Seibu Giken Co., Ltd.

Business Details

With Desiccant Dehumidifiers, VOC Concentrators, and Total Heat Exchangers as its core products, the company serves a wide range of industries including food, pharmaceuticals, lithium-ion batteries, semiconductors, and automotive coating. Built on honeycomb laminate technology established in 1974, it is a global manufacturer with four domestic plants and six overseas plants, and a sales network spanning approximately 50 countries. In the first quarter of FY2026 (ending December 2026) (single segment), sales were ¥9,619 million (up 40.7% year on year), and operating profit was ¥1,533 million (up 21.8% year on year).

Recent Overview

Q1 sales rose 40.7% year on year to ¥9,619 million, driven by a sharp increase in domestic Desiccant Dehumidifier sales

In the first quarter of FY2026 (ending December 2026), sales reached ¥9,619 million (up 40.7% year on year), driven mainly by increased domestic sales of Desiccant Dehumidifiers. By region, Japan sales roughly doubled to ¥6,186 million (versus ¥3,122 million in the same period of the prior year), while China sales declined to ¥1,090 million (versus ¥1,431 million). Sales recognized over time surged to ¥4,397 million (versus ¥870 million), reflecting a shift in the revenue structure. A subsidy income of ¥500 million related to the new domestic plant was recorded as extraordinary income. The financial structure shifted due to treasury stock acquisitions (¥999 million) and an increase in short-term borrowings (up ¥5,700 million). The full-year earnings forecast remains unchanged (sales of ¥36,050 million, operating profit of ¥4,030 million).

Key Products

Growth Drivers

• Increased demand for Desiccant Dehumidifiers driven by continued expansion of domestic lithium-ion battery manufacturing investment (Japan sales in Q1 of FY2026, ending December 2026: ¥6,186 million, roughly double the ¥3,122 million in the same period of the prior year)
• Revenue stabilization from the rapid expansion of services transferred over a period of time, such as rentals (Q1 of FY2026, ending December 2026: ¥4,397 million, versus ¥870 million in the same period of the prior year)
• Expanded production capacity from the completion of a new domestic plant (construction in progress increased by ¥834 million; subsidy income of ¥500 million was recorded)
• Expansion of sales to South Korea (Q1 of FY2026, ending December 2026: ¥861 million, versus ¥214 million in the same period of the prior year)
• Growing new demand for VOC Concentrators for solvent recovery and reuse applications in EV battery manufacturing processes
• Expectations of expanded corporate capital investment driven by the continuation of the mid- to long-term decarbonization trend
• Continued strong order intake and sales recognition, as reflected in the increase in notes and accounts receivable and contract assets (from ¥9,327 million to ¥12,758 million)

Risks

• Continued decline in Desiccant Dehumidifier and VOC Concentrator sales due to a prolonged slowdown in the Chinese economy (China sales fell from ¥1,431 million to ¥1,090 million year on year)
• Risk of sales volatility in Europe due to dependence on large-scale VOC Concentrator projects (Europe sales: ¥949 million versus ¥858 million in the same period of the prior year)
• Impact on North American operations from the review of U.S. trade policy (tariffs) (U.S. sales declined from ¥296 million to ¥168 million year on year), and uncertainty in capital investment due to reconsideration of decarbonization policy
• Cost pressure indicated by the decline in operating profit margin (from 18.4% to 15.9% year on year) and EBITDA margin (from 21.7% to 18.7%)
• Increased financial burden from a sharp rise in short-term borrowings (from ¥3,200 million to ¥8,900 million) and a decline in the equity ratio (from 66.6% to 62.4%)
• Risk that the full-year operating profit forecast represents an 11.0% year-on-year decline (¥4,030 million), premised on a recovery in earnings in the second half
• Intensifying competition from low-priced VOC Concentrators offered by local Chinese manufacturers
• Mid- to long-term risk of a slowdown in growth of the EV lithium-ion battery industry and the risk of the spread of alternative coatings that do not contain VOCs
• Foreign exchange risk (a foreign exchange loss of ¥72 million was recorded in the same period of the prior year, turning into a foreign exchange gain of ¥19 million in the current period, but volatile exchange rate conditions continue)