PLATZ Co.,Ltd. Q4 FY2025 earnings call

Company Overview and Core Positioning

• Platz is a medical and care bed manufacturer founded in 1992, listed on the Tokyo Stock Exchange Standard market after moving from the Growth market in March 2025. It follows a fabless operating model, with most bed manufacturing outsourced to its equity-method affiliate SHENG BANG METAL in Vietnam.
• The company's core value proposition is "high quality, high functionality, low price" to deliver strong cost performance for customers.

Core Competitive Strengths

• High Quality: Primary manufacturing facility in Vietnam holds Japanese JIS factory certification, and received an Excellent Award from Japan's Ministry of Economy, Trade and Industry for accident-free manufacturing.
• High Functionality: Flexible in-house product development with joint research partnerships with academic institutions such as Fujita Health University. Recent product launches include the Mioretto 3 Next standard rental bed (optimized for light weight, easy installation and automated washing) and the new Aspino medical facility bed with built-in bed exit sensors.
• Low Price: Leverages low-cost manufacturing in Vietnam, maintains minimal fixed capital expenditure via its fabless model, and focuses on a streamlined product portfolio to improve production and inventory efficiency, enabling competitive pricing across all market segments.

Mid-Term Strategic Priorities

1. Domestic Market Expansion and Entry into New Segments:
   • Target to increase in-home care bed share from 24.5% to 40% and medical/elderly facility bed share from 10% to 25% by fiscal year 40 (6 years out), reaching annual shipment volumes of 50,000 and 12,000 units respectively, via increased marketing, R&D investment and sales capability building.
   • Expand beyond beds to add more adjacent care products (e.g. standing handrails launched last year with growing shipments) and leverage Yamato Sangyo's capabilities to develop care-focused mattresses.
   • Pilot new value-added services for understaffed care industry clients, including door-to-door delivery and installation of beds, with plans to expand maintenance and management services.
2. Strengthen Manufacturing Capabilities
   • Integrate existing facilities (SHENG BANG METAL in Vietnam, acquired Yamato Sangyo) and the new under-construction joint venture factory with Haier in Zhejiang, China to scale production for the Chinese market, with a goal to achieve top-tier industry technical capability by fiscal year 40.
3. Strengthen Management Base and Talent Development
   • Prioritize building a formalized employee education and training system, adopting modern development methods to build internal capability over the mid-term.
4. Strengthen East and Southeast Asian Overseas Markets
   • Lead China market expansion via the Haier joint venture, and actively seek new agency partners to expand operations in Indonesia, Thailand and India post-COVID.

1. Welfare Equipment Distribution Market: Excluding Yamato Sangyo, this segment accounts for approximately 70% of total revenue, and grew by 260 million yen year-over-year. Current market share in the rental bed segment is 24.5%.
2. Medical and Elderly Facility Market: Grew by 300 million yen year-over-year. Current market share in this segment is 10.2%.
3. Furniture and Bedding Distribution Market: Revenue is almost entirely from the acquired Yamato Sangyo, a urethane processing company, and contributed to overall revenue growth following the M&A.
4. Overseas Market: China operations are held through an equity-method joint venture, so revenue is not consolidated. Non-China overseas revenue is projected at approximately 200 million yen for the current mid-term plan period.

Overall full year 2025 June period consolidated results: Total revenue of 8.422 billion yen (+31.9% YoY), operating profit of 183 million yen (+389.4% YoY), ordinary profit of 240 million yen (+28.1% YoY), net income of 192 million yen (+193.8% YoY).

• Annual targets through fiscal 36 (3-year mid-term plan): Platz projects revenue of 8.8 billion yen (fiscal 34, +4.5% YoY), 9.5 billion yen (fiscal 35), and 10.5 billion yen (fiscal 36, exceeding 100 billion yen total). Corresponding operating profit targets are 400 million yen, 500 million yen, and 600 million yen, with ordinary profit of 425 million, 550 million, and 650 million yen, and net income of 275 million, 375 million, and 450 million yen.
• Market-specific guidance: The two core domestic bed segments (welfare distribution, medical/elderly facilities) will grow steadily. The furniture/bedding segment will moderate sales slightly in fiscal 34 after exceeding expectations in fiscal 33, before resuming growth thereafter.
• Dividend guidance: Maintains a target 30% payout ratio. Planned dividends are 24 yen (fiscal 34), 32 yen (fiscal 35), and 38 yen (fiscal 36), rising in line with net income growth.
• Management expects steady gradual growth rather than rapid hyper-growth, aligned with the stable demand outlook for the aging care market.

• Japanese Long-Term Care Insurance Reform Risk: Changes to insurance coverage and benefit levels can impact demand for care beds and rental services.
• Foreign Exchange Rate Fluctuation Risk: Most manufacturing is sourced from Vietnam, so yen exchange rate swings directly impact input costs and profit margins.
• Intellectual Property Management Risk: Risks related to unauthorized use of the company's intellectual property, or potential third-party IP claims.
• Production and Procurement Risk: Disruptions to overseas manufacturing or supply chains can impact production and delivery schedules.
• Management stated it aims to manage these risks and pursue solid, stable growth.

Q: What is Platz's planned capital policy to improve ROE, given the current low PBR? / A: Management said that there are no specific new capital policies to announce at this time. It believes the first priority to improve ROE is to steadily grow earnings and accumulate net assets to drive returns higher.

Q: What is the growth outlook for relationships with major clients including Nippon Care Supply and Nishikawa? Is the Nishikawa relationship a one-off opportunity? / A: Management confirmed these major clients make a large contribution to revenue stability and building a solid earnings base. The company aims to deepen these relationships to support continued long-term growth. The Nishikawa relationship is a long-standing existing client of acquired Yamato Sangyo, and it contributes heavily to Yamato's stable earnings. Platz aims to grow this relationship further, and also expand Yamato's sales to other new clients leveraging the combined group's capabilities.

Q: What is the nature of the cooperation with Haier, and what is the opportunity for large-scale expansion of Platz products into the Chinese market via Haier? / A: Management confirmed that the joint venture with Haier was established last year, but has not yet started full operations. The partnership was formed because Haier sought to enter the Chinese care bed market, and wanted to leverage Platz's technical and manufacturing know-how developed in Japan. The joint venture will specifically manufacture and sell care beds for the Chinese market.

Q: What drove the large 4.9x year-over-year increase in operating profit, and can this strong improvement continue to reach 2.2x growth next year? / A: Management stated the key drivers were crossing the break-even point on higher sales, contribution from the acquired Yamato Sangyo, and successful cost reduction at the Vietnamese manufacturing facility that offset headwinds from yen depreciation, allowing the core bed business to become profitable. Going forward, the 145 yen/dollar forecast for next year (compared to 150+ yen last year) will improve gross margin by roughly 2%, and continued cost reduction and sales growth will drive further profit gains to hit the 400 million yen operating profit target. Management confirmed it is targeting the profit levels laid out in the mid-term plan after next year's strong growth.