HOGY MEDICAL CO.,LTD.

Business Details

The Group operates a single segment covering the manufacture and sale of medical consumables, medical devices, and non-woven medical products. Its mainstay is surgical kit products, centered on the high-value-added "Premium Kit" offered primarily to domestic medical institutions. Manufacturing is partly outsourced to the Indonesian subsidiary PT. Hogy Indonesia, while sales subsidiaries in Singapore and Indonesia handle sales to ASEAN markets. For the nine months ended December 2025 (cumulative Q3 of FY2026, ending March 2026), net sales were ¥28,719 million (down 4.3% year on year), and operating profit was ¥2,088 million (down 38.7% year on year).

Recent Overview

Both sales and profit declined significantly, though Premium Kit maintained a slight increase

For the cumulative nine months of FY2026 (ending March 2026), net sales were ¥28,719 million (down 4.3% year on year), reflecting ongoing pressure from medical institutions to curb material costs and the continued advance of competitors' low-priced substitute products. Selling, general and administrative expenses expanded to ¥7,409 million (up 14.1% year on year) due to upfront investments in personnel recruitment and development, DX initiatives, and one-time costs related to head office relocation and structural reforms, resulting in a significant decline in operating profit to ¥2,088 million (down 38.7% year on year). A one-time cost of ¥100 million related to responding to the tender offer was also recorded as a non-operating expense. On the other hand, Premium Kit achieved a slight increase to ¥10,228 million (up 0.6% year on year), and the number of Opera Master contracts increased by 8 from the end of the previous fiscal year, indicating some success in strengthening the customer base. The full-year forecast remains unchanged, with net sales of ¥39,240 million (up 0.3% year on year) and operating profit of ¥2,770 million (down 27.3% year on year).

Key Products

Growth Drivers

• Continued maintenance and expansion of Premium Kit sales (cumulative nine months of FY2026 ending March 2026: ¥10,228 million, up 0.6% year on year)
• Deepening relationships with key facilities through an increase in Opera Master contracts (up 8 from the end of the previous fiscal year as of the end of Q3 FY2026 ending March 2026)
• Recovery in medical institutions' willingness to invest and improve management following the decision to raise the base medical fee revision rate by +3.09% for fiscal 2026
• Expansion of product adoption at major hospitals across ASEAN countries (through sales subsidiaries in Singapore and Indonesia)
• Improvement in cost structure due to reduced depreciation expenses from Phase II of the new kit factory (cost of sales ratio of 66.9%, an improvement of 0.1 percentage point year on year)
• Expansion of DX-related products and launch of new components progressing largely as planned under the medium-term management plan (announced July 16, 2024)
• Addressing the need for improved operating room utilization at consolidated hospitals amid the progressing regional consolidation of surgeries

Risks

• Risk of substitution by competitors' low-priced products due to medical institutions' pressure to curb material costs (under consideration even at Opera Master facilities among the most important customers)
• Upward pressure on the cost of sales ratio due to rising raw material procurement costs (partially offsetting the effect of reduced depreciation expenses from Phase II of the new kit factory)
• Declining demand due to deteriorating financial conditions at medical institutions and an increase in hospitals running ordinary losses, driven by the full implementation of work-style reform for physicians
• Rising selling, general and administrative expenses due to upfront investments in personnel recruitment and development, DX-related initiatives, and one-time costs related to head office relocation and structural reform (cumulative nine months of FY2026 ending March 2026: ¥7,409 million, up 14.1% year on year)
• Incurrence of one-time costs related to responding to the tender offer (¥100 million recorded as a non-operating expense in the cumulative nine months of FY2026 ending March 2026)
• Foreign exchange risk and country risk at the Indonesian manufacturing subsidiary
• Significant decline in cash flow from operating activities (cumulative nine months of FY2026 ending March 2026: ¥1,800 million, down 76.7% from ¥7,702 million in the same period of the previous year)