Naito & Co.,Ltd.

Business Details

The Group is a machine tools specialty trading company that operates in a single segment covering the sale of Cutting Tools, Measurement, and Industrial Equipment & Machine Tools, etc., along with related ancillary services. Domestic sales account for over 90% of total sales, while overseas expansion is also being pursued through the consolidated subsidiary NAITO VIETNAM CO.,LTD. (Vietnam) and the equity-method affiliate SOMAT Co.,Ltd. (Thailand). The company aims to establish its position as a solutions partner in machine tools by providing manufacturing customers with "optimal products and the best service." As the first year of the medium-term management plan "Kyoso Vision 2030" (from March 1, 2026 to February 28, 2031), the company is working to steadily execute its priority measures.

Recent Overview

Front-loaded demand for Cutting Tools drove a sharp increase in Q1 sales and profit, with net sales up 18.7% year on year

In the first quarter of FY2027 (ending February 2027) (March to May 2026), demand was front-loaded in response to price revisions by major cutting tool manufacturers, and demand for inventory build-up emerged in anticipation of supply uncertainty stemming from geopolitical risks, resulting in net sales of ¥13,110 million (up 18.7% year on year). Operating profit increased substantially to ¥324 million (up 388.1% year on year). In March, the Kobe office was upgraded to the Hyogo Branch, strengthening the sales structure. There has been no change to the full-year earnings forecast (net sales of ¥45,000 million, operating profit of ¥400 million), and the Q1 progress rate was high, at 29.1% for net sales and 81.0% for operating profit.

Key Products

Growth Drivers

• Capturing front-loaded demand ahead of price revisions in the Cutting Tools category and expanding sales of original brand products (such as the Victory end mill series)
• Improving order convenience through the promotion of NICE-NET and EDI integration, and strengthening product lineups through inventory expansion
• Expanding customer touchpoints and strengthening value-added proposals through regular events such as measurement and cutting tool exhibitions held using the NaITO Technical Center
• Expanding orders centered on equipment projects in the Ho Chi Minh City and Hanoi areas through the Vietnamese subsidiary (NAITO VIETNAM CO.,LTD.)
• Boosting spot product sales through strengthened proposals for automation and labor-saving products and expansion of new product offerings
• Strengthening the sales structure, including the upgrade of the Hyogo Branch, and steadily executing priority measures as the first year of the medium-term management plan "Kyoso Vision 2030"

Risks

• The risk that trends in U.S. trade policy could affect capital investment demand in the manufacturing industry, particularly the automotive industry
• Increased cost burden and continued cautious customer stance toward capital investment amid ongoing price increases and labor shortages
• Uncertainty regarding orders for spot projects in the Industrial Equipment & Machine Tools, etc. category (down 0.9% year on year in Q1)
• The risk of continued slowdown in automotive-related demand at the Thai affiliate (SOMAT Co.,Ltd.)
• The risk of a rebound decline once the effect of front-loaded demand for Cutting Tools runs its course (full-year operating profit forecast down 0.9% year on year)
• The impact on gross profit margin from rising procurement costs due to elevated raw material and energy prices