DENKI KOGYO CO.,LTD.

Business Details

Manufactures, constructs, and sells various antennas, reflector plates, steel towers, steel structures, etc.; performs construction work for telecommunications facilities; manufactures various telecommunications equipment; plates steel frames and other structures; and manufactures and sells AI Solution Systems. Major customers include NTT DOCOMO, Inc. (net sales of ¥4,782 million for the current period, 13.5% of consolidated net sales), mobile communication carriers, the Ministry of Defense and Japan Self-Defense Forces, local governments (disaster prevention administrative radio), and broadcasters. Also develops solution businesses combining the image AI technology and wireless communication technology of subsidiary Cybercore Inc.

Recent Overview

Substantial increase in both revenue and profit, with net sales up 15.0% and segment profit up 23.9%, driven by defense, disaster prevention, and 5G demand

In the Telecommunications-Related Business for FY2026 (ending March 2026), net sales reached ¥25,387 million (up 15.0% year on year) and segment profit reached ¥2,377 million (up 23.9% year on year). The main drivers of increased revenue were continued growth in demand for defense equipment and facilities due to increased defense budgets, continued demand for disaster prevention administrative radio stemming from emergency disaster prevention and mitigation bonds, and recovery in demand for 5G-related capital expenditure by mobile communication carriers. Orders received also grew to ¥28,092 million (up 11.7% year on year), and the order backlog increased to ¥17,257 million, strengthening the performance foundation for the next fiscal year. Note that accounting treatment related to changes in the retirement benefit plan was corrected in a corrective disclosure (dated May 29, 2026), but the direct impact on segment performance figures is considered minor.

Key Products

Growth Drivers

• Increased demand for defense equipment and various defense facilities against a backdrop of continued increases in defense budget appropriations (increasing trend continues)
• Continuation of demand for disaster prevention administrative radio from local governments following the announced five-year extension of emergency disaster prevention and mitigation bonds
• Continued recovery in capital expenditure demand from mobile communication carriers for communication quality improvement (5G) (antennas, wireless devices, steel towers, maintenance)
• Expansion of orders in the AI solution business through collaboration with Cybercore Inc. (strengthened proposal and development capabilities through organizational restructuring)
• Beginning of increase in some demand for digital broadcasting equipment renewal and improving trend in maintenance demand
• Expansion of surface treatment demand scope through new zinc phosphate treatment equipment installed at Denko Co., Ltd.
• Improved profitability through productivity improvement and fixed cost reduction initiatives

Risks

• Uncertainty regarding the pace of recovery in capital expenditure plans of mobile communication carriers (risk that recovery remains limited to certain customers)
• Disaster prevention administrative radio demand stemming from emergency disaster prevention and mitigation bonds is expected to settle down from the next fiscal year onward
• Profitability pressure from intensifying bid price competition in disaster prevention administrative radio and defense-related projects
• Full-scale recovery in demand for digital broadcasting equipment renewal remains limited
• Continued risk of cost increases due to rising material prices, energy costs, and labor costs
• Uncertainty in the business environment due to geopolitical risks (Middle East situation, etc.) and foreign exchange fluctuations
• Risk that changes in trade policy such as U.S. tariff policy indirectly affect customers' capital expenditure plans