KATO Works Decides to Sell Full Stake in China Subsidiary

TOKYO, Jul 10 (Pulse News Wire) – Kato Works CO.,LTD. (6390.T) announced today that it has decided to sell its entire stake in its subsidiary, Katō Zhongjun (Xiamen) Construction Machinery Co., Ltd., effective October 2026.

The decision follows discussions with a domestic Chinese firm, which led to an agreement on conditions for the sale. Katō Zhongjun (Xiamen) Construction Machinery, established October 22, 2004, manufactures and sells hydraulic excavators and parts. As of March 31, 2026, the subsidiary had total assets of ¥3.357 billion, capital of 30 million yuan, and reported operating profit of ¥143 million for the fiscal year ending December 2025. The company's major shareholder is KATO WORKS with a holding ratio of 100%. Details of the buyer remain confidential due to a non-disclosure agreement.

However, KATO WORKS confirmed that the buyer is a reputable private enterprise without existing capital, human, or transactional ties to the parent company. The transfer price will also remain undisclosed but was agreed upon through mutual negotiations and deemed fair by KATO WORKS. Regarding future implications, KATO WORKS noted that the anticipated gain from the share transfer is not included in its forecast for the fiscal year ending March 2027. Any necessary adjustments to the earnings outlook will be disclosed promptly once determined. Additionally, the company continues to support local customers and suppliers in Kunshan and Xiamen through liaison offices opened in April 2025.