Research

Shima Seiki: Knitting-machine maker enters final year of its recovery plan

SHIMA SEIKI MFG., LTD. (6222) · Initiated coverage 2026-10-21 · Beluuga AI Research Team · Independent research

Not investment advice or a solicitation. See Important disclosures below.

Business overview

  • Shima Seiki designs and manufactures computerized flat knitting machines, including its WHOLEGARMENT machines that knit complete garments, and sells them to knitwear makers and apparel companies. It also sells design systems and apparel CAD/CAM software, the P-CAM automatic cutting machines, and seamless glove and sock knitting machines.
  • It reports three segments: flat knitting machines (the largest, which the company calls its core business), design systems, and glove and sock knitting machines. A fourth, unreported category, Other, covers replacement parts, repair and maintenance, and woolen yarn sales (see Performance & Balance).
  • Products are made by the parent company in Wakayama Prefecture, with two Wakayama subsidiaries supplying parts. Sales are made directly, through trading companies and agents, and through sales subsidiaries in Europe, the United States, Hong Kong and mainland China, Thailand and South Korea. The annual securities report states that the large majority of sales go to customers outside Japan, mainly in Asia, Europe and the Middle East.
  • The group also has a textile raw-materials subsidiary, a hotel company, and a minority stake in Innovation Factory, a knit-product maker majority-owned by Fast Retailing. Innovation Factory has been accounted for by the equity method since the first quarter of the year to March 2027.

Investment case

  1. The annual securities report for the year to March 2026 states that the group's cash exceeds its borrowings and describes its equity ratio and current ratio as indicating a very sound financial position (see Performance & Balance).
  2. After large one-off charges in the year to March 2025, including inventory write-downs, bad-debt provisions, foreign-exchange losses and impairment losses, the company reported that these charges fell sharply in the year to March 2026. Net income attributable to owners returned to a profit, and all segments reported segment profits (see Performance & Balance).
  3. The company states that it pays dividends against a consolidated payout-ratio target under its medium-term plan, and that it will buy back shares flexibly depending on the share price, funds and market conditions. Its articles allow the board to authorize buybacks and an interim dividend without a shareholder vote. The first-quarter release kept the annual dividend forecast unchanged.
  4. The design-systems segment reported more licenses for its APEXFiz subscription software and recovering demand for P-CAM cutters in the year to March 2026. In the first quarter of the year to March 2027, sales of shaping machines to Italy, mainly for luxury brands, increased.

Bear case

  1. In the first quarter of the year to March 2027, sales fell from a year earlier and the company reported operating, ordinary and net losses. It cited weaker machine sales in Bangladesh and China, where it described tougher competition and cautious customer investment (see Performance & Balance).
  2. Full-year orders and the order backlog for the year to March 2026 both declined from the previous year. A lower-priced shaping-machine model planned for the second half of that year was delayed, and sales of it stayed limited in the first quarter. The company expects full rollout from the second half of the year to March 2027.
  3. Even if met, the medium-term plan's targets for the year to March 2027 include a return-on-equity goal at the same level the company reported for the year to March 2026. The operating profit target is small relative to the planned sales level (see Performance & Balance).
  4. The balance sheet carries large trade receivables and a sizable amount of bankruptcy and rehabilitation claims with a corresponding bad-debt allowance. The company describes long collection periods as an industry practice. Borrowings rose in the year to March 2026 and again in the first quarter of the year to March 2027 (see Performance & Balance).

Catalysts

  • The year to March 2027 is the final year of the Ever Onward 2026 medium-term plan. Its targets match the full-year forecast announced on May 8, 2026, which was left unchanged in the first-quarter release, and a successor plan would follow.
  • The second-quarter results for the six months to September 2026 will show whether the lower-priced shaping machine's full rollout starts in the second half as stated, and how Asian demand develops. September 30 is the record date for the interim dividend.
  • In the first quarter of the year to March 2027, the company set up a structural-reform headquarters. It will review development, procurement, manufacturing, sales and service, and has brought in outside personnel; disclosures on its measures and results are items to watch.

Key risks

  • Demand risk: the company states that capital spending by knitwear makers can fall sharply because of changes in consumer behavior, economic slowdown or warm winters. It also expects competition for market share with Chinese manufacturers to intensify.
  • Trade and currency risk: most sales are to overseas customers and in foreign currencies, so sharp exchange-rate moves affect results. The company also cites tariff increases and export controls, including those stemming from U.S.-China trade friction, and higher costs if tension in the Middle East persists.
  • Credit risk: receivables are concentrated in flat knitting machines, and per-customer amounts in Asia are growing. The company uses receivable sales, collateral, leasing, trade insurance and a password-management system on machines to encourage payment by due dates.
  • Concentration and governance: production is concentrated in Wakayama Prefecture, so a major disaster could halt manufacturing for a long period. Under its articles, the quorum for director elections and special resolutions is lowered to one-third of voting rights. The president appears among the major shareholders, together with a holding company and several individuals (see Shareholders).

Trading liquidity

Median daily trading value US$0.98mn
Average daily volume 191,162 shares

2025-10-03 to 2026-10-20 (250 trading days). Trading value is daily closing price × daily volume on the Tokyo Stock Exchange.

Assumptions

  • Financial figures on this page come from beluuga.ai's daily data set; trading liquidity is measured over the period shown. We do not use consensus estimates.
  • Comparisons with the year to March 2025 are affected by the large one-off charges booked that year, which the company reported fell sharply in the year to March 2026.
  • The first-quarter release for the year to March 2027 was not reviewed by an auditor and does not include a quarterly cash-flow statement.
  • Qualitative statements are taken from the annual securities report for the year to March 2026 and the first-quarter earnings release for the year to March 2027.

This is independent research. No company paid for or reviewed it. We do not publish ratings, price targets or buy/sell views. Figures on the other slides of this page come from beluuga.ai's daily data set.

Important disclosures

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Overview
Machinery

SHIMA SEIKI MFG.,LTD.

Shima Seiki is a leading manufacturer of computerized flat knitting machines, design systems/software, and glove/sock knitting machines, serving the global textile and apparel industry. The company offers an integrated Total Fashion System encompassing hardware (WholeGarment® seamless knitting machines), design software (APEXFiz®), and digital services (SHIMA Datamall™, yarnbank®), enabling customers to streamline the entire process from design to production. Its proprietary WholeGarment® technology, which produces fully-fashioned knitwear without seams, is a key competitive differentiator, with applications spanning fashion, sportswear, medical, footwear, automotive, and aerospace sectors.

Market Cap
¥29.8B
US$190M
EV
¥15.4B
US$98.2M
Stock¥880▼-0.68%
US$1 = ¥157.05 (2026-10-22)
LTM EV/EBITDA
NM
LTM EV/EBIT
NM
LTM PER
NM
LTM PBR
0.4
x
Stock vs TOPIX (1Y, base=100)vs TOPIX ▼-40.5%pt
1001
Oct 23, 25 – Oct 22, 26StockTOPIX
1Feb 2, 26Templeton stake reduction (-3.12%)
MC → EV Bridge
29.8BUS$190MMarket Cap18.2BUS$116M+ Debt25.2BUS$160M− Cash7.46BUS$47.5M− Inv. Sec.0.03BUS$0.20M+ NCI15.4BUS$98.2MEV
AI Briefing
Shima Seiki: global flat-knitting and WholeGarment® technology leader spanning fashion, medical, sportswear and industrial textiles. FY26/3 revenue ¥33.5B, still loss-making at OP ¥-1.7B after a deeper FY25/3 operating loss of ¥-11.9B; LTM EBITDA negative at ¥-1.8B. Trading at EV ¥15.4B against ¥25.2B cash and ¥82.7B equity, net cash-rich with founder-family and bank holders anchoring the register amid a slow profitability recovery.
Performance & Balance
Revenue 5Y (¥B)
31.0US$197M'22/337.9US$241M'23/335.9US$229M'24/332.5US$207M'25/333.5US$213M'26/3
EBITDA 5Y (¥B)
-2.90-US$18.5M'22/3-0.76-US$4.86M'23/31.43US$9.07M'24/3-10.7-US$68.3M'25/3-0.64-US$4.07M'26/3
Net Income 5Y (¥B)
-3.59-US$22.9M'22/3-5.64-US$35.9M'23/31.03US$6.56M'24/3-14.3-US$90.9M'25/30.86US$5.45M'26/3
Capital Structure
82%
18%
EquityD/E 0.22xDebt
Liquidity vs Debt 5Y (¥B)▲ Net Cash
CashInv. Sec.Debt
29.8US$189M2.71US$17.3M'22/322.3US$142M2.90US$18.4M'23/320.3US$129M4.01US$25.5M'24/320.2US$129M9.98US$63.6M'25/327.9US$178M17.0US$108M'26/3
Shareholders
Top 10 hold 37.0%
1
Wajima Kosan Co., Ltd.
8.85%
2
The Master Trust Bank of Japan, Ltd. (Trust Account)
7.71%
3
The Kiyo Bank,Ltd.
4.09%
4
Masahiro SHIMA
3.15%
5
Mihiro SHIMA
3.13%
6
MUFG Bank, Ltd.
2.59%
7
Wako GK (Wako LLC)
2.30%
8
Chikage UMEDA
1.87%
9
Kyoko TATSUMI
1.69%
10
Miyako YAMADA
1.63%
Management
8 officers
Mihiro SHIMA
Representative Director, President and Executive Officer; General Manager, Sales Division; in charge of Internal Audit Office, Sustainability Promotion Office, and Cutting Solutions Business Division
Mar 1987 Joined the Company Mar 1998 General Manager, System Development Department, the Company Jun 2002 Director, General Manager, System Development Department, the Company Jun 2007 Managing Director; in charge of Control System Development Department, Intellectual Property Department, and Total Design Center; General Manager, Graphic System Development Department, the Company Jun 2011 Senior Managing Director; in charge of Production Technology Department and Total Design Center; General Manager, Production Division, the Company Jun 2012 Director, Vice President; in charge of Corporate Planning Department and Total Design Center; Deputy General Manager, Sales Division, the Company Apr 2015 Director, Vice President; Deputy General Manager, Sales Division; in charge of Corporate Planning Department, the Company Jun 2017 Representative Director, President; General Manager, Sales Division; in charge of Corporate Planning Department, the Company Jun 2018 Representative Director, President and Executive Officer; in charge of Corporate Planning Department, the Company Jun 2020 Representative Director, President and Executive Officer; General Manager, Sales Division; in charge of Total Design Center and Corporate Planning Department, the Company Jun 2021 Representative Director, President and Executive Officer; General Manager, Sales Division; in charge of Total Design Center, the Company Jun 2022 Representative Director, President and Executive Officer; General Manager, Sales Division; in charge of Internal Audit Office and Sustainability Promotion Office, the Company Jun 2023 Representative Director, President and Executive Officer; General Manager, Sales Division; Chief Executive Officer, Shima Seiki (Hong Kong) Co., Ltd.; in charge of Internal Audit Office and Sustainability Promotion Office, the Company Jun 2024 Representative Director, President and Executive Officer; General Manager, Sales Division; in charge of Internal Audit Office and Sustainability Promotion Office, the Company Jun 2025 Representative Director, President and Executive Officer; General Manager, Sales Division; in charge of Internal Audit Office, Sustainability Promotion Office, and Cutting Solutions Business Division, the Company (current)
1961-06-23
Akihiro OTANI
Director, Managing Executive Officer; General Manager, Production Division; in charge of Development Division
Aug 1988 Joined the Company Mar 2018 General Manager, Production Department, the Company Jun 2018 Executive Officer; General Manager, Production Department, the Company Jun 2021 Director, Executive Officer; General Manager, Production Division; in charge of Development Division, the Company Jun 2024 Director, Managing Executive Officer; General Manager, Production Division; in charge of Development Division and Logistics Department, the Company Jun 2025 Director, Managing Executive Officer; General Manager, Production Division; in charge of Development Division, the Company (current)
1963-11-20
Shosaku KITAGAWA
Director, Managing Executive Officer; General Manager, Corporate Planning Department; in charge of General Affairs and Human Resources Department, Information Systems Department, and Accounting and Finance Department
Mar 1991 Joined the Company Mar 2016 General Manager, Corporate Planning Department, the Company Jun 2018 Executive Officer; General Manager, Corporate Planning Department, the Company Jun 2021 Director, Executive Officer; General Manager, Corporate Planning Department; in charge of General Affairs and Human Resources Department and Information Systems Department, the Company Jun 2024 Director, Managing Executive Officer; General Manager, Corporate Planning Department; in charge of General Affairs and Human Resources Department, Information Systems Department, Accounting and Finance Department, and Administration Department, the Company Jun 2025 Director, Managing Executive Officer; General Manager, Corporate Planning Department; in charge of General Affairs and Human Resources Department, Information Systems Department, and Accounting and Finance Department, the Company (current)
1967-06-23
Yoshio ICHIYANAGI
Director
Apr 1968 Joined the Ministry of International Trade and Industry (currently the Ministry of Economy, Trade and Industry) Jun 1993 Director-General, Kinki Bureau of International Trade and Industry Jun 1995 Deputy Director-General, Machinery and Information Industries Bureau, MITI Aug 1996 Senior Councillor for General Affairs, Minister's Secretariat, MITI Jun 1998 Retired from MITI Jul 2000 Founded Ichiyanagi Associates Inc.; Representative Director and CEO (current) Feb 2006 Outside Director, Sala Corporation (current) Jun 2014 Director, the Company (current) Jan 2023 Representative Director, Japan Future Creation Research Institute, General Incorporated Association (current)
1946-01-03
Rieko ZANMA
Director
Apr 1970 Joined Shizuoka Broadcasting System Co., Ltd. Jun 1973 Joined Kobunsha Co., Ltd. Jun 1980 Founded Candid Co., Ltd. (merged with Candid Produce Co., Ltd. in May 2021); Representative Director and President Jul 2005 Founded Creative Senior Co., Ltd. (currently Candid Produce Co., Ltd.); Representative Director and President (current) Jun 2016 Director, the Company (current) Sep 2016 Outside Director (Audit and Supervisory Committee Member), Trust Tech Inc. (currently OpenUp Group Inc.) (current)
1950-03-21
Hisahito TOTSUI
Director (Audit and Supervisory Committee Member) (Full-time)
Mar 1988 Joined the Company Mar 2008 General Manager, Internal Audit Office, the Company Jun 2018 Full-time Corporate Auditor, the Company Jun 2020 Director (Audit and Supervisory Committee Member) (Full-time), the Company (current)
1965-04-03
Daisuke NIIKAWA
Director (Audit and Supervisory Committee Member)
May 1991 Registered as Certified Public Accountant Aug 1991 Registered as Certified Tax Accountant Apr 2002 Founded Hokuto Tax Corporation; Partner Jan 2003 Hokuto Tax Corporation; Managing Partner (current) Jun 2012 Corporate Auditor, the Company Jun 2016 Outside Director (Audit and Supervisory Committee Member), Kurabo Industries Ltd. (current) Jun 2020 Director (Audit and Supervisory Committee Member), the Company (current) Jun 2024 Corporate Auditor, Ozeki Co., Ltd. (current)
1964-04-28
Shoko NOMURA
Director (Audit and Supervisory Committee Member)
Apr 2000 Registered as Attorney-at-law; joined Dojima Law Office (to present) Apr 2014 Visiting Professor, Osaka University Graduate School of Law and Politics (current) Jun 2015 Corporate Auditor, the Company Jan 2018 Outside Corporate Auditor, B&P Co., Ltd. Jun 2019 Outside Corporate Auditor, Shinobu Foods Co., Ltd. (current) Jun 2020 Director (Audit and Supervisory Committee Member), the Company (current) Jan 2021 Outside Director (Audit and Supervisory Committee Member), Kobe Bussan Co., Ltd. (current) Jan 2025 Outside Director (Audit and Supervisory Committee Member), B&P Co., Ltd. (current)
1973-12-31
Large Shareholding Reports
Wajima Kosan Co., Ltd.
2026-06-18
8.20%→10.87%
Correction filing (name/detail fix only) — ratio carried over from the original filing
Annual report (as of 2026-03-31): 8.85%
Mitsuhiro SHIMA
2026-06-12
13.27%→15.73%
Annual report (as of 2026-03-31): 3.13%
Wajima Kosan Co., Ltd.
2026-06-05
8.20%→10.87%
Annual report (as of 2026-03-31): 8.85%
Disclosures
No disclosures
Primary Source Filings
TDnet
2026-07-31
Q1 Earnings Flash
FY ending Mar 2027
EDINET
2026-06-24
Annual Securities Report
Period: Apr 2025 – Mar 2026
EDINETAmended
2026-06-18
Change Report
EDINETAmended
2026-06-12
Change Report
EDINET
2026-06-05
Large Shareholding Report
TDnet
2026-01-30
Q3 Earnings Flash
FY ending Mar 2026
EDINET
2025-11-14
Semi-Annual Securities Report
Period: Apr 2025 – Mar 2026
TDnet
2025-07-31
Q1 Earnings Flash
FY ending Mar 2026
EDINET
2025-06-27
Annual Securities Report
Period: Apr 2024 – Mar 2025
TDnet
2025-01-31
Q3 Earnings Flash
FY ending Mar 2025
EDINET
2024-11-14
Semi-Annual Securities Report
Period: Apr 2024 – Mar 2025
TDnet
2024-07-31
Q1 Earnings Flash
FY ending Mar 2025
EDINET
2024-06-27
Annual Securities Report
Period: Apr 2023 – Mar 2024
EDINET
2024-02-14
Quarterly Securities Report
Period: Oct 2023 – Dec 2023
EDINET
2023-11-14
Quarterly Securities Report
Period: Jul 2023 – Sep 2023
EDINET
2023-08-09
Quarterly Securities Report
Period: Apr 2023 – Jun 2023
EDINET
2023-06-29
Annual Securities Report
Period: Apr 2022 – Mar 2023
EDINET
2023-02-14
Quarterly Securities Report
Period: Oct 2022 – Dec 2022
EDINET
2022-11-14
Quarterly Securities Report
EDINET
2022-08-10
Quarterly Securities Report
EDINET
2022-06-29
Annual Securities Report
EDINET
2022-02-14
Quarterly Securities Report
EDINET
2021-11-12
Quarterly Securities Report
EDINET
2021-08-13
Quarterly Securities Report
EDINETAmended
2021-08-06
Amended Annual Securities Report
EDINET
2021-06-28
Annual Securities Report
EDINET
2021-02-12
Quarterly Securities Report
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