三和油化工業's share price entered a temporary adjustment phase after the company announced its results for the fiscal year ending March 2026. While its PER of around 10x and PBR of around 0.8x suggest an undervaluation, its long-term plan sets growth targets for fiscal 2028 through fiscal 2031.
After hitting a low of ¥1,080 in April 2025, the share price reached a year-to-date high of ¥4,050 on 15 May 2026, but profit-taking emerged from the following day after the earnings announcement on the same day, sending the price down to around ¥2,500. From a valuation perspective, PER has fallen to around 10x and PBR to the 0.8x range, leading some to view the current decline as temporary.
For the fiscal year ending March 2026, revenue rose 26.3% year on year to ¥20.263 billion and operating profit increased 84.6% to ¥1.543 billion, resulting in substantial profit growth. In addition to the steady performance of the reuse and recycling business, the expansion of the engineering business drove quarterly revenue and profit to record highs.
While improving business conditions are lifting results, raw material and energy costs continue to rise. Against a backdrop of growing resource-recovery demand driven by the worsening situation in the Middle East, the company continues to strengthen the competitiveness of its reuse and recycling operations and invest in facilities.
For the fiscal year ending March 2027, the company forecasts revenue of ¥23.5 billion, up 16.0% year on year, and operating profit of ¥1.7 billion, up 10.1%. It plans to expand its resource-recovery business, centered on reuse and recycling. Under its medium-term management plan, it will also reclassify its fine chemicals and basic chemicals businesses.
The medium-term plan retains its targets of revenue of ¥25 billion and operating profit of ¥1.55 billion for the fiscal year ending March 2028, revenue of ¥26.5 billion and operating profit of ¥2 billion for the fiscal year ending March 2029, and revenue of ¥35 billion and operating profit of ¥4.2 billion for fiscal 2031.
The company plans growth investments including approximately ¥8 billion in the Kyushu plant, with a subsidy of up to ¥2 billion expected, strengthening resource-recycling capacity through the conversion of A&H Japan into a subsidiary, and pilot production of manufacturing equipment for binders used in automotive batteries. The dividend will remain at ¥50 for the current fiscal year, with a dividend yield of approximately 1.9% expected.