Net sales and profit are expected to increase thanks to strong performance. The Company has actively implemented ESG management and accelerated its operations abroad in India and elsewhere. At the same time, it participated in the joint development of next-generation compact low-voltage wind power equipment and focused on expanding its renewable energy segment.
TOKYO, 22 November 2021 / PRNewswire / – Daiki Axis Co., Ltd. (TOKYO: 4245) , an eco-creation and development company that creates social infrastructure focused on water-related businesses, was recently reviewed by KCR Inc., an independent investor relations research and support company providing reports on various Japanese listed companies. In this report, KCR provides an analysis of the business model and profits of the company.
Highlights of the report
Daiki Axis Co., Ltd. (TSE1: 4245) adopted PROTECT × CHANGE (“protecting the global environment” and “changing the future of humanity”) as the company’s mission and slogan. Supported by the water professions which constitute its central pillar, the Company is developing its commercial activity with the ambition of becoming an “eco-creation and development company” which builds social infrastructures, thus contributing to the creation of Comfortable living environments that respect both the natural environment and people. At the same time, the Company adopts various ESG management measures. In the Environment category, the company promotes initiatives aimed at achieving 100% renewable energy. In terms of societal measures, the company promotes diversity by introducing new and reformed working styles and encouraging the active participation of women. At the same time, the Company is reforming its management structure and strengthening risk management as part of its efforts in the Governance category.
The two main segments of the Company are its environmental equipment segment (mainly focused on Johkasou and wastewater treatment systems) and its household equipment business (characterized by its bespoke kitchens), which together account for over 90%. of its activities. At the same time, it is developing its renewable energy segment, characterized by commercial activities of compact wind power equipment and commercial activities aimed at the sale of electricity produced by solar energy installations. The company’s growth strategy includes building water-related infrastructure overseas, expanding recurring revenue activities by converting groundwater into potable water, generating high value-added products, focus on its renewable energy business and the completion of mergers and acquisitions.
Daiki Axis is actively expanding its business activities in the field of water-related infrastructure overseas. The Japanese government has announced that it will create a system to facilitate approximately $ 5,000 million (approximately JPY5.500 billion) in public and private investments and the financing of infrastructure development in the region straddling the Indian and Pacific Oceans. In particular, the Company focuses on the ASEAN regions and India like overseas markets and has acquired ecological certification for Johkasou which it manufactures in India. This GreenPro certification is the Company’s first in the wastewater treatment category. Daiki Axis expects this certification to publicize its products in India and lead to an increase in inquiries regarding Johkasou for government buildings and green buildings. In the meantime, the Company also maintains that the Regional Comprehensive Economic Partnership (RCEP), which includes both Japan and China and is currently the largest free trade agreement in the world, it can be expected to have a positive impact on the performance of his business in the medium to long term.
Turnover realized during the closed semester June 30, 2021 amounted to JPY19,117 million (up 9.6% year-on-year). Gross profit amounts to JPY4,008 million (up 5.7% year-on-year) because operating income was JPY 780 million (+ 14.3% YoY), recurring result JPY864 million (up 14.2% year-on-year) and profit attributable to owners of parent company 440 million JPY (up 56.3% year-on-year). For the year ended December 31, 2021, the Company plans JPY35,400 million in net sales, JPY 1,300 million in recurring income, and JPY 700 million in profit attributable to owners of the parent company.
In formulating this new medium-term management plan, the Company only calculated quantitative targets on an annual basis due to the impact of the COVID-19 pandemic. At the same time, the qualitative objectives of the plan follow those of the Company’s previous medium-term management plan with an emphasis on improving future profitability and promoting growth strategies for the future. More specifically, in the environmental equipment segment, the Company will promote the development of business abroad while developing its activities as a recurring revenue energy service company (ESCO) in the fields of maintenance and water. At the same time, in the household equipment segment, the Company will launch an e-commerce business, find new products and implement a number of other initiatives with the aim of moving from commercial stability to growth. In the renewable energy segment, the Company will lead initiatives aimed at achieving a recycling-oriented society, strengthening its ability to ensure stable profits and to design high value-added companies and products for post-conclusion conditions. the feed-in tariff (FIT) application of the system. In terms of overall initiatives, the Company will strengthen its internal organizations to support the successful implementation of IT strategies and apply IT as a tool for improving productivity.
Zephyr Corporation, Ricoh Japan Co., Ltd. and Daiki Axis Sustainable Power Corporation will join forces to develop a new wind turbine rated at 50 kW and promote its use as an energy source comparable to solar power generation. These three companies launched the efforts associated with this wind generator by January 2021 and expect to complete them by approximately April 2023. The company plans to meet independent electricity supply needs and prepare for the upcoming smart grid technology by leveraging the abundant research data it has accumulated over many years of R&D regarding the production of compact wind energy and through its electricity sales activity. It also plans to facilitate the associated efforts by utilizing the expertise in FRP molding of long products (cylindrical tanks) that Daiki Axis has developed over a long period of time.
The exercise of the share purchase rights raised the Company’s equity ratio to 30%. Daiki Axis is characterized by its high efficiency benchmarks and well-systematized capital turnover. In its financial analysis of the Company, KCR Inc. selected Kubota Corporation (TSE1: 6326), Tsukishima Kikai Co., Ltd. (TSE1: 6332) and EPCO., Ltd. (TSE1: 2311) as like or competitor companies for comparison.
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This report is intended to provide baseline information for investment decisions and is not intended to solicit investments. Although the figures and opinions contained in the report are based on data obtained from sources believed to be reliable, KCR Inc. does not guarantee their accuracy. KCR will not assume any responsibility for any loss or damage caused by the use of any or all of these materials. Investors are advised to make investment decisions based on their own judgment and responsibility. The opinions and forecasts described in the report are expressed as of the date of its preparation and we cannot guarantee their accuracy or completeness. In addition, these opinions and forecasts may change in the future without notice. KCR reserves all rights regarding the content. Copying or reproduction of the content without prior permission is prohibited.
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