SHINKO Inc.

Business Details

Leveraging an engineer network across nationwide branches and sales offices, the segment primarily provides maintenance for electronic medical records and receipt computers manufactured by Wiemecs Co., Ltd. and electronic medication history systems manufactured by PHC Corporation, as well as call center, help desk, and life/death monitoring services. Recurring revenue based on maintenance contracts (stock-type) forms the core of the business, giving it a stable revenue structure that is less susceptible to economic fluctuations. As an independent maintenance company, its strength lies in its ability to support multi-vendor equipment across both medical and non-medical fields.

Recent Overview

Profit grew 16.6% against a 4.4% increase in revenue, marking significant improvement in profitability, while Technical Center functions were also expanded

Full-year segment revenue for FY2026 (ending March 2026) was ¥5,140 million (up 4.4% year on year), and segment profit was ¥1,018 million (up 16.6% year on year), achieving profit growth that far exceeded the revenue growth rate. The shift to the system support contract format for Wiemecs products has progressed, and the number of contracts is trending upward. Starting in September, the Technical Center newly began repair operations for electronic whiteboards and has also expanded its business scope to include outsourced medical equipment repair. Maintenance contracts following the completion of network construction work associated with new retail store openings have also increased.

Key Products

Growth Drivers

• New contract acquisition among previously uncontracted customers and an increase in contract numbers driven by the shift to system support contracts for Wiemecs products
• Increase in the number of maintenance cases for online eligibility verification equipment and equipment for home-visit nursing stations, driven by the promotion of medical DX
• Increase in network equipment maintenance cases associated with new retail store openings and expansion into new store areas (synergy from the Solutions Business)
• Expansion into new service areas at the Technical Center, including outsourced repair of electronic whiteboards and medical equipment
• Accumulation of stock-type revenue through the expanding number of Flat12 (printer subscription) installations
• Expansion of network equipment maintenance for diverse industries including banks, hospitals, and airports
• Increase in the number of electronic medical record maintenance and call center outsourcing contracts associated with client mergers, etc. (planned for FY2027 ending March 2027)
• Initiation of efforts toward the full-scale expansion of LCM (life cycle management) projects

Risks

• Tendency for revenue growth to be constrained by the ongoing shift to system support contracts for Wiemecs products (profit increases, but revenue growth rate is limited)
• High dependency on a specific vendor (Wiemecs Co., Ltd.), creating risk that changes in the vendor's business policy could affect performance
• Difficulty in hiring and retaining maintenance engineers due to the IT talent shortage, and upward pressure on labor costs (bonus payments increased from 3 months' to 4 months' worth of salary)
• Increase in system development costs associated with the nationwide rollout of the Medical Equipment Repair Business license
• Risk of new entrants into the maintenance service market by competitors or intensified price competition among existing competitors
• Risk of rising maintenance costs due to soaring raw material and parts prices stemming from the worsening situation in the Middle East