Japanias <9558> provides technology to customers primarily in the IT and communications industry and the manufacturing industry through cutting-edge engineering services (on-site development support and contracted development).

In on-site development support, about 90% of engineers are stationed at client companies, participating in design and development projects. As of the third quarter of the fiscal year ending November 2024, the number of engineers is 1,695 (compared to 1,498 in the same period last year) with an operational rate of 93.6%, maintaining a high utilization rate due to favorable market conditions for engineers. Many engineers hold technical qualifications, and in terms of revenue by customer, listed companies and their group companies account for over 70%. Additionally, regarding revenue by years of transaction, customers with more than five years of trading account for about 70% of revenue, indicating growth in transactions with new clients while stable transactions with existing clients, mainly listed companies, continue.

For the cumulative revenue in the third quarter of the fiscal year ending November 2024, revenue reached 8,297 million yen, a 14.4% increase compared to the same period last year, while operating profit was down 10.5% to 547 million yen. Continuous hiring of engineers to meet strong demand in IT has led to steady revenue growth, recording the highest cumulative amount for the third quarter. Although profits decreased, the decline in the gross profit margin was due to an increase in the proportion of trainees requiring a certain training period as competition intensified in the hiring market. However, despite the increase in low-priced trainees, revenue per person maintained the previous year's level of 580,000 yen due to the price revision effect of experienced personnel. For the full year, revenue is projected to increase by 19.4% to 11,800 million yen, with operating profit expected to rise by 22.0% to 1,020 million yen.

Since the fiscal year ending November 2021, the company has increased its number of engineers at a CAGR of 16.4%. In addition to hiring skilled engineers, the establishment of a training center called "J-college" has initiated efforts to cultivate engineers, and a robust education system is in place. Furthermore, in addition to existing areas of software, infrastructure, and machinery and electricity, engineers specializing in a wide range of advanced technologies such as new areas of CRM and cloud have been retained. Many qualified personnel hold various certifications, including 306 in the Information Processing Engineer Examination, 540 in vendor certifications, and 445 in other qualifications, enhancing the ability to provide high-quality services to clients.

As the shortage of IT personnel is expected to worsen, further IT demand is anticipated due to corporate DX and telework, while manufacturing companies are seeing rapid growth and recovery trends in semiconductors and electronic components. With such market tailwinds, the goal is to achieve revenue of 20,000 million yen by November 2026, including strategic M&A. By making targeted investments for further business expansion and aiming for sustainable profit growth, the goal is to improve the ordinary profit margin to 10%. With a well-established environment for engineer development, hiring plans have also been revised upwards to secure more than 3,000 engineers. Additionally, there are likely plans to expand into new fields such as chemicals and biotech as new growth engines, as well as expanding the recruitment business leveraging hiring power to address the social issue of talent shortages. Furthermore, the goal of sustaining profit growth and maintaining a dividend payout ratio of 50% is set. Currently, with a dividend yield exceeding 4% at the current stock price, attention is expected to focus on whether continued sustainable growth can be maintained.