Premier Anti-Aging Co., Ltd.

The majority of net sales depend on cleansing balm products of the mainstay brand "DUO," and if the company loses customer support due to new product launches by competitors, changes in consumer preferences, reputational damage, or other factors, this could have a material impact on business performance. As countermeasures, in addition to maintaining and strengthening competitive advantage through the renewal of the DUO brand and the launch of new package sizes, the company is promoting diversification of its business portfolio through the development and cultivation of new brands.

If the development of new products does not proceed as planned, or if developed products are not accepted in the market, this could affect business performance. The company seeks to reduce development risk through product development based on detailed analysis of market needs, strengthening of the research and development system and collaboration with external research institutions, and confirmation of market response through small-scale test sales.

There is a risk that unforeseen large-scale natural disasters or the spread of infectious diseases could stagnate business activities. The company works to stabilize product supply and secure sales opportunities through the formulation and regular review of its BCP (Business Continuity Plan), the development of a remote work system and promotion of digitalization, diversification of the supply chain and optimization of inventory management, and strengthening of online sales channels.

If a serious quality issue occurs with a product, it could damage the brand image and result in significant costs, potentially having a material impact on business performance. The company strives to minimize impact through thorough product management via regular quality audits of contract manufacturers and the introduction of traceability systems, as well as by establishing a system for rapid response in the event of quality issues.

If customers' personal information is leaked externally, it could damage the company's credibility and affect business performance. The company obtained Privacy Mark certification in 2020, and seeks to reduce information leakage risk through continuous strengthening of its information security management system, thorough employee training, regular security audits by external experts, and the principle of encrypting personal information and acquiring and storing it to the minimum extent necessary.

The company is advancing its overseas expansion, including beginning sales of 7 SKUs of DUO's "The Cleansing Balm" to the general market in China from early July 2024, and aims to further expand overseas sales going forward. Since the company conducts sales and other activities in foreign currencies, fluctuations in exchange rates could affect business performance, and the company is considering formulating flexible pricing and procurement/sales strategies that take exchange rate fluctuations into account.

Business activities could be restricted due to revisions to laws such as the Pharmaceuticals and Medical Devices Act, the Food Sanitation Act, and the Act against Unjustifiable Premiums and Misleading Representations, the enactment of new regulations, or changes in the interpretation of laws. The company aims to minimize legal risk by strengthening its legal department and cooperating with external experts to grasp regulatory trends, thoroughly implementing company-wide compliance training, and establishing a strict review system for product labeling and advertising content.

If it becomes difficult to procure the diverse raw materials such as plant-derived ingredients and functional ingredients, or if their prices rise sharply, this could affect business performance. The company is working on risk diversification by securing multiple procurement sources, stable procurement through long-term supply contracts for key raw materials, promotion of research and development of alternative materials, and cost reduction through improved raw material usage efficiency.

If advertising activities fail to achieve the expected effect, customer acquisition may not proceed as planned, potentially affecting business performance. The company aims to achieve effective advertising activities with reduced risk through measurement of the effectiveness of diverse advertising media and realization of an optimal media mix, formulation of marketing strategies based on detailed analysis of target customers, establishment and thorough implementation of SNS operation guidelines, and strengthening of word-of-mouth marketing.

The company is actively recruiting new graduates and mid-career hires, but if it is unable to secure and develop the necessary talent, this could affect the execution of its growth strategy. The company aims to utilize a wide range of talent through the development of an attractive compensation system and workplace environment, enhancement of in-house training programs, cultivation and securing of specialized talent through industry-academia collaboration, and introduction of systems supporting diverse working styles.