Worth reading
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How definitive the wording is.Items stated in the management plan
Partially revisedROE+2.0pt
基準 2,026Target2,028%
Each line is the climb from the baseline the document states to the target it sets. The slope is scaled against the largest climb in this document. For metrics expressed as percentages, differences are shown in percentage points (pt).
What happened to the previous planThe previous fiscal year's results were described as falling short of the sales forecast while achieving the profit target (no figures disclosed)
Total investment planApproximately ¥12.6 billion (approximately ¥12 billion in growth investment plus approximately ¥600 million in research and development expenses). Total cash inflows and outflows are approximately ¥17 billion.
Investment amount by sectorField Growth Investment / Amount Approximately ¥12.0 billion / Breakdown Renewal of the Yokohama Pharmaceutical Analysis Center, renovation work at existing facilities, construction of the Zao No. 2 Plant, renewal of the head office plant, and installation of packaging machinery, among other investments, Field Research and development costs / Amount Approximately ¥600 million, Field M&A / Amount Not disclosed
Statements about the use of capital
Payout ratio / DOE policyThe dividend policy is to increase dividends every year in principle. The company will continue to pay stable, long-term dividends and forecasts a dividend of ¥19 per share for the fiscal year ending June 2027. Numerical targets for the dividend payout ratio and DOE are Not disclosed.The payout ratio is the proportion of profit paid out as dividends, while DOE is the ratio of dividends to net assets.
Cost of capitalThe cost of equity is recognized as being in the 8–10% range, or around 8–10%, on a CAPM basis. The company assumes a risk-free rate of 2.8% based on the 10-year Japanese government bond yield and a market risk premium of 6.0%, while also taking low liquidity into account.The cost of capital is the minimum rate of return expected by shareholders and banks from the company.
Self-assessment of PBR and share pricePBR at the end of the previous fiscal year was 1.02x, above 1x. The share price was on an improving trend in the fiscal year ending June 2026, but PBR remained lackluster because book value per share also increased. PER was low compared with the Prime Market Composite, the Wholesale Trade sector and the Pharmaceutical sector.PBR is a measure of how many times the share price is the book value per share.
Key initiatives
01Maintaining the highly profitable business structure of both segments
02Active Pharmaceutical Ingredients segment: Increase in sales of newly listed products
03Pharmaceuticals segment: Early commencement of operations at the Zao No. 2 Plant and more efficient production through improved yields and operating rates
04Promoting capital and financial strategies to improve capital profitability
05Maintaining Stable Long-Term Dividends
06Promoting growth investment through the use of borrowings
07Steady execution of the medium-term management plan to achieve the financial targets of the long-term business plan for 2030
08Expanding new adoptions in the Active Pharmaceutical Ingredients segment
09Early commencement of operations at the Zao No. 2 Plant in the Pharmaceuticals segment
10Strategic investment for sustainable growth
11Considering measures to improve capital efficiency, including balancing investment and shareholder returns and using financial leverage
12Building market expectations through greater awareness of the long-term business plan
13Enhancing dialogue and disclosure materials by strengthening the IR framework
14Improving non-financial value by promoting sustainability initiatives
15Reducing GHG emissions through GX initiatives and contributing to the realization of a decarbonized society
16Building a Sustainable Supply Chain
17Sustainable growth of people and the organization through human capital management
Plan assumptionsThe cost of equity is estimated assuming a 10-year Japanese government bond yield of 2.8%, a market risk premium of 6.0% and low liquidity. Other assumptions, including foreign exchange rates, market growth rates and raw material prices, are Not disclosed.
Risks identified by the company
Foreign exchange fluctuations (US dollar and euro)
Inflation and surging material costs
Logistics delays and raw material procurement risks arising from the situation in the Middle East
Impact of drug price revisions and changes to the healthcare system
Impact of new competitive entrants and drug price revisions
Impact of annual maintenance at the Zao Plant on shipment volumes and business performance
Reason for revision or withdrawal
PBR has remained lackluster. PER is low compared with the Prime Market Composite, the Wholesale Trade sector and the Pharmaceutical sector, and the company recognizes the need to strengthen shareholder returns and IR activities. Based on its ROE analysis, the company recognizes that achieving further growth through the use of financial leverage is a challenge.
| Item | Details |
|---|---|
| Plan name | Medium-Term Management Plan / Long-Term Business Plan |
| Plan period | Fiscal years ending June 2026 to June 2028 (three-year medium-term plan), fiscal year ending June 2030 (long-term financial targets) |
| Progress against the plan | Partially revised |
| ROE target | Latest result: 12.6% (fiscal year ending June 2026) → 12% or higher (by the fiscal year ending June 2028) |
| Payout ratio / DOE policy | The dividend policy is to increase dividends every year in principle. The company will continue to pay stable, long-term dividends and forecasts a dividend of ¥19 per share for the fiscal year ending June 2027. Numerical targets for the dividend payout ratio and DOE are Not disclosed. |
| Cost of capital | The cost of equity is recognized as being in the 8–10% range, or around 8–10%, on a CAPM basis. The company assumes a risk-free rate of 2.8% based on the 10-year Japanese government bond yield and a market risk premium of 6.0%, while also taking low liquidity into account. |
| Self-assessment of PBR and share price | PBR at the end of the previous fiscal year was 1.02x, above 1x. The share price was on an improving trend in the fiscal year ending June 2026, but PBR remained lackluster because book value per share also increased. PER was low compared with the Prime Market Composite, the Wholesale Trade sector and the Pharmaceutical sector. |
| Total investment plan | Approximately ¥12.6 billion (approximately ¥12 billion in growth investment plus approximately ¥600 million in research and development expenses). Total cash inflows and outflows are approximately ¥17 billion. |
| Investment amount by sector | Field Growth Investment / Amount Approximately ¥12.0 billion / Breakdown Renewal of the Yokohama Pharmaceutical Analysis Center, renovation work at existing facilities, construction of the Zao No. 2 Plant, renewal of the head office plant, and installation of packaging machinery, among other investments, Field Research and development costs / Amount Approximately ¥600 million, Field M&A / Amount Not disclosed |
| Plan assumptions | The cost of equity is estimated assuming a 10-year Japanese government bond yield of 2.8%, a market risk premium of 6.0% and low liquidity. Other assumptions, including foreign exchange rates, market growth rates and raw material prices, are Not disclosed. |
| Key initiatives | Maintaining the highly profitable business structure of both segments, Active Pharmaceutical Ingredients segment: Increase in sales of newly listed products, Pharmaceuticals segment: Early commencement of operations at the Zao No. 2 Plant and more efficient production through improved yields and operating rates, Promoting capital and financial strategies to improve capital profitability, Maintaining Stable Long-Term Dividends, Promoting growth investment through the use of borrowings, Steady execution of the medium-term management plan to achieve the financial targets of the long-term business plan for 2030, Expanding new adoptions in the Active Pharmaceutical Ingredients segment, Early commencement of operations at the Zao No. 2 Plant in the Pharmaceuticals segment, Strategic investment for sustainable growth, Considering measures to improve capital efficiency, including balancing investment and shareholder returns and using financial leverage, Building market expectations through greater awareness of the long-term business plan, Enhancing dialogue and disclosure materials by strengthening the IR framework, Improving non-financial value by promoting sustainability initiatives, Reducing GHG emissions through GX initiatives and contributing to the realization of a decarbonized society, Building a Sustainable Supply Chain, Sustainable growth of people and the organization through human capital management |
| Results under the previous plan | The previous fiscal year's results were described as falling short of the sales forecast while achieving the profit target (no figures disclosed) |
| Reason for revision or withdrawal | PBR has remained lackluster. PER is low compared with the Prime Market Composite, the Wholesale Trade sector and the Pharmaceutical sector, and the company recognizes the need to strengthen shareholder returns and IR activities. Based on its ROE analysis, the company recognizes that achieving further growth through the use of financial leverage is a challenge. |
| Risks identified | Foreign exchange fluctuations (US dollar and euro), Inflation and surging material costs, Logistics delays and raw material procurement risks arising from the situation in the Middle East, Impact of drug price revisions and changes to the healthcare system, Impact of new competitive entrants and drug price revisions, Impact of annual maintenance at the Zao Plant on shipment volumes and business performance |
| Date of board resolution | 17 September 2026 |
| Publication date | 17 September 2026 |
Items this document does not state (9)
Sales TargetOperating profit targetOperating profit margin targetNet income targetROIC targetTreasury share acquisition policySegment targetNon-financial targetsSize of the Target Market
These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.
The reasons the company gives
The company's own explanation, not something inferred from the numbers.PBR at the end of the previous fiscal year was 1.02x, above 1x but remaining lackluster, while PER was also low compared with the Prime Market Composite, the Wholesale Trade sector and the Pharmaceutical sector. The company therefore recognizes the need to strengthen shareholder returns and IR activities. It also aims to maintain and improve ROE above the cost of equity and achieve further growth through the use of financial leverage.
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