Giken Kogyo CO.,LTD (E00116) Stock Price

Giken Kogyo is a construction-related company whose core business is specialized construction contracting in civil engineering and building, along with the sales and rental of construction equipment and materials. The company possesses a broad range of specialized technologies spanning from slope protection work to radiation and electromagnetic wave countermeasures, with particular strength in specialized environmental remediation projects. Additionally, the company operates a steel formwork rental business for wave-dissipating block manufacturing, making it an essential player in coastal protection projects.

The company's primary customers are government agencies and construction firms, establishing a stable revenue base centered on public works projects. In addition to revenue from construction contracts, ongoing income from the rental and sales of formwork and construction materials represents an important revenue stream. Through its subsidiary Nichido Giken, the group also handles construction material rental operations, with the entire group responding to the needs of the construction industry.

The company's business is divided into three main segments: civil engineering-related, building-related, and formwork rental-related operations. In civil engineering, the company handles slope protection and steep slope stabilization work. In building-related services, it undertakes specialized construction projects such as radiation shielding and electromagnetic wave countermeasures. In formwork rental operations, the company centers on the rental of steel formwork for wave-dissipating blocks while also expanding sales of environmentally conscious concrete products, pursuing diversified business development.

Giken Kogyo is restructuring its revenue model to reduce dependence on formwork rental operations and achieve balanced growth across three core business segments, in response to the challenging operating environment in the construction industry. The company has identified strengthening each segment's ability to generate independent profits as a key priority, and has achieved certain results through cost reduction activities conducted via an employee-led activation committee. Going forward, the company plans to improve profitability further by implementing planned order acquisition strategies and rigorous cost management.

In civil engineering operations, the company's profitability-focused order strategy is proving effective, with improved profit margins achieved through elimination of unprofitable projects and securing adequate construction capacity. While maintaining current profit margins, the company aims for volume growth and continues focused sales activities targeting post-Great East Japan Earthquake reconstruction demand and national resilience-related projects. The strategy involves further strengthening monitoring systems from order to project completion to ensure stable profit realization.

In building construction operations, the company is expanding and diversifying its business scope beyond its core healthcare sector. To counter intense price competition, the company is implementing rigorous cost management while focusing on acquiring new customers through after-sales services and newly developed construction materials. The company is also planning comprehensive responses, including redesign services, to capture future equipment replacement demand from radiation shielding facilities previously constructed.

In formwork rental operations, the company is building a business foundation in anticipation of future public works contraction and creating synergies through integrated operations with civil engineering operations. The company is implementing thorough cost management by reviewing all processes from steel formwork manufacturing through maintenance and transportation, while strengthening equipment capacity through replacement of obsolete rental formwork and introduction of new wave-dissipating blocks. The company is also enhancing its capacity to handle large-scale projects through collaboration with Freesia Macros Co., Ltd., a group company.