| Metric | Current Period | Prior Period | YoY |
|---|---|---|---|
| Revenue | ¥903.9B | ¥814.1B | +11.0% |
| Operating Income | ¥30.2B | ¥28.1B | +7.6% |
| Equity-method Investment Gains/Losses | - | - | - |
| Ordinary Income | ¥30.6B | ¥28.4B | +7.9% |
| Net Income | ¥20.4B | ¥20.6B | -1.0% |
| ROE | 8.7% | 8.5% | - |
For the fiscal year ended March 2026, Revenue was ¥903.9B (YoY +¥89.8B +11.0%), Operating Income ¥30.2B (YoY +¥2.1B +7.6%), Ordinary Income ¥30.6B (YoY +¥2.2B +7.9%), and Net income attributable to owners of the parent ¥20.4B (YoY -¥0.2B -1.0%). The company maintained a top- and bottom-line growth trend, but Net Income declined slightly due to higher tax burden. Gross profit margin was 11.8% (down 36bp YoY), but SG&A ratio was contained at 8.5% (improved 26bp YoY), securing an Operating margin of 3.3%. Sales to the two major customers totaled ¥220.8B, accounting for 24.4% of total revenue, capturing demand from domestic hospital equipment renewal.
[Revenue] Revenue was ¥903.9B, up +11.0% YoY, achieving double-digit growth. Sales to two major customers (FS Uni Management ¥113.5B, M.C. Healthcare ¥107.3B) increased +11.6% and +10.2% YoY respectively, driving overall growth. Domestic hospital CAPEX cycles were a tailwind, expanding demand for high-priced medical equipment, consumables, and maintenance services. Regionally, sales were only domestic with no overseas operations, indicating high concentration in the Japanese market.
[Profitability] Cost of sales was ¥797.3B (YoY +11.5%), gross profit was ¥106.6B (YoY +7.7%), with gross margin 11.8% (down from 12.2% a year earlier, -36bp). This was likely affected by price competition and product mix changes (fluctuation in high-priced equipment share). SG&A was ¥76.4B (YoY +7.9%), SG&A ratio improved to 8.5% (from 8.7% a year earlier, -26bp), with increases controlled mainly in salaries and allowances ¥33.3B (YoY +6.1%). Operating Income was ¥30.2B (YoY +7.6%), with Operating margin at 3.3%, a limited decline of 11bp from 3.4% a year earlier. Non-operating income was ¥0.6B (mainly interest income ¥0.5B) and non-operating expenses ¥0.2B, both minor, resulting in Ordinary Income ¥30.6B (YoY +7.9%). Extraordinary gains were ¥0.4B (gains on sale of investment securities, etc.), extraordinary losses ¥0.1B (losses on disposal of fixed assets, etc.), netting +¥0.2B, so one-off impacts were limited. Profit before tax was ¥30.8B (YoY +7.7%), corporate taxes ¥9.7B (effective tax rate 31.3%), yielding Net Income ¥20.4B (YoY -1.0%). Corporate taxes increased ¥1.2B YoY and the higher tax rate was the reason for the slight decline in Net Income. In conclusion, the company finished with higher revenue and income, but the fall in gross margin pressured profitability, and SG&A containment preserved Operating Income growth.
[Profitability] Gross profit margin 11.8% (prior 12.2%, -36bp), Operating margin 3.3% (prior 3.4%, -11bp), Ordinary Income margin 3.4% (prior 3.5%, -11bp), Net margin 2.3% (prior 2.5%, -27bp) — slight deterioration across stages. ROE 8.7% (prior 8.5%, +0.2pt) was maintained due to improved total asset turnover despite lower Net margin. SG&A ratio improved to 8.5% (prior 8.7%, -26bp), contributing to defending Operating Income. [Cash Quality] Operating Cash Flow (OCF) ¥29.3B is 1.4x the Net Income, indicating good cash generation. OCF/EBITDA ratio was 0.88x (EBITDA = Operating Income ¥30.2B + Depreciation ¥3.0B = ¥33.2B), slightly below the 0.9x benchmark, with working capital increases (Accounts receivable +¥18.8B, Inventories +¥5.0B) constraining cash conversion. Accrual ratio -1.6% ((OCF - Net Income)/Revenue) is low, indicating generally healthy earnings quality. [Investment Efficiency] Total asset turnover 1.79x (Revenue ¥903.9B / Total assets ¥506.3B) shows good efficiency. Capital expenditures ¥2.3B were 0.76x of depreciation ¥3.0B, indicating mainly maintenance investments. Goodwill rose to ¥5.8B (+¥5.0B YoY, +566.5%) reflecting M&A activity; goodwill/EBITDA ratio 0.18x indicates low impairment risk. [Financial Soundness] Equity Ratio 46.0% (prior 51.6%, -5.6pt) declined due to asset growth and share buybacks but remains healthy. Current ratio 169.8% (Current assets ¥428.6B / Current liabilities ¥252.5B), Quick ratio 154.2% ((Current assets - Inventories) ¥389.4B / Current liabilities ¥252.5B) indicate solid short-term liquidity. Cash and deposits ¥159.3B provide ample cushion against short-term liabilities. Interest-bearing debt is minimal (lease liabilities approx. ¥7.1B), effectively net cash management.
OCF was ¥29.3B, a large increase of +42.4% YoY. Starting from profit before tax ¥30.8B, adding non-cash items (Depreciation ¥3.0B, goodwill amortization, etc.) yielded subtotal OCF ¥38.0B. In working capital, Accounts receivable increased ¥18.8B absorbing cash, Inventories increased ¥5.0B also a negative contribution, while Accounts payable increased ¥21.7B generating cash; overall working capital made a small positive contribution. After deducting tax payments ¥9.2B, OCF settled at ¥29.3B. Investing cash flow was -¥1.3B: capital expenditures ¥2.3B were almost offset by proceeds from sale of fixed assets ¥1.3B and sale of investment securities ¥6.7B, resulting in net small outflow. Acquisition of subsidiary shares ¥8.5B and purchase of investment securities ¥20.0B were negative contributors but limited in scale. Free Cash Flow was ¥28.0B and remained robust. Financing cash flow was -¥30.8B, with dividends ¥14.9B and share buybacks ¥14.4B totaling shareholder returns ¥29.3B, slightly exceeding FCF. As a result, cash and cash equivalents ended at ¥109.3B, down ¥2.8B YoY. Days Sales Outstanding (DSO) is approximately 75 days (Accounts receivable ¥185.3B / Revenue ¥903.9B × 365), relatively long, indicating significant scope to improve OCF/EBITDA via stronger collections.
Non-operating income ¥0.6B (0.07% of Revenue) and extraordinary gains ¥0.4B (0.04%) indicate limited contribution from one-off items; Net Income ¥20.4B largely reflects operating performance. Main component of non-operating income was interest income ¥0.5B, a recurring financial revenue; non-operating expenses ¥0.2B were minor, so divergence between Ordinary Income and Operating Income was limited. Net extraordinary items +¥0.2B comprised gains on sale of investment securities ¥0.4B and losses on disposal of fixed assets ¥0.02B, affecting pre-tax profit by less than 1%. The gap between Ordinary Income ¥30.6B and Net Income ¥20.4B is explained by the effective tax rate 31.3%; no anomalies observed. Accrual ratio -1.6% indicates OCF ¥29.3B exceeded Net Income ¥20.4B, suggesting cash-led earnings recognition. OCF/Net Income ratio of 1.4x denotes high-quality earnings, though OCF/EBITDA 0.88x slightly under the 0.9x benchmark due to working capital build-up restricting cash conversion. Overall, earnings are driven by recurring operations and quality is stable; one-offs are minor, but improving working capital efficiency is key to strengthening next-period cash generation.
Full Year plan: Revenue ¥1,000.0B (YoY +10.6%), Operating Income ¥33.5B (YoY +10.9%), Ordinary Income ¥33.8B (YoY +10.4%), Net Income attributable to owners of the parent ¥22.1B (EPS forecast ¥80.37), expecting revenue and income growth. Implied Operating margin ~3.35%, roughly flat from current 3.3%, indicating volume-driven growth rather than margin expansion. The plan assumes incremental Revenue +¥96.1B and Operating Income +¥3.3B YoY, with gross margin and SG&A ratio maintained. Continued expansion of sales to the two major customers and domestic hospital CAPEX demand are growth drivers. Achievement rates against current-period results are 90.4% for Revenue and 90.1% for Operating Income, indicating steady progress, but revenue recognition in H2 and working capital management are key to hitting targets.
Year-end dividend is ¥54, with Payout Ratio 73.8% (Total dividends ¥14.9B / Net Income attributable to owners of the parent ¥20.4B × 100). Free Cash Flow ¥28.0B (OCF ¥29.3B minus Investing CF ¥1.3B) covers dividends ¥14.9B by 1.9x, indicating high sustainability of dividends. Share buybacks of ¥14.4B were executed; combined dividends and buybacks total shareholder returns ¥29.3B, slightly above FCF. Total Return Ratio is about 104.7% (Total returns ¥29.3B / FCF ¥28.0B × 100), reflecting an aggressive capital return policy. While maintaining Equity Ratio 46.0% at a healthy level, the company strengthens shareholder returns via both dividends and buybacks. Average shares outstanding during the period were 27,879 thousand shares, slightly reduced YoY, showing dilution mitigation from buybacks. If guidance-led earnings growth expands FCF, the sustainability of total returns is likely; however, expansion of working capital or further gross margin decline could necessitate adjustment to the pace of total returns.
Declining gross margin trend and price competition risk: Gross profit margin is 11.8%, down 36bp YoY. Price competition and product mix shifts (variation in high-priced equipment ratio) appear to be main causes, and continued competitive pressure or stronger customer bargaining power could further compress gross margins. With Operating margin at a low 3.3%, further gross margin deterioration would increase downside rigidity for profit growth. Managing product mix and expanding value-added services (maintenance, consumables) are key defensive measures.
Revenue concentration risk to two major customers and credit risk management: Sales to the two major customers account for 24.4% of total revenue; changes in purchasing terms or trading policies could significantly impact performance. Accounts receivable ¥185.3B and DSO ~75 days are long; collection delays or defaults could materially affect liquidity. Revising contract terms and strengthening credit control to shorten collection periods are necessary.
Working capital build-up and liquidity efficiency risk: Accounts receivable increased ¥18.8B and inventories ¥5.0B, with OCF/EBITDA 0.88x below the 0.9x benchmark. Extended inventory days or inventory obsolescence risk may generate impairment losses and harm both profitability and cash generation. Improving inventory turnover and accelerating receivables collection are essential to improve capital efficiency.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating margin | 3.3% | 3.4% (1.4%–5.0%) | -0.0pt |
| Net margin | 2.3% | 2.3% (1.0%–4.6%) | -0.0pt |
Profitability is roughly in line with the industry median; margins are standard for a medical device trading company.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue growth (YoY) | 11.0% | 5.9% (0.4%–10.7%) | +5.1pt |
Revenue growth outpaces the industry median by 5.1pt, and capturing domestic hospital CAPEX demand puts the company in the upper tier of the industry in growth pace.
※ Source: Company aggregation
Continued top- and bottom-line growth and room to improve working capital efficiency: Revenue +11.0% and Operating Income +7.6% delivered double-digit growth, with similar growth planned for the next fiscal year. Gross margin softness stems from price competition and product mix changes, but SG&A ratio improvement defended Operating Income. With DSO ~75 days and OCF/EBITDA 0.88x, there is substantial scope to improve working capital; successful collection strengthening and inventory turnover improvement could lead to upside in both cash generation and profit growth. Continued expansion of sales to the two major customers and stable demand in the domestic medical device market underpin growth.
Enhanced shareholder returns and balance in capital allocation: Payout Ratio 73.8% supports stable dividends, and share buybacks ¥14.4B make total return ratio ~104.7%, indicating proactive shareholder returns. Free Cash Flow ¥28.0B covers dividend payments 1.9x, but total returns slightly exceeding FCF warrants attention to investment flexibility. With Equity Ratio 46.0% maintained, sustainable total returns are expected if future profit growth and cash generation improve.
This report was automatically generated by AI analyzing XBRL financial statement data and is a financial analysis document. It does not constitute a recommendation to invest in specific securities. Industry benchmarks are reference information aggregated by the company based on public financial statements. Investment decisions are your own responsibility; consult professional advisors as necessary before making investment decisions.