TESS Holdings Co., Ltd.
5074・Prime Market・Construction
Business
TESS Holdings Co., Ltd. originated in 1973 as an energy-saving equipment engineering business and currently operates two businesses: the "Engineering Business" and the "Energy Supply Business," positioning itself as an independent energy solutions company. In the Engineering Business, the company provides EPC for CGS, fuel conversion, utility equipment, and battery storage systems in both contract-based and development-type formats. In the Energy Supply Business, the company engages in the ownership, operation, and power sales of solar and biomass power plants (369.4MW held by consolidated subsidiaries), the on-site PPA model (51 projects, 57.8MW), Operation & Maintenance (O&M) (1,033 projects), electricity retail supply, and PKS fuel sales. The company's primary customer base consists of corporate clients such as manufacturers, hospitals, and commercial facilities, and it is listed on the Tokyo Stock Exchange Prime Market. The group is composed of 22 consolidated subsidiaries and 4 equity-method affiliates.
Business Model
The Engineering Business (net sales of ¥16,720 million) is centered on flow-type EPC revenue from order-based projects, with an order backlog of ¥22,876 million securing sales for future periods. The Energy Supply Business (net sales of ¥19,963 million) is a stock-type revenue stream centered on power sales income from the company's own power plants utilizing the FIT/FIP schemes, with a 94% O&M continuation rate and expanding on-site PPAs forming a stable revenue base. The two businesses function complementarily, constituting a one-stop solution in which EPC track record leads to orders for power plant development and O&M.
Company Strengths
For FY2025 (ended June 2025), the Engineering Business order backlog reached ¥22,876 million (up 134.4% year on year), while orders received also stood at a high level of ¥22,571 million (up 106.9% year on year). Against a backdrop of decarbonization needs, the scale of projects such as CGS and battery storage systems has been expanding, significantly improving revenue visibility for subsequent periods.
Power generation capacity held by consolidated subsidiaries increased by 137.6MW, from 231.8MW at the end of the previous fiscal year to 369.4MW at the end of the current fiscal year. The main factors were the consolidation of Fukuoka Miyako Mega Solar (approx. 67.0MW) as a subsidiary, the commencement of commercial operation of the Saga Imari Biomass Power Plant (46.0MW), and the addition of 22 on-site PPA projects totaling 22.7MW. This has expanded the stable earnings base backed by long-term FIT power sales contracts (extending to as late as 2044).
As of the end of June 2025, the number of O&M contracts provided reached 1,033 (of which 583 involve 24-hour remote monitoring), maintaining a retention rate of 94%. Backed by EPC know-how in energy-saving and renewable energy equipment accumulated since the company's founding in 1973, its ability to provide integrated support from equipment installation through to O&M and energy management underpins this high customer retention rate.
ENVALITH's Perspective
Performance Trend
For the cumulative nine months of FY2026 (ending March 2026)6, net sales were ¥37,444 million (up 39.8% year on year), operating income was ¥3,592 million (up 34.6%), ordinary income was ¥2,497 million (versus ¥225 million in the same period of the prior year), and net income attributable to owners of the parent was ¥1,263 million (up 105.0%). Looking at full-year results over the past five fiscal years, operating income peaked at ¥6,864 million in FY2023, followed by a sluggish period in FY2024 and FY2025. In the current period, however, the start of commercial operations at the Saga Imari Biomass Power Plant and the consolidation of Fukuoka Miyako Mega Solar as a subsidiary drove expansion in the Energy Supply Business (net sales of ¥21,001 million, up 40.2% year on year), while the derivative valuation loss recorded in the prior period (¥1,816 million) shrank to ¥120 million, resulting in substantial improvement in ordinary income and net income. The full-year forecast remains unchanged at net sales of ¥47,000 million, operating income of ¥3,600 million, and net income of ¥1,200 million. Depreciation expense surged from ¥3,246 million in the same period of the prior year to ¥5,264 million, and the increase in fixed costs associated with the operation of the biomass power plant is expected to affect profit levels from the second half onward.
Growth Strategy
Concentrating investment in three areas—grid-connected battery storage, FIP conversion, and biomass fuel—the company aims for operating profit of ¥13,400 million in FY2030.
The company is building up generation capacity through both FIT/FIP scheme-based power plants and the on-site PPA model, expanding stock-type power sales revenue. As of the end of March 2026, consolidated subsidiaries held 128 plants totaling 381.3MW, while on-site PPA reached 59 projects and 67.7MW, an increase of 12 projects and 12.9MW year on year.
The Saga Imari Biomass Power Plant, which commenced commercial operation in the current fiscal year, is driving the increase in Energy Supply Business sales. Stable procurement of PKS fuel and optimization of power generation efficiency are key to profitability. PKS fuel sales to parties outside the consolidated group were not recorded in the current fiscal year, and resuming external sales could become an additional revenue source.
The company continues to expand orders for battery storage system projects, which drove the increase in Engineering Business sales in the current fiscal year. Against the backdrop of the policy to make renewable energy a mainstay power source under the 7th Strategic Energy Plan, the company is capturing demand for grid stabilization, an expanding market, leveraging its own EPC track record and technological capabilities.
Through the buildup of renewable energy generation capacity, development of battery storage plants, and expansion of the biomass fuel business, the medium-term plan targets operating profit of ¥13,400 million in FY2030. The gap versus the FY2026 (ending March 2026) full-year forecast operating profit of ¥3,600 million is significant, and achieving the target will require substantial expansion of generation capacity and improvement in profit margins.
Last updated: July 17, 2026