ENVALITH
大伸化学株式会社 logo

DAISHIN CHEMICAL CO.,LTD.

4629・Standard Market・Chemicals

Official website
大伸化学株式会社 logo
DAISHIN CHEMICAL CO.,LTD.4629

Business

Daishin Chemical Co., Ltd. is a specialist manufacturer of organic solvents (thinners) founded in 1952, listed on the Standard Market of the Tokyo Stock Exchange as a chemical products company. Serving a broad range of industries including paints, printing, automotive, chemical manufacturing, and pharmaceuticals, the company manages approximately 32,000 product types—including Lacquer Thinners and Synthetic Resin Paint Thinners, Printing Solvents, Special Thinners, and Single Solvents—through a database system, and has established a production and delivery framework capable of fulfilling made-to-order production and immediate delivery for orders as small as a single oil drum. Annual shipment volume reached 138,346 tons (FY2026, ending March 2026), with production carried out at two sites: the Koshigaya Plant (Saitama) and the Hyogo Plant. Major customers include leading companies in the paint and printing industries, led by the Toyo Ink Group (accounting for approximately 20.8% of net sales), and the company supplies its products through a nationwide network of approximately 1,000 sales distributors.

Business Model

The company entrusts product sales to approximately 1,000 agencies nationwide, while it itself specializes in product development, manufacturing, and quality control, adopting a division-of-labor business model. Its sources of competitive advantage are made-to-order manufacturing (including OEM) tailored to customer needs and an immediate-delivery system leveraging a database of approximately 32,000 product types. The cost-of-sales ratio is high at 86.1% (FY2026, ending March 2026), reflecting a low-margin, high-volume structure, but the company is working to improve profitability through efficient procurement of raw materials and rationalization of production and logistics. In addition, a recycling system that collects and reuses spent solvents as raw materials also forms part of the earnings base.

Company Strengths

The nationwide network of approximately 1,000 sales agents built since the company's founding in 1952 boasts the largest scale in the industry. Agents not only handle product supply but also serve a function of grasping and providing feedback on customer needs, forming the foundation for developing new users. This extensive sales network is one factor that enabled the company to maintain its own shipment volume at a 1.6% year-on-year increase even in an environment where overall paint industry shipment volume fell below the same period of the previous year.

Through a fully computerized build-to-order production system, the company has established a structure capable of same-day shipment of approximately 32,000 product types in units as small as a single petroleum can. This capability for high-mix, low-volume production is the result of years of accumulated pursuit of quality and customization, forming an entry barrier that is difficult for competitors to replicate in a short period. Production volume for FY2026 (ending March 2026) reached 138,404 tons, a 1.6% increase year-on-year.

As of the end of FY2026 (ending March 2026), the equity ratio stood at 66.7%, and interest-bearing debt was zero (making the cash flow to interest-bearing debt ratio incalculable), while cash and cash equivalents on hand reached ¥8,587 million. Operating cash flow secured ¥2,850 million, and the company maintains a policy of implementing capital expenditures within the range of operating cash flow. This financial foundation enables flexible responses even amid sudden changes in raw material market conditions.

ENVALITH's Perspective

In FY2026 (ending March 2026), revenue was nearly flat, down 0.3% year on year, but as raw material prices fell below the previous period's level as an external factor, the cost of sales ratio improved from 87.6% to 86.1%. Operating profit reached ¥1,170 million (up 46.4% year on year), and net income reached ¥889 million (up 51.2% year on year), representing a substantial increase in profit. This marks the strongest profit recovery since FY2022 (ended March 2022), confirming an improvement in the earnings structure.

Sales to the Toyo Ink Group amounted to ¥7,182 million (20.8% of total revenue), maintaining a high degree of concentration, and there remains a risk that changes in the group's procurement policy could directly affect business performance. In addition, the risk of a closure of the Strait of Hormuz due to worsening relations between the United States and Iran has become apparent, and management itself has explicitly identified difficulties in procuring Middle Eastern crude oil and naphtha, along with soaring prices, as the greatest concern for FY2027 (ending March 2027).

The company's forecast for FY2027 (ending March 2027) calls for revenue of ¥36,040 million (up 4.1% year on year), operating profit of ¥1,300 million (up 11.1%), and ordinary profit of ¥1,350 million (up 9.2%), representing an increase in both revenue and profit. However, net income is forecast to decline by 8.9% year on year to ¥810 million. Earnings per share is also expected to decrease to ¥177.04 (from ¥194.39 in the previous period), and attention should be paid to the structure in which an increased tax burden and fluctuations in extraordinary gains and losses are squeezing net income. The dividend will be maintained at ¥45, with a projected dividend payout ratio of 25.4%.

Growth Strategy

Strengthening the earnings base through new user development, diversification of raw material procurement, and rationalization leveraging AI/IT

Even in an environment where shipment volumes across the paint industry as a whole fell below the previous period, the company increased product shipment volume by +1.6% year on year, centered on new user development. The company plans to continue expanding sales by leveraging its nationwide network of approximately 1,000 distributors.

In response to the risk of difficulty in procuring Middle Eastern crude oil and naphtha, the company has positioned diversification of raw material procurement routes as its top priority. This will be pursued in conjunction with agile sales price revisions that respond promptly to market price fluctuations, with the aim of stabilizing earnings.

The company is promoting thorough rationalization across each process of procurement, production, and logistics by leveraging the latest AI and IT technologies. Intangible fixed assets (other) increased significantly from ¥6 million in the previous period to ¥314 million, indicating that system investment is now in full swing.

The company is advancing new business development and new product development toward sustainable growth, aiming to build a robust earnings base. It also plans to promote human resource development and organizational revitalization in parallel, thereby enhancing its ability to respond to an uncertain business environment.

Last updated: July 19, 2026