Oi Electric Co., Ltd.

Business Details

Oi Electric Co., Ltd. and Oi Techno Co., Ltd. manufacture and sell equipment related to optical transmission systems, security/monitoring systems, remote measurement/sensing systems, and wireless application systems. Major customers are power and telecommunications carriers such as TEPCO Power Grid, Incorporated and KDDI Corporation. The IoT-related equipment business for electric power smart meters and the optical multiplex transmission equipment business are the mainstays, and in FY2026 (ending March 2026), sales to external customers of ¥20,731 million accounted for approximately 63% of consolidated sales, making it the pillar of earnings.

Recent Overview

Substantial increase in sales and profit, with sales up 23.3% and profit up 59.9%, driven by the full-scale rollout of smart meters and growth in optical transmission equipment

In FY2026 (ending March 2026), both the optical multiplex transmission equipment business and the IoT-related equipment business grew, with segment sales (including internal, total) reaching ¥20,898 million (up 23.3% year on year) and segment profit reaching ¥1,368 million (up 59.9% year on year), a substantial increase in profit. The full-scale rollout of communication devices for second-generation smart meters for power companies and expanded deployment in the water utility field drove the increase in sales. Improved profit margins resulting from changes in the product mix also contributed. On the other hand, capital expenditures expanded in connection with the preparation of mass-production systems, and segment assets increased by ¥4,556 million compared to the end of the previous fiscal year.

Key Products

Growth Drivers

• Continued expansion of the IoT-related equipment business in line with the full-scale introduction of second-generation smart meters by power companies (from fiscal 2025 onward)
• Solid demand for optical multiplex transmission equipment for telecommunications carriers against a backdrop of increasing communication traffic, expanding data center demand, and network sophistication
• Acquisition of new demand through expanded deployment of smart meter-related business for the water utility field
• Enhanced production capacity and cost reduction through preparation of mass-production systems, including the start-up of automated lines
• Improved product mix and higher profit margins through the introduction of high-value-added products and new models

Risks

• Impact on business performance from changes in procurement policy of major customers (TEPCO Power Grid, Incorporated, KDDI Corporation, etc.)
• Decline in profit margin due to the rising proportion of sales from the mass-production-type business for second-generation smart meters (a decline in profit is expected in FY2027 ending March 2027)
• Pressure on earnings from increased costs for production capacity expansion and organizational preparation, as well as rising raw material costs
• Sustained high manufacturing costs due to soaring energy and raw material prices resulting from price levels and exchange rate effects (a profit/loss impact of approximately ¥45 million per ¥1 change in exchange rate)
• The need for continuous improvement in technological capability and product added value amid the progressing commoditization of information and communications equipment
• Risk of inventory (work in process) stagnation and excess inventory (work-in-process balance increased from ¥4,092 million at the end of the previous fiscal year to ¥5,736 million)