THK CO., LTD.
6481・Prime Market・Machinery
Business
THK Co., Ltd. was founded in 1971. The company develops the global manufacture and sale of mechanical component parts centered on linear motion systems, including LM Guide (Linear Motion Guide). Its main customers are capital goods manufacturers such as machine tool, semiconductor manufacturing equipment, and industrial robot makers, and it has built an "integrated regional manufacturing-and-sales system" across five regions: Japan, Americas, Europe, China, and emerging Asian countries. From FY2025 (ending December 2025), the company classified its Transportation Equipment business (Steering & Suspension Components, Brake Components, etc.) as discontinued operations under IFRS 5, and in February 2026 decided to transfer it to AP87 Co., Ltd., clarifying its selective focus and concentration on the Industrial Equipment business. The company comprises 39 subsidiaries and 3 affiliated companies.
Business Model
The company adopts a vertically integrated model in which core products—mechanical component parts such as the LM Guide, ball splines, and Ball Screw—are manufactured at production sites in each region and sold directly through sales channels. In recent years, it has strengthened its expansion into the "FA Solutions Business," which extends beyond the scope of mechanical component parts, through offerings such as the IoT predictive-detection and AI tool-monitoring solution "OMNIedge" and the next-generation linear transport system "VTS." By expanding touchpoints with machine users in addition to machine builders, the company aims to build a multi-layered customer base and secure recurring service revenue.
Company Strengths
Since beginning development and sales of LM Guides (Linear Motion Guide) in 1972, the company has established its position as the world's top manufacturer of linear motion systems for over 50 years. Its proprietary technology, which converts "sliding" motion into "rolling" motion to reduce friction to 1/50, is adopted across a wide range of fields including machine tools, semiconductor manufacturing equipment, seismic isolation devices, and medical equipment, forming a high barrier to entry as an irreplaceable core component.
The company has built an integrated manufacturing and sales structure at the point of demand, operating local manufacturing bases and sales bases together across five regions: Japan, the Americas, Europe, China, and Others (Taiwan, ASEAN, India, etc.). Of the ¥240,444 million in continuing operations revenue for FY2025 (ending December 2025), China accounted for ¥78,184 million (up 21.6% year on year) and Others accounted for ¥26,512 million (up 20.2% year on year), demonstrating clear growth in emerging markets.
The company has obtained and maintained an A+ (single A plus) rating from both Rating and Investment Information, Inc. and Japan Credit Rating Agency, Ltd. As of the end of FY2025 (ending December 2025), cash and cash equivalents stood at ¥120,534 million, and the company has secured a commitment line of ¥50.0 billion (with a year-end outstanding balance of ¥20,000 million). Cash flow from operating activities was ¥42,748 million, maintaining a stable cash-generating capability.
ENVALITH's Perspective
Performance Trend
Revenue over the past five fiscal years peaked at ¥393,687 million in FY2022 before declining, and in FY2025 the company fell into a net loss (net income of -¥69,891 million) due to restructuring losses recorded in the Transportation Equipment business. However, in Q1 of FY2026 (ending December 2026) (continuing operations), revenue reached ¥69,043 million (+27.4% YoY) and operating profit came to ¥7,620 million (+364.4% YoY), marking a sharp recovery. The cost-of-sales ratio declined by 4.2 points YoY to 66.9%, and the operating margin improved to 11.0% (+8.0 points YoY). The main external factor was a recovery in demand related to electronics (such as semiconductor manufacturing equipment). On the other hand, the impact of U.S. tariffs, continued operating losses in Europe, and structural reform costs including ¥740 million in Next Career support expenses partially weighed on profit. Full-year guidance calls for revenue of ¥276,000 million (+14.8% YoY) and operating profit of ¥31,000 million (+114.7% YoY).
Growth Strategy
Concentration on the Industrial Equipment business following the transfer of the Transportation Equipment business, and early achievement of ROE exceeding 10%
The transfer of the Transportation Equipment business to AP87 Co., Ltd. is scheduled to be executed on June 1, 2026. Following completion of the transfer, the business structure will become specialized in the Industrial Equipment business, and elimination of the capital cost burden and improvement of ROIC are expected. Assets held for sale increased to ¥53,854 million (as of end of March 2026), and procedures are in their final stage.
Structural reform of the Industrial Equipment business is being promoted under the new management policy. Fixed costs are being reduced through measures such as the implementation of the Next Career Support Program (announced February 12, 2026). Improvement effects have become evident, with the cost of sales ratio declining 4.2 percentage points year on year to 66.9% and operating margin reaching 11.0% in the first quarter of FY2026 (ending December 2026).
Emphasis is placed on controlling equity capital, the denominator of ROE, while maintaining a dividend policy based on a DOE of 8% (forecast annual dividend of ¥184.00 for FY2026 (ending December 2026)). The company aims to achieve ROE exceeding 10% through a combination of equity capital compression following the Transportation Equipment business transfer and profit growth. The ratio of equity attributable to owners of the parent stood at 52.6% at the end of the first quarter of FY2026 (ending December 2026).
In China, demand for industrial equipment has trended favorably, achieving a 44.1% year-on-year increase in revenue in the first quarter of FY2026 (ending December 2026). In India and ASEAN, proactive sales activities have driven new customer development and sales network expansion, achieving a 32.8% increase in revenue over the same period. Local responsiveness is being strengthened through the establishment of an integrated production and sales system in demand areas.
Last updated: July 17, 2026