JSH Co., Ltd. (Securities Code: 150A) FY2027 Q1 Earnings Deep Dive: Growth Story Driven by Upward Revisions, Mid-Term Business Plan, and Structural Reform

The Q1 earnings report for the fiscal year ending March 2027 for JSH Co., Ltd. (Securities Code: 150A) presents a comprehensive picture of significant upward revisions to full-year earnings forecasts , the disclosure of a mid-term business plan , the initiation of share buybacks and inaugural dividends , and solid progress across all business segments .

This report provides an in-depth analysis of the company's latest financial results and mid-term growth strategy, covering all key topics.

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1. Executive Summary and Upward Revision of Earnings Forecasts

JSH has announced an upward revision to its full-year consolidated earnings forecast for the fiscal year ending March 2027 (FY26). This is primarily driven by robust demand in its core Regional Revitalization Business (the "Cordiale Farm" employment support service for individuals with disabilities) , which has led to increased revenue and optimized cost structures.

Highlights of the FY26 Full-Year Earnings Revision

• Net Sales : 6,461 million JPY (up 81 million JPY from the previous forecast of 6,380 million JPY; +36.3% YoY)
• Operating Profit : 395 million JPY (up 217 million JPY from the previous forecast of 178 million JPY; +121.5% increase )
• Ordinary Profit : 371 million JPY (up 220 million JPY from the previous forecast of 150 million JPY; +146.8% increase )
• Profit Attributable to Owners of Parent : 192 million JPY (up 152 million JPY from the previous forecast of 40 million JPY; +375.5% increase )
• EBITDA : 703 million JPY (up 221 million JPY from the previous forecast of 482 million JPY; +405.8% YoY)

As shown above, the operating profit forecast has been revised upward by more than double the original projection. This is largely due to orders from semiconductor-related companies, including the Kumamoto farm, and additional orders from existing clients exceeding expectations. This allowed the company to reduce marketing expenses (down by approximately 127 million JPY) —such as advertising and recruitment-related personnel costs—and decrease labor costs through improved farm productivity.

Furthermore, the company has presented a mid-term business plan leading up to FY28 (fiscal year ending March 2029), setting growth targets of over 10 billion JPY in net sales (10,658 million JPY) , over 1.3 billion JPY in operating profit (1,321 million JPY) , and a company-wide operating margin exceeding 10% . On an EBITDA basis, the company targets 1,814 million JPY by FY28 , aiming to transition from a phase of upfront investment to a full-scale harvest and high-profitability phase.

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2. Progress of FY2027 Q1 Earnings

In the first quarter (FY26 Q1), the company achieved significant year-on-year growth in net sales and a substantial turnaround to profitability, showing steady progress against the upwardly revised full-year plan.

FY26 Q1 Results and Progress Rate

• Net Sales : 1,466 million JPY ( +34.4% YoY, 22.7% of full-year target)
• Gross Profit : 527 million JPY ( +43.1% YoY, 22.9% of full-year target)
• Operating Profit : 105 million JPY (up from 2 million JPY in the same period last year, approx. 43x increase , 26.7% of full-year target)

As confirmed by the graph and table, the previous year's Q1 (FY25 Q1) had a unique comparison base due to a heavy reliance on high-margin recruitment placement revenue. In contrast, this quarter saw steady expansion in core recurring revenue. Against a 34.4% revenue growth rate , the company limited the increase in cost of sales to 30.0% and SG&A expenses to 15.3%, resulting in an operating margin improvement of 7.0 percentage points to 7.2% compared to the same period last year.

With a revenue progress rate of 22.7% and an operating profit progress rate of 26.7%, the company has made an extremely healthy start to the fiscal year.

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3. Segment Trends and KPI Analysis

3.1 Regional Revitalization Business (Cordiale Farm)

This segment is the primary growth engine driving the company's performance. By providing employment opportunities for individuals with disabilities through regional farms to large urban corporations, this service boasts a high level of recurring revenue.

• Q1 Net Sales : 995 million JPY ( +35.9% YoY)
• Q1 Segment Profit : 333 million JPY ( +82.4% YoY, 33.5% segment margin)
• Recurring Revenue Ratio : Approx. 90% (Q1 recurring revenue of 834 million JPY, +29.9% YoY)
• Key KPIs : Net increase in employees with disabilities: 112 (Total: 1,900), Number of farms: 27 , Total plots: 2,305 , Number of client companies: 260

With the statutory employment rate for individuals with disabilities rising from 2.3% to 2.5% in April 2024, and a further increase to 2.7% scheduled for July 2026, corporate demand is extremely strong. The annual churn rate is kept low at approximately 5.8%, and combined with an increase in annual unit price per company (10,775 thousand JPY on an annualized basis in FY26 Q1), the company has built a highly robust business model.

3.2 Home Medical Care Business (Psychiatric Visiting Nursing Station)

This segment is undergoing structural reform (reduction and consolidation of bases) to improve profitability. The strategy focuses on reducing fixed costs, such as rent, while increasing the number of visits and patients.

• Q1 Net Sales : 432 million JPY ( +26.6% YoY)
• Q1 Segment Profit/Loss : -51 million JPY (compared to -18 million JPY in the same period last year)
• Key KPIs : Number of patients: 2,474 (net increase of +177 from end of previous period, +21.3% YoY), Annual visits: 46,000 ( +25.7% YoY)

As shown in the slide above, the company is consolidating its bases from 47 to approximately 35 to compress fixed costs. Meanwhile, the number of visits per full-time equivalent nurse and monthly visits per patient reached 6.44 , meeting budget targets. With a net increase in patients (+177) and strong growth in visits (+25.7% YoY), it is confirmed that the business has moved past the upfront investment phase and is on a profitability trajectory toward an early turnaround .

3.3 IoT Solution Service Business (Showtime 24)

This business, which provides unmanned property viewing systems using smart locks, recorded significant revenue growth through strengthened B2B marketing and customer success initiatives.

• Q1 Net Sales : 40 million JPY ( +145.8% YoY)
• Q1 Segment Profit/Loss : -1 million JPY (narrowing of losses)
• Key KPIs : Number of client companies: 135 , Annual unit price per company: 965 thousand JPY (annualized, exceeding budget)

Deepening relationships with major developers and house builders has significantly increased the unit price per company, setting the stage for a full-scale profit contribution from FY27 onwards (FY28 plan targets 328 million JPY in operating profit).

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4. Cash Flow and Shareholder Return Policy

Backed by a stable financial foundation, the company has announced proactive shareholder return measures . As of the end of July 2026, cash and deposits stood at 1,183 million JPY , with an equity ratio maintained at 47% . The company expects to cover its mid-term investment framework (approximately 2.5 to 3.0 billion JPY) through operating cash flow and bank borrowings, and therefore has no plans for equity financing.

Shareholder Return Measures

1. Share Buyback : Maximum of 1,000,000 shares (a high ratio relative to total shares outstanding), with a total acquisition cost of up to 500,000,000 JPY
2. Dividend Forecast : 3.00 JPY per share set as the year-end dividend for the fiscal year ending March 2027 (inaugural dividend)

This move clearly demonstrates the company's commitment to improving capital efficiency and returning value to shareholders.

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5. Mid-Term Outlook and Social Impact (Synergy with SDGs)

JSH's greatest strength lies in the close collaboration between its Home Medical Care Business and Regional Revitalization Business . By applying psychiatric care expertise to farm operations, the retention rate of employees with mental disabilities working on the farms has reached 76% , which is 21 percentage points higher than the national average (55%).

From creating employment for individuals with disabilities in regional areas to providing medical access and utilizing renewable energy on farms, the company's business structure itself is a sustainable model that directly contributes to 9 of the SDGs .

As outlined in the mid-term business plan (FY26–FY28), the company aims to scale its high-margin Regional Revitalization Business amid the tailwind of rising statutory employment rates, while simultaneously combining the turnaround of the Home Medical Care Business and the growth of the IoT business to achieve its goal of a market capitalization of over 10 billion JPY and expanded EBITDA by 2030 .