2026.5.21
The Essence of Quality-Oriented Management – Insights into Long-Term Value from a Dialogue with Sysmex
This month, we spotlight Sysmex Corporation (6869) — providing an overview of the company and the ongoing engagement activities Cadira has conducted with it.
Company Overview （*1）
Sysmex was established in 1968 as a spin-off from TOA Special Electric (now TOA Corporation), an audio equipment manufacturer, and is a medical device company primarily engaged in the development, manufacture, and sale of instruments and reagents for clinical laboratory testing. Headquartered in Kobe, Hyogo Prefecture, the company is recognised as a global leader in diagnostic fields including haematology, urinalysis, and immunoassay testing. Sysmex's business is specialised within the testing segment of healthcare — and specifically within "in-vitro diagnostics," which involves testing blood, urine, and other specimens collected from the body, as distinct from "in-vivo diagnostics" such as X-rays that examine the body directly. The company manufactures and sells both the instruments used to analyse specimens collected in hospitals and the reagents used in conjunction with those instruments, providing an integrated solution that gives its hospital customers confidence and peace of mind.
Sysmex's core product is the haematology analyser (automated blood cell counter), a field in which the company commands the world's top market share and has earned high regard from the medical community for its precision and reliability.
Haematology plays a vital role in supporting the fundamentals of medical practice — from early disease detection to the determination of treatment plans. As an established and well-proven testing method, it is expected to see growing demand in emerging markets as healthcare provision expands in its early stages. At the same time, through the advancement of testing instruments, there remains scope to unlock new demand even in developed markets by enhancing the precision and efficiency of testing — making it a field with significant growth potential.
Sysmex has built its competitive strengths not only through technological capability but also through the development of its sales and service infrastructure. Its early adoption of IT to improve the efficiency of laboratory operations, and its achievement of enhanced service quality through remote monitoring, have been highly valued — enabling the company, as a relative latecomer, to establish itself as the world's top player in its core haematology business with a global market share exceeding 50%. The company has built a direct sales network on a global scale, with overseas revenues accounting for close to 90% of total sales.
Cadira's Engagement Activities
In April 2026, Cadira conducted a collaborative dialogue meeting at Sysmex's Tokyo office, together with other capital market participants including institutional investors. With Sysmex's CFO Kensuke Iizuka as the principal speaker, the meeting explored the challenges facing the company before moving to an exchange of views on its growth strategy and future direction. The central question of the meeting was how Sysmex perceives its own raison d'être at a time when near-term earnings are under pressure.
The most pressing management challenge Sysmex currently faces is adapting to structural change in the Chinese market. Against the backdrop of the Chinese government's healthcare cost-containment policy, the diagnostics industry is undergoing a paradigm shift from "volume" to "value." As the correction of the previously prevalent practice of over-testing proceeds, local manufacturers competing primarily on cost have gained ground — and Sysmex's China business is facing short-term headwinds as a result. This led to a downward revision of its fiscal year ending March 2026 earnings guidance, and the share price fell sharply.
This issue was addressed in detail during the collaborative dialogue meeting. Sysmex indicated its intention to maintain a quality-first approach — resisting the temptation to compete on cost — and instead focusing on technical support and customer education. In practice, the company has received the highest recognition in a medical device industry data survey conducted in China, and Sysmex's management philosophy is translating into strong local recognition. While the quality-first stance is acting as a short-term drag on earnings, the endorsement it has earned within the local medical community is a point that cannot be overlooked from a medium-to-long-term perspective. As China moves to consolidate testing operations into large-scale testing centres in pursuit of greater efficiency, the high regard from healthcare professionals is expected to work in Sysmex's favour.
The Social Challenges Sysmex Addresses
The medium-to-long-term view was also a key topic of discussion at the collaborative dialogue meeting, with a focus on the healthcare challenges that Sysmex itself recognises. Looking back, Sysmex has sustained its growth by identifying and addressing challenges in laboratory testing that arise from changes in the healthcare landscape. In its early years, the company responded to the surge in testing demand that accompanied the expansion of Japan's universal health insurance system by developing automated blood cell counters. In the 1980s and 1990s, the spread of HIV infection created a need for testing processes in which operators would not come into contact with specimens — and Sysmex pioneered the world's first practical automated transport system in response. From the 2000s onwards, it has supported the stable operation of large-scale testing centres through remote monitoring.
At the meeting, Sysmex outlined five healthcare challenges it considers most important — shortages of laboratory professionals, improving treatment satisfaction, healthcare disparities, personalised medicine, and preventive management — and presented its strategy for addressing these through AI and digital initiatives.
In developed markets, the shortage of healthcare workers — physicians, nurses, and laboratory technicians alike — has become acute, with professionals who should be focusing on their specialist work increasingly diverted to routine tasks, creating significant inefficiencies. Sysmex is addressing this structural challenge through the automation of quality control and labour-saving measures, working to build a framework that can maintain both the quality and volume of testing even under staffing constraints.
In emerging markets, the challenges are of a different nature. Given the absolute shortage of qualified professionals, simply making testing equipment more widely available does not translate directly into improvements in healthcare standards. Sysmex therefore continues to enter these markets through an infrastructure-building approach that combines the dissemination of testing equipment with training programs for laboratory technicians. The company is also developing AI-powered technology capable of diagnosing disease conditions even in the absence of specialist personnel, pursuing both human capital development and technological supplementation in parallel.
Summary
When portfolio companies face earnings headwinds, capital market attention tends to narrow towards near-term metrics. The importance of earnings growth goes without saying — but we would not want the pursuit of short-term performance to come at the expense of a commitment to addressing the challenges facing the healthcare industry, or of the quality of the products and services on offer. The collaborative dialogue meeting this month centred on medium-to-long-term strategy. It is precisely during periods of near-term difficulty that forward-looking dialogue serves its purpose — and we believe this is the role that long-term investor engagement is meant to play.
Cadira will continue to engage constructively with Sysmex, fulfilling its role as an investor that supports the company's creation of social value and the enhancement of its long-term corporate value.
*1 Republished from article dated 23 January 2025: https://cadiracm.com/news-en/XHLAoeKN
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