ENDO MANUFACTURING CO.,LTD.

Business Details

This segment's main businesses are the manufacture and sale of Golf Club Heads, Medical Device Components (Artificial Joints, etc.), and Aircraft Components. Most products are OEM production under customer brands, with the majority of supply destinations being domestic companies. Golf head manufacturing is handled by Thai subsidiaries (ENDO THAI CO.,LTD. and ENDO FORGING (THAILAND) CO.,LTD.), while medical device components and aircraft components are manufactured and sold domestically by the Company, applying the forging, machining, and polishing technologies cultivated through golf head production. Major customers are Sumitomo Rubber Industries, Ltd. and IHI Corporation.

Recent Overview

Shipments remained firm across all three fields—golf, medical, and aircraft—with net sales up 27.1% year on year, but operating income fell 9.9% due to higher procurement and freight costs

In Q1 FY2026 (ending December 2026) (January to March 2026), the Fine Process Business saw firm shipment trends across the golf, medical device, and aircraft component fields, resulting in a substantial increase in net sales to ¥2,464 million (up 27.1% year on year). On the profit side, however, the continued weak yen led to higher procurement prices, and freight costs rose due to the impact of Middle East conditions, both of which pressured profitability, resulting in a decline in operating income to ¥191 million (down 9.9% year on year). The operating margin fell from 10.9% in the same period of the prior year to 7.8%.

Key Products

Growth Drivers

• Medical device field: increasing demand for artificial joints and other products driven by global population aging, and improved stable supply capability through expanded production systems
• Aircraft field: expanding orders driven by an increasing trend in passenger and cargo demand (mainly for the major customer IHI)
• Golf field: growing demand for forged heads driven by changing market preferences, and support for the golfing population from new formats such as the TGL league
• Efforts to expand business partners and secure new orders through the evolution of forging processes and new product development
• Promotion of manufacturing cost reductions through optimization and efficiency improvements at the Thai production base

Risks

• Risk of rising procurement prices from the Thai production base due to the continued weak yen (impact on raw material costs and manufacturing costs)
• Risk of rising transportation costs due to the impact of Middle East conditions (a factor pressuring operating margin that materialized in Q1 FY2026 ending December 2026)
• Risk of shipment fluctuations due to model change cycles in the golf field (decreased sales in certain periods)
• Major customer concentration risk: Sumitomo Rubber Industries and IHI together account for approximately 21.8% of net sales (FY2025 ending December 2025)
• Risk of rising labor costs at the Thai subsidiaries, including minimum wage increases
• Foreign exchange risk (fluctuations in the Thai baht/yen rate directly affect manufacturing costs)