YAMASHIN-FILTER CORP.

Business Details

Develops, manufactures, and sells hydraulic filters for construction machinery (return filters, line filters, etc.), hydraulic filters for industrial machinery, and Process Filters. Domestically, the company sells directly, while overseas, consolidated subsidiaries in the US, Europe, Southeast Asia, and China are responsible for sales. In-house production of filter media and years of hydraulic circuit know-how are key differentiators from competitors. Supply of Nanofiber long-life filters to major customers is also ramping up in earnest, with replacement parts (repeat demand) becoming a pillar of earnings. Upfront investment costs of ¥177 million for new businesses are also included and disclosed within this segment.

Recent Overview

Achieved increased revenue and profit due to a significant increase in new vehicle demand and steady replacement demand

In FY2026 (ending March 2026), despite varying levels of demand across markets, overall new vehicle demand increased substantially, and replacement demand remained steady, resulting in net sales of ¥18,654 million (up 6.7% YoY) and operating profit of ¥2,713 million (up 6.2% YoY), achieving both higher revenue and profit. Share expansion, particularly in the North American market, and the growing adoption of Nanofiber products progressed steadily. Note that upfront investment costs of ¥177 million (capital expenditure and personnel recruitment) associated with launching new businesses are included in this segment. For FY2027 (ending March 2027), net sales of ¥20,200 million (+8.3%) and operating profit of ¥3,190 million (+17.6%) are expected.

Key Products

Growth Drivers

• Expansion of the higher-profitability sales mix through increased sales volume of replacement parts (repeat demand)
• Steady progress in share expansion in the North American market (expected to remain solid on the back of AI data center demand and active infrastructure investment)
• Value-added enhancement through the full-scale supply of Nanofiber long-life filters to major customers
• Increase in new vehicle demand (a significant overall increase in FY2026 (ending March 2026))
• Global expansion leveraging the overseas sales network (US, Europe, Southeast Asia, China)
• Improved profitability through sales price revisions and cost improvements (incorporated into the FY2027 (ending March 2027) outlook)

Risks

• Fluctuations in new vehicle demand for construction machinery (risk of demand decline in various markets)
• Concerns over demand decline in the construction machinery market due to prolonged conflicts in the Middle East
• Demand fluctuations in the construction machinery market due to the impact of US tariff policy (currently explained as having an extremely minor impact on performance)
• Continued elevated material prices (aluminum, steel, etc.) and energy costs against a backdrop of geopolitical risk
• Foreign exchange risk (foreign exchange losses pressuring ordinary profit: foreign exchange losses of ¥63 million recorded in FY2026 (ending March 2026))
• Increased fixed costs due to human capital investment (7% base pay increase)
• Continued recording of upfront investment costs for new businesses (approximately ¥370 million expected in the FY2027 (ending March 2027) outlook)