NITCHITSU CO.,LTD.
7021・Standard Market・Machinery
Business
Nichitsu Co., Ltd. was established in 1950 (its predecessor, Chosen Mining Development, was founded in 1929) and is listed on the TSE Standard Market. The company comprises four segments: Machinery-related Business (marine equipment, industrial machinery), Resources-related Business (High Silica, i.e., Refined Silica Powder, etc.), Real Estate-related Business (office building leasing in Tokyo), and Materials-related Business (heat-resistant paint, high-purity natural rubber). Its main customers are domestic shipyards (Oshima Shipbuilding, its largest customer, accounts for approximately 29.5% of net sales), as well as industrial players such as heavy electrical equipment and steelmaking manufacturers, and semiconductor and electronic materials manufacturers. The group conducts business through three consolidated subsidiaries: Minx Co., Ltd., Tokyo Netsu Kagaku Kogyo Co., Ltd., and Sansen Kikou Co., Ltd.
Business Model
The Machinery-related Business is an order-based business that performs design, manufacturing, and construction based on orders received from shipyards and industrial machinery manufacturers. The Resources-related Business follows a manufacturing-and-sales model in which silica sourced from the company's own mines is refined and processed, then sold for use in semiconductor sealing materials, glass, and other applications. In the Materials-related Business, subsidiaries manufacture and sell Heat-resistant Paint and Linatex (High-purity Natural Rubber). The Real Estate-related Business secures stable, recurring income through the leasing of office buildings in Tokyo. Capital expenditures are funded through internal resources, with the company aiming to strengthen the competitiveness of each business while maintaining financial soundness.
Company Strengths
Ohshima Shipbuilding Co., Ltd. alone accounts for 29.5% (¥2,768 million) of net sales in FY2026 (ending March 2026), reflecting a robust business relationship with the company. The Machinery-related Business held an order backlog of ¥3,626 million as of the end of FY2026 (ending March 2026), securing near-term construction volume. The company strengthened its production system through the installation of a new automated steel material processing line (an investment of ¥824 million), enhancing its capacity to respond to increasing construction volume.
In the Resources-related Business, the company handles the manufacturing and sale of Refined Silica Powder (High Silica) on an integrated basis using its own proprietary materials as a base. In FY2026 (ending March 2026), the company introduced a new high-performance jet mill (an investment of ¥336 million), strengthening its production capacity for high-purity, high-value-added products. Even amid weak demand for semiconductor encapsulation materials, the company improved its earnings through increased sales of higher-priced products, with segment profit turning around from a loss of ¥15 million in the previous fiscal year to a profit of ¥51 million.
As of the end of FY2026 (ending March 2026), the equity ratio stood at 71.2%, with cash and cash equivalents of ¥3,343 million, securing sufficient liquidity. While funding capital expenditures of ¥1,279 million (on a completed basis) entirely with internal funds, net assets expanded to ¥12,246 million (up ¥1,013 million year on year). The company maintains a financial structure that allows it to continue proactive equipment renewal and capacity expansion while restraining financial leverage.
ENVALITH's Perspective
Performance Trend
After consecutive operating losses in FY2022 and FY2023, the company returned to profitability in FY2024 (operating profit of ¥326 million), and in FY2025 achieved record-high sales of ¥9,851 million with operating profit of ¥270 million. However, in FY2026, sales fell back to ¥9,381 million (down 4.8% YoY) and operating profit to ¥220 million (down 18.2% YoY). The main causes were the drop-off of large-scale construction projects from the previous period and the occurrence of unprofitable projects in the construction division of the Machinery-related Business, as well as weakness in Heat-resistant Paint within the Materials-related Business (sales of ¥797 million, down 29.1% YoY). The sole bright spot was the Resources-related Business, which returned to profitability (operating profit of ¥51 million) despite continued weak demand for semiconductors. For FY2027 (ending March 2027), the company forecasts further declines, projecting sales of ¥8,800 million and net profit of ¥120 million, with external risks such as uncertainty over U.S. tariff policy and the situation in the Middle East also seen as downside risks to performance.
Growth Strategy
Following the completion of the previous medium-term management plan "Shin Nitchitsu 2025", the company is advancing the formulation of a new medium-term plan while strengthening profitability and establishing a stable management foundation.
In FY2026 (ending March 2026), the company implemented a restructuring of the production system, including the establishment of a new automated steel processing line. Hull Blocks progressed favorably due to active acquisition of spot construction work. For FY2027 (ending March 2026), Hull Blocks are expected to remain firm, while Hatch Covers are projected to be somewhat subdued.
In FY2026 (ending March 2026), the company secured new orders in the renewable energy field, including offshore wind power-related projects, and obtained a certain level of orders related to heavy electrical equipment and steelmaking machinery. For FY2027 (ending March 2026), the policy is to strengthen order intake for power plant and plant equipment construction. Preventing the recurrence of unprofitable construction projects is a prerequisite for profit improvement.
Aiming to reduce dependence on semiconductor encapsulant materials, the company achieved a return to profitability in FY2026 (ending March 2026) (operating profit of ¥51 million) through increased sales of higher-priced products and expanded demand from LCD-related applications, specialty glass, and overseas markets. For FY2027 (ending March 2026), a delay in demand recovery similar to the previous fiscal year is expected for both semiconductor encapsulant materials and semiconductor-related glass.
The company has announced its policy to formulate a new management plan following the previous medium-term plan "Shin Nitchitsu 2025". The basic policy is to strengthen profitability and establish a stable management foundation. In addition, in order to secure flexibility and agility in capital policy, the company plans to implement a capital reduction without compensation, reducing capital from ¥1,100 million to ¥100 million, in August 2026 (subsequent event).
Last updated: July 19, 2026