TEIKOKU ELECTRIC MFG.CO.,LTD.

Business Details

The core business of the Group, manufacturing and selling Canned Motor Pumps, Metering Pumps, and Other Pumps. Characterized by a completely leak-free structure, it is adopted at sites where safety is the top priority, such as petrochemical plants, semiconductors, electric power, and refrigeration/air conditioning. Based on domestic manufacturing, the Group conducts global sales and after-sales service through subsidiaries in the U.S., China, India, Europe, Taiwan, Singapore, and Korea. Following the cessation of the Electronic Components Business (Hirafuku Electric Manufacturing Co., Ltd.) effective December 31, 2024, the segment structure was changed to a single reportable segment, the "Pump Business," from the current consolidated fiscal year.

Recent Overview

Revenue and profit declined due to slowing demand in the U.S. and China and cessation of a subsidiary's business. Net profit increased due to extraordinary gains.

In FY2026 (ending March 2026), net sales were ¥29,091 million (down 4.8% year on year) and operating profit was ¥4,983 million (down 17.7% year on year), reflecting lower revenue and profit. In the major market of the U.S., capital investment slowed due to tariff policy and financial conditions, while in China, large-scale projects were curtailed due to the economic slowdown, resulting in decreases in Chemical Equipment Canned Motor Pumps and after-sales service. Meanwhile, Southeast Asia, India, and Europe remained solid. A decline in gross margin weighed on profit. Owing to the recognition of a gain on sale of investment securities of ¥868 million and a gain on sale of fixed assets of Hirafuku Electric Manufacturing of ¥140 million, profit attributable to owners of parent increased to ¥4,341 million (up 13.9% year on year). The Electronic Components Business (Hirafuku Electric Manufacturing) ceased operations effective December 31, 2024, and the Group transitioned to a single reportable segment, the Pump Business, from the current fiscal year.

Key Products

Growth Drivers

• Continued solid demand in Southeast Asia, India, and European markets
• Expanding demand for semiconductor equipment Canned Motor Pumps for data centers amid the spread of generative AI
• Recovery trend in the U.S. market (revenue growth expected in the FY2027 (ending March 2027) forecast)
• Support for revenue from continued high order backlog
• Concentration of management resources on the Pump Business following the cessation of the Electronic Components Business
• Acquisition of large-scale nuclear power-related projects in the U.S. and India
• Expanding capital investment demand for decarbonization (accelerating efforts toward zero CO₂ emissions in the petrochemical industry)
• Revenue-boosting effect from foreign exchange (FY2027 (ending March 2027) forecast)

Risks

• Decline in large-scale projects and softness in Chemical Equipment Canned Motor Pumps sales due to the continued slump in the Chinese economy (expected to remain sluggish next fiscal year as well)
• Slowdown in capital investment demand in the chemical industry due to uncertainty over U.S. tariff policy
• Impact on the global economy from escalating tensions in the Middle East and uncertainty over global demand
• Pressure on profit from rising raw material prices and increased SG&A expenses such as personnel costs and R&D expenses
• Difficulty procuring certain materials, such as organic solvents, in Japan
• Declining trend in gross margin (operating margin of 17.1% in FY2026 (ending March 2026), down from 19.8% in the prior period)
• Foreign exchange risk (fluctuations in the foreign currency translation adjustment account associated with global operations)
• Expected decrease in net profit for FY2027 (ending March 2027) due to the absence of the prior-period extraordinary gain (gain on sale of investment securities of ¥868 million)