Healthcare is recovering through cross-border e-commerce, while domestic demand is the focus for FY2027-H1

The healthcare business posted revenue of ¥1,221.9 million and operating profit of ¥281.6 million in FY2027-Q1, down 15.8% and 24.5%, respectively, from the same period of the previous year. The company explained that group-wide export revenue from polyurethane condoms through cross-border e-commerce increased, but sluggish domestic revenue and changes in purchasing patterns resulting from prolonged inflation led to the declines in revenue and profit. The operating margin was approximately 23.0% and remained high, but the business has yet to recover its profit level from the same period of the previous year.

In FY2026, the healthcare business posted revenue of ¥4,675 million and operating profit of ¥762 million, up 9.5% and 24.7%, respectively, from the previous fiscal year. FY2026-H1 revenue was ¥2,489 million and operating profit was ¥462 million, making these the comparison benchmarks for FY2027-H1. The FY2026-H1 operating margin was approximately 18.6%. FY2027-Q1 exceeded this level on margin alone, but whether the high quarterly margin can continue through the second half will depend on a recovery in domestic sales, product mix, export logistics and manufacturing costs at the Malaysia site.

The company explained that growth in cross-border e-commerce sales of polyurethane condoms using a cross-border business platform was successful. This represents progress in capturing global markets and inbound demand, which had previously been challenges. However, the FY2027-Q1 earnings summary did not disclose cross-border e-commerce revenue itself, the composition of export revenue, sales volume or average customer spend. Accordingly, the current disclosures do not allow the revenue growth to be broken down into volume growth versus price and mix effects.

In FY2027-H1, the company will assess whether domestic demand has bottomed and whether cross-border e-commerce growth has continued, using the same-period revenue of ¥2,489 million and operating profit of ¥462 million as benchmarks. It will be particularly important to determine whether domestic and export sales are diverging again, and whether procurement costs for polyurethane products or energy costs at the Malaysia site are weighing on the operating margin. If the earnings summary provides additional disclosures of revenue or volume by domestic/export market and by polyurethane/latex product, the likelihood of achieving full-year FY2027 revenue of ¥6,400 million can be assessed more precisely.