI servers and semiconductors, and has grown into a core profit-driving business accounting for approximately 42% of the group's net sales of ¥118,229 million. The Medical segment integrates production of in-vitro diagnostic pharmaceuticals from raw materials through to final products, securing leading domestic market share in inflammation markers and osteoporosis markers. The Insulation Materials segment, as an industry pioneer that first succeeded in manufacturing glass wool in Japan in 1949, provides energy-saving products for housing and construction applications. The company operates globally with 24 subsidiaries and 3 affiliated companies in Japan and overseas.

Business Model

The company maintains an integrated production system spanning from glass fiber yarn manufacturing to glass cloth processing, and captures high added value by independently developing, manufacturing, and selling specialty glass with special compositions such as low dielectric constant and low thermal expansion. The electronic materials business achieves an operating margin of 39.4%, forming a structure in which it generates over 93% of the group's total operating profit. In the medical business as well, an integrated manufacturing system spanning from raw materials to final products realizes high quality and stable supply, securing stable earnings.

Company Strengths

The company has independently developed specialty composition glasses such as low dielectric "NE Glass" and "NER Glass" and low thermal expansion "T Glass," and maintains an integrated production system spanning from glass fiber yarn manufacturing to glass cloth processing. The Electronic Materials segment's operating margin reached 39.4% in FY2026 (ending March 2026), and 799 domestic and international patents (including utility models) form a technological entry barrier.

In the Medical business, the company has built an integrated manufacturing system spanning from antiserum production to final diagnostic reagents, and sells diagnostic reagents covering more than 100 types of domestic test items. It holds substantial sales share in inflammation markers and osteoporosis markers, forming a stable earnings base with operating profit of ¥2,431 million in FY2026 (ending March 2026).

The equity ratio stood at 61.3% at the end of FY2026 (ending March 2026), with cash and cash equivalents reaching ¥61,835 million. Net income for the period was ¥41,770 million, including extraordinary gains such as a ¥34,165 million gain on sale of fixed assets. The company also holds a commitment line of ¥10 billion in borrowing capacity, underpinning a financial base that supports approximately ¥120.0 billion in planned capital expenditure under the medium-term management plan.

ENVALITH's Perspective

Of the ¥41,770 million in profit attributable to owners of parent for FY2026 (ending March 2026), a combined ¥38,149 million was recorded as extraordinary income—comprising ¥34,165 million in gains on sale of fixed assets and ¥3,832 million in gains on sale of investment securities—creating a large gap versus the ordinary income base of ¥21,544 million. The net profit forecast for FY2027 (ending March 2027) is ¥17,000 million (down 59.3% year on year), pointing to a substantial earnings decline outlook, making it important to assess underlying earnings power excluding one-time gains. In addition, the revenue concentration structure in which the electronic materials business accounts for approximately 93% of consolidated operating profit inherently carries the risk of significant performance swings if the AI investment cycle shifts.

The capital expenditure forecast for FY2027 (ending March 2027) is ¥45,000 million, roughly 2.1 times the FY2026 (ending March 2026) actual of ¥21,702 million, with depreciation expense also expected to rise from ¥9,301 million to ¥11,600 million. The main purpose is capacity expansion for special glass used in electronic materials, but external environment risks—such as the sustainability of demand for AI servers and data centers, US tariff policy, and China's economic slowdown—could affect the return on this investment. It will be necessary to continuously verify the alignment between the timing of harvesting returns on this investment and demand trends.

The composite materials business remained in the red in FY2026 (ending March 2026) as well, posting an operating loss of ¥122 million (an improvement from a loss of ¥900 million in the prior period). The insulation materials business saw a sharp profit decline, with operating profit of ¥202 million (down 70.8% year on year), due to sluggish sales for housing applications and rising periodic maintenance costs. Combined sales of the two businesses totaled ¥28,537 million, accounting for about 24% of consolidated sales, but their contribution to profit remains limited. While the external tailwind of stricter energy-conservation standards could benefit the insulation materials business, concretizing structural profit improvement measures remains a challenge, and future policy direction from the standpoint of portfolio optimization warrants attention.

Growth Strategy

Advancing both special glass capacity expansion investment and the building of new business pillars as twin pillars of the medium-term management plan

To respond to robust demand for AI servers/data centers, server and network equipment, and semiconductor package substrates, capital expenditure of ¥45,000 million (2.1x year-on-year) is planned for FY2027 (ending March 2027). Construction in progress in FY2026 (ending March 2026) increased 65.8% year-on-year to ¥12,067 million, indicating investment is now in full swing.

In FY2026 (ending March 2026), the operating profit margin of 17.6% and EBITDA of ¥30,120 million (EBITDA margin of 25.5%) are progressing ahead of plan. The FY2027 (ending March 2027) forecast targets an operating profit margin of 19.0% and EBITDA of ¥37,600 million (margin of 27.4%), and the company will continue to steadily reap the benefits of investment while pursuing its growth strategy.

Amid external headwinds from progress in domestic-product preference in China, sales of in vitro diagnostic pharmaceuticals and related products remained firm. The company continued to strengthen its business foundation, securing net sales of ¥13,850 million and operating profit of ¥2,431 million in FY2026 (ending March 2026). It will continue its strategy of capturing growing demand for diagnostic reagents driven by an aging population and the shift toward preventive medicine.

In the composite materials business, the operating loss improved significantly from ¥900 million to ¥122 million due to the absence of periodic repair costs incurred in the prior period. In the insulation materials business, operating profit fell 70.8% year-on-year to ¥202 million due to sluggish demand for housing use and higher periodic repair costs. Future challenges include shifting toward high-performance insulation materials amid tightening energy conservation standards and capturing demand for automotive weight reduction through composite materials.

Under the long-term vision 'Big VISION 2030,' the company aims to create global niche No. 1 positions in the fields of 'environment/energy,' 'digitalized society,' and 'health/safety/security.' R&D expenses will be increased from ¥3,400 million in FY2026 (ending March 2026) to ¥4,600 million in FY2027 (ending March 2027) (3.4% of net sales), accelerating the exploration of next-generation products and businesses.

Last updated: July 19, 2026