StemCell Institute Inc.

Business Details

Targeting expectant mothers and others as customers, the company operates a cell bank business that collects, separates and processes, and provides ultra-low-temperature long-term storage for cord blood and umbilical cord tissue. Revenue is composed of three categories: "processing fees" (separation fees, testing fees, registration fees), "storage fees" (prepayments recognized on a pro-rata basis over the storage period), and "other" (renewal fees, etc.). The company combines a strong network with obstetric and gynecological facilities with both real and digital channel marketing to continuously expand the number of stored samples. As of the end of March 2026, the cumulative number of stored samples (since founding) exceeded 110,000. The company is also promoting overseas expansion and related new businesses through its subsidiaries STEMCELL INNOVATIONS PTE. LTD. (Singapore) and Milcare Co., Ltd.

Recent Overview

Consolidated net sales reached a record high in the first year of consolidation, while consolidated operating margin declined to 7.2% due to upfront overseas investment

Consolidated financial statements began to be prepared from the second quarter of FY2026 (ending March 2026), consolidating subsidiaries STEMCELL INNOVATIONS PTE. LTD. and Milcare Co., Ltd. Net sales of ¥2,811 million marked a record high on a non-consolidated basis, driven by the steady performance of the domestic business. On the other hand, consolidated operating profit was limited to ¥202 million, with an operating margin of 7.2%, due to a combination of increased personnel costs from staff expansion and wage revisions, rising raw material prices, and business launch costs (increased SG&A expenses) at the Singapore subsidiary. For FY2027 (ending March 2027), the company forecasts net sales of ¥3,100 million (up 10.3% year on year), while expecting operating profit to decline to ¥100 million (down 50.7% year on year) due to continued upfront overseas expenses. Under the medium-term management plan, the company targets consolidated net sales of ¥5,500 million and consolidated operating profit of ¥1,000 million for FY2030 (ending March 2030).

Key Products

Growth Drivers

• Increased contract conversion rate and average unit price driven by penetration of the new storage plan "HOPECELL," and accumulation of stock-type storage fee revenue as the cumulative number of stored samples surpasses 110,000
• Increase in the number of inquiries and contract conversion rate driven by the "5-year free storage fee campaign" (through June 2026)
• Strengthened marketing across both real and digital channels through enhanced collaboration with obstetric and gynecological facilities, optimization of web advertising, and participation in maternity and baby-related events
• Establishment of a revenue base in Southeast Asia following the completion of the Singapore CPC and CCC (scheduled for May 2026) and the commencement of operations in the middle of FY2027 (ending March 2027) after obtaining the MOH license (estimated market size of 6,000 cases/year in Singapore and 3,000 cases/year in Indonesia, with a future target share of 50%)
• Enhanced appeal of the medical significance of cord blood storage and expanded storage demand driven by progress in clinical research at Osaka Metropolitan University, Kochi University, Duke University in the United States, and others
• Expansion of the Family Supernatant Manufacturing Service by Milcare Co., Ltd. (cumulative 37 orders received) and expansion of the partner clinic network
• Consideration of commercialization of the iPS cell manufacturing and storage service through joint research with iPS Portal, Inc., and expanded use of umbilical cord-derived culture supernatant in the cosmetic and free-choice medical treatment fields
• Improved operational efficiency through the planned replacement of the core system in FY2027 (ending March 2027)

Risks

• Structural risk of shrinking domestic market due to declining birthrate and falling number of births (approximately 720,000 births per year in Japan)
• Risk of delay in the start of overseas operations due to delays in obtaining the Singapore MOH license or regulatory changes
• Risk of continued decline in consolidated profit margin due to prolonged overseas business launch costs (FY2027, ending March 2027, operating margin forecast of 3.2%)
• Pressure on profitability from increased upfront investment costs such as rising personnel expenses and advertising expenses
• Uncertainty regarding the pace of penetration of new services (such as HOPECELL) and the risk of entry by competitors
• Safety and accident risks related to facilities for long-term storage of cord blood and umbilical cord tissue (such as liquid nitrogen management at storage centers)
• Impact on storage demand from regulatory changes such as the Act on the Safety of Regenerative Medicine, or delays or discontinuation of clinical research
• Collection risk associated with a significant increase in trade receivables (up ¥496 million) and low level of operating cash flow (¥73 million)