ENVALITH
応用技術株式会社 logo

APPLIED TECHNOLOGY CO., LTD.

4356・Standard Market・Information & Communication

Official website
応用技術株式会社 logo
APPLIED TECHNOLOGY CO., LTD.4356

Business

Oyo Technology & Engineering Corporation is an independent IT services company founded in 1984. It operates two segments: Solution Services (net sales of ¥5,347 million) and Engineering Services (net sales of ¥2,107 million). The former provides in-house developed sales support, design support, and BIM-related solutions for the manufacturing and construction industries, while the latter offers disaster prevention, environmental, and construction informatization consulting based on data analysis and numerical simulation technology. Major customers include housing equipment manufacturers, building materials manufacturers, general contractors, and public institutions, with a basic policy of direct provision to domestic end users. The parent company is transcosmos inc. The company is listed on the Standard Market of the Tokyo Stock Exchange.

Business Model

The main revenue sources are contract development (Solution Services) and contract analysis (Engineering Services) based on the company's proprietary solutions and know-how. Since November 2024, the company has shifted software sales to an intermediary contract model, significantly reducing procurement costs and improving profit margins. In addition, the company aims to increase the proportion of recurring revenue by expanding subscription and SaaS services such as BooT.one and ΣSpace.E (Machi Supe). The company maintains a debt-free management policy, funding all capital needs with its own funds.

Company Strengths

With the transition of software sales to an intermediary contract from November 2024, cost of purchases decreased significantly, and cost of sales for FY2025 fell 11.5% year on year to ¥5,160 million. As a result, while net sales remained limited to ¥7,454 million (down 4.9% year on year), operating income increased 28.0% year on year to ¥1,200 million, achieving an operating margin of 16.1% (up 4.1 percentage points year on year).

The Ministry of Land, Infrastructure, Transport and Tourism made the application of BIM/CIM in directly-controlled construction projects the principle from FY2023, and published the "BIM/CIM Handling Guidelines" in March 2025. The Company has maintained steady order intake in BIM-related contract development, CIM utilization consulting, GIS support services, and other areas, directly linking policy-driven demand expansion to business opportunities.

Against a backdrop of intensifying natural disasters due to climate change, flood control, urban flood countermeasures, and water supply system seismic maintenance and management operations have remained solid. As FY2026 marks the first year of the "1st Medium-Term Implementation Plan for National Resilience," with expectations of expanded public investment, segment income for Engineering Services increased 22.1% year on year to ¥644 million.

ENVALITH's Perspective

Operating profit for the cumulative first quarter of FY2026 (ending December 2026) came in at ¥307 million (down 29.5% year-on-year), a significant decline. This resulted from a combination of multiple unprofitable projects arising in Solution Services and a temporary decrease in river disaster prevention-related work within Engineering Services. Against the full-year operating profit forecast of ¥1,100 million (down 8.3% year-on-year), the first-quarter progress rate stood at only 27.9%. The resolution of unprofitable projects from the second quarter onward and a recovery in river flood control work are the keys to achieving the full-year target.

For the cumulative first quarter of FY2026 (ending December 2026), the gross profit margin was 32.0% (down 3.5 percentage points from 35.5% in the same period of the previous year), and SG&A expenses were ¥286 million (up 9.7% from ¥260 million in the same period of the previous year), showing a notable deterioration on the cost side. Although cost of sales remained roughly flat year-on-year (¥1,260 million), the decline in revenue put pressure on the profit margin. Strengthening the management of unprofitable projects and controlling SG&A expenses are prerequisites for a medium-term recovery in profit margins.

Revenue in Engineering Services fell sharply to ¥562 million (down 14.0% year-on-year), primarily due to a temporary factor in which local government tender announcements were pushed back to April 2026 or later in connection with the application of new guidelines starting in fiscal 2026 (Reiwa 8). As an external factor, the start of application of new standards to small and medium-sized rivers could bring about a structural expansion in demand, but given the lead time from tender announcement to order receipt and revenue recognition, there is a risk that the contribution to full-year results could be pushed back to the third quarter or later.

Growth Strategy

Cultivating the toBIM, toDIM, and toCIM brands while expanding digital twin and SaaS offerings to build an ecosystem across the manufacturing, construction, and environmental fields

In addition to expanding services under the toBIM (including BooT.one) brand, the company is focusing on expanding orders for BIM related to facility design (mechanical, electrical, and piping). Inquiries have been increasing against the backdrop of labor shortages and productivity improvement needs in the construction industry, and the company aims to improve profitability while strengthening management of unprofitable projects.

The company aims to differentiate itself by providing services that integrate PLM Service (Peripheral Business Integration) as a core offering with related operations (sales, procurement, design, manufacturing, after-sales service, etc.). Orders for sales support solutions targeting housing equipment manufacturers and building materials manufacturers have remained steady, and the company aims to expand this into a core business going forward.

Riding the tailwind of the Ministry of Land, Infrastructure, Transport and Tourism's principle-based adoption of BIM/CIM and the publication of BIM/CIM handling guidelines, the company is working to expand sales of add-in packages such as Navismaster and to develop new products that contribute to the utilization of construction information technology. Sales of CIM utilization consulting services increased on a cumulative basis in the first quarter of FY2026 (ending December 2026), and initiatives are progressing.

The company is currently offering a cloud-based environmental simulation service utilizing PLATEAU, promoted by the Ministry of Land, Infrastructure, Transport and Tourism, free of charge for a limited period. Through functional enhancements, the company aims to expand its service offerings related to urban development. This is being cultivated as a new revenue source linked to the increase in orders for environmental assessment services.

With the application of new guidelines to small and medium-sized rivers beginning in FY2026 (Reiwa 8), the number of bid announcements from local governments is expected to increase from April 2026 onward. The company is also responding to the full-scale launch of flood risk map creation operations associated with the transition to urban-type inundation projections for Class A rivers, aiming to achieve recovery and expansion of Disaster Prevention Engineering Services.

Last updated: July 17, 2026