ENVALITH
株式会社長府製作所 logo

CHOFU SEISAKUSHO CO., LTD.

5946・Prime Market・Metal Products

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株式会社長府製作所 logo
CHOFU SEISAKUSHO CO., LTD.5946

Business

Choho Manufacturing Co., Ltd. is a comprehensive manufacturer of housing-related equipment headquartered in Shimonoseki City, Yamaguchi Prefecture. The company manufactures and sells Water Heating Equipment (oil, gas, electric, and EcoCute), Air Conditioning Equipment (oil and gas stoves, hot water heating, geothermal heat pumps, snow-melting systems), System Equipment (system baths and system kitchens), and Solar Equipment (solar water heaters and EneWater). The group conducts business including three consolidated subsidiaries (Osaka Technocrat Co., Ltd., Insight Energy Co., Ltd., and Sunpot Engineering Co., Ltd.), with major customers including homebuilders, the housing renovation market, and retailers serving general households. The company is listed on the Prime Market of the Tokyo Stock Exchange.

Business Model

The company manufactures products at its own factories based on combustion and air conditioning technologies, and supplies them to home builders, distributors, and remodeling contractors through nationwide sales offices (branches and sales offices in Tokyo, Osaka, Fukuoka, and elsewhere). It adopts a build-to-forecast production system and manages profitability through product price revisions and cost reduction activities. Working capital and capital expenditures are, in principle, funded from internal resources under a debt-free management policy, and the company maintains a robust financial base with an equity ratio of 93.0%.

Company Strengths

At the end of FY2025 (ending December 2025), the equity ratio stood at 93.0%, with net assets of ¥137,732 million against total assets of ¥148,076 million. Total liabilities were limited to ¥10,343 million, reflecting a debt-free management approach in which working capital and capital expenditures are funded in principle by internal funds. Financial risk is extremely low, and resilience to economic fluctuations is high.

The company employs 127 R&D staff (10.8% of total employees) and invests ¥1,107 million in R&D expenses. In March 2025, it launched the industry's first oil-fired water heater equipped with ultra-fine bubble technology. It continues to bring differentiated products to market, such as weather-forecast-linked EcoCute units and bedroom panel air conditioners.

Since its founding in 1954, the company has manufactured in-house Water Heating Equipment covering multiple heat sources—oil, gas, electricity, and heat pumps—as well as Air Conditioning Equipment covering heating, cooling, snow melting, and ground-source heat pumps. In FY2025 (ending December 2025), sales of Water Heating Equipment reached ¥21,539 million and Air Conditioning Equipment sales reached ¥18,685 million, with these two pillars accounting for over 86% of net sales, reflecting a stable product mix.

ENVALITH's Perspective

Operating profit for Q1 FY2026 (ending December 2026) more than doubled to ¥537 million (versus ¥247 million in the same period last year). While cost of sales was reduced from ¥8,614 million to ¥8,493 million year-on-year, revenue also increased, improving the gross profit margin from 21.5% to 23.7%. The results of group-wide cost reduction activities are clearly reflected in the numbers, and this can be evaluated as progress toward achieving the full-year operating profit forecast of ¥2,400 million (up 40.2% year-on-year).

While the Q1 operating profit margin shows an improving trend at 4.8%, the full-year operating profit margin over the past five fiscal years has declined from a peak of 5.9% in FY2022 to 3.7% in FY2025, indicating that structurally low profitability remains an ongoing issue. The majority of ordinary profit of ¥1,149 million depends on non-operating income (¥725 million), including interest received of ¥307 million and real estate rental income of ¥172 million, underscoring the continued need to strengthen the core business's earning power. External factors such as the sluggish trend in new housing starts also constrain profitability improvement.

Strong performance of heat pump-type heat source units for Europe (Air Conditioning Equipment up 7.9% year-on-year in Q1) is being supported by the tailwind of Europe's energy transition policy as an external factor. Meanwhile, Q1 foreign exchange gains shrank substantially from ¥105 million in the same period last year to ¥22 million, highlighting the emerging risk that changes in the foreign exchange environment could affect ordinary profit. Continued attention is also needed regarding geopolitical risks such as the situation in the Middle East and trends in raw material prices.

Growth Strategy

Capturing carbon-neutral demand through increased market share in heat pumps and high-efficiency products, together with new customer development overseas

Against the backdrop of Europe's energy transition policy, the Company is strengthening sales of heat pump-type heat source units to Europe. In Q1 FY2026 (ending March 2026), Air Conditioning Equipment maintained strong performance, up 7.9% year on year, reflecting the results of new overseas customer development efforts in sales.

High-efficiency water heating equipment such as EcoFeel and EcoJozu is driving Water Heating Equipment sales. The Company continues to work on expanding its lineup of high-efficiency products with low environmental impact toward achieving carbon neutrality, and is promoting the capture of demand in the domestic renovation market.

The Company is promoting group-wide cost reduction activities, and in Q1 FY2026 (ending March 2026) reduced cost of sales by ¥121 million year on year. The operating margin improved from 2.3% in the same period of the previous year to 4.8%, and progress is being made toward achieving the full-year operating profit forecast of ¥2,400 million (up 40.2% year on year).

Last updated: July 17, 2026