Business Overview 4. DX Regional Collaboration Project Signpost's DX and Regional Collaboration Project started in March 2022 with the establishment of the DX and Regional Collaboration Division. It aims to provide products and services that contribute to regional collaboration by collaborating with local financial institutions nationwide, utilizing its own DX technology and open innovation. In August 2022, it began working with Oita Made Co., Ltd., which was established with the investment of multiple companies in Oita Prefecture, including Oita Bank, to sell original products made in Oita Prefecture to both domestic and overseas markets and to match local companies and Signpost's products and services in order to promote the revitalization of Oita Prefecture's economy. In addition, in April 2024, it started offering DX support services for medium-sized and small businesses. As the first effort, it supports the creation of DX declaration by (The) Fourth Hokuriku Bank, Ltd. (Niigata City, Niigata Prefecture) to deploy DX declaration support services to the market. Furthermore, it will realize new solutions by commercializing its own technology and open innovation and promote regional collaboration through innovation.
2. Features and strengths of Riken NPR <6209>.
The main role of the main product, the piston ring, includes a sealing function to prevent combustion gas leakage in the engine combustion chamber, a control function of lubricating oil (engine oil), a heat transfer function for escaping combustion heat, and a support function for suppressing piston wear, etc. It is a function part that is important and directly related to engine performance, used in the combustion chamber under severe conditions of 300℃. Manufacturers who can supply high-quality piston rings are essentially limited to five companies in the world, including Riken and NPR (one in the United States, one in Germany, and three in Japan). High technical capabilities such as low friction, improved wear resistance, high performance and quality materials, and surface treatment are required, but both companies have strengths in advanced precision processing, surface treatment, and material technology. They also have their own strengths in powder metallurgy technology and engineering plastic technology. Major customers include the world's major automobile manufacturers such as Toyota Motor <7203> and Honda Motor <7267>, for which they supply a wide range of products.
3. Risk factors and countermeasures.
The risk factors include a decrease in automobile production due to economic fluctuations, infectious diseases, disasters, and other impacts. However, the global automobile market is gradually expanding due to the progress of automobile popularization in emerging countries, and for the company, the impact of medium- to long-term environmental regulations based on the global trend toward decarbonized societies (such as low fuel consumption of engines, reduced gasoline engines, response to clean engines, and EVs for cars) is a risk factor rather than the increase or decrease of automobile production. The company will promote the development of engine technology toward evolution, such as further reduction in fuel consumption of gasoline engines and response to next-generation engines that use hydrogen or alternative fuels. In addition, the company will focus on expanding its business in non-ICE areas, taking into account the trend toward EVs, and will continue to reform its business portfolio.
(Authored by FISCO guest analyst Masanobu Mizuta)