Business overview

• Nagaoka reports two segments. The Energy segment makes screen internals, which support catalysts inside reactors at oil refining, petrochemical and fertilizer plants. The Water segment makes intake screens for wells and riverbed collectors, a chemical-free biological groundwater treatment unit, a VOC stripping unit and seawater intake systems, and takes on water treatment plant construction.
• The group consists of the company and three consolidated subsidiaries: a manufacturing subsidiary in Dalian, China, which serves both segments, a subsidiary in Hung Yen Province, Vietnam, and Yazawa Ferromite, a water treatment plant contractor acquired in July 2022. Both the Dalian subsidiary and Yazawa Ferromite each account for more than a tenth of consolidated sales.
• The current company was set up in November 2004 by a turnaround fund run by Japan Asia Investment Co., Ltd. It took over the main businesses of a predecessor, founded in 1934, that had filed for civil rehabilitation in August 2004, and it listed in 2015.
• The fiscal year ends June 30, and the group had 227 employees on a consolidated basis at June 30, 2026. The company has run Osaka and Tokyo head offices since June 2024 and closed its Tokyo factory in April 2025, and its Himeji factory land and buildings are leased from a parent-group company.

Investment case

1. The annual securities report states that interest-bearing debt at June 30, 2026 was small relative to cash and cash equivalents, and equity makes up most of total assets (see Performance & Balance).
2. Orders received and the year-end order backlog both rose year on year in both segments. In the Water segment, Yazawa Ferromite won a large order in March 2026 for improvement work at the Misato water purification plant, and the company bases its forecast for the year to June 2027 on this backlog and expected orders.
3. The company kept its annual dividend per share unchanged for the year to June 2026, forecasts the same dividend for the year to June 2027, and repurchased its own shares during the year. Its articles allow the board to authorize buybacks without a shareholder vote.
4. Of the Energy projects halted in the year, one held up by prolonged specification talks between the end user and the process owner had those talks concluded by June 2026, and the project is set to restart.

Bear case

1. Revenue and profit fell in both segments in the year to June 2026. Energy shipments to customers outside China were delayed by U.S. policy developments and the Middle East situation, and lower factory utilization, higher raw material costs and higher freight costs reduced margins (see Performance & Balance). Results fell well short of the targets the company had already revised at the start of that year.
2. Another Energy project was suspended after the customer's financing problems surfaced. The company has no confirmed date or terms for restarting production, and it booked a bad-debt provision against receivables recognized before it stopped work.
3. Sales to Honeywell UOP, the largest customer, rose in the year while total revenue fell, which increased reliance on that one customer. Overseas sales were the majority of the total, and the company says demand for new plants in China is stagnant.
4. The parent company posted an operating loss on a standalone basis in the year to June 2026, while the Dalian subsidiary reported a profit. The plan to grow through M&A has produced no completed deal, and the company has not included any acquisition in its forecast.

Catalysts

• The annual shareholders' meeting on September 25, 2026 will vote on the election of three directors who are not audit and supervisory committee members, and the year-end dividend is scheduled to be paid from September 28, 2026.
• Quarterly earnings releases for the year to June 2027 will show progress against the first-year targets of the new mid-term plan, FLIGHT PLAN: TRANSFORM (REBOOT) 2029, published on August 24, 2026. These targets are the same as the company's full-year forecast, and the plan sets further revenue and net income targets for the year to June 2029.
• Watch for any acquisition announcement in water treatment, any restart or settlement of the Energy project halted by customer financing problems, and execution of the Misato water purification plant order.

Key risks

• The company lists overseas business risk, including political, regulatory, conflict and payment-collection risks in customer countries, together with exchange-rate movements that its hedging cannot fully offset.
• Energy projects can be long and large. The company states that material cost increases, customer postponement, cancellation or specification changes, and its own delays or defects could cause losses, repair liability or damages, and could harm future orders.
• Domestic water construction work, including at Yazawa Ferromite, requires a specified construction business license from the prefectural governor under the Construction Business Act. The license can be revoked, or business suspended, for violations or if a qualified full-time engineer is absent.
• Hamada Group holds a majority of voting rights directly, and its parent companies Hamada and Hamada Com hold them indirectly. Each of the three parent entities has one director serving concurrently with Nagaoka, and the company outsources part of its manufacturing to Hamada and leases its Himeji factory from Hamada Com. The company states that the parent's interests may not always match those of other shareholders, and that the parent's voting and any sale of its shares could affect the company's operations and the supply and demand for its shares.

Trading liquidity

2025-10-15 to 2026-10-30 (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.
• Net assets increased in the year to June 2026 mainly because of foreign currency translation adjustments rather than retained earnings, which reflects the size of the Chinese subsidiary. Comprehensive income and equity therefore depend on exchange rates as well as on operating results (see Performance & Balance).
• The full-year earnings release was filed on August 7, 2026, before the new mid-term plan was published on August 24, 2026, and the annual securities report was filed on September 24, 2026. The first-year targets of the new plan are the same as the forecast in the earnings release.
• Qualitative statements are taken from the annual securities report for the year to June 2026 and the full-year earnings release for the year to June 2026.