■Business Overview
1. business segment
The main business of Heeist ＜6433＞ is divided into 3 areas: “linear motion equipment,” “precision parts processing,” and “unit products.” Sales by sector for the fiscal year ended 2024/3 were 1,591 million yen (sales composition ratio 68.9%) for linear motion equipment, 529 million yen (same 22.9%) for precision parts processing, and 188 million yen (same 8.2%) for unit products.
2. Linear motion devices
Linear motion devices are precision parts for transmitting straight forward force as smoothly as possible (with less frictional resistance), and are mainly used in various machine tools, semiconductor manufacturing equipment, etc. The company's products include next-generation linear ball bushings UTB (Utility Track Ball), hybrid flange linear ball bushings (JFK), linear ball bushings, and ball spline units. Approximately 90% of sales in this field are OEM sales for THK, and THK, which purchased products from the company, sells them all over the world under its own brand. The remaining 10% is sold in-house, and this includes ※ for major lure manufacturers.
Although it is an OEM, orders are placed on a “regular” plus “spot” basis. Expected production is carried out in order to increase production efficiency, and a fixed amount of inventory is held, but in recent years, model numbers have also increased and the trend of multiple types and small quantities has intensified, so the severity has increased slightly in terms of profit. Demand (sales) is influenced by THK's sales situation, but ultimately it is affected by trends in the FA market (machine tools, robots, etc.) and capital investment trends in semiconductor manufacturing equipment, etc. On the other hand, since those for lures are rather a “world of hobbies,” order acceptance trends may differ from economic fluctuations.
3. Precision parts processing
We manufacture special/custom-made parts for racing models, research and development, prototyping, etc., but currently about 95% are for Honda. Therefore, sales are greatly influenced by Honda's involvement in new product development and various races (especially F1). In addition to various complex and precise processing, there are many cases where short delivery times are required, and it is necessary to own many types of machine tools. As a result, the operating rate of the machine will inevitably decrease, but responding to such difficult orders has led to trust from customers (Honda). However, Honda has withdrawn from Formula 1 racing since 2022, and parts orders for the same race have declined drastically. However, since sales remain for Honda Racing Co., Ltd., which is a subsidiary of Honda, and for Red Bull GmbH (hereafter, Red Bull), which is an F1 body manufacturer, and RB Formula One Team, a certain amount of sales continues. Also, as recent news, Honda has announced that it will participate in the Formula 1 race from 2026, and engines will be supplied to the Aston Martin team. Therefore, a full-scale recovery is expected in this sector from the latter half of the 2026/3 fiscal year.
4. Unit products
It is a product that combines linear motion technology and bearing technology, and includes precision positioning devices, alignment stages (XYtheta stages, XYz stages), spherical bearings, etc. It is used for devices that require accurate bonding (positioning), such as liquid crystals and organic EL. Most of this field was aimed at mid-sized LCD manufacturers in China, but in recent years, it has also been adopted in electronic device assembly processes, etc. Since most unit products are incorporated into manufacturing equipment, etc., demand is influenced by capital investment trends in these industries.
5. Characteristics, strengths, and competition
(1) High technical capabilities
The company's greatest characteristic is probably its long history and high technical capabilities in precision parts processing. As described above, many patents have been obtained in the past, and it can be said that the experience and technical capabilities accumulated in this way have been evaluated by major customers, starting with Honda.
(2) Trustworthy relationships with major customers
Long transactions with THK and Honda have continued, and relationships of trust with such major customers can also be said to be strengths in enhancing the company's technical capabilities.
(3) Competition
As mentioned above, the company's products are centered on direct orders from customers, so there are not many companies that directly compete. If I were to name competitors, they include the MISUMI Group headquarters (9962) and Nippon Bearing Co., Ltd., for linear motion equipment.
However, for the company, competition in the true sense of the word may rather be technological innovation itself. Demand for the company's products may decline as new parts appear due to technological innovation. In that sense, it will become important for the company itself to constantly strive to develop new products and new markets (customers).
(4) Active investment in human resources
Another characteristic (strength) of the company is that it is actively investing in human resources against the backdrop of high technical capabilities and high market share (lack of competition). As a result, it was proudly ranked 18th in a survey of “companies that increased average salary over the past 3 years” conducted by Nikkei Inc. in 2019/4 targeting 563 listed companies with sales of 10 billion yen or less and 50 or more employees. The current average salary (yearly) of the company is 5.05 million yen.
Furthermore, an environment where employees feel rewarding has been created, such as an incentive type reward system and a system that pays allowances for excellent proposals, etc., and technology and efficiency have been enhanced. This is also a characteristic of the company, and it would not be an exaggeration to say that such investment in human resources supports the company's technical capabilities.
(Written by FISCO Visiting Analyst Noboru Terashima)