ENVALITH
日本発条株式会社 logo

NHK SPRING CO., LTD.

5991・Prime Market・Metal Products

Official website
日本発条株式会社 logo
NHK SPRING CO., LTD.5991

Business

Nippon Hatsujo Kabushiki Kaisha (NHK Spring), founded in 1936, is a manufacturer of precision components and a global group comprising 67 domestic and overseas subsidiaries and 8 affiliated companies. Its core operations are organized into five segments: Suspension Springs, Seats, Precision Components, DDS (HDD Suspensions), and Industrial Machinery & Others. In automotive-related components, the company supplies a broad range of Japanese and foreign OEMs, and in the information and communications field, it holds a global position in HDD Suspensions. Of total net sales of ¥816,879 million, automotive-related business accounts for approximately 70%, while information/communications and industrial machinery-related business accounts for approximately 30%. The company operates manufacturing bases in Thailand, the United States, China, India, Mexico, Hungary, and other locations.

Business Model

Based on five core technologies—material development, metal processing, heat treatment, simulation, and joining—the company manufactures and sells a wide range of products, from automotive Suspension Springs, Seats, and Precision Components to HDD Suspensions and Semiconductor Process Components. While securing stable orders centered on long-term supply relationships with OEMs and information equipment manufacturers, the company simultaneously pursues profitability improvement through the development of high-value-added products and rationalization measures. Research and development expenses amount to 3.0% of net sales (¥24,676 million), aimed at maintaining and enhancing technological competitiveness.

Company Strengths

The DDS Business achieved net sales of ¥126,753 million, operating income of ¥26,058 million, and an operating margin of 20.6% in FY2026 (ending March 2026). Manufacturing takes place at multiple sites in Thailand, China, and Japan, mass-producing CLA/TSA suspensions for high-capacity HDDs equipped with 10 to 11 disks. Productivity has continued to improve through rationalization measures such as the introduction of AI-enabled AOI, and the business functions as a highly profitable core business generating more than half of the Group's total profit.

The company holds five segments—Suspension Springs, Seats, Precision Components, DDS, and Industrial Machinery & Others—building a portfolio in which fluctuation risk in automotive production volumes can be offset by HDD demand and semiconductor demand. In FY2026 (ending March 2026), despite weakness in automotive-related markets, the DDS Business and Industrial Machinery & Others Business achieved increased revenue, and the Group maintained net sales of ¥816,879 million, a result that demonstrates the effectiveness of this portfolio diversification.

At the end of FY2026 (ending March 2026), the equity ratio stood at 59.3%, net assets were ¥453,035 million, and interest-bearing debt was at a low level of ¥64,271 million. The company has obtained a credit rating of "A Flat (Single A)" from Rating and Investment Information, Inc. (R&I). Operating cash flow was robust at ¥77,446 million (up 39.0% year on year), and while covering capital expenditures of ¥47,675 million with internal funds, the company secured cash and cash equivalents of ¥89,963 million.

ENVALITH's Perspective

Net sales rose 1.9% year on year to ¥816,879 million, securing revenue growth, but operating profit fell 12.2% year on year to ¥45,784 million, and net income attributable to owners of parent plunged 42.2% year on year to ¥27,862 million. Extraordinary losses included an impairment loss of ¥9,835 million (mainly ¥6,809 million from the Industrial Machinery & Others Business), while total income taxes surged to ¥21,677 million (versus ¥9,662 million in the previous period), significantly weighing on net income. Additionally, an error in the accounting treatment of retirement benefits was discovered, requiring a correction to the earnings report, which is a concerning factor from an internal controls perspective.

Of the ¥45,784 million in operating profit for FY2026 (ending March 2026), the DDS Business accounted for ¥26,058 million (approximately 57%), while the combined operating profit of the Seats and Suspension Springs businesses, which together account for approximately 56% of net sales, was only ¥8,779 million (an operating margin of approximately 1.9%). The Seats Business saw profit decline 28.3% year on year due to reduced production by Japanese manufacturers in Japan and Thailand and changes in vehicle model mix in North America. The recovery of profitability in automotive-related segments is key to the overall assessment. As external factors, the shift toward electrification in global automotive production and uncertainty over trade policy continue to pose downside risks.

The company forecasts net sales of ¥860,000 million (up 5.3% year on year), operating profit of ¥59,000 million (up 28.9% year on year), and net income of ¥45,000 million (up 61.5% year on year) for FY2027 (ending March 2027), and expects to achieve the medium-term plan targets of ROE of 10.0% and ROIC of 8.0%. This is premised on continued growth in the DDS Business (forecast at ¥30,000 million) and recovery in the Seats Business (forecast at ¥9,000 million), but external factors such as the trajectory of US tariff policy, foreign exchange rates (assumed at ¥150/USD), and the sustainability of data center investment will affect the certainty of achievement. The fact that operating cash flow of ¥77,446 million provides sufficient coverage against expanding capital expenditure (an increase in tangible fixed assets of ¥47,675 million) is a positive factor.

Growth Strategy

"Medium-Term Management Plan 2026," whose final year strategy rests on two pillars: sustaining high growth in DDS and Industrial Machinery & Others while strengthening profitability in automotive-related businesses

Against a backdrop of expanding demand for high-capacity HDDs for data centers, the company aims to increase sales volume of HDD Suspensions. Targeting net sales of ¥144,000 million and operating profit of ¥30,000 million for FY2027 (ending March 2027), it is promoting productivity improvements through rationalization measures such as the introduction of AI-powered AOI.

The Seats Business saw operating profit decline 28.3% year on year in FY2026 (ending March 2026), impacted by production cuts at Japanese-affiliated manufacturers in Japan and Thailand and changes in vehicle mix in North America. Through the pass-through of higher raw material and logistics costs into sales prices and rationalization measures, the company aims to recover to net sales of ¥311,000 million and operating profit of ¥9,000 million in FY2027 (ending March 2027).

The company continues to make capital investments (segment tangible fixed asset increase of ¥13,307 million in FY2026, ending March 2026) to address future demand growth for Semiconductor Process Components and Metal Substrates. Following the disposal of assets for which an impairment loss of ¥6,809 million was recorded, the company expects substantial improvement in FY2027 (ending March 2027), with net sales of ¥133,000 million and operating profit of ¥11,000 million (up 50.8% year on year).

The medium-term management plan, with FY2026 (ending March 2026) as its final year, sets targets of ROE of 10% or higher and ROIC of 7% or higher. Actual results for FY2026 (ending March 2026) were ROE of 6.6% and ROIC of 6.8%, falling short of the targets. For FY2027 (ending March 2027), the company forecasts achieving ROE of 10.0% and ROIC of 8.0%, promoting investment with an awareness of cost of capital and improving profitability.

The annual dividend for FY2026 (ending March 2026) was ¥66 per share (payout ratio of 48.0%). For FY2027 (ending March 2027), the company plans an annual dividend of ¥69 (interim ¥33, year-end ¥36), with an expected payout ratio of 31.1%. The policy is to continue stable dividends premised on a substantial recovery in net profit.

Last updated: July 19, 2026