■Company Overview

1. Company history

Wavelock Holdings ＜7940＞ originated from Nippon Wavelock Co., Ltd., which was established in 1964 with equal investment by three companies, Nissho Corporation (currently Sojitz ＜2768＞), Nippon Carbide Industries (4064), and Maruto Kasei Kogyo Co., Ltd. (currently Tatsuta Chemical Co., Ltd.), to introduce manufacturing method patent “Wavelock” technology related to thread-reinforced plastic sheets from Italy. The wave lock manufacturing method is a manufacturing method in which multiple synthetic fiber threads are arranged in waves (waves) between two sheets of plastic film and adhesively fixed (locked) to form a sandwich structure, and resin-processed sheets made by the same manufacturing method have characteristics such as having elasticity and at the same time greatly improving physical strength. Vinyl products used in the agricultural field in the 1960s have an issue that they are weak in strength and break easily, and the founder, Kinebuchi Hiromi (Kinebuchi Hiromi), saw that there was a need for wavelock products in the same field and decided to introduce technology starting with agricultural raincoats. After that, they expanded their business while expanding their market base to vinyl houses, raincoats, industrial materials, etc.

In addition to entering the wallpaper industry as a wallpaper-based manufacturer in 1979, it continued to grow while promoting diversification of business due to the founder's strong leadership, such as manufacturing and sales of multilayer laminate sheets combining multiple materials, such as metal-evaporated polyester film, which is the foundation of the current advanced technology business, and in 1990, it was registered as a storefront trading stock with the Japan Securities Dealers Association and publicly traded. Management was taken over in 2003 by Mr. Kinebuchi Jun (Kinebuchi Jun), the eldest son of the founder and former president, and since then they have actively worked on M&A as one of their growth strategies, and transitioned to a pure holding company system in 2005.

Regarding overseas expansion, in addition to establishing a joint venture in China in 2012 to enhance manufacturing functions in the woven business in the material solutions business, a subsidiary was established in Thailand for the purpose of strengthening business activities in the ASEAN region in 2018. Meanwhile, in the advanced technology business, sales subsidiaries were established in Korea in 2012, the US in 2018, and Germany in 2019. As for European and American subsidiaries, we are promoting sales activities mainly targeting the automotive sector. Furthermore, in 2013, a subsidiary was established in Hong Kong for the purpose of strengthening trading company functions in the Asian region.

In March 2021, 51% of the shares of Wavelock Interior Co., Ltd. (currently Creanate Co., Ltd.) were transferred to Sangetsu ＜8130＞, and the interior business (wallpaper business), which was one of the main businesses, was separated. Sangetsu is the largest interior trading company and concluded a capital and business alliance in 2015 as the main customer, and although it was also the company's largest shareholder, the interior business was transferred due to discussions between the two parties, and the capital and business alliance was also dissolved. The remaining 49% of Creanate's shares were transferred in 2022/5, and the funds obtained from stock sales are invested in advanced technology businesses and new businesses where growth can be expected, M&A, alliance funds, etc., and are adopting a strategy aimed at improving corporate value. Most recently, it acquired 20.32% of the shares of the resin processing manufacturer RP Topra in 2023/6, making it an equity method related company.

Develop material solutions business and advanced technology business on both axes

2. Business content

The company manufactures and sells various value-added products (agricultural and construction/construction sheets, insect repellent nets, food container sheets, metal decorative films, etc.) created by “combining” multiple materials (resin, fiber, metal, etc.) with various processing techniques (adhesion, welding, lamination, surface processing, printing, embossing, weaving, vapor deposition, foaming, etc.).

The business segment consists of two segments: material solutions business and advanced technology business. Looking at the composition ratio trend for the fiscal year ending 2023/3, the material solutions business accounts for over 70% of sales, but the composition ratio of the advanced technology business is rising year by year. Meanwhile, with regard to operating income, since the sales scale of the advanced technology business is still small and there is an advance investment period, it is expected that the profit structure ratio will also rise in the medium to long term as the sales scale expands, although there are large fluctuations depending on the period.

(1) Material solutions business

In the material solutions business, we sell various high-quality synthetic resin products (sheets, films, meshes, nets, etc.) using our own technology to a wide range of fields such as construction materials, housing materials, industrial materials, agricultural materials, daily necessities, food packaging materials, etc. Therefore, sales organizations are divided into 5 solutions: building solutions, industrial solutions, packaging solutions, living solutions, and agricultural solutions by industry and product group, and optimal solutions in response to changes in the market are provided. In terms of the sales composition ratio for the mid-term fiscal year ending 2025/3, the two fields of living solutions and packaging solutions account for over 50% of the total. Other than that, in addition to products purchased and sold through subsidiaries in Thailand and China, the geothermal heat business is included. As for production sites, in addition to the Koga Plant (Ibaraki Prefecture), which is the main base of Inovex Co., Ltd., we process and produce woven products at the Daio Fukuroi Plant in Shizuoka Prefecture, Daio Kakegawa Plant, and China, and we also outsource production for some products.

a) Building solutions

As main products, they provide temporary construction materials such as construction sheets and meshes, vegetation nets used as civil engineering/forestry materials, weed-proof fences, and curtains, sheet shutters, etc. used as partition materials. The main sales destinations are temporary leasing companies, agents, and trading companies.

(Author: FISCO Visiting Analyst Joe Sato)