NAGAOKA INTERNATIONAL CORPORATION
6239・Standard Market・Machinery
Business
Nagaoka Co., Ltd. is a specialized manufacturer whose core businesses are Screen Internal products for oil refining and petrochemical plants (Energy-related Business) and Intake Screens and water treatment equipment (Water-related Business). Founded in 1934, the company accumulated decades of technical expertise, and following a civil rehabilitation process in 2004, transitioned to its current management structure. It operates as a four-company consolidated group, comprising its Chinese manufacturing subsidiary in Dalian (那賀設備（大連）有限公司), its Vietnamese subsidiary (NAGAOKA VIETNAM CO., LTD.), and Yazawa Ferromite Co., Ltd., which handles Water Treatment Plant Construction (Yazawa Ferromite Co., Ltd.). Its main customers include international petrochemical plant owners such as Honeywell UOP, as well as domestic and overseas water utilities and private-sector factories, and it maintains a global sales network spanning the Middle East, the Americas, Europe, and Africa. The company is listed on the Standard Market of the Tokyo Stock Exchange.
Business Model
In the Energy-related Business, the company manufactures and sells high-precision Screen Internal products that have obtained strict certification from process owners, with planned equipment renewal demand at existing plants serving as the main revenue source. The segment profit margin for FY2025 (ended June 2025) stood at a high level of 32.4%. In the Water-related Business, in addition to selling proprietary chemical-free water treatment equipment "Chemi-less" and intake screens, the company is expanding its business domain by winning lump-sum orders for water treatment plant construction through Yazawa Ferromite Co., Ltd. Cost competitiveness leveraging the Dalian, China base underpins the earnings foundation.
Company Strengths
The Energy-related Business achieved a segment profit margin of 32.4% in FY2025 (ended June 2025) (segment profit of ¥1,875 million). Screen Internal benefits from strict production system reviews and certification by process owners, which serve as an entry barrier. The structure whereby renewal demand can be continuously captured from existing plants that have once obtained certification underpins its high profitability.
Chemi-less (Ultra-high-speed Chemical-free Biological Treatment Equipment) is a proprietary device that removes iron, manganese, ammonia nitrogen, and other substances at ultra-high speed without using chemicals, offering an environmental advantage of not generating industrial waste. Continuous improvements are being made, including expanding the scope of application through joint research with universities and developing wash wastewater treatment technology, and a track record is being built up for domestic water purification plants and private factories.
As of the end of FY2025 (ended June 2025), interest-bearing debt stood at ¥231 million against cash and cash equivalents of ¥2,428 million, maintaining a virtually debt-free management structure. Net assets were ¥7,508 million, and the equity ratio remains at a high level, preserving financial flexibility that can be allocated to strategic investments such as M&A.
ENVALITH's Perspective
Performance Trend
Cumulative results for the first nine months of FY2026 (ending June 2026) showed a sharp decline in both revenue and profit, with net sales of ¥5,011 million (down 7.0% year-on-year), operating income of ¥305 million (down 60.4% year-on-year), and quarterly net income attributable to owners of the parent of ¥257 million (down 48.1% year-on-year). The full-year earnings forecast has already been revised downward to net sales of ¥7,500 million (down 15.9% year-on-year) and operating income of ¥630 million (down 58.5% year-on-year). As external factors, changes in energy demand from China, U.S. policy trends, and the situation in the Middle East have caused delays in manufacturing schedules, while soaring raw material prices and freight costs have also squeezed profit margins. On the financial front, the company maintains soundness with an equity ratio of 79.4%. The trend over the past five fiscal years (net sales: ¥6,263 million in FY2021 → ¥9,505 million in FY2024 → ¥8,917 million in FY2025 → forecast of ¥7,500 million for full-year FY2026) shows a clear shift from the rapid growth phase of FY2023-FY2024 to a phase of distinct deceleration and pullback.
Growth Strategy
Aiming to transform into a comprehensive water treatment company and achieve net sales of ¥16,000 million through M&A, expansion of existing businesses, and strengthening of human capital
The company aims to stabilize the business by continuing to secure planned equipment renewal demand from existing plants, while promoting expansion of its product lineup beyond processes where it holds competitive advantage and optimizing manufacturing bases (in response to geopolitical risk). The ratio of sales to existing facilities reached 95.7% for the cumulative third quarter of FY2026 (ending June 2026), but the order backlog remained at ¥2,565 million, down 23.4% year on year, with building up new orders remaining a challenge.
In addition to intake and water treatment for water supply systems, the company is considering entering water business domains beyond water supply, such as sewage and wastewater treatment, to expand its business scope to include water treatment plant operation and maintenance. The large-scale order for the Misato Water Purification Plant (approximately ¥2,260 million) received by Yazawa Ferromite Co., Ltd. is expected to be recognized as sales from the next fiscal period onward, and is expected to contribute to earnings. However, monetization has been delayed, with a segment loss of ¥63 million recorded for the cumulative third quarter.
As one of the pillars of the medium-term management plan, the company is promoting business structure transformation through M&A. It has already acquired the water treatment plant construction domain by making Yazawa Ferromite Co., Ltd. a subsidiary. The company continues to consider additional M&A leveraging its sound financial base, with an equity ratio of 79.4% and net assets of ¥7,807 million, but no specific new deals have been announced at this time.
The company is strengthening staffing in administrative and R&D departments through promotion of new graduate and career hiring and reform of its personnel system. The increase in SG&A expenses in the Water-related Business (up year on year) reflects this phase of upfront investment. Other (Corporate Expenses & Adjustments) increased to ¥442 million for the cumulative third quarter, up from ¥416 million in the same period of the previous year, as personnel expenses continued to rise.
Last updated: July 17, 2026