KEL CORPORATION

Business Details

The Group is a single-segment company that manufactures and sells Connectors, Racks, Sockets, Harnesses, and other products for industrial equipment, automotive equipment, medical equipment, imaging equipment, and gaming machines, both domestically and internationally. In addition to its domestic operations, the Group has consolidated subsidiaries in China (Wang Chang Electronics Co., Ltd. and KeLu Electronic Trading (Shanghai) Co., Ltd.) and Europe (KEL Europe GmbH), and conducts business globally. The main customer is Sanwa Techno Solutions Corporation (12.0% of net sales for the current period). Connectors are the core product, accounting for approximately 85% of net sales.

Recent Overview

Correction of certain figures in the cash flow statement in the financial results summary (June 17, 2026)

In the financial results summary for FY2026 (ending March 2026) disclosed on May 12, 2026, an error was found in the consolidated statement of cash flows, and a correction was made effective June 17, 2026. The main corrections include: expenditure for acquisition of property, plant and equipment within investing activities CF (before correction: ¥1,474 million → after correction: ¥1,502 million), proceeds from sale of property, plant and equipment (¥756 thousand → ¥276 thousand), other (-¥42,720 thousand → -¥13,794 thousand), and minor adjustments to changes in other assets within operating activities CF. The substantive impact on the cash and cash equivalents balance at end of period (¥4,730 million) and on the totals for each activity is minor.

Key Products

Growth Drivers

• Steady orders for connectors for industrial equipment and connectors for gaming machines
• Expansion of the Rack business: increased orders for custom-order racks for medical equipment and for electric power and railway-related applications, and improvements to the production system
• Optimization of production sites and cost reduction through the launch of mass production at the new China plant (Kailu Connector (Zhuhai) Co., Ltd.)
• Expansion of new products for the 5G/IoT peripheral equipment market, including high-speed transmission connectors, floating connectors, and waterproof connectors
• Strengthening of sales structures in Europe, China, and North America, and development of new sales channels in India and Southeast Asia

Risks

• Risk of continued decline in production efficiency and pressure on profitability due to delays in the start of mass production at the China plant and increased capital expenditure (expenditure for acquisition of property, plant and equipment in FY2026, ending March 2026, of ¥1,502 million, a significant increase year on year)
• Decline in orders due to inventory adjustments for floating connectors for automotive equipment
• Decline in gross profit margin due to persistently high raw material costs and labor costs
• Risk of spillover effects on the global economy from U.S. tariff policy and geopolitical risks (situations in Ukraine and the Middle East)
• Dependence on sales to the major customer Sanwa Techno Solutions Corporation (12.0% of net sales for the current period) and a declining trend in sales to that company
• Risk to the reliability of the information disclosure process arising from the occurrence of a correction of figures after the financial results disclosure