TOKYO TEKKO CO., LTD.
5445・Prime Market・Iron & Steel
Business
Tokyo Steel Manufacturing, founded in 1939 with its head office and plant in Oyama City, Tochigi Prefecture, is an electric-furnace steelmaker specializing in steel bars and rebar. Its core business is the manufacture and sale of Rolled Steel Bars for General Structure (Small Bars) and reinforcing bars for concrete based on JIS standards, and it offers engineering services combining its proprietary screw-thread rebar "Neji Tekkon" with Mechanical Rebar Splicing Joints to propose labor-saving and rationalization solutions for construction sites. The group includes 8 consolidated subsidiaries and 1 equity-method affiliate, and also operates peripheral businesses such as freight transportation and equipment maintenance. Its major customers are steel trading companies such as Itochu Marubeni Steel, Hanwa, and MM Kenzai, with the top three companies accounting for approximately 79% of net sales. The company is listed on the Prime Market of the Tokyo Stock Exchange.
Business Model
The company produces steel bars via electric-furnace steelmaking using steel scrap as the primary raw material, and sells them to construction companies through trading companies. The core of profitability lies in securing price premiums by expanding sales of high value-added products—Neji Tekkon and Mechanical Rebar Splicing Joints, both proprietary specifications—rather than general-purpose steel bars. Profit margins are governed by the management of the metal spread, the difference between product prices and raw material (steel scrap) prices, and the Steel Business segment maintained a profit margin of 16.5% in FY2026 (ending March 2026).
Company Strengths
Neji Tekkon, an in-house developed threaded rebar, is a proprietary technology that obtained Building Center evaluation certification in 1983, and has become established in the construction industry as a labor-saving construction method combined with mechanical rebar splicing joints. In FY2026 (ending March 2026), the Steel Business segment recorded a profit margin of 16.5%, maintaining higher profitability compared to general-purpose bar steel manufacturers.
As of the end of FY2026 (ending March 2026), total net assets stood at ¥63,416 million and total liabilities at ¥17,033 million, resulting in an equity ratio of approximately 78.8%, indicating an extremely sound financial structure. The company has also established a total of ¥12,000 million in commitment lines with financial institutions, ensuring stability and flexibility in fund procurement.
In 2018, the company made Ito Seitetsujo Co., Ltd. an equity-method affiliate and concluded a capital and business alliance. Ito Seitetsujo is utilized as a production base to supplement the head office plant (Oyama), where production capacity is becoming tight, promoting the expansion of Neji Tekkon production. In September 2023, the company also established JOTS Co., Ltd. (Sanjo City, Niigata Prefecture), further diversifying its production and supply system.
ENVALITH's Perspective
Performance Trend
After bottoming out in FY2022 (ending March 2022) with net sales of ¥66,089 million and an operating loss of ¥192 million, the company recovered sharply, achieving record-high levels in FY2025 (ending March 2025) with net sales of ¥82,593 million and operating profit of ¥14,676 million. However, in FY2026 (ending March 2026), performance fell sharply, with net sales of ¥72,540 million (down 12.2% year on year), operating profit of ¥12,042 million (down 17.9%), and net profit attributable to owners of the parent of ¥8,075 million (down 25.6%). As an external factor, a sharp rise in scrap steel prices in the latter half of the fiscal year pushed up costs, while delays and revisions to construction work amid labor shortages and soaring material costs caused shipments of small rebar to remain persistently sluggish. The operating profit margin declined from 17.8% (FY2025, ended March 2025) to 16.6% (FY2026, ending March 2026), but remained at a high level nonetheless. For FY2027 (ending March 2027), the company forecasts net sales of ¥76,000 million (up 4.8% year on year) and operating profit of ¥10,000 million (down 17.0%), suggesting that while sales are expected to recover, profit is projected to decline further.
Growth Strategy
New medium-term management policy (FY2026 - 3-year period) centered on expanding sales of high value-added products, promoting DX, and raising the dividend payout ratio
Expand the sales regions for large-diameter, high-strength rebar, a high value-added product, targeting mid- and low-rise properties in addition to conventional high-rise buildings. Strengthen labor-saving solution proposal sales, securing metal spread while avoiding price competition with general-purpose products through a differentiation strategy focused on solving customer challenges.
Continuously promote efficiency in manufacturing processes and reduction of logistics costs, while pursuing DX strategy to improve operational efficiency and strengthen competitiveness. Selling, general and administrative expenses for FY2026 (ending March 2026) were ¥8,414 million, achieving a reduction compared to the previous period (¥8,699 million), and cost management initiatives continue.
The target has been raised from a consolidated dividend payout ratio of 30% or more under the old medium-term policy to 35%-40% under the new medium-term policy. The dividend forecast for FY2027 (ending March 2027) is ¥100 per share annually (post-split basis; equivalent to ¥300 pre-split), with a dividend payout ratio of 36.0% expected. A 1-for-3 stock split was implemented effective April 1, 2026, also aiming to expand the investor base.
The ROE target of 10.0% or more under the old medium-term policy was achieved (actual result of 13.1% in FY2026, ending March 2026). Under the new medium-term policy, the target has been set at ROE of 11.0% or more. Measures to improve capital efficiency, such as share buybacks (resolved by the Board of Directors in May 2026: upper limit of 350,000 shares/¥500 million), will continue to be implemented.
Last updated: July 19, 2026