Company Overview

No.1 <3562> has the management philosophy of "Becoming the primary force to invigorate companies in Japan." The company primarily targets small and micro businesses across the country, engaging in the planning, development, manufacturing, sales, and maintenance of information security devices, as well as the sales and maintenance services for OA-related products, etc. It was established in 1989 as a company selling software for corporate clients in Yokohama, Kanagawa Prefecture under the name J.B.M. Co., Ltd. (currently No.1) and started its business. After that, as it began selling OA equipment such as multifunctional printers, business phones, and PCs, it opened sales offices across Japan and expanded its business by acquiring new customers and enhancing support services. Recently, to expand stock revenue, the company has also focused on a subscription-based consulting service called "No.1 Business Support." Furthermore, the information security devices developed and manufactured by Alexon, which became a subsidiary in July 2020, are performing well and driving the company's growth. The customer base consists of about 16,000 small and micro businesses nationwide. In terms of customer composition by industry, the top three industries are construction, healthcare and welfare, and manufacturing, which together account for over 50%, while the rest covers multiple industries.

Although it is a single segment, it can be classified into the following categories based on the content of the business: 1) information security devices sales business, 2) OA-related products sales business, 3) information and communications terminal sales business, 4) web solutions, and 5) business consulting services.

The company group consists of the company itself, six consolidated subsidiaries, one non-consolidated subsidiary, and one equity-method non-applicable affiliated company, totaling nine companies (as of the end of August 2024). The consolidated subsidiaries are: Club One Systems, Inc. (established in May 2013), Office Alpha, Inc. (became a subsidiary in September 2014), No.1 Partner, Inc. (a joint venture with Hikari Tsushin <9435>, established in April 2019), No.1 Digital Solution, Inc. (hereafter, NDS; became a subsidiary in June 2020, a joint venture with Hyper <3054>), Alexon, Inc. (became a subsidiary in July 2020), and OZ MODE, Inc. (became a subsidiary in June 2024). Additionally, the non-consolidated subsidiary is IT Engineering, Inc. (became a subsidiary in April 2024), while the equity-method non-applicable affiliated company is Saison Business Support, Inc. (a joint venture with Credit Saison <8253>, established in September 2022).

In October 2024, S.I.T Co., Ltd. will be made a subsidiary.

1. Overview of each business

(1) Information security devices sales business

Focusing mainly on products made by Alexon, which became a subsidiary in July 2020, the company has established a manufacturing wholesale structure that covers everything from product planning and development to design, manufacturing, and sales within the group. With the spread of the internet and the trend of digital transformation (DX), information security measures have become a major challenge for companies, leading to an increasing demand. A rich lineup includes UTM*1 and security switches*2.

A product that integrates multiple different security features into a single hardware for Unified Threat Management. It has the functionality to prevent various attacks (unauthorized access, DoS attacks, virus attacks, etc.) that infiltrate from the internet into the internal network before they occur at the network's entry point.

Security equipment that has monitoring capabilities to watch over the communication packets flowing through the internal network, enabling early identification and rapid isolation of infected devices in the event of a virus infiltrating, thus preventing the spread of infection and attacks on the network.

(2) Business of selling OA related commodities.

This is the company's main business since its establishment, sourcing and selling OA equipment such as multifunction devices, business phones, and PCs. The company also receives counter service fees based on the usage amount of copiers as compensation for maintenance services and consumables such as toner from customers. Additionally, the subsidiary Office Alpha specializes in the sale and rental of used OA equipment.

(3) Information communication terminal sales business.

No.1 Partner, a joint venture with Optical Communications, utilizes web marketing to sell various information communication terminals such as mobile Wi-Fi, SIM cards, and emergency disaster communication equipment 'Hazard Talk.'

(4) Web solutions business.

The business develops a web consultancy service that supports the creation and operation of websites tailored to the characteristics of each industry, enhancing the strengths of individual companies. Additionally, NDS is involved in the sale of the fully managed cloud service 'Digital Telus,' developed in partnership with Oracle Corp Japan <4716>.

(5) Business consulting business

Since September 2020, "No.1 Business Resistance" has been initiated. In the midst of significant changes in the management environment, it aims to deepen solution sales (management support and IT support) for business owners facing various management challenges, deploying dedicated business consultants for each client *1, aiming to contribute to clients' substantial profits such as "contributing to sales growth," "contributing to business improvement and efficiency," and "risk avoidance." In October 2023, a renewal was implemented, and menus aimed at solving management issues have been expanded with the addition of collaboration with various professionals *2, No.1 Business Resistance member matching, and No.1 Business Resistance seminar.

*1 A business consultant refers to personnel who regularly visit existing clients (including online visits), understand client needs and challenges, and provide optimal services tailored to the company's situation and environment.

*2 SOICO, a business partner, established SOICO Consulting Co., Ltd. with the goal of providing support for tax, labor, legal, and grant applications all in one go. By investing in this company, a collaboration system was established to streamline the services related to each business and enhance the value of the services provided.

2. Main commodities

The company's main commodities are six: security-related (including UTM), server-related, websites, MFP (multifunction printers), business phones, and crime prevention security. Among them, the three commodities of security-related (including UTM), server-related, and websites are self-planned, focused on as high value-added commodities, and account for 58.8% of the sales composition by product (as of February 2024).

(Written by Fisco Guest Analyst Ikuo Shibata)