ENVALITH
日亜鋼業株式会社 logo

NICHIA STEEL WORKS, LTD.

5658・Standard Market・Iron & Steel

Official website
日亜鋼業株式会社 logo
NICHIA STEEL WORKS, LTD.5658

Business

Founded in 1908, Nichia Steel Works is a comprehensive wire rod processed products manufacturer built around three core businesses: Ordinary Wire Rod Products (Various Galvanized Iron Wires, Various Fences, Rockfall Protection Netting), Specialty Wire Rod Products (Hard Steel Wire, Steel Cable, Galvanized Steel Wire), and Rivet & Screw Wire Rod Products (High Strength Bolts). Its main customers span a broad range of industries, including public civil engineering/construction, automotive, and electric power/telecommunications. The company operates as an 8-company group, including consolidated subsidiaries J-Wytex Corporation, Shiga Bolt Co., Ltd., and Taiyo Metal Industry Co., Ltd. It has manufacturing bases in both eastern and western Japan (Hyogo, Ibaraki, etc.) and its strength lies in short-lead-time delivery. Consolidated net sales for FY2026 (ending March 2026) were ¥33,793 million.

Business Model

The company manufactures high-value-added products (number-one and only-one products) leveraging its own galvanizing and forming processing technologies, and proposes directly to customers through integrated manufacturing-sales-technology solution selling. Increases in raw material costs are absorbed by passing them through to selling prices, while profitability is secured through self-help efforts such as production cost improvements and logistics efficiency gains. Real Estate Leasing (operating margin of approximately 61%) functions as a stable earnings source, and the structure pursues synergies through integrated operations with group subsidiaries.

Company Strengths

The company possesses number-one and only-one products backed by advanced galvanizing and forming technologies, and has a track record of jointly developing differentiated products such as the reinforced soil wall product "Hyper Pre-Mesh" together with customers. It achieves short-lead-time delivery from its eastern and western manufacturing bases in Hyogo, Ibaraki, and elsewhere, and conducts solution-oriented sales that integrate manufacturing, sales, and technology.

As of the end of FY2026 (ending March 2026), the equity ratio stood at 73.1% and the interest-bearing debt to equity (D/E) ratio was 0.04x, both far exceeding the company's financial soundness target (D/E ratio of 0.3x or below). Total net assets amounted to ¥57,206 million and cash and cash equivalents to ¥7,356 million, providing the company with financial flexibility to support capital expenditure and business expansion.

In FY2026 (ending March 2026), despite a decrease in net sales of ¥333 million year on year, operating profit increased by ¥82 million (6.1%) year on year, driven by improved selling prices and cost reduction measures. Both the operating profit margin before depreciation of 8.4% and the ordinary profit margin of 10.8% met the company's own targets (8% and 10%, respectively), demonstrating a track record of profit management capability achieved through a combination of cost pass-through and self-help efforts.

ENVALITH's Perspective

Net profit attributable to owners of the parent for FY2026 (ending March 2026) came in at only ¥1,017 million (down 4.5% year on year), primarily due to a ¥1,017 million loss on liquidation of an affiliated company recorded as an extraordinary loss (a loss associated with the transfer of all shares in the Thai affiliate TSN Wires Co., Ltd.). The company has already been removed from the scope of equity-method application, and the likelihood of a recurrence of this one-off loss is low. The projected recovery in net profit to ¥1,200 million (up 17.9%) for FY2027 (ending March 2027) is mainly attributable to the disappearance of this one-time factor.

The Rivet & Screw Wire Rod Products segment deteriorated significantly, with sales of ¥6,673 million (down 6.8% year on year) and operating profit of ¥210 million (down 63.3% year on year). While the company anticipates a recovery from the second half of FY2026 onward for stagnant construction and civil engineering projects, there is a risk that the recovery timing could be pushed back if the suppression of construction investment due to labor shortages, rising material and equipment costs, and higher interest rates persists. As an external factor, trends in the construction market will determine the performance of this segment.

Specialty Wire Rod Products performed well in FY2026 (ending March 2026), with sales up 2.4% and operating profit up 75.7%, but for FY2027 (ending March 2027) there are concerns about the impact on automobile production from the tariff and trade policies of the Trump administration in the US and the worsening situation in the Middle East. As external factors, trends in automobile production volume and cost increases from rising crude oil prices will directly affect the profitability of this segment. While a certain level of projects in the electric power and telecommunications field is expected to provide support, overall uncertainty remains high.

Growth Strategy

Completing price pass-through of rising costs, expanding sales of differentiated products, renewing core systems, and maintaining a total return ratio of 50% or more including share buybacks

Passing on increases in labor costs, logistics costs, auxiliary raw material costs, etc. to selling prices to secure profitability. In FY2026 (ending March 2026), the effect of price improvements in Ordinary Wire Rod Products and Specialty Wire Rod Products exceeded the decline in volume, achieving an increase in profit. With significant increases expected in main and auxiliary raw material prices in FY2027 (ending March 2026 [March 2027]) as well, continuing the pass-through is the most critical measure for maintaining profitability.

Strengthening a profit structure that does not rely on price competition through the expansion of differentiated products such as the reinforced earth wall system "Hyper Premesh" and No.1/Only One products leveraging galvanizing and forming processing technologies. Also promoting responses to growth markets such as the electric power and telecommunications sectors.

In FY2026 (ending March 2026), software in progress increased significantly from ¥353 million to ¥1,104 million, with system investment moving into full swing. Of the ¥2,319 million adjustment amount for the increase in tangible and intangible fixed assets, system renewal and related items account for the majority. The company aims to strengthen its management foundation through business efficiency improvements and more sophisticated decision-making.

In FY2026 (ending March 2026), the company implemented share buybacks of ¥691 million plus dividends of ¥450 million, for a total return of ¥1,141 million (approximately 112% of net income). In May 2026, an additional buyback frame was resolved (upper limit of 500,000 shares / ¥200 million). The company continues to maintain an annual dividend of ¥10 (the same amount is forecast for FY2027 (ending March 2027)) while pursuing agile capital policy.

The unprofitable overseas business was rationalized through the transfer of all shares of the Thai affiliate TSN Wires Co., Ltd. The company is pursuing cost reduction and quality improvement synergies through integrated manufacturing-sales-technology operations with domestic subsidiaries, aiming to improve the profitability of the group as a whole.

Last updated: July 19, 2026