ENVALITH
黒田精工株式会社 logo

KURODA PRECISION INDUSTRIES LTD.

7726・Standard Market・Machinery

Official website
黒田精工株式会社 logo
KURODA PRECISION INDUSTRIES LTD.7726

Business

Kuroda Precision Industries Ltd. is a precision equipment manufacturer founded in 1925, listed on the Standard Market of the Tokyo Stock Exchange. With 7 consolidated subsidiaries and 2 affiliated companies, the company operates in three segments: (1) Drive Systems, handling precision ball screws and actuators, etc.; (2) Die & Mold Systems, manufacturing Laminated Precision Press Dies and motor cores; and (3) Machine Tools & Measurement Systems, providing Holding Tools / Gauges, precision grinding machines, and measuring instruments. Its main customers include semiconductor and LCD-related equipment manufacturers, automotive (EV/HV)-related manufacturers, and machine tool manufacturers, capturing a wide range of demand for advanced manufacturing and automation both domestically and internationally. The company has production and sales bases in Germany, the United States, South Korea, China, and Malaysia, operating globally.

Business Model

The company generates revenue by directly selling in-house manufactured precision parts and equipment to industrial machinery manufacturers and others in each segment. In the Die & Mold Systems segment, revenue is also derived from licensing agreements (with Euro Group S.p.A, Wuxi Lead Intelligent Equipment Co., Ltd., etc.) for its proprietary in-mold adhesive lamination system "Glue FASTEC®" and resin bonding system "MAGPREX®". The company also utilizes equipment sales to affiliated companies and intra-supply-chain transactions through a joint venture (Kochu Kuroda Lamination Co., Ltd.).

Company Strengths

The company's proprietary in-mold bonding and laminating system "Glue FASTEC®" and resin fixing system "MAGPREX®" produce lower CO2 emissions compared to other methods, and have a track record of licensing to multiple overseas companies. In FY2026 (ending March 2026), the company continues to work on several new projects, ongoing process improvement, and productivity enhancement.

Precision Ground Ball Screws, Rolled Ball Screws, and actuators are manufactured in Japan (Kazusa Academia Plant), Germany (Jenaer Gewindetechnik GmbH), and China (Kuroda Precision Industries (Zhejiang) Co., Ltd.), supported by a multi-location sales network including South Korea and the United States. The order backlog for Drive Systems in FY2026 (ending March 2026) increased significantly to ¥2,410 million (up 114.2% year on year), and is expected to contribute to future revenue.

The Machine Tools & Measurement Systems segment achieved a turnaround to profitability in FY2026 (ending March 2026), posting operating income of ¥176 million (versus an operating loss of ¥103 million in the previous fiscal year). The company continues new product development, including the launch of the column-moving surface grinder GS-64/65CV (achieving a 70% reduction in power consumption and space savings), and order intake has also expanded to ¥4,152 million (up 20.1% year on year).

ENVALITH's Perspective

In FY2026 (ending March 2026), revenue increased to ¥19,501 million (up 12.8% YoY), but operating profit fell to ¥32 million (down 89.5% YoY), ordinary profit fell to ¥11 million (down 97.3% YoY), and net loss attributable to owners of the parent was ¥96 million, a level approaching a de facto management crisis. This resulted from a combination of margin deterioration due to product mix changes, increased depreciation expenses (¥1,229 million), and widening losses at the German subsidiary. The fragility of a revenue structure in which sales growth fails to translate into profit is the issue investors should watch most closely.

In FY2026 (ending March 2026), the company recorded a gain of ¥286 million on sale of investment securities as extraordinary income, but also recorded a fixed asset impairment loss of ¥207 million related to the German subsidiary and restructuring costs of ¥240 million as extraordinary losses, resulting in a net loss for the period. The German subsidiary's underperformance has continued over multiple periods, and the effectiveness of the restructuring measures and the presence or absence of additional loss risk will be an important point to watch going forward. Operating cash flow also turned negative at ¥614 million, and the company covered funding through financing activities (long-term borrowings of ¥2,545 million), which also warrants close attention from the standpoint of financial soundness.

The company forecasts revenue of ¥25,800 million (up 32.3% YoY), operating profit of ¥770 million (up roughly 23-fold YoY), and net income of ¥330 million for FY2027 (ending March 2027). The main basis for this is a sharp recovery in orders for Drive Systems and the second-half contribution of New Project-related Equipment in Die & Mold Systems, but the gap from the FY2026 (ending March 2026) actual results (operating profit of ¥32 million) is extremely large, requiring simultaneous realization of improved product mix, recovery in profitability at the European and US subsidiaries, and progress on new projects. External factors such as geopolitical risk, changes in the trade environment, and the continuation of China's rare earth export restrictions also remain as potential downside risks.

Growth Strategy

Aiming for a significant V-shaped recovery in FY2027 (ending March 2027), centered on the recovery in Drive Systems orders and the contribution of the new Die & Mold Systems project

Orders for the semiconductor and LCD-related equipment market have recovered sharply since the end of last year, with orders received in FY2026 (ending March 2026) reaching ¥7,765 million (up 22.5% year on year). In FY2027 (ending March 2027), the recognition of sales from the order backlog is expected to accelerate in earnest, leading to increased sales and profit at Kuroda Precision Industries on a standalone basis, as well as improved earnings at the European and U.S. subsidiaries. The recording of ¥240 million in restructuring costs is positioned as a step toward a fundamental improvement in profitability at the German subsidiary.

The New Project-related Equipment currently underway is expected to make a substantial contribution to performance from the second half of FY2027 (ending March 2027) onward. In FY2026 (ending March 2026), sales of equipment to affiliated companies drove an increase in sales in Die & Mold Systems (up 20.8% year on year), but operating profit remained at only ¥49 million due to an increase in lower-margin products. Improving the profit margin of the New Project is key to the earnings recovery in FY2027 (ending March 2027).

In FY2026 (ending March 2026), the segment returned to profitability with an operating profit of ¥176 million (compared to an operating loss of ¥103 million in the previous period). This was driven by improved profit margins in the systems division, centered on machine tools, and increased profit at domestic subsidiaries. Large-scale orders for Precision Equipment Products and an increasing trend in orders for component equipment continue, and the segment is expected to function as a stable profit contributor in FY2027 (ending March 2027) as well.

In FY2026 (ending March 2026), an impairment loss on fixed assets of ¥207 million and restructuring costs of ¥240 million related to the German subsidiary were recorded as extraordinary losses, marking the start of a fundamental structural reform. The deterioration in profitability at the European and U.S. subsidiaries was the main cause of the operating loss (¥186 million) in the Drive Systems segment, and the effectiveness of the structural reform is directly linked to the earnings recovery from FY2027 (ending March 2027) onward.

Last updated: July 19, 2026