ENVALITH
中央発條株式会社 logo

CHUO SPRING CO.,LTD.

5992・Standard Market・Metal Products

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中央発條株式会社 logo
CHUO SPRING CO.,LTD.5992

Business

Chuo Spring Co., Ltd. is a spring manufacturer founded in 1925, operating as an automotive parts supplier with Chassis Springs, Precision Springs, and Control Cables as its core products. Domestically, it operates multiple plants including Narumi, Hekinan, Miyoshi, Fujioka, and Nagasaki, while overseas it maintains 19 consolidated subsidiaries and 1 affiliated company across North America (the United States), China (6 companies), and Asia (Taiwan, Thailand, Indonesia, and India). Its main customer is Toyota Motor Corporation, accounting for approximately 34% of net sales, and it supplies a wide range of other automakers as well. The company is also expanding into non-automotive fields (housing environment, medical, aviation, and aerospace), and consolidated net sales for FY2026 (ending March 2026) reached a record high of ¥110,869 million.

Business Model

The company receives quarterly and monthly production plan information from customers (mainly finished-vehicle manufacturers such as Toyota Motor Corporation) and adopts a make-to-order model in which it manufactures and delivers products in line with the group's production capacity. It operates manufacturing bases across four regions—Japan, North America, China, and Asia—and its main pillars for profit improvement are reducing raw material costs through global procurement sourcing and reducing costs through rationalization improvements. Cost increases from inflation, tariffs, and other factors are addressed through price pass-through negotiations with customers, while technology licensing royalty income also serves as a supplementary revenue source.

Company Strengths

Since its founding in 1925, the company has accumulated manufacturing technology for Chassis Springs, Precision Springs, and Control Cables, and its technological capability is internationally recognized, including through technology licensing agreements (with automatic renewal) with South Africa and Thailand. It has a track record of commercializing proprietary technologies, including continued mass production of the high-value-added ODDS (On Demand Disconnectable Stabilizer) product and knit mesh products adopted for the H3 rocket.

The company operates 19 consolidated subsidiaries and 1 affiliate across Japan, North America, China, and Asia. In FY2026 (ending March 2026), overseas sales (North America: ¥9,057 million; China: ¥7,131 million; Asia: ¥14,117 million) accounted for approximately 27% of consolidated net sales. The Asia segment showed strong growth, with sales up 6.0% and operating profit up 41.3% year on year, and the company is developing a revenue structure in which global operations can offset the profit decline in the Japan segment.

As of the end of FY2026 (ending March 2026), the equity ratio stood at 56.6% (improved from 53.7% at the end of the previous fiscal year), cash and cash equivalents totaled ¥31,751 million, and interest-bearing debt totaled ¥23,858 million, maintaining a net cash position. The sale of investment securities in November 2025 (gain on sale of approximately ¥12,886 million) increased retained earnings, expanding the financial capacity to support both growth investment and shareholder returns.

ENVALITH's Perspective

Profit attributable to owners of parent for FY2026 (ending March 2026) surged to ¥12,420 million (up 569.4% year on year), but this was mainly due to a gain of ¥12,886 million on the sale of investment securities (extraordinary income) implemented in November 2025. Operating profit was ¥2,847 million, down 35.0% year on year, indicating that underlying earning power has declined. The forecast for net income in FY2027 (ending March 2027) is ¥2,400 million (down 80.7% year on year), significantly affected by the disappearance of the gain on sale, and investors should focus on the recovery trajectory on an operating profit basis (forecast of ¥3,300 million, up 15.9% year on year) at this stage.

FY2026 (ending March 2026) is positioned as the first year of the Medium- to Long-Term Management Plan 2030, characterized as a "Deliberate Plateau," during which increased fixed costs from safety measures, renewal of aging facilities, and human capital investment pushed down operating profit by approximately ¥33 million. For FY2027 (ending March 2027), the company forecasts a profit increase (operating profit of ¥3,300 million, up 15.9% year on year) as rationalization improvements are expected to outweigh increases in equipment depreciation and other costs. However, uncertainty in the external environment remains high, including the impact of North America tariffs, the situation in the Middle East, and the yen appreciation assumption (assumed rate of ¥155/dollar at fiscal year-end), and the probability of achieving the forecast needs to be continuously monitored.

The annual dividend for FY2026 (ending March 2026) is ¥60 (up from ¥40 in the previous period), and the forecast for FY2027 (ending March 2027) is ¥90 (an increase of ¥30 year on year), indicating an aggressive stance toward shareholder returns. However, the dividend payout ratio for FY2026 (ending March 2026) is 12.2% (with the denominator inflated by the surge in net income due to gains on sale of investment securities), and the forecast for FY2027 (ending March 2027) is 94.6%, a high level on a net income basis. Maintaining high dividends without a corresponding level of underlying earning power on an operating profit basis could become a financial burden, so the sustainability of returns needs to be assessed together with the progress toward the profit targets of the Medium- to Long-Term Management Plan 2030.

Growth Strategy

Under the Medium- to Long-Term Management Plan 2030, the company aims to maximize corporate value through strengthening safety and equipment infrastructure and through "needs-driven product development."

In light of the serious accident in the previous fiscal year, the company prioritized safety investment, replacement of aging equipment, workplace environment improvements including heat countermeasures, and fostering a corporate culture that places top priority on safety. In FY2026 (ending March 2026), capital expenditure of approximately ¥71 million was deployed, laying the foundation for strengthening the production base from the following fiscal year onward.

The company is constructing a new building (12th Plant) at the Fujioka Plant to build a model line incorporating advanced initiatives such as renewal of aging coil lines, state-of-the-art equipment, and introduction of renewable energy. Proceeds from the sale of investment securities are planned to be allocated to fund this investment.

As the core axis of the growth strategy under the Medium- to Long-Term Management Plan 2030, the company is promoting the expansion of high value-added products (such as stabilizer ODDS) and expansion into new fields. It has also added an affiliated company in India (SSS CHUHATSU PRECISION SPRINGS PRIVATE LTD.) to the scope of equity-method application, accelerating new market development.

As the financial strategy under the Medium- to Long-Term Management Plan 2030, the company is planning to sell financial assets and progressively expand shareholder returns. It has announced an aggressive dividend increase policy, with an annual dividend of ¥60 for FY2026 (ending March 2026) and a projected ¥90 for FY2027 (ending March 2027), an increase of ¥30 year on year.

Last updated: July 19, 2026