DN HOLDINGS CO., LTD.

Business Details

The company conducts surveys, planning, design, construction supervision, and consulting services related to civil engineering, architecture, surveying, geology, and soil. Its main operating company is Dai Nippon Consultant Co., Ltd. Approximately 87.8% of sales come from the Construction Consultant Business and approximately 12.2% from the Geological Survey Business (based on cumulative results for the third quarter of FY2026 (ending June 2026)). Its primary market is domestic public works, with demand related to disaster prevention, disaster mitigation, and national resilience serving as its main earnings base.

Recent Overview

Net sales increased 5.3% year-on-year, but profit declined approximately 2% year-on-year due to increased selling, general and administrative expenses, among other factors

For the cumulative third quarter of FY2026 (ending June 2026) (July 2025 to March 2026), net sales secured an increase to ¥29,210 million (+5.3% year-on-year). Meanwhile, selling, general and administrative expenses increased to ¥7,281 million (+7.5% year-on-year), resulting in a slight decline in operating profit to ¥2,260 million (-2.0% year-on-year). Short-term borrowings surged to ¥12,000 million (zero at the end of the prior fiscal year), and the equity ratio declined to 43.9% (60.6% at the end of the prior fiscal year). Contract assets increased significantly to ¥18,474 million (¥11,428 million at the end of the prior fiscal year), indicating an abundant volume of business. The full-year earnings forecast (net sales of ¥38,000 million, operating profit of ¥2,500 million) remains unchanged.

Key Products

Growth Drivers

• Continuous and stable promotion of public works related to disaster prevention, disaster mitigation, and national resilience through the Cabinet decision on the "National Resilience Implementation Medium-Term Plan"
• Expanding demand for geological and ground surveys related to nuclear power plants and nuclear fuel cycle facilities based on the "7th Strategic Energy Plan"
• Demand for planning and design of seismic reinforcement and anti-aging measures for Self-Defense Forces facilities based on the "Defense Buildup Program"
• Increasing demand for decarbonization energy-related consulting, including offshore wind power, hydrogen utilization, and CCS
• Productivity improvement and acquisition of new demand through technology development such as AI-utilized infrastructure maintenance and geological survey DX
• Expanding demand related to disaster recovery and reconstruction amid the intensification and increasing frequency of natural disasters such as the Noto Peninsula earthquake and heavy rain disasters

Risks

• Risk of selling, general and administrative expenses remaining elevated due to aggressive human capital investment and increased outsourcing costs (SG&A expenses for the cumulative third quarter increased +7.5% year-on-year)
• Increased funding needs and reliance on short-term borrowings due to seasonality where accounts receivable collection is concentrated in the second half of the fiscal year (short-term borrowings of ¥12,000 million at the end of the third quarter)
• Deterioration in financial soundness due to a decline in the equity ratio (from 60.6% at the end of the prior fiscal year to 43.9% at the end of the third quarter)
• Risk of downward pressure on the domestic economy and impact on public works budgets due to continued price increases, uncertainty in the Middle East situation, and other external environmental factors
• Constraints on business execution capability due to labor shortages and difficulty securing engineers in the construction consultant industry