Subaru Enterprise Co., Ltd.
9632・Standard Market・Services
Business
Subaru Kogyo Co., Ltd. was founded in 1946 and is listed on the Standard Market of the Tokyo Stock Exchange as a comprehensive service company. The company, together with its 16 subsidiaries, operates three segments: Road-Related Business, Leisure Business, and Real Estate Business. In its core Road-Related Business, the company provides road maintenance and management, cleaning, and civil engineering works on a 365-day, 24-hour basis, with the Ministry of Land, Infrastructure, Transport and Tourism and expressway companies as its main clients. This segment accounts for approximately 93% of net sales and is the company's core business, with Central Nippon Highway Maintenance Tomei (10.7% of net sales) and Hanshin Expressway Engineering (11.8% of net sales) as major business partners. The Leisure Business handles the management and operation of Marina Business (Urayasu Marina) as well as the Food and Beverage Business, while the Real Estate Business involves leasing company-owned properties such as the Kichijoji Subaru Building and the Shin-Kiba Warehouse.
Business Model
The core of earnings is Road Maintenance and Management Services and cleaning operations conducted under annual contracts with expressway operators and government agencies, generating continuous and stable cash flow. This is supplemented by one-off construction orders such as bridge repairs, which help offset fluctuations in sales. The Real Estate Business is highly profitable, with an operating margin of approximately 59.6%, and rental income from company-owned properties provides a stable contribution to profit. Capital expenditures are funded entirely from internal resources, and the company maintains financial soundness while simultaneously pursuing growth investments through real estate acquisitions and M&A.
Company Strengths
Road maintenance and management services and cleaning services are primarily based on annual contracts, securing continued orders backed by a 365-day, 24-hour response system and extensive construction track record. Road-related business sales in FY2025 (ending January 2025) maintained stable growth at ¥28,056 million (up 5.4% year on year), with an order backlog of ¥7,393 million.
The Real Estate Business boasts extremely high profitability, with an operating margin of approximately 59.6% (segment profit of ¥632 million). In addition to steady occupancy at existing properties such as Kichijoji Subaru Building and Shin-Kiba Warehouse, the company newly acquired and began leasing four properties in Suita City, Osaka Prefecture; Akishima City, Tokyo; Gotemba City, Shizuoka Prefecture; and Chiba City, Chiba Prefecture in fiscal 2024, expanding its revenue base.
The company owns a large number of road maintenance vehicles and specialized machinery in-house, establishing a system capable of rapid response even in emergencies. By leveraging these owned assets to strengthen its response to comprehensive evaluation bidding methods and through proactive technical proposals, the company secures orders even in a fiercely competitive environment. Of the ¥2,325 million in capital expenditures, ¥426 million allocated to the Road-Related Business was funded entirely with internal funds.
ENVALITH's Perspective
Performance Trend
Revenue rose from ¥28,977 million in FY2022 to a peak of ¥30,274 million in FY2025, before declining slightly to ¥29,611 million in FY2026. Q1 of FY2027 (ending January 2027) came in at ¥7,965 million (up 1.7% year on year), maintaining the revenue growth trend. On the other hand, operating profit has been on a downward trend since peaking at ¥5,092 million in FY2023, falling to ¥4,863 million in FY2026, and to ¥1,560 million in Q1 of FY2027 (ending January 2027), a double-digit decline of 13.3% year on year. The main causes are the drop-off of the price escalation portion recorded in the same period of the previous year in the Road-Related Business, and a rise in the cost of sales ratio (from 70.3% to 73.6%) due to persistently high labor costs and materials/equipment prices. As external factors, the chronic shortage of construction skilled workers and rising materials/equipment prices continue to weigh on profitability. The Real Estate Business and the Leisure Business have both seen revenue and profit growth, and the recovery of profit in the Road-Related Business holds the key to overall performance improvement.
Growth Strategy
Under the Medium-Term Management Plan 2028, the company aims to achieve net sales of ¥34,000 million and operating profit of ¥5,500 million through expanding road-related orders, increasing real estate holdings, and cultivating environmental businesses.
As part of efforts to strengthen responsiveness to the comprehensive evaluation bidding method in general competitive bidding, the company is promoting improved cost estimation accuracy and the establishment of a stable construction system. Owing to steady progress on large-scale bridge repair works and proactive sales activities in Road Maintenance and Management Services, net sales of the Road-Related Business in the first quarter of FY2027 (ending January 2027) increased to ¥7,334 million (+0.7% year on year). However, segment profit declined to ¥1,543 million (-14.2% year on year) due to the erosion of price escalation gains.
Under the policy of continuously acquiring high-quality new properties based on location conditions and profitability, properties acquired in the previous fiscal year (in Suita City, Osaka Prefecture; Akishima City, Tokyo; Gotemba City, Shizuoka Prefecture; Chiba City, Chiba Prefecture; and others) began operating, resulting in steady growth in the first quarter of FY2027 (ending January 2027), with Real Estate Business net sales of ¥275 million (+5.8% year on year) and segment profit of ¥214 million (+6.8% year on year). The business is expanding its revenue base while maintaining a high profit margin (approximately 73%).
Through improved reservation-handling operations and enhanced customer service in the Food and Beverage Business, which increased table turnover, and through a review of the mooring fee structure and maintenance of a high number of annually contracted moored vessels in the Marina Business (Urayasu Marina), Leisure Business net sales in the first quarter of FY2027 (ending January 2027) improved significantly to ¥355 million (+24.5% year on year), with segment profit of ¥27 million (+49.6% year on year). External factors such as inbound demand are also serving as a tailwind.
The company is cultivating the solar power generation facility installation and maintenance business, conducted through TESS Tohoku Co., Ltd. and others, as a new profit pillar within the Road-Related Business. Under Medium-Term Management Plan 2028, the environmental business is positioned as a growth area, with efforts to generate synergies with the existing road infrastructure business. Currently, it is included in the “Other” category within the Road-Related Business, and its scale of independent contribution to results remains limited.
Last updated: July 17, 2026