DAISHIN CHEMICAL CO.,LTD.

Business Details

The Daishin Chemical Group operates in the single segment of the Chemical Products Business as a specialist manufacturer of organic solvents. It manufactures products such as Lacquer Thinners and Synthetic Resin Paint Thinners, Printing Solvents, and Single Solvents under a high-mix, low-volume production system, and supplies them to a wide range of industries including paint, printing, automotive, and pharmaceuticals through a nationwide network of approximately 1,000 sales agents. Its major customer is the Toyo Ink Co., Ltd. group (20.8% of net sales). The company operates solely in Japan and has no overseas sales.

Recent Overview

Operating profit rose sharply by 46.4% year on year, driven by higher shipment volumes and lower raw material prices

In FY2026 (ending March 2026), amid an overall decline in shipment volumes across the paint industry compared to the same period of the prior year, the company achieved product shipment volume of 138,346 tons (up 1.6% year on year) through sales expansion centered on developing new users. Net sales declined slightly to ¥34,606 million (down 0.3% year on year) due to lower selling prices, but gross profit expanded to ¥4,797 million (up 11.3% year on year) as raw material prices fell below the level of the same period of the prior year. The company achieved substantial profit growth across the board, with operating profit of ¥1,170 million (up 46.4% year on year), ordinary profit of ¥1,236 million (up 41.3% year on year), and net profit of ¥889 million (up 51.2% year on year). Looking ahead, the greatest concern for the coming periods is the risk of difficulty in procuring, and sharp price increases for, Middle Eastern crude oil and naphtha stemming from a potential closure of the Strait of Hormuz triggered by worsening relations between the United States and Iran.

Key Products

Growth Drivers

• Improved gross profit margin due to lower raw material prices (cost of sales ratio: 87.6% in the prior period → 86.1% in the current period)
• Increase in product shipment volume driven by sales expansion centered on developing new users (up 1.6% year on year)
• Growth in Special Thinners (up 3.0% year on year) and expansion of merchandise (Single Solvents and other products)
• High-mix, low-volume production and prompt delivery system leveraging a nationwide network of approximately 1,000 sales agents
• Strengthening of the earnings base through rationalization of procurement, production, and logistics using AI and IT technologies
• Improved profit margins through correction of selling prices and promotion of efficient raw material purchasing

Risks

• Risk of difficulty in procuring, and sharp price increases for, Middle Eastern crude oil and naphtha stemming from a potential closure of the Strait of Hormuz triggered by worsening relations between the United States and Iran
• Risk of rising import costs and price increases due to a weaker yen
• Risk of demand decline due to sluggish shipment volumes across the paint industry as a whole
• Downward pressure on net sales from declining selling prices (net sales declined slightly in the current period despite an increase in shipment volume)
• Risk of sales concentration in the Toyo Ink Co., Ltd. group (20.8% of net sales)
• Risk of demand decline stemming from a global economic slowdown and U.S. tariff policy