ENVALITH
神東塗料株式会社 logo

SHINTO PAINT COMPANY, LIMITED

4615・Standard Market・Chemicals

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神東塗料株式会社 logo
SHINTO PAINT COMPANY, LIMITED4615

Business

Shinto Paint Co., Ltd. is a long-established paint manufacturer founded in 1901 and incorporated under its current name in 1933. As a consolidated subsidiary of Dai Nippon Toryo Co., Ltd. (ownership ratio 50.1%), it operates two segments: the Paints Business and the Chemical Products Business. In the Paints Business, the company offers a wide range of products including electrodeposition coatings, powder coatings, industrial coatings, anti-corrosion coatings, automotive paints, and track materials, supplying diverse customers across industrial, infrastructure, automotive, and construction sectors. The Chemical Products Business is dedicated to contract manufacturing of epidemic prevention agents and bactericides for Sumika Enviro-Science Co., Ltd. The company has 7 domestic subsidiaries and 5 affiliated companies, and also maintains overseas bases in Thailand, Indonesia, and Taiwan. Consolidated net sales for FY2025 (ended March 2025) were ¥21,481 million.

Business Model

In the core Paints Business, in-house manufactured synthetic resin paints and other products are sold through subsidiary sales networks (Shinto Family, Kyushu Shinto, etc.), while also undertaking contract manufacturing for Japan Carboline Co., Ltd. and Shinto Axalta Coating Systems. The Chemical Products Business consists solely of contract manufacturing for Sumika Enviro-Science, a structure that bears no raw material procurement risk. The company treats the operating margin as its most important indicator, aiming to improve profitability through continuous price revisions and fixed cost reductions. Royalty income based on technical assistance agreements also serves as a complementary revenue source.

Company Strengths

Since its founding in 1901, the company has over 120 years of manufacturing track record and holds a product lineup spanning more than 10 fields, including electrodeposition paints, powder paints, anti-corrosion paints, and track materials. It has obtained ISO9000S (1997) and ISO14001 (2001) certifications, and also provides technical guidance and licenses royalties to overseas affiliated companies in Thailand, Indonesia, and Taiwan, confirming external recognition of its technology.

In March 2025, the company became a consolidated subsidiary of Dai Nippon Toryo Co., Ltd., and in December 2025 concluded a memorandum of business alliance. Under a business alliance committee and subcommittee structure, a framework has been established to promote joint procurement, production optimization, utilization of the sales network, and new product development through technological synergies. This enables new customer acquisition leveraging Dai Nippon Toryo's sales network.

On December 22, 2025, the company concluded a syndicated commitment line agreement (contract amount ¥6,000 million, term through December 2028) arranged by MUFG Bank. Ten financial institutions participate with no financial covenants attached, mitigating liquidity risk to a certain extent as a measure to address material events related to the going concern assumption.

ENVALITH's Perspective

In FY2026 (ending March 2026), the company achieved increased revenue and profit, with net sales of ¥21,481 million (up 3.5% year on year) and operating profit of ¥255 million (up 10.8% year on year), marking operating profitability for a second consecutive period. However, as a result of recording an impairment loss of ¥552 million related to the sale of welfare facilities as an extraordinary loss, net loss attributable to owners of the parent expanded significantly to ¥593 million from ¥59 million in the previous period, marking a bottom-line loss for a fifth consecutive period. While the extraordinary loss can be considered one-off in nature, retained earnings have declined to ¥566 million, leaving little financial cushion.

Although the note on going concern assumptions was determined to be "not applicable," disclosure of material events continues. A damages lawsuit totaling ¥703 million related to inappropriate quality conduct (of which ¥670 million was filed by Haz Co., Ltd.) is ongoing, and there is a risk that additional compensation costs may arise depending on the outcome of future mediation and litigation. In addition, the balance of interest-bearing debt of ¥5,100 million, including short-term borrowings of ¥5,068 million, remains at a high level, raising concerns that rising interest rates could increase financial expenses and pressure earnings.

The earnings forecast for FY2027 (ending March 2027) anticipates net sales of ¥19,000 million (down 11.6% year on year) and operating profit of ¥200 million (down 21.7% year on year), a substantial decrease in both revenue and profit. The forecast assumes a domestic naphtha price of ¥64,000/kl, but was prepared before the impact of the situation in the Middle East, leaving upside risk to raw material prices. On the other hand, ordinary profit is forecast to increase to ¥450 million (up 14.3% year on year), premised on the continued contribution of equity-method income. Trends in sales to Daito Kentaku Partners Co., Ltd. (¥4,824 million in FY2026 (ending March 2026)) hold the key to overall performance.

Growth Strategy

Fundamental improvement of the earnings structure through realization of alliance synergies with Dai Nippon Toryo, price revisions, and production rationalization

Aiming to realize synergy effects in technology, procurement, and sales at an early stage through the business alliance with Dai Nippon Toryo Co., Ltd. The company has set a target of securing profit attributable to owners of parent of ¥200 million in FY2026 (ending March 2027), and is now at a stage where quantitative manifestation of the alliance effects is being tested.

Continuing to reduce fixed costs by promoting production rationalization, among other measures. In FY2026 (ending March 2026), total selling, general and administrative expenses were ¥3,367 million (a reduction of ¥58 million from ¥3,425 million in the previous period), contributing to the improvement in operating income. The company aims to improve profitability by continuing to improve its cost structure even amid persistently high raw material prices.

Continuously implementing sales price revisions in response to rising raw material prices. In the Automotive Paints field in FY2026 (ending March 2026), despite a decline in shipment volume, revenue increased due to the effect of price revisions. The company has stated a policy of responding flexibly to future raw material price fluctuations through sales price revisions and other measures.

All certification suspensions related to the quality impropriety identified in FY2022 (ended March 2022) have already been lifted. The company continues to work on strengthening its quality control system. A damages lawsuit totaling ¥703 million remains pending, and early resolution of the mediation and litigation is an important issue from the standpoint of reducing financial risk.

Concluded a syndicated commitment line agreement on December 22, 2025, strengthening the response to liquidity risk. The company aims to stably manage its high level of debt structure, with interest-bearing debt of ¥5,100 million including short-term borrowings of ¥5,068 million.

Last updated: July 19, 2026