Shinko Shoji Co., Ltd. (8141): FY2025 Results Summary — Profit Rebounds Sharply Despite Lower Sales, Board Backs Kaga Electronics Tender Offer

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Shinko Shoji Co., Ltd. (8141) reported consolidated net sales of ¥99,113 million for the fiscal year ended March 31, 2026 (FY2025), down 14.6% year on year, mainly due to the termination of the company’s distribution agreement with Renesas Electronics Corporation in September 2024. Despite the lower sales, profitability improved sharply: operating income rose 88.5% to ¥1,201 million, ordinary income rose 169.0% to ¥1,555 million, and profit attributable to owners of parent rose 123.1% to ¥1,127 million, supported by the contribution of SHIMIZUSYNTEC Corporation, which the company fully acquired in June 2025, and the absence of prior-year inventory write-downs related to Renesas products. Separately, on May 15, 2026, the company’s Board of Directors resolved to express an opinion in support of a tender offer for its shares by Kaga Electronics Co., Ltd.

Consolidated Results (Full-Year Actual)

In the electronics industry, demand for AI-related and data center applications remained strong during FY2025, and inventory adjustments largely ended, leading to a recovery in demand driven by capital investment. For Shinko Shoji, net sales decreased year on year mainly due to the termination of the Renesas Electronics distribution agreement, despite an increased contribution from the full acquisition of SHIMIZUSYNTEC Corporation in June 2025. On the profit side, earnings increased compared with the previous year, supported by the SHIMIZUSYNTEC contribution and the absence of the inventory write-downs related to Renesas products that were recorded in the prior year. Gross profit rose 13.2% to ¥10,465 million even as net sales declined, and basic earnings per share rose to 38.72 yen from 15.75 yen (all figures in millions of yen unless noted).

Item	FY2025	FY2024	YoY Change
Net sales	99,113	116,008	(16,895) / (14.6%)
Gross profit	10,465	9,245	1,220 / 13.2%
Selling, general and administrative expenses	9,263	8,608	655 / 7.6%
Operating income	1,201	637	564 / 88.5%
Ordinary income	1,555	578	977 / 169.0%
Profit attributable to owners of parent	1,127	505	622 / 123.1%
Basic earnings per share (yen)	38.72	15.75	22.97

Segment Results (Sales by Market and by Product)

By end market, Industry represented 50.5% of FY2025 net sales, up from 43.0% in FY2024, while Automotive accounted for 37.8% (37.1% in FY2024). Office Automation, Amusement, Consumer and Communication each declined as a share of sales, to 6.0%, 4.0%, 1.3% and 0.4% respectively, from 9.0%, 9.0%, 1.3% and 0.7% in FY2024. In absolute terms (100 millions of yen), Industry sales rose from 499 to 501, while Automotive fell from 430 to 375, Office Automation fell from 104 to 40, Amusement fell from 104 to 60, Consumer fell from 16 to 12, and Communication fell from 8 to 4. By product, the Electronic Device Business (Semiconductors and Electronic Devices combined) fell to 65.1% of net sales from 79.2% in FY2024, as Semiconductors’ share dropped to 13.3% from 41.6% following the termination of the Renesas distribution agreement, while Electronic Devices rose to 51.8% from 37.6%. Other Businesses rose to 20.7% of net sales from 6.4%, and the Assembly Business share was little changed at 14.2% (14.3% in FY2024).

Market	FY2025	FY2024
Industry	50.5%	43.0%
Automotive	37.8%	37.1%
Office Automation	6.0%	9.0%
Amusement	4.0%	9.0%
Consumer	1.3%	1.3%
Communication	0.4%	0.7%

FY2026 Forecast

For the fiscal year ending March 31, 2027, Shinko Shoji forecasts consolidated net sales of ¥126,000 million, up 27.1% year on year, operating income of ¥1,800 million (+49.8%), ordinary income of ¥2,100 million (+35.0%), and profit attributable to owners of parent of ¥1,400 million (+24.2%).

Item	FY2026 (Forecast)	FY2025 (Actual)	YoY
Net sales	126,000	99,113	27.1% / 26,887
Operating income	1,800	1,201	49.8% / 599
Ordinary income	2,100	1,555	35.0% / 545
Profit attributable to owners of parent	1,400	1,127	24.2% / 273

Shareholder Returns

Shinko Shoji’s basic dividend policy targets a consolidated payout ratio of around 50%. For FY2025, annual dividends per share totaled 18.5 yen (interim 6.0 yen, year-end 12.5 yen), compared with 15.5 yen in FY2024 (interim 7.5 yen, year-end 8.0 yen), for a payout ratio of 47.8% (98.4% in FY2024). For FY2026, the company forecasts annual dividends of 24.5 yen per share (interim 12.0 yen, year-end 12.5 yen), for a payout ratio of 50.0%.

Item	FY2024	FY2025	FY2026 (Forecast)
2Q end	7.5 yen	6.0 yen	12.0 yen
Fiscal year-end	8.0 yen	12.5 yen	12.5 yen
Total	15.5 yen	18.5 yen	24.5 yen
Payout ratio	98.4%	47.8%	50.0%

Tender Offer by Kaga Electronics Co., Ltd.

On May 15, 2026, Shinko Shoji’s Board of Directors resolved to express an opinion in support of a tender offer (TOB) for the company’s shares by Kaga Electronics Co., Ltd. (Securities Code: 8154), while leaving the decision of whether to tender to the discretion of individual shareholders. The board’s opinion is premised on the tender offer making Shinko Shoji a wholly-owned subsidiary of Kaga Electronics, with the company’s shares scheduled to be delisted through subsequent squeeze-out procedures following completion of the offer. Under the terms of the tender offer, Kaga Electronics is offering 1,580 yen per share, for a total purchase price of approximately 45.9 billion yen, targeting a minimum of 19,226,700 shares out of up to 29,097,599 shares to be purchased. The tender offer period is scheduled to run from May 18, 2026 to June 26, 2026 (30 business days), with settlement scheduled to commence on July 3, 2026. Shinko Shoji cites expected synergies including expansion of its product lineup through mutual complementation of suppliers with Kaga Electronics, expansion of end markets and overseas sales channels by leveraging Kaga Electronics’ customer base and global network, strengthening of its assembly (EMS) business by leveraging Kaga Electronics’ global manufacturing network, business expansion in high value-added areas such as software, AI and DX, and strengthening of its organizational structure through joint recruitment activities and personnel exchanges within the group.

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.