ENVALITH
綿半ホールディングス株式会社 logo

Watahan & Co.,Ltd.

3199・Prime Market・Retail Trade

Official website
綿半ホールディングス株式会社 logo
Watahan & Co.,Ltd.3199

Business

Watahan Holdings is a holding company originating in Nagano Prefecture, founded in 1598 with a history spanning over 420 years. Through 17 consolidated subsidiaries, it operates three businesses: retail centered on supercenters (net sales of ¥77,034 million), construction covering wooden building construction, steel structures, roof and exterior renovation, and self-propelled multi-story parking structures (¥49,902 million), and trading, which imports and sells naturally derived raw materials from more than 20 countries worldwide (¥6,502 million). The company maintains a broad customer base spanning local residents, construction customers nationwide, and pharmaceutical and cosmetics manufacturers, and is listed on the Prime Market of the Tokyo Stock Exchange.

Business Model

The retail business secures customer traffic and gross profit through differentiation via an EDLP strategy and sixth-industrialization (in-house farms → store sales). The construction business operates on an order-based model across four fields—wooden housing, steel structures, parking lots, and roof renovation—maintaining cost competitiveness through an in-house integrated production system. The trading business achieves profit margins exceeding 10% through the import and sale of natural raw materials and the manufacture of active pharmaceutical ingredients. Across the three businesses, group purchasing, raw material procurement, and sales channels are mutually leveraged, achieving both earnings stability and growth potential.

Company Strengths

In wooden housing, the company has built an integrated in-house production system covering procurement, lumber processing, drying, precutting, and construction, supplying materials to more than 500 affiliated stores nationwide. In roof and exterior renovation, it holds a proprietary WK cover construction method that does not require halting operations, which has been widely adopted for renovations at major automaker factories. In self-propelled multi-level parking structures, it has developed products certified by the Minister of Land, Infrastructure, Transport and Tourism, achieving shorter construction periods.

Leveraging its overseas network spanning more than 20 countries, the company imports and sells pharmaceutical and cosmetics raw materials. In FY2026 (ending March 2026), the segment's operating margin stood at 10.2%, the highest among all segments. It holds exclusive domestic distributorship rights for IOI OLEO and SASOL, establishing a monopolistic procurement and sales position that is difficult for competitors to replicate.

Built on the credibility and trust established since its founding in 1598, the company operates retail, construction, and real estate businesses centered on Nagano Prefecture. Its supercenters offer differentiated products through direct procurement from fishing ports, bulk vessel purchasing, and company-operated farms (SHIN Ruby Beef and Maboroshi no Sangen Pork). In FY2026 (ending March 2026), the company renovated 7 stores, reflecting its ongoing investment to respond to local community needs.

ENVALITH's Perspective

In FY2026 (ending March 2026), segment profit from the construction business rose 22.7% year on year to ¥2,207 million, accounting for approximately 61% of total operating profit of ¥3,599 million, further deepening business dependence on this segment. Meanwhile, the retail business saw segment profit decline 11.3% year on year to ¥1,563 million due to reduced sales floor space from multiple store renovations and a rebound decline following the prior period's disaster-preparedness demand surge, while the trading business saw a 22.3% decline to ¥666 million due to suspended sales stemming from a review of manufacturing processes for certain active pharmaceutical ingredients—resulting in simultaneous profit declines in both segments. The risk of profit concentration in the construction business is a point investors should monitor closely.

The mid-term management plan targets of ¥150,000 million in sales revenue and ¥4,500 million in ordinary profit, originally set for FY2027 (ending March 2027), have been revised to a target achievement timeframe of FY2029 (ending March 2029), reflecting uncertainty in the outlook due to conditions such as the situation in the Middle East. The FY2027 (ending March 2027) forecast for ordinary profit of ¥4,000 million represents only 89% of the original target level, and the ordinary profit margin of 2.9% falls short of the target level (above 3%). External factors (elevated resource and energy prices, rising labor costs) are weighing on profitability improvement, making cost management and the cultivation of high-value-added businesses urgent priorities.

The full-year forecast for FY2027 (ending March 2027) projects sales revenue of ¥140,000 million (up 3.4% year on year) and operating profit of ¥3,800 million (up 5.6% year on year), representing higher revenue and profit. However, the cumulative operating profit forecast for the first half (through the second quarter) is ¥1,196 million (down 17.5% year on year), indicating a significant expected decline, as construction project progress timing and the impact of the review of manufacturing processes for active pharmaceutical ingredients in the trading business are expected to weigh on first-half performance. Achieving the full-year target is predicated on a profit skew toward the second half, making progress rate confirmation an important monitoring point.

Growth Strategy

Aiming for FY2029 (ending March 2029) net sales of ¥150,000 million and recurring profit of ¥4,500 million through sixth-industrialization, an integrated timber production system, and utilization of overseas networks

Actively securing large-scale orders in fields such as self-parking multi-story parking structures (contract awarded and construction commenced for two large 6-level, 7-tier parking structures, the first of their kind in the Kyushu area) and steel structures (building steel frames). Strengthening design support capabilities through CAD centers in Myanmar, China, and Vietnam, and improving productivity through DX, the company expects segment net sales of ¥52,102 million (up 4.4% year on year) and segment profit of ¥2,632 million (up 19.2% year on year) for FY2027 (ending March 2027).

Strengthening the integrated production-to-sales system through expanded sales of Japanese Black Beef "SHIN Ruby Beef" and "Phantom Sanmoto Pork" produced at the company-operated farm (Watahan Farm), along with full-scale entry into agriculture. In addition to renovating 7 stores annually, the company is promoting expansion of sales floor area through use of vacant retail properties and M&A. Segment net sales of ¥79,079 million (up 2.7% year on year) are expected for FY2027 (ending March 2027).

Watahan Wood Power (Shiojiri City, Nagano Prefecture) will be consolidated as a subsidiary from FY2026 (ending March 2026). The company will launch a power generation business using sawmill offcuts and forest residues as fuel, and together with the acquisition of approximately 1,500 hectares of forest land in Iida City, Nagano Prefecture, will build a system for circular forestry and effective utilization of forest resources.

Accelerating expansion into the food segment through expanded sales of frozen avocado "Natavo," establishment of a domestic cultivation system for the prickly pear cactus-derived product "SABOVEG," and establishment of a new import route for chicle, a raw material for chewing gum. Despite being affected by revisions to the manufacturing process for certain APIs, the company expects segment net sales of ¥6,786 million (up 4.4% year on year) for FY2027 (ending March 2027).

The target achievement timeframe, originally set for FY2027 (ending March 2027), has been revised to FY2029 (ending March 2029) in light of uncertain conditions such as the situation in the Middle East. Priority is given to sustainable growth and steady improvement in profitability, while continuing to strengthen the competitiveness of each business and optimize the business portfolio.

Last updated: July 19, 2026