TOYO DENKI SEIZO K.K.

Business Details

This segment manufactures and sells Electrical Equipment for Railway Rolling Stock, Electrical Equipment for New Transit System Vehicles, Electrical Equipment for Special Vehicles, Power Storage Systems for Railways, and related products, along with associated construction work. Domestically, the main customer base consists of new vehicle construction and equipment renewal for private railway operators and JR; overseas, it centers on maintenance parts for China's high-speed rail and new vehicle investment in Indonesia. The business is conducted through a group structure including the Company, Toyo Koki Co., Ltd., Taihei Electric Co., Ltd., and local subsidiaries in China and the United States. Effective June 1, 2026, this segment will be integrated with the ICT Solutions Business to promote an integrated approach to cashless and ticketless initiatives for railway and bus operators.

Recent Overview

Profit surged on higher domestic private railway sales and improved profitability; overseas sales fell due to a rebound from a large Indonesian order in the prior period

In the Transportation Systems Business for FY2026 (ending May 2026), net sales declined slightly to ¥27,398 million (down 1.5% year on year), but segment profit rose substantially to ¥5,316 million (up 47.1% year on year) on improved profitability. Domestically, railway operators' vehicle investment became more active against a backdrop of solid inbound demand, with increased sales to private railway operators driving domestic railway net sales to ¥17,371 million (up 17.2% year on year). Overseas, however, sales declined sharply due to a rebound from a large-scale order for Indonesia in the prior period, with overseas railway net sales falling to ¥6,506 million (down 35.9% year on year). Orders received increased to ¥32,063 million (up 15.6% year on year) on higher orders from private railway operators and overseas customers (excluding China), and the order backlog also grew to ¥36,479 million. Effective June 1, 2026, the ICT Solutions Business was integrated into this segment, and operations under the new structure have commenced.

Key Products

Growth Drivers

• Increased vehicle investment by railway operators driven by rising domestic railway ridership amid the recovery in inbound tourism (increased orders for new vehicle construction and equipment renewal)
• Continued inquiries and orders for maintenance parts for China's high-speed rail
• Continued demand centered on new vehicle investment for Indonesia (PT Industri Kereta Api)
• Increased inquiries for new vehicle products from overseas markets (excluding China) amid robust railway infrastructure investment in various countries
• Expanding renewal demand for decarbonization and labor-saving equipment amid domestic railway operators' GX/DX initiatives
• Deepened capital and business alliance and accelerated development of electrical equipment for next-generation Shinkansen through the disposal of treasury shares via third-party allotment to East Japan Railway Company (578,000 shares; total disposal value of approximately ¥1,164 million)
• Integrated response to cashless and ticketless needs through integration with the ICT Solutions Business

Risks

• Risk of fluctuation in overseas net sales due to the rebound from a large-scale order for Indonesia in the prior period (overseas railway net sales fell 35.9% year on year to ¥6,506 million)
• Decline in orders from China (orders from China decreased year on year in FY2026 (ending May 2026))
• Impact on overseas operations from heightened geopolitical risk and continued tension in Japan-China relations
• Volatility in quarterly results arising from the build-to-order production model
• Impact on export profitability from trends in U.S. trade policy and foreign exchange fluctuations
• Risk of increased costs in response to China's rare earth export restrictions (expected costs associated with supply chain diversification and development of rare-earth-free products)