Summary

Microwave Chemical Co., Ltd. was established in 2007 and develops new manufacturing processes utilizing microwave technology. Specializing in the pharmaceutical, environmental, and electronic materials fields, the company aims to contribute to the realization of a carbon-neutral society by establishing highly energy-efficient manufacturing processes. Its business model provides integrated services ranging from R&D based on customer needs to commercial implementation and manufacturing support, with an emphasis on building long-term relationships.

Its main business segments consist of pharmaceutical manufacturing processes, environmental technologies, electronic materials manufacturing, and new business development, each offering products and services tailored to specific market needs. In particular, in the pharmaceutical field, the company is improving the efficiency of peptide drug synthesis and has achieved high productivity through collaboration with major pharmaceutical companies. In environmental technologies, it focuses on chemical recycling technologies for waste plastics, contributing to the advancement of a sustainable society.

Performance has grown from ¥458 million in FY2021 to ¥1,215 million in FY2023, with ordinary income also showing an improving trend. However, earnings volatility and high customer concentration remain challenges. Under its medium-term management plan, the company aims to achieve ¥10 billion in revenue by 2030, accelerating technological development and strengthening global expansion. The creation of new businesses, technology standardization, and the pursuit of carbon neutrality are also positioned as key strategies. For investors, the company’s clear vision and concrete measures toward sustainable growth are attractive, and further expansion is anticipated.

1. Overview of FY2023 Results

In FY2023, Microwave Chemical Co., Ltd. recorded revenue of ¥1,215 million, representing a 41% year-on-year increase. This substantial growth from ¥861 million in FY2022 was driven by the development of new products and services utilizing microwave technology. Ordinary income turned positive at ¥26 million, improving from a loss of ¥99 million in the previous year. The stabilization of revenue from joint development agreements is considered a key factor in this improvement.

Net income for the period recovered to ¥75 million from a loss of ¥110 million in the previous year. However, it is projected to decline again to a loss of ¥945 million in FY2024, requiring careful attention to future performance trends.

From an income statement perspective, cost of sales increased to ¥352 million, and gross profit reached ¥658 million. However, selling, general and administrative expenses rose to ¥804 million, impacting operating income. On the balance sheet, total assets reached ¥2,124,539 thousand, while current liabilities increased to ¥1,060,531 thousand. The equity ratio remained solid at 50.1%, indicating maintained financial soundness.

In the cash flow statement, net cash used in operating activities amounted to ¥73,516 thousand, while net cash used in investing activities was ¥147,235 thousand, reflecting ongoing investment in new technologies. Key performance indicators show an ROE of 6.5%, with expectations for further growth. Overall, Microwave Chemical has achieved steady growth, and its business model is gaining positive momentum.

2. Earnings Outlook for the Fiscal Year Ending March 2024

For the fiscal year ending March 2024, the company forecasts revenue of ¥1,863 million, operating income of ¥131 million, ordinary income of ¥182 million, and net income attributable to owners of the parent of ¥161 million.

Building on FY2023 performance, continued development of new products and services utilizing microwave technology is expected to drive growth. In particular, rising demand in pharmaceutical manufacturing processes and environmental technologies is anticipated to stabilize joint development agreements with customers, contributing to improved profitability.

In FY2024, the company plans to focus especially on new business development, including expansion in mining processes and chemical recycling technologies. This strategy is expected to sustain revenue growth while improving profit margins. In addition, stricter control of SG&A expenses and more efficient operations are expected to support operating income.

By responding flexibly to changes in the market environment and advancing product development aligned with customer needs, the company aims to achieve sustainable growth. Overall, the fiscal year ending March 2024 is expected to be a pivotal year in strengthening the foundation for future expansion and will be of particular interest to investors.

3. Medium- to Long-Term Growth Strategy

Under its medium-term management plan and the mission “Make Wave, Make World — Create a world unknown to the world,” Microwave Chemical Co., Ltd. aims to foster the development of a sustainable chemical industry by 2030.

As a concrete target, the company aims to achieve ¥10 billion in revenue by FY2025. Priority initiatives include accelerating technological development, strengthening global expansion, promoting environmentally friendly processes, and cultivating human capital. Plans include introducing new microwave process equipment and digitalizing existing production lines to maximize manufacturing efficiency.

The company will continue investing in R&D to establish next-generation process technologies, with a focus on chemical recycling technologies and new material development. In new business creation, it intends to leverage the “PlaWave” platform to secure diversified revenue sources through projects such as bio-oil production and metal refining.

Technology standardization and the pursuit of carbon neutrality are also key components of its strategy, with the goal of providing sustainable manufacturing processes toward 2050. From an execution standpoint, the company emphasizes developing specialized talent and strengthening collaboration with external experts to ensure a strong foundation for technological innovation.

Key risk factors include managing customer concentration and adapting flexibly to changes in the market environment, particularly uncertainties associated with technological innovation and compliance with environmental regulations. Through these strategies, Microwave Chemical aims to achieve sustainable growth and establish itself as an attractive company for investors.

・FY2023 revenue increased 41% year-on-year to ¥1,215 million, with ordinary income turning positive at ¥26 million. However, net income is projected to decline to a loss of ¥945 million in FY2024, requiring caution.

・For the fiscal year ending March 2024, revenue of ¥1,863 million, operating income of ¥131 million, ordinary income of ¥182 million, and net income attributable to owners of the parent of ¥161 million are forecast. Growth will be driven by new products and services, with a particular focus on new business development.

・The company’s medium-term management plan targets ¥10 billion in revenue by FY2025 as part of its vision to promote a sustainable chemical industry by 2030, prioritizing technological development, global expansion, and environmentally friendly processes.

Business Overview

1. Overview of the Business Model

Microwave Chemical Co., Ltd., established in 2007, develops new manufacturing processes utilizing microwave technology. Its distinctive business model is characterized by the integrated provision of services ranging from research and development to commercial equipment implementation and manufacturing support, enabling it to deliver comprehensive solutions to address diverse customer challenges. In its key focus areas—pharmaceuticals, environmental technologies, and electronic materials—the company stands out for establishing highly energy-efficient manufacturing processes and contributing to the realization of a carbon-neutral society.

The company’s business model consists of four phases: R&D based on customer needs; design and fabrication of pilot-scale equipment; implementation into manufacturing lines; and subsequent manufacturing technology support. A key differentiator is its emphasis on building long-term relationships with customers and securing stable revenue streams through joint development projects and licensing income. This comprehensive approach enhances its adaptability to new markets and strengthens its competitive advantage.

Its proprietary technology platform is built on an extensive database related to reaction system design and reactor design, maximizing the unique characteristics of microwave processes. This enables high-efficiency reactions in short timeframes, significantly reducing energy consumption and manufacturing costs, thereby contributing to the advancement of sustainable manufacturing.

2. Main Business Segments

Microwave Chemical Co., Ltd.’s operations are broadly categorized into the following four segments, each providing products and services tailored to specific market needs:

1. Pharmaceutical Manufacturing Processes
    In the pharmaceutical field, the company advances more efficient synthesis methods using microwave technology. In particular, it has achieved high productivity in peptide drug synthesis through collaboration with major pharmaceutical companies. This segment is expected to generate future profit growth, while fostering long-term customer relationships by supporting clients’ R&D activities.

2. Environmental Technologies
   In response to growing sustainability demands, the company focuses on recycling waste plastics using chemical recycling technologies. This segment is progressing steadily, addressing new environmental regulations and contributing to the realization of a circular economy.

3. Electronic Materials Manufacturing
   The application of microwave technology is expanding in the production of advanced materials and nanomaterials. In the electronics industry, providing high-performance materials is key to maintaining a competitive edge, and rapid product development is essential.

4. New Business Development
   The company is developing new technologies applying microwave processes to mining and metal refining. These initiatives aim to establish new revenue streams and represent a high-growth area with strong market interest.

Across these four segments, the company supports overall performance by proposing solutions tailored to customer needs, generating synergistic effects among its businesses.

3. Market Position and Competitive Advantages

Microwave Chemical has established a competitive position in the market based on its specialization in microwave process technology. Its technology enables highly energy-efficient and low-energy manufacturing processes, aligning with global trends toward sustainability and carbon neutrality.

One of its key competitive advantages lies in its proprietary technology platform. Its capabilities in reactor design and process development allow for flexible and rapid responses to diverse market needs, delivering significant added value to customers. By achieving high-yield production through microwave processes, the company helps customers reduce costs, leading to repeat contracts and long-term partnerships.

Furthermore, its extensive partnerships strengthen its competitive position. Through collaborations with major chemical manufacturers, the company has deepened its technological capabilities via joint development, enabling access to new markets. These strategic alliances establish a structure capable of responding flexibly to market changes.

4. Competitive Environment and Challenges

Microwave Chemical operates in a rapidly evolving and competitive market environment. Competition with existing players is constant, while the emergence of new entrants and ongoing technological innovation further complicate the competitive landscape. To remain competitive, the company must not only meet existing customer needs but also swiftly develop new technologies and products by leveraging its accumulated expertise.

In a society that increasingly emphasizes sustainability, strengthening corporate social responsibility (CSR) is also essential. Efforts to reduce environmental impact during production are directly linked to corporate brand value and must be strategically pursued. Additionally, external risks such as natural disasters and political instability must be considered, making robust risk management systems indispensable.

5. Future Outlook

Microwave Chemical has articulated clear plans to capture future growth opportunities. With a long-term target of achieving ¥10 billion in revenue by 2030, the company aims to further strengthen customer relationships and expand partnerships. It also seeks to diversify revenue sources through expansion into new business areas such as mining processes and chemical recycling.

Going forward, continuous technological innovation will be essential to provide products and services that meet evolving market needs. As competition intensifies, strengthening its R&D framework and securing skilled engineers will be critical to achieving sustainable growth.

Microwave Chemical Co., Ltd. is committed to pursuing environmentally harmonious and sustainable business operations. By deepening understanding of its business overview, investors will be better positioned to assess the company’s long-term growth potential accurately.

Performance Trends

1. Recent Performance Overview

Microwave Chemical Co., Ltd. has focused on the rapidly evolving chemical process market in recent years and has demonstrated remarkable growth over the past three years. Specifically, revenue increased from ¥458 million in FY2021 to ¥861 million in FY2022, and further to ¥1,215 million in FY2023. This growth was driven by the development of new products and services utilizing microwave technology. Notably, revenue grew 87% year-on-year in FY2022 and maintained a strong 41% increase in FY2023.

Revenue is projected to reach ¥1,863 million in FY2024. However, it is expected to decline to ¥1,608 million in FY2025 before slightly increasing to ¥1,613 million in FY2026. While the overall trend reflects growth, the company’s reliance on joint development contracts creates inherent performance volatility.

Ordinary income also shows significant improvement. It rose from a loss of ¥356 million in FY2021 to a loss of ¥99 million in FY2022, turning positive at ¥26 million in FY2023. It is projected to increase further to ¥131 million in FY2024 and ¥182 million in FY2025, with continued growth anticipated in FY2026. This reflects the stabilization of revenue from joint development agreements and steady profitability improvement.

Net income improved from a loss of ¥1,036 million in FY2021 to a loss of ¥110 million in FY2022, and then to a profit of ¥75 million in FY2023. Although it is projected to decline again to a loss of ¥945 million in FY2024, a recovery to ¥161 million is expected in FY2025. These fluctuations are believed to be influenced in part by the outcomes of R&D initiatives and commercial equipment implementation projects in FY2023.

Overall, Microwave Chemical has achieved steady growth, and improving trends in ordinary income and net income reinforce its position as a company with sustainable growth potential.

2. Analysis of the Income Statement

Despite strong growth, a deeper analysis of the income statement is necessary. While revenue increased 41% year-on-year to ¥1,215 million in FY2023 and is forecast to reach ¥1,863 million in FY2024, a projected decline in FY2025 suggests that sustained revenue growth requires careful monitoring.

Cost of sales increased to ¥352 million in FY2023, reflecting expanded production activities driven by rapid revenue growth. Gross profit rose significantly from ¥238 million to ¥658 million and then to ¥864 million, with the FY2023 gross profit margin reaching a high level of 71.1%. This strong margin underscores the efficiency of microwave technology and the high profitability of new products.

Selling, general and administrative (SG&A) expenses also increased to ¥804 million in FY2023. Operating income was ¥60 million and is projected to reach ¥134 million in FY2024. As SG&A expenses have a direct impact on profitability, careful cost control will be essential for further profit improvement.

Although the company benefits from relatively stable revenue through joint development contracts, its business model requires flexibility in responding to evolving customer needs. Additionally, the potential for extraordinary losses highlights the importance of disciplined financial management and careful budgeting.

Overall, the income statement indicates improving performance and growth potential, but close attention must be paid to margin fluctuations and cost management.

3. Analysis of the Balance Sheet

An examination of the balance sheet provides insight into the company’s asset structure and financial position. Total assets for FY2024 amounted to ¥2,124,539 thousand, an increase of ¥229,565 thousand from the previous fiscal year. This growth was primarily driven by increases in accounts receivable and work in progress, suggesting positive prospects for future revenue generation.

Current liabilities rose to ¥1,060,531 thousand, up ¥21,849 thousand year-on-year, with long-term borrowings increasing by ¥151,440 thousand. This reflects the need to secure funding for ongoing R&D activities. Net assets reached ¥1,064,007 thousand, representing an increase of ¥207,715 thousand and demonstrating improved financial strength.

The equity ratio stands at 50.1%, confirming a sound capital structure supported largely by shareholders’ equity. While this indicates financial stability, continued attention to liquidity management remains necessary. A relatively high current ratio supports short-term solvency, and the balance between current assets and liabilities remains stable.

Overall, the company maintains a solid financial foundation for growth, though ongoing liquidity management and proactive revenue expansion strategies remain important.

4. Analysis of the Cash Flow Statement

Analyzing the cash flow statement helps assess the company’s financial health and capital flows. In FY2023, net cash used in operating activities was ¥73,516 thousand, a significant decrease from ¥205,747 thousand in positive cash flow the previous year. This decline was primarily due to increases in accounts receivable and decreases in contract liabilities, raising concerns about short-term working capital management.

Meanwhile, net cash used in investing activities totaled ¥147,235 thousand, reflecting continued investment in new technologies and R&D. Capital expenditures for property, plant, and equipment reached ¥117,001 thousand, which may contribute positively to future performance.

In financing activities, the company recorded ¥198,443 thousand in net cash inflows, mainly from long-term borrowings. While this funding supports liquidity, prudent financial management will be required to manage future interest burdens.

Overall, although operating cash flow has weakened, inflows from investing and financing activities have offset the decline. Improving operating cash flow will be an urgent priority to support sustainable growth.

5. Analysis of Key Performance Indicators

Key performance indicators provide insight into Microwave Chemical’s growth potential. Important metrics include ROE (return on equity), ROA (return on assets), and EBITDA (earnings before interest, taxes, depreciation, and amortization).

ROE for FY2023 was 6.5%, with expectations for further improvement in the following fiscal year, suggesting enhanced returns to shareholders. ROA has also improved, indicating that the company is utilizing its assets more efficiently to generate profits. Positive EBITDA in FY2023 supports the company’s ability to fund ongoing investments and sustain long-term growth.

Taken together, these indicators suggest strong growth potential, particularly if the company continues to deepen its R&D capabilities and strengthen its responsiveness to customer needs. Overall performance trends remain positive, supporting an optimistic outlook.

Looking ahead, Microwave Chemical must build strategies for future growth while reflecting on past performance. To achieve further expansion in an increasingly competitive and dynamic market, continuous improvement and new initiatives will be essential. For investors, understanding these trends will be critical for making informed, strategic investment decisions.

Medium-Term Management Plan and Growth Strategy

1. Overview of the Medium-Term Management Plan

Microwave Chemical Co., Ltd.’s medium-term management plan centers on the development of a sustainable chemical industry. Under its mission, “Make Wave, Make World — Create a world unknown to the world,” the company has established specific targets through 2030. The plan emphasizes the development of new manufacturing processes centered on microwave technology, as well as the promotion and expansion of environmentally friendly processes. In particular, applications in the pharmaceutical and food sectors are expected to drive growth.

Key initiatives within the plan include accelerating technological development, strengthening global expansion, promoting environmentally responsive processes, and cultivating human capital. Through these measures, the company aims to achieve sustainable growth and has set a target of increasing revenue to ¥10 billion by FY2025.

From an expert perspective, formulating strategies with a long-term outlook is essential, along with maintaining the flexibility to respond swiftly to technological innovation and market changes. Investors should find the company attractive due to its clear vision and concrete initiatives designed to support future growth.

2. Investment Plan and Priority Initiatives

Strategic capital investment and R&D are crucial to securing Microwave Chemical’s growth. The plan places significant importance on introducing new microwave process facilities. In particular, the company plans to establish a third demonstration facility in Osaka in 2024 to accelerate the commercialization of microwave processes. Additionally, it intends to digitalize existing production lines and promote smart factory initiatives to maximize manufacturing efficiency.

Investment in research and development is positioned at the core of the growth strategy. By focusing on new material development and advancing chemical recycling technologies, the company aims to establish next-generation process technologies. Furthermore, it seeks to strengthen initiatives aligned with sustainable development goals by exploring new business opportunities through partnerships.

These strategic investments are expected not only to enhance competitiveness but also to lay a solid foundation for long-term growth. Investors should evaluate the company’s performance potential through the lens of this clear and structured investment approach.

3. New Businesses and Segment-Specific Growth Strategies

The creation of new businesses and expansion of existing operations are central pillars of Microwave Chemical’s growth strategy, with particular attention on chemical recycling and mining processes. By leveraging the “PlaWave” platform, the company aims to explore new business models and achieve diversified growth. New projects aligned with market needs include bio-oil production and metal refining, which are expected to secure additional revenue streams.

At the same time, the company seeks to promote broader adoption of microwave technology by developing new products tailored to customers’ manufacturing needs, thereby contributing to the sustainable growth of its clients. In particular, its initiatives in nanomaterials and electronic materials may have wide-ranging impacts across multiple industries.

　Such expansion into new business areas represents a cornerstone of future growth. Investors can assess long-term attractive investment opportunities by focusing on the company’s growth potential in these emerging fields.

4. Technology Standardization and the Pursuit of Carbon Neutrality

Technology standardization and the promotion of carbon neutrality play vital roles in the company’s growth strategy. By standardizing technologies, the company aims to reduce labor and costs while improving long-term profit margins and providing sustainable manufacturing processes. Its initiatives toward achieving carbon neutrality by 2050 reflect its commitment to fulfilling corporate social responsibility.

Efforts include reducing costs through in-house production of oscillators and establishing highly efficient manufacturing processes. As environmental considerations become increasingly important, the introduction and social implementation of innovative technologies will further strengthen the company’s competitive capabilities.

Investors should pay close attention to the company’s concrete measures toward sustainable growth and the performance improvements expected from these initiatives.

5. Execution Structure and Human Resource Development

Executing the growth strategy requires a robust organizational framework and the cultivation of highly skilled personnel. Microwave Chemical prioritizes securing talent with diverse technical expertise, particularly through the development of engineers who can drive technological innovation. The company plans to introduce training programs in collaboration with external experts and educational institutions to enhance employee skills.

This strengthened technical foundation is expected to reinforce the company’s competitiveness and support expansion into new business areas. Investors can evaluate positively the company’s long-term, strategic approach to talent development and equity alignment.

6. Risk Factors and Countermeasures

Identifying and appropriately addressing risk factors is essential in implementing the growth strategy. The company must prepare for various risks, including market volatility, delays in technological innovation, and talent shortages. Technological risks are particularly significant and require continuous R&D efforts and a deep understanding of customer needs to mitigate.

In addition, flexible strategies are necessary to respond swiftly to changes in the external environment. By strengthening its risk management systems, the company aims to sustain reliable operations and long-term growth.

Overall, Microwave Chemical’s strategy demonstrates broad growth potential. If successfully executed, it is well positioned to meet—and potentially exceed—investor expectations for sustained business expansion.

News & Topics

1. Business Progress and Acquisition of New Projects

Microwave Chemical Co., Ltd. has reported notable progress in its recent business activities. Of particular significance is the acquisition of new projects utilizing microwave technology. In FY2024, the company secured 24 new projects against a full-year target of 29. While slightly below plan, the total number of contracted projects reached 71 compared with the planned 61, exceeding expectations. These figures indicate that the company’s technology is well aligned with customer needs and suggest a solid foundation for continued growth.

Among the newly concluded agreements is a service contract with MiRESSO Co., Ltd. for a beryllium production demonstration project, representing an important step in proving the practical viability of microwave technology. In the mining process business, joint development with Taiheiyo Metal Co., Ltd. has progressed, resulting in the establishment of nickel ore processing technology. Such achievements are expected to increase contract volumes in the short term and provide stable revenue streams over the medium to long term.From an investor’s perspective, the increase in new projects and total contracts is likely to contribute to improved future profitability. In particular, the mining process business—one of the company’s priority areas—offers strong long-term growth potential and reflects solid progress in building a stable business foundation.

2. Promotion of Technology Standardization

Microwave Chemical is actively advancing the standardization of its technologies and business processes. Standardization is a critical initiative to maintain competitiveness and respond swiftly to customer needs. In both the chemical recycling and mining process businesses, promoting the standardization of microwave technology enables the company to provide effective solutions to diverse customer challenges.

Since 2021, the company has accumulated technical expertise through projects with more than 20 companies in the chemical recycling field. Going forward, it plans to further advance standardization by installing demonstration facilities at its Osaka site, thereby contributing to sustainable environmental policies. From an expert standpoint, technology standardization contributes to cost reduction and quality improvement, strengthening competitive advantage.

For investors, progress in standardization enhances the company’s ability to respond flexibly to market demands and build sustainable relationships with a diverse customer base—an important factor supporting long-term earnings stability.

3. Environmental Initiatives and Future Business Potential

As addressing global warming becomes increasingly urgent, Microwave Chemical aims to contribute to achieving carbon neutrality by 2050 through its microwave technology. By shifting from fossil fuel–dependent processes to electrically powered processes, the company has the potential to reduce greenhouse gas emissions significantly.

In FY2023, revenue declined 13.7% year-on-year to ¥1,608,403 thousand, while operating income increased by 39.4%, reflecting improved profitability. This improvement in operating income resulted from strengthened sales capabilities and successful project execution tailored to customer needs.

Over the medium to long term, new business development and technological innovation will be key drivers of growth, particularly through expanding the range of microwave technology applications. Experts emphasize that environmentally conscious business models align with future investment trends, and the company’s commitment to social responsibility is likely to attract support from both customers and investors.

For investors, environmental initiatives enhance growth potential and brand value. Moreover, technological development aligned with environmental policy may facilitate access to government support, creating favorable conditions for capturing future business opportunities.

4. Why Microwave Technology?

Microwave Chemical’s microwave technology achieves higher efficiency and energy savings compared with conventional chemical reaction methods. By transmitting energy directly into materials from within, it promotes more effective reactions. This technology is also highly compatible with renewable energy sources, offering significant potential to reduce environmental impact.

A particularly noteworthy application is the chemical recycling business, which aims to chemically decompose used plastics and reuse them as raw materials for new products. Experts regard this initiative as an important step toward realizing a circular economy.

For investors, the application of microwave technology is directly linked to sustainable business opportunities and future profitability. As this field is likely to gain support from both governments and markets, it is expected to offer both stability and growth potential.

5. Organizational Expansion and Talent Development

To achieve sustainable growth, Microwave Chemical recognizes the importance of securing highly specialized talent. The company is recruiting professionals from fields such as chemistry, physics, and engineering, with an emphasis on developing future project leaders. It is also revising its HR systems to create an environment that supports employee growth and skill development.

Experts note that such talent development is essential for sustainable corporate growth. In rapidly changing markets, the ability to quickly understand customer needs and provide accurate solutions strengthens competitiveness. The presence of highly skilled personnel also facilitates the smooth execution of advanced projects.

From an investor’s perspective, securing and nurturing high-quality talent is fundamental to maintaining competitive advantage and building a long-term growth foundation, making this initiative worthy of close attention.

6. Management Challenges and Risk Awareness

Microwave Chemical faces several management challenges as it seeks to stabilize performance. Accelerating new business development and associated technological innovation is a key priority. At the same time, appropriately managing customer concentration and diversifying risk are essential. Experts caution that excessive reliance on specific clients may lead to long-term earnings instability.

The company must also respond flexibly to changes in environmental policies and intensifying market competition. As microwave technology becomes increasingly standardized and commercialized, establishing a system capable of adapting to growing demand for sustainability-oriented products is an urgent priority.

For investors, awareness of management challenges and risks is an important consideration. Sustainable success requires not only recognizing these issues but also implementing concrete plans to address them, and monitoring progress will be essential.

7. Outlook and Growth Opportunities for the Next Fiscal Year

Looking ahead, Microwave Chemical is exploring new growth opportunities for the coming fiscal year. The company intends to enhance performance by expanding microwave-based businesses and securing new projects. Despite changing market conditions, heightened environmental awareness and expectations for technological innovation support prospects for growth.

The company is also deepening partnerships with customers and exploring new markets to achieve sustainable growth. As environmental considerations become increasingly important, products and services utilizing microwave technology may further strengthen its competitive position.

Over the medium to long term, these initiatives are expected to improve profitability, making them highly relevant for investors. Ultimately, the company may enhance its credibility and reputation as a contributor to a sustainable society, warranting continued close attention to its future developments.

Company Overview

1. Basic Corporate Information

Microwave Chemical Co., Ltd. was established in 2007 and is headquartered in Suita City, Osaka Prefecture. President and CEO Iwao Yoshino, drawing on his extensive experience at Mitsui & Co., is leading the development of new manufacturing processes centered on microwave technology. The company proposes environmentally conscious chemical processes in the fields of pharmaceuticals, food, environment, and electronic materials, with a particular focus on introducing non-fluorinated technologies.

The company currently has 49 employees, including seven Ph.D. holders, reflecting a high level of technical expertise. Its headquarters, located in the Photonics Center, serves as an important hub for industry–government–academia collaboration, supporting the provision of products and services that contribute to a sustainable society.

Such a foundation provides investors with indicators of future potential. In particular, the concentration of highly specialized talent and the possession of technologies that reduce environmental impact suggest strong prospects for sustainable growth.

2. History and Key Milestones

The company’s journey began in 2007 when it was founded in August under the name Microwave Environmental Chemistry Co., Ltd. In 2008, it relocated its headquarters to Suita City and advanced R&D activities at the Bio-Innovation Center. In 2011, the company changed its name to its current one and secured its core patents, marking an important step in demonstrating its technological capabilities. In the same year, it began shipping its first product, fatty acid esters.

In 2014, it completed a manufacturing plant with an annual production capacity of 3,000 tons, significantly enhancing its production capabilities and strengthening its business foundation.

Subsequently, in 2017, the company entered into a business alliance with Mitsui Chemicals, Inc.. In 2022, it was listed on the Growth Market of the Tokyo Stock Exchange, continuing its corporate expansion. In 2024, it plans to complete a new demonstration facility. These milestones represent steady steps toward the commercialization of microwave technology and the provision of sustainable chemical products.

Such achievements reinforce the company’s credibility and technological strength, forming the foundation for future growth. For investors, this track record is an important indicator of corporate sustainability and continued development potential.

3. Organizational Structure and Management Characteristics

The organization is composed of professionals with diverse backgrounds. President and CEO Iwao Yoshino has guided the company with a strategic vision. Meanwhile, Director and CSO Yasunori Tsukahara leverages his experience as a researcher at Osaka University to drive R&D in microwave processes. The combined expertise of the management team provides a solid foundation supporting both technological advancement and business strategy.

With 49 employees across a broad age range, the company recruits diverse talent aligned with its target industries. Harmonious labor relations are another notable feature, fostering a corporate culture that supports continued growth. The company is also committed to developing personnel with specialized expertise in microwave technology, thereby enhancing overall competitiveness.

Such an organizational structure enables rapid adaptation to changing market needs and contributes significantly to enhancing corporate value from an investor perspective.

4. Business Activities and Market Expansion

5. Research & Development and Technological Innovation

The company places strong emphasis on technological innovation through research and development. By advancing chemical reaction processes utilizing microwaves, it aims to simultaneously reduce energy costs and carbon dioxide emissions. In particular, it focuses on chemical recycling technologies and the development of new materials, seeking to move beyond conventional methods.

By broadening the application scope of microwave technology, the company is also actively promoting external projects. This approach has the potential to enhance market competitiveness while contributing to environmental problem-solving. Technological innovation is central to building a sustainable business model and underpins expectations for long-term growth.

Further expansion of microwave technology applications in future R&D efforts may open new revenue opportunities for investors, strengthening the company’s long-term reliability.

6. ESG and Sustainability Initiatives

Microwave Chemical is committed to environmental, social, and governance (ESG) principles, working toward the realization of a sustainable society. Its microwave-based chemical processes are evolving to reduce environmental impact while enabling efficient manufacturing. Proposing ecological processes based on client needs also enhances customer satisfaction.

As sustainability becomes increasingly important in the corporate landscape, the company views ESG initiatives as a key factor in strengthening competitiveness. For investors, the company’s commitment to environmental responsibility and transparency enhances credibility and trustworthiness.

This strong emphasis on sustainability serves as a cornerstone for building a resilient corporate foundation capable of adapting to future market changes.

7. Future Outlook

To sustain corporate growth, Microwave Chemical must further strengthen its existing business foundation while responding flexibly to future market needs. Continued technological innovation, the creation of new business models, and the promotion of alliances with other companies will be essential strategies for achieving sustainable growth.

As environmental awareness rises in the marketplace, demand for the company’s solutions is expected to increase. Expanding the application fields of microwave technology will not only broaden business opportunities but may also generate new sources of profit for investors.

In this way, Microwave Chemical is expected to continue fulfilling its role as a company contributing to a sustainable society while pursuing diverse growth scenarios. Investors should closely monitor its development and make informed decisions accordingly.

Building upon its historical foundation, technological innovation, and established market position, the company is anticipated to continue management initiatives aimed at future growth.

Shareholder Returns

1. Dividend Policy and Track Record

Microwave Chemical Co., Ltd. maintains a highly cautious stance toward shareholder returns. According to the latest information, the company has not paid dividends since its establishment. This policy reflects its priority on upfront investment in research and development. The development of new manufacturing processes and products based on microwave technology requires substantial capital, and the company believes that reinvesting profits contributes to sustainable long-term growth.

While the possibility of dividends may be considered flexibly depending on the external environment and financial conditions, no decision has been made at this time. This approach reflects the characteristics of a growth-oriented emerging company and can be viewed as a strategy focused on long-term expansion.

The company seeks to balance investor expectations with profit allocation while maintaining transparency in management. It holds a strong conviction that building a solid business foundation through growth should take precedence before implementing shareholder returns. In this sense, the current emphasis on R&D investment can be interpreted as laying the groundwork for potential future dividends. The key question is how the foundation being built today will contribute to shareholder returns in the future.

2. Share Repurchases and Their Impact

Share buybacks are widely recognized as a means of returning value to shareholders. Although Microwave Chemical has not resolved to implement a share repurchase program at present, it remains a potential future option. Repurchasing treasury shares reduces the supply of outstanding shares and can enhance the value of remaining shareholders’ equity.

By buying back shares, earnings per share may improve, potentially leading to a higher stock price. Increased scarcity of shares can also strengthen investor support. Moreover, share repurchases may signal a positive outlook regarding capital structure optimization and effective use of surplus funds. They can indicate management confidence in growth strategies and future business prospects.

If the company’s financial position and cash flow improve, share repurchases could become a viable shareholder return measure. Demonstrating financial soundness may contribute to stock price appreciation and support stable growth as part of a broader shareholder return strategy.

3. Evaluation of the Current Shareholder Return Policy

The company’s shareholder return policy is grounded in prioritizing R&D investment, resulting in the absence of dividends to date. While this approach is often considered reasonable for growth-stage companies, it may also conflict with certain shareholder expectations. Investors typically value short-term returns, making transparent communication about the absence of dividends essential.

However, refraining from dividends does not justify disengagement from shareholders. The company must strengthen communication and clearly explain why profits are retained internally and how this supports long-term growth. Presenting a concrete growth strategy and future vision is critical to maintaining investor confidence.

Depending on future performance and economic conditions, revisions to or the introduction of a dividend policy may be anticipated. Maintaining fairness and transparency based on past performance will be a key factor in positively evaluating the company’s shareholder return policy.

4. Importance of Retained Earnings and Capital Policy

Retained earnings play a vital role in corporate growth strategies. At Microwave Chemical, priority is placed on forward-looking investments such as R&D and capital expenditures. However, this policy carries risks. If dividends are not paid over an extended period, shareholders may perceive that their expectations are unmet.

Therefore, the company must strike an appropriate balance between growth investment and shareholder returns. Strengthening shareholder return measures can enhance corporate valuation in capital markets. Companies with strong performance records can gain investor trust and potentially reduce capital costs.

By effectively utilizing retained earnings while demonstrating a commitment to shareholder returns, the company can execute its growth strategy more smoothly and secure stable funding through strengthened investor confidence.

5. Potential and Significance of Interim Dividends

As a basic policy, the company adopts an annual year-end dividend framework; however, its articles of incorporation allow for the payment of interim dividends. This provides flexibility in capital strategy depending on business performance.

The implementation of interim dividends could serve as an effective way to demonstrate growth to investors and strengthen trust. To achieve this, the company must present clear financial data and performance analyses to enhance investor understanding.

A transparent dividend policy aligned with a consistent growth strategy is essential for earning shareholder trust. Microwave Chemical will need to make continued efforts to realize such alignment.

6. Shareholder Expectations and Corporate Responsibility

Shareholders are highly interested in both corporate growth and short-term returns. While Microwave Chemical prioritizes research and development, shareholder return policies remain an important consideration. When profits are generated, returning a portion to shareholders helps build trust. Management must carefully balance growth objectives with shareholder return considerations.

Clear communication is essential to explain why dividends are not currently paid and how this decision aligns with long-term strategy. By articulating its growth vision and rationale transparently, the company can reduce the risk of disappointing shareholders and strengthen credibility.

Future growth strategies will inevitably influence investor decision-making, making this an area requiring ongoing attention.

7. Medium- to Long-Term Outlook on Shareholder Return Measures

Shareholder returns are not a one-time initiative but a fundamental element of corporate management. In the future, Microwave Chemical may review its dividend policy and integrate profit distribution more explicitly into its growth strategy, thereby strengthening trust with shareholders.

If economic conditions improve and corporate performance advances, the resumption or initiation of dividends may be expected. Such actions would signal management’s recognition of the importance of shareholder returns.

This perspective can serve as a driving force for sustainable growth, particularly for a company that places strong emphasis on R&D. By establishing a framework capable of meeting shareholder expectations, further enhancement of corporate value can be anticipated.

Currently, while the company’s shareholder return policy is designed to support sustainable growth, calls for a more flexible review of dividend policies in response to performance and market conditions are likely to increase. As discussed in this chapter—from dividends and share buybacks to retained earnings and shareholder communication—effectively integrating these elements into future management strategy will be essential for maximizing shareholder value.

Investment Risks

1. Factors Causing Earnings Volatility

The revenues of Microwave Chemical Co., Ltd. depend primarily on joint development agreements and licensing contracts with customers. As a result, the terms of these contracts and the business conditions of customers have a significant impact on performance. In particular, the timing of contract inspections and acceptances can be unpredictable, leading to fluctuations in reported earnings. Customers’ R&D budget allocations and management policies are directly linked to the company’s revenue structure, and changes in the competitive market environment may also have an impact.

Commercialization of microwave processes requires a long lead time, and delays in orders or technical evaluations by customers may occur. Therefore, there is always a risk of revenue decline due to external demand conditions or competitive pressures. In addition, fluctuations in raw material prices cannot be overlooked. The chemical industry is sensitive to raw material costs, and rising energy prices in particular may compress profit margins.

Investors should carefully consider these sources of earnings volatility, paying close attention to order trends and customer developments. Proper risk assessment is essential for evaluating the stability of the company’s revenue base.

2. Industry-Specific Risks

The chemical industry faces inherent risks such as environmental regulations, raw material supply shortages, and intense market competition. As environmental policies evolve, companies are required to respond accordingly, and this presents challenges for Microwave Chemical as well.

Stricter requirements for reducing greenhouse gas emissions may require significant time and cost for customers to transition from conventional chemical processes to microwave-based processes. In addition, unstable raw material supply conditions may create manufacturing risks, especially if dependence on certain suppliers is high.

Rapid technological advancements can also reshape the competitive landscape. If new entrants or existing competitors introduce alternative technologies, customer interest in microwave processes may decline. Continuous technological development and careful analysis of market needs are therefore essential.

Understanding these industry-specific risks and formulating appropriate strategies are critical for sustainable corporate growth. Investors should also analyze industry trends carefully and consider investing in companies capable of contributing to sustainable development.

3. Financial and Management Risks

Microwave Chemical faces financial risks related to funding stability and management transparency. R&D expenditures are substantial, and stable financing is directly linked to corporate survival. Sustainable capital policies are therefore essential. Changes in economic conditions and interest rates may affect fundraising capabilities and threaten financial soundness.

Management transparency is another important issue. An organizational structure that relies heavily on specific executives increases the risk of instability in the event of leadership changes or unforeseen circumstances. Ensuring transparency and establishing a robust governance framework are indispensable for maintaining investor trust.

Dependence on specific customers also heightens risk sensitivity, making diversification of the customer portfolio an important strategic priority.

Understanding these financial and managerial risks and strengthening risk management systems are essential for achieving sustainable growth. Investors should carefully evaluate capital management practices and the level of management transparency when making investment decisions.

4. Risks Associated with Technological Innovation

The company’s core strength—its microwave process—also entails technological uncertainty. If the technology fails to gain widespread market acceptance, the company may not achieve anticipated revenues. Limited verification data may also delay the acquisition of new customers, and entry into new industrial fields may introduce additional uncertainty.

To keep pace with rapid technological evolution, the company must continuously monitor the competitive environment and maintain flexible adaptability. Intellectual property risks are also significant. Should other companies assert patent infringement claims, the impact on business operations could be substantial. Strategic management of intellectual property is therefore essential.

Investors should evaluate the company’s technological development strategy and associated risks, carefully analyzing technological maturity and market adaptability to assess long-term growth potential.

5. Environmental and Regulatory Compliance Risks

Operating in an environment of increasingly stringent environmental regulations, Microwave Chemical may face risks arising from new laws and regulatory changes. Failure to adapt to manufacturing-related environmental regulations could result in operational restrictions or increased costs, potentially affecting overall financial performance.

The ability to understand and comply with legal requirements is essential to future management strategy. Investors should assess whether the company has established an appropriate compliance framework and how effectively it responds to regulatory developments.

Risk management related to environmental factors is closely linked to ESG (Environmental, Social, and Governance) initiatives and represents an important consideration in investment decisions. Companies that prioritize environmental impact reduction and sustainable growth are expected to maintain advantages in regulatory compliance over the long term.

6. Organizational and Human Resource Risks

With a relatively small team, Microwave Chemical relies heavily on certain key personnel. Changes involving executives or critical positions could significantly affect corporate strategy and operational efficiency. As the organization grows, appropriate recruitment and talent development will become increasingly important. Strengthening employee expertise and leadership capabilities is essential.

For investors, evaluating the stability of organizational capabilities and leadership—and their contribution to future growth and sustainability—is crucial. Consideration should also be given to the risk of talent outflow and the availability of suitable successors from a long-term human resource strategy perspective.

 7. Revenue Recognition Volatility

Because a significant portion of the company’s revenue derives from joint development contracts, the timing and amount of revenue recognition can be unstable. Large project orders and specific contract terms may cause substantial quarterly fluctuations in financial results. This instability in revenue recognition could negatively affect financial performance and shareholder value.

Investors should closely examine contract execution status and customer stability, analyzing the factors behind revenue fluctuations. Attention to market conditions and the progress of joint development projects is essential for understanding potential risks and making informed investment decisions.


A comprehensive assessment of these risks is critical for evaluating the company’s strategy to achieve sustainable growth. Flexible responses to economic and market changes, combined with systematic risk management, are essential.

By clearly understanding the range of risk factors, investors can make more informed decisions. Strengthening adaptability and risk management capabilities is expected to contribute to maintaining and enhancing corporate value over the long term.