ENVALITH
株式会社誠建設工業 logo

Makoto Construction CO,Ltd

8995・Standard Market・Real Estate

Official website
株式会社誠建設工業 logo
Makoto Construction CO,Ltd8995

Business

Makoto Construction Industry Co., Ltd. was established in 1991 and is a housing group (five-company structure) headquartered in Sakai City, Osaka Prefecture. Its core Detached Housing Development Business (Spec Homes, Contract Homes, and Custom Homes) accounts for approximately 99% of net sales, with primary operating areas in Sakai City, Tondabayashi City, Osaka-Sayama City, Takaishi City, and Matsubara City. The company has built an integrated in-house structure spanning land acquisition, design (Makoto design Kobo), construction, and sales (Makoto Home Service and Makoto Corporation). As complementary businesses, it operates a Real Estate Brokerage Business and a Real Estate Leasing Business (office buildings and rental apartments). The company listed on the Second Section of the Osaka Securities Exchange in 2006, moved to the TSE Standard Market in 2022, and additionally listed on the Nagoya Stock Exchange Main Market in September 2024. Its primary customers are first-time buyers in the southern Osaka area, with expansion toward second-time buyers and affluent customers identified as a key challenge.

Business Model

By completing land information gathering, procurement, development application, design (subsidiary Makoto Design Studio), construction management, and sales brokerage (two subsidiaries) within the group, the company suppresses outsourcing costs and achieves competitively priced spec home sales. The Spec Home Business accounts for approximately 97% of net sales, with the basic structure being revenue recognition linked to units sold (80 units in FY2026 (ending March 2026)). The Real Estate Leasing Business (office buildings and rental apartments) complements this with stable, stock-type income. The target metric is a gross profit margin of 15% or higher.

Company Strengths

Land procurement, design (Makoto Design Studio), construction management, and sales brokerage (Makoto Home Service and Makoto Corporation) are completed in-house across five group companies. By curbing reliance on outsourcing, the company has built an in-house cost structure that realizes "better homes at lower prices." This integrated structure has been maintained and strengthened since the company's listing in 2006.

Since its founding in 1991, the company has built up over 30 years of business track record centered on Sakai City, concentrating its head office and showrooms (two Sumaikan showrooms) in the same area. It has established a locally rooted advertising and sales approach along with a system for sharing information across multiple stores through monthly sales meetings, maintaining an ongoing sales foundation with the goal of becoming the top company in the region.

Net assets at the end of FY2026 (ending March 2026) stood at ¥4,122 million (up ¥138 million year on year). Valuation gains on investment securities increased by ¥163 million, with unrealized gains on other securities supporting the balance sheet. For a business with revenue of around ¥3,130 million, the relative thickness of equity capital is high, forming the basis for financial stability.

ENVALITH's Perspective

In FY2026 (ending March 2026), revenue decreased to ¥3,130 million (down 4.4% year on year), but operating profit recovered to ¥41 million (up 106% year on year) due to reductions in selling, general and administrative expenses (from ¥437 million in the prior period to ¥401 million in the current period) and the completion of the sell-through of low-margin properties. However, because the ¥55 million gain on sale of investment securities (extraordinary income) recorded in the prior period did not recur in the current period, profit before income taxes fell sharply from ¥70 million to ¥37 million, and profit attributable to owners of parent came in at only ¥25 million (down 46% year on year). It is necessary to distinguish between the recovery of the core business and the fading of one-time factors when evaluating performance.

The balance of cash and cash equivalents at period end was ¥700 million, a decrease of ¥764 million from ¥1,465 million at the end of the prior period. While inventories (real estate for sale and real estate for sale in process) remained at a high combined level of ¥4,071 million, long-term borrowings due within one year surged to ¥1,259 million (from ¥346 million in the prior period), indicating a shift toward shorter-term borrowing. Operating cash flow was negative for the second consecutive period (an outflow of ¥235 million in the current period), and the turnover speed of inventories along with cash flow management continue to be important monitoring metrics.

The forecast for FY2027 (ending March 2027) calls for revenue of ¥3,535 million (up 12.9% year on year), operating profit of ¥115 million (up 180.5% year on year), and ordinary profit of ¥105 million (up 183.8% year on year), representing an ambitious plan. As external factors, rising interest rates are weakening demand among first-time home buyers, and elevated construction costs also continue to characterize the market environment. The key to achieving the plan lies in securing well-located, high-margin properties in Sakai City and Tondabayashi City and in promoting sales of completed properties, making quarterly monitoring of land acquisition progress and the number of units sold essential.

Growth Strategy

Recovery of profitability through the aggressive acquisition of well-located, high-margin properties and the pass-through of added value

Based on the current status of contracts and negotiations, as well as planned acquisitions of well-located properties in Sakai City and Tondabayashi City, the company plans a 12.9% increase in revenue (to ¥3,535 million) for FY2027 (ending March 2027). The key lies in the advance acquisition of superior properties leveraging a community-based land information network.

Following the completion of sales of low-margin properties in FY2026 (ending March 2026), the company is shifting toward the acquisition and sale of high-value-added, high-margin properties. By advancing price pass-through, the company aims for a 183.8% increase in ordinary profit (to ¥105 million) in FY2027 (ending March 2027).

By promoting the early sale of completed properties, the company aims to improve inventory turnover and cash flow. Through the appeal of added value such as earthquake-resistant and vibration-damping specifications, the company promotes differentiated sales, simultaneously achieving improved profit margins and differentiation from competitors.

Currently, the business centers on brokerage services for the sale of Spec Homes within the group, but the company aims to expand revenue from external customers by strengthening brokerage services for properties outside the group. Sales capability will be strengthened through fostering competitive awareness across a multi-store structure and information sharing via monthly sales meetings.

Last updated: July 19, 2026