AFC-HD AMS Life Science Co.,Ltd

Business Details

The core business of AFC-HD, engaged in the manufacturing and sale of health foods and cosmetics as well as OEM supply. The OEM Division mainly handles orders from store-based retailers such as drugstores and mail-order businesses. The In-house Product Sales Division operates through three channels: domestic mail order (functional foods with health claims), domestic store sales, and overseas sales (promoting the switch to Halal-certified products). The group incorporates R&D, information dissemination, and overseas sales functions in-house, building an integrated system from planning through to sales.

Recent Overview

Net sales rose 103.0% YoY, but operating income declined to 86.4% YoY.

For the nine months ended Q3 FY2026 (ending August 2026) (September 2025 to May 2026), the Healthcare Business recorded net sales of ¥14,798 million (103.0% YoY) and operating income of ¥1,700 million (86.4% YoY). While the OEM Division and in-house product mail order performed well, overseas division net sales fell sharply to ¥2,429 million from ¥3,348 million in the prior-year period, pressuring profit. The company is strengthening its structure through the switch to Halal-certified products and an increase of 3 sales staff, and aims for Q4 to stabilize orders for overseas beauty products and increase the number of mail-order subscription members.

Key Products

Growth Drivers

• Continued strong orders from drugstores and EC malls in the OEM Division (cumulative OEM Division sales for the nine months ended Q3 FY2026 were 112.1% YoY)
• Expansion of the subscription customer base for functional foods with health claims in mail order (steady growth in subscription purchase numbers from internet orders)
• Expansion of overseas sales to Islamic regions through Halal certification (structure strengthened with 3 additional sales staff)
• Improved productivity and labor savings through an automatic tablet collection machine (installed November 2025) and a PTP automatic packaging machine (scheduled for installation August 2026)
• Uplift in domestic store sales due to increasing inbound demand

Risks

• Demand volatility risk in overseas sales (Asian region) (cumulative overseas division sales for the nine months ended Q3 FY2026 fell sharply to 72.6% YoY)
• Intensifying new entrants from other industries and price competition in the health food industry
• Difficulty in differentiation due to shared raw material suppliers with competitors
• Risk of domestic market contraction due to Japan's declining population
• Risk of customer concentration and order fluctuation associated with the OEM contract manufacturing model

Business Details

The Pharmaceuticals Business, operated by Honzo Co., Ltd., manufactures and sells Kampo prescription pharmaceuticals and OTC pharmaceuticals, and sells generic pharmaceuticals. It serves both the prescription pharmaceutical market and the OTC market, with key products including the in-house manufactured prescription generic drug "Pimuro Granules" (laxative) and the lifestyle-improvement drugs "Sildenafil Tablets," "Finasteride Tablets," and "Tadalafil Tablets." The division also handles OTC pharmaceuticals OEM orders. For the nine months ended Q3 FY2026 (ending August 2026), it accounted for ¥1,887 million of total company net sales of ¥25,279 million.

Recent Overview

Both the prescription and OTC markets performed well; operating income rose sharply to 154.5% YoY

For the nine months ended Q3 FY2026 (ending August 2026) (September 2025 to May 2026), the Pharmaceuticals Business achieved net sales of ¥1,887 million (102.8% YoY) and operating income of ¥230 million (154.5% YoY), representing an increase in both sales and a sharp increase in profit. In addition to increased OEM orders for OTC pharmaceuticals, the key sales products Pimuro Granules, Sildenafil Tablets, Finasteride Tablets, and Tadalafil Tablets steadily drove sales. The effect of the April 2024 drug price increase for prescription Kampo formulations also contributed to profit. The company expects favorable factors to continue into Q4.

Key Products

Growth Drivers

• Continued increase in OTC pharmaceuticals OEM orders
• Steady sales expansion of the four mainstay prescription generic products (Pimuro Granules, Sildenafil Tablets, Finasteride Tablets, and Tadalafil Tablets)
• Improvement in profit structure due to the April 2024 drug price increase for prescription Kampo formulations
• Favorable performance in both the prescription and OTC markets

Risks

• Drug price revision risk (deterioration in profitability due to future drug price reductions)
• Intensifying competition in the generic pharmaceutical market
• Increasing quality control and regulatory compliance costs related to pharmaceutical manufacturing
• Rising raw material procurement costs

Business Details

Operates a retail business combining self-operated department store zones and external tenant recruitment, centered on Saikaya Co., Ltd. (Yokosuka store and Fujisawa store). The group also holds Alpha Trend Co., Ltd. (watches, jewelry & precious metals wholesale) and Saikaya Tomonokai Co., Ltd. (prepaid membership program) under its umbrella. After returning to profitability for the first time in 9 fiscal years in FY2023 (ending August 2023), the segment has achieved profitability for 3 consecutive fiscal years. The profit structure is improving through accumulated tenant rental income and low-cost operations. This fiscal year, Saikaya completed the elimination of its retained earnings deficit, making dividend resumption possible.

Recent Overview

Large tenants opened in succession; Saikaya's financial structure now allows resumption of dividends

On May 28, 2026, "Round1 Saikaya Yokosuka Store" opened at the Yokosuka store, contributing to improved store circulation and extended dwell time. On July 10, 2026, "Matsumotokiyoshi Saikaya Fujisawa Store" opened at the Fujisawa store, expected to increase sales in the department store zone through greater customer traffic. In addition, Saikaya completed the elimination of its retained earnings deficit on May 20, 2026, and plans to pay a dividend of ¥5 at the end of this fiscal year. Saikaya also raised funds through a third-party allotment to EVO FUND, with the exercise of stock acquisition rights concluding on June 16, 2026. Net sales for the cumulative nine months of Q3 were ¥3,505 million (100.0% YoY), and operating income was ¥47 million (85.5% YoY).

Key Products

Growth Drivers

• Effect of increased rental income and increased customer traffic from Round1's opening at the Yokosuka store (May 2026) and Matsumotokiyoshi's opening at the Fujisawa store (July 2026)
• Continued reduction in rent payable from the acquisition of part of the Yokosuka store premises (annual fixed cost reduction of over ¥40 million)
• Resumption of dividends and healthier capital structure following the completion of Saikaya's retained earnings deficit elimination
• Contribution to department store zone sales from outside sales promotional events and measurement sessions
• Continued profitability improvement through ongoing low-cost operations (review of outsourced operations, etc.)

Risks

• Structural downward sales trend in the department store business model (full-year FY2025 net sales were 93.3% YoY, a decrease)
• Goodwill amortization burden (cumulative amortization for the nine months ended Q3 FY2026 was ¥69 million)
• Risk of compliance with Saikaya's Standard Market listing maintenance criteria (tradable share market capitalization)
• Dilution risk associated with Saikaya's third-party allotment (stock acquisition rights to EVO FUND) (exercise of stock acquisition rights concluded on June 16, 2026)
• Risk of decreased customer traffic due to consumers moving away from department stores and the progression of e-commerce

Business Details

Nasubi Co., Ltd. and Asafuji Chef's Co., Ltd. (formerly FSC Co., Ltd.) operate restaurant management, event catering, and restaurant consulting. Based mainly in Shizuoka Prefecture, the segment's main businesses are private-room dining for banquets, group customers, and memorial services, along with catering. "Nasubi Sohonten" has benefited from enhanced brand power due to media exposure, contributing to customer traffic. For the nine months ended Q3 FY2026 (ending August 2026), the segment improved by ¥43 million YoY and achieved an operating profit.

Recent Overview

Improved by ¥43 million YoY, achieving an operating profit of ¥12 million. A new store was also opened.

For the nine months ended Q3 FY2026 (ending August 2026) (September 2025 to May 2026), the Food & Beverage Business recorded net sales of ¥1,913 million (107.5% YoY) and operating income of ¥12 million (an improvement of ¥43 million YoY), achieving a return to profitability. Increased customer traffic due to a well-received exhibition at the Shizuoka Prefectural Museum of Art, strong catering orders within public facilities, the effect of the third appearance on "Omoumai Mise" on May 12, 2026, and the new store opening near Hamamatsu Station on May 20, 2026 all contributed. Goodwill amortization decreased from ¥63 million in the prior-year period to ¥46 million, contributing to profit improvement.

Key Products

Growth Drivers

• Continued media exposure of "Nasubi Sohonten" (third appearance on "Omoumai Mise") boosting brand power and customer traffic
• Strengthened promotional measures and capture of group customers ahead of increased summer eel demand
• Sustained strong catering orders within public facilities
• Stable sales secured through contracted restaurant operation within a public facility, begun in April 2026
• Sales expansion from the new Hamamatsu Ekimae store (opened May 20, 2026)
• Profit improvement effect from decreasing goodwill amortization

Risks

• Risk of profit pressure from goodwill amortization burden (balance of ¥354 million at end of FY2025, ending August 2025), though on a decreasing trend
• Risk of cost ratio deterioration due to rising labor and raw material costs in the restaurant industry
• Risk of increased initial costs and fixed costs associated with new store openings (such as the Hamamatsu Ekimae store)
• High sensitivity of dining-out demand to economic conditions, with risk of sharp sales decline if consumer sentiment worsens
• Risk of regional concentration in the Shizuoka base
• Risk that the effect of media exposure is temporary (uncertainty over the sustainability of customer traffic increases from TV appearances)

Business Details

Centered on three companies—AFC Smile Real Estate Co., Ltd., AFC Smile Plus Co., Ltd., and AFC Kentaku Co., Ltd.—the segment engages in real estate sales, management, and leasing brokerage; contracted construction work such as apartment construction, custom-built housing, and renovation; and support for customers' land utilization and apartment rental management (building trust). In October 2023, the company brought real estate and construction firms in Shizuoka Prefecture into the group to strengthen its structure. Against a backdrop of an active used housing market, the purchase and resale of used detached houses and condominiums has become a major source of revenue. From the previous fiscal year, this segment was promoted to an independent reporting segment due to increasing quantitative significance.

Recent Overview

Sales declined 13.6% YoY, but the operating loss narrowed by ¥66 million

For the nine months ended Q3 FY2026 (ending August 2026) (September 2025 to May 2026), net sales decreased to ¥1,607 million (86.4% YoY), while the operating loss narrowed to ¥29 million, an improvement of ¥66 million from the ¥95 million loss in the prior-year period. Purchase, resale, and brokerage of used detached houses and condominiums performed well against a backdrop of an active used housing market. The new branches in Tokyo, Shizuoka, and Toyohashi, opened in November 2025, began full-scale operations in coordination with the existing Hamamatsu branch. For Q4, the company expects continued demand for used housing in addition to apartment construction, and aims to expand sales and profit through strengthened purchase, resale, and brokerage activities.

Key Products

Growth Drivers

• An active used housing market (demand shift due to soaring new home prices)
• An increasing trend in inheritance and vacant house consultations in the Tokai region
• Expansion of trading area through the full-scale operation of the Tokyo, Shizuoka, and Toyohashi branches opened in November 2025
• Growth in brokerage fee income due to rising real estate contract prices nationwide
• Development of a new revenue source through focus on the building trust business (land utilization and apartment rental management support)

Risks

• Risk of deteriorating asset efficiency due to accumulation of real estate inventory for sale (segment assets of ¥7,637 million at the end of FY2025, ending August 2025)
• Risk of deteriorating real estate market conditions and declining demand for used housing in a rising interest rate environment
• Risk of profit pressure from goodwill amortization burden (¥42 million for the cumulative nine months of Q3)
• Risk of deteriorating profitability in contracted construction work due to soaring raw material and labor costs
• Risk of startup cost burden and delayed profitability at newly opened branches (Tokyo, Shizuoka, Toyohashi)

Business Details

The Other Businesses segment comprises New World Entertainment Co., Ltd. (tourism, travel, and hotel business), Rabbit Kyuko Co., Ltd. (chartered bus business, owning 32 buses), Rabbit Travel Co., Ltd. (travel business), AFC Kanko Co., Ltd. (travel business), and 5SPRO Joint Stock Company (food service business). This segment is positioned as an "investment incubation business that invests in new businesses, including recently founded companies, with the aim of becoming a future pillar of group business," with the goal of developing the tourism business into the group's third pillar alongside health foods and real estate.

Recent Overview

Net sales rose 12.7% YoY, but the operating loss remained roughly level with the prior-year period, with the business still in its investment incubation phase

For the cumulative nine months of Q3 FY2026 (ending August 2026), Other Businesses net sales increased to ¥1,568 million (¥1,391 million in the prior-year period, approximately 112.7% YoY). Meanwhile, the operating loss of ¥131 million remained roughly flat compared to ¥132 million in the prior-year period, with losses continuing. AFC Kanko Co., Ltd. (newly established in May 2025) has begun full-scale operations, and the company is engaging with relevant parties to improve the convenience of Mt. Fuji Shizuoka Airport and attract a new Shinkansen station near Shizuoka Airport. Goodwill amortization remained stable at ¥46 million (¥45 million in the prior-year period).

Key Products

Growth Drivers

• Expansion of sales scale through the consolidation of Rabbit Kyuko Co., Ltd. and Rabbit Travel Co., Ltd. (August 31, 2024)
• Strengthened structure for the tourism business through the establishment of AFC Kanko Co., Ltd. (May 2025)
• Capturing tourism demand centered on improving the convenience of Mt. Fuji Shizuoka Airport and attracting a new Shinkansen station near Shizuoka Airport
• Creation of revenue opportunities through new tourism programs such as bus tours around Japan
• Development of tourism infrastructure utilizing the tangible asset of 32 owned buses

Risks

• Many businesses remain in the investment incubation stage, with operating losses expected to continue for the time being
• Goodwill amortization burden weighing on profit (balance of ¥528 million at end of FY2025, ending August 2025)
• The tourism and travel business is highly susceptible to external environmental changes such as weather, infectious diseases, and geopolitical risks
• Securing personnel such as bus drivers may become a constraint on business expansion
• Risk that integrating and developing newly established or acquired subsidiaries will require time and cost
• A fixed asset impairment loss was recorded in the previous fiscal year, indicating challenges in asset profitability