Soken Chemical & Engineering Co., Ltd.
4972・Standard Market・Chemicals
Business
Soken Chemical & Engineering was founded in 1948 as a specialty chemicals manufacturer, comprising a total of six companies: the parent company and five consolidated subsidiaries (three in China, one in Thailand, and one domestic). In its core Chemicals segment, the company manufactures and sells Adhesive Products, Fine Particle Products, Specialty Functional Materials Products, and Processed Products, centering on adhesives for polarizing plates used in liquid crystal displays (LCDs), while expanding into the automotive, information electronics, and life sciences fields. In the Equipment Systems segment, subsidiary Soken Technix handles Equipment & System Sales, Production System Engineering, and Heat Transfer Oil Import & Sales. Chemicals accounts for approximately 91% of net sales, and the company is advancing its global expansion with China, ASEAN, and India as key markets.
Business Model
In the Chemicals business, the company manufactures proprietary-technology products centered on acrylic adhesives at domestic and overseas production sites, selling directly and through trading company channels to LCD, automotive, and electronic component manufacturers. Trading company channels are also leveraged, with Sojitz Shanghai accounting for approximately 12% of sales. In the Equipment Systems business, the company handles the design, construction, and maintenance of Chemicals production facilities, capturing equipment demand both within and outside the group. R&D expenses of ¥1,465 million support the continuous market introduction of high-value-added products through technological differentiation, underpinning the earnings base.
Company Strengths
The company expanded adhesive production capacity for LCD applications at its Nanjing plant in China, achieving record-high sales in both FY2023 and FY2024. In FY2026 (ending March 2026), despite weak demand related to liquid crystal displays, the company maintained its market share through strengthened technical responsiveness in the China market. Sales of Adhesive Products reached ¥31,282 million, accounting for approximately 65% of consolidated sales and serving as the company's core product.
In FY2026 (ending March 2026), the company maintained high levels of operating margin at 12.9% and ordinary income margin at 13.0%. The equity ratio stood at 70.7%, indicating strong financial soundness, with cash and cash equivalents of ¥17,360 million. Operating cash flow generated was ¥5,659 million, and the company achieved ROA of 11.1% and ROE of 10.2%, meeting the targets of its medium-term management plan.
The company invested ¥1,465 million in research and development and maintained a research and development workforce of 100 employees. In addition to its four product lines of Adhesive Products, Fine Particle Products, Specialty Functional Materials Products, and Processed Products, the company is also promoting new business development in the medical, healthcare, and environmental energy fields. It has also engaged in collaboration and investment with startups, building a technological foundation aimed at creating next-generation business areas.
ENVALITH's Perspective
Performance Trend
In FY2026 (ending March 2026), revenue was ¥47,968 million (up 0.7% year on year), a marginal increase, while operating profit fell to ¥6,171 million (down 2.8%) and profit attributable to owners of parent decreased to ¥4,047 million (down 7.6%), both declines. Product price cuts in the Chinese market accompanying falling raw material prices, along with increases in personnel and other expenses, squeezed profits. Extraordinary losses included a valuation loss on investment securities of ¥213 million and a valuation loss on shares of affiliated companies of ¥100 million. Looking at performance over the past five fiscal years, results recovered sharply in FY2024 and FY2025 following a slump in FY2022 and FY2023, and FY2026 appears to represent a plateau phase. The operating profit margin remained at a high level of 12.9% (versus 13.3% in the previous fiscal year).
Growth Strategy
Business structure reform to reduce dependence on the China LCD market through expansion into India/ASEAN and creation of next-generation business domains
Promoting the establishment of new sales and production systems in the India/ASEAN market. Aiming to diversify risk from concentration on the China LCD market and capture growth in emerging markets. Acquisition of tangible fixed assets in FY2026 (ending March 2026) increased 87% year-on-year to ¥2,799 million, indicating accelerating capital expenditure.
Sales growth related to electronic components and a recovery in electronic materials applications in the China market led to a 4.3% year-on-year increase in sales of Specialty Functional Materials Products. Diversification of applications into information/electronics fields outside of LCD is progressing, contributing to the expansion of non-LCD revenue sources.
Promoting the development of non-acrylic products and application development that do not rely on existing acrylic-based adhesives, as well as establishing a technological foundation for biomass material and product development. Also pursuing new business creation through collaboration with startups in parallel. Aiming to strengthen R&D capabilities to enter new domains that have high affinity with existing businesses.
The conversion of the order backlog accumulated in the previous period into completed construction revenue was realized, resulting in Equipment Systems sales of ¥4,143 million (up 52.3% year-on-year) and segment profit of ¥179 million, turning profitable in FY2026 (ending March 2026). Continued high sales levels are expected depending on order trends for equipment-related construction.
Last updated: July 19, 2026