Company overview of Quol Holdings＜3034＞.
2. Insurance pharmacy business.
(1) Business scale and positioning within the industry. Quol Holdings is mainly engaged in the operation of dispensing pharmacies in the insurance pharmacy business. As of the end of March 2024, in terms of the number of stores, of the total number of 920 stores, 898 are dispensing pharmacies, accounting for about 98%, and the remaining 22 stores are operated in hospital sales outlets. In addition, about 93% of the segment sales are accounted for by prescription drug sales (so-called dispensing sales), and the remaining portion is accounted for by sales of products at pharmacies, convenience stores, hospital stores, and sales of health foods and sanitary goods on the company's official online store. When looking at the positioning of the company in the dispensing pharmacy industry, it is the second largest after Ain Holdings＜9627＞(1,221 stores as of the end of January 2024) among the listed dispensing specialty chains in terms of number of stores, and the third largest in terms of sales after Ain Holdings and Nippon Chouzai＜3341＞. Although Nippon Chouzai is in third place in terms of the number of stores with 742 stores (as of June 1, 2024), it exceeds the company in terms of sales scale as it is more prevalent in front-of-hospital pharmacies with large sales.
(2) Store strategy. One of the characteristics of the company's store strategy is that it operates its business in two types of formats that are significantly different from each other. One is the "Man-to-man pharmacy," and the other is the "healthcare pharmacy" created through collaboration with non-pharmaceutical companies such as Lawson＜2651＞, Bic Camera＜3048＞, and Ryohin Keikaku＜7453＞, which are major convenience stores. The man-to-man pharmacy is a concept that represents the basic stance of store deployment targeting normal Quol stores, and is also a "core business" in the business model. The point is that it has a deep collaborative relationship with the dispensing medical institution. The word "Man-to-Man" is understood by the company to mean that it is used to create a deep collaborative relationship with the medical institution. Although the word "Man-to-Man" may give the impression that one Quol pharmacy has a deep relationship with only one dispensing medical institution, in reality, one pharmacy seems to have deep relationships with multiple medical institutions. The aim of the Man-to-Man pharmacy is to achieve efficient and low-cost operations by leveraging the collaboration with medical institutions, and to contribute to improving services for patients as a result. Specifically, the company pursues store creation that changes the store design and function according to the medical departments and regional differences of the dispensing medical institution that are in a Man-to-Man relationship. The source of this concept is the low-cost structure of the store, including the efficient inventory management of pharmaceuticals, which is a merit of Man-to-Man management. The company regards the creation of pharmacies that are highly valued by patients and chosen by patients as the core of its store strategy based on the concept of Man-to-Man pharmacies that focus on collaboration with medical institutions. In addition, the concept of Man-to-Man pharmacies that focus on collaboration with medical institutions is in line with the "Pharmacy Vision for Patients" advocated by the government, and is an important point in the growth strategy. In the new pharmacy certification system introduced in August 2021, two categories of "Regional Collaborative Pharmacy" and "Specialized Medical Institution Collaborative Pharmacy" were established, and it is expected that the former will play an important role in the construction of the government's "Regional Comprehensive Care System", and the company is actively seeking certification※.
※As of the end of March 2024, 174 stores were certified as regional collaborative pharmacies (pharmacies that can work together with other medical institutions for hospitalization or medical treatment at home), and 11 stores were certified as specialized medical institution collaborative pharmacies (pharmacies that can work together with other medical institutions for specialized pharmaceutical management such as cancer).
(2) Store Strategy One of the characteristics of the company's store strategy is that it operates in two different types of formats. One is a "Man-to-man Pharmacy", and the other is a "Healthcare Pharmacy" in collaboration with other industries such as Lawson <2651>, Bic Camera <3048>, and Roppongi Ichi <7453>. Man-to-man pharmacies embody the basic concept of store expansion targeting normal QOL pharmacies and are also the "core business" in the business model. The key point is a deep collaboration with the prescribing medical institution and QOL pharmacy. We understand that the word "Man-to-man" is used to establish a deep collaborative relationship with medical institutions. Although the word "Man-to-man" (1-to-1) may give the impression that one QOL pharmacy only deepens its collaboration with one prescribing medical institution, in reality, one pharmacy seems to be building a deep collaboration with multiple medical institutions. In Man-to-man pharmacies, we aim to use collaboration with medical institutions to achieve efficient and low-cost operations and contribute to improving services for patients. Specifically, we are pursuing store creation that changes store design and functions depending on the medical department and regional characteristics of the prescribing medical institution in the Man-to-man relationship. The source of this is the low-cost structure of the store, including the efficient inventory of pharmaceuticals derived from the advantages of Man-to-man management. The company positions the creation of a pharmacy that is highly valuable to patients and chosen by patients based on the concept of Man-to-man pharmacies as the core of its store strategy. The concept of Man-to-man pharmacies that emphasizes collaboration with medical institutions can be said to be in line with the government's "Pharmacy Vision for Patients," and is also an important point in the growth strategy. In the new pharmacy certification system introduced in August 2021, two categories, "Regional Collaboration Pharmacy" and "Specialized Medical Institution Collaboration Pharmacy," have been established. Of these, it is expected that the "Regional Collaboration Pharmacy," for which the government is promoting the construction of a "Regional Comprehensive Care System," will play an important role, and the company is actively working to obtain certification.※ ※As of the end of March 2024, the company has been certified as a "Regional Collaboration Pharmacy" (a pharmacy that can respond in collaboration with other medical facilities at the time of admission or home medical care) for 174 stores, and as a "Specialized Medical Institution Collaboration Pharmacy" (a pharmacy that can respond in collaboration with other medical facilities for specialized pharmaceutical management such as cancer) for 11 stores.
One of the characteristics of the company's store strategy is that it operates in two different formats, which are significantly different types. One is a "Man-to-man Pharmacy," and the other is a "Healthcare Pharmacy" that collaborates with other industries, such as Lawson<2651>, Big Camera<3048>, and Roppongi Ichi<7453>.
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In Man-to-man pharmacies, we aim to use collaboration with medical institutions to achieve efficient and low-cost operations and contribute to improving services for patients. Specifically, we are pursuing store creation that changes store design and functions depending on the medical department and regional characteristics of the prescribing medical institution in the Man-to-man relationship. The source of this is the low-cost structure of the store, including the efficient inventory of pharmaceuticals derived from the advantages of Man-to-man management. The company positions the creation of a pharmacy that is highly valuable to patients and chosen by patients based on the concept of Man-to-man pharmacies as the core of its store strategy. The concept of Man-to-man pharmacies that emphasizes collaboration with medical institutions can be said to be in line with the government's "Pharmacy Vision for Patients," and is also an important point in the growth strategy. In the new pharmacy certification system introduced in August 2021, two categories, "Regional Collaboration Pharmacy" and "Specialized Medical Institution Collaboration Pharmacy," have been established. Of these, it is expected that the "Regional Collaboration Pharmacy," for which the government is promoting the construction of a "Regional Comprehensive Care System," will play an important role, and the company is actively working to obtain certification.※
※As of the end of March 2024, the company has been certified as a "Regional Collaboration Pharmacy" (a pharmacy that can respond in collaboration with other medical facilities at the time of admission or home medical care) for 174 stores, and as a "Specialized Medical Institution Collaboration Pharmacy" (a pharmacy that can respond in collaboration with other medical facilities for specialized pharmaceutical management such as cancer) for 11 stores.
The expansion of healthcare pharmacies through collaboration with other industries, which is another business format, is driven by the 2009 Pharmaceutical Affairs Law revision, which allows other industry stores such as convenience stores, drug stores, and supermarkets to sell general pharmaceuticals (so-called OTC drugs) as registered dealers. In response to this, a trend has emerged for drug stores to enter into the dispensing pharmacy business, and the company has taken the initiative to collaborate with the two aforementioned companies to promote these efforts. Product structure, 10-30 billion yuan products operating income of 401/1288/60 million yuan respectively.
For one-on-one pharmacies, the target customer base can be narrowed down to some extent, so drug inventory, etc., are also streamlined accordingly, but healthcare pharmacies are customer-facing pharmacies targeting unspecified numbers of customers located in high-traffic areas. For this reason, there is more burden on inventory management at healthcare pharmacies than at one-on-one pharmacies, but it can also result in a greater number of customers (i.e. prescription demand). While positioning one-on-one pharmacies as the core model, the company aims to expand its customer base by also expanding healthcare pharmacies. In addition, in collaboration with Ryohin Keikaku <7453>, expansion into Muji stores has also begun from the fiscal year ending March 2022. Ryohin Keikaku operates a "town health room," which offers health events and consultations as a place for health creation, and provides everything from disease prevention to medicine in a comprehensive manner, and the company has opened a dispensing pharmacy as its collaborative partner. As of the end of March 2024, the number of healthcare pharmacy stores was 36 collaboration stores with Lawson, 5 stores within Bic Camera, and 2 stores within Muji, and there were also 2 station-nearby stores.
Check the regional store counts at the end of March 2024, with Kanto having the highest number of stores at 391 (42.5%), followed by Kansai with 145 stores (15.8%), and Hokuriku and Shizuoka with 113 stores (12.3%), accounting for 70% of the total in the three regions. While Kanto has the most stores due to Tokyo being the founding location (Tochigi Prefecture has the highest number of group stores in the prefecture), the company has steadily increased its number of stores in the Kansai, Kyushu, and Okinawa area through M&A in recent years as well.
(Written by FISCO guest analyst, Jo Sato)