METALART CORPORATION

Business Details

Metalart Corporation operates the manufacture and sale of precision die-forged products as its sole reportable segment. Its core product is Automotive Parts (accounting for approximately 83% of net sales), centered on sales to Daihatsu Motor and Toyota Motor. The company also handles Construction Machinery Parts, Agricultural Machinery Parts, and Other Parts. In addition to domestic manufacturing sites, its Indonesian subsidiary (PT.METALART ASTRA INDONESIA) manufactures and sells forged products to local companies. Consolidated subsidiary Metal Forge Co., Ltd. will be excluded from consolidation (through absorption-type merger) during FY2026 (ending March 2026), advancing a group-wide business structure transformation.

Recent Overview

FY2026 (ending March 2026) achieved sales growth across all segments and operating profit growth of over 30%; delisting planned following acceptance of tender offer

In FY2026 (ending March 2026), net sales reached ¥45,289 million (up 3.0% year on year) and operating profit reached ¥3,905 million (up 30.4% year on year), achieving a substantial increase in profit. Thorough cost reduction efforts and the promotion of price pass-through for energy and labor costs proved successful, improving the operating profit margin to 8.6% (from 6.8% in the prior period). Meanwhile, on May 14, 2026, the company resolved to support and recommend that shareholders tender their shares in the tender offer by Gerbera holdings Co., Ltd., with a wholly-owned subsidiary conversion and delisting planned. For FY2027 (ending March 2027), the company forecasts net sales of ¥43,400 million (down 4.2% year on year) and operating profit of ¥2,410 million (down 38.3% year on year), a substantial decline in profit. This is mainly attributable to the discontinuation of production of certain parts due to the shift toward electrification and a decrease in domestic sales.

Key Products

Growth Drivers

• Domestic automotive parts: sales increase driven by the resolution of the impact from a customer's suspended shipments and resilient demand (domestic sales of ¥30,223 million, up year on year)
• Construction machinery and agricultural machinery parts: sales recovery driven by signs of bottoming-out demand (construction machinery +4.8%, agricultural machinery +15.0%)
• Other parts: high growth driven by contributions from new sales expansion (up 27.9% year on year to ¥1,494 million)
• Improved profitability through thorough cost reduction and promotion of price pass-through for energy and labor costs (operating profit margin of 8.6%)
• Group-wide business structure transformation and agile response capability through the absorption-type merger of Metal Forge
• Medium- to long-term business restructuring in a non-listed environment through the wholly-owned subsidiary conversion by Gerbera holdings

Risks

• Risk of medium- to long-term contraction in demand for internal combustion engine parts due to accelerating electrification of the automotive market (affected by the discontinuation of production of certain parts in FY2027, ending March 2027)
• Risk of decreased sales at the overseas subsidiary due to economic slowdown in the ASEAN market (Indonesia) (sales to Indonesia decreased to ¥7,422 million in the current period from ¥7,865 million in the prior period)
• Risk of renewed trade friction and global economic slowdown due to U.S. trade policy (reciprocal tariff measures)
• Risk of rising material and manufacturing costs due to persistently high energy prices and continued yen depreciation
• Difficulty securing human resources due to market contraction and declining working-age population amid Japan's ultra-low birthrate and aging population
• Risk of sales concentration in specific customers (Daihatsu Motor and Toyota Motor)
• Risk of changes in governance and information disclosure practices associated with the changing management environment following the completion of the tender offer and delisting