ENVALITH
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NIPPON SHINDO CO.,LTD

5753・Standard Market・Nonferrous Metals

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日本伸銅株式会社 logo
NIPPON SHINDO CO.,LTD5753

Business

NIPPON SHINDO CO.,LTD. is a specialist manufacturer of copper alloy products founded in 1938, headquartered in Sakai City, Osaka Prefecture. The company operates a single-segment business manufacturing and selling copper alloy products (sheets, strips, rods, tubes, etc.) and processed copper alloy products, using copper and zinc as its main raw materials. It became a consolidated subsidiary of CK SAN-ETSU CO., LTD. in 2015, and has established an optimal division of labor with its sister company, SAN-ETSU METALS CO., LTD., through the allocation of production varieties between the two. Its main customers are metal distribution and processing companies, led by Ichihara Kinzoku Sangyo Co., Ltd. (13.2% of net sales), and the company is listed on the Standard Market of the Tokyo Stock Exchange.

Business Model

The company adopts a price-list system based on international copper and zinc market prices (LME prices) to set product selling prices, with a fundamental mechanism to pass on raw material cost fluctuations to selling prices. While copper alloy products (88.0% of net sales) serve as the mainstay, the company aims to improve profitability by expanding sales of higher value-added processed copper alloy products (5.4% of net sales). Market fluctuation risk is hedged through derivative transactions, but this creates a structure in which hedging costs affect non-operating income and expenses.

Company Strengths

The company has established an optimal division of labor system with its sister company Sanetsu Metal Co., Ltd. by segregating production item types, pursuing synergies such as mutual OEM supply of products, joint procurement of raw materials, and personnel exchanges. Through intra-group collaboration, it secures scale merit and cost competitiveness that would be difficult to achieve independently.

The equity ratio as of the end of FY2026 (ending March 2026) remained at a high level of 68.7%, with total net assets reaching ¥12,711 million. The company has a sufficient financial foundation to respond to working capital needs during sharp copper price surges and M&A funding needs, using both retained earnings and financial institution borrowings.

In FY2026 (ending March 2026), sales of processed copper alloy products achieved high growth, reaching ¥1,640 million (up 31.4% year on year). Sales volume of the mainstay copper alloy products also expanded to 20,419 tons (up 6.4% year on year), and the order backlog has been accumulating, reaching ¥3,479 million (up 58.1% year on year).

ENVALITH's Perspective

Operating income for FY2026 (ending March 2026) was strong at ¥2,694 million (up 46.8% year on year), but losses on derivatives used to hedge copper price risk expanded sharply to ¥1,703 million (versus ¥360 million in the prior period), causing ordinary income to fall to ¥1,028 million (down 27.2% year on year) and net income for the period to decline to ¥742 million (down 23.1%). This reflects a structure in which a sharp rise in copper prices (LME surge and yen depreciation pushed prices up to ¥2.19 million per ton) as an external factor inflated hedging costs, once again highlighting the inherent risk of a business model tied to commodity price fluctuations.

The earnings forecast for FY2027 (ending March 2027) calls for net sales of ¥36,800 million (up 22.1% year on year), while operating income is expected to decline sharply to ¥1,320 million (down 51.0%). This is a conservative plan premised on the assumption that the price-related gains recorded in the current period will not recur in the next period; the assumed price for electrolytic copper is ¥2,110 thousand per ton, and for electrolytic zinc, ¥586 thousand per ton. The forecast of net sales growth accompanied by a halving of profit is likely to prompt investors to take a cautious view of the quality of earnings.

Cash flow from operating activities for FY2026 (ending March 2026) deteriorated significantly to -¥975 million (compared with a net inflow of ¥299 million in the prior period). This was mainly due to an increase in inventories of -¥951 million and an increase in trade receivables of -¥905 million, combined with a sharp rise in income tax payments to -¥560 million (versus -¥127 million in the prior period). The company raised ¥1,110 million in short-term borrowings under financing activities to cover the shortfall, and future attention should be paid to working capital management and the rising reliance on borrowings.

Growth Strategy

Enhancing competitiveness and corporate value through deepening group synergies and expanding processed copper alloy products

Leveraging the sibling-company structure with SANETSU METAL Co., Ltd. and MITANI SHINDO CO., LTD., the company is deepening optimal division of labor in raw material procurement, manufacturing, and sales. In FY2026 (ending March 2026), a reduction in selling, general and administrative expenses was realized (from ¥847 million to ¥818 million), contributing to improved cost efficiency.

Sales of high value-added processed copper alloy products achieved strong growth, reaching ¥1,640 million in FY2026 (ending March 2026), up 31.4% year on year. This growth rate exceeded that of the core copper alloy products business, and is expected to contribute to diversification of the revenue structure and improvement of profit margins.

Sales volume in FY2026 (ending March 2026) maintained an expansionary trend, reaching 21,176 tons, up 6.3% year on year. For FY2027 (ending March 2027), based on assumed prices of ¥2,110 thousand/ton for electrolytic copper and ¥586 thousand/ton for electrolytic zinc, the company plans net sales of ¥36,800 million (up 22.1% year on year), aiming for revenue growth driven by both volume and price.

Last updated: July 19, 2026