ENVALITH
新晃工業株式会社 logo

SINKO INDUSTRIES LTD.

6458・Prime Market・Machinery

Official website
新晃工業株式会社 logo
SINKO INDUSTRIES LTD.6458

Business

Shinko Industries, founded in 1950, is a specialist manufacturer of commercial air conditioning equipment, with Air Handling Units (AHU) and Fan Coil Units (FCU) as its core products. The company handles both central air conditioning for large-scale buildings and individual air conditioning systems for small and medium-sized buildings, providing the full value chain from design and manufacturing through installation and maintenance. Its main customers are general contractors and piping/HVAC subcontractors, delivering products for a wide range of building types including office buildings, factories, hospitals, and data centers. The company operates two domestic plants (Kanagawa and Okayama) and a local subsidiary in China, recording consolidated net sales of ¥59,339 million for FY2026 (ending March 2026). Listed on the Tokyo Stock Exchange Prime Market.

Business Model

The upstream sales division, which provides design support from the building planning stage, secures projects early, and AHUs and other products are manufactured and delivered on a made-to-order basis tailored to customer specifications. In addition to product sales, group company Shinko Atmos handles Air Conditioning Equipment Construction & Maintenance, while Nippon BAC sells cooling towers and ice thermal storage systems, achieving a composite revenue model combining equipment sales with services and construction. In FY2026 (ending March 2026), sales of Air Conditioning Equipment Construction & Maintenance reached ¥14.6 billion, reflecting continued progress in the shift toward a stock-type business.

Company Strengths

As the only company in Japan to hold both AMCA certification and AHRI certification, the company has established product reliability based on objective performance evaluation by third-party institutions. Using the SINKO Technical Center as its development base, the company continuously creates proprietary technologies such as the SSA Project, which pursues higher efficiency in blowers and heat exchangers, and the WA Coil (reducing the number of fins used by 10% or more), thereby maintaining a technological advantage that is difficult for competitors to imitate.

The industry's largest upstream sales department provides design support from the building planning stage, establishing a system for acquiring project information at an early stage. The company has a track record of continuous AHU replacement at representative buildings in Japan such as Kasumigaseki Building, Landmark Tower, and Tokyo Dome, and the order backlog for replacement projects remained at a high level of ¥23,974 million (up 36.9% year on year) at the end of FY2026 (ending March 2026).

The Air Conditioning Equipment Construction & Maintenance business, centered on group company Shinko Atmos, achieved sales of ¥14.6 billion in FY2026 (ending March 2026), significantly exceeding, and ahead of schedule, the ¥12.6 billion target set for FY2027 (ending March 2027) in the medium-term management plan "move.2027". The expansion of construction and service revenue, which is not dependent on product sales, is contributing to the stabilization of the company's earnings base.

ENVALITH's Perspective

In FY2026 (ending March 2026), the company achieved revenue growth to ¥59,339 million (up 4.1% year on year), but profit declined, with operating profit of ¥9,444 million (down 5.4% year on year) and profit attributable to owners of parent of ¥6,826 million (down 12.8% year on year), both falling short of the previous period. In addition to selling, general and administrative expenses increasing from ¥11,810 million to ¥13,177 million, a decrease in sales volume of central air conditioning equipment weighed on profitability. The operating margin declined from 17.5% to 15.9%, making price pass-through and sales volume recovery key evaluation points for the next fiscal year.

The company's forecast for FY2027 (ending March 2026) calls for revenue of ¥63,000 million (up 6.2% year on year) and operating profit of ¥10,000 million (up 5.9% year on year), anticipating a return to simultaneous revenue and profit growth. This is based on strong equipment sales in the data center and individual air conditioning segments, as well as increased production capacity from the launch of the second phase of the SIMA project. On the other hand, risks remain, including longer construction periods for projects due to work-style reform in the construction industry, and difficulties in procuring raw materials and price surges stemming from the impact of international trade policy, leaving uncertainty as to whether the forecast will be achieved depending on external conditions.

Against the ROE target of 10% or higher set forth in the medium-term plan "move.2027," ROE for the current period stood at 11.0% (down from 12.8% in the previous period), maintaining the target level but trending downward. PBR stood at 1.3x as of the end of March 2026, keeping it above 1x. The use of debt through the issuance of ¥6,000 million in convertible bond-type bonds with subscription rights to shares can be evaluated positively as a measure to improve capital efficiency; however, the Asia segment continued to post an operating loss of ¥116 million (an improvement from a loss of ¥283 million in the previous period), and this remains a drag on consolidated profitability that warrants continued attention.

Growth Strategy

Targeting sales of ¥63,000 million and operating profit of ¥10,000 million in FY2027 (ending March 2027) through three pillars—data centers, individual air conditioning, and replacement demand—alongside DX investment

Deploying proposal-based sales leveraging experimental and exhibition facilities such as "SINKO AIR DEVELOPMENT LAB" and "BAC BASE." Equipment sales in the data center and individual air conditioning fields are expanding at a pace exceeding the plan. From FY2027 (ending March 2027), the company plans to begin launching new products targeting heat countermeasures.

Phase 2 operation of the new production system aimed at shortening manufacturing lead times and improving quality will begin for some products starting April 2026. The company aims to strengthen order-handling capacity through enhanced production capacity, and improve profitability through increased sales volume and price pass-through.

Under the medium-term plan "move.2027," the company is advancing share buybacks with an upper limit of ¥10.0 billion. In the current fiscal year, it acquired ¥4,892 million in treasury shares and issued ¥6,000 million in convertible bond-type bonds with stock acquisition rights in April 2025, implementing a review of its capital structure through the use of debt. The company aims to maintain its targets of ROE of 10% or more and PBR of 1x or more.

Amid continued severe price competition in China, the company is promoting a differentiated sales strategy in products and services, along with cost reductions through reviews of quality and manufacturing. The segment loss for FY2026 (ending March 2026) was ¥116 million (an improvement from a loss of ¥283 million in the previous fiscal year), narrowing the loss, but the segment has not yet returned to profitability.

Launched a new DX initiative aimed at transforming operations in marketing and after-sales service and creating group synergies. The company aims to deepen group management toward realizing its long-term vision, "VISION 2030: Opening the Future with Air."

Last updated: July 19, 2026