ENVALITH
株式会社ナカニシ logo

NAKANISHI INC.

7716・Standard Market・Precision Instruments

Official website
株式会社ナカニシ logo
NAKANISHI INC.7716

Business

Nakanishi Inc. is a precision equipment manufacturer founded in 1930, operating four segments: the Dental Business (approximately 59% of net sales), centered on dental handpieces and sterilizers; the DCI Business (approximately 25%), centered on dental chairs; the Surgical Business (approximately 7%), covering bone-cutting equipment for neurosurgery; and the Precision Machinery Business (approximately 9%), covering industrial spindles and other products. Its products are sold in more than 135 countries worldwide, with overseas sales accounting for 88.4% of net sales. With "extending healthy life expectancy" amid an ultra-aging society and "factory automation" as the keywords of its long-term vision, the company provides innovative products based on "cutting technology" in both the medical and industrial fields. Through a group structure that includes 28 subsidiaries, it has built a global manufacturing, sales, and service network.

Business Model

Nakanishi manufactures core technologies such as precision micromotors in-house at its head office plant in Kanuma City, Tochigi Prefecture, and delivers products to end users through sales subsidiaries and distributors around the world under a basic manufacturing-and-direct-sales model. In the Dental Business, in addition to brand sales of its mainstay handpieces, the company secures stable volume-sales revenue through OEM supply and bundled sales to DSOs (dental chains). In the Surgical Business and Precision Machinery Business, it specializes in high-value-added products and maintains high profit margins. The company conducts self-funded financial management, using operating cash flow as its main source of funds to continuously invest in capital expenditure and research and development.

Company Strengths

In FY2025 (fiscal year ended December 2025), the Dental Business recorded net sales of ¥48,197 million and segment operating income of ¥16,853 million, achieving an operating margin of approximately 35%. Brand strength backed by core technologies such as precision micromotors, combined with a sales network spanning more than 135 countries worldwide, supports strong price competitiveness.

In FY2025 (fiscal year ended December 2025), company-wide orders received totaled ¥84,922 million (up 13.9% year on year), with the order backlog reaching ¥12,231 million (up 44.1% year on year), a substantial increase. The Surgical Business order backlog rose 190.5% year on year and the Precision Machinery Business rose 233.9%, both showing particularly strong leading indicators that underpin future sales growth.

In FY2025 (fiscal year ended December 2025), operating cash flow was ¥16,649 million, exceeding the prior period's ¥15,303 million, with cash and cash equivalents reaching ¥45,964 million. The company holds cash on hand well in excess of its interest-bearing debt balance of ¥26,773 million, giving it a financial base capable of responding flexibly to M&A and capital investment opportunities.

ENVALITH's Perspective

FY2026 (ending March 2026) Q1 net sales of ¥22,488 million and operating profit of ¥4,675 million represent progress rates of approximately 24.9% and 28.8%, respectively, against the full-year forecast (net sales of ¥90,185 million and operating profit of ¥16,215 million). Operating profit increased significantly year-on-year by +39.1%, and profit attributable to owners of parent surged +803.9% (including the effect of the disappearance of the ¥1,200 million in prior-period corporate taxes for prior years recorded in the previous period). As an external factor, the impact of U.S. tariffs pushed down the gross profit margin by 2.2 percentage points, but the effect of higher sales and unexecuted R&D expenses supported profit.

In FY2026 (ending March 2026) Q1, a foreign exchange gain of ¥533 million was recorded, leading to a significant increase in ordinary profit to ¥5,548 million (+111.2% year-on-year), but this was largely due to the rebound effect from the foreign exchange loss of ¥1,011 million recorded in the same period of the previous year. The full-year ordinary profit forecast of ¥16,091 million represents an expected decrease of 5.0% year-on-year, and if the foreign exchange environment deteriorates further or additional impacts from U.S. tariffs materialize, there remains a risk of profit margin pressure in the second half. It should also be noted that short-term borrowings increased by ¥4,953 million from the end of the previous fiscal year, which warrants attention from a funding cost perspective.

The total acquisition cost for Acra Cut and Intech (converted into yen) reaches approximately ¥13,941 million, but the amount of goodwill to be generated, its amortization period, and the breakdown of assets and liabilities to be assumed remain undetermined at this time. There is also a provision for additional earn-out consideration of up to $14,000 thousand. The Surgical Business posted a high segment operating profit margin of 48.9% in FY2026 (ending March 2026) Q1, and if the M&A effects are realized, the mid-to-long-term profit contribution could be substantial; however, integration costs and an increased goodwill amortization burden may pressure short-term profits.

Growth Strategy

Targeting sales of ¥100,000–120,000 million and EBITDA of ¥25,000–33,000 million by 2030 under NV2030

Under the medium-term management plan NV2030, the Surgical Business is positioned as the second pillar following the Dental Business, with development and manufacturing resources concentrated on it. In April 2026, the company acquired Acra Cut, Inc. (cranial perforators for neurosurgery) and Intech, Inc. (manufacturer of surgical instruments), entering the neurosurgery field. In Q1 FY2026 (ending March 2026), Surgical Business sales continued to grow strongly, up 37.1% year on year.

The company is diversifying its sales channels, including DSO (Dental Service Organization) channels, and maximizing synergies through bundled sales of dental handpieces and DCI dental units. In Q1 FY2026 (ending March 2026), the Dental Business achieved simultaneous revenue growth across all four major regions—Japan, North America, Europe, and Asia—while the DCI Business also posted revenue growth of +28.3%, driven partly by demand ahead of price increases.

Increased production at the head office plant contributed to an improvement in the gross profit margin. In Q1 FY2026 (ending March 2026), the gross profit margin declined by 2.2 percentage points year on year due to the impact of US tariffs; however, this was partially offset by the effect of fixed-cost absorption from increased production, resulting in EBITDA of ¥5,876 million, up 23.6% year on year. Full-year EBITDA is forecast at ¥21,854 million (up 9.8% year on year).

The Precision Machinery Business also achieved revenue growth across all regions—Japan, North America, Europe, and Asia (up 23.4% year on year in Q1 FY2026 (ending March 2026)). The company is capturing growing demand for spindle products used in precision and micro-machining, driven by factory automation needs. Toward achieving the full-year sales forecast of ¥90,185 million (up 11.1% year on year), the company continues to strengthen sales across all regions.

Last updated: July 17, 2026