3583.T

• Historical Background and Core Business

  • Founded in 1892 as Tokyo Hat Manufacturing, renamed to Aubex in 1985; leverages textile processing expertise to become a leading global nib manufacturer, with recent expansion into medical devices and cosmetics.
  • 2025 March term saw company-wide strengthening of new product development combining group core technologies, delivering steady sales and profit growth.

• Previous Mid-Term Management Plan (FY2022-FY2024) Review

  • Despite headwinds from the COVID-19 pandemic and the Ukraine invasion, both segments achieved sales growth in the final year; Tech Products exceeded operating profit plans, and overall operating profit, ROE hit final year targets even if total revenue came in slightly below plan. 2024 fiscal year actual results: revenue 6.035 billion yen, operating profit 841 million yen, operating margin 13.9%, ROE 8.9%.
  • Key achieved milestones: Tech Products secured large new orders for high-value-added nib products, expanded sales in Asia, and established a new marketing strategy office; Medical Products captured top domestic market share for Besfuser chemotherapy infusion products and grew awareness for labor analgesia products; company achieved compliance with Tokyo Stock Exchange listing maintenance standards and reduced outstanding debt.

• Long-Term 10-Year Vision

  • Targets becoming a high-value manufacturing company with strong global brand recognition; focuses on creating new value by combining core group technologies, improving profitability via unique technology and innovation, and delivering quality products to global consumers.
  • Plans to grow Tech Products profitability via high-value product development, build a profit base around the Besfuser product line for Medical Products, and pursue creation of a third core business segment by 2034.

• 9th Mid-Term Management Plan (Aubex Vision 2027, FY2025-FY2027)

  • Core basic policy: Promote ESG management, pursue new value creation and sustainable growth aligned with the 10-year vision.
  • Three core strategies: Build a strong profit base by advancing core molding technology to create new value; drive environmental impact reduction via greenhouse gas emission cuts and development of eco-friendly products; support growth through human capital investment to improve employee engagement, strengthen governance and maintain sustainable operations.
  • Segment strategic priorities: Tech Products will strengthen sales in high-growth regions, expand high-value and eco-friendly product lines, invest in production capacity and efficiency, and pursue new market expansion through collaboration with Medical Products; Medical Products will shift to high-value products, expand domestic market share for Besfuser products, launch new products in urology and gastroenterology, build global market entry infrastructure, and strengthen product development capabilities.
  • Cash allocation plan: Targets 2.5 billion yen+ in cumulative operating cash flow over 3 years; allocates 1.5 billion yen+ to capacity expansion, 600 million yen+ to growth investments (new product development, overseas base expansion, eco-friendly product R&D), and 400 million yen+ to shareholder returns, balancing allocation for long-term corporate value growth.
  • Capital efficiency and share price strategy: Current PBR is 0.62x, improved from prior periods but still below 1x; ROE reached 8.9% in FY2025, and management targets PBR improvement through steady execution of mid-term plan initiatives to lift ROE and PER, with a focus on exceeding cost of capital through sales growth, high-value product expansion, and total asset optimization including inventory rationalization.

• FY2026 March Term (next fiscal year) financial guidance: Expects 2.7% year-over-year revenue growth to 6.2 billion yen; projects a 10.9% year-over-year decrease in operating profit to 750 million yen, a 10.3% decrease in ordinary profit to 730 million yen, and a 12.1% decrease in net profit attributable to parent shareholders to 510 million yen, factoring in global economic uncertainty.
• Dividend guidance: 2025 March term full-year dividend is planned at 33 yen per share, a 13 yen per share increase from the prior year; 2026 March term dividend is planned at 35 yen per share, representing another increase. Consolidated payout ratio is expected to be 15.8% for FY2025 and 18.9% for FY2026.
• 9th Mid-Term Management Plan (FY2025-FY2027) end targets: Total consolidated revenue of 7 billion yen (16% growth from FY2024), operating profit of 1 billion yen (18.8% growth from FY2024), operating margin of 14.3%, and ROE of over 9%. The plan calls for cumulative capital expenditure of more than 1.5 billion yen over three years, exceeding the 600 million yen spent in the prior mid-term plan period.
  • Mid-term segment targets: Tech Products will reach 4.8 billion yen in revenue and 1.1 billion yen in operating profit (22.9% margin); Medical Products will reach 2.2 billion yen in revenue and 300 million yen in operating profit (13.6% margin).

Aubex operates two business segments for the 2025 March term (fiscal year ended March 2025):

1. Tech Products Segment: Revenue of 4.334 billion yen, up 14.2% year-over-year. Segment profit of 1.06 billion yen, up 43.2% year-over-year. Revenue contribution to total consolidated revenue is 71.8%.
2. Medical Products Segment: Revenue of 1.701 billion yen, up 6.9% year-over-year. Segment profit of 123 million yen, down 17.8% year-over-year. Revenue contribution to total consolidated revenue is 28.2%. Total consolidated revenue for the full year was 6.035 billion yen, up 12.0% year-over-year, with total operating profit of 841 million yen, up 50.1% year-over-year.

• External macro risks: Persistent global inflationary pressure, shifting international trade policies, and growing concerns over global economic slowdown create ongoing uncertainty for future performance.
• Segment-specific operational risks: Tech Products needs to address underpenetration of high-growth regions, inventory imbalances at overseas sales locations, insufficient production capacity, and slow progress on new business creation. Medical Products needs to address insufficient production capacity, slow global expansion of Besfuser labor analgesia products, and a need to speed up and strengthen product planning and development capabilities.
• Company-wide risks: Shrinking labor supply creates challenges for securing sufficient talent, and the company currently trades at a PBR below 1x, requiring ongoing efforts to improve capital efficiency and align operations with the goal of increasing shareholder value.

No formal question and answer section is included in the provided transcript.