Maezawa Industries, Inc.

Business Details

A segment engaged in the manufacture and sale of Water and Sewage Treatment Machinery and Equipment, Industrial Water Treatment Machinery and Equipment, Organic Waste Recycling Equipment, and other products. Major customers are public institutions such as local governments, and the segment focuses primarily on demand for renewal and reconstruction of aging facilities, while also pursuing solution-based sales in industrial wastewater treatment and organic waste recycling fields. The majority of revenue consists of goods transferred over a period of time (percentage-of-completion basis), and there is seasonality with revenue and profit concentrated in the second half of the fiscal year.

Recent Overview

Orders received grew strongly by 14.7% year-on-year, but profit declined 5.1%, indicating deteriorating profitability

For the cumulative nine months of FY2026 (ending May 2026) (June 2025 to February 2026), the Environmental Business recorded orders received of ¥11,832 million (up 14.7% year-on-year) and revenue of ¥10,438 million (up 4.9% year-on-year), securing revenue growth. On the other hand, segment profit declined to ¥587 million (down 5.1% year-on-year). A provision for completed construction contract compensation of ¥148 million was recorded as an extraordinary loss, suggesting challenges in construction profitability management. In terms of revenue composition, goods transferred over a period of time continued to account for the majority at ¥7,637 million.

Key Products

Growth Drivers

• Continued expansion of demand for renewal and reconstruction of aging water and sewage facilities
• Promotion of solution-based sales in industrial wastewater treatment and organic waste recycling fields
• Capturing demand for biomass and energy-saving equipment toward realizing a decarbonized, resource-recycling society
• Orders received rose 14.7% year-on-year to a high level, and the ¥22,317 million order backlog at the end of the previous fiscal year provides visibility into future revenue
• Profitability improvement through proposal-based sales promotion and enhanced management across business processes

Risks

• High dependence on public works makes the business susceptible to national and local government budget trends and policy changes
• Seasonality with revenue and profit concentrated in the second half tends to result in weak first-half performance
• Risk of deteriorating cost ratio due to rising raw material and outsourcing costs (amid continuing price increases)
• Risk of recording provisions for construction losses on projects under the percentage-of-completion method (a provision for completed construction contract compensation of ¥148 million was recorded in cumulative Q3)
• Risk that revenue shortfalls at water and sewage utilities due to population decline from the falling birthrate and aging population could suppress capital expenditure
• Risk of deteriorating construction profitability due to increasing difficulty in securing construction capacity and personnel to meet rising orders