The Hanshin Diesel Works,Ltd.
6018・Standard Market・Transportation Equipment
Business
Hanshin Diesel Works, Ltd. was founded in 1918 and is headquartered in Kobe City as a specialized manufacturer of Main Engines (Marine Diesel Engines). Its core products are low-speed 4-cycle marine diesel engines, in which it holds the top domestic share for the domestic coastal shipping market. The product lineup consists of two categories: Main Engines (Marine Diesel Engines, variable pitch propellers, side thrusters, lubricating oil purifiers, remote engine monitoring systems, etc.) and Parts & Repair Work (parts sales, repair, maintenance management, machining, etc.). Customers are centered on domestic coastal ship owners and shipyards, and the company is expanding its sales network to overseas ship owners in Southeast Asia, East Asia, South Korea, and other regions. With a cumulative production record of over 12,000 units, the company is listed on the Standard Market of the Tokyo Stock Exchange.
Business Model
The company has a stock-type revenue structure in which it generates initial sales from the manufacture and sale of Main Engines (Marine Diesel Engines), and then earns recurring revenue from parts sales, repair work, and maintenance management after delivery. Through a technical alliance with Kawasaki Heavy Industries, the company holds manufacturing and sales rights for MAN-B&W type engines, which complements its product competitiveness. In FY2026 (ending March 2025), the sales composition consisted of ¥8,435 million (60.1%) from Main Engines and ¥5,592 million (39.9%) from Parts & Repair Work, with after-sales service revenue forming a stable revenue base.
Company Strengths
The annual securities report explicitly states that the company "maintains its top share position in main engines in the coastal shipping sector," and in June 2023 achieved cumulative production of 12,000 diesel engines. The historical accumulation of technology, dating back to 1953 when it obtained the industry's first JIS marking permit, forms a barrier to entry, building a customer base and relationships of trust that competitors cannot easily replicate in a short period.
In 2015, the company completed the world's first electronically controlled low-speed 4-cycle marine engine, followed by the world's first gas engine in 2018 and the world's first methanol fuel engine in 2024. With R&D expenditure of ¥208 million and a dedicated staff of 14, the company has achieved continuous technological innovation, and its early development of GHG-free technologies underpins future competitiveness in regulatory compliance.
As of the end of FY2026 (ending March 2025), the main engine order backlog reached ¥12,001 million (up 71.2% year on year), while orders received also surged to ¥19,021 million (up 34.2% year on year). With some shipyards' construction schedules booked out five to six years in advance, the accumulated order backlog enhances revenue visibility over multiple years going forward, serving as a company-specific strength underpinning the stability of its business performance.
ENVALITH's Perspective
Performance Trend
Revenue increased 38.3% over five periods, from ¥10,142 million in FY2022 (ended March 2022) to ¥14,028 million in FY2026 (ending March 2026). In particular, the company achieved substantial revenue growth for two consecutive periods, with FY2025 (ended March 2025) up 38.4% year on year and FY2026 (ending March 2026) up 5.2% year on year. Operating profit expanded from ¥549 million in FY2022 (ended March 2022) to ¥824 million in FY2026 (ending March 2026), with the operating margin improving from 5.4% to 5.9%. As external factors, expanding demand for replacement newbuilds in coastal shipping and the buildup of shipyard order backlogs provided a tailwind, while an increase in inventories (¥653 million) and a decrease in accounts payable (¥690 million) caused operating cash flow to fall sharply to ¥414 million (from ¥1,591 million in the prior period). For FY2027 (ending March 2027), the company forecasts revenue of ¥17,200 million and operating profit of ¥900 million.
Growth Strategy
Three pillars: reliable acquisition of domestic (coastal) shipping replacement orders, export expansion, and new customer development in the CMR business
Reliably capture replacement-construction demand in domestic (coastal) shipping and secure order intake and sales volume for Main Engines (Marine Diesel Engines) at or above the previous fiscal year's level. Continue to advance price pass-through in response to soaring materials costs, achieving a gross profit margin of 20.9% in FY2026 (ending March 2026). Main Engine sales are expected to expand further in FY2027 (ending March 2027).
To offset the gradual decline in the number of vessels operating domestically, actively capture orders for overseas Parts & Repair Work. In FY2026 (ending March 2026), export-related Parts & Repair Work expanded 30.3% year on year to ¥1,133 million. The policy is to secure a certain level of order intake and sales volume through enhancement of the patrol service and the entrenchment of the price increase policy implemented in the previous fiscal year.
The CMR (Casting & Metal Machining) business struggled in FY2026 (ending March 2026), with sales of ¥606 million (down 6.5% year on year). The company aims for growth through further expansion of the casting business and development of new customers based on its "high-precision metal processing technology." In parallel, it will promote in-house production of components, expansion of the supply chain, and cost reduction through VE (value engineering).
Last updated: July 19, 2026