A&A Material Corporation

Business Details

The segment's main operations are the manufacture and sale of non-combustible building materials (calcium silicate board, non-combustible decorative boards for interior use, etc.) and the design and construction of steel frame fireproof coating work. The company expanded the scale of the business through M&A, acquiring Uniboard Co., Ltd. (low-pressure melamine decorative board) in October 2024 and Decor Co., Ltd. (decorative boards, building material coatings, decorative sheets) in April 2025. The domestic construction market is the main focus, with overseas exports also developed to Taiwan, South Korea, and China.

Recent Overview

Revenue increased 23.4% year on year driven by M&A effects, but profit declined 8.1% due to lower construction revenue and higher costs

In the Construction & Building Materials Business for FY2026 (ending March 2026), material sales revenue increased substantially to ¥17,988 million (up 39.0% year on year), mainly due to the consolidation of Decor Co., Ltd. (effective April 1, 2025), and overall segment revenue reached ¥23,067 million (up 23.4% year on year). On the other hand, construction revenue was limited to ¥5,078 million (down 11.7% year on year) due to a decrease in the number of projects and schedule delays in large-scale projects, and combined with rising costs for raw materials, fuel, labor, and logistics, segment profit declined to ¥2,253 million (down 8.1% year on year). Overseas exports to China, Taiwan, and South Korea all saw sales volumes fall below the previous year as construction markets in these regions remained sluggish.

Key Products

Growth Drivers

• Substantial increase in material sales due to the consolidation of Decor Co., Ltd. (decorative boards, building material coatings, decorative sheets) (up 39.0% year on year in FY2026, ending March 2026)
• Steady progress in generating synergies with Uniboard Co., Ltd., such as logistics cost reductions and new product development
• Market penetration and sales growth of high-value-added products such as "BEoNA®" across a wide range of applications including offices, retail stores, and residences
• Passing on cost increases through price revisions (implementation of price revisions in response to various cost increases)
• Continued pursuit of strategic M&A based on the 2026 Medium-Term Management Plan (business scale expansion and synergy creation)
• Business process reform and enhanced competitiveness through the development of a group-wide DX platform, to be operational from April 2026

Risks

• Decrease in construction revenue due to nationwide construction schedule delays (schedule delays and pushed-back completion timing for large-scale projects)
• Sluggish domestic sales of flagship products (Hylak Funen®, etc.) due to project postponements and reviews stemming from soaring construction costs
• Pressure on construction profit margins due to rising costs of raw materials, labor, and logistics
• Constraints on construction order intake and construction capacity due to a shortage of construction workers
• Decrease in overseas export sales volumes due to the prolonged real estate slump in China and sluggish construction markets in Taiwan and South Korea
• Risk of additional provisions for litigation losses related to construction asbestos lawsuits (multiple class actions pending) (balance of ¥155 million as of FY2026, ending March 2026)
• Risk of rising crude oil prices and petroleum-derived raw material price increases and procurement risk due to heightened tensions in the Middle East (not factored into earnings forecasts)