KOBAYASHI PHARMACEUTICAL CO.,LTD.
4967・Prime Market・Chemicals
Business
Kobayashi Pharmaceutical, founded in 1886, is a consumer products manufacturer that develops everyday lifestyle brands such as Anmerutsu, Bluelet, Shoshuu-Moto, Netsusama Sheet, and Body Warmers (Kairo) both domestically and internationally. The company operates on two main pillars, the Domestic Business (net sales of ¥122,920 million) and the International Business (net sales to external customers of ¥46,994 million), and maintains manufacturing and sales bases in the United States, China, and Southeast Asia. Its primary customers are general consumers, and products are sold through retail channels such as drugstores and supermarkets. Following the red yeast rice (beni-koji) issue in 2024, the company is at a turning point, advancing quality and governance reforms as well as restructuring of its business portfolio.
Business Model
Under the slogan of turning "wouldn't it be nice if..." ideas into reality, the company develops and manufactures unique products that solve niche everyday problems, builds awareness through marketing centered on TV advertising, and sells through retail channels. The Domestic Business accounts for approximately 71% of sales, with continued investment of ¥9,122 million in R&D expenses and ¥20,723 million in capital expenditures. Dependence on PALTAC, the largest wholesaler, is high at 39.7%, and wide-area expansion leveraging distribution efficiency underpins the company's earnings base.
Company Strengths
The company holds multiple brands that have been established in the market for decades, including Anmerutsu (launched 1967), Bluelet (1969), and Sawaday (1975). It offers highly recognized products across multiple categories such as healthcare, household products, and Body Warmers (Hokkairo, etc.), forming a stable earnings base with net sales to outside customers, both domestic and overseas, of ¥118,064 million.
As of the end of December 2025, the equity ratio stood at 76.3%, with net assets of ¥211,008 million, indicating an extremely strong financial base. Cash and cash equivalents at period-end increased by ¥18,719 million year on year to ¥64,693 million, and free cash flow secured was ¥25,435 million. A financial structure close to debt-free underpins the company's capacity for strategic investment.
The company has manufacturing and sales bases in the US, China, Southeast Asia, Thailand, Indonesia, Malaysia, Singapore, and other locations, with International Business net sales of ¥48,415 million (up 3.4% year on year). The US Body Warmers (Kairo) business performed well, with net sales to outside customers of ¥23,813 million (up 12.1% year on year), building up a track record of global expansion.
ENVALITH's Perspective
Performance Trend
Revenue peaked at ¥173,455 million in FY2023 (ended December 2023), then remained flat in the ¥165,000 million range in FY2024 and FY2025. The full-year forecast for FY2026 (ending December 2026) projects a recovery to ¥173,000 million (up 4.4% year on year). On the other hand, operating profit plunged from ¥25,780 million in FY2023 (ended December 2023), before the Benikoji (red yeast rice) issue came to light, to ¥14,923 million in FY2025 (ended December 2025), and is expected to decline further to ¥12,500 million in FY2026 (ending December 2026). In the first quarter of FY2026 (ending December 2026), revenue was ¥33,665 million (up 3.2% year on year), while SG&A expenses, including advertising expenses, swelled to ¥16,087 million (up 13.7% year on year), resulting in operating profit of ¥1,350 million (down 46.7% year on year). As external factors, disruptions to international logistics stemming from the situation in the Middle East, surging energy prices, and currency fluctuations are heightening uncertainty in the business environment, but the impact on the first quarter's results is described as minor.
Growth Strategy
Aiming for operating profit of ¥22,000 million and ROE of 10% by 2028 through trust restoration and business focus
Continuing to prioritize sincere compensation response to customers and companies affected by health damage. Compensation payments are proceeding while gradually drawing down the provision for product recall-related losses, with extraordinary losses recorded in Q1 FY2026 (ending December 2026) at ¥318 million (down from ¥688 million in the same period of the previous year). Risk of additional costs from litigation and other matters remains.
Following the full resumption of TV advertising in July 2025, advertising and promotional activities are being conducted throughout the full year in FY2026 (ending December 2026). Both Healthcare and Household Products continue to show a recovery trend in sales, with Q1 FY2026 (ending December 2026) Domestic Business external customer sales at ¥23,288 million (up 2.3% year on year). However, increased SG&A expenses are putting pressure on profit.
In China, the three core products (Body Warmers, Netsusama Sheet, and Anmerutsu) performed well (up 33.6% year on year). The U.S. saw a decline in sales due to supply issues with Healthcare Products (down 9.0% year on year), while Southeast Asia saw a decline due to the reaction from the prior infectious disease outbreak. Overall, the International Business recorded net sales of ¥10,203 million (up 5.1% year on year), but posted a segment loss of ¥338 million.
Through the establishment of Strategic Business Units (SBUs), the company is concentrating management resources on priority areas and promoting initiatives to improve the quality and efficiency of new product development. Ten new products were launched in spring 2025 and twelve in autumn 2025, contributing to sales. Sales through the company's own mail-order website and call center ended at the end of December 2025, and the channel structure is being reviewed.
Last updated: July 17, 2026