HIKARI HEIGHTS-VARUS CO.,LTD. (2137) Stock Price

Hikari Heights Veras is a company based in Hokkaido (primarily in Sapporo and Otaru) that specializes in establishing, operating, and managing paid nursing homes and service-oriented housing for the elderly. The company operates multiple facilities that provide integrated residential and care support, focusing on room provision and daily living assistance.

The primary customers are elderly residents and their families. Revenue is generated mainly through entrance fees, monthly rent, and monthly service fees. The company also derives significant income from long-term care insurance service payments, day service and short-term stay fees, and business partnerships with in-facility tenants.

The company operates five business segments: (1) care-inclusive paid nursing homes—facilities with on-site care staff providing 24-hour care; (2) residential-type paid nursing homes—facilities offering living support where residents can use external care services; (3) service-oriented housing for the elderly; (4) adult day services; and (5) short-term residential care. The company flexibly uses owned and leased facilities for each location, coordinates with medical institutions and home care providers to establish nursing and care systems, and addresses the diverse needs of residents.

The company aims to maintain an average occupancy rate of 95% or higher across all operated facilities as its primary growth target, ensuring a stable operational foundation. Specifically, it plans to open one new care-dedicated facility per year, including through acquisitions and mergers, with a target capacity of 50 to 100 residents per facility. Financially, backed by retained earnings of 1,705,724 thousand yen (as of the fiscal year-end), the company secures revenue through both entrance fee and monthly rent models. It is also improving occupancy rates by introducing monthly rent options at existing facilities to enhance accessibility for prospective residents.

Priority investment areas are securing care-dedicated rooms and strengthening medical partnerships. To address changing needs of aging residents, the company facilitates smooth transitions from standard units to dedicated care units or in-house care facilities. It differentiates itself by co-locating periodic visiting care and nursing services, as well as home care support offices within facilities. Additionally, by promoting "Second Life: The Luxury of Freedom," the company attracts baby boomers and creates competitive advantage through integrated provision of residential environment, life support, and medical coordination.

For new market development and business expansion, the company prepares for active opening of care-included paid nursing homes following regulatory relaxation in Sapporo, while also expanding short-stay and adult day service operations. Expansion focuses primarily on Hokkaido, centered on Sapporo and Otaru, using a mix of owned and leased properties to optimize capital efficiency. The company plans to balance social contribution with stable business growth by providing services tailored to regional needs.

Regarding technological innovation, the company is adopting information and communication technology to improve operational efficiency and address labor shortages. Specific initiatives include implementing electronic record management, monitoring sensors, and exploring remote medical coordination (telemedicine) with healthcare institutions to reduce staff workload and enhance service quality. Additionally, the company strengthens staff training programs through external professional development and credential support, advancing human capital investment to improve both care quality and operational efficiency.