ENVALITH
ホシデン株式会社 logo

Hosiden Corporation

6804・Prime Market・Electric Appliances

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ホシデン株式会社 logo
Hosiden Corporation6804

Business

Hoshiden Corporation is a comprehensive electronic components manufacturer founded in 1950, listed on the Tokyo Stock Exchange Prime Market. The company operates in three segments: "Mechanical Components" including Connectors, Jacks, and Switches; "Acoustic Components" including Microphones and Headphones/Headsets; and "Composite Components, Other" including Composite Devices. As a group comprising 21 domestic and overseas subsidiaries, it has production bases in Vietnam, China, Taiwan, South Korea, and other locations, supplying products mainly to domestic and overseas set makers either directly or through sales bases. Its main customer is Nintendo, accounting for 78.0% (¥349,551 million) of sales in FY2026 (ending March 2026). The company also develops products for automotive, mobile communications, medical/healthcare, and industrial equipment applications, aiming to diversify its customer base and applications.

Business Model

The Group develops products in-house based on diverse core technologies such as mechanical design, acoustic design, and sensor development, and manufactures them through a vertically integrated model utilizing production sites both in Japan and overseas. Manufactured products are supplied primarily to set makers in Japan and overseas, either directly or through sales offices. Cost reduction through the relocation of production to Southeast Asia (Vietnam, etc.), together with strengthening cost competitiveness through mechanization, automation, and labor savings, forms the pillars of the Group's earnings structure.

Company Strengths

In FY2026 (ending March 2026), sales to Nintendo amounted to ¥349,551 million, accounting for 78.0% of consolidated net sales of ¥448,250 million. This represents a substantial expansion from the previous fiscal year (¥142,221 million, 57.4%), with the deep trading relationship with the core customer supporting the rapid expansion in sales scale. Many years of transaction track record and quality response capability form the foundation for large-volume orders.

The company possesses a wide range of core technologies including mechanical design, high-frequency design, acoustic design, optical design, circuit design, mold design, simulation, EMC countermeasures, sensor development, and applied technology. Under the mid-term technology plan (3 years), the company has been conducting an inventory of past technologies and rebuilding the strengths of its proprietary products, and its securities report states that results are emerging in the form of faster development speed and improved efficiency.

The company operates a production base in Vietnam (HOSIDEN VIETNAM (BAC GIANG) CO., LTD.), and in FY2026 (ending March 2026) implemented capital expenditure for production equipment (¥7,866 million) for amusement-related and mobile communication-related applications. The company has set the strengthening and establishment of new production bases centered on ASEAN as a priority issue, and is promoting cost competitiveness through mechanization, automation, and labor savings.

ENVALITH's Perspective

The sharp increase in net sales for FY2026 (ending March 2026) (up 81.1% year on year) was primarily driven by a large increase in demand for Amusement Applications, and the structure in which the Mechanical Components segment accounts for approximately 92% of net sales has become even more concentrated. The earnings forecast for FY2027 (ending March 2027) anticipates a decline in both revenue and profit, with net sales of ¥436,000 million (down 2.7% year on year) and operating profit of ¥18,000 million (down 6.4% year on year). The structural risk that earnings are heavily influenced by Nintendo's product cycle remains high.

Of the ordinary profit of ¥24,644 million for FY2026 (ending March 2026) (up 66.8% year on year), the effect of a sharp increase in foreign exchange gains, from ¥45 million in the previous fiscal year to ¥4,182 million, was significant. The ordinary profit forecast for FY2027 (ending March 2027) anticipates a substantial decline to ¥18,000 million (down 27.0% year on year), primarily due to the drop-off of foreign exchange gains. The assumed exchange rate underlying the earnings forecast is ¥155 to the US dollar, and a reversal toward yen appreciation would be a downward pressure factor on profit. The high degree of exchange rate dependence in earnings remains a point that investors should continue to monitor closely.

Total inventories at the end of FY2026 (ending March 2026) improved to ¥69,782 million (down ¥3,524 million year on year), but raw materials and supplies of ¥57,628 million remain at a high level. Meanwhile, the company decided to sell its entire equity interest in its consolidated subsidiary, Dongguan Qiaotou Zhongxing Electric Co., Ltd. (scheduled for May 31, 2026, at a sale price of 25 million yuan), and recorded a provision for loss on reorganization of affiliated companies of ¥723 million as an extraordinary loss. Attention is focused on whether the reorganization of production bases in China, together with the transfer of production to ASEAN bases, will lead to an improved cost structure and a strengthened earnings base over the medium to long term.

Growth Strategy

Pursuing diversified growth through strengthening ASEAN production sites, expanding IoE/sensor products, and deepening automotive electronic component business

Considering strengthening and establishing new production sites centered on ASEAN, and promoting optimization of the production structure in conjunction with the sale of the China site (Dongguan Qiaotou Zhongxing Electric Co., Ltd.). Aiming to strengthen cost competitiveness and diversify geopolitical risk.

Promoting automation and labor saving, including the use of industrial robots, with a sense of speed, to achieve cost reduction and quality stabilization. Also positioned as a response to societal issues such as the declining birthrate and aging population, shrinking labor force, and rising labor costs.

Against the backdrop of the full-scale adoption of IoE products as factory DX tools, strongly promoting the development of new IoE-oriented sensors, units, and module products leveraging sensor development and application technology. Also planning to launch product lineups for lifeline and transportation infrastructure maintenance applications.

Aiming to expand sales for automotive applications against the backdrop of progress in ADAS (Advanced Driver Assistance Systems) and electrification. Sales for automotive applications are also expected to grow in the FY2027 (ending March 2027) forecast, and quality systems will be maintained at IATF16949-certified sites.

Continuing to pay dividends with a target payout ratio of around 30% (FY2026 (ending March 2026) annual dividend of ¥98, payout ratio of 30.0%). Continuing to promote IR measures such as simultaneous disclosure of supplementary materials to financial results, public release of materials for analyst briefings, disclosure of the medium-term management plan in the integrated report, and English-language disclosure (partial) of the Annual Securities Report.

Last updated: July 19, 2026