ENVALITH
新東工業株式会社 logo

SINTOKOGIO,LTD.

6339・Prime Market・Machinery

Official website
新東工業株式会社 logo
SINTOKOGIO,LTD.6339

Business

Shinto Kogyo is an industrial machinery manufacturer founded in 1934, forming a group consisting of the company itself along with 84 subsidiaries and 6 affiliated companies. Led by its core Surface Treatment Business (shot blast, projection media, etc.), the company operates across five business segments—casting equipment, dust collection/deodorizing equipment, conveying systems, and special machinery—with consolidated net sales reaching ¥176,178 million in FY2026 (ending March 2026). Its main customers span a wide range of manufacturing industries including automobiles, construction machinery, semiconductors, electronic components, and logistics, and it conducts business not only domestically but globally, including in Europe, the Americas, and Asia. In 2024, the company made France's Elastico S.A. a consolidated subsidiary, significantly strengthening its surface treatment business foundation in Europe.

Business Model

While the equipment/machinery manufacturing and sales business serves as the foundation, the company builds a stable revenue base by continuously providing parts, consumables, and maintenance services for previously delivered equipment. In the Surface Treatment Business, the company promotes a "Trinity" model integrating "Equipment / Consumables / After-Sales Service," and in the Environmental Business as well, parts and maintenance sales underpin revenue. Annual R&D expenditure amounts to ¥2,873 million, aimed at enhancing added value through technological differentiation.

Company Strengths

The company has 84 subsidiaries and 6 affiliated companies, with manufacturing and sales locations in Taiwan, South Korea, China, Brazil, Germany, the United States, India, Thailand, and other countries. In April 2024, it made France's Elasticos a consolidated subsidiary, substantially strengthening its presence in the European surface treatment market. With the company's annual sales incorporated from FY2026 (ending March 2026), Surface Treatment Business sales grew 24.1% year on year to ¥96,493 million.

The company operates six segments—Surface Treatment, Casting, Environmental, Conveying, Special Machinery, and Others—forming a structure that limits dependence on specific customers or industries. In FY2026 (ending March 2026), the Environmental Business maintained a high operating margin of 13.0% (operating profit of ¥1,749 million), and the Conveying Business achieved an operating margin of 10.9% (operating profit of ¥894 million), functioning as a structure in which other segments offset losses in the Special Machinery Business.

Sales of parts, consumables, and maintenance services for previously delivered equipment serve as a continuous revenue source. Under the medium-term management plan, the company is pursuing measures to raise the parts coverage ratio from 56.2% in FY2025 results to a target of 61.0% by FY2027 (ending March 2027). In the Environmental Business, sales of parts and maintenance services have remained solid, and the order backlog has also increased 6.8% year on year to ¥7,455 million.

ENVALITH's Perspective

Most of the ¥20,910 million impairment loss (of which ¥20,810 million relates to the Surface Treatment Business) recorded in FY2026 (ending March 2026) stems from the impairment of goodwill and fixed assets related to Elastico, acquired in 2024. As a result, net loss attributable to owners of the parent widened to ¥16,262 million, and net loss per share reached ¥309.80. While the company explains this as an "early resolution of future burdens," the fact that such a large-scale impairment occurred only one to two years after the acquisition highlights the difficulty of generating integration synergies, and the market's scrutiny of the effectiveness of future M&A strategy is likely to become more stringent.

Operating profit for FY2026 (ending March 2026) improved to ¥3,831 million (up 27.5% year on year), but the Special Machinery Business posted an operating loss of ¥995 million (widening from a loss of ¥422 million in the previous period), reflecting the continued impact of the slowdown in the EV market. Orders received in the Casting Business fell sharply to ¥37,027 million, down 20.3% year on year, and order backlog dropped 34.8% to ¥26,173 million, which will act as a drag on sales and profit in the coming periods. The company's forecast for FY2027 (ending March 2026) [sic] calls for revenue of ¥170,000 million (down 3.5% year on year), and the path to earnings recovery remains uncertain.

The company has set targets of 8.0% ROE and consolidated operating profit of ¥15.0 billion for the final year of its next medium-term management plan, but ROE for FY2026 (ending March 2026) turned significantly negative due to the net loss recorded. Even with the projected net profit of ¥5,600 million for FY2027 (ending March 2026) [sic], ROE is expected to remain around 5%, meaning substantial profit growth will be needed to achieve the target. On the other hand, the company's stance on strengthening shareholder returns is commendable, including plans to reduce cross-shareholdings (targeting a ratio of less than 15% of net assets), presenting the option of flexible share buybacks, and increasing dividends (forecast of ¥48 for FY2027 (ending March 2026) [sic], up from ¥44 in the previous period). It should also be noted that external factors such as uncertainty over U.S. tariff policy and Middle East tensions pose downside risks to the earnings forecast.

Growth Strategy

Redefinition of business domains around "Shaping and Surface Finishing" and a shift toward capital-efficiency-focused management

The "Three Attractions Integrated" business model—providing equipment, consumables, and after-sales service as an integrated offering—is being rolled out in Europe to generate synergies within the Surface Treatment Business. In FY2026 (ending March 2026), the full-year contribution was incorporated, achieving Surface Treatment Business net sales of ¥96,493 million (up 24.1% year on year); however, large-scale impairment losses on goodwill and other assets were recorded, bringing integration challenges to the surface.

A plan is underway to newly construct a mass-production plant for metal parts manufacturing and ceramic parts manufacturing using 3D printers, primarily producing high-value-added components for data centers. Leveraging the favorable market environment driven by expanding AI-related investment, the company aims to cultivate this as a new profit pillar for the Special Machinery Business.

The company is promoting a structural transformation to increase the proportion of parts and consumables within net sales. The order backlog decreased 25.6% year on year to ¥49,378 million, which the company explains as the result of an intentional shift away from dependence on equipment orders toward a parts, consumables, and after-sales-service-oriented model. Sales of parts and consumables have remained solid in the Environmental Business and the Surface Treatment Business.

The company is reducing cross-shareholdings with a target of bringing them below 15% of net assets, and is strengthening capital efficiency in conjunction with appropriate management and utilization of interest-bearing debt. The equity ratio as of the end of FY2026 (ending March 2026) stood at 48.9% (down from 50.5% in the previous fiscal year), falling short of the 50% target, making efforts toward achieving a PBR of 1.0x or above an urgent priority. The dividend for FY2027 (ending March 2027) is planned to be increased to ¥48 per share (from ¥44 in the previous fiscal year).

Last updated: July 19, 2026