ENVALITH
ダイト株式会社 logo

Daito Pharmaceutical Co.,Ltd.

4577・Prime Market・Pharmaceuticals

Official website
ダイト株式会社 logo
Daito Pharmaceutical Co.,Ltd.4577

Business

Daito Pharmaceutical Co., Ltd. was founded in 1942 and is a listed company (Tokyo Stock Exchange Prime Market) headquartered in Toyama Prefecture, specializing exclusively in the Pharmaceutical Business. The company handles everything from the manufacturing and sale of Active Pharmaceutical Ingredients (API) to the manufacturing, sale, and contract production of prescription and OTC drug formulations. While its core business is supplying API to domestic generic drug manufacturers, it also engages in contract formulation manufacturing for major new drug manufacturers. The company employs a fab-type model, having no medical representatives (MRs) and instead concentrating its management resources on research & development and manufacturing. As a consolidated subsidiary, it has Daito Pharmaceutical (China) Co., Ltd. in China, building a production system that combines Japanese quality with Chinese cost through Japan-China collaboration. Net sales for FY2025 (ended May 2025) were ¥50,643 million.

Business Model

Revenue composition consists of Active Pharmaceutical Ingredients (API) ¥22,872 million (45.2%), Formulations (Generic & OTC Drugs) ¥27,592 million (54.5%), and Health Foods & Others ¥178 million (0.4%). In addition to manufacturing and selling in-house developed generic products, the company maintains its utilization rate by combining this with contract formulation manufacturing for major new drug manufacturers. Without holding its own MRs, it outsources sales to partner manufacturers and optimizes its cost structure by specializing in R&D and manufacturing.

Company Strengths

While many domestic generic manufacturers procure active pharmaceutical ingredients (API) externally, Daito has an in-house group structure capable of completing everything from API manufacturing to formulation. In FY2025 (ended May 2025), API production output was ¥20,871 million and formulation production output was ¥23,931 million (both on a sales price basis). This integrated system is the source of centralized quality control and cost competitiveness.

In addition to Japan's domestic GMP standards, the company satisfies the requirements of the US FDA and European EMA. This quality control capability underpins the acquisition of contract manufacturing orders from major new drug manufacturers, with formulation order intake in FY2025 (ended May 2025) at ¥24,355 million (up 4.6% year on year) and order backlog at ¥5,840 million (up 7.8% year on year), showing steady progress.

Over roughly 15 years since 2010, the company has accumulated investments in Chinese companies, building a three-company structure comprising Qianhui Pharmaceutical (Anhui), Anhui Dingwang Pharmaceutical (API), and Daito Pharmaceutical (China) (formulations). In May 2025, Daito Pharmaceutical (China) made its first shipment of its proprietary generic formulation pregabalin capsules to the Chinese market, marking the start of monetization in the Chinese market.

ENVALITH's Perspective

For FY2026 (ending May 2026), operating profit reached ¥3,637 million (up 38.8% year on year), ordinary profit ¥3,812 million (up 40.9%), and profit attributable to owners of parent ¥3,161 million (up 65.7%), marking a sharp profit increase. Net sales were ¥50,650 million, essentially flat (up 0.0% year on year), yet a significant improvement in inventory valuation losses and cost of sales reduction through smart spending (down ¥1,252 million year on year) pushed up profits. A clear reversal from the profit decline trend that had continued since FY2022 (ended May 2022) can be confirmed.

Beginning this fiscal year, the company changed the timing for commencing depreciation of production facilities (from an acceptance-date basis to a mass-production-commencement basis). This change increased operating profit, ordinary profit, and profit before income taxes by ¥210 million each. Of the reported operating profit of ¥3,637 million, approximately 5.8% is attributable to the benefit of this accounting policy change, and adjustment is necessary when assessing the extent of the actual underlying earnings improvement. On the other hand, EBITDA (operating profit plus depreciation and amortization) came to ¥8,024 million (versus ¥6,952 million in the prior period), confirming an improvement even on a substantive basis.

The company's forecast for FY2027 (ending May 2027) calls for net sales of ¥54,000 million (up 6.6% year on year), operating profit of ¥4,000 million (up 10.0%), and ordinary profit of ¥4,000 million (up 4.9%), representing an increase in both sales and profit. However, profit attributable to owners of parent is forecast to decline to ¥3,000 million (down 5.1%). This appears to reflect the drop-off of extraordinary gains such as the ¥331 million gain on sale of investment securities recorded in the current period, as well as the normalization of the corporate tax burden. Headwinds from external factors—such as drug price revisions, higher raw material costs due to yen depreciation, and rising labor costs—are also expected to continue, making it important to continue verifying the quality and sustainability of profits.

Growth Strategy

Pursuing five pillars toward the final year of DTP2027, targeting net sales of ¥54,000 million for FY2027 (ending May 2027)

Promoting thorough cost management through smart spending and improvement in inventory valuation losses. In FY2026 (ending May 2026), cost of sales was reduced by ¥1,252 million year-on-year, improving the operating margin from 5.2% to 7.2%. Depreciation methods were also reviewed and revised to reflect actual equipment usage conditions.

Leveraging a Japan-China collaborative production base to strengthen the product supply system that combines Japanese quality with cost competitiveness. Positioned as a key initiative under DTP2027, and one of the main drivers toward achieving 6.6% net sales growth in FY2027 (ending May 2027).

In addition to the existing Pharmaceutical Business (Active Pharmaceutical Ingredients (API) and Formulations), exploring entry into new business areas. The Health Foods & Others segment recorded ¥184 million in FY2026 (ending May 2026), up 3.0% year-on-year, and continues to grow despite its small scale. Launching a concrete new business remains a challenge toward the final year of DTP2027.

Implemented share buybacks (¥1,631 million spent in FY2026, ending May 2026) and share cancellations (1,242,000 shares, ¥1,626 million), raising net assets per share to ¥1,840.13 (from ¥1,734.26 in the prior period). Annual dividend set at ¥40 (dividend payout ratio of 37.2%), with an increase to ¥45 planned for FY2027 (ending May 2027).

Continuing investment in human capital in response to intensifying competition for talent acquisition. The bonus provision increased significantly from ¥56 million in the prior period to ¥678 million, reflecting efforts to improve treatment and compensation in the financial figures as well.

Last updated: July 17, 2026