NISHIKAWA KEISOKU Co., Ltd.

Business Details

An engineering trading company that provides sales of various electronically applied equipment such as measurement and control instruments and scientific & chemical instruments, together with associated engineering, software development, instrumentation construction work, and maintenance services on an integrated basis. The company procures its core products as an agent for Yokogawa Electric, Yokogawa Solution Service, and Agilent Technologies, and maintains a broad customer base ranging from public utilities such as water and sewage, electric power, and city gas to private industries such as energy, chemicals, semiconductors, and automobiles. Over 90% of sales are domestic.

Recent Overview

Cumulative Q3 net sales up 13.3%; full-year forecast revised upward, dividend increase also announced

For the cumulative nine months of FY2026 (ending March 2026) (July 2025 to March 2026), net sales reached ¥35,666 million (up 13.3% year on year), driven by steady performance in lifeline-related fields (water and sewage, gas, electricity) as well as increased semiconductor-related capital investment demand and the acquisition of large automotive-related orders. Operating profit was ¥3,908 million (up 5.7% year on year), ordinary profit was ¥4,016 million (up 6.6% year on year), and net income for the quarter was ¥2,759 million (up 9.4% year on year). In light of progress through cumulative Q3, the full-year earnings forecast was revised upward (net sales of ¥45,000 million, up 16.2% year on year; operating profit of ¥4,100 million, up 9.1% year on year). The dividend forecast was also revised upward from the previous forecast to an annual dividend of ¥350 (an increase of ¥30 year on year). Total assets increased 25.0% from the end of the previous fiscal year to ¥42,361 million, with notes and accounts receivable and contract assets increasing by ¥7,476 million, while investment securities also increased by ¥3,576 million.

Key Products

Growth Drivers

• Continued expansion of demand for lifeline-related (water, gas, electricity) equipment renewal
• Recovery and expansion of capital investment demand from semiconductor, telecommunications, and automotive-related companies (as shown by the 28.2% increase in measuring instrument sales and 64.2% increase in industrial equipment sales)
• Strengthening of proposal-based sales through the provision of added value via DX, IoT, and AI, based on the medium-term management plan "Strong & Expanding 2025"
• Improved visibility of future sales due to a high level of order backlog accumulation at ¥28,516 million (up 9.2% year on year)
• Capturing demand for lab DX by adding solutions such as LAS to the R&D business
• Order backlog for Control & Information Equipment Systems expanded significantly, up 26.3% year on year, expected to contribute to sales over the medium to long term

Risks

• Seasonal fluctuation risk from the concentration of sales and profit in the third quarter (January to March), due to concentrated budget execution among public works-related and heavy electrical plant-related customers
• Orders received in the Industrial Equipment & Others category declined sharply, down 50.4% year on year, raising the risk that large automotive-related orders may prove to be a one-time occurrence
• Increased working capital and collection risk associated with a sharp rise in accounts receivable and contract assets (up 97.3% from the end of the previous fiscal year, to ¥15,158 million)
• Equity ratio declined from 60.4% at the end of the previous fiscal year to 57.4% (increased financial leverage associated with total asset growth)
• Risk of impact on net sales and cost of sales due to fluctuations in total project costs under construction contracts
• Risk of dependence on the three major suppliers, including Yokogawa Electric (supplier concentration)
• Risk of downside in overseas economic conditions due to geopolitical risks such as the situations in Ukraine and the Middle East, and concerns over the outlook for the Chinese economy