NIPPO CORPORATION (E00049) Stock Price

NIPPO is a comprehensive construction company with core operations in road paving construction and the manufacturing and sales of asphalt concrete. The company undertakes pavement civil engineering and building construction projects, playing a vital role in the construction and maintenance of road infrastructure. It also manufactures and sells asphalt concrete and emulsions—materials essential for paving work—as an integrated operation.

The company's primary customers are public sector entities, including national and local governments, from which it receives orders for social infrastructure projects such as roads and airports. For material procurement, the company purchases asphalt—the primary raw material for asphalt concrete—from its parent company ENEOS, leveraging group synergies for efficient operations. Revenue stability is secured through a dual structure of construction contract awards and manufacturing and sales of paving materials.

The company's business comprises four segments: construction, manufacturing and sales, development, and other operations. In construction, subsidiaries including Dainippon Civil Engineering and Hasegawa Sports Facilities operate general civil engineering and sports facility projects. The manufacturing and sales segment operates asphalt concrete production facilities across the country. The development segment handles real estate development and condominium projects, while other operations include construction equipment leasing and PFI projects, supporting business diversification.

NIPPO is currently implementing its "New Three-Year Management Plan (FY2021-2023)," positioning this period as a business phase to further strengthen its resilient and flexible group collaboration structure. For fiscal 2023, the company has set performance targets of 351 billion yen in revenue and 38.5 billion yen in operating profit on a core consolidated basis, and 480 billion yen in revenue and 47 billion yen in operating profit on a total consolidated basis. The company is focusing on improving profitability and securing stable cash flow. This plan builds on the revenue foundation established during the previous three-year plan (FY2018-2020) and aims for further growth.

The company's priority investment areas are concentrated in building a resilient group structure in its core asphalt paving and civil engineering business, and planned capital investment in its manufacturing and sales operations. In the manufacturing and sales business, the company is securing appropriate raw material procurement and reducing manufacturing costs while increasing asphalt mixture usage within the group and ensuring stable profits through appropriate pricing. In general civil engineering, the company is pursuing revenue expansion in specialized fields by leveraging the technical capabilities of subsidiaries such as Dainippon Civil Engineering and Hasegawa Sports Facilities, and improving profitability through collaboration between the company's and Dainippon Civil Engineering's building divisions.

For new market development, the company positions overseas operations as a growth area and is working to expand business by utilizing its strong technical capabilities. In development operations, the company is deploying a strategy based on appropriate combinations of "investment scale" and "portfolio," continuously and systematically acquiring properties in condominium sales, rental, redevelopment, and logistics facility sectors to improve profitability. Additionally, to address labor shortages and aging workforces in the construction industry, the company is promoting work style reforms and creating attractive workplaces through initiatives to reduce working hours and prevent overwork.

In technological innovation efforts, the company prioritizes alignment with sustainable development goals and has set specific initiatives since fiscal 2020, including "low-carbon society formation," "circular economy development," "safety assurance," and "human resource development." As a measure to prevent recurrence of antitrust law violations, the company continuously implements compliance system reforms and measures to ensure appropriate bidding practices, and has established a monitoring system involving the legal department and external specialists. The company upholds "reliable manufacturing" as its corporate philosophy and aims for trustworthy business management that balances business development with management stability.