Amvis Holdings,Inc. FY2026 Q3 Earnings Report

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Executive Summary

Despite higher revenue, operating income declined due to rising costs, making the decline in profit margins the most important issue this fiscal period. Revenue increased to ¥38.29B (+5.3% YoY), while operating income declined to ¥3.62B (-22.9%), ordinary income to ¥3.68B (-23.9%), and net income to ¥2.49B (-17.1%). Deteriorating profitability due to rising costs in the core Ichishinkan segment pushed down the Company-wide profit margin, and this could not be fully offset by the expansion of the highly profitable Comprehensive Medical Support segment.

Factors Affecting Performance

【Revenue】Revenue increased 5.3% YoY to ¥38.29B. While the Ichishinkan segment maintained its underlying growth at ¥37.39B (97.7% composition ratio, +3.9%), Comprehensive Medical Support achieved strong growth at ¥0.90B (2.3% composition ratio, +131.2%), indicating progress in diversifying the business portfolio.

【Profit and Loss】Operating income declined substantially by 22.9% YoY to ¥3.62B. The gross profit margin fell to 26.5% from 30.9% in the previous year, a decline of approximately 4.4pt, with rising costs being the primary cause of the decline in earnings. SG&A expenses were contained at ¥6.53B, broadly in line with the previous year, indicating that cost increases primarily occurred on the cost-of-sales side. Ordinary income declined 23.9% YoY to ¥3.68B. Of ¥0.61B in non-operating income, ¥0.47B was subsidy income, which provided support; this should be noted as a non-recurring factor. Net income declined 17.1% YoY to ¥2.49B, with an effective tax rate of approximately 32.8%. Extraordinary items were limited, comprising extraordinary income of ¥0.03B and extraordinary losses of ¥0.01B, and had a limited impact on current-period earnings. In conclusion, the Company recorded higher revenue but lower earnings this fiscal period.

Segment Analysis

The Ichishinkan segment generated revenue of ¥37.39B (+3.9%) and operating income of ¥3.02B (-33.8%), with its profit margin declining substantially to 8.1%. Comprehensive Medical Support generated revenue of ¥0.90B (+131.2%) and operating income of ¥0.60B (+357.3%), demonstrating extremely high profitability with a 66.8% profit margin. However, its revenue composition ratio remained limited at 2.3%, and its contribution to boosting Company-wide earnings was therefore limited. The profit-margin gap between the two segments is substantial, and Company-wide profitability is highly dependent on cost trends in Ichishinkan.

Key Financial Indicators

【Profitability】The operating profit margin was 9.5%, down approximately 3.4pt from 12.9% in the previous year, while the net profit margin also declined to 6.5% from 8.2%, a decrease of approximately 1.7pt. The gross profit margin narrowed by approximately 4.4pt to 26.5% from 30.9% in the previous year, making it the primary cause of the deterioration in profitability.【Cash Quality】Cash and deposits declined substantially to ¥3.27B from ¥10.83B in the previous year, while accounts receivable remained broadly flat at ¥9.07B.【Investment Efficiency】ROE was 6.4%, and the equity ratio improved to 49.1% from 43.0% in the previous year, indicating a strengthening financial base. Basic EPS was ¥25.41, down 17.3% from ¥30.73 in the previous year.【Financial Soundness】Fixed liabilities were ¥28.85B, and long-term borrowings were ¥18.55B. Property, plant and equipment totaled ¥59.64B, accounting for 75.9% of total assets, resulting in a highly capital-intensive financial structure.

Cash Flow Analysis

Although the cash flow statement has not been directly disclosed, changes in the balance sheet indicate shifts in funding trends. Cash and deposits declined substantially to ¥3.27B from ¥10.83B in the previous year, while buildings and structures increased 35.4% YoY, suggesting that the primary use of funds was investment in facilities. Treasury shares were substantially unwound year on year (from -¥0.75B to -¥0.005B), and shareholder capital transactions may also have contributed to cash outflows. Accounts receivable remained broadly flat at ¥9.07B, with no sharp deterioration in working capital observed; however, normalization of the collection cycle will be an important point to monitor in terms of future liquidity management.

Quality of Earnings

The recurring source of earnings was operating income of ¥3.62B from the Ichishinkan and Comprehensive Medical Support segments, while temporary items remained limited, comprising extraordinary income of ¥0.03B and extraordinary losses of ¥0.01B. However, subsidy income accounted for ¥0.47B of ¥0.61B in non-operating income, and attention should be paid to the fact that non-core factors boosted ordinary income. Interest expense of ¥0.50B constituted the major component of non-operating expenses, resulting in an ordinary income margin of 9.6%. The gap between net income and ordinary income was primarily attributable to the tax burden, with an effective tax rate of approximately 32.8%. No major abnormalities were observed from an accrual perspective, although the recurrence of subsidy income may be limited.

Earnings Forecast and Guidance

Progress against the full-year plan was 74.1% for revenue, broadly in line with the standard Q3 seasonal progress rate of 75%, while progress for operating income, ordinary income, and net income was 95.3%, 111.6%, and 118.3%, respectively, substantially exceeding standard progress levels. The full-year forecasts of operating income of ¥3.80B (-38.3% YoY) and ordinary income of ¥3.30B (-48.0% YoY) indicate that substantial earnings declines had already been incorporated into the initial plan. The high progress rates may reflect contributions from subsidy income and improved profitability in Comprehensive Medical Support; however, if new facility openings and personnel assignments are brought forward toward the fiscal year-end, profit margins may be adjusted by higher expenses.

Shareholder Returns

The Company paid no interim dividend, and the full-year dividend forecast is ¥4 per share. The payout ratio against forecast EPS of ¥21.53 is approximately 18.6%, indicating a conservative shareholder return policy relative to the earnings level. Given the financial structure, including an equity ratio of 49.1% and long-term borrowings of ¥18.55B, the Company appears to have some capacity to maintain dividends in the near term.

Risk Factors

1. Segment concentration risk: The core Ichishinkan business accounts for 97.7% of revenue, creating a structure dependent on a single business. Profitability in this segment has deteriorated substantially to 8.1%.

2. Risk of rising costs and deteriorating profitability: The gross profit margin declined approximately 4.4pt YoY to 26.5%, while the operating profit margin also declined to 9.5%. If start-up costs associated with new facility openings and rising labor costs continue, recovery in profit margins may be delayed.

3. Liquidity and working capital risk: Cash and deposits declined substantially from ¥10.83B in the previous year to ¥3.27B, while accounts receivable remained high at ¥9.07B. The status of liquidity management will therefore be a key area of focus going forward.

Industry Benchmark (For Reference; Compiled by the Company)

Industry Benchmark (it_telecom)

Profitability and Returns

Profitability metrics are slightly above the industry median.

Growth and Capital Efficiency

The revenue growth rate is below the industry median, indicating a relatively slower pace of top-line expansion.

※Source: Compiled by the Company

Key Points from the Financial Results

1. Higher revenue but lower earnings: While revenue increased 5.3%, the gross profit margin narrowed by approximately 4.4pt and the operating profit margin declined to 9.5%. Deteriorating profitability in the core Ichishinkan segment is weighing on Company-wide profitability.

2. Non-recurring elements in ordinary income: Subsidy income accounted for ¥0.47B of ¥0.61B in non-operating income, boosting profit at the ordinary income level. The recurrence of this income may be limited.

3. Asymmetric progress against the full-year plan: While revenue progress was 74.1%, operating income, ordinary income, and net income progress were high at 95.3%, 111.6%, and 118.3%, respectively, suggesting that the initial plan was set at a conservative level.

Theoretical Share Price (Reference Value)

Sensitivity: ¥342–¥362 at ±1% cost of equity, and ¥351–¥353 at ω±0.1.

Notes:

• Because net income progress against the full-year forecast (118%) exceeds the standard level (75%), forecast EPS has been adjusted upward within a maximum range of +10% (because companies whose progress is ahead of plan tend to exceed forecasts. Adjustments may be excessive for businesses with strong seasonality).
• Because forecast ROE is below the cost of equity, the theoretical value is below book value per share.
• Net assets as of the quarter-end are used (there is a time lag relative to the full-year forecast).
• Because net assets include non-controlling interests, the theoretical value may be calculated somewhat higher.

(Model: Residual Income Model (Ohlson-type, explicit 5-year fade) / Interest Rate Reference Month: 2026-07 / Mechanically calculated solely from publicly disclosed data; this is not a forecast of the market share price or a recommendation of any specific investment action, nor does it predict or guarantee future share prices.)

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This report is an earnings analysis document automatically generated by AI based on XBRL earnings release data. It does not recommend investment in any specific security. The industry benchmarks are reference information compiled by the Company based on publicly disclosed earnings data. Investment decisions should be made at your own discretion and responsibility, after consulting with a professional as necessary.

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