M3 (2413): Subsidiary Elan (6099): 2Q results rise slightly above guidance on minor impact of cost growth; watch for benefits from price hikes from 3Q

Research evidence excerpt

M3 (2413): Subsidiary Elan (6099): 2Q results rise slightly above guidance on minor impact of cost growth; watch for benefits from price hikes from 3Q

J P M O R G A N Asia Pacific Equity Research

01 August 2026

M3 (2413)

Subsidiary Elan (6099): 2Q results rise slightly Overweight

above guidance on minor impact of cost growth; 2413.T, 2413 JP

watch for benefits from price hikes from 3Q Price (31 Jul 26):¥1,782

Price Target (Dec-26):¥2,500

M3’s consolidated subsidiary Elan (M3’s patient solution segment) reported 2Q Japan Equity Research

FY2026 results on July 31. 2Q operating profit of ¥1.2 billion was above guidance

Medical Technologies & Services

(Bloomberg consensus ¥1.3 billion). Elan maintained FY2026 operating profit

guidance for ¥5 billion. Higher costs from the Middle East conflict and inflation Naoko Saito AC

still had a minor impact in 2Q, and Elan accelerated some price hikes. However, (81-3) 6736-8693

naoko.saito@jpmorgan.com

Elan expects costs for linen and other items to increase from 3Q. The future pace

Seiji Wakao, Ph.D.

of price hikes seems uncertain because uptake volume for high-priced services was (81-3) 6736-8612

slower than planned as of 2Q as a result of higher prices. Given that operating profit seiji.wakao@jpmorgan.com

in the patient solution segment accounts for only 6% of operating profit at M3 JPMorgan Securities Japan Co., Ltd.

(FY2026 guidance), we think M3’s share price could hinge mainly on sales in the

pharma marketing support segment, and expect a limited impact on M3’s share

price. However, considering Elan’s high cost ratio of 78.6% in FY2025, we

estimate that if the cost ratio in the patient solution segment deteriorates by +0.5ppt

in FY2026, it could reduce operating profit in this business by ¥3 billion.