TESS Holdings Co., Ltd.
5074・Prime Market・Construction
Engineering Business
Core flow-type revenue business providing EPC for energy-saving and renewable energy equipment
| Period | Current | Previous | Change |
|---|---|---|---|
| Segment revenue (external customers) - cumulative Q3 FY2026 (ending June 2026) | ¥16,442 million | ¥11,811 million (cumulative Q3 FY2025, ended June 2025) | ↑ |
| Segment profit - cumulative Q3 FY2026 (ending June 2026) | ¥593 million | ¥775 million (cumulative Q3 FY2025, ended June 2025) | ↓ |
| Revenue including inter-segment sales - cumulative Q3 FY2026 (ending June 2026) | ¥16,447 million | ¥13,199 million (cumulative Q3 FY2025, ended June 2025) | ↑ |
| Goods transferred at a point in time (revenue breakdown) - cumulative Q3 FY2026 (ending June 2026) | ¥1,829 million | ¥1,000 million (cumulative Q3 FY2025, ended June 2025) | ↑ |
| Goods transferred over time (revenue breakdown) - cumulative Q3 FY2026 (ending June 2026) | ¥14,612 million | ¥10,811 million (cumulative Q3 FY2025, ended June 2025) | ↑ |
Business Details
Provides EPC (Engineering, Procurement, and Construction) for energy-saving equipment such as cogeneration systems, fuel conversion equipment, and utility equipment, as well as renewable energy equipment such as solar, biomass, and battery storage systems. Operates in two formats: the "contract-based" format in which EPC is contracted from customers, and the "development-type" format in which the Group leads the entire development process from land acquisition. This is a flow-type business that builds a complementary relationship with the Energy Supply Business (stock-type).
Recent Overview
Contract-based EPC (battery storage systems) drove revenue up 39.2% year on year, but profit fell 23.4%
In the cumulative third quarter of FY2026 (ending March 2026) (July 2025 to March 2026), Engineering Business revenue increased significantly to ¥16,442 million (up 39.2% year on year). In the contract-based format, an increase in battery storage system projects contributed, while the number of energy-saving equipment (CGS, fuel conversion, utility equipment) projects declined slightly. Development-type EPC had no new projects in the period, resulting in no sales recorded. Segment profit decreased to ¥593 million (down 23.4% year on year), with profit margin declining despite the increase in revenue.
Key Products
Growth Drivers
- Expansion of project scale for energy-saving equipment (CGS, fuel conversion, utility equipment) EPC amid growing decarbonization needs
- Increase in EPC orders due to the expanding adoption of battery storage systems (grid-connected and commercial/industrial), driving revenue growth in the current period
- Capturing demand for FIT solar power plants converting to FIP plus the addition of battery storage systems
- Acceleration of renewable energy equipment investment driven by policy support such as the 7th Strategic Energy Plan (approved by the Cabinet in February 2025) and the GX2040 Vision
- Medium- to long-term expansion of capital investment demand toward the goal of a 40-50% renewable energy ratio in the domestic power generation mix by FY2040 (ending March 2041)
Risks
- Risk of revenue fluctuation inherent to flow-type businesses, whereby development-type EPC revenue is discontinuous depending on the presence of projects (development-type revenue was zero in the current period)
- Despite a 39.2% year-on-year increase in revenue, segment profit decreased by 23.4%, indicating a risk of declining profit margins due to rising construction costs and other factors
- Risk of rising construction costs due to surging prices of materials and energy
- Risk of increased procurement costs due to the continued depreciation of the yen
- Risk of fluctuation in demand for renewable energy equipment EPC due to revisions to the FIT/FIP system or declines in fixed purchase prices
- Risk of constraints on order fulfillment capacity due to a shortage of engineering personnel and difficulty in hiring
Last updated: March 4, 2026