ENVALITH
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Daiei Kankyo Co., Ltd.

9336・Prime Market・Services

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大栄環境株式会社 logo
Daiei Kankyo Co., Ltd.9336

Business

Daiei Kankyo Co., Ltd. is an industrial waste treatment company established in 1979, operating 93 business locations as a group including 48 consolidated subsidiaries. Its core "Environment-Related Business" consists of seven businesses: Waste Treatment & Resource Recycling, Soil Purification, Facility Construction & Operation Management, Consulting, Energy Creation, and forest conservation. The company holds disposal business permits covering all 20 categories of industrial waste, and its customers include manufacturers, general contractors, medical institutions, and 512 municipalities (FY2026 (ending March 2026)). It owns 26 intermediate treatment facilities (total permitted capacity of 58,951 tons/day) and 7 regional controlled-type final disposal sites (total permitted installation capacity of 43,750 thousand m³), providing integrated services from collection and transport through to final disposal.

Business Model

Waste treatment requires obtaining licenses and substantial capital investment, resulting in high entry barriers, and strengthened generator responsibility has increased the continuity of transactions with existing customers. By owning its own incineration and other thermal treatment facilities and final disposal sites, the company eliminates outsourcing costs and achieves a high profit margin (Environment-Related Business segment profit margin of 26.4%). It employs a growth model that combines business area expansion through M&A with public-private partnerships (PPP) with local governments to continuously expand intake volume and revenue.

Company Strengths

The company owns 26 intermediate treatment facilities (total permitted capacity of 58,951 tons/day) and 7 controlled-type final disposal sites (total installed permitted capacity of 43,750 thousand m³), providing one-stop services from collection and transport through final disposal. By eliminating outsourcing costs, the company achieves a 26.4% profit margin in the Environment-Related Business segment. The difficulty of obtaining permits and licenses creates a structural advantage that deters competitor entry.

In FY2026 (ending March 2026), the number of municipalities the company does business with reached 512, an increase of 25 from the same period the previous year, spreading nationwide with a focus on the Kansai and Chubu regions. Given the nature of waste treatment, waste-generating businesses tend to select safe and reliable treatment operators, resulting in high continuity of transactions with existing customers and forming a stable revenue base.

The company executed 6 M&A deals in FY2026 (ending March 2026), including major transactions such as making Scarabée Sacré a consolidated subsidiary (its first foothold in Kyushu, adding approximately 8,810 thousand m³ of permitted final disposal capacity) and making Yokosangyo an equity-method affiliate (Tokyo area). The company has continued active investment since its listing on the Tokyo Stock Exchange Prime Market in December 2022, with M&A investment in FY2026 (ending March 2026) reaching ¥49.3 billion (equivalent to ¥49,300 million).

ENVALITH's Perspective

Against an acquisition cost of ¥44,000 million for Scarabée Sacré, the resulting goodwill of ¥33,700 million (amortized evenly over 20 years) accounts for approximately 77% of the acquisition cost. Long-term borrowings surged from ¥51,441 million in the previous fiscal year to ¥96,463 million, and the equity ratio declined from 51.0% to 42.2%. Cash flow from financing activities was a net inflow of ¥41,428 million, reflecting ¥63,800 million in long-term borrowings. The rise in financial leverage during this phase of accelerated M&A, together with the goodwill amortization burden (approximately ¥1,685 million per year), could constrain net income growth going forward.

In addition to the Kanto region (Kyodo Doboku) and the Kansai region (DINS Kansai, etc.), Kyushu (Scarabée Sacré) has been added, advancing the geographic diversification of waste intake volume. Contaminated soil intake volume showed strong growth, up 38.2% year on year to 464 thousand tons, with the focus on hard-to-treat soil contributing to higher unit prices. As an external factor, continued orders for infrastructure development projects accompanying the government's proactive fiscal policy are underpinning waste generation volumes, and the business environment is judged to remain solid.

The operating margin for FY2026 (ending March 2026) was 25.3%, down 1.6pt from 26.9% in the previous fiscal year. Depreciation expense of ¥8,808 million (versus ¥6,174 million in the previous fiscal year), along with increases in personnel expenses, outsourcing costs, and transportation costs, combined to push down the margin, and the cost-increase trend accompanying M&A expansion is expected to continue for the time being. The operating margin forecast for FY2027 (ending March 2027) is approximately 25.9% (¥24,300 million ÷ ¥93,900 million), suggesting a slight improvement, but the key focus will be the tug-of-war between the full-year contribution from Scarabée Sacré and rising costs.

Growth Strategy

Under D-Plan2028, the Company is expanding final disposal site capacity and business areas through a dual approach of M&A and organic growth

In November 2025, the Company acquired an 80% voting interest for ¥44,000 million. It obtained a controlled-type final disposal site with a permitted capacity of approximately 8,810 thousand m³ and a maritime transport network utilizing a dedicated berth, thereby building a waste treatment and resource recycling system in the Kyushu area. Contribution to earnings begins from Q4 of FY2026 (ending March 2026) (4 months), and on a full-year basis, the additional effect is expected to be ¥3,924 million in net sales and ¥1,110 million in operating profit.

The second-phase final disposal site under construction at the Gobo Recycling Center commenced operation during FY2026 (ending March 2026). Final disposal sites (net) increased substantially from ¥11,532 million in the previous fiscal year to ¥20,552 million. The plastic recycling facility at DINS Kansai also commenced operation, strengthening the integrated processing capability from intermediate treatment through final disposal.

Contaminated soil intake volume grew significantly to 464 thousand tons in FY2026 (ending March 2026) (up 38.2% year on year). The Company is focusing on securing orders for hard-to-treat soil to raise unit prices and differentiate its services. Geore Japan Co., Ltd. also completed construction of a new contaminated soil treatment facility, expanding processing capacity. The Soil Purification business is contributing to increased revenue in the Environment-Related Business segment.

A jointly invested company of the Company is advancing plans to develop energy recovery facilities and related infrastructure in the Kyushu area through PPP projects. By combining this with the consolidation of Scarabée Sacré as a subsidiary, the Company aims to build a self-contained waste treatment and resource recycling system within the area and expand its market share. This is part of the growth initiatives under the medium-term management plan

In FY2026 (ending March 2026), the Company consolidated Scarabée Sacré Co., Ltd., Hizen Kankyo Co., Ltd., Kaisei Co., Ltd., Kyoto Eco Service Co., Ltd., and others as subsidiaries. Yo Kogyo Co., Ltd. was made an equity-method affiliate (an increase of ¥6,150 million in investment securities). Expenditure on acquisition of subsidiary shares increased substantially to ¥45,743 million from ¥3,112 million in the previous fiscal year, clearly indicating an acceleration of M&A activity. The Company plans to continue growth investment toward its EBITDA target of ¥37,100 million for FY2027 (ending March 2027).

Last updated: July 19, 2026