Techno Smart Corp.

Business Details

The company's core business is coating and drying equipment that imparts functionality to substrates such as film, metal foil, and paper. It designs, manufactures, installs, and sells Display Component-Related Equipment, Functional Film-Related Coating Equipment, Energy-Related Equipment (including automotive lithium-ion batteries, etc.), and Electronic Component-Related Coating Equipment. All products are built to order, custom-made for each project. The main customer is Tsubakimoto Kogyo Co., Ltd. (36.9% of sales in FY2026 (ending March 2026)). The company has a broad presence serving advanced industries both domestically and overseas, with an export ratio of 54.3% (FY2026 (ending March 2026)).

Recent Overview

Sales and profit declined, but gross profit margin improved; orders received recovered sharply, up 43.8% year on year

In FY2026 (ending March 2026), sales were ¥20,737 million (down 3.9% year on year) and operating profit was ¥2,971 million (down 15.4% year on year), representing a decline in both revenue and profit. While Energy-Related Equipment declined sharply by 23.8% year on year, Display Component-Related Equipment (up 2.4%) and Functional Film-Related Coating Equipment (up 7.5%) saw increased sales. The gross profit margin improved to 24.4% (from 22.3% in the prior period), but SG&A expenses ballooned to ¥2,087 million (up 60.1% year on year), squeezing operating profit. Orders received recovered sharply to ¥20,157 million (up 43.8% year on year), with Functional Film-Related Coating Equipment orders surging 206.1% year on year in particular. Operating cash flow turned significantly positive at ¥5,074 million (versus negative ¥1,532 million in the prior period). For FY2027 (ending March 2027), the company forecasts sales of ¥19,000 million and operating profit of ¥2,000 million.

Key Products

Growth Drivers

• Sharp expansion in orders for Functional Film-Related Coating Equipment: Orders received in FY2026 (ending March 2026) totaled ¥10,250 million (up 206.1% year on year), with an order backlog of ¥9,979 million (up 89.1% year on year), expected to contribute to results in the coming period
• Continued stable demand for Display Component-Related Equipment: Steady demand is expected to continue for equipment related to optical films for smartphones, tablets, and LCD TVs
• Improving trend in gross profit margin: 24.4% in FY2026 (ending March 2026) (versus 22.3% in the prior period and 18.9% two periods prior), reflecting ongoing effects of process efficiency improvements, outsourcing management, and specification standardization
• Enhanced customer testing capabilities and accelerated development of new products and technologies through the new experimental building and new experimental equipment (three test machines) that began operating in March 2025
• Strengthened new orders for semiconductor and electronic component-related coating equipment: Orders received in FY2026 (ending March 2026) surged to ¥745 million (up 362.0% year on year), with the order backlog also up 56.0% year on year
• Expansion of export orders: Export orders received in FY2026 (ending March 2026) totaled ¥11,372 million (up 56.5% year on year), with the export order ratio rising to 56.4% (from 51.9% in the prior period)

Risks

• Continued slowdown in EV market demand: Orders received for Energy-Related Equipment fell sharply by 61.9% year on year due to customers postponing or revising capital expenditure plans, with the timing of recovery uncertain
• Significant profit decline forecast for FY2027 (ending March 2027): The company expects sales of ¥19,000 million (down 8.4% year on year) and operating profit of ¥2,000 million (down 32.7% year on year), indicating further deterioration in performance
• Sharp increase in SG&A expenses: SG&A expenses of ¥2,087 million in FY2026 (ending March 2026) (up 60.1% year on year) squeezed operating profit, with changes in the cost structure affecting profitability
• Concentration of sales with a specific customer: Tsubakimoto Kogyo Co., Ltd. accounted for 36.9% (¥7,656 million) of sales in FY2026 (ending March 2026) (versus 45.8% in the prior period)
• Decline in order backlog: Order backlog at the end of FY2026 (ending March 2026) was ¥23,704 million (down 2.4% from the end of the prior period), with the Energy-Related Equipment backlog shrinking sharply by 49.1% year on year
• Intensifying price competition with domestic and overseas equipment manufacturers: Price competition is increasing, with terms becoming stricter for some projects, requiring continued efforts to reduce costs
• Raw material procurement risk: Amid heightened tensions in the Middle East, there have been moves toward price increase requests, shipment adjustments, and order suspensions for some raw materials, requiring responses such as investigating alternative materials
• Foreign exchange risk: With an export ratio of 54.3% (FY2026 (ending March 2026)) and high dependence on overseas sales, exchange rate fluctuations affect business performance