ASAHI EITO HOLDINGS CO.,LTD.

Business Details

The Housing Business sells sanitary equipment and washstand equipment such as sanitary ware and vanity units, as well as architectural finishing coatings. It is the group's largest segment, accounting for approximately 63.8% of group revenue (H1 FY2026, ending November 2026), but has continuously recorded operating losses due to a combination of rising costs from surging raw material prices and yen depreciation, together with increased SG&A expenses. In the current interim period, the loss narrowed year on year, showing signs of improving profitability.

Recent Overview

Revenue down 5.4% year on year, but operating loss improved by ¥42 million

In H1 FY2026 (ending November 2026) (December 2025 to May 2026), Housing Business revenue was ¥1,337 million (down 5.4% year on year), continuing the decline. Meanwhile, the operating loss improved by ¥42 million to ¥84 million from ¥126 million in the same period of the prior year. While weakness in the real estate business weighed on revenue, various profitability improvement initiatives led to gross margin improvement and cost reduction results, contributing to the narrowing of the loss.

Key Products

Growth Drivers

• Capturing new demand through the full-scale rollout of the Reform & Renovation Business (launched October 2024)
• Cost reduction and business structure streamlining through consolidation of sales and production sites
• Business expansion through creation of synergies among group companies
• Strengthening profitability through continued gross margin improvement and expense reduction initiatives

Risks

• Continued rise in cost of sales due to surging raw material prices and yen depreciation
• Sluggish demand in the housing equipment market and impact of price increases on personal consumption
• Material uncertainty regarding going concern assumption (unimproved profitability and financial condition across the group)
• Overseas procurement risk (exchange rate fluctuations and geopolitical risk including the Vietnam base)
• Impairment risk on fixed assets (goodwill impairment loss of ¥34 million was recorded two fiscal years ago)
• Limited synergy effects with the Lifestyle Business due to continued sluggishness in the real estate business

Business Details

The Lifestyle Business handles installation and sales of solar power generation and storage battery systems, facility management, and real estate sales. Orders for solar and storage battery equipment obtained through event-based sales at home centers and similar venues are the main source of revenue, and the segment also operates a Reform & Renovation Business. In H1 FY2026 (ending November 2026), the real estate business was sluggish, causing revenue to decline 4.7% year on year, but the operating loss slightly improved to ¥5 million from ¥6 million in the same period of the prior year.

Recent Overview

Revenue down 4.7%, but operating loss improved by ¥1 million year on year

In H1 FY2026 (ending November 2026) (December 2025 to May 2026), the Lifestyle Business saw steady performance in the commercial facility management business and employment support business, while the real estate business was sluggish, resulting in revenue of ¥750 million (down 4.7% year on year). The operating loss improved by ¥1 million to ¥5 million from ¥6 million in the same period of the prior year, indicating that cost-side profitability improvement initiatives are showing some results. However, the segment has not yet returned to profitability, and full-year profit recovery remains a challenge.

Key Products

Growth Drivers

• Continued expansion of solar and storage battery orders through event-based sales at home centers and similar venues
• Expanding revenue contribution from the Reform & Renovation Business (launched October 2024)
• Stable earnings contribution from steady performance in the commercial facility management and employment support businesses
• Creation of business synergies through cooperation among group companies (establishment of the Holdings Business Development Group and Event Sales Group)
• Gross margin improvement and cost reduction through various profitability improvement initiatives

Risks

• Risk of downward pressure on revenue from continued sluggishness in the real estate business
• Rising cost of sales due to surging raw material prices and yen depreciation
• Revenue dependence on a major customer, Japan Life Support Co., Ltd. (¥504 million in FY2025 ending November 2025, approximately 30% of revenue)
• Pressure on profitability from increased launch costs for the new Reform & Renovation Business
• Material uncertainty regarding going concern assumption (unimproved financial condition across the group)
• Amortization burden from goodwill balance (¥70 million at end of FY2025 ending November 2025; ¥28 million annually)

Business Details

The Investment Business is a segment directly operated by ASAHI EITO Holdings Co., Ltd., with M&A (Corporate Acquisition) and Real Estate Leasing as its main activities. It serves as a command-center function driving the group's business diversification strategy. Although its revenue scale is small at approximately 0.4% of consolidated revenue, it maintains an operating profit. Its asset structure reflects intra-group investment and capital relationships.

Recent Overview

H1 revenue expanded to ¥8 million, up 175.8% year on year

In H1 FY2026 (ending November 2026) (December 1, 2025 to May 31, 2026), Investment Business revenue was ¥8 million (up 175.8% year on year), and operating profit was ¥2 million (up 36.9% year on year). While the revenue scale remains small, it expanded significantly from ¥3 million in the same period of the prior year. At the group level, ¥571 million in funding was raised in the interim period through exercise of stock acquisition rights and other means, of which ¥59 million was allocated to cryptocurrency acquisition, marking the start of new investment activities.

Key Products

Growth Drivers

• Expanding the group's business portfolio through aggressive pursuit of M&A strategy
• Stable earnings contribution from real estate leasing
• Enhancing business value through creation of synergies among group companies
• Securing capacity for new investments utilizing funds raised through third-party allotment capital increases and exercise of stock acquisition rights (up to approximately ¥2.7 billion)
• Developing new revenue sources such as cryptocurrency asset management (treasury business)

Risks

• The Investment Business segment's revenue scale is extremely small (¥8 million in the interim period), limiting its direct contribution to group earnings
• Uncertainty regarding the success of M&A deals and integration effects
• Material uncertainty regarding going concern assumption exists across the group, which may affect the continuation of investment activities
• No guarantee that fundraising through stock acquisition rights will be exercised as planned, creating uncertainty over securing investment funds
• New risks associated with cryptocurrency asset management, including valuation losses, operating losses, and management costs (in the current interim period, a cryptocurrency valuation loss of ¥4 million and management costs of ¥6 million, among others, were recorded)

Business Details

The "Other" segment comprises business segments not included in the reportable segments (Housing Business, Lifestyle Business, Investment Business), and its main revenue source is management guidance fees provided by ASAHI EITO Holdings Co., Ltd. to group companies. No revenue from external customers is recorded; all revenue is recognized as intersegment internal revenue or transfers, and is eliminated as an adjustment item on the consolidated income statement.

Recent Overview

Interim internal revenue decreased year on year, but segment profit turned positive

In H1 FY2026 (ending November 2026) (December 1, 2025 to May 31, 2026), internal revenue of the "Other" segment decreased to ¥94 million (from ¥106 million in the same period of the prior year), while segment profit (before adjustment) turned positive at ¥4 million (compared with a loss of △¥3 million in the same period of the prior year). "Other/adjustment" on the consolidated income statement contributed a profit of ¥7 million (versus ¥1 million in the same period of the prior year), contributing to the narrowing of the group's overall operating loss.

Key Products

Growth Drivers

• Increase in management guidance fee revenue accompanying business expansion at group companies
• Expansion of the number of group companies and business scale through pursuit of the business diversification strategy
• Deepening of group-wide cooperation through strengthened holding company functions
• Expansion of group management functions accompanying the launch of the treasury business (including cryptocurrency asset management)

Risks

• Risk of decreased management guidance fee revenue due to deteriorating performance at group companies
• Material uncertainty regarding going concern assumption (unimproved profitability and financial condition across the group)
• Cash flow risk if fundraising through stock acquisition rights is not exercised as planned
• Structural constraint limiting the segment's contribution on the consolidated financial statements due to elimination of internal transactions