Meisei Industrial (1976): FY2025 Results Summary — Sales and Profit Decline While Orders Grow

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

Note: japan-equity.com classifies every company’s most recent completed fiscal year as FY2025; Meisei Industrial labels this year “FY3/26” (the fiscal year ended March 31, 2026), and the labels used in the text and tables below follow the company’s own materials. Meisei Industrial reported net sales of 60,299 million yen for FY3/26, down 9.0% year on year, with operating profit of 7,675 million yen (down 27.7%), ordinary profit of 8,306 million yen (down 26.1%) and profit attributable to owners of parent of 5,494 million yen (down 35.0%). The company states that domestic orders progressed steadily, but that revenue and profit decreased due to a decline in large-scale projects and increased costs. Orders rose 2.0% to 63,536 million yen and the balance of orders rose 16.8% to 22,486 million yen, both above the company’s forecast.

Consolidated Results (Full-Year Actual)

Against the forecast announced on May 9, 2025, net sales came in 0.5% higher, gross profit 3.2% higher and ordinary profit 3.8% higher, while operating profit was 0.9% below and profit attributable to owners of parent was 11.4% below plan. Orders exceeded the forecast by 5.9%.

Item (Millions of yen)	FY3/25 Results	FY3/26 Forecast*1	FY3/26 Results	YoY	Vs. forecast
Net sales	66,283	60,000	60,299	(9.0)%	+0.5%
Gross profit	15,739	12,800	13,208	(16.1)%	+3.2%
Operating profit	10,613	7,750	7,675	(27.7)%	(0.9)%
Ordinary profit	11,235	8,000	8,306	(26.1)%	+3.8%
Profit attributable to owners of parent	8,454	6,200	5,494	(35.0)%	(11.4)%
Orders	62,271	60,000	63,536	+2.0%	+5.9%
Balance of order	19,249	19,249	22,486	+16.8%	+16.8%

*1 Announced on May 9, 2025. The company lists the following indicators for FY3/26: ROE 8.0%; PBR 1.14 times; PER 14.7 times; net income per share ¥116.92. Net assets per share are stated as ¥1,503.30. Total assets decreased by 2,986 million yen to 85,597 million yen, total liabilities decreased by 3,302 million yen to 16,074 million yen and total net assets increased by 315 million yen to 69,522 million yen, giving a composition of current assets 71.5% and non-current assets 28.5% on the asset side, and current liabilities 15.0%, non-current liabilities 3.8% and net assets 81.2% on the liabilities and net assets side.

Segment Results

In the construction business, the company states that orders remained at a high level despite a decline in large-scale biomass-related construction projects and a reactionary decrease from the previous fiscal year, when scheduled maintenance work was concentrated; revenue and profit decreased due to the impact of rising costs, including material and labor expenses. In the boiler business, large-scale orders were secured, but revenue and profit decreased due to a decline in new boiler projects and increased cost burdens, including depreciation expenses for the new plant.

Segment	Metric (Millions of yen)	FY3/26	FY3/25
Construction	Net sales	54,145	58,944
Construction	Operating profit	7,343	10,102
Construction	Orders	55,628	56,778
Construction	Balance of order	17,735	16,198
Boiler	Net sales	6,154	7,338
Boiler	Operating profit	237	499
Boiler	Orders	7,908	5,493
Boiler	Balance of order	4,751	2,996

Next-Year Forecast

For FY3/27 the company forecasts net sales of 61,000 million yen, up 1.2% YoY, operating profit of 7,000 million yen, down 8.8% YoY, ordinary profit of 7,650 million yen, down 7.9% YoY, and profit attributable to owners of parent of 5,600 million yen, up 1.9% YoY.

Item (Millions of yen)	FY3/26 Results	FY3/27 Forecast	YoY change
Net sales	60,299	61,000	701
Gross profit	13,208	12,950	(258)
Operating profit	7,675	7,000	(675)
Ordinary profit	8,306	7,650	(656)
Profit attributable to owners of parent	5,494	5,600	106

By segment, the company states that in the construction business domestic maintenance and cleanroom operations remain strong, but large-scale overseas projects are in a transitional period, and sales and profit are expected to decline due to anticipated increases in material and labor costs, with additional concerns over the impact of the situation in the Middle East. In the boiler business, despite cost increases such as rising labor expenses, progress on large-scale projects exceeding the previous year is expected, leading to forecasts of higher sales and profit.

Metric (Millions of yen)	Segment	FY3/26 Results	FY3/27 Forecast	YoY change
Net sales	Construction	54,145	53,800	(345)
Net sales	Boiler	6,154	7,200	1,046
Net sales	Total	60,299	61,000	701
Operating profit	Construction	7,343	6,550	(793)
Operating profit	Boiler	237	450	213
Operating profit	Total	7,581	7,000	(581)
Orders	Construction	55,628	53,500	(2,128)
Orders	Boiler	7,908	7,500	(409)
Orders	Total	63,536	61,000	(2,536)
Balance of Order	Construction	17,735	17,435	(300)
Balance of Order	Boiler	4,751	5,051	300
Balance of Order	Total	22,486	22,486	0

Shareholder Returns

The company’s dividend policy is to target a DOE (Dividend on Equity) of 4% or more and a dividend payout ratio of about 30% to 40%, with the basic policy of comprehensively considering the above. The plan for FY3/26 is to increase the annual dividend by ¥5 to ¥65 per share (interim ¥20 and year-end ¥45). The forecast for the FY3/27 dividend is to maintain an annual dividend of ¥65 per share (interim ¥20 and year-end ¥45).

Item	FY3/22	FY3/23	FY3/24	FY3/25	FY3/26 PLAN	FY3/27 Forecast
Dividend per share (Yen)	30	36	55*	60	65	65
Payout ratio (%)	40.2%	38.3%	43.6%	34.3%	55.6%	53.3%
Dividend on equity (%)	2.8%	3.1%	4.4%	4.4%	4.4%	At least 4.0%
Stock repurchased (Millions of yen)	1,053	−	1,199	1,650	2,744	Not announced

*includes a commemorative dividend of ¥7 for Meisei’s 80th anniversary.

Medium-Term Management Plan 2024-2026

The basic policy of the Medium-term Management Plan 2024-2026 is “Investments for rapid progress in the future” — growth of corporate value backed by an even stronger business infrastructure due to reinforcement and change at current businesses and implementing strategies for sustained growth and by a commitment to sustainability management. Key measures are grouped into consistently making the profit structure stronger (more initiatives for decarbonization, strengthening the foundation for existing businesses, maintaining and improving the profitability of business operations), a strategy for sustainable growth (growth in other countries, adding new business domains following the thermal insulation business, use of M&A), and a stronger foundation for the Meisei Group (recruiting and training people, more DX investments, strengthening governance). The company states that it achieved the target values in both the first and second years of the plan, and that for the final year all profit items are expected to fall below targets due to anticipated cost increases from factors such as rising prices.

Item (Millions of yen)	FY3/26 Targets	FY3/26 Results	FY3/27 Targets	FY3/27 forecast
Net sales	59,000	60,299	61,000	61,000
Operating profit	7,450	7,675	8,400	7,000
Ordinary profit	7,750	8,306	8,700	7,650
Profit attributable to owners of parent	5,450	5,494	6,250	5,600
Orders	60,000	63,536	61,000	61,000
ROE	At least 8.0％	8.0%	At least 10.0％	At least 8.0％

Cash Flow

The company states that, compared to the previous period, free C/F increased due to an increase in contract liabilities and the sale of held shares, while financial C/F decreased due to an increase in expenditures from the acquisition of treasury shares. Operating activities C/F was 6,497 million yen (FY3/25: 6,937 million yen), investing activities C/F was 2,285 million yen (FY3/25: (500) million yen), free C/F was 8,782 million yen (FY3/25: 6,436 million yen), financing C/F was (5,639) million yen (FY3/25: (4,692) million yen), and cash and cash equivalents at end of period were 36,696 million yen (FY3/25: 33,449 million yen).

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.