CREATE MEDIC CO.,LTD.

Business Details

The company's core business is the manufacture and sale of disposable catheters, tubes, and medical devices made primarily from silicone rubber. It operates through three sales channels—domestic proprietary sales, overseas sales, and OEM sales—with products organized into five categories: Urology, Gastroenterology, Surgical, Vascular, and Nursing & Examination and Other. The company has production bases in Japan, China, and Vietnam, and its customers include medical institutions and medical device manufacturers both in Japan and overseas. In the first quarter of FY2026 (ending December 2026), the company achieved revenue growth to ¥3,364 million (up 4.5% year on year), but operating profit declined sharply to ¥140 million (down 36.6% year on year) due to a rise in the cost-of-sales ratio caused by yen depreciation and increased expenses for developing new overseas markets.

Recent Overview

Revenue increased, but operating profit fell sharply by 36.6% year on year due to yen depreciation and increased overseas market development expenses

In the first quarter of FY2026 (ending December 2026), strong performance of new urology products drove growth in both proprietary sales (¥1,809 million, up 5.7% year on year) and OEM sales (¥372 million, up 15.7% year on year), resulting in revenue of ¥3,364 million (up 4.5% year on year). On the other hand, a rise in the cost-of-sales ratio due to yen depreciation, along with increased selling, general and administrative expenses associated with expanding sales channels into India and Southeast Asia, pressured profitability, causing operating profit to fall sharply to ¥140 million (down 36.6% year on year). The expansion of China's centralized procurement system to all provinces is expected to affect some products from the second quarter onward. Overseas sales of Gastroenterology Products declined due to a production suspension related to MDR compliance. The company acquired 211,200 shares of treasury stock (¥245 million), bringing the treasury stock balance at period-end to ¥1,443 million. The full-year earnings forecast (revenue of ¥13,960 million, operating profit of ¥1,060 million) remains unchanged.

Key Products

Growth Drivers

• Expansion of domestic proprietary sales through the launch of new urology products (proprietary sales of ¥1,809 million in Q1 of FY2026 ending December 2026, up 5.7% year on year)
• Increase in OEM sales driven by strong performance of Vascular Products (¥372 million, up 15.7% year on year)
• Building an overseas business foundation through expanded sales channels in India and Southeast Asia
• Continued exports of urology products to Europe (favorable performance maintained in Europe)
• Promotion of cost reduction through diversification of suppliers and strengthened negotiating power
• Advancement of manufacturing function optimization and new business projects

Risks

• Risk of declining sales of urology products due to the expansion of China's centralized procurement system to all provinces (impact expected from Q2 onward)
• Risk of rising cost-of-sales ratio due to continued yen depreciation
• Risk of supply instability for petrochemical-based raw materials due to persistently high raw material and energy prices and Middle East tensions
• Risk of production suspension and declining sales of gastroenterology products due to MDR (European Medical Device Regulation) compliance
• Risk of profit pressure from increased selling, general and administrative expenses associated with developing new overseas markets (India and Southeast Asia)
• Risk of dilution from conversion of convertible bond-type bonds with subscription rights to shares (¥749 million)
• Decrease in shareholders' equity due to continued acquisition of treasury stock (period-end treasury stock of ¥1,443 million)