■Soft99 Corporation ＜4464＞ Business Overview
2. Porous materials business
The porous materials business developed by the subsidiary Aion Co., Ltd. is a business taken over from Kanebo Co., Ltd. in 1999, and Aion is known as a pioneer company for sponges (functional porous absorbers) based on polyvinyl alcohol (PVA) materials. Utilizing its high water absorption performance, it is mainly developed and manufactured for industrial materials and household materials. Applications include manufacturing lines for semiconductors, hard disks, etc. (cleaning/water absorption process, polishing process) for industrial materials, and car wash towels, sports towels, etc. for household materials. Also, Aztec, which plans, develops, and sells health-related supplies for hospitals, became a subsidiary in 2020/8 for the purpose of expanding business in the medical field. Aztec has a particularly high market share for operating room mops in large-scale hospitals, and sells them through direct sales and medical product wholesalers.
The sales composition ratio for the fiscal year ending 2024/3 will be 79% for industrial materials and 22% for household materials. Furthermore, the overseas sales ratio is 49%, and in the semiconductor field, they have major semiconductor manufacturers from Taiwan, South Korea, and the United States as customers, and they are competitive enough to split their market share in half with one US company for production lines with cutting-edge processes. As a product for the medical field, adoption is progressing in influenza test kits such as liquid absorption sponges, etc.
The operating profit margin for the last 5 years has remained stable in the first 10 percent range. Products for semiconductor/hard disk production lines with high added value are leading the way, and the sales ratio for the high-tech industry among industrial materials is at the level of about 50%. Note, since transactions for overseas markets are denominated in yen, they are not directly affected by exchange rate fluctuations.
3. Service business
In addition to the automobile maintenance and metal business developed by subsidiaries, the service business consists of a driving school business and a daily necessities planning and sales business. The sales composition ratio for the 2024/3 fiscal year is 49% for automobile maintenance and metal, 19% for driving schools, and 33% for planning and sales of daily necessities.
In the automobile maintenance and sheet metal business, Soft99 Auto Service Co., Ltd. is developing sheet metal coating and various coating construction services. They mainly carry out repairs and vehicle inspections and maintenance of accident vehicles, etc. received via non-life insurance companies and car dealers (mainly imported cars), but in the past few years, accident vehicles have been on a downward trend as safe driving systems have begun to spread, and demand has plateaued. Therefore, we are focusing on car wrapping services for makeup and construction services for protection films that protect paint surfaces from scratches and stains caused by stepping stones, insects, etc. There is a system of 5 service bases in Kansai and 2 in the Tokyo metropolitan area.
As for the driving school business, Asmo Co., Ltd. operates 1 “Amagasaki Drive School” in Amagasaki City, Hyogo Prefecture. As for the household goods planning and sales business, Kurashi Kikaku Co., Ltd. is involved in the planning and sale of household goods and miscellaneous goods, mainly for consumer cooperatives. We are also focusing on sales on our EC site, and development and sale of PB products began in the fiscal year ending 2021/3.
4. Real estate-related business
Real estate-related businesses include real estate leasing business, hot bath business, and preventive care support business. Looking at the sales composition ratio for the fiscal year ending 2024/3, the hot bath business that operates “Gokurakuyu” (3 stores) is 71%, the real estate leasing business is 27%, and the preventive care support business is 2%. Regarding the real estate leasing business, we rent out the head office building and our own building in Akihabara, Tokyo. The preventive care support business is a business that began in 2014/11 as an additional service to the hot bath business on the company's premises at “Gokurakuyu” (Amagasaki store). Note, with regard to real estate-related businesses, the purpose is to effectively utilize real estate owned by the company, so it is a policy to maintain the current business scale in the future.
(Author: FISCO Visiting Analyst Joe Sato)