ENVALITH
DOWAホールディングス株式会社 logo

DOWA HOLDINGS CO., LTD.

5714・Prime Market・Nonferrous Metals

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DOWAホールディングス株式会社 logo
DOWA HOLDINGS CO., LTD.5714

Business

DOWA Holdings traces its origins to the 1884 acquisition of the Kosaka Mine, and today operates as a comprehensive nonferrous metals and resource recycling company with five core businesses: Environment & Recycling, Smelting & Refining, Electronic Materials, Metal Processing, and Heat Treatment. Comprising 84 subsidiaries and 14 affiliated companies, the group covers a wide range of business areas, from waste treatment to high-purity metal materials, compound semiconductor wafers, copper alloy processing, and automotive parts heat treatment. In addition to its domestic operations, the company has established global bases in Thailand, Indonesia, China, Mexico, the United States, India, and elsewhere, and positions the four fields of automotive, information & communications, environment & energy, and medical & healthcare as its main customer markets.

Business Model

The company has built a "circular business model" in which waste and used products are collected and given intermediate processing by the Environment & Recycling Division, valuable metals such as gold, silver, PGM, and zinc are recovered and refined by the Smelting & Refining Division, and these are further supplied as high-value-added products and services through the Electronic Materials, Metal Processing, and Heat Treatment Divisions. The Smelting & Refining Division is the largest segment, accounting for approximately 49% of net sales, and while fluctuations in precious metal prices and foreign exchange rates directly affect performance, the waste treatment contract revenue of the Environment & Recycling Division forms a stable earnings base.

Company Strengths

Since its founding in 1884, the company started with black ore smelting and has accumulated multi-product Smelting & Refining technology for gold, silver, PGM, zinc, copper and other metals. The smelting complexes such as Kosaka Smelting & Refining and Akita Smelting & Refining work in conjunction with the waste treatment facilities of the Environment & Recycling Division, enabling integrated processing from the collection of recycling raw materials through to the recovery of valuable metals. This equipment and technology infrastructure is a proprietary asset that is difficult for competitors to replicate in a short period.

The company operates business sites for Environment & Recycling, Metal Processing, and Heat Treatment in Thailand, Indonesia, China, Mexico, the United States, India, and elsewhere. In January 2023, PT DOWA ECO SYSTEM INDONESIA commenced operations, and waste treatment orders received in Indonesia increased in FY2026 (ending March 2026), demonstrating how the global site network directly translates into new order acquisition.

The company operates five divisions: Environment & Recycling (net sales of ¥227,173 million), Smelting & Refining (¥364,783 million), Electronic Materials (¥104,584 million), Metal Processing (¥147,336 million), and Heat Treatment (¥33,999 million). While the Smelting & Refining Division is affected by market price fluctuations, the Environment & Recycling Division, which is centered on contracted waste treatment, provides stable earnings, structurally reducing the risk of dependence on a single business.

ENVALITH's Perspective

Net profit attributable to owners of the parent for FY2026 (ending March 2026) increased sharply to ¥62,458 million (up 130.2% year on year); however, extraordinary income includes a ¥24,960 million gain on sale of investment securities (including the sale of Fujita Kanko shares, etc.) and a ¥3,457 million gain on the reimbursement of paid-in capital reduction from an affiliated company, indicating that one-time factors contributed significantly. Operating profit was only ¥34,192 million (up 6.1% year on year), and the operating margin slightly declined to 4.6% from 4.7% in the previous period, despite a 9.8% increase in net sales. Deteriorating purchasing terms for smelting raw materials and rising personnel expenses and depreciation costs weighed on earnings, with underlying profitability improvement remaining modest.

The Electronic Materials Division posted an operating loss of ¥2,663 million in FY2026 (ending March 2026) as well, marking two consecutive years of losses, due to intensifying competition in Silver Powder (Conductive Materials) and rising raw material costs from soaring silver prices. In addition, inventories increased by ¥82,228 million year on year (raw materials and supplies rose from ¥146,536 million to ¥207,468 million), causing cash flow from operating activities to shrink significantly to ¥5,241 million (down from ¥12,827 million in the previous period). This appears to be mainly attributable to the expansion of inventory valuation amounts amid soaring precious metal prices, but continued attention is warranted regarding the risk of inventory valuation losses if prices reverse, as well as the increase in working capital.

The earnings forecast for FY2027 (ending March 2027) is bullish, projecting net sales of ¥941,000 million (up 26.2% year on year), operating profit of ¥53,000 million (up 55.0% year on year), and ordinary profit of ¥80,000 million (up 47.3% year on year). The underlying assumptions envisage a continuation of high metal prices and yen depreciation, with an exchange rate of ¥155/dollar (versus the actual ¥150.8 in the previous period), copper at $12,000/t (versus the actual $10,816), and zinc at $3,100/t (versus the actual $2,968). Whether the market environment evolves as assumed is a key external factor for achieving the plan, and fluctuations in metal prices and exchange rates driven by geopolitical risks such as Middle East tensions and U.S. tariff policy could pose downside risks. On the other hand, net profit attributable to owners of the parent is forecast to decline to ¥57,000 million (down 8.7% year on year), reflecting the drop-off of one-time gains from the previous period, which can be considered a realistic aspect of the plan.

Growth Strategy

Advancing the deepening of the circular business model and strengthening the five core businesses under the Medium-Term Plan 2027

In the Medium-Term Plan 2027, which started from FY2026 (ending March 2026), the company is pursuing further strengthening of its circular business model and enhancement of its management foundation, based on the fundamental strategies of "value creation" and "suppressing volatility and fostering expectations." The shareholder return policy is set at either a payout ratio of 35% or ¥150 per share, whichever is higher, and in FY2026 (ending March 2026), a total dividend of ¥368, including a special dividend of ¥100, was implemented.

Sales and profit in the semiconductor business increased due to the start of mass production and sales of near-infrared LEDs and PDs (photodetectors) for wearable devices. Revenue from paid samples of new products for next-generation secondary batteries and fuel cells expanded to ¥3,503 million. Resolving the operating loss of ¥2,663 million caused by intensifying competition in Silver Powder (Conductive Materials) is an urgent priority, and accelerating the mass production of new products is key to improving profitability.

Orders for waste treatment in Indonesia increased, functioning as a growth driver for the Environment & Recycling Division. At the final disposal site in Thailand, costs increased due to a revision of the estimated maintenance management expenses, but the company continues to expand its business foundation across Southeast Asia as a whole. Steady sales of automotive-related and information/communication-related products are expected to continue in the next fiscal period.

In FY2026 (ending March 2026), the company conducted share buybacks totaling ¥9,991 million, increasing the number of treasury shares at fiscal year-end to 2,840,817 shares (up from 2,439,918 shares in the previous period). The annual dividend was significantly increased to ¥368 (ordinary dividend of ¥268 plus special dividend of ¥100). The forecasted dividend for FY2027 (ending March 2027) is ¥338 (payout ratio of 35.1%), maintaining a continued high level of shareholder returns.

Last updated: July 19, 2026