ENVALITH
株式会社STG logo

STG Co., Ltd.

5858・Growth Market・Nonferrous Metals

Official website
株式会社STG logo
STG Co., Ltd.5858

Business

STG Co., Ltd. is a precision parts manufacturer specializing in the manufacturing and processing of Aluminum Alloy Parts, with a particular focus on magnesium alloy—the lightest practical metal—as well as Magnesium Alloy Parts. Its strength lies in an integrated manufacturing system covering everything from Mold Design & Manufacturing to casting, machining, surface treatment, painting, assembly, and final inspection. The company operates a global production network across 6 sites in 5 countries: Japan (Osaka, Shizuoka), China (Shenzhen), Thailand (Ayutthaya), and Malaysia (Johor Bahru, Penang). Its major customers include AXIS COMMUNICATIONS AB (21.6% of sales), Mitsubishi Electric (16.2%), and CBC (13.2%), and it supplies lightweight parts for a wide range of end products including mirrorless cameras, network cameras, automobiles, medical devices, and drones. In FY2026 (ending March 2026), net sales were ¥6,815 million, with aluminum die-casting accounting for 54% and magnesium die-casting for 41% of the product mix.

Business Model

For product specifications received from customers, the company provides added value through an integrated end-to-end system that completes everything from Mold Design & Manufacturing, casting, and processing to surface treatment and assembly within its own group. Magnesium Alloy Parts achieve a higher profit margin compared to Aluminum Alloy Parts, while Aluminum Alloy Parts secure cost competitiveness mainly through the two Malaysian subsidiaries. The company positions net sales, Magnesium Alloy Parts sales, and EBITDA as key indicators, and pursues a growth-investment-type model that expands scale through capacity expansion via capital expenditure and M&A.

Company Strengths

Magnesium carries a high risk of ignition and explosion, and is a material from which major manufacturers have withdrawn, making it a high entry-barrier market with few domestic competitors. The Company developed a wet dust collector (Patent No. 3481487) in 1998, and has accumulated proprietary technologies such as solidification shrinkage control through years of casting and mold design know-how. It achieves a higher profit margin compared to aluminum.

The Company operates six sites in Osaka, Shizuoka, Shenzhen, Ayutthaya, Johor Bahru, and Penang, enabling it to accommodate the increasingly globalized production systems of its customers. In September 2025, it made E-CAST INDUSTRIES SDN. BHD. a subsidiary, establishing a two-site structure in Malaysia. E-Cast's die-casting division has approximately 50% spare production capacity, and synergies from reduced outsourcing costs are also expected.

The Company provides integrated services from mold design using 2D/3D CAD to casting, machining, shot blasting, chemical conversion treatment, painting, assembly, and final inspection using coordinate measuring machines. Rather than simply manufacturing parts, it proposes VE (Value Engineering) solutions that reduce costs while maintaining the performance and functionality of customers' products, thereby building deep relationships with customers.

ENVALITH's Perspective

In FY2026 (ending March 2026), net sales reached ¥6,815 million (up 6.1% year on year), maintaining revenue growth, but selling, general and administrative expenses expanded to ¥1,282 million (up 23.5% year on year), far outpacing the sales growth rate. As a result, operating profit fell sharply to ¥337 million (down 30.5% year on year), and the operating margin declined steeply to 4.9% (from 7.5% in the previous fiscal year). One-time expenses such as ¥122 million in advisory fees related to the acquisition of E-Cast also had an impact, but the situation calls for structural cost management. The forecast for FY2027 (ending March 2027) calls for operating profit of ¥500 million (up 48.3% year on year), with the realization of synergies from E-Cast being the key factor.

Due to fundraising for the acquisition of E-Cast, long-term borrowings roughly doubled to ¥2,818 million (from ¥1,381 million at the end of the previous fiscal year), and short-term borrowings also increased to ¥1,407 million (from ¥1,070 million at the end of the previous fiscal year). Total assets expanded to ¥9,639 million (from ¥6,653 million at the end of the previous fiscal year), while the equity ratio remained roughly flat at 36.8% (versus 36.4% at the end of the previous fiscal year). Interest expenses increased to ¥87 million (from ¥66 million in the previous fiscal year), and it will be necessary to closely monitor the impact of further increases in borrowings associated with additional M&A on financial soundness going forward.

The medium-term management plan "Challenge 100" targets consolidated net sales of ¥12.0 billion and operating profit of ¥1.2 billion for FY2028 (ending March 2028). Relative to FY2026 (ending March 2026) results (net sales of ¥6,815 million and operating profit of ¥337 million), this requires approximately 76% growth in net sales and approximately 256% growth in operating profit, demanding considerable acceleration in growth over the remaining two fiscal years. The forecast for FY2027 (ending March 2027) (net sales of ¥7,600 million and operating profit of ¥500 million) is positioned as a waypoint toward this goal, but it should be noted that it does not incorporate the impact of any undetermined M&A. As external factors, continued sluggish EV demand and uncertainty over U.S. trade policy pose risks of delaying the recovery in demand for automotive parts.

Growth Strategy

"Challenge 100": Aiming for consolidated net sales of ¥12.0 billion and operating profit of ¥1.2 billion in FY2028 (ending March 2028) through M&A and capital investment

In September 2025, the company made E-Cast Industries Sdn. Bhd., an aluminum die-casting manufacturer located in Penang, northern Malaysia, a wholly owned subsidiary for ¥2,145 million. By linking this site with the existing Johor site, the company aims to complement production capacity, optimize utilization rates, and reduce outsourcing costs between the two sites. The company targets revenue and profit growth by utilizing E-Cast's spare die-casting production capacity (approximately 50%).

The company is considering additional M&A under a disciplined approach, targeting not only highly profitable companies but also business turnaround cases. The number of deals under consideration is said to have increased significantly. Since the FY2027 (ending March 2027) earnings forecast does not incorporate the impact of unconfirmed M&A, any deals that are finalized could be an upside factor.

To offset weak EV-related demand for automotive parts, the company is promoting increased orders for precision equipment at its China site and for network cameras at its Malaysia site. By diversifying its sales composition, the company aims to reduce risk from dependence on specific applications while targeting net sales of ¥7,600 million in FY2027 (ending March 2027) (+11.5% year on year).

In FY2026 (ending March 2026), capital surplus increased by ¥534 million (proceeds from share issuance of ¥555 million) through the issuance of preferred shares. By raising part of the funds for the E-Cast acquisition through share issuance, the company is executing growth investment while maintaining its financial base. The projected dividend on Class A preferred shares for FY2027 (ending March 2027) is ¥63,000 per share.

Last updated: July 19, 2026