ASANTE INCORPORATED

Business Details

Asante provides Termite Control, Moisture Control, and Earthquake Resistance as its core services targeting existing wooden houses. Its main sales channel is through partnerships with JA (Japan Agricultural Cooperatives) and others, with its own employees handling everything from sales to construction and after-sales maintenance. The company sees approximately 26 million wooden houses nationwide as potential demand, and is expanding its business on the tailwind of government policy promoting the extension of the lifespan and maintenance of existing housing stock. In FY2026 (ending March 2026), net sales were ¥14,355 million, with an operating margin of 5.8%.

Recent Overview

Operating profit declined 31.9% due to upfront growth investments; impairment loss of ¥284 million recorded as extraordinary loss

In FY2026 (ending March 2026), net sales increased by ¥331 million (up 2.4%) year on year to ¥14,355 million, securing revenue growth. However, selling, general and administrative expenses swelled by ¥529 million year on year to ¥9,008 million, causing operating profit to decrease by ¥390 million (down 31.9%) to ¥835 million. In addition, as a result of recording an impairment loss of ¥284 million as an extraordinary loss following the suspension of operations at the Inawashiro General Training Center (Yama-gun, Fukushima Prefecture), profit attributable to owners of parent declined sharply to ¥274 million (down 60.1% year on year). For FY2027 (ending March 2027), the company forecasts further profit decline, with net sales of ¥13,660 million (down 4.8%) and operating profit of ¥200 million (down 76.1%), due to upfront expenses associated with improved working conditions including an increase in annual holidays and aggressive growth investments. The company has newly formulated a three-year fixed medium-term management plan targeting net sales of ¥16,900 million and operating profit of ¥1,440 million for FY2029 (ending March 2029). Total number of employees has increased for the first time in five years, and the company has designated the expansion of revenue-generating capacity through securing human resources as its top priority.

Key Products

Growth Drivers

• Large-scale potential demand for termite control targeting approximately 26 million wooden houses nationwide
• Continuation of government policy ('rebuilding the foundation to support housing life in the era of 100-year lifespans') promoting the extension of lifespan and maintenance of existing housing
• Diversification of sales channels through expansion of partnerships with JA and other agricultural cooperatives and corporate partners
• Initiatives to raise awareness of the 'Shiroari Busters®' brand utilizing TV commercials, web advertising, and SNS
• Improved sales efficiency and contract acquisition accuracy through digitalization, including nationwide rollout of the electronic map system across all branches and utilization of generative AI
• Stimulation of new demand through disaster prevention and mitigation appeals via the 'Ouchi Naga-mochi Project'
• Expansion of revenue-generating capacity through an increase in new hires resulting from revised working conditions and the first increase in total employees in five years
• Rebuilding of growth foundations based on the three-year fixed medium-term management plan with FY2029 (ending March 2029) as the final year

Risks

• Risk of seasonal demand fluctuation due to unstable weather and temperatures affecting termite activity
• Suppression of personal consumption due to sluggish consumer sentiment and rising prices
• Risk of significant profit decline in FY2027 (ending March 2027) due to upfront expenses for improved working conditions and growth investments (operating profit forecast of ¥200 million, down 76.1% year on year)
• Risk of rising personnel costs and difficulty securing human resources amid a tight labor market
• Increase in business costs due to rising resource prices, etc.
• Seasonal fluctuation risk with business results (particularly profit) concentrated in the interim period (April to July)
• Dilution risk from conversion of convertible bond-type bonds with subscription rights to shares (¥1,999 million)
• Risk of additional impairment losses on idle assets (fixed assets other than the Inawashiro General Training Center)