Hi-CRATES CO.,LTD. (4172) Stock Price

Towa High System is a company that specializes in electronic medical record systems for dental clinics, handling everything from research and development through sales to implementation support and customer service. The company's flagship product is an integrated electronic medical record system that combines AI and voice input, providing a unified platform to manage patient information, test results, treatment explanations, and more.

The company's primary customers are dental clinics nationwide, with extensive installation records concentrated in western Japan and a customer base numbering in the thousands. Revenue is primarily generated from the company's proprietary system sales. Dental clinics typically pay through lease agreements, with hardware repair costs borne by customers, though a mutual aid program helps reduce these expenses. On the software side, the company operates under a "three free software principle," providing support, maintenance, and version upgrades at no cost.

The business operates as a single segment: "Dental Clinic System Business." Products center on the integrated electronic medical record system and include AI and voice-enabled series such as periodontal disease screening and digital sub-records, along with various optional add-ons. The company maintains approximately 75 sales support staff across 24 nationwide locations, delivering community-focused on-site support that sustains a high replacement renewal rate of approximately 91.1%.

The company aims for steady mid-to-long-term growth, with numerical targets for the fiscal year ending September 2026 of 2.484 billion yen in revenue, 662 million yen in operating profit, and 451 million yen in net income. It targets an operating profit margin of 26.7% and net profit margin of 18.2%, aiming for three consecutive years of record earnings. Rather than pursuing short-term expansion, the company prioritizes establishing community-focused sales offices and building customer trust. It plans to enhance corporate value through brand unification (transitioning to Hi Klates from January 1, 2026).

Key investment areas are electronic medical records and related solutions centered on AI and voice input. Specifically, the company is allocating resources to developing the integrated electronic medical record system Revo.11, AI-based periodontal disease precision diagnostics, and voice sub-records. The company's core competitive advantage is providing end-to-end services from research and development through sales, implementation support, and after-sales support. Through its "software three-free principle" offering free support, maintenance, and version upgrades, combined with on-site support from 24 nationwide offices and approximately 75 sales staff, the company maintains high customer retention with a replacement renewal rate of approximately 91.1%.

For new market development, the company targets approximately 39,000 potential customers pursuing digitalization among Japan's 65,579 dental clinics. Aligned with policy trends emphasizing "prevention over treatment" and "home visits over clinic visits," the company plans to capture demand for home care and remote support services. Leveraging its implementation track record primarily in western Japan, it will strengthen nationwide expansion and expand stable revenue through a lease-based business model.

On the technology innovation front, the company focuses on practical applications of AI and voice technology to improve treatment record creation, diagnostic accuracy, and reduce administrative workload. Specific initiatives include streamlining input through voice recognition, automating preventive recommendations via AI-driven clinical data analysis, and strengthening integration with other medical applications. Through these efforts, the company aims to address dental hygienist shortages and changing patient visit patterns due to aging populations, while maintaining quality of care and contributing to healthcare cost reduction.