ENVALITH
株式会社サンユウ logo

SANYU CO.,LTD.

5697・Standard Market・Iron & Steel

Official website
株式会社サンユウ logo
SANYU CO.,LTD.5697

Business

SANYU CO.,LTD. was founded in 1957 and is headquartered in Hirakata City, Osaka Prefecture, operating as a specialized manufacturer of Polished Steel Bars and Cold Forging Steel Wire. The company procures materials from steel manufacturers, primarily Nippon Steel Corporation, and supplies products that have undergone high-precision secondary and tertiary processing (centerless grinding, lathing, dimensional cutting, etc.) to automotive and construction/industrial machinery manufacturers. Through a group structure that includes subsidiaries Osaka Migaki Co., Ltd. and Daido Kousaizai Kogyo Co., Ltd., the company operates manufacturing, sales, and processing in an integrated manner, and also serves overseas Japanese-affiliated automotive parts manufacturers through participation in joint ventures primarily led by Nippon Steel Corporation in China and Thailand. Listed on the Standard Market of the Tokyo Stock Exchange.

Business Model

The company procures steel bars and wire rods from Nippon Steel Corporation and other suppliers, subjects them to precision processing such as polishing, centerless grinding, and cold forging processing, and sells the resulting products to customers. Revenue consists of the difference between the product selling price and material cost (the processing margin); when steel prices rise, passing through the increase to product prices and correcting the processing margin are key to profitability. The company's competitive strength stems from its ample inventory levels and immediate-delivery capability, and it maximizes production efficiency through cooperation across the group.

Company Strengths

Full penetration of the processing fee correction implemented from July 2024, combined with product price revisions accompanying steel price increases, resulted in significant profit growth for FY2026 (ending March 2026), with operating profit of ¥886 million (up 32.6% year on year) and ordinary profit of ¥966 million (up 33.2% year on year). The ordinary profit margin of 3.8% exceeded the company's own target of 2.5%.

The company has continuously implemented capital investment every fiscal period, with capital expenditure of ¥656 million in FY2026 (ending March 2026), including the establishment of a new Hyogo sales office by Osaka Migaki Co., Ltd. (¥144 million) and the expansion of the Shiga plant (¥171 million). Capital expenditure of ¥1,400 million is planned for the next fiscal period, confirming a continued commitment to improving productivity and quality.

At the end of FY2026 (ending March 2026), net assets stood at ¥11,082 million, with an equity ratio of 48.4%. Against interest-bearing debt of ¥1,128 million, cash and cash equivalents stood at ¥4,700 million, placing the company in a state close to being effectively debt-free. The interest coverage ratio was extremely high at 262.9 times, maintaining a high level of financial soundness.

ENVALITH's Perspective

In FY2026 (ending March 2026), operating profit improved significantly, up 32.6% year on year, driven by full penetration of processing fee corrections and steel price pass-through. The company's forecast for FY2027 (ending March 2027) calls for both higher revenue and profit, with sales of ¥26,500 million (+3.6%) and operating profit of ¥900 million (+1.5%). The key point of focus is whether profit accumulation will continue at the level where the effect of price pass-through has become entrenched. On the other hand, the impact of external factors such as the Trump administration's tariff policy in the United States and the situation in the Middle East on automobile production remains uncertain, and it is necessary to carefully assess whether the plan, which assumes a recovery in the second half, will be achieved.

The structure in which automotive-related sales account for the majority of total sales remains unchanged, and the risk that the impact of US tariff policy on automobile production will spread remains. Although FY2026 (ending March 2026) saw a broadly recovering trend in the second half, industry production volume for calendar year 2025 increased by only 0.3% year on year. Amid uncertainty over the sustainability of demand recovery, if growth in sales volume remains limited, it will be difficult to maintain profit growth through price pass-through effects alone, making trends in volume an important factor for investment decisions.

The market-value-based equity ratio improved to 19.6% in FY2026 (ending March 2026) (up from 15.5% in the previous fiscal year), but the gap with the book-value-based ratio of 48.4% remains large, indicating that the market is valuing the company well below its net asset value. ROE is on an improving trend at 6.1% (up from 4.7% in the previous fiscal year), but further improvement in profitability and expanded shareholder returns are needed to resolve the sub-1x PBR. Dividend per share was increased from ¥22 to ¥30 (payout ratio of 29.6%), but it should be noted that low liquidity remains a barrier to entry for institutional investors.

Growth Strategy

Maximizing consolidated earnings through four pillars: entrenchment of price pass-through, cost efficiency improvement, capital investment, and overseas collaboration

Continuing to correct processing fees to secure sustainable levels amid rising labor costs, logistics costs, and other expenses. The processing fee correction implemented from July 2024 fully materialized in FY2026 (ending March 2026), achieving an operating margin of 3.5%. The Company has also stated its policy to continue passing through steel price increases in FY2027 (ending March 2027).

Promoting reduction of energy intensity and improvement of product yield through equipment renewal utilizing the Subsidy for Energy Conservation Investment Promotion Support Business (subsidy income of ¥20,618 thousand in FY2026 (ending March 2026)). The Company continues to pursue proactive renewal investment, with capital expenditures of ¥656 million against depreciation of ¥418 million.

Total capital investment in FY2026 (ending March 2026) amounted to ¥656 million (¥577 million for acquisition of property, plant and equipment and ¥51 million for acquisition of intangible assets), funded through internal funds and borrowings, aiming for efficient and optimal operation of production facilities. The Company is enhancing collaboration among group companies and business sites to effectively utilize management resources within the group.

Maintaining the product supply framework to overseas local Japanese automotive parts manufacturers through participation in joint ventures in China and Thailand led primarily by Nippon Steel Corporation. Equity in earnings from the equity-method affiliate Mega Sus Co., Ltd. contributed stably at ¥9 million in FY2026 (ending March 2026) (¥9 million in the prior period).

Last updated: July 19, 2026