ENVALITH
東北化学薬品株式会社 logo

TOHOKU CHEMICAL CO.,LTD.

7446・Standard Market・Wholesale Trade

Official website
東北化学薬品株式会社 logo
TOHOKU CHEMICAL CO.,LTD.7446

Business

Tohoku Chemical Co., Ltd. is a specialty trading company for industrial chemicals founded in 1953. It operates three segments: Industry (industrial chemicals, equipment, food, and agrochemicals), Medical (clinical diagnostic reagents and medical devices), and Academia & Life Science (research reagents and analytical instruments). Its main customers are manufacturers, medical institutions, and universities and research institutions in the Tohoku and Kanto regions. It has subsidiaries Asunaro Riken Co., Ltd. (industrial chemicals manufacturing) and Nichiei Tokai Co., Ltd. (clinical diagnostic reagents sales), building an integrated business structure spanning manufacturing, sales, and maintenance services. The company is listed on the Standard Market of the Tokyo Stock Exchange.

Business Model

The company operates a wholesale model in which it procures chemicals, medical reagents, analytical instruments, and other products from manufacturers and sells them to manufacturing companies, medical institutions, and research organizations. It secures stable earnings through maintenance services after equipment sales and continued supply of consumables and reagents. In FY2025 (ended September 2025), the gross profit margin was approximately 9.5% (gross profit of ¥3,286 million divided by net sales of ¥34,443 million). The company's management policy calls for expanding gross profit margin through supplier diversification to avoid risk and through diversification of proposals.

Company Strengths

Founded in 1953, the company has a business history of more than 70 years and operates in the six Tohoku prefectures of Aomori, Iwate, Akita, Miyagi, Yamagata, and Fukushima, as well as in Tokyo. It holds various licenses and permits, including for the sale of poisonous and deleterious substances, pharmaceutical wholesaling, and high-pressure gas sales, and has built a broad supply system for products to manufacturers, medical institutions, and research organizations.

In FY2025 (ended September 2025), sales were distributed across three segments: Industry at ¥17,859 million (52% of total), Medical at ¥14,144 million (41%), and Academia & Life Science at ¥2,439 million (7%). There is no dependence on any specific customer (no major customer accounts for more than 10% of sales), and risk is diversified through a customer base spanning different economic cycles.

The Academia & Life Science segment achieved net sales of ¥2,439 million (up 26.3% year on year) and segment profit of ¥301 million (up 33.0% year on year) in FY2025 (ended September 2025). Purchases also expanded to ¥2,138 million (up 26.8% year on year), driven by increased orders for research analytical reagents and antibody reagents as well as the acquisition of large-scale equipment deals.

ENVALITH's Perspective

Operating profit for the interim period of FY2026 (ending March 2026) reached ¥530 million (vs. ¥325 million in the same period last year), a 63.2% increase. This was driven by an expansion in gross profit (from ¥1,679 million to ¥1,859 million) combined with a reduction in SG&A expenses (from ¥1,354 million to ¥1,329 million), resulting in effective profit leverage. However, it should be noted that the full-year operating profit forecast remains unchanged at ¥530 million, implying a conservative plan that assumes essentially zero profit contribution in the second half.

The full-year forecast for FY2026 (ending March 2026) remains unchanged, with net sales of ¥35,000 million (up 1.6% YoY) and operating profit of ¥530 million (up 2.3% YoY). Given that operating profit at the interim stage has already reached the same level as the full-year forecast, there is potential upside in the second half. However, since profits were similarly concentrated in the second half in the previous fiscal year, close attention should be paid to seasonality and the timing of project-related revenue. It should also be confirmed that the dividend forecast of ¥105 per share annually (down from ¥125 in the previous fiscal year) represents a step back in terms of shareholder returns.

The equity ratio at the end of the interim period of FY2026 (ending March 2026) declined to 41.5% (from 43.0% at the end of the previous fiscal year). While total assets increased to ¥20,352 million (from ¥18,422 million at the end of the previous fiscal year), short-term borrowings rose from ¥312 million to ¥409 million, and notes and accounts payable expanded from ¥8,013 million to ¥8,906 million. Cash and deposits increased substantially, from ¥924 million to ¥3,719 million, indicating improved liquidity; however, the impact of the increase in trade payables on cash flow warrants continued monitoring.

Growth Strategy

Strengthening earnings power through deepening existing businesses, expanding gross margins, and capturing semiconductor-related demand

Actively capture capital expenditure demand associated with new plant construction and production capacity increases in manufacturing industries including semiconductors. In the first half of FY2026 (ending March 2026), Industry segment sales reached ¥9,608 million (up 5.0% year on year) and segment profit reached ¥906 million (up 9.7% year on year), demonstrating the effect of these initiatives in the results.

Expand ongoing revenue through winning large-scale deals for medical devices and securing new orders for consumables. In the first half of FY2026 (ending March 2026), Medical segment sales reached ¥8,028 million (up 11.6% year on year) and segment profit reached ¥777 million (up 14.5% year on year), achieving the highest growth rates in both revenue and profit among all segments.

Pursue reductions in selling, general and administrative expenses in parallel with sales expansion to improve the operating margin. In the first half of FY2026 (ending March 2026), SG&A expenses came to ¥1,329 million, a reduction of ¥25 million from ¥1,354 million in the same period of the previous year. The operating margin improved to 2.80% (from 1.82% in the same period of the previous year).

Promote the acquisition of large-scale orders for analytical instruments and measuring instruments and strengthen the lineup of research reagents for universities and research institutions. In the first half of FY2026 (ending March 2026), sales came to ¥1,306 million (down 10.9% year on year) due to the drop-off of a large-scale service provision deal from the previous period, but segment profit secured a slight increase to ¥176 million (up 0.8% year on year).

Last updated: July 17, 2026