(7374) Confidence Interworks -New Analyst Report 9/13

1. Company Overview
- Confidence, which provides personnel dispatch and introduction services for the gaming industry, absorbed and merged with Interworks, which operates in the manufacturing industry, such as personnel introduction and job information site operation, in August 2023, and changed its company name to Confidence Interworks (hereinafter referred to as the Company).
- The company's reporting segment consists of HR solution business (personnel dispatch and outsourcing) that provides personnel dispatch and outsourcing services for the gaming industry and related fields, HR solution business (personnel introduction) that introduces personnel to manufacturing industries, and media & solution business that operates job information sites.

2. Financial Analysis
- Confidence has been on a trend of increasing revenue due to the increase in the number of dispatched creators (job seekers), while Interworks has experienced a decrease in revenue in the fiscal years 2020/3 and 2021/3 due to the impact of the COVID-19 pandemic, but has since recovered. The operating margin calculated by simply combining the performance of the two companies in the fiscal year 2023/3 is 15.9%, and in the fiscal year 2024/3 after the merger, it is 15.3%.
- In comparison with other companies' financial indicators, the company's total asset operating margin and revenue operating margin are at a higher level than the other four companies.

3. Non-financial analysis
- The source of the company's intellectual capital lies in its accumulated know-how of matching the needs of trading companies with the skills of creators, while efficiently operating the organization to achieve high profitability.

4. Analysis of management strategy
- The company has indicated its focus on expanding its HR solution business (staffing and outsourcing) through deepening customer relationships and promoting cross-selling to existing customers in order to achieve sustainable business growth.

5. Analyst evaluation
- The Securities Research Center evaluates the company's competitive advantage based on its strong recruitment ability and accumulated expertise in conducting highly accurate matching of customer needs and creator skills.
- It is expected that the performance for the fiscal year ending in March 2025 will be at a level close to the company's plan, and it is anticipated that revenue and profit will continue to increase in the fiscal year ending in March 2026 and beyond.