ENVALITH
株式会社トーカイ logo

TOKAI Corp.

9729・Prime Market・Services

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株式会社トーカイ logo
TOKAI Corp.9729

Business

Tokai Corporation is a comprehensive service company founded in 1955 and headquartered in Gifu. It operates around three core segments: bedding and linen rental for medical institutions and nursing care facilities along with nursing care product rental (Health & Living Services); the "Tampopo Yakkyoku" dispensing pharmacy chain (Dispensing Services), based in the Tokai, Hokuriku, Kansai, and Shikoku regions; and environmental sanitation product rental under the Leaseking brand along with building cleaning and management (Environmental Services). The group comprises 26 consolidated subsidiaries and 2 affiliated companies, with medical institutions, nursing care and welfare facilities, hotels, and general corporations as its main customers. As a corporate group supporting medical and nursing care infrastructure in a super-aged society, the company posted consolidated net sales of ¥159,664 million for FY2026 (ending March 2026), a record high.

Business Model

In the core Health & Living Services and Environmental Services businesses, the company rents bedding, linens, nursing care supplies, and environmental sanitation products to customers, adopting a circular rental model in which used items are collected, cleaned, reprocessed, and re-leased. This continuous billing structure generates stable cash flow. In the pharmacy services business, insurance dispensing fees serve as the main revenue source, with scale expansion driven by rising per-prescription unit prices and new store openings. The Leasekin business leverages a franchise network of approximately 900 regional headquarters and agencies nationwide, achieving highly asset-efficient business operations.

Company Strengths

Holds 104 long-term care insurance-designated business locations (as of end-March 2026), 161 dispensing pharmacies, and approximately 900 Leaseкин (Leasekin) FC locations. Long-standing business relationships with medical institutions and long-term care facilities are not easily replaced, and the continuity of rental contracts supports stable earnings. Operating cash flow of ¥11,442 million in FY2026 (ending March 2026) marked a record high.

Adopts a circular business model in which bedding, linen, nursing care supplies, and environmental sanitation products are collected, cleaned, reprocessed, and re-rented. In FY2026 (ending March 2026), the Silver business achieved cost reductions through improved rental material turnover, expanding operating profit in the Health & Living Services segment by 19.9% year on year (up ¥1,415 million) to ¥8,546 million.

The company has continuously pursued M&A, mainly in the Silver business, including mik japan in July 2024, Kaigo Center Hanaoka in December 2024, and Eva (northern Kyushu) in December 2025. Under the medium-term management plan, it envisions a new investment allocation of ¥10 billion, actively participating in business succession deals to expand regional market share.

ENVALITH's Perspective

Net sales reached ¥159,664 million (+6.8% YoY), operating profit ¥9,382 million (+14.5% YoY), and profit attributable to owners of parent ¥6,069 million (+28.3% YoY), with all three key metrics hitting record highs. In addition to the full-year contribution from two subsidiaries consolidated mid-way through the prior fiscal year, higher rental asset turnover in the silver business, improved profitability in the food service business, and price optimization in bedding and linen supplies pushed up profit. The operating profit margin improved from 5.5% to 5.9%, and ROE rose from 5.5% to 7.2%. Profit quality has clearly improved compared with the prior fiscal year.

The company's forecast for FY2027 (ending March 2027) calls for net sales of ¥165,400 million (+3.6%), but a decline in operating profit to ¥8,985 million (-4.2%) and ordinary profit to ¥9,437 million (-6.5%). The main causes are headwinds to the dispensing pharmacy business from the April 2026 revision to dispensing fee reimbursement rates (an external factor), and higher fuel costs at laundry plants due to surging energy prices (another external factor). The company aims to offset these with higher rental sales in the health and living services segment and service price optimization, but the structural decline in profitability of the dispensing services business (operating profit margin of 3.9%) remains an ongoing challenge.

In FY2026 (ending March 2026), the company carried out share buybacks of ¥6,317 million (more than double the prior fiscal year) and paid an annual dividend of ¥68 (including a ¥5 commemorative dividend for the 70th anniversary), expanding cash flow from financing activities to -¥7,831 million. The dividend forecast for FY2027 (ending March 2027) is an annual ¥80 (payout ratio of 40.4%), indicating continued dividend increases. On the other hand, share buybacks/retirements and dividend payments reduced net assets from ¥85,841 million to ¥84,431 million, and the equity ratio fell from 74.5% to 73.0%. M&A investment capacity remains sufficient, but the balance between enhanced shareholder returns and growth investment will be a key focus going forward.

Growth Strategy

Aiming to achieve the revenue and profit targets of the Medium-Term Management Plan through Silver business M&A, new store openings leveraging pharmacies, and group synergies

A strategy of capturing business-succession needs among care-product rental operators to build up regional market share. The company continues active M&A, including the acquisition of all shares of Eva Co., Ltd. (Fukuoka City) in northern Kyushu in December 2025. Kaigo Center Hanaoka and mik japan, consolidated in the previous fiscal year, contributed to full-year results starting this period.

A proprietary model launched this period that opens Silver business outlets within the existing space of the 161 dispensing pharmacy stores. This speed-focused rollout, which minimizes property acquisition costs, simultaneously expands regional market share for the Silver business and strengthens the community comprehensive care function of Tampopo Pharmacy.

Productivity is being improved through the launch of AI-based medication history management, centralization of medical clerical operations, and remote medication guidance by pharmacists. Increased technical fee revenue from strengthening the family-pharmacy function and obtaining the Medical DX Promotion System Add-on is absorbing the impact of drug price revisions and rising costs. Responding to the FY2027 (ending March 2027) dispensing fee revision is an urgent priority.

Starting with the absorption-type merger of Bilmen Co., Ltd. into T-Assist (implemented April 1, 2025), which improved business efficiency in the Kanto region, the company aims to strengthen collaboration among businesses and locations across the group to enhance profitability. The Medium-Term Management Plan positions this period as one of profitability improvement and creation of new value.

Last updated: July 19, 2026