ENVALITH
大日精化工業株式会社 logo

Dainichiseika Color & Chemicals Mfg.Co.,Ltd.

4116・Prime Market・Chemicals

Official website
大日精化工業株式会社 logo
Dainichiseika Color & Chemicals Mfg.Co.,Ltd.4116

Business

Dainichiseika Color & Chemicals Mfg. Co., Ltd. is a functional materials manufacturer founded in 1931, supplying products centered on pigments, colorants, resin compounds, synthetic resins, and printing inks to a wide range of industries including automotive, information/electronics, packaging, and building materials. The company operates a group structure of 24 companies at home and abroad, with manufacturing and sales bases deployed in Thailand, India, Taiwan, Indonesia, China, Italy, the United States, and elsewhere. Based on three core technologies—organic/inorganic synthesis and pigment processing technology, dispersion processing technology, and resin synthesis technology—the company develops and supplies high-value-added products such as pigments and dispersions for liquid crystal displays, semiconductor-related materials, and environmentally friendly inks, aiming to become an

Business Model

Starting from three core technologies—pigment treatment, dispersion processing, and resin synthesis—the company develops products by combining customer needs with seeds from open innovation, manufactures to forecast at domestic and overseas production sites, and sells to diverse industries. Of net sales of ¥124,294 million (FY2026 (ending March 2026)), Color & Functional Products accounts for approximately 55%, and the company secures an operating margin of 6.1% through price pass-through and profitability improvements for high-value-added products.

Company Strengths

The company has accumulated three core technologies—organic/inorganic synthesis and pigment processing technology, dispersion processing technology, and resin synthesis technology—since its founding in 1931. Technology-driven differentiated products, such as expanded adoption of new color filter pigments for liquid crystal displays and new adoption of carbon nanotube dispersions for semiconductors, drove the increase in revenue and profit in FY2026 (ending March 2026) (Color & Functional Products operating profit up 32.1% year on year).

The company has manufacturing and sales bases in Thailand, India, Taiwan, Indonesia, China, Italy, the United States, and other locations, operating under the basic policy of "local production for local consumption." In FY2026 (ending March 2026), local subsidiaries in Thailand, India, and Taiwan performed well, and the Indonesian subsidiary also regained business rights after a period of intensified competition. This multi-site structure serves as a foundation for dispersing region-specific risk while capturing growth opportunities.

At the end of FY2026 (ending March 2026), the equity ratio stood at 67.5% (up 2.5 percentage points year on year), interest-bearing debt was ¥18,705 million, and the D/E ratio was an extremely low 0.13x. The company has also secured liquidity through a total of ¥6,500 million in commitment line agreements with four partner banks. This high level of financial soundness supports the company's capacity for growth investments, such as capital expenditure and M&A, under its medium-term management plan.

ENVALITH's Perspective

In FY2026 (ending March 2026), net sales were ¥124,294 million (down 0.4% year on year), a slight decline, while operating profit rose to ¥7,610 million (up 8.6% year on year), improving the operating margin to 6.1% (from 5.6% in the previous fiscal year). The main driver was a decline in the cost-of-sales ratio (from 79.8% to 79.1%), reflecting efforts to improve profitability in the numbers. On the other hand, net income declined to ¥8,101 million (down 21.3% year on year), but this reflects the absence of a one-time gain of ¥7,761 million from the sale of the former Kawaguchi manufacturing site recorded in the previous fiscal year; on an ordinary income basis, the underlying trend of profit growth continues, which should be positively assessed.

The consolidated earnings forecast for FY2027 (ending March 2027) projects net sales of ¥126,600 million (up 1.9% year on year), operating profit of ¥8,400 million (up 10.4% year on year), and ordinary income of ¥9,500 million (up 11.9% year on year), indicating higher sales and profit. However, the effects of the business portfolio review, domestic production and sales efficiency improvements, and site reorganization described in the "Notice Concerning Implementation of Business Structure Reform" disclosed on May 15, 2026, have not been incorporated into the earnings forecast, leaving uncertainty in both upside and downside directions. In addition, raw material procurement and pricing risks associated with the deteriorating situation in the Middle East have similarly not been reflected.

The Polymer & Coating Materials segment recorded net sales of ¥24,132 million (down 4.8% year on year) and operating profit of ¥2,587 million (down 17.7% year on year) in FY2026 (ending March 2026), a decline in both sales and profit. The main cause was sluggish domestic and overseas demand for Urethane Resin due to weak sales of key vehicle models in which it is adopted, and the FY2027 (ending March 2027) forecast also anticipates "a slight decline due to continued weak sales of the vehicle models in which it is adopted." As an external factor, the segment's dependence on automotive market demand trends is unlikely to change in the short term, making the timing of its recovery a key factor for overall performance. This contrasts sharply with the strong performance of Color & Functional Products, whose operating profit rose 32.1%.

Growth Strategy

Aiming to become an excellent company in the functional materials field through three pillars: technology leadership, overseas expansion, and ESG management

Under the three-year medium-term management plan launched in April 2024, the company is advancing business portfolio review, streamlining of domestic production and sales, and reorganization of business sites. In FY2026 (ending March 2026), the company achieved an operating margin of 6.1%, putting it on an improvement trajectory. In May 2026, the company disclosed the implementation of business structure reforms, accelerating the transformation of its earnings structure from the next fiscal year onward.

The company is systematically proceeding with the sale of strategic shareholdings, recording a gain on sale of investment securities of ¥2,812 million as extraordinary income in FY2026 (ending March 2026). Proceeds from the sale of ¥3,408 million were reflected in cash flow. Due to the rise in market value of held shares, the balance of investment securities increased to ¥20,630 million, and there remains room for further sales going forward.

The company's policy is a total payout ratio of 50% or more during the medium-term management plan period. In FY2026 (ending March 2026), the company achieved an annual dividend of ¥220 (ordinary dividend of ¥190 plus special dividend of ¥30), with a dividend payout ratio of 46.5%. The company also carried out ¥1,114 million in share buybacks. Following the 1-for-4 stock split in April 2026, the company has set an annual dividend of ¥55 (forecast) to expand its investor base.

Local subsidiaries in Thailand, India, Taiwan, and Indonesia performed well in FY2026 (ending March 2026). Sales to Asia reached ¥25,088 million. The Indonesian subsidiary recovered its competitiveness in the second half and turned favorable. For FY2027 (ending March 2027), the company expects overseas business to remain solid, supported by an increase in environmentally friendly water-based flexo inks, among other factors.

The company positions the expansion of adoption of new pigment and dispersion products for liquid crystal displays, as well as growth in pigments and dispersions for inkjet applications in industrial and commercial printing, as key growth drivers. Expenditure on acquisition of intangible fixed assets surged to ¥1,081 million (compared to ¥232 million in the previous fiscal year), reflecting accelerating investment in software and technology development.

Last updated: July 19, 2026