CellSource Co., Ltd.

Business Details

Founded in 2015. The company operates a single segment—the Regenerative Medicine-Related Business—centered on contract processing and storage services for blood- and fat-derived cells, and also provides regulatory compliance and management support services for medical institutions, medical device sales, and cosmetics sales. Its major customers show a high degree of concentration in specific medical institutions: Medical Corporation Katsuju-kai (36.5% of net sales), Metras Co., Ltd. (14.8%), and Medical Corporation THE CLINIC Institute (12.4%). For FY2025 (ending October 2025), net sales were ¥3,711 million and operating profit was ¥167 million (operating margin of 4.5%).

Recent Overview

In the six-month period, cost structure improved through reduced SG&A expenses, and operating profit surged 636% year on year

In the six months ended FY2026 (ending October 2026) (November 2025 to April 2026), net sales were ¥1,775 million (down 2.5% year on year), a slight decline, but by reducing selling, general and administrative expenses to ¥919 million (down 8.5% year on year), gross margin improved, and operating profit rose significantly to ¥125 million (up 636.3% year on year). The number of affiliated medical institutions expanded steadily to 2,183 (up 81 from the end of the prior fiscal year), while the number of contract processing cases declined year on year to 10,114. Medical device sales recovered, up 18.6% quarter on quarter. The company launched the sleep beauty brand "PAJUU." The full-year earnings forecast remains unchanged, with an operating loss of ¥170 million expected due to continued upfront investment.

Key Products

Growth Drivers

• Continued expansion in the number of affiliated medical institutions (2,183 institutions at end of Q2 FY2026, ending October 2026, up 81 from the end of the prior fiscal year)
• Improved earnings structure through significant reduction in selling, general and administrative expenses (down 8.5% year on year in the six-month period)
• Rapid growth in Medical Institution Support Services (up 72.7% year on year in the six months ended FY2026, ending October 2026)
• Recovery in Medical Device Sales (up 18.6% quarter on quarter in standalone Q2 FY2026, ending October 2026)
• Cultivation of the consumer business through the launch of the sleep beauty brand "PAJUU"
• Structural shift toward a problem-solving business model centered on cell processing technology (orthopedic field foundation, inbound expansion, support for introduction into the self-pay medical field)
• Advancement away from dependence on specific medical institutions through the penetration of hybrid-type orthopedic services

Risks

• Risk of revenue concentration in specific medical institutions (top three customers account for 63.7% of net sales)
• Sluggish growth in the number of contract processing cases (10,114 cases in the six months ended FY2026, ending October 2026, down from 10,303 in the same period of the prior year)
• Operating loss of ¥170 million expected for the full year FY2026 (ending October 2026) due to continued upfront investment (no change to earnings forecast)
• Risk of order fluctuations among major customers in medical device sales
• Risk of regulatory changes such as to the Act on Safety of Regenerative Medicine
• Declining trend in BtoB model cosmetics sales (down 11.2% year on year in the six months ended FY2026, ending October 2026)
• Expanding losses from investment partnership operations (¥11 million in the six-month period, up from ¥1 million in the same period of the prior year)