New Constructor's Network Co.,Ltd. Q4 FY2026 earnings call

• Company Overview & Mission

  • NCN was founded after the 1995 Great Hanshin-Awaji Earthquake to address structural safety gaps in Japanese wood construction, particularly the lax Building Standard Law exemption for small wood buildings that waived mandatory structural calculation.
  • The company's core mission is to popularize fully structurally-calculated safe wood construction in Japan and create wood homes with retained long-term asset value, supported by permanent digital BIM records of structural data.
  • NCN operates as a one-of-a-kind wood construction platform serving nationwide contractors and homebuilders, backed by a group of 9 affiliated and subsidiary companies including joint ventures with Ryohin Keikaku (MUJI HOUSE) and Sanu (N&S Development for shared second homes).

• Core Product Update: SE Kouhou Version 3

  • NCN launched SE構法 Ver.3, a major update to its proprietary wood construction system after 10 years of development, obtaining official national certification on April 1, 2025, with full design implementation starting June 1, 2025.
  • Technical improvements include 1.5x higher shear wall strength than the prior version (2.5x stronger than conventional wood construction, 4x stronger than standard plywood walls), full removal of span restrictions, and increased allowable floor height, all officially approved by Japanese regulators.
  • The updated SE構法 now allows standard design of 5.4-meter-wide open living rooms (compared to the conventional 3.6-4.5m industry standard), eliminates unnecessary columns and structural beams for open atriums, and supports high sloped ceilings, creating major differentiation from conventional construction.

• Residential Segment Strategic Advantages from Regulatory Change

  • Starting April 2026, Japan will implement stricter Building Standard Law requirements that raise mandatory wall volume for earthquake resistance by 1.4x for all new residential construction.
  • Conventional construction requires adding many more structural walls to meet the new rule, which reduces usable open space, while NCN's SE構法 can meet the new requirements with only 60% of the wall volume needed by conventional methods, preserving open, light-filled floor plans and greatly increasing NCN's competitive advantage.
  • NCN is rolling out multiple initiatives to increase SE構法 adoption rates among registered contractors following the regulatory change, with partner firms currently updating their showrooms to display the new certified method.

• Large-Scale Non-Residential Segment Strategic Developments

  • The large-scale non-residential wood construction market is steadily growing in Japan, and NCN has existing competitive advantages from its in-house structural design capability and nationwide network of pre-processing factories.
  • NCN recently established a dedicated Large-scale Wood Construction Network, partnering with 36 qualified local general contractors with in-house skilled labor to address the industry-wide challenge that even major general contractors lack experience with large wood construction execution.
  • The network targets 30 billion yen in total cumulative orders within one year, with full financial impact expected to appear in fiscal 2027 and beyond due to the 2-year lead time from design to completion for large projects. This development allows NCN to offer end-to-end total solutions from design to execution for non-residential clients, capturing share from the existing steel construction market.

• Environmental Design Segment Expansion

  • The segment has expanded its service scope to include energy efficiency design calculation for renovation projects (in addition to new construction) and obtained official zero-energy building certification for commercial projects, supporting the company's 20% growth target.

This document only provides full-year 2026 March fiscal year forecasted segment performance, with no actual historical performance data disclosed:

1. Residential Segment: Forecasted to achieve 17% year-over-year revenue growth, driven by general independent construction firms' growing demand that offsets continued softness from OEM/homebuilder clients. This is the company's fastest-growing core segment for the forecast period.
2. Large-scale Wood (Non-Residential) Segment: Forecasted to be nearly flat year-over-year, with a 0.1% change. The prior year benefited from large one-time Expo 2025 venue construction projects, which will not repeat in the current forecast period, but underlying organic growth of the large-scale wood construction market is expected to offset the decline.
3. Environmental Design Segment: Targets double-digit year-over-year revenue growth, specifically 20% growth, driven by expansion into energy efficiency design for renovation projects and zero-energy building certification services.
4. DX & Other Segment: Targets double-digit year-over-year revenue growth, driven by growing demand for 3D BIM data rendering and presentation services for both residential homebuilders and non-residential construction projects.

• Full-year consolidated guidance for the 2026 March fiscal year projects 9.016 billion yen in total revenue, an 11.0% increase year-over-year.
• Operating profit is forecast at 0.294 billion yen, a 64.9% year-over-year increase, while ordinary profit is forecast at 0.326 billion yen, an 11.6% year-over-year increase.
• The company maintains long-term growth outlooks aligned with ongoing industry trends: continuing stricter building code regulation, national decarbonization goals that increase demand for carbon-storing wood construction, and ongoing digitalization of the construction industry.

• The 2026 Building Standard Law tightening will extend government review periods for construction permit approvals from 7 days to 35 days, adding approximately one month of lead time from application to construction start.
• This lead time extension reduces the effective working period for structural calculation and material shipments in the 2026 March fiscal year to 11 months, which is expected to cap the residential segment's year-over-year growth at 17% despite strong underlying demand for the updated SE構法.

No question and answer section was included in the provided transcript.