SANDEN CORPORATION
6444・Standard Market・Machinery
Business
Sanden Corporation was founded in 1943 and operates the Automotive Equipment Business—centered on automotive air conditioning systems, compressors, and heat exchangers—as its sole reporting segment. The company has 29 consolidated subsidiaries and 7 affiliated companies in Japan and overseas, and is a global enterprise with overseas sales accounting for 93% of total revenue. Its major customers include the Volkswagen Group (14.8% of net sales) as well as automotive OEM manufacturers across Europe, China, Asia, and the Americas. Following the establishment of a business revitalization ADR in 2021, the company welcomed the Hisense Group as its parent company and is advancing its transformation from a component supplier into a full-solution supplier of Integrated Thermal Management Systems (ITMS).
Business Model
Under a four-pole production system spanning Japan, Europe, China, North America, and Asia, the company supplies air conditioning compressors, heat exchangers, HVAC systems, and other products to automotive OEM manufacturers. It employs a build-to-forecast production approach, formulating production plans based on order status, sales results, and forecast information. Working capital is funded through operating cash flow and financial institution borrowings that leverage credit support from the parent company, Hisense Group. The structure also incorporates investment gains from equity-method affiliates (such as Sanden Huayu Automotive Air-Conditioning Co., Ltd.) (¥5,392 million in FY2025), which contribute to ordinary profit.
Company Strengths
In December 2023, SANDEN INTERNATIONAL (U.S.A.), INC. in the United States began production of Electric Compressor (for Car Air Conditioners), establishing a four-pole production system spanning Japan, China, Europe, and North America. Global cumulative production of compressors reached 400 million units in February 2024, and this track record of mass production together with the breadth of the production network form the foundation of the company's competitive advantage.
In FY2025, sales of Electric Compressor (for Car Air Conditioners) to Chinese EV manufacturers trended favorably, contributing to revenue growth. In the Indian market, sales to local OEMs increased significantly. In the Americas, revenue grew due to progress in deliveries for EVs and strong aftermarket sales. The company has a globally diversified revenue base, with overseas sales accounting for 93% of total sales and Europe and China together accounting for approximately 60% of sales.
The company receives support from its parent company, the Hisense Group, in the form of technology know-how and resources such as imaging technology, sensing technology, and AI-based air conditioning control, and is also able to raise funds at local subsidiaries through credit enhancement. Investment gains of ¥5,392 million from equity-method affiliates contributed significantly to the turnaround to ordinary income in FY2025 (ordinary income of ¥1,774 million).
ENVALITH's Perspective
Performance Trend
Revenue for the first quarter of FY2026 (ending December 2026) accelerated to ¥51,819 million (up 13.9% year-on-year). The main drivers of revenue growth were an increase in automobile production volumes in the Indian market and the continuation of a weak yen (both external factors). The operating loss narrowed significantly to ¥464 million (versus ¥1,016 million in the same period of the previous year), with ordinary income of ¥206 million and quarterly net income attributable to owners of the parent of ¥763 million, achieving a bottom-line profit. Combined with the financial trend over the past five fiscal years (operating loss of ¥18,456 million in FY2021 → operating loss of ¥1,507 million in FY2025), the trend of narrowing losses is clear. The full-year forecast remains unchanged, with revenue of ¥200,000 million (up 4.8% year-on-year), an operating loss of ¥1,000 million, ordinary income of ¥2,700 million, and net income of ¥500 million.
Growth Strategy
Aiming to transform into a full-solution ITMS supplier with the NEV market as the main battlefield, targeting net sales of ¥300,000 million in FY2028
Advancing the transformation from a component supplier to a full-solution system supplier. Centered on the product strength of the Electric Compressor (for Car Air Conditioners), the company aims to expand the scope of ITMS solutions offered for NEVs and improve customer unit prices and profitability.
In India, automobile production increased in Q1 of FY2026 (ending December 2026), and sales to local OEMs contributed to the increase in net sales. Sales of Electric Compressors to China's NEV and EV manufacturers are also being continuously promoted. Expanding the customer base in both markets is a pillar of medium-term growth.
In parallel with the liquidation of fixed assets (gain on sale of ¥973 million in Q1 of FY2026, ending December 2026) and the complete resolution of the structural reform reserve (reducing the balance to zero), the company is working to strengthen its balance sheet and record extraordinary gains. Efforts continue toward resolving the accumulated deficit (retained earnings of ¥-19,866 million).
Through a combination of expanded sales scale and cost reduction measures, gross profit improved from ¥6,697 million in the same period of the previous year to ¥8,128 million. For the full year, an operating loss of ¥1,000 million is forecast, and achieving operating profitability remains a challenge for the following period and beyond.
Last updated: July 17, 2026