Menicon's share price is falling, mainly due to the downward revision for the fiscal year ending March 2025 and temporary profit pressure from growth investments. The start of operations at the new plant in Malaysia, accelerated overseas expansion and the global increase in myopia are cited as factors supporting the company's medium- to long-term outlook.
The reasons for Menicon's share price decline can be broadly grouped into 3 factors: a downward revision well below market consensus, temporary cost increases from growth investments and slower growth in Mels Plan membership. The profit forecast for the fiscal year ending March 2025 was revised down from the initial ¥7 billion to ¥5.5 billion, while the operating profit forecast for fiscal 2026 is below the market consensus of ¥10.2 billion.
The company manufactures and sells contact lenses, primarily 1DAY products, and is pursuing growth investments including construction of a new plant in Malaysia, development of new products in Japan and overseas, and wage increases for employees. As a result, profit margins are expected to remain under temporary pressure.
Mels Plan membership has remained flat at approximately 1.34 million, and slower membership growth is acting as a constraint on growth. Through fiscal 2026, which is positioned as the investment implementation period, the timing of the increase in costs and the recovery of growth investments will be key focuses.
The global increase in myopia and growing demand for orthokeratology are expected to support future market growth. In addition, the start of operations at the new plant in Malaysia and the planned increase in the overseas sales ratio to 35% in fiscal 2026 will be key to the company's global expansion.
Although the investment implementation period will continue under the medium-term plan, the company's ability to strengthen its presence in global markets will determine its medium- to long-term growth. Regarding shareholder returns, the company is considering measures including shareholder benefits, making the effective yield another point of interest.