TOTECH CORPORATION
9960・Prime Market・Wholesale Trade
Business
Toho Tec Co., Ltd. is a specialized trading group for facility-related equipment and construction, founded in 1955, comprising the company plus 15 subsidiaries. In its product sales business, it sells and maintains air-conditioning equipment, control equipment, and facility equipment, while its construction business handles the design, installation, and maintenance of instrumentation work, piping work, and electrical facility work. Its main customers are entities undertaking capital investment in facilities, such as private buildings, redevelopment projects, data centers, and manufacturing industries. Domestically, it maintains a nationwide network of locations from Hokkaido to Kyushu, and overseas it operates in Singapore, Malaysia, Thailand, China, Vietnam, and Indonesia. The company has entered into long-term agency agreements with major manufacturers such as Daikin Industries and Azbil, providing an integrated service from equipment sales to installation and maintenance.
Business Model
In the Equipment Sales business (net sales of ¥93,786 million), the company sells air conditioning and control equipment as a manufacturer's agent, securing recurring revenue through post-delivery maintenance service contracts. In the Construction business (net sales of ¥76,193 million), the company undertakes design and construction work for instrumentation, piping, and electrical systems, building a stock-type business model that leads customers into post-construction maintenance contracts. The combined order backlog for both businesses remained at a high level of ¥106,341 million (up 18.2% year on year), providing strong visibility into future sales.
Company Strengths
Signed long-term agency/distributor agreements with Daikin Industries (package air conditioners, etc.), Azbil (automatic control equipment, central monitoring systems), Showa Boiler (boilers, etc.), and Tokyo Gas/Yanmar Energy System (GHP). With trading relationships spanning over 60 years since the start of contracts with Daikin in 1960 and Azbil in 1964, the company has built a procurement and sales base that competitors cannot easily replicate in a short period.
The company operates on two pillars—the product sales business (net sales of ¥96,820 million) and the construction business (net sales of ¥76,290 million)—with an in-house group structure capable of handling everything from equipment delivery through to maintenance and upkeep. Order backlog has been building up, reaching a combined total of ¥106,341 million (up 18.2% year on year), consisting of ¥46,526 million in the product sales business and ¥59,815 million in the construction business, providing high visibility into future sales.
Starting with the acquisition of Tottori Bilcon in 2007, the company carried out step-by-step M&A activity, including Kita Nihon Keisou in 2010, I.B. Technos in 2019, Quantum Automation (with four locations in Singapore and Southeast Asia) in 2022, and Sanou Kiko in April 2025. Through these efforts, the company built a nationwide domestic network and a multi-location network across Southeast Asia on its own, and construction business net sales reached ¥76,290 million, up 16.8% year on year.
ENVALITH's Perspective
Performance Trend
Revenue increased 54.4% over five fiscal years, from ¥110,120 million in FY2022 (ending March 2022) to ¥170,013 million in FY2026 (ending March 2026). Operating profit expanded 2.7-fold over the same period, from ¥6,297 million to ¥17,125 million, with the operating margin improving from 5.7% to 10.1%. In FY2026 (ending March 2026), revenue grew 9.0% year on year while operating profit grew 16.6%, maintaining a profit growth rate that outpaced revenue growth. On the external environment front, resilient urban redevelopment and data center investment provided a tailwind, while elevated construction material prices and labor shortages remained persistent cost pressures. For FY2027 (ending March 2027), revenue of ¥180,000 million and operating profit of ¥18,000 million are forecast, with the trend of simultaneous revenue and profit growth expected to continue.
Growth Strategy
Under the Second Medium-Term Management Plan (FY2026 through FY2030), the company aims to achieve net sales of ¥220,000 million in FY2030 through two pillars: transformation into a high-profitability business structure and enhancement of its management foundation.
The company aims to actively capture capital expenditure demand in fields related to data centers and renewable energy, expanding sales in both the construction business and the product sales business. In FY2026 (ending March 2026), construction business net sales grew substantially, up 16.8% year on year, as order acquisition in growth sectors bore fruit.
The company aims to enhance the value of human capital, the source of value creation, through steady personnel increases and active investment in education and training expenses. By strengthening development programs, including the establishment of a comprehensive technical training center, it will address labor shortage challenges and advance the sophistication of its construction execution capabilities.
The company will set its cash and deposit level at 1.5 months of monthly sales, directing surplus funds toward shareholder returns and growth investment. It aims to improve capital efficiency by reducing cross-shareholdings to 15% or less of consolidated net assets by the end of FY2030. Investment securities stood at ¥21,278 million (28.9% of net assets) at the end of FY2026 (ending March 2026), exceeding the target level, making further reduction a challenge.
The company has shifted from its previous dividend payout ratio-based standard to a DOE (dividend on equity ratio) of 6% plus progressive dividends, implementing stable shareholder returns that are not affected by fluctuations in single-year net income. The projected dividend for FY2027 (ending March 2027) is ¥128, at a DOE level of approximately 6%, maintaining the same amount as the previous period.
The company expanded the business foundation of its construction business through the new consolidation of Sanou Kikou Co., Ltd. (in FY2026, ending March 2026). Meanwhile, it deconsolidated Toteku Denko Co., Ltd. and Quantum Security System Pte. Ltd., advancing selection and concentration within its business portfolio. It invested ¥1,151 million in the acquisition of subsidiary shares.
Last updated: July 19, 2026