RENT CORPORATION

Business Details

A semi-wide-area major operator engaged in comprehensive rental of industrial machinery, construction machinery, industrial vehicles, and related equipment. It maintains a network of sales offices both domestically and overseas, and is characterized by a customer base in which approximately 59% consists of manufacturing, transportation, public plants, and other non-construction industries. It seeks differentiation through its high-value-added "Value Plus Service," built around the themes of environment, safety, and efficiency, and has also expanded overseas into Thailand, Indonesia, and Vietnam. In FY2026 (ending May 2026), the company achieved revenue of ¥52,945 million (up 7.9% year on year) and operating profit of ¥4,382 million (up 12.2% year on year).

Recent Overview

Achieved higher revenue and profit in FY2026 (ending May 2026); strengthened financial and business foundations through IPO and M&A

In FY2026 (ending May 2026), the company achieved revenue of ¥52,945 million (up 7.9% year on year), operating profit of ¥4,382 million (up 12.2% year on year), and profit attributable to owners of parent of ¥2,901 million (up 16.1% year on year), recording increases at every profit level. On June 30, 2025, the company listed on the Standard Market of the Tokyo Stock Exchange, with the issuance of new shares increasing both capital stock and capital surplus by ¥1,248 million each. The company expanded its scope of consolidation by making Rent Vietnam (Vietnam) a wholly owned subsidiary, acquiring Kanagawa Sekiyu Hanbai as a subsidiary (acquisition consideration of ¥1,500 million), and making PT. Rent Indonesia Asia a wholly owned subsidiary. On the other hand, operating cash flow fell sharply to ¥410 million from ¥1,997 million in the prior period, due in part to a decrease in trade payables (¥3,195 million). Interest expense increased to ¥639 million (from ¥465 million in the prior period), and the balance of interest-bearing debt also expanded. For FY2027 (ending May 2027), the company forecasts revenue of ¥58,000 million (up 9.5% year on year) and operating profit of ¥4,950 million (up 12.9% year on year).

Key Products

Growth Drivers

• A solid demand environment in which overall construction investment is trending above the previous year, driven by increases in private civil engineering investment and public building/civil engineering investment, with construction investment projected to increase 5.4% in fiscal 2026
• Increases in disaster prevention/mitigation and aging-infrastructure countermeasure work based on the National Resilience Basic Plan, as well as expanding capital investment demand for semiconductor plants, EV battery plants, renewable energy facilities, data centers, and logistics facilities
• Continued expansion of Value Plus Service revenue (¥6,866 million in FY2025, ended May 2025, results, 15.1% of revenue), driving higher value addition and differentiation from competitors
• Planned expansion of rental asset holdings (net owned rental assets of ¥19,898 million and net leased assets of ¥8,180 million in FY2026, ending May 2026) and promotion of appropriate rental pricing
• Expansion of the ASEAN business and strengthening of the domestic maintenance system through the full subsidiarization of Rent Vietnam and PT. Rent Indonesia Asia, and the subsidiarization of Kanagawa Sekiyu Hanbai
• Enhanced capital-raising capacity and greater name recognition and creditworthiness following listing on the Standard Market of the Tokyo Stock Exchange (June 30, 2025)
• Productivity improvements and development of new business areas through digital- and AI-driven business development and operational reform

Risks

• Risk that persistently high construction material prices and labor shortages could delay construction starts and lead to revisions of capital investment plans, dampening demand
• Increased interest expense due to rising interest rates (¥639 million in FY2026, ending May 2026, up 37.3% year on year) and a high level of interest-bearing debt (total short- and long-term borrowings of ¥28,365 million and lease obligations of ¥8,935 million)
• Risk that increased depreciation expense (¥8,714 million in FY2026, ending May 2026) associated with large-scale capital investment in rental assets could pressure operating cash flow (operating cash flow shrank sharply to ¥410 million in FY2026, ending May 2026)
• Foreign exchange risk in overseas (ASEAN) operations, and downside economic risk stemming from changes in U.S. trade policy, Middle East conditions, and other factors
• Intensifying competition and pricing pressure due to increasing oligopolization within the rental industry
• Obligation to comply with financial covenants attached to syndicated loans and other borrowings (maintenance of net assets and avoidance of ordinary losses for two consecutive periods)
• Goodwill amortization burden and integration risk associated with expanding the scope of consolidation through M&A (including ¥460 million of goodwill from Kanagawa Sekiyu Hanbai, amortized over 16 years, etc.)
• Risk that constraints on additional fundraising capacity could arise given a relatively high level of financial leverage, with an equity ratio of 29.3%