DIJET INDUSTRIAL CO., LTD.

Business Details

The Group operates as a single-segment company engaged in the manufacture and sale of cemented carbide alloys and tools. Centered on three product groups—Yakihada Chip, Cutting Tools, and Wear-Resistant Tools—the company maintains an in-house integrated manufacturing system from alloy to finished product. It operates on two pillars: domestic sales (42.8% of net sales) and exports (57.2% of net sales), selling globally through overseas subsidiaries in the U.S. and Germany and an affiliated company in China. The major customer is SHANGHAI STAR INTERNATIONAL TRADE CO.,LTD. (11.7% of net sales).

Recent Overview

Net sales up 5.7% and operating profit nearly tripled, with a significant improvement in profitability; a decline in profit is forecast for the next fiscal year

In FY2026 (ending March 2026), the company achieved net sales of ¥9,292 million (up 5.7% year on year) and operating profit of ¥648 million (up 195.8% year on year), a substantial increase in earnings. Improvement in the cost-of-sales ratio and higher sales contributed to an improvement in operating margin from 2.5% to 7.0%. With the addition of extraordinary gain of ¥184 million from the sale of investment securities, net profit reached ¥783 million (up 281.6% year on year). On the other hand, the forecast for FY2027 (ending March 2027) calls for net sales of ¥9,600 million (up 3.3%) but operating profit of ¥400 million (down 38.3%), a decline in earnings. The assumed exchange rates for the next fiscal year are ¥160 to the US dollar and ¥185 to the euro.

Key Products

Growth Drivers

• Expansion of sales through the enhancement of the Cutting Tools new product lineup (Alumijet, Max Master Mini, etc.) (net sales for the period up 5.4% year on year)
• Growth in exports to Asia (up 6.6% year on year to ¥2,761 million, comprising ¥1,895 million to China and ¥865 million to other Asian markets)
• Improvement in the cost-of-sales ratio (gross margin for the period improved by 3.7 percentage points to 37.9% from 34.2% in the prior period)
• Expansion of sales channels for Wear-Resistant Tools in new fields such as molds for EV/HEV battery cases
• Expansion of sales channels through participation in domestic and international trade shows (MF-TOKYO2025, MECT2025, EMO)
• Build-up of order backlog (¥1,356 million at period-end, up 54.6% from ¥877 million at the prior period-end)

Risks

• The operating margin remains below the 10% target, at 7.0% for the current period, with the forecast for the next fiscal year projected to decline to 4.2%
• Concerns over developments in U.S.-China trade policy and a slowdown in production in the automotive industry and other sectors due to U.S. tariff increases
• Risk of sales concentration in the major customer SHANGHAI STAR INTERNATIONAL TRADE CO.,LTD. (11.7% of net sales for the period) and concerns over a slowdown in the Chinese economy
• Continued decline in sales and production of Wear-Resistant Tools (down 6.9% year on year in net sales and down 11.9% in production for the period)
• Risk of rising raw material prices (such as tungsten used as a raw material for cemented carbide alloys) and resource price increases stemming from the situation in the Middle East
• Uncertainty in the business environment due to geopolitical risks (the situation in Russia-Ukraine and issues in the Middle East)
• Inventory risk from the increase in inventories (¥5,343 million at period-end, up 10.8% from ¥4,821 million at the prior period-end)