KIKUCHI SEISAKUSHO CO.,LTD.

Business Details

With precision electronics manufacturers and automotive parts manufacturers as its primary customers, the company manufactures prototype products, mass-produced products, molds, robots, and more, leveraging diverse technologies such as mold design and manufacturing, sheet metal processing, machining, molding, and press processing. Its strength lies in an "integrated one-stop system" that completes everything from design to mass production in-house, contributing to customers' faster market entry. In addition to domestic facilities, the company has overseas consolidated subsidiaries in South Korea, Hong Kong, and China (Dongguan), and in the robotics field, it also provides comprehensive business commercialization support to startups.

Recent Overview

Revenue increased 11.7%, operating loss narrowed significantly, and operating CF turned positive

For the full year of FY2026 (ending March 2026), revenue was ¥6,093 million (up 11.7% year on year), and gross profit was ¥1,216 million (up 21.5% year on year). Reductions in SG&A expenses (from ¥1,522 million to ¥1,464 million) also contributed, and the operating loss narrowed significantly to ¥248 million from ¥520 million in the previous fiscal year. While non-operating income of ¥334 million was recorded, including ¥253 million in subsidy income, non-operating expenses of ¥200 million were also recorded, including a ¥109 million equity method investment loss, resulting in an ordinary loss of ¥113 million. Extraordinary income of ¥293 million (including a ¥138 million gain on sale of investment securities and a ¥75 million gain on changes in equity, etc.) secured profit attributable to owners of parent of ¥103 million. On the financial front, the term loan with financial covenants was fully repaid by the end of June 2025. Due to a rise in the market value of investment securities, valuation difference on available-for-sale securities increased by ¥759 million, expanding net assets to ¥6,267 million (up 16.0% year on year). The market value-based equity ratio rose to 200.7%.

Key Products

Growth Drivers

• Continuation of a gradual recovery trend in R&D and production for precision electronics manufacturers and semiconductor manufacturing equipment makers
• Stabilization of hobby-related orders and progress in developing new fields such as semiconductor manufacturing equipment
• Efficiency gains in R&D expenses through subsidy income and public funding (¥253 million in subsidy income was recorded as non-operating income for the full fiscal year)
• Cost reduction and improved gross profit margin (20.0% for the fiscal year) through higher manufacturing division utilization rates, organizational integration, and strengthened purchasing networks
• Expansion of contracted development and contracted manufacturing and increased earnings opportunities through cross-selling and comprehensive business commercialization support with startups
• Improved financial soundness and resolution of cash flow concerns following full repayment of the term loan with financial covenants at the end of June 2025
• Forecast of a return to profitability for the full FY2027 (ending April 2027) with operating profit of ¥177 million and ordinary profit of ¥227 million

Risks

• Continued risk of falling short of sales plans in robot and equipment-related products, as startups' transition to the mass production phase remains limited
• An operating loss continues to be recorded, raising material doubt about the company's ability to continue as a going concern (although it has been determined that no material uncertainty exists)
• Risk that delays in payment due to the time required to finalize amounts of public subsidies and grants could affect business results
• Impact on major customers' development and production appetite and raw material procurement from US trade policy and geopolitical risks (the situation in Ukraine and the Middle East)
• Continuation of intensifying competition and declining unit price trends in the precision electronics field
• Impact on valuation of investment securities and non-operating income/expenses from exchange rate and stock price fluctuations (equity method investment loss expanded to ¥109 million in the current fiscal year)
• Risk of profit skewing toward the second half, with cumulative results for the first half (through Q2) of FY2027 (ending April 2027) forecast at revenue of ¥2,576 million (down 4.8% year on year) and an operating loss of ¥536 million, indicating a significant loss in the first half