SANYU CO.,LTD.

Business Details

The Company's group is a single-segment company whose core business is the manufacture and sale of Polished Steel Bars and Cold Forging Steel Wire. Raw materials are procured from steel manufacturers, mainly Nippon Steel Corporation, via trading companies and other intermediaries. The primary demand sectors are the automotive industry and the construction/industrial machinery industry. Its subsidiary Osaka Migaki Co., Ltd. is responsible for the manufacture and sale of Polished Steel Bars, while Daido Migakobozai Kogyo Co., Ltd. handles cutting and other processing and sale of Polished Steel Bars. The Company also handles some precision machining such as centerless grinding, lathe turning, and dimensional cutting. The major customer is Nittetsu Bussan Corporation (approximately 10.7% of sales in FY2026 (ending March 2026)).

Recent Overview

Full penetration of processing fee corrections and price pass-through, combined with energy reduction efforts, drove a 32.6% increase in operating profit

In FY2026 (ending March 2026), sales volume increased 1.6% year on year, and net sales were ¥25,572 million (up 4.6% year on year). Through the full penetration of processing fee corrections implemented from July 2024 onward, full penetration of product sales price revisions due to steel price increases, and reductions in energy consumption per unit, the Company absorbed cost increases such as wage increases aimed at securing human resources, resulting in significant profit growth at every profit level: operating profit of ¥886 million (up 32.6% year on year), ordinary profit of ¥966 million (up 33.2% year on year), and net profit of ¥611 million (up 35.7% year on year). Operating cash flow improved significantly to ¥3,116 million, mainly due to an increase in trade payables (¥2,258 million). For FY2027 (ending March 2027), the Company forecasts net sales of ¥26,500 million (up 3.6%) and operating profit of ¥900 million (up 1.5%).

Key Products

Growth Drivers

• Improved profitability through full penetration of product sales price revisions from steel price increases and correction of processing fees
• Cost efficiency improvements through reduction of energy consumption per unit and improved product yield
• Expanded sales and higher value addition of products in both the Polished Steel Bars and Cold Forging Steel Wire fields (expansion into tertiary processing)
• Improved productivity and quality through continuous capital investment (capital expenditure of ¥656 million in FY2026 (ending March 2026))
• Effective utilization of group resources through strengthened collaboration between group companies and business sites
• Serving local Japanese-affiliated automotive parts manufacturers overseas through participation in joint ventures led mainly by Nippon Steel Corporation in China and Thailand

Risks

• Sluggish production activity in the automotive industry, the primary demand sector (impact of tariff policy under the Trump administration in the U.S.)
• Continued weak demand in the construction/industrial machinery industry
• Soaring prices and difficulty procuring various materials due to concerns over crude oil and naphtha procurement stemming from the situation in the Middle East
• Pressure on profitability from rising steel prices, labor costs, logistics costs, and other expenses
• Risk of economic downturn due to tensions in Japan-China relations and unstable international conditions
• Risk of restricted material supply due to accidents or other incidents at Nippon Steel Corporation's Muroran Works
• Decline in equity ratio (from 51.1% to 48.4%): expansion of total assets due to increased trade payables