ENVALITH
株式会社UEX logo

UEX,LTD.

9888・Standard Market・Wholesale Trade

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株式会社UEX logo
UEX,LTD.9888

Business

UEX Co., Ltd. is a specialized stainless steel and titanium trading company founded in 1955, forming a corporate group consisting of the Company and 8 subsidiaries. The Company operates three segments centered on its core stainless steel and other metal materials sales business (net sales of ¥47,392 million): stainless steel processed products manufacturing and sales (¥1,262 million), and machinery and equipment manufacturing/sales and engineering business (¥1,071 million). In addition to cutting and selling stainless steel plates, pipes, and bar steel, the company provides a wide range of metal-related services extending to the design and manufacture of steel pipes for semiconductor equipment, cast and forged products, machined parts, and industrial equipment. Major customers span industrial fields including manufacturing, construction, food, chemicals, and semiconductors. Listed on the Standard Market of the Tokyo Stock Exchange.

Business Model

The basic distribution model involves procuring stainless steel, titanium, and other materials from suppliers, performing cutting and processing at the company's own steel service centers (Isehara, Mishima, etc.), and then supplying the processed products to customers. By holding inventory, the company responds to small-lot and short-lead-time needs, thereby earning distribution margins. In addition, the company builds up value-added earnings through expanded sales of high-value-added products such as processed goods and titanium, as well as through design, manufacturing, and engineering services for industrial equipment provided by subsidiaries.

Company Strengths

In addition to its steel service centers in Tokyo, Isehara, and Mishima, the company maintains a nationwide branch network including Tohoku, Hokuriku, Osaka, and Kyushu. Its dedicated delivery subsidiary, Stainless Kyuso Co., Ltd., serves as the core of product delivery, enabling the company to build an in-house, self-contained immediate-delivery system essential for inventory-holding-type distribution.

The company operates Nissin Stainless, a specialist in stainless steel pipes for semiconductor equipment; Nakatani Corporation (made a wholly owned subsidiary in April 2025 (Reiwa 7)), which handles cast, forged, and machined parts; and Ueno Engineering, which designs and manufactures industrial equipment. Together these give the company a multi-layered value-added provision structure that goes beyond simple distribution.

Having specialized in stainless steel and titanium distribution for over 70 years since its founding, the company has built up trading relationships with a wide range of industrial customers across manufacturing, construction, food, chemicals, semiconductors, and other sectors. It also has a track record of expanding its customer base through M&A, such as making Reiwa Special Steel Co., Ltd. a subsidiary in 2019 (Reiwa 1).

ENVALITH's Perspective

For FY2026 (ending March 2026), net sales are projected at ¥49,725 million (down 1.1% year-on-year), operating profit at ¥1,298 million (down 26.7%), and profit attributable to owners of parent at ¥667 million (down 28.1%), marking three consecutive periods of substantial profit decline from the FY2023 peak (operating profit of ¥4,273 million). A combination of softness in the stainless steel market amid weak nickel prices, an 8.4% decline in sales volume, and a 1.3% drop in selling prices contributed to a decline in gross profit margin. While there are some external signs of a market recovery emerging in the latter half of the fiscal year, structural demand stagnation continues, and confirmation of a bottoming-out in performance is a prerequisite for investment decisions.

The consolidated earnings forecast for FY2027 (ending March 2027) projects profit attributable to owners of parent of ¥2,500-3,000 million (up 275-350% year-on-year), a substantial increase, but this figure incorporates extraordinary gains (estimated at approximately ¥2,200 million) from the sale of cross-shareholdings. The operating profit forecast is ¥1,700-2,100 million (up 31-62% year-on-year), indicating only a limited degree of recovery in core business performance. Investors need to distinguish between the one-time extraordinary gain and the underlying earnings power of the core business when evaluating results. Achieving the projected net sales of ¥52,000-57,000 million will require both a market recovery and a recovery in sales volume.

Annual dividends for FY2026 (ending March 2026) were set at ¥22 per share (a substantial decrease from ¥40 in the previous period), with a payout ratio of 36.4% and total dividends of ¥242 million, representing a contraction in shareholder returns. On the other hand, as a subsequent event, the company resolved to acquire and retire 720,000 shares of treasury stock (6.53% of shares issued, with an upper limit of ¥558 million) and to grant restricted stock (242,500 shares) to 485 employees. While this more proactive capital policy is commendable, it should be noted that under the dividend policy targeting a DOE of 1.0% or higher and a payout ratio of 35-40%, the absolute amount of shareholder returns will be limited during periods when core business profit levels are low.

Growth Strategy

Four pillars: enhancing high-value-added products, using proceeds from the sale of cross-shareholdings for growth investment, expanding the engineering business, and strengthening employee incentives

While placing emphasis on inventory-based sales, the company is enhancing proposal-based sales to increase value added, primarily in the processed products segment, and is also focusing on expanding titanium sales and building materials. It is simultaneously pursuing sales price revisions in response to rising labor costs, materials costs, and financing costs, aiming to restore the gross profit margin.

In May 2026 (Reiwa 8), the company resolved to sell listed securities (estimated gain on sale of approximately ¥2,200 million). By reducing cross-shareholdings, the company aims to improve asset efficiency, while using the proceeds from the sale as funds for growth investment. The gain is scheduled to be recorded as an extraordinary gain in the first quarter of FY2027 (ending March 2027).

In FY2026 (ending March 2026), operating profit improved significantly to ¥118 million, up 94.1% year on year, due to revenue recognition from a large-scale project. The company is actively working to strengthen not only its sales structure but also its design capabilities and on-site construction management systems, aiming to improve its order-taking capacity and profit stability.

The company resolved to repurchase and cancel 720,000 shares (6.53% of shares issued, up to a maximum of ¥558 million) with the aim of improving EPS and enhancing shareholder returns. At the same time, it introduced a restricted stock plan granting 242,500 shares to 485 employees, strengthening employees' sense of participation in management and their incentive to contribute to medium- to long-term enhancement of corporate value.

Last updated: July 19, 2026