Aso International Co., Ltd. Fiscal Year Ended June 2026: Deep Dive Earnings Report

Based on the fiscal year 2026 (ended June 30, 2026) earnings materials for Aso International Co., Ltd. (Securities Code: 9340) , a leader in orthodontic laboratory services, this report provides a multi-faceted analysis of the company's performance highlights, growth drivers, market environment, and future growth strategies.

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1. FY2026 Full-Year Performance Highlights

For the fiscal year ended June 2026, Aso International delivered robust consolidated results, achieving record highs in both net sales and all profit categories .

• Net Sales : 4,166 million JPY ( +9.7% YoY)
• Operating Profit : 723 million JPY ( +9.9% YoY)
• Ordinary Profit : 734 million JPY ( +16.3% YoY)
• Net Profit : 518 million JPY ( +18.2% YoY)
• Earnings Per Share (EPS) : 52.9 JPY (compared to 44.9 JPY in the previous fiscal year)

Furthermore, compared to the initial full-year forecasts (Net Sales: 4,013 million JPY, Ordinary Profit: 725 million JPY, Net Profit: 504 million JPY), the company exceeded its targets with a net sales achievement rate of 103.8% , ordinary profit achievement rate of 101.3% , and net profit achievement rate of 102.9% .

[Slide Commentary: FY2026 Earnings Summary]

The slide above (PAGE_2) is the most critical document summarizing the overall picture of the fiscal year ended June 2026. In addition to achieving record highs across all sales and profit items, it highlights the key drivers of growth, including the expansion of aligner devices and 3D printer-related products, as well as a sharp increase in overseas sales. The operating profit margin remained steady at 17.4% , demonstrating the company's strong profitability, which absorbed rising material and labor costs through efficient SG&A management (the SG&A-to-sales ratio decreased by 0.8%) and increased revenue.

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2. Factors Behind Sales and Profit Changes and Trends by Product/Region

(1) Trends by Product

A detailed breakdown of net sales reveals strong growth in both core orthodontic laboratory products and merchandise (equipment such as 3D printers) .

• Orthodontic Laboratory Product Sales : 3,392 million JPY ( +7.5% YoY)
  • Analog Manufacturing : 2,111 million JPY ( +6.9% YoY) — Orthodontic plates, retainers, etc.
  • Digital Manufacturing : 1,280 million JPY ( +8.5% YoY) — Aligner (clear aligner) devices, digital setup devices, etc.
• Merchandise Sales : 726 million JPY ( +18.4% YoY) — Significant increase in sales of related equipment, primarily LuxCreo 3D printers .

By manufacturing method, the ratio of high-value-added products utilizing digital technology is increasing, with the digital manufacturing ratio reaching 37.8% (up from 37.4% in the previous year). Market demand for clear aligner therapy continues to be tapped, with related Indirect Bonding (IDB) bracket systems (+12.7% YoY) and aligners (+17.5% YoY) strongly driving sales.

(2) Regional Trends and Accelerated Global Expansion

• Domestic Sales : 3,917 million JPY ( +8.5% YoY)
• Overseas Sales : 248 million JPY ( +34.3% YoY)
  • Aso International (Overseas Business Division) : 143 million JPY ( +79.1% YoY)
  • Aso International Hawaii : 105 million JPY ( +0.3% YoY)

The overseas sales ratio rose from 4.9% in the previous year to 6.0% . In particular, the trend of increasing orders from the U.S. mainland continues, and new orders from the Eurozone (supported by participation in academic conferences in Italy, etc.) contributed to an approximately 80% increase in sales for the Overseas Business Division, marking a very high growth rate.

(3) Cost Structure and Profit Margins

The gross profit margin decreased by 0.7% YoY (to 44.2%) due to rising material costs (+35.9% YoY) and labor costs (+18.9% YoY) influenced by exchange rates and personnel expenses. However, thanks to economies of scale from increased sales and appropriate control of personnel and recruitment costs, the SG&A-to-sales ratio was contained at 26.8% (an improvement of 0.8% YoY) . As a result, the operating profit margin was maintained at 17.4% (17.3% in the previous year) , a level equal to or better than the previous year.

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3. Overwhelming Customer Base and Financial Soundness

(1) Solid Business Foundation in the Domestic Dental Industry

Aso International has contracts with all 29 dental university faculties in Japan and serves approximately 7,000 dental clinics as active customers. The number of registered clinics has reached over 20,000 , establishing an overwhelming market share and brand recognition as an orthodontic laboratory in Japan.

(2) Balance Sheet (B/S) and Cash Flow Characteristics

• Total Assets : 3,740 million JPY (+409 million JPY from the end of the previous fiscal year)
• Net Assets : 3,244 million JPY (+314 million JPY from the end of the previous fiscal year)
• Equity Ratio : 86.8% (88.0% at the end of the previous fiscal year)
• Book Value Per Share (BPS) : 329.0 JPY

While maintaining 1,428 million JPY in cash and deposits, the company has allocated funds to short-term securities (500 million JPY) and corporate bonds of A-rated domestic listed companies (investment securities), improving financial efficiency by securing interest income in a rising interest rate environment . Cash flow from operating activities remains robust at +454 million JPY , demonstrating consistent cash-generating capability.

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4. Structural Changes in the Orthodontic Market and Growth Potential

The market environment surrounding the company is experiencing long-term tailwinds.

[Slide Commentary: Orthodontic Market Composition and Growth Outlook]

The slide above (PAGE_18) illustrates the market structure that supports Aso International's long-term growth story. Currently, the domestic orthodontic market is estimated at approximately 240 billion JPY (with about 290,000 new patients annually), but it holds the potential to expand to a maximum of 400 billion JPY if it reaches global penetration levels.

Of particular note is the clear aligner market, which is expected to see a high Compound Annual Growth Rate (CAGR) of 10–20% . The rise in oral health awareness among the younger generation (20s–30s) due to the spread of social media, expansion into the senior demographic (50s–60s), and the lowering of barriers to treatment through subscription models are strongly driving market expansion. Japan's orthodontic penetration rate remains at only 50–60% of the global average, indicating significant room for future growth.

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5. Growth Strategy and Earnings Forecast for FY2027

(1) Evolution of Product and Merchandise Strategy

For the fiscal year ending June 2027, the company will actively promote the introduction of high-value-added products and new solutions.

1. Full-scale rollout of the new lingual orthodontic device "AIS"
   • Inherited the "Incognito" business from Solventum and digitally renewed the manufacturing technology.
   • As a popular "invisible" orthodontic device, the company expects to expand orders in Japan and the Eurozone, cultivating it as a new pillar of revenue.
2. Expansion of SAM for LuxCreo 3D printers and digital equipment
   • Expanding the scope of application from aligner printing to the printing of soft dentures (resin-based dentures).
3. Market introduction of new products
   • Launching the wire-bending robot "Bender II" (from Q1) and a proprietary new intraoral scanner (IOS, expected from Q3) to approach both dental clinics and laboratories that are moving toward in-house manufacturing.

(2) Strengthening Global Omnidirectional Sales

In addition to strengthening marketing in North America, the company aims to expand orders from leading orthodontists on the West Coast. In the Eurozone, the company will enhance global recognition and strengthen direct sales and distributor networks through participation in events such as the European Society of Lingual Orthodontics (Italy).

(3) FY2027 Full-Year Earnings Forecast and Shareholder Returns

[Slide Commentary: FY2027 Full-Year Earnings Forecast]

The slide above (PAGE_26) summarizes the earnings plan and shareholder return policy for the fiscal year ending June 2027.

• Net Sales : 4,402 million JPY (+5.7% YoY)
• Operating Profit : 790 million JPY (+9.3% YoY)
• Ordinary Profit : 798 million JPY (+8.7% YoY)
• Net Profit : 555 million JPY (+7.0% YoY)

For the fiscal year ending June 2027, the company expects continued revenue and operating profit growth , with an operating profit margin projected to rise to 17.9% . The assumed exchange rates are 160 JPY per USD and 182 JPY per EUR.

[Shareholder Return Policy (Dividends)]

Regarding shareholder returns, the company has set a target of a dividend payout ratio of approximately 50% and a Dividend on Equity (DOE) ratio of 5% or higher . The planned annual dividend per share for the fiscal year ending June 2027 is 28.0 JPY (14.0 JPY interim, 14.0 JPY year-end), an increase of 2.0 JPY from the 26.0 JPY in the fiscal year ended June 2026. Compared to the time of the IPO (FY2023: 11 JPY), the dividend level has expanded by approximately 2.5 times, clearly demonstrating an active stance on shareholder returns in line with earnings growth.

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6. Conclusion

Aso International is leveraging its solid domestic customer base (all 29 dental university faculties and 7,000 dental clinics) while driving three growth engines: expansion of aligner orthodontics , provision of digital laboratory solutions such as 3D printers , and development of global markets centered on North America and Europe . In an orthodontic market where structural demand growth is expected, these earnings results demonstrate both the maintenance of high profitability through digital DX and a proactive stance on shareholder returns.