Aso International <9340> is engaged in the production and sales of orthodontic dental products. The main products include aligners (mouthpiece-type orthodontic devices), IDBS (Indirect Bonding System), appliances (functional and mechanical orthodontic devices), and retainers, along with intraoral scanners and 3D printers.
The manufacturing methods of orthodontic dental products are divided into two categories: analog manufacturing, where dental impressions are taken with materials and then handcrafted by dental technicians, and digital manufacturing, where digital data from intraoral scanners are used to fabricate products with 3D CAD and 3D printers. The business segment is a single segment of dental orthodontics, but in the revenue composition for the fiscal year ending June 2024, analog manufacturing products account for 54%, digital manufacturing products 31%, and other product sales 15%. Additionally, the area composition ratio shows that domestic revenue makes up 95% and overseas revenue 5%. The order routes include inbound methods such as referrals/word of mouth and HP/SNS at 92%, while outbound sales comprise only 8%.
In Japan, orders are received from dental medical institutions, catering to custom-made products based on dental technician directives issued by these institutions, while production is handled within the group. At the same time, a system has been established to outsource generic products to partners. In contrast, overseas, orders for dental orthodontic products are received from the USA, Australia, EU, Asia, etc., data is transferred to headquarters, and optimal production systems are utilized at the Manila manufacturing base, with international shipping handled by DHL. A local subsidiary in the USA, ASO International USA, established in April 2024, is planned to become a global data center in the future.
In the first quarter of the fiscal year ending June 2025, revenue was 916 million yen, an increase of 6.3% compared to the same period last year, and operating profit reached 135 million yen, up 36.5%. This increase is attributed to a rising social awareness of aesthetics and an expansion of efforts to improve pre-diseases, with domestic revenue increasing by 5.5%. Main products such as aligners, IDBS, retainers, and appliances showed steady revenue, and an increase in customer unit price due to price hikes from the previous period contributed to this growth. Particularly, revenues from digitally manufactured orthodontic devices increased by 19.2%, maintaining a digital manufacturing ratio of 37.6%. Overseas revenue also showed a favorable increase of 24.9%. For the fiscal year ending June 2025, revenue is projected to increase by 8.0% compared to the previous period, reaching 3,828 million yen, with operating profit expected to grow by 13.7% to 620 million yen.
The company has overwhelming sales, share, and brand presence in the domestic dental orthodontic sector, capable of manufacturing and supplying various types of orthodontic dental products. Additionally, there are over 100 internal and external partner dental technicians capable of manufacturing rare orthodontic dental products in Japan, which leads to significant differentiation from other companies. Furthermore, in its 43rd year of establishment, the company boasts the largest number of cases, experience, and know-how domestically, conducting transactions with all dental faculties of universities across Japan and having the largest number of active dental clinic clients, exceeding 6,300. Currently, the number of dentists capable of performing orthodontics stands at approximately 0.02 million (5,000 clinics), indicating a substantial potential for customer acquisition even within the country.
The company also discloses its mid-term management plan, targeting sales of 5,000 million yen and operating profit of 918 million yen for the fiscal year ending June 2028, aiming for a CAGR (compound annual growth rate) of 9.2% in sales (8.5% domestically and 21.4% overseas) and a CAGR of 12.8% in net income. The CAGR for the orthodontic dental market is projected to be approximately 10% in Japan and about 21% in the USA, indicating high potential for global growth. According to the American health insurance company Humana Inc., over 4 million Americans wear orthodontic devices, with 25% being adults, and the rapid introduction of advanced dental technologies such as digitization and 3D printing seems to support market growth. In such circumstances, high-quality, high-value-added orthodontic devices produced and overseen by qualified dental technicians in Japan are likely in high demand in the USA. Already, the company has registered as the first official supplier of UCSF as a Japanese orthodontic dental laboratory.
Moving forward, establishing a foundation in the USA is the top priority, while expanding sales channels through the inheritance of the business model in Japan and alliances with leading companies. As a precursor investment, plans include strengthening human resources acquisition, enhancing manufacturing capacity, and establishing a second factory in Manila to cover sales of 10 billion yen, indicating a steady execution of investments to drive growth. The long-term vision targets being a new global dental orthodontic company with over 50% of sales from overseas by 2032. Additionally, in terms of shareholder returns, the company aims for a stable dividend payout ratio (DOE) of over 5% and maintains a dividend yield exceeding 3% amid strong performance. The mid-to-long-term trends of the company, which is currently at a phase of global growth, are worth paying attention to.