Tsumura & Co. (4540): FY2025 Results Summary — Sales Up 6.4% on China Growth, Dividend Raised to 147 Yen

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

TSUMURA & CO. (4540), a manufacturer of prescription Kampo formulations, reported consolidated net sales of 192,615 million yen for FY2025, up 6.4% year on year, at its financial results briefing held on May 13, 2026. Sales fell short of the plan in the domestic business, while the China business met the plan, and all profit indicators achieved the plan. Operating profit was 35,219 million yen, down 12.2% year on year but 100.6% of the plan, and profit attributable to owners of parent was 28,117 million yen, 115.7% of the plan. Note: Tsumura labels the fiscal year ended March 31, 2026 as “FY2025”; this article follows the company’s labeling throughout.

Consolidated Results (Full-Year Actual)

Net sales of 192,615 million yen came to 97.3% of the plan revised on November 10 (198,000 million yen), an increase of 11,521 million yen year on year. The sales composition ratio of the China business increased significantly: domestic prescription Kampo products accounted for 79.9% of total sales, the China business crude drug platform for 16.3%, domestic healthcare products (OTC Kampo medicine, etc.) for 3.2%, and domestic others for 0.6%. The operating profit margin was 18.3%, up 0.6pt versus the FY2025 plan but down 3.9pt year on year, reflecting a cost ratio of 52.5% (up 2.5pt year on year on a higher proportion of sales from China operations) and an SG&A expense ratio of 29.2% (up 1.3pt year on year on increases in salaries and allowances and costs related to information provision).

Ordinary profit of 40,036 million yen (116.0% of plan) included foreign exchange gains related to loans to overseas subsidiaries of 5,752 million yen, which were not factored into the earnings forecast. Profit attributable to owners of parent included a gain on sales of cross-shareholdings of 2,193 million yen. On the balance sheet, total assets rose 128,385 million yen from the end of March 2025 to 592,766 million yen (of which 37,728 million yen was the impact of consolidating Shanghai Hongqiao drug pieces), and the equity ratio declined 10.4pt to 54.3%.

Item (Million yen)	FY2025 Plan (Revised Nov. 10)	FY2025 Results	Achievement Rate	YoY Amount	YoY %
Sales	198,000	192,615	97.3%	+11,521	+6.4%
— Domestic business	167,900	161,172	96.0%	+712	+0.4%
— China business	30,100	31,442	104.5%	+10,809	+52.4%
Operating profit	35,000	35,219	100.6%	(4,905)	(12.2)%
— Domestic business	35,500	35,024	98.7%	(5,112)	(12.7)%
— China business	△500	195	—	+206	—
Ordinary profit	34,500	40,036	116.0%	(2,410)	(5.7)%
Profit attributable to owners of parent	24,300	28,117	115.7%	(4,311)	(13.3)%

Results by Business: Domestic and China

In the domestic business, total sales of the 129 prescription Kampo formulations were 153,918 million yen, down 0.1% year on year, while actual sales volume grew 2.0%. Plan achievement for the 129 formulations was 96.5%; the company cited a lower-than-expected outbreak of infectious diseases for cold-associated formulations, slower-than-expected recovery of prescriptions that had been under limited shipment, and the impact of competitive new drugs in women’s health. Distribution inventory was normalized as of the end of FY2025. Sales of healthcare products (OTC Kampo medicine, etc.) were 6,206 million yen, up 17.4% year on year. By product, Goreisan grew 13.0% to 8,338 million yen, while Daikenchuto, the largest formulation, edged down 0.5% to 14,688 million yen.

In the China business, crude drug platform sales were 31,442 million yen, up 52.4% year on year, with raw material crude drugs up 7.5% and drug pieces up 371.7% following the consolidation of Shanghai Hongqiao traditional Chinese drug pieces Co., Ltd. The China business turned profitable, with operating profit of 195 million yen versus a loss of 10 million yen in FY2024, despite depreciation and amortization expenses of approximately 1.5 billion yen after the implementation of the PPA for Hongqiao drug pieces, including one-time costs of approximately 0.8 billion yen for fiscal 2025 only. The PPA identified customer-related assets of 21,011 million yen (amortized over 25.5 years) and provisional goodwill of 8,768 million yen (amortized over 20 years).

Product (No. / Formulation)	FY2024 (Million yen)	FY2025 (Million yen)	YoY Amount	YoY %
#100 Daikenchuto	14,769	14,688	(81)	(0.5)%
#54 Yokukansan	11,147	11,053	(93)	(0.8)%
#17 Goreisan	7,376	8,338	+962	+13.0%
#41 Hochuekkito	7,597	7,451	(146)	(1.9)%
#43 Rikkunshito	7,199	7,205	+6	+0.1%
Drug-fostering program formulations (total)	40,163	40,117	(45)	(0.1)%
“Growing” formulations (total)	24,364	25,346	+982	+4.0%
Total of 129 prescription Kampo formulations	154,072	153,918	(154)	(0.1)%

FY2026 Forecast

For FY2026, Tsumura forecasts sales of 213,600 million yen, up 10.9% year on year, with the domestic business up 4.0% to 167,600 million yen and the China business up 46.3% to 46,000 million yen. Operating profit is forecast at 37,500 million yen, up 6.5%, as increased sales and cost reductions — including an improved utilization rate of the Tianjin Plant and the reversal effect of PPA-related amortization — are expected to offset rising raw material and labor costs. Ordinary profit is forecast at 35,500 million yen, down 11.3%, and profit attributable to owners of parent at 26,200 million yen, down 6.8%. The company notes that foreign exchange gains related to loans and other receivables to overseas subsidiaries are not included in the earnings forecast, as reasonable estimation is difficult due to exchange rate fluctuations. In the domestic business, the company aims to restore actual sales volume growth of the 129 formulations to the pace assumed in the mid-term plan in the second half of the fiscal year, targeting 3.0% growth for FY2026.

Item (Million yen)	FY2025 Results	FY2026 Forecast	YoY Amount	YoY %
Sales	192,615	213,600	+20,984	+10.9%
— Domestic business	161,172	167,600	+6,427	+4.0%
— China business	31,442	46,000	+14,557	+46.3%
Operating profit	35,219	37,500	+2,280	+6.5%
— Domestic business	35,024	34,800	(224)	(0.6)%
— China business	195	2,700	+2,504	+1,281.4%
Ordinary profit	40,036	35,500	(4,536)	(11.3)%
Profit attributable to owners of parent	28,117	26,200	(1,917)	(6.8)%
ROE	9.0%	8.0%	—	—
EPS	376.28 yen	351.46 yen	—	—

Shareholder Returns

Tsumura pursues “optimal dividends based on an optimal capital structure that ensures financial soundness.” For FY2025, the annual dividend was 147 yen per share, 11 yen per share above the initial forecast and 3 yen per share above the revised forecast. Based on a shareholder return policy that maintains and improves DOE, an 11 yen per share dividend increase is expected for FY2026. Under the revised cash allocation for FY2025–FY2027, the company plans shareholder returns of 41 billion yen plus alpha, including the 6 billion yen share buyback conducted in 2025 that was not included when the medium-term plan was formulated.

Item	FY2024	FY2025	FY2026 (Forecast)
Interim dividend	68 yen	68 yen	79 yen
Year-end dividend	68 yen	79 yen	79 yen
Annual dividend per share	136 yen	147 yen	158 yen
DOE	3.6%	3.6%	3.6%

Medium-Term Plan / Topics

The numerical targets of the second medium-term management plan (2025–2027) are unchanged: net sales of 234 billion yen, operating profit of 46 billion yen, and ROE of 9.0% for FY2027. By leveling new capital investments — centered on the Gunma plant — the company plans to reduce investment amounts by approximately 40 billion yen during the second-phase medium-term plan period, with total planned investment revised from 186 billion yen to 145 billion yen. In the China business, equipment that fully automates “Personalized Medicine” decoction is planned to be introduced and operational during FY2026, and the company aims to increase the proportion of processed drug pieces to over 50% of China business sales.

Tsumura has introduced a company-based organizational system consisting of the Prescription Pharmaceuticals Company, the China Business Company, and the Healthcare Company, with a management framework by company for P/L and ROIC to be established within the first quarter of FY2026, with disclosure planned; from fiscal 2027 onward the framework will be expanded to include the balance sheet and cash flows. The Healthcare Company will succeed the Yomeishu-related businesses (planned to become a subsidiary). Policy shareholdings were reduced to 7,478 million yen at the end of FY2025, roughly half the 15,241 million yen at the end of FY2023, under a “principle of zero” with continuous reduction going forward.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.