ENVALITH
高周波熱錬株式会社 logo

Neturen Co., Ltd.

5976・Prime Market・Metal Products

Official website
高周波熱錬株式会社 logo
Neturen Co., Ltd.5976

Business

Neturen Co., Ltd. (Netsuren) is a company listed on the Tokyo Stock Exchange Prime Market, founded in 1946, that conducts business domestically and internationally centered on Induction Heating (IH) technology. In its core Products Division Related Business, the company manufactures and sells PC Steel Bars, Deformed PC Steel Bars, Shear Reinforcement Bars, High-Strength Spring Steel Wire (ITW), and Swing Bearings for Construction Machinery, etc., while in the IH Division Related Business, it provides Contract Heat Treatment Processing for critical safety components used in automobiles, machine tools, construction machinery, and other equipment, as well as the manufacture and sale of Induction Heating (IH) Equipment. In addition to multiple manufacturing sites in Japan, the company has subsidiaries and affiliates in the United States, the Czech Republic, China, Indonesia, Mexico, South Korea, and other countries, conducting business on a global scale. Consolidated net sales for FY2026 (ending March 2026) were ¥58,277 million. In recent years, the company has also pursued expansion of its business domains through M&A.

Business Model

The Products Division manufactures and sells products for civil engineering, construction, automotive, and construction machinery applications in-house. The IH Division operates on two pillars: contract heat treatment processing (processing fee income) for automotive parts and other applications, and the manufacture and sale of induction heating equipment. The company continuously implements sales price pass-through for cost increases and cost reduction activities to secure earnings. The Real Estate Leasing Business provides stable earnings support, and the business portfolio is being expanded through the incorporation of new businesses via M&A.

Company Strengths

The company has commercialized high-frequency induction heating technology since 1946, applying it to a wide range of industrial fields including automobiles, construction machinery, machine tools, and civil engineering/construction. It has independently developed advanced technologies such as CAE simulation technology, heating coil manufacturing utilizing metal 3D printers, and SiC power supplies/FPGA-controlled power supplies, investing ¥756 million in R&D expenses in FY2026 (ending March 2026).

The company has multiple manufacturing sites domestically, including Kariya, Ako, Kobe, Okayama, and Iwaki, and operates subsidiaries and affiliates overseas in the United States, Czech Republic, China (multiple sites), Indonesia, Mexico, and South Korea. Overseas sites for Contract Heat Treatment Processing support local production for the automotive industry, and High-Strength Spring Steel Wire (ITW) continues to develop new customers and applications in the United States and Czech Republic.

The equity ratio as of the end of FY2026 (ending March 2026) remained at a high level of 66.0%. Against total assets of ¥88,146 million, the company secured net assets of ¥65,378 million, giving it the financial strength to execute M&A and capital expenditures (¥4,009 million in actual results for FY2026 (ending March 2026)) primarily through its own funds. The company has maintained financial soundness while making dividend payments of ¥2,005 million and share buybacks of ¥2,000 million.

ENVALITH's Perspective

In FY2026 (ending March 2026), operating profit improved to ¥1,892 million (up 17.0% year on year), but profit attributable to owners of parent fell to ¥1,329 million (down 26.8% year on year). This reflects both the reversal from the ¥1,217 million gain on sale of investment securities recorded in the prior period and an impairment loss of ¥257 million recorded in the current period. While ordinary profit improved, volatility in extraordinary income and losses has undermined the stability of net income, and the structure that makes it difficult to assess true underlying earnings power continues.

The consolidation of Doken Co., Ltd. and MDI Corporation as subsidiaries expanded the scope of consolidation, resulting in goodwill of ¥1,626 million. Borrowings increased by approximately ¥4,825 million year on year, causing the ratio of interest-bearing debt to cash flow to rise sharply from 1.7x in the prior period to 6.6x in the current period, while the interest coverage ratio declined from 58.7x to 15.3x. There is a possibility that financial indicators will continue to deteriorate during the period before the benefits of business expansion through M&A are reflected in earnings.

The company forecasts for FY2027 (ending March 2027) call for revenue of ¥64,000 million (up 9.8% year on year) and operating profit of ¥2,100 million (up 11.0% year on year), representing higher revenue and profit, while ordinary profit is projected to decline to ¥2,500 million (down 6.2% year on year). This appears to reflect pressure on non-operating income and expenses from higher interest payments associated with increased borrowings. In addition, the dividend payout ratio of 178.6% (FY2026, ended March 2026) significantly exceeds net income, and maintaining the dividend at ¥71 against the next period's forecast net income of ¥1,500 million would still result in a high payout ratio of 154.3%. Earnings improvement is essential from a sustainability standpoint.

Growth Strategy

Aiming to enhance corporate value through three pillars—M&A, price pass-through, and global expansion—toward the final year of the 16th Medium-Term Management Plan

Doken (precast concrete products) and MDI Corporation (thermal management and energy-saving systems) were made consolidated subsidiaries. ANDO Imagineering Group was incorporated as an equity-method-unapplied affiliate, creating synergies with high-strength PC steel materials and precast products. Full-scale profit and loss consolidation of MDI is expected from FY2027 (ending March 2027) onward.

In response to persistently high costs such as personnel expenses, electricity charges, and steel materials, the company is promoting price revisions through proactive sales activities. In FY2026 (ending March 2026), the effects of price revisions became evident in civil engineering/construction-related products and construction machinery-related products, improving the Products Division's operating profit by 157.8% year on year to ¥464 million.

The company continues to develop new customers and applications for high-strength spring steel wire in the U.S., Czech Republic, and other regions. In FY2026 (ending March 2026), overseas sales of high-strength spring steel wire remained solid, contributing to increased revenue in the Products Division. Orders for construction machinery-related products also increased both domestically and in China. On the other hand, Induction Heating (IH) Equipment in China faced difficulties due to economic slowdown and changes in customer schedules.

Capital expenditures on property, plant and equipment in FY2026 (ending March 2026) amounted to ¥3,990 million, a substantial increase from ¥2,653 million in the previous fiscal year. The increase in tangible and intangible fixed assets in the IH Division surged to ¥2,656 million from ¥1,545 million in the previous fiscal year, driving reinforcement of production technology capabilities. Construction in progress also increased from ¥1,783 million to ¥2,545 million, and equipment is expected to come online from the following fiscal year onward.

As FY2027 (ending March 2027) is the final year of the 16th Medium-Term Management Plan, the plan's target figures were revised in line with the consolidated financial forecast figures (announced May 13, 2026). While maintaining the dividend policy of DOE 4.0% or higher, the company also carried out share buybacks (¥2,000 million in FY2026 (ending March 2026)). The company aims to enhance corporate value through management with awareness of capital costs.

Last updated: July 19, 2026