DAIKO TSUSAN CO.,LTD.

Business Details

The Company operates as a single segment providing sales services for the CATV-related and information/telecommunications-related markets. It is an independent specialized trading company that purchases products (approximately 43,000 items) from roughly 450 domestic and overseas manufacturers, including Cables, Materials, and Equipment, and sells them to approximately 2,700 customers such as telecommunications construction contractors, telecommunications carriers, electric power companies, and government agencies. The Company operates a region-focused sales approach through a network of 13 locations across four blocks—Shikoku-Kyushu, Eastern Japan, Western Japan, and Tokai-Hokuriku—handling approximately 70% of transactions through direct shipment from suppliers. Its strengths lie in a cost leadership strategy through overseas manufacturing outsourcing of In-house Planned Products (Cost Leadership Products) and its own logistics network (4 logistics centers plus 11 warehouses).

Recent Overview

FY51 achieved increased revenue and profit, with margin improvement driven by a decrease in price-concession projects

In FY2026 (ending May 2026, FY51), the Company achieved sales revenue of ¥21,983 million (up 1.2% year on year), operating profit of ¥1,265 million (up 8.0% year on year), and profit attributable to owners of parent of ¥915 million (up 12.1% year on year), with increases at all profit levels. The Eastern Japan block drove results with sales revenue of ¥8,453 million (up 9.5% year on year), supported by strong order intake for large-scale fire department communication equipment, disaster prevention administrative radio, and outdoor communication equipment projects, while the Shikoku-Kyushu block saw sales revenue decline to ¥4,913 million (down 9.6% year on year) due to the conclusion of a large-scale fire department digital communication equipment project. By product, the gross profit margin for Cables and Equipment improved due to a decrease in price-concession projects, and the overall gross profit margin improved to 14.9% (from 14.3% in the prior period). For FY2027 (ending May 2027), the Company forecasts sales revenue of ¥22,500 million (up 2.3% year on year) and operating profit of ¥1,373 million (up 8.5% year on year). The annual dividend is planned to increase from ¥70 to ¥72.

Key Products

Growth Drivers

• Ongoing capital investment demand for optical transmission line construction and FTTH development based on the "Digital Garden City Nation Initiative" and the "Regional Future Strategy" (formerly "Regional Revitalization 2.0")
• Replacement demand due to aging deterioration among municipalities that have completed digitalization of disaster prevention administrative radio, as well as replacement demand anticipating the termination of certain radio band services
• Strong order intake for large-scale projects such as fire department communication equipment, disaster prevention administrative radio, and outdoor communication equipment in the Eastern Japan block, along with an increase in routine transactions
• Expansion of information and communication infrastructure investment driven by the growing application of new technologies such as AI and the full-scale implementation of corporate cybersecurity measures
• Structural improvement in gross profit margin and continued profitability enhancement measures resulting from a decrease in price-concession projects

Risks

• Risk of rising crude oil and naphtha prices and increased procurement costs due to the worsening situation in the Middle East and the prolonged conflict in Ukraine
• Risk of performance fluctuation depending on the presence or absence of large-scale orders (risk of a downturn similar to the conclusion of the fire department digital communication equipment project in the Shikoku-Kyushu block)
• Risk of declining gross profit margin due to price concessions (discounts) on large-scale projects
• Risk of increased procurement costs due to rising resource and energy prices and exchange rate fluctuations
• Risk of obsolescence of handled products due to accelerating technological innovation in the information and telecommunications field
• Risk of stagnation in personal consumption and economic slowdown due to global economic uncertainty, including trends in U.S. trade policy