TAMAGAWA HOLDINGS CO.,LTD.

Business Details

The group's flagship segment, engaged in the manufacture and sale of radio equipment, measuring instruments, information equipment, and industrial equipment. Sales to government and public sector clients account for more than half of revenue, and the segment also handles 5G communication infrastructure sharing-related equipment and FA/measurement equipment (Semiconductor Reliability Test Equipment). The new Vietnam plant (operational from October 2025) is being leveraged to achieve both low cost and high quality through mass production. Major customers include NEC Corporation (23.8% of revenue) and Toshiba Corporation (15.3% of revenue).

Recent Overview

First-half revenue up 53% and segment profit up 187%, showing rapid expansion

In the first half of FY2026 (ending March 2026) (November 2025 to April 2026), the segment achieved revenue of ¥3,449 million (up 53.0% year on year) and segment profit of ¥900 million (up 187.3% year on year). Contributing factors included the transition of core social infrastructure products to the mass-production phase, large orders in mobile infrastructure, and the smooth ramp-up of the new Vietnam plant. The company has also purchased land for the construction of a second plant near its headquarters, further advancing its response to localized, on-site mass production.

Key Products

Growth Drivers

• Rapid demand expansion and increased large-scale project orders in the government/public sector-related market, driven by increased national budgets
• Expanded scale benefits from the transition of core social infrastructure products to the mass-production phase
• Steady growth in sales of related equipment driven by expanded use of infrastructure sharing by telecom carriers
• Increased production capacity and the achievement of both low cost and high quality through the new Vietnam plant (operational from October 2025)
• Increased demand for Semiconductor Reliability Test Equipment driven by expanded national policy investment in the semiconductor industry
• Establishment of a localized, on-site mass-production system and improved supply stability through the acquisition of land for a second plant

Risks

• Extended parts procurement lead times and increased inventory due to the global lengthening of delivery times for semiconductors and non-ferrous metal materials
• Risk of profit pressure from persistently high material costs, energy costs, and logistics costs
• Risk of delays in establishing production capacity due to difficulty securing technical personnel (design and production staff)
• Risk of curtailed capital investment by customer companies due to the impact of US trade policy
• Ensuring production capacity and supply stability to keep pace with order growth (risk of disruptions in materials supply)

Business Details

Centered on subsidiary Tamagawa Energy Co., Ltd., the segment's core activities are the development, ownership, and power sales of solar power plants and small wind power plants (in Hokkaido, Tohoku, Nagano, Ibaraki, Yamanashi, and other regions). Power Plant Development & Sale, as well as Power Plant Management & Maintenance for plants that have been sold, are also sources of revenue. Development funds are raised through syndicated bank loans and sustainable financing. The company is also working to diversify its power sources, including entry into the Grid-Connected Battery Storage Business and Overseas Small Hydropower Plants in Indonesia, aiming to establish a stable business foundation.

Recent Overview

Revenue down 9.0% year on year, but profit up 4.8%; Grid-Connected Battery Storage Business gaining momentum

In the first half of FY2026 (ending March 2026) (November 2025 to April 2026), revenue decreased to ¥293 million (down 9.0% year on year), while segment profit increased to ¥83 million (up 4.8% year on year). In May 2026, the company concluded a purchase agreement for a grid-connected battery storage facility in Miyama City, Fukuoka Prefecture, targeting grid connection in July 2026, and the Overseas Small Hydropower Plant project in Indonesia is also scheduled for completion and connection in July 2026, with power source diversification becoming concrete.

Key Products

Growth Drivers

• Upward revision of the 2040 target for renewable energy power generation volume (from 0.218 trillion kWh to 0.44–0.60 trillion kWh) under the 7th Strategic Energy Plan (approved by the Cabinet in February 2025)
• Creation of a new revenue source through entry into the Grid-Connected Battery Storage Business (a highly profitable business expected to achieve an IRR of 10% or more)
• Expanded opportunities for Power Plant Development & Sale amid rising purchase inquiries for solar and small wind power plants
• Diversification of revenue through overseas power source development, including the Indonesia small hydropower plant (scheduled for completion in July 2026)
• Stable procurement of development funds through the use of syndicated bank loans and sustainable financing
• Policy tailwinds toward making renewable energy a mainstay power source through the securing of adjustment capacity via storage batteries and demand response (DR), among other measures

Risks

• Continued decline in power sale prices under the Feed-in Tariff (FIT) scheme
• Revenue volatility due to the timing of Power Plant Development & Sale deals (the 9.0% year-on-year revenue decline reflects quarterly earnings fluctuations)
• Risk of development delays and cost overruns in new businesses such as the Grid-Connected Battery Storage Business and Overseas Small Hydropower Plants
• Risk of power generation volume fluctuations due to weather conditions (wind and sunlight conditions)
• Financial risk from a funding structure heavily reliant on borrowings
• Impact on overseas projects from geopolitical risks and resource price trends