■Company Overview

1. Business Overview

The business segment of Fuyo General Lease ＜8424＞ is divided into three categories: “leases and installments,” “finance,” and “others.” “Lease and installment” is further disclosed by dividing it into “lease” and “installment”. The main force, “leasing,” accounts for 57.7% of net profit ※ and 62.4% of operating asset balances (results for the fiscal year ending 2024/3). Furthermore, as a future growth driver, it is a policy to actively invest management resources into business fields such as “mobility,” “energy environment,” “BPO/ICT,” and “healthcare,” promote differentiation in “real estate,” and “aircraft,” and promote “de-finance” in the medium to long term.

*Gross profit before deducting capital costs.

The outline of each business is as follows.

(1) Lease and installment

We are engaged in leasing business for information and communication equipment, office equipment, industrial machine tools, etc., and installment sales business for commercial facilities, production equipment, hospital equipment, etc. A lease is a transaction where a leasing company acquires machinery, equipment, etc. selected by the customer on behalf of the customer and leases it for a relatively long period of time at a fixed lease fee. It can be said that it is a means of raising funds (financial transactions) focused on the introduction of equipment. In addition to “efficient use of funds,” “reduction of administrative burdens,” and “avoidance of obsolescence risks,” there are advantages in terms of “cost control functions” rather than purchasing (owning) equipment in-house for customers. Since leasing companies themselves own ownership of leased properties compared to normal loan transactions, the recovery risk is small. Also, when a property or customer wishes to own a property that does not belong to a lease transaction for tax purposes, it is handled by installment sales.

“Buildings, etc.” (real estate leases) and “transportation equipment” have increased in recent years in terms of lease contract execution volume by property. In addition to commercial facilities (large shopping centers, etc.), which the company excels at, real estate leasing has diversified as alliances expand, such as hotels, nursing/living, leisure/services, logistics, etc. It is a field where expertise and know-how are required due to high legal hurdles and complicated rights relationships, etc., and the company's rules of experience and network spanning over 30 years have been utilized. Also, the growth in “transportation equipment” up until now has been due to aircraft leasing, and long-standing experience and know-how have become strengths. Additionally, with the consolidation of Yamato Lease Co., Ltd. (2020/4), they are also strengthening the mobility business where growth potential can be expected.

*The consolidation of Yamato Lease, a subsidiary of Yamato Holdings ＜9064＞, was carried out in April 2020. The ownership ratio is 60% for the company and 40% for Yamato Holdings.

(2) Finance

In addition to loans for business funds such as capital investment funds and real estate finance, it also carries out securities management operations, etc. It also includes fund investments in the renewable energy business and retail use by the consolidated subsidiary Sharp Finance Co., Ltd. (hereinafter, SFC). Also, due to the consolidation of Active Co., Ltd. (2017/1), factoring business* was also added.

* We are mainly developing FPS (accounts receivable early payment service) for small and medium-sized enterprises and FPS medical (early payment service for medical treatment and nursing care compensation claims) for medical institutions.

(3) Others

As an in-house business, in addition to mega solar operations (renewable energy business), it also includes anonymous union formation operations and life insurance agency operations related to aircraft leasing, etc. Also, the consolidated billing service* provided by Invoice Co., Ltd., which was consolidated in 2018/10, and NOC Outsourcing & Consulting Co., Ltd. (currently Fuyo Outsourcing & Consulting Co., Ltd.), which was consolidated in 2019/8. A wide range of back office services (accounting, personnel/payroll, general affairs, sales administration, etc.) developed by FOC) have also been added, and a system that responds to various BPO needs has been built. In October 2021, WorkVision Co., Ltd., which develops IT solutions (DX support, etc.) centered on cloud packages, was consolidated to expand service functions. Furthermore, under a business agreement with Ryo Co., Ltd., which provides DX solutions utilizing algorithms and AI technology, they are also working on the development of high-value-added BPO services utilizing AI.

* A service that organizes complicated tasks for monthly invoices, such as communication carriers and various utility bills, and makes payments on your behalf.

2. HISTORY

The company was established in 1969 with six Fuyo Group companies centered on Fuji Bank (now Mizuho Bank) and Marubeni Iida (now Marubeni) as shareholders. After that, when the business expanded steadily, a local subsidiary was established in the United States in 1988, and a local subsidiary was established in Ireland (Dublin), which is the mecca of aircraft leasing, in 1999. Recently, entry into the aircraft business, which competitors are focusing on, is relatively quick, and achievements and know-how such as leveraged dreaming (investor recruitment type aircraft leasing) have also been built up.

Furthermore, we have also been working on cooperation with other companies, such as establishing Yokogawa Rental & Lease Co., Ltd. (high market share for measuring instruments) in 1987 as a joint venture with Yokogawa Electric (6841), and establishing Japan Credit Leasing Co., Ltd. (high market share for medical devices/equipment, and welfare equipment) in 1999 as a joint venture with Nichii Gakukan Co., Ltd.

*An absorption merger of Japan Credit Leasing with the company as the surviving company was carried out in January 2022.

A major turning point for the company was listing on the Tokyo Stock Exchange Section 1 in 2004/12 and making SFC a consolidated subsidiary in 2008/4 (acquiring 65% of the shares). In particular, SFC boasts a high market share in the retail (vendor leasing) field, and it can be said that it has contributed greatly to the company's performance in terms of both business domain expansion and scale expansion.

Also, in 2014/7, the British aircraft-related service company ALM 2010 Limited (trade name changed to Fuyo Aviation Capital Europe Limited) was made into a consolidated subsidiary (acquisition of all shares), and the system was strengthened to expand the aircraft business.

In 2017/1, Active Co., Ltd., which is a subsidiary of Don Quijote Holdings Co., Ltd. (currently Pan Pacific International Holdings ＜7532＞), and which mainly develops factoring (accounts receivable purchases) businesses, etc. for small and medium-sized enterprises, became a consolidated subsidiary. Of course, they are pursuing synergy through cross-selling with each company in the company's group, and efforts in new areas are being strengthened. In addition, Invoice, which provides consolidated billing services in 2018/10, and FOC, which develops a wide range of back office services, became consolidated subsidiaries in 2019/8, and they are also working to strengthen BPO services. Yamato Lease, a subsidiary of Yamato Holdings, was consolidated in 2020/4, and a foothold was built for expansion into the mobility business and logistics industry where growth potential can be expected.

(Written by FISCO Visiting Analyst Ikuo Shibata)