ODAWARA AUTO-MACHINE MFG.CO.,LTD.

Business Details

The main segment handled by the Company (Odawara Kiki) and its consolidated subsidiary Oval Tech Co., Ltd. It designs, develops, manufactures, and sells real-time counting fare boxes, cashless payment terminals, ticket dispensers, fare adjustment devices, and related equipment for route buses and one-man operated railways, and also provides maintenance services. The business operates nationwide through five domestic sales offices and sales agents. In the first quarter of FY2026 (ending December 2026), sales to external customers were ¥1,073 million, accounting for approximately 87.9% of consolidated net sales, making it the core business.

Recent Overview

Net sales declined 39.8% year on year, but segment profit margin improved significantly

In the first quarter of FY2026 (ending December 2026), net sales to external customers in the Fare Collection Equipment Business were ¥1,073 million, a decrease of approximately 39.8% from the same period of the prior year (¥1,782 million). On the other hand, segment profit increased to ¥59 million (from ¥38 million in the same period of the prior year), with the profit margin improving significantly to approximately 5.5% (from approximately 2.1% in the same period of the prior year). The decline in sales is believed to reflect the timing of orders and deliveries amid the continued difficult business environment in the route bus industry (driver shortages and rising fuel costs). The Company is working to capture demand for cashless-compatible multi-payment terminals and to develop new demand through participation in the Ministry of Land, Infrastructure, Transport and Tourism's "Pilot Project No. 4 for Eliminating Transportation Deserts."

Key Products

Growth Drivers

• Increased sales of multi-payment terminals such as "BOSS" driven by expanding demand for cashless payments
• Large-scale replacement demand for fare collection equipment planned in the Tokyo metropolitan area (a key initiative under ONG2030)
• New demand from participation in the Ministry of Land, Infrastructure, Transport and Tourism's "Pilot Project No. 4 for Eliminating Transportation Deserts" (digital bus stop systems, timetable creation support systems)
• New demand accompanying the expansion of pilot trials for autonomous buses and fully cashless buses
• Recovery in capital investment appetite among bus operators driven by inbound tourism demand

Risks

• Deterioration in customers' financial condition and suppressed capital investment due to persistently high fuel costs and worsening driver shortages in the route bus industry
• Instability in orders and deliveries, as indicated by the significant decline in net sales (down approximately 39.8% year on year)
• Changes in the sales structure due to the end of special demand for equipment replacement related to the issuance of new banknotes
• Risk of sales concentration among specific customers (Nagoya Municipal Transportation Bureau 13.3%, Nagoya Guideway Bus 10.1%)
• Risks to earnings and inventory management during the transition period accompanying the production transformation from the production-order-number method to the MRP method
• Rising procurement costs for parts and materials due to geopolitical risks such as U.S. trade policy and the situation in the Middle East