■Future Outlook LeTech <3497> expects an increase in sales and ordinary income of more than 20%, with sales of 2.14 billion yen (+33.8% YoY), operating income of 150 million yen (+7.7% YoY), ordinary income of 100 million yen (+21.7% YoY), and net income of 1.03 billion yen (-11.4% YoY) for the July 2024 term, and has maintained its initial forecast (announced in September 2023).
1. Performance Outlook for March 2025
For the fiscal year ending March 2025, Meito Facility Works' performance is expected to increase revenue by 0.6% from the previous year to 5.3 billion yen, operating profit by 2.0% to 109 million yen, ordinary profit by 1.8% to 109 million yen, and net income by 1.2% to 800 million yen. For the sales amount, in the previous year, there was a joint proposal project with another company, which accounted for about 64 million yen in sales revenue and sales cost, but for the fiscal year ending March 2025, there is no such case, so the actual increase in revenue is approximately 100 million yen, and growth rate is expected to increase by 1.9%. The operating profit margin is expected to remain at the same level as the previous year. In addition, the tax deduction for wage increases is expected to be 46 million yen compared to 61 million yen in the previous year.
As for the company's plans, they have been formulated conservatively due to the difficulties faced by private sector clients in forecasting construction investments due to the instability of the financial environment. However, due to the continued labor shortage in the construction industry caused by rising prices and the 2024 problem, it has become difficult for clients to execute construction projects independently, and expectations for the company's CM services are expected to increase even further. In addition, with the increase in decarbonization support needs and the expansion of client-side business support services, including DX support that the company is good at and work style reform and productivity improvement on the client side, there is room for upward revision on the company's plans according to our company.
According to the Construction Economic Research Institute's "Construction Investment Outlook" (released in April 2024), construction investment in fiscal year 2024 is expected to increase by 5.1% compared to the previous year to 48.7 trillion yen, with non-residential investment increasing by 5.3% to 16.5 trillion yen (of which the government accounted for 4.8 trillion yen, up 13.3% ), and building renovation investment increasing by 8.8% to 14.2 trillion yen (up 10.8% to 2.7 trillion yen). Both areas are expected to have positive growth, with particularly strong growth in the public sector. On a real basis, excluding the impact of inflation, non-residential investment is expected to increase by 3.0%, and building renovation investment is expected to increase by 6.4% for two consecutive periods, indicating that construction investment in companies and the public sector is expected to remain robust. In the public sector, it is expected that the government budget will be directed toward public investment with the convergence of the corona crisis, and in the private sector, the trend of domestic return of manufacturing due to the progress of the yen's depreciation is continuing, and demand for renovation due to deteriorating facilities is increasing. Considering the expansion of CM service needs, we believe that the company's CM service will continue to be busy and that sales growth will be limited by human resources.
Over the past 1-2 years, new semiconductor factory construction plans have been advancing in Kyushu, Hokkaido, Tohoku, and other areas under national policy. If a large-scale semiconductor factory is completed, there is a possibility that related company factories will also be consolidated in the surrounding area, and the company aims to take advantage of the opportunity for CM service needs in these surrounding company construction projects. In addition, there is expected to be an increase in construction projects for data centers in the future, and since the company has had several achievements in this area in the past, it is expected to acquire more orders in the future.
In April 2024, the company was certified as a 'DX Certified Business' by the Ministry of Economy, Trade and Industry. This certification is based on the fact that the company meets the certification criteria for digital governance codes and disclosure of appropriate information to stakeholders, as well as its preparations to transform its business through DX and provide value to its customers. We believe that this certification will have a positive impact on the company's expansion of its DX support business. The number of employees is expected to continue to increase by about ten people and be incorporated into the performance plan.
(Written by FISCO guest analyst, Jo Sato)