ENVALITH
日本ケミコン株式会社 logo

NIPPON CHEMI-CON CORPORATION

6997・Prime Market・Electric Appliances

Official website
日本ケミコン株式会社 logo
NIPPON CHEMI-CON CORPORATION6997

Business

Nippon Chemi-Con is an electronic components manufacturer that succeeded in commercializing Japan's first electrolytic capacitor product in 1931, and has a history of over 90 years as the leading company in Aluminum Electrolytic Capacitors. The Group consists of the Company, 20 subsidiaries, and 2 affiliated companies, with Capacitors (Aluminum Electrolytic Capacitors, Conductive Polymer Hybrid Aluminum Electrolytic Capacitors, Electric Double-Layer Capacitors, etc.) as its core business, while also handling Inductors (Coils), CMOS Camera Modules, and other products. Its main customers span the ICT (AI servers, data centers), automotive (AD/ADAS), and industrial equipment markets, and in addition to domestic manufacturing sites, the company operates a global production and sales network spanning the US, Indonesia, China, Taiwan, and other regions. Consolidated net sales for FY2026 (ending March 2026) were ¥136,821 million.

Business Model

The Group employs a vertically integrated model that covers everything in-house, from R&D on key materials such as aluminum electrode foil, sealing rubber, and electrolytes, through the design and manufacture of production equipment, to the finalization of end products. The basic structure has domestic subsidiaries (Chemi-Con East Japan, Chemi-Con Device, etc.) handling manufacturing while the Company handles procurement and sales, whereas overseas local subsidiaries handle both manufacturing and sales. R&D expenses of ¥3,892 million were invested in FY2026 (ending March 2026), securing profitability by simultaneously pursuing continuous development of high-value-added products and strengthening the cost competitiveness of general-purpose products.

Company Strengths

Since its founding in 1931, the company has built an in-house group structure that completes everything from research on core materials such as aluminum electrode foil, sealing rubber, and electrolytes, through production equipment design, to product commercialization. This integrated system enables the supply of original, highly reliable products, and is explicitly cited in the securities report as a source of corporate value. R&D expenses for FY2026 (ending March 2026) amounted to ¥3,892 million.

In FY2026 (ending March 2026), the company developed and launched the board-mounted, self-supporting aluminum electrolytic capacitor "KHR Series" for AI server power supplies (up to 100mm in length, achieving an average 25% increase in capacitance versus conventional products). It also successively introduced new rated hybrid capacitor products supporting the 48V DC power feeding method, the "HXG Series" for automotive motor drives, and the Inductor (Coil) "FX Series," expanding its product lineup for growth markets.

The company maintains a global network of manufacturing and sales sites in the United States, Indonesia, China, Taiwan, Singapore, and elsewhere. In FY2026 (ending March 2026), it newly established a sales subsidiary, Chemi-Con Electronics (India) Pvt. Ltd., in India and opened a new sales office at its U.S. subsidiary United Chemi-Con Inc., concretely strengthening its sales structure for emerging and overseas markets.

ENVALITH's Perspective

In FY2026 (ending March 2026), revenue increased to ¥136,821 million (up 11.5% year on year), but operating profit declined to ¥3,369 million (down 9.9% year on year). The operating profit margin remained low at 2.5%. Soaring raw material costs are squeezing profits, and the company has been unable to fully absorb this through the effect of higher sales. The FY2027 (ending March 2027) forecast calls for a substantial improvement in operating profit to ¥8,000 million (up 137.4% year on year), but achieving this will require both an improved product mix targeting growth markets and cost structure reform. Progress on both fronts warrants close monitoring.

In May 2026, 901 shares of Class B preferred stock were converted into 988,996 common shares, increasing the total number of issued common shares to 25,687,446. Furthermore, on June 29, 2026, Class C and Class D preferred shares (totaling ¥9,000 million) are scheduled to be issued to Development Bank of Japan Inc. through a third-party allotment. Diluted earnings per share stood at ¥68.80, significantly diluted from basic EPS of ¥106.29, indicating that profit attribution to common shareholders remains structurally constrained. This continues to be an important risk factor.

At the end of FY2026 (ending March 2026), short-term borrowings stood at ¥34,640 million and long-term borrowings at ¥35,871 million, with interest-bearing debt remaining at a high level. Interest expense of ¥1,508 million is weighing on ordinary income, and the equity ratio remains low at 37.6%. Under the 11th Medium-Term Management Plan, reducing interest-bearing debt through stable cash flow generation is positioned as a pillar of financial strategy, but with operating cash flow of ¥7,622 million against financing cash outflow of ¥6,232 million in FY2026 (ending March 2026), the margin for improvement remains limited. Downside risks to earnings from external factors such as U.S. tariff policy also add uncertainty to the pace of financial improvement.

Growth Strategy

Under the 11th Medium-Term Management Plan, the Company is promoting priority investment in growth markets such as AI servers and automotive applications, together with cost structure reforms.

Completed capacity expansion for Aluminum Electrolytic Capacitor (Large-sized) and hybrid capacitors, and launched new products such as the KHR Series for AI servers into the market. The Company is promoting stable order acquisition through design-in activities, aiming to expand sales to the ICT sector and improve profitability through better product mix.

Strengthening cost competitiveness through the establishment of an optimal production system, promotion of optimal-location material procurement, and advanced logistics and inventory management. This is a priority measure under the 11th Medium-Term Management Plan, aiming to simultaneously recapture market share and improve profitability in the highly price-competitive general-purpose product market.

Established a sales subsidiary in India and opened a new sales office within the U.S. subsidiary. The Company continues to expand its sales structure in overseas markets where new demand is anticipated, and to grow sales in China, Asia, and other regions. In FY2026 (ending March 2026), net sales to China reached ¥46,034 million (up 16.6% year on year).

The Company plans to issue Class C preferred shares of ¥6,000 million and Class D preferred shares of ¥3,000 million on June 29, 2026. Using the proceeds, the Company will continue priority investment in growth markets while also reorganizing its capital structure through the acquisition and cancellation of Class A preferred shares (equivalent to ¥11,034 million). By reducing common stock and capital reserves, the Company will secure ¥9,000 million in other capital surplus, thereby expanding the amount available for distribution.

Last updated: July 19, 2026