Kawasaki Chishitsu <4673> is a geological survey company that engages in natural disaster and disaster prevention-related business, infrastructure maintenance business, renewable energy business, and ocean resource development and defense force development business, etc.

There are hundreds of geological survey companies nationwide, including small-scale companies. In terms of construction consultant business, such as stability problems of earth structures such as slopes and river embankments, that require diverse and comprehensive geological surveys, Kawasaki Chishitsu <4673>, along with other industry leaders such as Oyo Chishitsu <9755> and Kiso Jiban Consultants, have extensive knowledge. Among them, Kawasaki Chishitsu <4673>, with a long history since its establishment in 1943, has a large share of geological survey business. Furthermore, it has a specialized department in marine surveys and has a proven track record in marine survey businesses for the Ministry of Land, Infrastructure, Transport and Tourism, the Ministry of Economy, Trade and Industry, and the Japan Coast Guard, for example. It has a competitive advantage in being able to carry out geological surveys from land to sea. Additionally, using specialized technology in ground-penetrating radar surveys, it is engaged in businesses that contribute to preventive maintenance management by identifying anomalies deep in sewers and other structures.

Sales in the first half of the 2022 fiscal year was 450.9 million yen, up 5.7% from the same period in the previous year, with an operating profit of 269 million yen, up 77.2% from the same period. In addition to focusing on preventive maintenance business such as inspection and diagnosis, it undertakes various businesses such as natural disaster and disaster prevention-related businesses, including the promotion of national land resilience, infrastructure maintenance business such as road and sewer maintenance and management, renewable energy, and ocean resource development. As a result, the order amount increased to 789.3 million yen (up 24.8% from the same period). As their transactions are highly concentrated in public sectors such as government agencies and public enterprises, their sales and profits are concentrated in the second and fourth quarters due to seasonal factors. When compared to public agencies and private companies, it seems that the ratio of customers is evenly split between the two. The full-year sales are expected to increase by 0.8%, to 930 million yen from the previous year, and operating profit is expected to triple to 390 million yen.

As for the industry structure, there is intense competition for contracts, and there is a tendency for lower profitability compared to other industries due to factors such as the impact of weather and the burden of accident and trouble avoidance in field work. However, with the government's promotion of national land resilience plans, the market environment surrounding public works is favorable. The defense budget is also on the rise, and it is expected that there will be an increase in requests for surveys from the Ministry of Defense, such as surveys on the aging and seismic reinforcement of airports and military bases. In addition, there is an increasing demand for geological surveys related to offshore wind power in the renewable energy field, and geological surveys are closely related to nuclear power generation. Furthermore, natural disasters cannot be avoided in Japan, and demand for disaster prevention and reduction-related businesses will continue. Moreover, for several years, the company has been actively increasing the proportion of profitable design consulting businesses, and there is a possibility of long-term improvement in profitability. We should pay attention to the future trends of Kawasaki Chishitsu <4673>, which has been involved in geological surveys since its founding and has seen a recovery in its stock price along with its performance.