■Company Overview

1. Company Overview

Forval ＜8275＞ is developing its business based on a “corporate doctor (next generation management consultant) group that supports ESG management with visualization support” for small and medium-sized enterprises as a basic strategy. We specialize in information and communication consulting for IP integrated systems, information security, web construction, etc., and perform management consulting on general consulting, overseas expansion, human resources/education, environment, business succession, etc. Conventionally, wholesale sales of information and communication equipment were mainly carried out, but faced a major decline in sales and profit in the mid-2000s, they switched to a consulting business type centered on visualization accompanying management support (icon services, etc.). This shift in business model was successful, and operating profit increased for 12 consecutive terms until the fiscal year ending 2020/3, and although profit declined in the fiscal year ending 2021/3 due to the spread of the novel coronavirus infection, it hit a record high in recent financial results. It is a unique enterprise that solves various issues faced by small and medium-sized enterprises, such as informatization, management improvement, overseas expansion, and business succession. DX/GX and ESG management have become urgent issues for small and medium-sized enterprises all over the country, and the company's role is growing even larger.

2. HISTORY

The company was established in 1980 as Shin-Nippon Koupan Co., Ltd., whose business purposes include sales and installation work of telecommunications equipment, computers, and terminal equipment. In 1988, Mr. Hideo Okubo (Hideo Okubo), the founder and current chairman of the board, received the “1st Entrepreneur Award,” and the stock was disclosed as a storefront registered stock with the shortest record in Japan at the time. In 1991, the trade name was changed to the current Forval Co., Ltd., taking inspiration from “For Social Value.” After that, we began providing a comprehensive IT consulting service “Icon Service” in 2008. The market was changed to the second section of the Tokyo Stock Exchange (hereafter, Tokyo Stock Exchange) in 2014/1, and designated as the first section in October of the same year. It transitioned to the prime market due to the restructuring of the Tokyo Stock Exchange in 2022/4, but as a result of examining various requirements in 2023/10, it transitioned to the standard market.

Since its establishment, the company has focused on creating “new commonalities” from the user's point of view in the field of information and communication. Beginning with the liberalization of telephones at the time of establishment, following price reductions in out-of-town charges, price cuts in international charges, and price cuts in city charges, it has challenged the liberalization of basic line charges, spread of corporate mobile phones, and further reduction of call charges. In 2022, efforts began by setting “establishing a firm position as a GDX companion advisor for small and medium-sized enterprises” as a medium- to long-term growth strategy theme. Currently, they have set a clear purpose of “supporting ESG management with visualization and accompaniment” of small and medium-sized enterprises, they have set an evolution into a consulting firm, and in addition to icon services, management techniques are taught to small and medium-sized enterprises through next-generation management consulting services. The company is actively utilizing M&A, and many companies, such as Apple Tree Co., Ltd., a comprehensive environmental consulting business group, and iTech Co., Ltd., a human capital management company, are consolidated subsidiaries through M&A, and business performance is growing. Since the beginning of 2024, 3 companies (Meisin Co., Ltd., Tanita Health Link Co., Ltd., and FP Stage Co., Ltd.) have become subsidiaries, and the expansion of group companies is accelerating.

3. Business content

The company is a “Forval Business Group” that sells icon services, information communication devices, and OA equipment to support GDX and ESG management of small and medium-sized enterprises; the “Forval Telecom Business Group” that handles communication services such as optical line services and ISPs; a “comprehensive environmental consulting business group” that handles environment-related products such as solar power generation systems, LEDs, and storage batteries; and “human resources” that provide human resources and education services and system development, etc. It consists of 4 business segments: “capital management” (formerly others).

In the interim period ending 2025/3, Forval Business Group will account for 51.6% of company-wide sales and 61.3% of company-wide segment profit composition ratio. Meisin, which became a subsidiary in 2024/2 and is based in Chiba Prefecture, will enter this segment. The sales composition ratio of the Forval Telecom Business Group is 36.8%, and the composition ratio of segment profit is 31.5%. These top 2 segments are the main forces. The General Environmental Consulting Business Group is dominated by Apple Tree, and it is a segment that became profitable in the previous fiscal year. Human capital management includes ITEC, which provides services in the fields of human resources and education, and Forval Frogwork Co., Ltd., which develops systems, and has growth potential and high profitability (5.4% of segment profit). Tanita Health Link, which became a subsidiary in 2024/5 and supports health management, and FP Stage for Financial Planner Education will also enter this segment.

4. Human Resource Development and Treatment: Nurturing “Corporate Doctors”

The company places importance on points of contact with client companies, and is putting effort into developing human resources responsible for points of contact. There is a long training period of 1 year for approximately 70 new employees who join the company every year, and assignments are decided 1 year after joining the company. Over the course of 1 year, they experienced advisors for Icon Service, which is the company's core service, call centers for remote support, sales departments, etc., and learned necessary expertise and skills. Also, from the idea that basic IT knowledge is essential for carrying out the company's business, 10 or more recommended qualifications have been clarified and used for ability development. Above all, the five qualifications of (1) internet certification dot com master, (2) business statistics specialist, (3) personal information protector certification test, (4) DX advisor certification test, and (5) environmental society certification test (eco certification) (R) are important, and almost all departments (consulting, call centers, sales) with customer contacts have obtained them. Also, in addition to this, the acquisition of GDX advisors and ESG advisors is also encouraged as corporate doctor qualifications. As of the end of 2024/9, there are 1,619 DX advisors (of which 1,021 partners), 391 GDX advisors (of which 77 partners), and 1,966 ESG advisors (of which 1,088 partners) are active on the front line of SME support.

The company has improved the productivity of client companies through IT, etc., and has provided support to solve long working hours, which is an issue for small and medium-sized enterprises. They themselves are also continuously promoting the reduction of overtime hours and taking paid leave, etc., to improve the health and productivity of employees. In particular, flexible work styles, prevention of outbreaks of stress-related diseases such as mental health, and prevention of outbreaks of lifestyle-related diseases etc. are regarded as priority issues, and we have been actively working on them. In 2024/3, it was certified as an “Excellent Health Management Corporation” for 7 consecutive years, honoring corporations that practice particularly excellent health management. Furthermore, the basic policy called “distribution of happiness” “the increase in profits obtained through the company's efforts shall be divided into 3 equal parts between shareholders, the company, and employees,” which enhances employee motivation. In 2023/12, we obtained certification for the international guideline “ISO 30414,” which relates to disclosure of human capital information.

(Written by FISCO Visiting Analyst Hideo Kakuta)