ENVALITH
ナカバヤシ株式会社 logo

NAKABAYASHI CO.,LTD.

7987・Standard Market・Other Products

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ナカバヤシ株式会社 logo
NAKABAYASHI CO.,LTD.7987

Business

Nakabayashi Co., Ltd. traces its origins to a bookbinding business founded in 1923, and today forms a group consisting of the company and 20 subsidiaries. Its core operations are built on two pillars: Business Process Solutions (net sales of ¥29,618 million), which handles BPO, printing, and Library Solutions, and Consumer Communications (net sales of ¥30,591 million), which offers albums, files, office furniture, stuffed toys, and more. In addition, the group operates an Energy Business covering Woody Biomass Power Generation and Solar Power Generation, as well as the Vegetable Plant Business and Garlic Farm Business. The company serves a broad customer base ranging from corporations and government agencies to general consumers, and maintains manufacturing and sales sites both in Japan and overseas. It is listed on the Standard Market of the Tokyo Stock Exchange.

Business Model

In the Business Process Solutions segment, the company produces Graduation Albums, diaries, DPS, BPO services and other products to order, enhancing profitability through profitability-focused project selection and in-house system development. In the Consumer Communications segment, the company produces Daily Paper Products, furniture, gadgets and other items to forecast demand, selling them through EC Channels, OEM orders, and overseas sales channels. Cost reduction through manufacturing consolidation at the Nakabayashi Factory and price revisions are driving margin improvement. The Energy Business supplements stable earnings with power generation revenue based on the FIT (Feed-in Tariff) system.

Company Strengths

In July 2025, Shimane Nakabayashi was renamed Nakabayashi Factory, and the manufacturing division was consolidated through an absorption-type split of the Hyogo Plant and the Head Office Plant. The integration results in the Graduation Albums segment directly contributed to improved cost ratios, and operating profit for FY2026 (ending March 2026) rose 60.9% year on year to ¥2,875 million. Through company-wide efforts to prioritize profitability in order selection and thoroughly implement price revisions, the operating profit margin improved significantly from 0.7% (FY2024, ended March 2024) to 4.7% (FY2026, ending March 2026).

In BPO services, an integrated in-house system development structure was established, enabling the acquisition of high value-added projects. In Library Solutions, designated administrator contracts leveraging years of operational expertise increased, along with the acquisition of highly specialized projects such as bookshelf relocation support. In the Seals & Labels segment, profit margins improved through expanded orders for high-unit-price products for medical and transportation companies and in-house production, maintaining strong performance.

In the Consumer Communications business, the company simultaneously pursued expansion of large-scale OEM orders such as child safety seats, delivery of office furniture to major theme parks, acquisition of new customers and increased customer spending through more efficient EC site operations, and expansion of sales channels for stuffed toys to theme parks in Europe, the U.S., and China. Operating profit for this segment in FY2026 (ending March 2026) rose 53.7% year on year to ¥1,808 million, demonstrating the effectiveness of the multi-channel strategy through actual results.

ENVALITH's Perspective

Operating profit for FY2026 (ending March 2026) recovered sharply to ¥2,875 million (up 60.9% year on year), but net income attributable to owners of the parent came to only ¥1,934 million (down 3.0% year on year) against ordinary profit of ¥3,219 million. Extraordinary losses of ¥1,451 million, including an impairment loss of ¥1,229 million related to Woody Biomass Power Generation, significantly weighed on net income. The improvement at the operating profit level reflects the combined effect of a profitability-focused strategy, manufacturing consolidation, and price revisions, and can be assessed as having high sustainability; however, fixed asset risk in the Energy Business warrants continued close attention.

The company forecasts revenue of ¥66,000 million (up 7.1% year on year), operating profit of ¥3,300 million (up 14.8%), ordinary profit of ¥3,650 million (up 13.4%), and net income of ¥1,950 million (up 0.8%). Revenue would need to increase by ¥4,402 million from the FY2026 (ending March 2026) level of ¥61,598 million, exceeding the highest level of the past five fiscal years (¥63,118 million in FY2022, ended March 2022). External factors such as the impact of U.S. trade policy, rising import prices due to yen depreciation, and labor shortages pose downside risks, and achieving the forecast will require simultaneous growth across all segments.

Paper products such as diaries, bound books, and albums continue to face an external environment of structural demand decline driven by digitalization, paperlessness, and the declining birthrate. On the other hand, the company is advancing its shift toward growth areas, including the DX integration of BPO services (synergy between digital and existing businesses), Library Solutions, medical-use seals, and the overseas expansion of Stuffed Toys (Sun Lemon Co., Ltd.). Progress in business structural reform toward the third year of the medium-term plan (FY2027, ending March 2027), together with stabilization of fuel procurement for Woody Biomass Power Generation, will be essential elements for improving the stock's valuation.

Growth Strategy

The mid-term plan "Go on 5ing" targets net sales of ¥66,000 million, strengthened profitability, and DX promotion.

Continuing to prioritize profitability in order selection and reviewing selling prices across all segments including BPO, consumer goods, and seals. Operating margin of 4.7% was achieved in FY2026 (ending March 2026), and the target for FY2027 (ending March 2027) is operating income of ¥3,300 million (operating margin of 5.0%).

Integrating digital technology with existing businesses in each segment to capture new high-gross-margin orders with high creative value. Concrete synergy effects are beginning to emerge, such as in-house system development for BPO services and DX-linked orders for diaries and printed materials.

The effects of consolidating the Graduation Albums manufacturing division became apparent as an improvement in the cost ratio in FY2026 (ending March 2026). The company will continue to reduce manufacturing costs and improve gross margin through further consolidation of manufacturing sites, production efficiency improvements, and specification reviews.

Accelerating growth in the Consumer Communications business by expanding large-scale OEM orders such as for child seats, leveraging price competitiveness in EC Channels, expanding sales channels for stuffed toys to theme parks in Europe, the US, and China, and strengthening sales operations in China and Korea.

In Woody Biomass Power Generation, the company aims for stable operation through securing a stable supply of fuel chips and output adjustment. An impairment loss of ¥1,229 million was recorded in FY2026 (ending March 2026), reflecting a review of asset value. Solar Power Generation is progressing steadily. Ongoing review of unprofitable businesses will continue.

Last updated: July 19, 2026