ENVALITH
株式会社ツムラ logo

TSUMURA & CO.

4540・Prime Market・Pharmaceuticals

Official website
株式会社ツムラ logo
TSUMURA & CO.4540

Business

Tsumura & Co. was founded in 1893 and is Japan's largest Kampo (traditional Japanese herbal medicine) manufacturer, with the manufacture and sale of Prescription Kampo Formulations (129 Formulations) as its core business. The company holds 129 prescription Kampo formulations, which it sells to domestic medical institutions, and also offers Healthcare Products (OTC Kampo Formulations, etc.). Its main customers are domestic medical institutions, with approximately 65% of net sales distributed through four major pharmaceutical wholesalers: Alfresa Holdings, Medipal Holdings, Suzuken, and Toho Holdings. In China, under a capital and business alliance with Ping An Insurance Group, the company is expanding its business from the procurement and sale of raw crude drugs and Yinpian (cut crude drugs) to entry into the Chinese Patent Medicine Business. In the United States, the company is aiming to obtain drug approval for TU-100 (Daikenchuto). Consolidated net sales for FY2026 (ending March 2026) are ¥192,615 million.

Business Model

Tsumura completes an integrated Kampo value chain within its own group, spanning crude drug cultivation and procurement (Japan, China, Laos), sorting and processing, formulation manufacturing, logistics, and provision of sales information. In Japan, Prescription Kampo Formulations (129 Formulations) are sold to medical institutions via pharmaceutical wholesalers, and the company seeks to expand prescriptions through hybrid information-provision activities combining MRs (medical representatives) with e-promotion. In China, the company is diversifying its revenue sources through external sales of raw crude drugs and Yinpian, as well as entry into the Chinese Patent Medicine Business. The operating margin for FY2026 (ending March 2026) is 18.3%.

Company Strengths

Tsumura is the only company that holds and sells all 129 Prescription Kampo Formulations (129 Formulations) covered by domestic health insurance, forming a product portfolio that is difficult for competitors to replicate in a short period. In FY2026 (ending March 2026), sales of Prescription Kampo Formulations (129 Formulations) amounted to ¥153,918 million, maintaining an overwhelming share of the domestic prescription Kampo market.

The company owns crude drug cultivation and procurement bases within its own group in China, Laos, and Hokkaido (Yubari Tsumura), and operates its own GACP guidelines and a crude drug traceability system. In FY2026 (ending March 2026), acquisitions of tangible fixed assets reached ¥32,780 million, reflecting continued capital investment to expand production capacity.

In 2017, the company concluded a capital and business alliance with the Ping An Insurance Group of China, establishing a collaborative framework leveraging the group's customer base and medical/healthcare business. In FY2026 (ending March 2026), sales of the China business expanded 52.4% year on year to ¥31,442 million, with the business foundation further strengthened by the consolidation of Shanghai Honggiao Chinese Herbal Medicine Yinpian Co., Ltd.

ENVALITH's Perspective

Operating profit for FY2026 (ending March 2026) was ¥35,219 million (down 12.2% year on year), with an operating margin of 18.3% (down 3.9 points). This reflected elevated distribution inventory and declining actual sales of infectious-disease-related prescriptions, a 2.5-point rise in the cost-of-sales ratio from strategic accumulation of raw crude drugs, and additional cost increases from the consolidation of Shanghai Honeycom Chinese Herbal Medicine Co., Ltd. As the underlying run-rate figure after the fading of the FY2025 (ended March 2025) drug price revision windfall (which had doubled operating profit), the focus is on whether an operating margin in the 18% range is sustainable.

The earnings forecast for FY2027 (ending March 2027) projects net sales of ¥213,600 million (up 10.9%) and operating profit of ¥37,500 million (up 6.5%), representing increased revenue and profit. However, ordinary profit is expected to decline to ¥35,500 million (down 11.3%), and profit attributable to owners of parent is expected to decline to ¥26,200 million (down 6.8%). As an external factor, the foreign exchange gain of ¥5,752 million recorded in FY2026 (ending March 2026) is expected to disappear in FY2027 (ending March 2027), which will significantly weigh down ordinary profit. The structure is one in which increased sales volume of domestic Prescription Kampo Formulations (129 Formulations) and the full-year contribution of the China business support operating profit.

In FY2026 (ending March 2026), China business net sales were ¥31,442 million (up 52.4% year on year), and operating profit turned positive at ¥195 million. The consolidation of Shanghai Honeycom Chinese Herbal Medicine Co., Ltd. resulted in the recognition of goodwill of ¥8,768 million (amortized evenly over 20 years) and customer-related assets of ¥21,011 million (weighted-average amortization period of 25.5 years), and the resulting amortization burden will weigh on profit going forward. The forecast for China business net sales in FY2027 (ending March 2027) is ¥46,000 million, anticipating high growth, but changes in China's regulatory environment, geopolitical risk, and foreign exchange fluctuations remain factors that could cause performance volatility.

Growth Strategy

Aiming for sustainable growth through the expansion of standard Kampo treatment in Japan and the full-scale development of the China crude drug and formulation platforms

On April 11, 2025, supply restrictions on all 129 Prescription Kampo Formulations (129 Formulations) were fully lifted. The company has built the foundation for capturing demand through strategic increases in raw crude drug inventory and investment in expanded production capacity (¥32,780 million in acquisition of tangible fixed assets in FY2026 (ending March 2026)). Growth in domestic sales volume of prescription Kampo formulations is positioned as the key revenue growth driver for FY2027 (ending March 2026, i.e. the subsequent fiscal year).

Through hybrid information provision activities combining e-promotion with MR (medical representative) activities, the company has expanded actual sales volume, primarily for formulations related to edema, headache, dizziness, anxiety, and insomnia. Actual sales volume in FY2026 (ending March 2026) increased 2.0% year on year. Total Growing formulations (Goreisan, Kamishoyosan, Kamikihito, etc.) grew to ¥25,346 million (up 4.0% year on year). The company aims for further formulation expansion by promoting inclusion in clinical practice guidelines.

In August 2025, the company consolidated Shanghai Honggiao Chinese Medicine Yinpian Co., Ltd. (51% equity stake acquired, acquisition cost ¥23,837 million), expanding China business revenue to ¥31,442 million (up 52.4% year on year). For FY2027 (ending March 2026, i.e. the subsequent fiscal year), China business revenue is projected at ¥46,000 million reflecting a full-year contribution. The company will simultaneously advance the expansion of raw crude drug and Yinpian sales and the development of the Chinese Patent Medicine Business.

Healthcare Products (OTC Kampo Formulations, etc.) achieved high growth, with FY2026 (ending March 2026) revenue of ¥6,206 million (up 17.4% year on year), driven by expansion in the number of retail outlets handling these products. The company aims to leverage the brand strength and evidence cultivated through prescription Kampo formulations to expand into the OTC market, contributing to health across the domains of treatment, pre-disease care, and wellness (prevention).

The company continues its dividend policy of maintaining a DOE level of 3.6%. The annual dividend for FY2026 (ending March 2026) is ¥147 (an increase of ¥11 year on year), and the forecast for FY2027 (ending March 2026, i.e. the subsequent fiscal year) is ¥158 (projected payout ratio of 45.4%). The company has clearly stated a medium- to long-term shareholder return policy aiming for a DOE of 5% by FY2031, and intends to continue increasing dividends while balancing profit growth with expansion of net assets.

Last updated: July 19, 2026