MEIWA CORPORATION

Business Details

The First Business Segment consists of three businesses: the Resources & Environment Business (rare earths and rare metals, environment-related, and metal-related products), the Flame Retardants Business, and the Functional Building Materials Business (insulation materials, waterproofing materials, and interior materials). The majority of segment assets consist of trade receivables and inventories such as rare metals and flame retardants. In the fiscal year under review (FY2025, ended March 2025), net sales were ¥42,340 million and segment profit was ¥2,370 million, driving the improvement in profitability across the group as a whole.

Recent Overview

The Flame Retardants Business remained strong, driving increased revenue and profit even in the nine-month cumulative period

In the full fiscal year ended March 2025, net sales were ¥42,340 million (down 0.9% year on year), while segment profit rose significantly to ¥2,370 million, up 56.1% year on year (an increase of ¥851 million). The Flame Retardants Business performed well, and within the Functional Building Materials Business, waterproofing materials were strong, while the Resources & Environment Business saw sluggish performance in metal-related and environment-related products. In the nine months of FY2026 (ending March 2026, April to December 2025), net sales were ¥33,983 million (up 6.4% year on year) and segment profit was ¥2,014 million (up 28.1% year on year), continuing the strong trend. The Flame Retardants Business remained strong even as market conditions showed some signs of stabilizing.

Key Products

Growth Drivers

• Continued strong performance of the Flame Retardants Business (solid demand even amid stable market conditions)
• Strong performance of waterproofing materials within the Functional Building Materials Business
• Increased revenue and profit in the nine months of FY2026 (ending March 2026), with net sales up 6.4% and segment profit up 28.1% year on year
• Increase in segment assets (inventory growth driven by strong performance in flame retardants and functional building materials)

Risks

• Sluggish performance in metal-related and environment-related products within the Resources & Environment Business
• Risk of fluctuations in rare earth and rare metal market conditions
• Risk of declining profitability of inventories (rare metals, flame retardants, etc.) due to market price fluctuations
• Order backlog down 26.1% year on year (as of the end of FY2025, March 2025)

Business Details

This segment operates solely in the petroleum products business, with Lubricants, Base Oil, and Additives as its core products. In addition to domestic and overseas sales channels, it operates a lubricants business in China (refrigerator oil and industrial machinery lubricants). The majority of segment assets consist of trade receivables and inventories of petroleum products and similar items. This segment accounted for approximately 28% of the group's total net sales (FY2025, ended March 2025), with sales to China accounting for more than half of segment net sales.

Recent Overview

Nine-month cumulative net sales fell sharply by 11.1% year on year to ¥30,456 million

In the nine months of FY2026 (ending March 2026, April to December 2025), net sales were ¥30,456 million (compared to ¥34,271 million in the same period of the prior year), a decrease of 11.1%. Segment profit was ¥634 million (versus ¥668 million in the prior-year period), a decrease of 5.1%. Domestic sales of Base Oil and Additives were sluggish, while overseas sales of Base Oil and Additives performed well, and in the China lubricants business, refrigerator oil and industrial machinery lubricants performed well. For the full fiscal year (FY2025, ended March 2025), net sales were ¥43,790 million, down 11.3% year on year, and segment profit was ¥804 million, down 17.9% year on year. The sluggishness in the China lubricants business and the reversal of trade receivables recorded at the prior fiscal year-end contributed to a significant decline in segment assets (down 27.8% year on year to ¥10,445 million).

Key Products

Growth Drivers

• Strong performance of overseas sales of Base Oil and Additives
• Solid demand for industrial machinery lubricants in the China lubricants business
• Strong phase for domestic Base Oil and Additives sales (FY2025, ended March 2025)

Risks

• Risk of demand fluctuations in the China lubricants business (sluggish phases for refrigerator oil, etc.)
• Risk of weak demand for domestic Base Oil and Additives
• Impact on net sales and profit from fluctuations in petroleum product market conditions
• Foreign exchange risk (foreign exchange losses arising from transactions with China and other overseas markets)
• Asset fluctuations due to temporary factors such as the reversal of trade receivables related to financial institution holidays at the prior fiscal year-end

Business Details

This segment consists of four businesses: the High-Performance Materials Business (film products and printing raw materials), the Functional Chemicals Business (papermaking chemical raw materials and adhesive raw materials), the Synthetic Resins Business (synthetic resin raw materials and synthetic resin products), and the Inorganic Chemicals Business. It is the largest segment by net sales within the Meiwa Corporation group, supplying a wide range of chemical products domestically, to China, and to other overseas markets. Segment assets consist predominantly of trade receivables, reflecting a typical trading company business structure.

Recent Overview

Acquisition of Takaroku Co., Ltd. brought synthetic resin recycling operations into the segment; nine-month cumulative net sales rose 7.5% year on year

On July 31, 2025 (deemed acquisition date), the company acquired all shares of Takaroku Co., Ltd. for ¥1,490 million, making it a consolidated subsidiary. Takaroku, a synthetic resin trading company with over 60 years of history and a recycling business, was integrated into the Synthetic Resins Business within the Third Business Segment. In the nine months of FY2026 (ending March 2026, April to December 2025), net sales were ¥48,891 million (up 7.5% year on year), while segment profit declined to ¥744 million (down 22.4% year on year), reflecting expenses related to the Takaroku share acquisition (advisory fees and other costs of ¥99 million) and sluggish performance in the Functional Chemicals Business. Goodwill recorded from the acquisition was ¥1,842 million (provisional figure), to be amortized on a straight-line basis over 15 years.

Key Products

Growth Drivers

• Expansion of net sales in the Synthetic Resins Business and incorporation of the waste plastic recycling business through the consolidation of Takaroku Co., Ltd.
• Continued strong performance of the Inorganic Chemicals Business
• Expansion of circular economy-related businesses in line with the environmental impact reduction materiality identified in the medium-term management plan
• Improved asset efficiency (reduction in segment assets) through the securitization of electronically recorded monetary claims

Risks

• Risk of continued weakness in synthetic resin raw material and product market conditions (sluggish in both the fiscal year under review and the most recent nine-month cumulative period)
• Weak demand for papermaking chemical raw materials and adhesive raw materials within the Functional Chemicals Business
• Risk of impairment of goodwill (¥1,842 million, provisional figure) arising from the Takaroku acquisition, and accounting uncertainty due to incomplete purchase price allocation
• Risk of a reversal in demand for film products (turned sluggish in the nine months of FY2026, ending March 2026)
• Foreign exchange risk (foreign exchange losses arising in some transactions)

Business Details

This segment consists of two businesses: the Automotive Business and the Battery Materials Business. The Automotive Business conducts Automotive Parts-Related Transactions through equity-method affiliates, while the Battery Materials Business sells battery materials, primarily for automotive use, in Japan and China. The majority of segment assets, which totaled ¥10,764 million, consist of investment assets in equity-method affiliates in the Automotive Business (investment amount of ¥8,795 million), reflecting a structure in which the primary source of profit is equity in earnings of affiliates rather than asset efficiency.

Recent Overview

Nine-month cumulative net sales fell 1.8% year on year, and the segment posted a loss of ¥167 million

In the nine months of FY2026 (ending March 2026, April to December 2025), net sales were ¥8,517 million (down 1.8% year on year), and the segment posted a loss of ¥167 million (compared to a profit of ¥238 million in the prior-year period), a significant deterioration. In the Battery Materials Business, sales of automotive battery materials in China remained solid, but performance turned sluggish overall as a one-time factor boosting sales disappeared. In the Automotive Business, the performance of equity-method affiliates was sluggish. For the full fiscal year ended March 2025 (based on the annual securities report), net sales were ¥10,715 million (up 42.3% year on year) and segment profit was ¥408 million, achieving increased revenue and profit.

Key Products

Growth Drivers

• Expanding demand for automotive battery materials in Japan and China within the Battery Materials Business
• Increase in equity in earnings of affiliates driven by recovery in the performance of equity-method affiliates
• Solid performance of automotive battery material sales in China

Risks

• Direct impact on segment results from deteriorating performance of equity-method affiliates (the segment posted a loss of ¥167 million in the nine months of FY2026, ending March 2026)
• Risk of the disappearance of one-time revenue-boosting factors in the Battery Materials Business
• Risk of fluctuations in demand for automotive battery materials in the Chinese market
• Risk arising from the concentration of the majority of segment assets (¥8,795 million) in investments in equity-method affiliates, making results dependent on the financial condition of those affiliates
• Foreign exchange risk (due to the presence of overseas transactions, including in China)

Business Details

The "Others" category aggregates business segments not included in the four reportable segments: the First Business Segment, Second Business Segment, Third Business Segment, and the Battery & Automotive Business. Net sales to external customers are effectively zero, and segment assets are extremely small, at ¥35 million (as of the end of the third quarter of FY2026, ending March 2026). The segment posted a loss of ¥205 million in the previous fiscal year (FY2025, ended March 2025) and a loss of ¥150 million in the fiscal year before that (FY2024, ended March 2024), reflecting consecutive years of losses. Sales performance has been on a declining trend, at ¥0 million in the previous fiscal year (down 70.3% year on year).

Recent Overview

A segment loss of ¥205 million was recorded again in the nine months of FY2026, ending March 2026

In the nine months of FY2026 (ending March 2026, from April 1, 2025 to December 31, 2025), the "Others" category recorded a segment loss of ¥205 million (the same amount as the loss recorded in the same period of the prior year). Net sales were ¥0 million, with no revenue generated from external customers. Segment assets were ¥35 million (a significant decrease from ¥157 million at the end of the previous fiscal year). In addition, an increase of ¥35 million in tangible and intangible fixed assets was recorded in the previous fiscal year (FY2025, ended March 2025).

Key Products

Growth Drivers

Risks

• Continued segment losses (-¥205 million in the previous fiscal year, -¥150 million in the fiscal year before that)
• A structure in which net sales to external customers are zero, offering no prospect of revenue contribution
• Sharp decline in segment assets, from ¥157 million at the end of the previous fiscal year to ¥35 million, indicating a shrinking business base