ENVALITH
加賀電子株式会社 logo

KAGA ELECTRONICS CO.,LTD.

8154・Prime Market・Wholesale Trade

Official website
加賀電子株式会社 logo
KAGA ELECTRONICS CO.,LTD.8154

Business

Kaga Electronics, founded in 1968, is an independent comprehensive electronics trading company. With 68 consolidated subsidiaries and 3 equity-method affiliates, its core business is the Electronic Components Business (sales of semiconductors and general electronic components, and EMS (Electronics Manufacturing Service)), complemented by the Information Equipment Business (sales of finished products such as PCs and PC peripherals), the Software Business (CG Video Production Service and planning/development of amusement-related products), and Other Businesses (Electronics Equipment Repair & Support, amusement equipment, and sporting goods), forming a four-segment structure. The company serves a broad customer base spanning domestic and overseas manufacturers, mass retailers, educational institutions, and the US amusement market, and operates overseas manufacturing bases in Malaysia, Turkey, Mexico, China, Thailand, and elsewhere. Net sales for FY2026 (ending March 2026) reached a record high of ¥658,941 million.

Business Model

The main revenue sources are two pillars: procurement and sales of electronic components and semiconductors (the Electronic Components Business, which accounts for approximately 86% of net sales), and the EMS business, which specializes in high-mix, low-volume production. As an independent trading company not tied to specific manufacturers, the company leverages its procurement capabilities to flexibly capture profits through spot sales during periods of tight supply-demand conditions. In the Information Equipment Business, the company sells PCs to educational institutions and mass retailers, while Other Businesses complement earnings through diversified activities such as recycling/reuse and sales of amusement equipment to the United States.

Company Strengths

Leveraging its position as an independent trading company not bound to specific manufacturers, the company actively expanded spot sales centered on general-purpose memory (scale of approximately ¥41,100 million) amid tight AI server memory supply-demand conditions in FY2026 (ending March 2026). This contributed significantly to achieving revenue of ¥658,941 million, up 20.3%. This procurement capability represents a proprietary competitive advantage underpinned by a long-standing network of distributor and dealer agreements with suppliers (including Teikoku Tsushin Kogyo, Mitsubishi Electric, Kioxia, and many others).'

The company operates overseas manufacturing bases in Malaysia, Turkey, Mexico, China, Thailand, Vietnam, and other locations. In FY2026 (ending March 2026), the majority of capital expenditure of ¥3,789 million (based on tangible fixed asset acquisition value) was allocated to capacity expansion at overseas manufacturing bases. EMS for air conditioning equipment and medical devices performed well, contributing to the Electronic Components Business achieving revenue of ¥568,834 million and segment profit of ¥19,304 million.

Following the consolidation of Fujitsu Electronics (now Kaga FEI) as a subsidiary in 2019 and Kyokuto Denki as a subsidiary in 2020, the company made Kyoei Sangyo Co., Ltd. a consolidated subsidiary through a tender offer in July 2025. Kyoei Sangyo's consolidated contribution from the second quarter onward directly contributed to the revenue increase in FY2026 (ending March 2026). Additionally, in August of the same year, the company executed its largest-ever capital policy, acquiring and retiring approximately 4.92 million of its own shares (9.4% of total shares issued) held by its four main lending banks, for a total of ¥14.4 billion.

ENVALITH's Perspective

Net income attributable to owners of the parent for FY2026 (ending March 2026) rose sharply to ¥31,099 million (up 82.0% year on year), but this was supported by total extraordinary gains of ¥10,918 million, including a ¥7,797 million gain on negative goodwill arising from the consolidation of Kyoei Sangyo and a ¥1,663 million gain on sale of investment securities. It is important to assess the underlying earning power on a basis excluding these one-time gains that do not accompany cash inflows, and the FY2027 (ending March 2026) net income forecast of ¥20,000 million (down 35.7% year on year) reflects the disappearance of these effects.

Large-lot spot sales (approximately ¥41,100 million) concentrated in the fourth quarter of FY2026 (ending March 2026) are expected to disappear in FY2027 (ending March 2026), and the sales forecast is for a decrease to ¥645,000 million (down 2.1% year on year). Additionally, the concentration of spot sales in the fourth quarter caused accounts receivable to increase by ¥57,243 million, turning operating cash flow to an outflow of ¥2,471 million. Short-term borrowings also increased by ¥53,507 million, and progress in collecting accounts receivable and repaying borrowings will determine the company's financial soundness in FY2027 (ending March 2026).

As the first year of the Medium-Term Management Plan 2027, the company achieved year-on-year increases in revenue and profit at all stages—sales, operating income, ordinary income, and net income—with ROE improving by 7.0 percentage points from 10.8% in the previous period to 17.8%. The speed of execution of initiatives, including M&A activity, share buybacks, share cancellations, and the payment of a special dividend, can be evaluated positively. On the other hand, the equity ratio declined from 54.4% to 45.5%, and close attention should be paid to the impact of the expansion in total assets and increase in interest-bearing debt resulting from the consolidation of Kyoei Sangyo.

Growth Strategy

Under Medium-Term Management Plan 2027, the company is driving enterprise value enhancement through an integrated approach combining M&A, EMS expansion, and improved capital efficiency

In July 2025, the company made Kyoei Sangyo Co., Ltd. a consolidated subsidiary through a tender offer (adding 8 newly consolidated companies). This significantly expanded the scale of the Electronic Components Business, delivering concrete results from the first year of the medium-term plan. The company intends to continue agile M&A execution going forward as an independent trading company.

In August 2025, the company acquired and cancelled approximately 4.92 million of its own shares (9.4% of total shares issued) held by its four main lender banks, for a total of ¥14,400 million (the company's first-ever share cancellation). A special dividend was also implemented, promoting active shareholder returns under the new policy of DOE 4.0% and a consolidated dividend payout ratio of 30-40%.

Continuous capital investment in overseas manufacturing bases in Malaysia, Turkey, and Mexico, among others, is expanding EMS orders for air conditioning equipment and medical devices. The slowdown in automotive-related demand was offset by growth in other fields, resulting in increased revenue and profit for FY2026 (ending March 2026).

The final target of Medium-Term Management Plan 2027 is to achieve revenue of ¥1 trillion in FY2029 (ending March 2029). Revenue reached a record high of ¥658,941 million in FY2026 (ending March 2026), but FY2027 (ending March 2027) is forecast to see a decline to ¥645,000 million due to the drop-off of spot sales. Additional M&A and EMS expansion are essential to achieving the target.

Last updated: July 19, 2026