TOKAI LEASE CO.,LTD.
9761・Standard Market・Services
Business
Tokai Lease Co., Ltd. is a company specializing in temporary building leasing, founded in 1968 and listed on the TSE Standard Market. It operates a single business segment providing leasing and sales of temporary buildings, unit houses, and associated fixtures and fittings. Together with its four consolidated subsidiaries (Tokai House Co., Ltd., Nippon Cabinet Co., Ltd., and two China joint ventures), the company provides a total service encompassing everything from parts manufacturing to transport, construction, and repair. Its main customers are private construction/work sites and government agencies, and it maintains a nationwide network of locations including Sendai, Tokyo, Yokohama, Nagoya, Hiroshima, and Fukuoka. Net sales for FY2026 (ending March 2026) were ¥18,856 million.
Business Model
A vertically integrated model in which a group manufacturing subsidiary (Tokai House Co., Ltd.) manufactures temporary building components, which the Company then holds and leases as rental assets. Products maximize reuse to improve asset efficiency, achieving both waste reduction and stable earnings. The majority of net sales consists of lease income, and the structure enhances customer convenience through a one-stop service encompassing manufacturing, transport, construction, and repair, thereby securing repeat orders.
Company Strengths
Since its founding in 1968, the company has built up 56 years of operating track record as a specialist in temporary building leasing, establishing a nationwide network of bases including Sendai, Tokyo, Yokohama, Nagoya, Hiroshima, and Fukuoka. Long-standing customer relationships and nationwide coverage capability underpin the order base, with the contract balance at the end of FY2026 (ending March 2026) reaching ¥16,197,031 thousand (108.2% year-on-year).
Consolidated subsidiary Tokai House Co., Ltd. handles component manufacturing, while Nippon Cabinet Co., Ltd. supplies furniture and fixtures, forming a vertically integrated structure. Manufacturing value of leasing assets in FY2026 (ending March 2026) was ¥1,877,260 thousand (102.6% year-on-year). By internalizing manufacturing, transportation, construction, and repair, the group has established a system that manages quality and costs in an integrated manner while limiting dependence on external procurement.
Under an operating lease model, the company adopts a reuse approach of repeatedly leasing out temporary building components. By rotating the same assets multiple times, the structure allows sales to accumulate while restraining additional investment; against leasing asset acquisitions of ¥1,964 million in FY2026 (ending March 2026), net sales of ¥18,856 million were recorded. The management policy explicitly states a recycling-oriented operating lease system that simultaneously achieves waste reduction and resource conservation.
ENVALITH's Perspective
Performance Trend
Revenue has maintained three consecutive years of growth (¥18,856 million in FY2026), rising from a trough of ¥15,736 million in FY2023 (ending March 2023), but the growth rate has decelerated from 7.1% to 2.5%. On the profit side, after two consecutive years of substantial profit growth in FY2024 (ending March 2024) and FY2025 (ending March 2025) (operating profit rose from ¥998 million in FY2024 to ¥1,511 million in FY2025), FY2026 saw a sharp reversal to ¥1,202 million (down 20.4% year on year). Contributing factors were: (1) a 1.6 percentage point rise in the cost-of-sales ratio, including personnel expenses; (2) an approximately ¥108 million year-on-year increase in interest expense (an external factor: a rising interest rate environment); and (3) failure to meet the in-period completion schedule for public-sector projects. Operating cash flow contracted to ¥695 million (from ¥1,028 million in the prior period), and the interest coverage ratio fell to 3.1x.
Growth Strategy
The company aims to restore earnings through maximum utilization of reused assets, securing government-related orders, and enforcing profitability-focused order-taking discipline.
Invested ¥1,965 million in the acquisition of lease assets (FY2026 (ending March 2026)) to expand asset balances. The company aims to maximize the reuse and refurbishment of used assets, thereby suppressing new acquisition costs while establishing a stable product supply system.
The company has announced that it has already secured a certain amount of orders for government-related demand projects toward FY2027 (ending March 2026). Strengthening process management to prevent recurrence of the mid-term completion plan shortfall that occurred in FY2026 (ending March 2026) is key to achieving the earnings forecast.
The company continues order-taking activities that emphasize profitability, aiming to improve the cost of sales ratio. Although the cost ratio rose in FY2026 (ending March 2026), the forecast for FY2027 (ending March 2026) anticipates recovery to an operating margin of 7.6% (¥1,570 million ÷ ¥20,690 million).
The company has already implemented measures to prevent recurrence of the deficiencies in practical experience requirements for the construction management engineer technical examination, disclosed in October 2025. It continues to respond to the Ministry of Land, Infrastructure, Transport and Tourism, and is working to restore the trust of stakeholders.
Last updated: July 19, 2026