TACHIBANA ELETECH CO., LTD.

Business Details

A technical trading company-type business handling programmable controllers, inverters, AC servos, industrial robots, laser processing machines, connectors, industrial PCs, and other products. Domestically, the Company, Kenden Kogyo, Daiden, Takagi Connect, and others handle sales and technical support, while overseas local subsidiaries in Taiwan, China, Thailand, Malaysia, and India take on this role. The segment is strengthening system solution proposals that capture factory automation and labor-saving needs, promoting the use of robots and M2M technology.

Recent Overview

Both revenue and operating profit rose slightly despite inventory adjustment effects; a bottoming-out was seen from Q3

Full-year revenue for FY2026 (ending March 2026) was ¥109,865 million (up 1.1% year on year), and operating profit was ¥5,042 million (up 1.3% year on year). In the FA Equipment field, prolonged inventory adjustments at some customers led to a decline in core equipment such as PLCs and inverters, while growth in inquiries and expansion of the System Solutions Business, growth in laser processing machines and automation equipment, and growth in information and communication equipment sales due to OS update demand contributed positively. Meanwhile, large-scale equipment for steel plants declined significantly due to a rebound from a large project in the prior period. At subsidiaries, connection equipment for semiconductor manufacturing equipment applications remained solid, while automotive-related equipment projects declined. Signs of a bottoming-out in inventory adjustment were observed from the third quarter.

Key Products

Growth Drivers

• Expansion of the System Solutions Business capturing factory automation and labor-saving needs (continued growth in inquiries and business expansion)
• Growth in sales of information and communication equipment due to OS update demand
• Expansion into the Indian market and building a sales expansion foundation (promoting relationship-building with suppliers and partner companies)
• Steady performance of connection equipment for semiconductor manufacturing equipment applications (subsidiary)
• Strengthening of sales capabilities and technical proposal capabilities through DX promotion, human capital investment, and head office renovation
• Execution of various strategies toward achieving ¥300 billion in revenue and a 4% operating margin by FY2030 under the medium- to long-term management plan "GIC30"

Risks

• Risk of continued sluggish demand for FA Equipment (PLCs, inverters, AC servos) due to prolonged distribution inventory adjustments
• Negative impact on Asian operations from sluggish demand in the Chinese market and the effects of US trade policy and geopolitical risks
• Risk of a rebound decline from strong projects in the prior period (such as large-scale equipment for steel plants)
• Decrease in demand for automotive-related control equipment and facility projects (subsidiary)
• Risk of profit pressure from rising raw material prices, sharp foreign exchange fluctuations, and rising interest rates
• Risk of cost increases due to domestic labor shortages and rising prices

Business Details

Centers on the sale of semiconductors (microcontrollers, ASICs, power modules, memory, analog ICs, logic ICs) and electronic devices (memory cards, contact image sensors, liquid crystal displays). The segment globally promotes technical proposal activities to support system development for customers in Japan and overseas, expanding across Asia through bases in Singapore, Hong Kong, Taiwan, Shanghai, Bangkok, Malaysia, and India.

Recent Overview

Revenue rose 6.1% year on year, but operating profit fell sharply by 42.3% due to inventory streamlining efforts

Revenue for FY2026 (ending March 2026) was ¥89,156 million, achieving growth of 6.1% year on year. In the semiconductor field, microcontrollers and memory grew, and in the electronic devices field, liquid crystal displays and SSDs grew significantly, while image sensors declined. As a result of efforts to streamline inventory in Japan and overseas, operating profit fell sharply to ¥1,446 million (down 42.3% year on year), and the operating margin declined from 2.98% to 1.62%. The adjustment phase, including customers' cautious demand assessment, continued, but signs of emerging from the bottom were seen from the third quarter.

Key Products

Growth Drivers

• Increased revenue from growing demand for microcontrollers, memory, SSDs, and liquid crystal displays
• Capture of new demand through expansion into the Indian market (establishment of Tachibana Sales (India))
• Expansion of the range of products handled and promotion of deeper penetration with existing customers and development of new customers
• Strengthening of technical proposal capabilities through promotion of localization at overseas bases and expansion of engineering centers
• Utilization of the global sales network through bases across Asia (Singapore, Hong Kong, Taiwan, Shanghai, Bangkok, Malaysia, India)

Risks

• Risk of sluggish demand due to prolonged inventory adjustments by customers in Japan and overseas
• Impact on revenue and profit from delayed demand recovery in the Chinese market
• Growing uncertainty in Asian economic activity due to US trade policy (tariffs)
• Deterioration in profitability due to continuation of the adjustment phase, including customers' cautious demand assessment
• Risk of short-term margin decline associated with inventory streamlining efforts
• Impact on procurement costs and overseas sales from foreign exchange fluctuations (yen depreciation/appreciation)

Business Details

The Facilities Business is a segment focused exclusively on the domestic market, handling air conditioning equipment such as package air conditioners and room air conditioners, LED lighting, solar power generation systems, all-electric appliances, elevators, power receiving/transforming equipment, and monitoring and control equipment. The segment views special high-voltage power receiving/distribution equipment and emergency power generation equipment for data centers, as well as carbon neutrality-related projects, as growth opportunities, while also capturing renewal demand and subsidy effects. In FY2026 (ending March 2026), the segment achieved record-high revenue.

Recent Overview

Driven by power receiving/transforming equipment for data centers, the segment achieved record-high revenue and a significant profit increase

In FY2026 (ending March 2026), the Facilities Business achieved revenue of ¥21,720 million (up 2.1% year on year) and operating profit of ¥934 million (up 31.7% year on year), setting a record-high revenue and achieving a significant increase in operating profit. Special high-voltage power receiving/distribution equipment and emergency power generation equipment for data centers contributed significantly to revenue, and growth in room air conditioners against a backdrop of severe heat and expansion of carbon neutrality-related orders also contributed. Meanwhile, LED lighting declined due to a rebound from a large-scale project in the prior year, and elevators and multi-split air conditioners for buildings also declined.

Key Products

Growth Drivers

• Increased demand for special high-voltage power receiving/distribution equipment and emergency power generation equipment against a backdrop of expanding data center investment
• Expanded orders for carbon neutrality-related projects (such as solar power generation systems)
• Increased demand for room air conditioners due to climate factors such as severe heat
• Continued capture of renewal demand (package air conditioners, LED lighting)
• Increased sales due to eco-cute water heater renewal demand and subsidy effects
• Promotion of a stable expansion strategy through standardization of service levels across bases and staff reinforcement

Risks

• Risk of revenue fluctuation due to dependence on large-scale projects such as special high-voltage power receiving/distribution equipment and emergency power generation equipment
• Quarterly performance fluctuations due to timing shifts in orders for large-scale projects
• Risk of rebound decline in LED lighting, elevators, and other products due to large-scale projects in the prior year
• Burden of establishing construction business law compliance and construction safety and health management systems in response to expanding construction demand
• Risk of rising costs due to labor shortages and rising prices
• Direct exposure to domestic economic conditions and capital investment trends as a segment focused exclusively on the domestic market

Business Details

The "Other" segment consists of two fields: EMS (Electronics Manufacturing Services) and MMS (Metal Processing Manufacturing Services). In MMS, components for multi-level parking structures, the core product, performed steadily, while in EMS, products for industrial machinery declined slightly, but the substrate business for home appliances and housing equipment grew. Although the scale is small at ¥6,768 million in revenue compared to consolidated total revenue of ¥227,511 million, the segment achieved a 9.2% year-on-year revenue increase and a significant 225.9% year-on-year increase in operating profit.

Recent Overview

Revenue rose 9.2% year on year due to steady MMS performance and growth in EMS home appliance products; operating profit rose 225.9%

In FY2026 (ending March 2026), in the MMS field, components for multi-level parking structures, the core product, performed steadily. In the EMS field, products for industrial machinery declined slightly, but the substrate business for home appliances and housing equipment grew, resulting in overall segment revenue of ¥6,768 million (up 9.2% year on year). Operating profit improved significantly to ¥88 million from ¥27 million in the prior period, an increase of 225.9%. Revenue to Asia also expanded from ¥600 million to ¥1,012 million.

Key Products

Growth Drivers

• Continued growth in the substrate business for home appliances and housing equipment
• Steady demand trends for components for multi-level parking structures
• Expansion of revenue to Asia (from ¥600 million in the prior period to ¥1,012 million in the current period)
• Development of new manufacturing service clients in the Asian region under the medium- to long-term management plan "GIC30"

Risks

• Risk of continued slight decline in EMS products for industrial machinery
• Profit pressure in the MMS field from yen depreciation and rising material costs
• Small segment scale, meaning fluctuations in a single project directly impact performance
• Risk of demand fluctuations for components for multi-level parking structures