■New Medium-Term Management Plan 1. Long-term Management Policy "ND For The Next 2030" In the future, it is expected that new buildings in the booming air conditioning equipment-related business will not expand much more than the current level in the long term, as it will no longer be an era like this where new buildings are built one after another against the background of population decline. On the other hand, it is expected that large buildings that reach the time of renovation will increase with the passage of years, but few companies are able to respond to renovation. Moreover, it is predicted that the environmental business market will steadily expand toward the realization of a decarbonized society based on Japan's energy policy*, with particular efforts being made in the construction industry to achieve ZEB the ultimate energy-saving of buildings. Therefore, the demand for Nihon Denshitsu's (1723) "Instrumentation Engineering" technology that achieves energy-saving and labor-saving is expected to increase further. In the industrial system-related business, the digitalization (smart factoryization) of factories utilizing DX technologies such as AI, IoT, and ICT in the medium to long term is expected to be a tailwind, expanding the market significantly. In particular, an increase in demand related to the renewal of factory equipment and the construction of production management systems, such as process automation and factory automation, is expected. From the above, we consider the air conditioning equipment-related business to be a stable source of income that supports the company and the industrial system-related business to be a growth driver. In the short to medium term, we will accumulate profits from new construction projects that lead to existing projects in the booming air conditioning equipment-related business, promote the independence of the industrial system-related business, and further accumulate existing projects while actively investing management resources in the industrial system field with ample room for expansion, in order to give momentum to the growth of the industrial system-related business. *1 The country aims to achieve carbon neutrality by 2050 and to reduce greenhouse gas emissions by 46% from fiscal year 2013 by fiscal year 2030. *2 ZEB: Net Zero Energy Building.
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Lately, it is not an era where new buildings are built one after another against the background of population decline and therefore, it is expected that new construction projects in the flourishing air conditioning equipment-related business will not expand significantly more than the current status in the long term. On the other hand, in existing projects, it is expected that large buildings whose renovation is due to the passage of years will increase; however, the number of companies that can respond to renovation is decreasing. Moreover, based on Japan's energy policy,* it is predicted that the environmental business market will steadily expand toward the realization of a decarbonized society, and particularly in the construction industry, efforts are being made to achieve ZEB, which is the ultimate energy-saving for buildings. Therefore, it is believed that the demand for Japan Electric Technology's (1723) "instrumentation engineering" technology, which achieves energy savings and labor saving, will continue to rise. In the industrial system-related business, digitalization (smart factoryization) of factories using DX technologies such as AI, IoT, and ICT in the medium to long term is expected to be a tailwind, and it is expected that the market will expand significantly. In particular, an increase in demand related to factory equipment renewal and production management system construction, such as process automation and factory automation, is expected. Based on the above, in regard to the air conditioning equipment-related business, it is considered to be a stable source of income that supports the company, and in regard to the industrial system-related business, it is considered to be a growth driver. In the short to medium term, we plan to build up earnings by winning profit in newly constructed projects in the flourishing air conditioning equipment-related business leading to already existing construction projects and independently shaping up the industrial system-related business while aiming for further building up of the existing construction projects, and actively put management resources into the industrial system field, which has ample room for business development, to boost growth of the industrial system-related business. *1 The country aims to achieve carbon neutrality by 2050 and to reduce greenhouse gas emissions by 46% from fiscal year 2013 by fiscal year 2030. *2 ZEB: Net Zero Energy Building.
The country aims to achieve carbon neutrality by 2050 and to reduce greenhouse gas emissions by 46% from fiscal year 2013 by fiscal year 2030.
ZEB refers to a net zero energy building.
(Author: FISCO guest analyst Nobumitsu Miyata)