MERF Inc.
3168・Standard Market・Wholesale Trade
Business
MERF Co., Ltd. is a group specializing in non-ferrous metal recycling with a history dating back to its founding in 1870. The company collects copper and copper alloy recycling raw materials from Japan and overseas, and its non-ferrous metals business—built on two pillars of ingot manufacturing and sales (approximately 50 product types) and the sorting, processing, and sales of recycled raw materials (approximately 150 product types)—accounts for over 99% of net sales. Major customers include shipbuilders (Nakashima Propeller Co., Ltd. accounts for 10.8% of net sales), housing equipment manufacturers, wire and cable manufacturers, and copper smelting manufacturers. The company has overseas bases in the United States and Thailand, and in January 2025 it acquired the California Metal-X business in California to expand its North American ingot operations. On a small scale, it also operates an arts and crafts business handling precious metal ornaments, Buddhist statues, and Buddhist altar fittings.
Business Model
The company's greatest competitive advantage lies in its ability to handle both ingots and recycled raw materials simultaneously, enabling bulk purchasing of miscellaneous non-ferrous metals. Purchased raw materials undergo component analysis, blending, and melting at the company's own plants to manufacture and sell ingots that conform to customer specifications, while surplus raw materials are processed and sold to wire and cable manufacturers, smelters, and others. The gross profit margin stands at a thin 2.8% (FY2025, ending August 2025), and the earnings structure is heavily influenced by LME copper prices and foreign exchange rates. The art and crafts business, which leverages precision casting technology to produce high-value-added products, maintains a relatively higher profit margin.
Company Strengths
By concurrently operating Ingot Manufacturing & Sales and Recycled Raw Material Processing & Sales, the company can purchase approximately 150 varieties of miscellaneous non-ferrous metals in bulk. This gives it a competitive advantage over suppliers and enhances its raw material procurement capability. The Annual Securities Report explicitly states this is "a major characteristic of the Group's Non-Ferrous Metals Business."
In January 2025, CMX Metals acquired the business of California Metal-X and began manufacturing and selling copper ingots in the State of California. In FY2025 (ending August 2025), ingot sales volume increased 17.8% year on year, and ingot sales revenue reached ¥35,548 million (up 27.6% year on year), achieving strong results that confirm the building of an overseas revenue base as a demonstrated track record.
Since its founding in 1870, the company has maintained over 150 years of business continuity, and through its copper alloy component analysis and blending technology, manufactures approximately 50 varieties of ingots that conform to domestic and international standards as well as customer-specific standards. It has obtained ISO9001, ISO14001, and OHSAS18001 certifications, and has established quality, environmental, and safety management systems.
ENVALITH's Perspective
Performance Trend
Revenue over the past five fiscal years moved sideways after peaking in FY2022, tracking ¥62,058 million (FY2021) → ¥89,103 million (FY2022) → ¥84,594 million (FY2023) → ¥82,070 million (FY2024) → ¥82,463 million (FY2025), while profit deteriorated sharply, resulting in a net loss (-¥203 million) in FY2025. However, in the cumulative nine months through Q3 of FY2026 (ending August 2026), performance improved substantially, with revenue of ¥73,491 million (up 18.6% year on year), operating profit of ¥3,401 million, and net income attributable to owners of the parent of ¥2,278 million. External factors provided tailwinds, including a historic surge in international copper prices (the average yen-based Cash price during the period rose 34.7% year on year for the same quarter) and yen depreciation (briefly reaching the ¥160/dollar range). The full-year forecast has already been revised upward to revenue of ¥105,980 million and operating profit of ¥4,561 million (a substantial increase from the previous fiscal year).
Growth Strategy
A growth strategy built on three pillars: expansion of the North American business, improvement of the earnings structure, and cultivation of the art and craft business.
In January 2025, U.S. subsidiary CMX Metals acquired the California Metal-X business, establishing a North American ingot sales network. The company aims to move away from domestic market dependence and diversify sales volume geographically, while capturing global copper demand driven by data centers, EVs, and power grids.
A strategy of continuously reviewing low-profitability transactions to improve profit margins while restraining sales volume. In the cumulative nine months of FY2026 (ending August 2026), gross profit margin improved significantly to approximately 7.3% (versus approximately 2.0% in the same period of the previous year), with operating profit of ¥3,401 million recorded. Focus on higher-margin transactions is progressing.
Promoting expansion of sales of high-value-added products such as gold products and character products, along with expanding sales channels through e-commerce. In the cumulative nine months of FY2026 (ending August 2026), revenue reached ¥628 million (up 40.9% year on year), with segment profit of ¥189 million, showing steady growth. The company continues to enhance its product lineup by developing new products and leveraging precision casting technology.
Last updated: July 17, 2026