Naikai Zosen Corporation
7018・Standard Market・Transportation Equipment
Business
Naikai Zosen, founded in 1944, is a mid-tier shipbuilding manufacturer operating a two-site structure consisting of the Setoda Plant and Innoshima Plant in Hiroshima Prefecture. In its new shipbuilding business, the company handles a diverse range of vessel types, including ocean-going vessels such as general cargo ships and car carriers, as well as coastal and government vessels such as ferries, RORO ships, and transport vessels. It also operates the ship repair business in an integrated manner, with the Shipbuilding Business accounting for approximately 99% of total revenue. Its consolidated subsidiary, Naikai Engineering, handles non-shipbuilding businesses such as civil engineering & construction, hotels, and facility management. Major customers include the Acquisition, Technology & Logistics Agency (ATLA), Mitsui O.S.K. Lines, Fuji Trans Corporation, and other major domestic shipowners and government agencies, and the company also has a track record of sales to ocean-going shipowners.
Business Model
In line with shipbuilding industry business practices, the company adopts the percentage-of-completion method, receiving payments in installments according to construction progress. By managing the entire process from sales through design, procurement, and operations in an integrated manner, it enhances cost competitiveness, and maximizes production efficiency through continuous construction of same-type vessels at its two plants. By combining this with the Ship Repair & Conversion business, the company levels out plant utilization, and builds up its order backlog to secure a medium-term revenue base.
Company Strengths
At the end of FY2026 (ending March 2026), the order backlog for the Shipbuilding Business stood at ¥134,345 million (up 33.7% year on year), equivalent to 25 newly built vessels. Orders received during the fiscal year also increased sharply to ¥80,345 million (up 67.4% year on year), securing a multi-year revenue base. Given the shipbuilding industry's business practice of delivery lead times exceeding three years, revenue visibility is relatively high.
Utilizing the two plants at Setoda and Innoshima, the company achieves learning-curve effects and reduced setup time through continuous construction of same-type vessels. In FY2026 (ending March 2026), 17 newly built vessels were delivered (up 4 vessels year on year), including 9 vessels completed in new fields such as LNG-fueled ferries and transport vessels. Capital expenditure of ¥1,151 million was allocated to productivity-enhancing equipment at both plants, aiming for continuous expansion of construction capacity.
The company has a track record of constructing a wide range of vessel types, including small and medium-sized ferries, RORO vessels, ocean-going cargo vessels, car carriers, and transport vessels, with a diversified customer base spanning the Acquisition, Technology & Logistics Agency (ATLA), major coastal shipowners, and ocean-going shipowners. In FY2026 (ending March 2026), the top customers together accounted for 60-70% of total sales, confirming ongoing transactional relationships with major customers.
ENVALITH's Perspective
Performance Trend
Net sales expanded rapidly from ¥33,035 million in FY2022 (ending March 2022) to ¥46,383 million in FY2024 (ending March 2024), then temporarily declined to ¥44,648 million in FY2025 (ending March 2025), before reaching a new record high of ¥47,016 million in FY2026 (ending March 2026). Operating profit had fallen to ¥1,415 million in FY2025 (ending March 2025), but achieved a V-shaped recovery in FY2026 (ending March 2026), rising 117.3% year on year to ¥3,075 million. As an external factor, the yen's depreciation trend contributed to improved profitability, while internally, the completion of ship conversion projects, productivity improvements, and a substantial reduction in the provision for losses on construction contracts (from ¥1,237 million to ¥0 million) contributed to the profit increase. For FY2027 (ending March 2027), the company forecasts operating profit of ¥1,600 million, projecting a renewed profit decline, with the drop-off of highly profitable projects and rising costs of materials and equipment expected to act as headwinds.
Growth Strategy
Aiming for sustainable growth and sustained order competitiveness through construction of high value-added vessels, capital expenditure, and strengthening of the two-plant system
The company has clearly stated its policy of implementing capital investment utilizing government subsidies over the medium to long term, aiming to expand construction capacity. Capital expenditure for the acquisition of fixed assets in the current fiscal year continued at ¥1,235 million (¥1,210 million in the previous fiscal year), and construction in progress also increased from ¥83 million to ¥248 million.
Against the backdrop of tightening environmental regulations, the company's strategy is to build a track record in new vessel categories such as LNG-fueled ferries and transport vessels. In the current fiscal year, the company delivered 9 vessels including LNG-fueled vessels, establishing a track record in new fields. In terms of orders received, the company received orders totaling ¥80,345 million (up 67.4% year on year), centered on RORO vessels and transport vessels.
The company continues to promote efficient production through continuous construction of sister vessels at its two plants in Setoda and Innoshima, along with company-wide reductions in materials and equipment costs and general expenses. In the current fiscal year, productivity improvements and reductions in general expenses directly contributed to increased profit, improving the operating margin from 3.2% to 6.5%. This functions as the core measure for securing short-term profitability.
Last updated: July 19, 2026