Asaka Riken Co.,Ltd. (5724) Stock Price

Asaka Riken is a company that recovers and refines precious metals and metal resources from electronic component waste and used waste liquids, while also developing and selling waste liquid recycling solutions and measurement data processing systems for production facilities. The company sells recovered gold, silver, platinum, and palladium, as well as refined lithium carbonate as raw materials, operating dual business pillars of resource recycling and solution services.

Its primary customers include printed circuit board manufacturers, electronic component makers such as connector producers, dental-related businesses and other companies handling valuable metals, as well as quality control inspection departments at manufacturing companies that prioritize quality assurance. The company generates revenue from the sale of precious metals and processing materials, the sale of regenerated ferric chloride solution and recovered copper, and from system implementation, maintenance, transportation, and analysis services.

The business is divided into three main segments: the precious metals business, the environmental business, and the systems business. The precious metals business handles processing materials such as bullion and vapor deposition materials, as well as cleaning and regeneration of fixtures. The environmental business regenerates used etching waste liquid to supply ferric chloride solution and sells byproducts including copper powder and copper pellets. The systems business provides automatic measurement inspection systems and measurement networks, while consolidated subsidiaries handle transportation operations and analysis services.

The company aims to become the No. 1 contributor to a resource-circular society, pursuing this long-term vision through stable growth in existing businesses and early-stage development of new ventures. Financially, the company targets a cost of equity of 7-8% and considers the continuous achievement of ROE and ROIC exceeding this threshold as key performance indicators. In the fiscal year ending September 2025, the company is front-loading costs through R&D investment and growth spending in lithium-ion battery (LiB) recycling operations. As this business stabilizes revenue, the company plans to gradually recover profitability and improve capital efficiency.

Priority investment areas include the recovery and refining of precious metals and lithium, along with process improvements supporting these operations. The company strengthens relationships with electronic components and device manufacturers, generating revenue through the sale of materials such as gold, silver, platinum, palladium, refined lithium carbonate, recycled ferric chloride, and recovered copper. As a differentiation strategy, the company goes beyond simple material trading by improving processes and applying proprietary refining technologies to increase yield, thereby reducing customer costs, expanding the customer base, and securing stable orders.

In new market development, the company positions LiB recycling as a growth pillar, advancing partnerships with battery manufacturers and preparing for mass production facility operations. Specifically, the company is installing production equipment at its Iwaki plant and aims to achieve early profitability in the automotive-focused lithium-ion battery recycling market. Leveraging its existing customer base in precious metals and environmental solutions, the company is also diversifying revenue through measurement system installation and maintenance for inspection divisions, as well as transportation and analysis services.

Regarding technological innovation, the company clearly prioritizes strengthening R&D capabilities and shortening development cycles, concentrating human resources accordingly. The company also develops and sells automated measurement and inspection systems and measurement networks, strengthening differentiation through solutions directly linked to quality control in manufacturing. Additionally, the company is reviewing its human resources recruitment, development, and evaluation systems to enhance R&D capabilities, simultaneously pursuing early profitability in new businesses including LiB recycling and improved profitability in existing operations.