Kanematsu details growth plan with strategic investments and value creation

Kanematsu Corporation released its Q2 FY2026 earnings summary, highlighting an updated "integration 1.1" medium-term management plan and the introduction of Mission, Vision, and Values to emphasize value creation. The company aims for a net profit increase from 27.5 bn yen (FY2025 actual) to 35.0 bn yen (FY2027 target), with approximately 3.5 bn yen from organic growth and 4.0 bn yen from M&A. This includes projections of 1.5 bn yen from organic growth and 1.0 bn yen from M&A for FY2026.

Despite a net D/E ratio below its target, Kanematsu plans to utilize financial leverage as investment execution progresses, targeting a gross D/E ratio around 1.0x and anticipating an ROE of approximately 16% if ROIC reaches 8%. The company is considering exceeding its 60.0 bn yen investment framework, particularly for ICT-related investments and the aerospace and defense sectors. Several investment projects are currently under consideration for execution within the current medium-term management plan period.

The ICT Solution segment experienced a temporary profit decrease in Q2 due to improved compensation to secure engineers, though improvements are expected from the second half. Kanematsu’s strength in ICT lies in integrating its SIer and trading company businesses, leveraging a 20,000-company customer base. The defense business shows promise, with current supply of frigate engines to Japan’s Ministry of Defense and potential future contracts with the Royal Australian Navy.