ENVALITH
Hiクラテス株式会社 logo

Hi-CRATES CO.,LTD.

4172Standard MarketInformation & Communication

Hiクラテス株式会社 logo
Hi-CRATES CO.,LTD.4172

Business

Hi-Corates Corporation (formerly Towa High System Co., Ltd.) is a company specializing in electronic medical record systems for dental clinics, founded in 1978 and listed on the TSE Standard Market in December 2020. Its flagship product, the "AI/Voice Electronic Medical Record Integrated System (AI/Voice Hi-Corates)", is a highly secure integrated system combining AI voice input, finger vein biometric authentication, and Hitachi's HiRDB, providing unified management of insurance claims (reception), electronic medical records, informed consent, periodontal precision examinations, and home-visit dental care support. The company serves 2,974 dental clinics nationwide, with approximately 75 sales support staff across 24 locations centered mainly in western Japan, building a regionally-focused direct sales system. The company operates in a single segment.

Business Model

The company procures equipment from suppliers and directly sells products equipped with in-house developed software to dental clinics. Customers contract with leasing companies, and the company receives the sales proceeds in a lump sum from the leasing company. In addition, stock-type revenue is expanding through software compatible with medical DX subsidies and monthly usage fees (¥101 million in FY2025 (ending September 2025), up 173.1% year on year). The company's founding principle of "software sanmu-shugi" (no-cost support, maintenance, and version upgrades) underpins a high customer retention rate (replacement/renewal ratio of 91.1%).

Company Strengths

As of the end of September 2025, the company had 2,974 customers. It has established an overwhelming position in western Japan, with a market share of 35.2% in the Shikoku block and 24.7% in the Chugoku block. The replacement/renewal rate over the past five years has reached 91.1%, and there are also many customers with long-term relationships exceeding 20 years. Free support based on the "Software San-mushugi" (three-no policy) principle underpins customer loyalty.

In FY2025 (ending September 2025), net sales were ¥2,407 million (up 13.9% year on year) and operating profit was ¥550 million (up 30.2% year on year), marking a record profit for the second consecutive period. The operating margin was 22.8%, the ordinary profit margin was 27.1%, and the equity ratio stood at a high level of 88.9%, indicating strong financial soundness. The company is debt-free and holds cash and cash equivalents of ¥1,104 million.

Through collaborative innovation with Hitachi, Ltd. on AI voice recognition technology, the company has rolled out three products: "AI/Voice Electronic Medical Record Integrated System Revo.11," "AI/Voice Periodontal Precision Examination," and "AI/Voice Sub-Chart." At clinics that have adopted these early, results have been confirmed such as enabling periodontal precision examinations to be completed by a single person, reducing examination time by 10 minutes, increasing maintenance rates by up to 12%, and tripling productivity.

ENVALITH's Perspective

Net sales of ¥1,279 million and operating profit of ¥379 million for the interim period of FY2026 (ending September 2026) represent progress rates of 51.5% and 67.5%, respectively, against the full-year forecast (net sales of ¥2,484 million and operating profit of ¥562 million). The progress rate for operating profit is particularly high, and even factoring in anticipated cost increases toward the second half (such as exhibiting at dental trade shows), the likelihood of achieving the full-year forecast is judged to be high. On the other hand, the full-year forecast remains unchanged, and whether there is room for an upward revision will be a point of attention.

The major FY2026 (Reiwa 8) revision to medical service fees—which strengthens preventive dentistry, home-visit dental care, and medical-dental collaboration, along with the establishment of a healthcare information platform and the launch of a universal dental checkup system—could, as an external factor, substantially boost demand for dental DX. However, as policy tailwinds become clearer in the market environment, there is also a risk that major IT companies and healthcare-related vendors will become more motivated to enter the market. The company's concentration in the western Japan region and its single-segment structure continue to warrant close attention as vulnerabilities amid intensifying competition.

In the income statement for the interim period of FY2026 (ending September 2026), a valuation loss on investment securities of ¥37,280 thousand was recorded as a non-operating expense, while financial income such as gain on sale of investment securities of ¥48,604 million and interest on securities of ¥16,712 thousand pushed up ordinary profit. The fact that the ordinary profit margin on net sales (33.2%) exceeds the operating profit margin on net sales (29.7%) indicates that ordinary profit is affected by financial market conditions, and it is appropriate to evaluate the company's core earning power based on operating profit.

Growth Strategy

Establishing leadership in the dental DX market through expanded sales of the AI/Voice series and response to the fee schedule revision

Centered on the "AI/Voice Electronic Medical Record Integrated System Revo.11," "AI/Voice Periodontal Precision Examination," and "AI/Voice Sub-Chart," the company is promoting new customer acquisition and upselling to existing customers through awareness activities such as web seminars (briefings on the FY2026 medical fee schedule revision) and exhibitions at dental shows. Record-high profit was achieved in the interim period of FY2026 (ending September 2026), reflecting the effects of the sales expansion.

The company positions the major medical fee schedule revision—centered on preventive dentistry, home-visit care, and strengthened medical-dental collaboration—as "a major turning point that will fundamentally change the nature of dental care," and is strengthening the appeal of products and features that address it. Web seminars held in February and March raised awareness of the details of the revision, aiming to stimulate capital investment demand among dental clinics.

The company is promoting product development that supports the development of medical information infrastructure, including the electronic prescription management service and the electronic medical record information sharing service. While other companies' products face challenges such as in-house prescription support and additional costs, the company aims to highlight the superiority of its own products and establish itself as a core vendor driving medical DX.

The company has set targets for FY2030 (ending September 2030) of net sales of ¥4,000 million, ordinary income of ¥1,200 million, net income of ¥800 million, an ordinary income margin of 30%, and a net income margin of 20%. Achieving the full-year forecast for FY2026 (ending September 2026) of net sales of ¥2,484 million and ordinary income of ¥662 million—record-high profit for the third consecutive term—will serve as a stepping stone toward these medium- to long-term targets.

Last updated: July 17, 2026