Nippon Yakin Kogyo Co.,Ltd.
5480・Prime Market・Iron & Steel
Business
Nippon Yakin Kogyo Co., Ltd. was founded in 1925 and marked its 100th anniversary in 2025, making it one of Japan's leading manufacturers of high-nickel alloys and specialty stainless steel. Centered on its two core sites, the Kawasaki Plant (steel sheet manufacturing and cold rolling) and the Oeyama Plant (ferronickel smelting), the company carries out integrated manufacturing of stainless steel sheet, strip, forged steel products, pipes, building materials, and processed products. Its major customers span a wide range of industries, including semiconductor manufacturing equipment, chemicals and petrochemicals, shipbuilding, energy, and building materials. The group, comprising 18 subsidiaries and 2 affiliated companies, conducts manufacturing, processing, and sales operations, and is advancing overseas expansion through its Indian local subsidiary (established in May 2025). The company is listed on the Prime Market of the Tokyo Stock Exchange (securities code 5480).
Business Model
A vertically integrated model in which ferronickel is smelted from nickel ore and recycled raw materials at the Oeyama Plant, and stainless steel and high-nickel alloys are melted, rolled, and finished at the Kawasaki Plant. Sales are built on two pillars: high-value-added High-Performance Materials (High-Nickel Alloys and High-Performance Stainless Steel) and versatile General Materials (General-Purpose Stainless Steel), which are delivered to end customers through group processing and sales companies. Cost competitiveness through in-house raw material production and technological differentiation serve as the sources of profitability.
Company Strengths
The company maintains a vertically integrated system at the Oe Steel Works, smelting ferronickel from nickel ore in-house. It is also pursuing simultaneous diversification of raw material procurement and strengthened cost competitiveness through the development of carbon-less nickel smelting technology (having secured a path to replace one-quarter of coal with recycled raw materials) and expanded use of recycled raw materials.
The company brought a high-efficiency electric furnace (E furnace) online in January 2022 and a new cold rolling mill in December 2024, and has decided to introduce slab-type electroslag remelting (ESR) equipment (investment amount of ¥2.2 billion) in fiscal 2026. R&D expenses for the fiscal year under review totaled ¥970 million, and the company maintains a dedicated staff of 37, continuing to advance the quality of high-performance materials such as nickel alloys and duplex stainless steel while developing new steel grades.
At the end of FY2026 (ending March 2026), net assets stood at ¥101,308 million, with an equity ratio of 46.1% (up 1.7 percentage points year on year). Even amid a phase of significantly lower profit year on year, the company secured free cash flow of ¥4,161 million and paid an annual dividend of ¥230 per share. Under the Medium-Term Management Plan 2026-2028, the company has set a DOE (dividend on equity) floor of 2.8% or higher, institutionalizing stable shareholder returns.
ENVALITH's Perspective
Performance Trend
Revenue declined for four consecutive periods: ¥148,925 million in FY2022 (ending March 2022) → ¥199,324 million in FY2023 (ending March 2023) (peak) → ¥180,341 million in FY2024 (ending March 2024) → ¥172,097 million in FY2025 (ending March 2025) → ¥150,866 million in FY2026 (ending March 2026). Operating profit also declined sharply from ¥29,256 million in FY2023 (ending March 2023) to ¥10,973 million in FY2026 (ending March 2026), with the operating margin falling from 9.9% (FY2025, ending March 2025) to 7.3% (FY2026, ending March 2026). The main causes in FY2026 (ending March 2026) were a 6.8% year-on-year decline in sales volume (a 9.9% decline for High-Performance Materials (High-Nickel Alloys and High-Performance Stainless Steel)), falling sales prices (a downward impact of approximately ¥7,000 million from this variable factor), and increases in fixed costs such as personnel expenses and depreciation. As an external factor, the continued high level of inflows of low-priced imported materials from East Asia persisted, and sluggish demand for construction materials also failed to improve. On the other hand, inventory valuation gains/losses improved from a loss of ¥2.5 billion in the previous period to a gain of ¥0.3 billion, and operating cash flow increased from ¥11,041 million to ¥13,545 million. For FY2027 (ending March 2027), a recovery to revenue of ¥169,000 million and operating profit of ¥13,000 million is forecast.
Growth Strategy
A three-pronged strategy centered on expanding sales of High-Performance Materials, recovering pricing, and diversifying raw materials, based on the Medium-Term Management Plan 2026-2028
Under the Medium-Term Management Plan 2026-2028, certain products have been reclassified from General Materials to High-Performance Materials, expanding the definition of High-Performance Materials. The forecast for FY2027 (ending March 2027) targets High-Performance Materials sales volume of 62 thousand tons (up 2 thousand tons versus FY2026 (ending March 2026) actual) and a unit price increase to ¥1,264/kg. Key initiatives include expanding sales to semiconductor manufacturing equipment makers and to the oil and gas sector in India and the Middle East.
Selling prices, which had a negative impact of approximately ¥7,000 million in FY2026 (ending March 2026), are expected to make a positive contribution of approximately ¥7,900 million in the FY2027 (ending March 2027) forecast. Against a backdrop of a recovering order trend for General Materials and a declining trend in imported material inflows, the company aims to restore its price negotiation power. Operating profit excluding inventory valuation gains/losses is expected to increase slightly from ¥10.7 billion to ¥11.1 billion.
The company aims to reduce procurement costs and secure stable supply of nickel and other rare metals by expanding the use of recycled raw materials, among other measures. Raw material prices remained relatively stable in FY2026 (ending March 2026), but the FY2027 (ending March 2027) forecast factors in raw material and other costs as a negative factor of approximately ¥7,500 million, underscoring the growing importance of cost management.
Capital expenditure in FY2026 (ending March 2026) was ¥8,693 million (down from ¥11,291 million in the previous fiscal year). Continued investment in fixed assets (total tangible fixed assets of ¥108,670 million) aims to improve production efficiency and quality. Depreciation expense increased from ¥5,830 million to ¥6,534 million, and managing the time lag before investment returns are reflected in earnings remains a challenge.
Last updated: July 19, 2026