ENVALITH
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Environment Friendly Holdings Corp.

3777・Growth Market・Information & Communication

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Environment Friendly Holdings Corp.3777

Business

Kankyo Friendly Holdings Inc. traces its origins to a software company founded in 1995 and changed to its current company name in April 2024. It is a holding company listed on the TSE Growth Market. It currently operates three segments: the Resources & Energy Business (solar power generation, energy storage, biomass, and asset management), the Reuse Business (precious metal buying and selling, and web application development), and the Environmental Business (multi-story parking, building maintenance, construction, and real estate). The company consists of 10 consolidated subsidiaries and adopts the 4Rs (Renewable, Reuse, Recycle, Reduce) as its basic management policy, with its core philosophy being the creation of a sustainable living environment. In FY2025 (ending December 2025), the company undertook a fundamental review of its business portfolio, withdrawing from the low-profitability, high-risk iPhone resale business and shifting toward a profitability-focused business structure.

Business Model

In the Resources & Energy Business, the main revenue sources are power sales income from investments in solar power plants and asset management (AM) fees from operating third-party power plants on an outsourced basis. In the Reuse Business, the company conducts on-site purchasing and sales of high-value precious metals such as gold and platinum, funded by consumption tax refunds, while also engaging in contract software development in parallel. The Environmental Business is responsible for stable revenue from multi-story parking lot maintenance contracts and new construction orders. From FY2026 (ending December 2026), a fund circulation model will also be added through "RECrowd No. 1," a crowdfunding platform specializing in renewable energy.

Company Strengths

In FY2025 (ending December 2025), order intake for the asset management business related to solar power plants achieved a 46.1% increase year on year. Owing to the accumulation of new business commission revenue and management fee income, segment profit turned positive at ¥150 million, up from a loss of ¥16 million in the previous period. An order backlog of ¥118 million offers scope for contribution to sales in the next period.

Following the withdrawal from the iPhone resale business, net sales declined sharply to ¥1,371 million (down 92.0% year on year); however, the elimination of low-profitability, high-risk transactions led to a turnaround to profitability, with operating profit of ¥110 million (versus an operating loss of ¥54 million in the previous period) and ordinary profit of ¥109 million. The shift toward profitability-focused business operations is reflected in these figures.

In the Reuse Business, net sales fell sharply to ¥329 million (down 97.9% year on year), while segment profit reached ¥118 million (up 118.1% year on year). The launch of an on-site precious metal buying and selling business funded by consumption tax refunds has advanced the shift toward a high-profitability portfolio, and an order backlog of ¥1,813 million is expected to contribute to sales in the next period.

ENVALITH's Perspective

Revenue for Q1 FY2026 (ending December 2026) was ¥189 million (down 42.8% year on year), with an operating loss of ¥13 million, an ordinary loss of ¥37 million, and quarterly net loss attributable to owners of the parent of ¥14 million, marking deterioration at every profit stage. In addition to the deconsolidation of Ailes Corporation (formerly the Environmental Business; prior-year quarter revenue of ¥122 million), there was a sharp decline in commission income from the Green Finance Business (down 70.9% year on year) and upfront costs incurred in the Green Energy Business. Transitional costs associated with the restructuring of the business portfolio have been concentrated in this period, and the timing of a recovery in earnings will be a key focus for investment decisions.

The consolidated earnings forecast for FY2026 (ending December 2026) remains undetermined, as the company deems a reasonable calculation difficult. The Green Digital Business (Green Coin Mining) is still in its launch stage, with zero revenue and zero profit. The timing and scale of commercialization for the Perovskite Solar Cell Business also remain undecided. As an external factor, the structure is such that trends in the cryptocurrency market, fluctuations in electricity prices, and renewable energy policy trends have a significant impact on performance, and poor visibility into earnings is expected to continue. Investors are being asked to make investment decisions without a quantitative earnings outlook.

In Q1 FY2026 (ending December 2026), selling, general and administrative expenses were ¥191 million, exceeding revenue of ¥189 million, a structure that consumed the entire gross profit of ¥178 million. Additionally, interest expenses surged from ¥0.09 million in the same quarter of the prior year to ¥16 million, reflecting the emergence of interest burden related to long-term borrowings of ¥1,638 million (including the portion due within one year). There is a risk that changes in the interest rate environment could directly affect financial expenses as an external factor. With the addition of a provision for doubtful accounts of ¥13 million (non-operating expenses) associated with the transfer of Ailes Corporation, the ordinary loss expanded to ¥37 million.

Growth Strategy

Establishing the earnings foundation for the four GX ecosystem businesses, and expanding overseas and into new areas through the Korean solar power business and Green Digital Business

The company continues to build up electricity sales revenue from domestic solar power plants while constructing a local production, local consumption model for renewable energy through collaboration with the Energy Storage Business. For perovskite solar cells, work continues on collaboration with local governments, accumulation of demonstration data, and deployment in port and coastal areas. The timing and scale of commercialization remain undetermined.

On May 11, 2026, consolidated subsidiary EF Investment made three SPCs engaged in the Korean solar power business into subsidiaries, at an acquisition cost of KRW 201,000 thousand. This is the first overseas deployment under the GX Ecosystem strategy. The amount of goodwill is currently undetermined.

Subscriptions for "RECrowd No. 1," a crowdfunding product specializing in renewable energy, began in February 2026. The company is proceeding with the origination of AM-entrusted deals and reviewing the fee structure to restore fee income. In Q1, the segment posted a loss of ¥16 million, remaining sluggish, making the origination of follow-on deals an urgent priority.

The company is advancing discussions, business scheme development, and profitability verification toward commercializing the Green Coin Mining Business, which utilizes electricity derived from renewable energy. In Q1, both revenue and profit were zero. The business carries inherent risk in that cryptocurrency market trends and electricity price fluctuations directly affect its profitability.

The company is shifting its product mix toward higher-value-added items such as gold and platinum, centered on inventory reduction, achieving segment profit of ¥83 million in Q1. Diversification is also underway through the Plastic-to-Oil Business and the Vehicle-Mounted Solar Business, among others. The change to net presentation of Metal Reuse Business transactions compresses reported revenue but improves the profit margin.

Last updated: July 17, 2026