TOKYO AUTOMATIC MACHINERY WORKS, LTD.

Business Details

Manufactures and sells Overwrapping Machines, Bag-Making & Filling Machines, Cartoning Machines, Various Line Systems, compression baling machines, Tobacco-Related Machinery, and other products. Main customers are domestic manufacturers, primarily in the confectionery and food industry. Manufacturing is handled by affiliated companies PT TAM PACKAGING ASIA and Tokyo Shisetsu Kogyo Co., Ltd. The company aims to expand sales by capturing automation and labor-saving demand driven by labor shortages, but competition on price with rival companies is intense, keeping profit margins at an extremely low level.

Recent Overview

Both net sales and segment profit improved significantly, with profitability recovering sharply

For the full year of FY2026 (ending March 2026), net sales in the Packaging Machinery segment increased approximately 13% year on year to ¥6,541 million (prior year: ¥5,785 million). Segment profit improved substantially to ¥407 million (prior year: ¥5 million), with the profit margin recovering to approximately 6.2%. The extremely low profit margin that had been an issue through the prior fiscal year improved significantly, likely reflecting progress in price pass-through and the working off of the order backlog. Note that, following the correction dated May 18, 2026, the net sales figure for the Production Machinery segment was revised, but there was no change to the Packaging Machinery segment figure (net sales of ¥6,541 million).

Key Products

Growth Drivers

• Continued automation and labor-saving demand driven by labor shortages, mainly in the confectionery and food industry
• Solid order trends including large-scale projects (orders received in FY2025 (ended March 2025) up approximately 16.5% year on year)
• Progress in recognizing sales as the order backlog is worked through
• Profitability improvement through efficiency gains and price pass-through (segment profit margin recovered to approximately 6.2% in FY2026 (ending March 2026))
• Emergence of capital expenditure demand related to "environment," "automation," and "IoT"

Risks

• Risk of renewed decline in profit margin due to price competition with rival companies
• Cost pressure from raw material prices remaining at elevated levels
• Increase in selling, general and administrative expenses due to active sales activities and development investment
• Risk of global economic slowdown due to the impact of US trade policy, and concerns over customers curbing capital expenditure
• Impact of slowing personal consumption due to price increases on food manufacturers' capital expenditure appetite