6289.T

• Company Overview & Core Value

  • Giken Group is a developer-focused company centered on its patented press-in principle, holding over 90% global market share in hydraulic pile press-in/pull-out machines, with operations spanning over 40 countries.
  • The two-segment business model: Construction Machinery develops, manufactures, sells and maintains press-in equipment; Press-in Construction undertakes early-stage construction for new methods to build market track records before opening the method to general users, creating a growing market cycle for equipment sales.
  • Corporate purpose: Connecting human life, property and culture to the future via one-of-a-kind press-in technology; Vision: Become a company proposing safe, secure and comfortable urban development.

• Domestic Operational Highlights

  • Hard Ground Clear Construction Method using flywheel pile auger was selected as a recommended technology by Japan's Ministry of Land, Infrastructure, Transport and Tourism (MLIT), increasing adoption potential.
  • Press-in of 900mm-wide hat-shaped steel sheet piles to hard ground was added to MLIT's public construction cost estimation standard, accelerating adoption as a standard public works method.
  • The company launched three DX user support apps linked to its cloud platform G-Lab to improve on-site management efficiency and address skilled labor shortages.
  • The company opened the 'Press-in Dojo' training facility at its Kansai plant to systematically train domestic and overseas engineers in press-in technology operation and maintenance.

• Overseas Operational Highlights

  • GTOSS, the comprehensive user support service for overseas market development, grew membership to 6 in Europe, 10 in Asia, 3 in North America in FY2025, driving overseas sales growth via co-development of projects with members.
  • Europe: The Netherlands UNESCO canal embankment rehabilitation project entered commercial operation, and the method was adopted for the Delta Program river embankment project. The company gained multiple leads after exhibiting at bauma2025 in Germany.
  • Asia: Sold additional Gyro Piler units to GTOSS members in Singapore and South Korea; signed a partnership agreement with a major precast concrete manufacturer in India to start market creation activities; Silent Piler was approved for government subsidies in Hong Kong, and the company is pursuing project opportunities in Bangladesh's subway ODA project.
  • North America: Opened a sales office in New Jersey, USA, and secured the country's first Gyro Press construction project with a GTOSS member, starting technical support and equipment rental.
  • Market phase classification: Netherlands is in the stable phase with multiple operating machines, Singapore is in the expansion phase with growing adoption.

• Updated Medium-Term Strategy (Mid-term Management Plan 2027)

  • Key basic strategy unchanged: Strengthen global technical promotion and method adoption, and improve development systems. Prioritize Asian market expansion, focusing on Singapore, India and Thailand.
    • Singapore: Strengthen partnership with local partners to promote Gyro Press method for underground development and coastal flood defense projects, and target expansion to neighboring countries.
    • India: Partner with local firms to promote the method to government agencies, educate the industry on the safety benefits of steel sheet piles and press-in construction to overcome low market awareness and price pressure.
    • Thailand: Develop and improve press-in machines compatible with concrete piles, which are in high demand for flood control projects, and build a local construction partnership network to enter the market.
  • Capital Policy & Cash Allocation (FY2025-FY2027):
    • Total expected cash in: ~15 billion yen from operating cash flow (before R&D) plus up to 2 billion yen in bank loans for overseas strategic investment.
    • Cash allocation: ≥6.5 billion yen for shareholder returns, 7.5 billion yen for existing business R&D and capital expenditure, up to 3 billion yen for overseas growth investment (capital ties, new market entry).
    • Updated dividend policy: Target 40% payout ratio with a 3.5% DOE lower bound starting FY2026; plan up to 2 billion yen in share buybacks for FY2026.
  • Mid/Long-term Growth Initiatives:
    • Overseas: Focus on accumulating track records in permanent infrastructure projects, strengthen engineering capacity, develop local-adapted products, allocate more management resources to overseas and pursue M&A to accelerate market expansion.
    • Domestic: Grow stable after-market revenue for construction machinery, expand used equipment business, improve G-Lab functions to boost equipment utilization; prioritize disaster recovery and infrastructure renewal projects for press-in construction, invest in IT and digital to improve productivity.
    • R&D: Continue developing products addressing market needs: equipment for commonly used overseas pile materials, low-carbon labor-saving press-in machines, construction methods for constrained sites, and seismic-resistant structures for new market segments.
    • Sustainability: Pursue carbon neutrality via electrification of equipment and biofuel adoption to reduce construction and supply chain emissions; build a diverse organization for global expansion, strengthen governance and stakeholder engagement.

• FY2026 (ending August 2026) Guidance:

  • Consolidated revenue: 27.8 billion yen, 5.6% YoY increase; operating profit: 2.9 billion yen, 13.0% YoY increase; net income attributable to parent: 2.2 billion yen, 47.9% YoY increase.
  • Construction Machinery Business: Revenue 19.295 billion yen (5.3% YoY increase), operating profit 4.126 billion yen (6.0% YoY increase). Domestic demand is expected to remain pressured by construction cost inflation and labor shortages, but new models targeting labor shortages will stimulate demand. Overseas revenue is expected to exceed the FY2025 record high.
  • Press-in Construction Business: Revenue 9.39 billion yen (6.2% YoY increase), operating profit 1.299 billion yen (19.1% YoY increase). Domestic orders for disaster recovery and infrastructure projects are expected to remain solid; growing demand for operator-included rental is expected in Germany.
  • Total overseas revenue is expected to reach 5.8 billion yen, 15.7% YoY increase, with growth across all three regions: Europe 2.174 billion yen, Asia 2.506 billion yen, North America 1.118 billion yen. Overseas revenue share is expected to reach 20.9%.
  • Capital expenditure: 1.56 billion yen, primarily for rental and demonstration equipment; R&D expenditure is expected to stay flat at 1 billion yen.

• Mid-term Management Plan 2027 (FY2027 ending August 2027) Updated Guidance:

  • Original plan: 36 billion yen consolidated revenue, 6.5 billion yen overseas revenue, 18.1% overseas share, 4.9 billion yen operating profit, 8.5% ROE.
  • Revised targets (downward revision for consolidated revenue and operating profit, upward revision for overseas revenue and share): 30-33 billion yen consolidated revenue, ≥7.5 billion yen overseas revenue, ≥25% overseas revenue share, ≥3.2 billion yen operating profit, ≥6.0% ROE. The revised target maintains flexibility to account for overseas market uncertainty, while aiming to exceed the pre-pandemic 2019 record high revenue of 32.4 billion yen. No changes to core strategy.

Full Year (FY2025, ending August 2025):

1. Construction Machinery Business:

• Total revenue: 18.316 billion yen, 14.4% YoY decrease. Domestic revenue decreased 24.6% YoY due to weak user capital investment, while overseas revenue reached a record high of 5.013 billion yen, 25.5% YoY increase, contributing 19.0% of total consolidated revenue. Regional breakdown: Europe 37%, Asia 41%, North America 22%.
• Operating profit: 3.892 billion yen, 15.8% YoY decrease.

1. Press-in Construction Business:

• Total revenue: 8.842 billion yen, 1.8% YoY increase, driven by solid orders for Noto Peninsula earthquake recovery and disaster prevention-related domestic construction.
• Operating profit: 1.09 billion yen, 6.1% YoY decrease, due to fewer high-value-added development projects.

4th Quarter (June-August 2025):

1. Construction Machinery Business:

• Revenue: 6.534 billion yen, 10.4% YoY increase. Domestic revenue decreased 30.3% YoY, while overseas revenue recovered to 3.017 billion yen, recovering delayed sales from Q3.
• Operating profit: 1.703 billion yen, 56.6% YoY increase, driven by concentrated sales of high-margin large specialty equipment overseas.

1. Press-in Construction Business:

• Revenue: 2.661 billion yen, 68.6% YoY increase. Domestic revenue grew 70.4% YoY to 2.46 billion yen, driven by large projects including Noto earthquake port recovery and landslide prevention works.
• Operating profit: 0.174 billion yen, 402.5% YoY increase.

• Domestic market: Rising construction costs, shrinking public construction scope, and persistent skilled labor shortages have weakened user capital investment sentiment more than expected, leading to lower-than-planned domestic construction machinery sales.
• Overseas market: Market development for press-in method has low penetration globally, especially in new markets like the US where adoption will take time. Expansion into new markets such as India faces challenges including local commercial practice adaptation, price pressure, and low market awareness of the method.
• Financial: Current ROE is below the 6-10% expected cost of equity, and PBR is below 1x due to perceived slow growth, putting pressure on valuations and shareholder returns.

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