ENVALITH
都築電気株式会社 logo

TSUZUKI DENKI CO., LTD.

8157・Prime Market・Information & Communication

Official website
都築電気株式会社 logo
TSUZUKI DENKI CO., LTD.8157

Business

Tsuzuki Denki Co., Ltd. is an independent information and communications solutions company founded in 1932. It provides an integrated offering across three business models: Equipment Sales (servers, storage, communication equipment, etc.), Development & Construction (consulting, design, system development, and network construction), and Services (Operation & Maintenance / Cloud, monthly subscription services). Its customers are domestic companies across a wide range of industries, including manufacturing, government agencies, finance, services, and transportation. The company covers both the SI and NI domains in collaboration with seven subsidiaries, including Tsuzuki Techno Service, Tsuzuki Software, Tsuzuki Cross Support, and Comdesign. It is listed on the Prime Market of the Tokyo Stock Exchange.

Business Model

Of net sales of ¥103,728 million, the three categories are almost evenly composed: Equipment Sales ¥43,378 million, Development & Construction ¥17,391 million, and Services ¥42,957 million. Equipment Sales and Development & Construction represent project-based one-time revenue, while Services represent monthly subscription-type recurring revenue from cloud solutions and the like, generating stable cash flow. The order backlog of ¥26,902 million (up 32.9% year on year) serves as a leading indicator of future sales, and the conversion from orders to sales is enhancing revenue visibility.

Company Strengths

The company has a system capable of providing an integrated offering from software development to network construction and operation/maintenance, enabling it to address both SI and NI domains for customers across a wide range of industries. Specialized subsidiaries such as Tsuzuki Techno Service, Tsuzuki Software, and Comdesign support this capability, giving the company a competitive advantage in capturing complex projects that are difficult for a single vendor to handle.

Revenue in the Services segment was ¥42,957 million, accounting for approximately 41% of total revenue, with subscription-based businesses such as cloud solutions supporting stable earnings. Resource shifting and pricing management under the previous medium-term plan "Transformation 2026" proved successful, with operating profit more than doubling over four periods, from ¥4,012 million in FY2022 (ending March 2022) to ¥8,178 million in FY2026 (ending March 2026).

In FY2026 (ending March 2026), the order backlog stood at ¥26,902 million (up 32.9% year on year), of which the Equipment segment accounted for ¥16,904 million (up 62.7% year on year), showing substantial accumulation. Orders received also expanded to ¥110,384 million (up 9.7% year on year), with a thick pipeline of projects expected to be recognized as revenue in subsequent periods.

ENVALITH's Perspective

The forecast for profit attributable to owners of parent for FY2027 (ending March 2027) is ¥5,750 million (down 11.2% year on year), indicating a decline in profit, but this is due to the reversal of the ¥2,419 million gain on sale of investment securities recorded in FY2026 (ended March 2026). Both operating profit and ordinary profit are targeted at ¥8,700 million (up 6.4% and up 4.6% year on year, respectively), aiming to set record highs for the 5th consecutive period, indicating that the underlying strength of the business is steadily improving. It is judged that the projected decline in net profit need not be viewed with excessive pessimism.

Under the new medium-term management plan "Trust & Challenge 2029," the guideline for the consolidated dividend payout ratio has been raised from 40% to 60%, and the lower limit for DOE has been raised from 3.5% to 6.0%. The annual dividend forecast for FY2027 (ending March 2027) is ¥190 (versus ¥126 in the previous period), representing a substantial dividend increase. While this is partly driven by external factors such as heightened awareness of cost of capital amid rising interest rates, it can also be evaluated as a measure demonstrating the company's genuine commitment to improving capital efficiency. On the other hand, maintaining a 60% payout ratio presupposes continued profit growth, which warrants ongoing attention.

The Equipment segment maintains a high order backlog of ¥16,904 million, but the company has explicitly identified memory supply constraints and price surges as concerns. There is also a risk that fluctuations in US trade policy could affect procurement costs and customers' capital expenditure plans. As an external factor, fluctuations in market conditions and supply-demand balance could affect the timing of realization and profitability of equipment sales, which is a point to note when evaluating the achievability of the earnings forecast. The risk of dependence on Fujitsu and progress in customer diversification also remain points of focus.

Growth Strategy

Under the new medium-term plan "Trust & Challenge 2029," the company is advancing enhanced shareholder returns and growth investment as twin pillars.

The company is concentrating personnel and sales resources into high-value-added areas such as logistics-oriented DX services, managed services, and cloud solutions. In FY2026 (ending March 2026), Development & Construction revenue grew significantly, up 13.6% year on year, confirming the effectiveness of these initiatives through actual results. The new medium-term plan will continue in the same direction.

The company has concluded an AI partnership with IBM Japan, Ltd. to strengthen its capability to provide generative AI-related solutions. By capturing the rapidly growing demand for generative AI in society and establishing a position leading customers' DX initiatives, the company aims to achieve differentiation and higher value-added services.

Under the new medium-term plan "Trust & Challenge 2029," the target consolidated dividend payout ratio has been raised from 40% to 60%, and the minimum DOE from 3.5% to 6.0%. An annual dividend of ¥190 (up ¥64 year on year) is planned for FY2027 (ending March 2026), further strengthening management with an awareness of capital costs.

The company has enhanced the functionality of "TCloud for SCM," a cloud-based dynamic vehicle management and delivery management service. While capturing DX demand in the logistics industry, the company is expanding its stable, monthly-billing-based revenue base, achieving both revenue stability and growth potential in the Services segment.

Last updated: July 19, 2026