KOMATSU WALL INDUSTRY CO., LTD.

Business Details

The company's core business is the manufacture, sale, and installation of Movable Partitions, Fixed Partitions, Toilet Booths, Movable Partitions, and Low Partitions, among others. Its strength lies in its proprietary integrated system covering everything from order receipt through design, manufacturing, sales, installation, and service, and it serves a wide range of applications including offices, cultural facilities, schools, and factories. As a domestic specialist manufacturer, all of its sales are directed to the domestic market, with office relocation and renovation demand centered on the greater Tokyo metropolitan area serving as its principal market. It is a non-consolidated, single-segment company with no subsidiaries or affiliates.

Recent Overview

FY2026 (ending March 2026) closed with higher revenue and profit; payout ratio raised sharply to 75%

For the full year FY2026 (ending March 2026), net sales were ¥46,725 million (up 4.7% year on year), operating profit was ¥4,099 million (up 12.8% year on year), and net income was ¥3,048 million (up 15.0% year on year), with increases across all profit line items. Gross margin rose to 36.1% (up 0.8 percentage points year on year) due to increased sales of high-value-added products, absorbing the rise in personnel expenses from base pay increases and other factors. The order backlog built up to ¥20,486 million (up 8.4% year on year). Investing cash flow increased significantly to -¥6,086 million due to ¥6,934 million in expenditures for the acquisition of property, plant and equipment associated with the construction of Building No. 2 (tentative name) at the Kaga Plant. The annual dividend was raised sharply from the prior year to ¥130 (payout ratio of 75.0%). For FY2027 (ending March 2027), the company forecasts net sales of ¥48,600 million (up 4.0% year on year), operating profit of ¥4,260 million (up 3.9% year on year), and net income of ¥3,050 million (up 0.0%).

Key Products

Growth Drivers

• Solid performance of Movable Partitions and Toilet Booths supported by robust office relocation and renovation demand
• Improvement in gross margin due to increased sales of high-value-added products (36.1% in FY2026, ending March 2026, up 0.8 percentage points year on year)
• Substantial growth in Movable Partitions for cultural facilities (orders received up 17.4% year on year, order backlog up 25.0% year on year)
• Entry into the super high-rise building market through the development of the new product SKYDOOR (Movable Partition for High-Rise Buildings and Exterior Use)
• Strengthened production and shipping capacity for Movable Partitions through construction of Building No. 2 (tentative name) at the Kaga Plant (scheduled to commence operations in May 2027)
• Strengthened direct outreach to architects and construction industry professionals through architectural seminars held at the Tokyo showroom
• Continued progress of urban redevelopment projects centered on the greater Tokyo metropolitan area and ongoing office environment investment aimed at supporting new work styles and talent acquisition
• Improved visibility of future performance due to the buildup in the order backlog (¥20,486 million at end of FY2026, ending March 2026, up 8.4% year on year)
• Promotion of management conscious of capital costs and resolution of the sub-1x PBR issue through a dividend policy targeting DOE of 6% and enhanced shareholder returns

Risks

• Upward pressure on personnel expenses due to base pay increases and other factors (selling, general and administrative expenses rose from ¥12,123 million in the prior year to ¥12,773 million in the current year)
• Risk of downward pressure on the domestic economy from continued price increases and US trade policy
• Risk of crude oil price spikes and rising prices/procurement risk for petroleum-derived raw materials amid escalating tensions in the Middle East (not factored into earnings forecasts)
• Worsening labor shortages driven by the medium- to long-term decline in Japan's birthrate and working-age population
• Risk of soaring raw material and energy prices
• Risk of delays in the construction of Building No. 2 at the Kaga Plant (scheduled to commence operations in May 2027)
• ROE remains below the medium-term management plan target (8% or higher), with actual results of 7.9% in FY2026 (ending March 2026)
• Decrease in cash and cash equivalents (period-end balance of ¥10,144 million, down ¥3,505 million year on year) due to large-scale capital expenditure of ¥6,934 million for the acquisition of property, plant and equipment associated with the construction of Building No. 2 at the Kaga Plant
• Reduced scope for retained earnings accumulation due to the sharp increase in the payout ratio to 75.0% (FY2026, ending March 2026)
• Year-on-year decline in orders received and order backlog for Fixed Partitions (orders received down 9.3% year on year, order backlog down 6.2% year on year)