KYOWA ELECTRONIC INSTRUMENTS CO., LTD.

Business Details

The Group's core segment. Manufactures and sells sensors such as strain gauges and measuring instruments such as data loggers, and also provides repair and maintenance services. The Company processes and sells goods procured from manufacturing subsidiaries, with Kyowa Electronic Instruments (Shanghai) Trading Co., Ltd. handling sales for the Chinese market and KYOWA AMERICAS INC. handling sales for the U.S. market. Customers span a wide range of industries including aerospace, nuclear power, energy, railways, dams, and defense. The segment is composed of three categories: general-purpose products, custom-order/system products, and repair & maintenance.

Recent Overview

Net sales increased on large-scale automotive crash testing and defense-related orders, but profit margin declined due to rising cost ratio

In the first quarter of FY2026 (ending December 2026) (January to March 2026), net sales of the Measuring Instruments segment were ¥4,231 million (up 4.1% year on year). General-purpose products benefited from increased demand related to transducers and instrumentation equipment (net sales of ¥1,804 million, up 3.3% year on year), custom-order & system products benefited from a large-scale order related to automotive crash testing (net sales of ¥1,582 million, up 4.7% year on year), and repair & maintenance also performed steadily (net sales of ¥332 million, up 6.5% year on year). On the other hand, segment profit (gross profit) was limited to ¥1,618 million (up 0.6% year on year), and the gross profit margin declined to 38.2% from 39.6% in the same period of the prior year. Rising raw material prices have pushed up the cost ratio, putting pressure on profit margins. Orders received increased significantly to ¥4,124 million (up 12.6% year on year), supported by strong demand in the energy and aerospace fields.

Key Products

Growth Drivers

• Continued increase in demand for general-purpose products across a wide range of industries including energy, aerospace, and nuclear power
• Securing large-scale custom-order & system product orders related to automotive crash testing and defense
• Demand for custom-order & system products related to infrastructure, such as dam renewal needs and high-speed rail applications
• Accumulation of recurring revenue through steady performance in the repair & maintenance division
• Creation of new revenue sources through commercialization of the Measurement Cloud Service
• Strengthening service revenue through expansion of the calibration business (broadening calibration scope and obtaining additional accreditations)
• Leveraging the global sales structure through sales subsidiaries serving the Chinese and U.S. markets
• Contribution to future net sales from a significant increase in orders received (up 12.6% year on year)

Risks

• Rising cost ratio due to soaring raw material prices (gross profit margin declined from 39.6% in the same period of the prior year to 38.2%)
• Uncertainty regarding the outlook due to a decline in order backlog (¥4,572 million, down 2.1% year on year)
• Dependence on specific large-scale orders (automotive crash testing, defense-related) and the risk of a subsequent decline
• Uncertainty in demand due to some customers deferring capital expenditures
• Impact on exports and overseas sales (KYOWA AMERICAS INC., etc.) from developments in U.S. trade policy
• Further increases in raw material prices due to geopolitical risks such as escalating tensions in the Middle East
• Downward pressure on operating profit margin from increased selling, general and administrative expenses