ENVALITH
オーエスジー株式会社 logo

OSG Corporation

6136・Prime Market・Machinery

Official website
オーエスジー株式会社 logo
OSG Corporation6136

Business

OSG Corporation is a precision machine tool manufacturer founded in 1938, engaged in the manufacture and sale of taps, dies, end mills, drills, thread rolling tools, measuring instruments, machine tools, and other products. The company is composed of the parent company together with 100 consolidated subsidiaries and 4 affiliated companies, and conducts business across four regional segments: Japan, Americas, Europe & Africa, and Asia. The overseas sales ratio reaches 68.2%, with a customer base spanning a wide range of manufacturing sites in industries including automobiles, aircraft, electronic components, energy, and medical devices. The company is listed on the Prime and Premier markets of the Tokyo and Nagoya Stock Exchanges.

Business Model

With Japanese manufacturing bases at its core, the company supplies precision machine tools to global markets through a network of local manufacturing and sales subsidiaries in the Americas, Europe & Africa, and Asia. It maintains price competitiveness centered on the high-value-added A Brand series and catalog products for micro-precision machining, while diversifying revenue through ancillary services such as Coating Services (Job Coating). The company pursues differentiation through continuous new product launches backed by R&D expenditure of ¥1,908 million.

Company Strengths

The company holds an overwhelming position in the Taps segment, setting a target of 40% global market share for Taps in its medium-term management plan "Beyond the Limit 2027." High-value-added products such as the A-brand Thread Rolling Tap "A-XPF" have performed well both domestically and internationally, and the Japan segment operating profit for FY2025 (ending November 2025) reached ¥8,884 million, up 23.3% year-on-year.

The company has established manufacturing and sales subsidiaries across four regions—Japan, Americas, Europe & Africa, and Asia—building a consolidated group of 100 subsidiaries. Overseas sales ratio reached 68.2%, reducing dependence on any single region. Net sales of ¥160,619 million in FY2025 (ending November 2025) marked a record high, with geographic diversification contributing to earnings stability.

The equity ratio at the end of FY2025 (ending November 2025) improved to 67.5% (from 64.8% at the end of the previous fiscal year), with net assets of ¥193,857 million. Against interest-bearing debt of ¥44,957 million, the company held cash and cash equivalents of ¥48,005 million, maintaining financial soundness close to a virtually debt-free state. Stable generation of operating cash flow of ¥26,389 million serves as a source of funds for capital expenditure and shareholder returns.

ENVALITH's Perspective

Operating profit for the interim period of FY2026 (ending November 2026) came to ¥15,661 million (up 65.1% year on year), with the operating margin recovering sharply to 17.0%. However, the profit increase in the Europe & Africa and Asia segments includes foreign exchange translation effects (an external factor), requiring careful examination of the scale of the underlying, on-the-ground earnings improvement. The mid-term management plan's target of an operating margin exceeding 16% has already been achieved at the interim stage, making sustainability over the full year the key focus.

The full-year forecast for FY2026 (ending November 2026) was revised upward to net sales of ¥185,000 million (up 15.2% year on year) and operating profit of ¥30,000 million (up 47.6% year on year). Progress at the interim stage was generally solid, with net sales progress at 49.8% and operating profit progress at 52.2% of the full-year forecast. On the other hand, external environment risks such as US tariff policy, tensions in the Middle East, and uncertainty in the Chinese economy could affect second-half performance, and the degree of certainty around achieving the forecast needs to be assessed.

The annual dividend forecast for FY2026 (ending November 2026) was raised to ¥115 (up 31.8% from ¥88 in the previous fiscal year), with the interim dividend also increased substantially to ¥39 (versus ¥28 in the same period of the prior year). On the other hand, ¥22,142 million in convertible bonds with stock acquisition rights remain outstanding, and diluted interim net income per share stands at ¥134.61 (versus basic EPS of ¥152.16), resulting in a dilution rate of approximately 11.5% — a risk factor investors should keep in mind.

Growth Strategy

Under "Beyond the Limit 2027," the company aims to achieve ROE above 10% and an operating margin above 16%

High-value-added A-brand products and catalog products for micro-precision machining are being rolled out across all regions. In the first half of FY2026 (ending November 2026), these contributed to sales growth across all segments—Japan, Americas, Europe & Africa, and Asia—functioning as a core measure for avoiding price competition and improving profit margins.

The company continues to strengthen its sales network through M&A, including the newly consolidated Alexandre & Maia, Lda. (Portugal) in the first half of FY2026 (ending November 2026). This contributed to Europe & Africa segment sales of ¥22,185 million (up 25.5% year on year). The company also acquired additional shares in Vischer & Bolli AG (Switzerland).

The medium-term management plan "Beyond the Limit 2027" sets ROE above 10% as a financial target. Profit attributable to owners of parent for the first half of FY2026 (ending November 2026) surged to ¥12,501 million (up 92.8% year on year), and profitability relative to equity of ¥191,680 million is improving. Enhanced shareholder returns through an increased dividend (annual forecast of ¥115) are also contributing to improved capital efficiency.

The company is promoting labor-saving and efficiency improvements on production lines through the introduction of in-house manufactured machinery and equipment. Capital expenditure in the first half of FY2026 (ending November 2026) was ¥5,727 million (down from ¥8,087 million in the same period of the prior year), while construction in progress increased by ¥2,259 million, reflecting ongoing investment ahead of the next phase of operation. The cost of sales ratio improved to 56.5% (from 58.8% in the same period of the prior year), with the investment effects contributing to improved profit margins.

Last updated: July 17, 2026