Business overview of Project Holdings <9246>
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Business overview of Project Holdings (9246) 1. Business Area The same group had seven affiliated companies, including Project Company, DCXforce, Project Technologies, Altwise, Project HR Solutions, Potential, and Dr. Health Management, at the end of the first quarter of the fiscal year ending in December 2024. However, from the second quarter, Project Technologies was absorbed into Altwise and Project HR Solutions was sold, and the company and its five affiliated companies are now under one organization. As a business area, the company provides business support services related to DX through three segments: Digital Transformation Business, DX x Technology Business, and DX x HR Business. The group considers expanding its business by developing and improving operations using digital at business companies as DX, and supports everything from DX strategy formulation for client companies to organizational construction, system development, and operation improvement. In the Digital Transformation Business, they are engaged in consulting services such as new business development and existing business reforms, UI scope services which evaluate the UI (the appearance of the product or service that appears between the user and the service or product) and UX (the experience users gain from the product or service) through user tests using their own monitors, and marketing services that support the formulation and execution of overall digital marketing strategy in the area of advertising agencies and business companies. In the DX x HR business, which they started in April 2022, they provide HR solution services that conduct adoption agency operations mainly in technology fields and healthcare services that support corporate health management through industrial physician matching services. In the DX x Technology business, which started in October 2022, they provide system development and software testing services by engineer talent. Looking at the breakdown of segment revenue and gross profit for the Q1 of the fiscal year ending in December 2024, the Digital Transformation Business accounted for 74.4% of revenue and 74.2% of gross profit, indicating that it is the company's main business. The DX x Technology Business accounted for 17.0% of revenue and 10.2% of gross profit, while the DX x HR Business accounted for 8.6% of revenue and 15.5% of gross profit. The gross profit margin for each business was 37.9% for the Digital Transformation Business, 23.0% for the DX x Technology Business, and 68.5% for the DX x HR Business. The DX x Technology Business has low profit margins due to receiving 2nd or 3rd subcontracting in engineer dispatch. The DX x HR Business has high profit margins as they record the difference between revenue from customers and payments to physicians as net through revenue standards.
In the Digital Transformation Business, they are engaged in consulting services such as new business development and existing business reforms, UI scope services which evaluate the UI (the appearance of the product or service that appears between the user and the service or product) and UX (the experience users gain from the product or service) through user tests using their own monitors, and marketing services that support the formulation and execution of overall digital marketing strategy in the area of advertising agencies and business companies. In the DX x HR business, which they started in April 2022, they provide HR solution services that conduct adoption agency operations mainly in technology fields and healthcare services that support corporate health management through industrial physician matching services. In the DX x Technology business, which started in October 2022, they provide system development and software testing services by engineer talent. Looking at the breakdown of segment revenue and gross profit for the Q1 of the fiscal year ending in December 2024, the Digital Transformation Business accounted for 74.4% of revenue and 74.2% of gross profit, indicating that it is the company's main business. The DX x Technology Business accounted for 17.0% of revenue and 10.2% of gross profit, while the DX x HR Business accounted for 8.6% of revenue and 15.5% of gross profit. The gross profit margin for each business was 37.9% for the Digital Transformation Business, 23.0% for the DX x Technology Business, and 68.5% for the DX x HR Business. The DX x Technology Business has low profit margins due to receiving 2nd or 3rd subcontracting in engineer dispatch. The DX x HR Business has high profit margins as they record the difference between revenue from customers and payments to physicians as net through revenue standards.
Looking at the breakdown of segment sales and gross profit for the first quarter of the 2024 fiscal year, the Digital Transformation business accounts for 74.4% of sales and 74.2% of gross profit, demonstrating that it is the company's main business. The DX x Technology business accounted for 17.0% of sales and 10.2% of gross profit, while the DX x HR business accounted for 8.6% of sales and 15.5% of gross profit. The gross profit margin for each was 37.9% for the Digital Transformation business, 23.0% for the DX x Technology business, and 68.5% for the DX x HR business. The DX x Technology business has low profitability due to orders for 2nd and 3rd tier engineer dispatch. DX x HR business has high profitability because it net calculates the difference between income from customers and expenses for physicians as revenue.
2. Digital Transformation Business They provide three services: consulting services, marketing services, and UIscope. Major affiliated companies are Project Company and DCXforce. In consulting services, they support new business development, existing business reforms, and business improvement through DX. For customers who want to create new revenue sources, the company identifies issues to be considered for business start-up, and supports them by considering and organizing business schemes from a DX perspective. They also support the achievement of business performance plans by utilizing digital for customers' existing businesses. From the perspective of business improvement, they support productivity improvement, such as introducing RPA (robots to take over standardized desk work) and BI tools (insights obtained by analyzing information for business decision-making) and organizational reforms for promoting a DX culture across the entire company. By accurately grasping the digitalization needs of companies and receiving orders for projects, consulting service revenues have continued to expand since the company's inception.
In the Digital Transformation Business, they provide three services: consulting services, marketing services, and UIscope. Major affiliated companies are Project Company and DCXforce.
In consulting services, they support new business development, existing business reforms, and business improvement through DX. For customers who want to create new revenue sources, the company identifies issues to be considered for business start-up, and supports them by considering and organizing business schemes from a DX perspective. They also support the achievement of business performance plans by utilizing digital for customers' existing businesses. From the perspective of business improvement, they support productivity improvement, such as introducing RPA (robots to take over standardized desk work) and BI tools (insights obtained by analyzing information for business decision-making) and organizational reforms for promoting a DX culture across the entire company. By accurately grasping the digitalization needs of companies and receiving orders for projects, consulting service revenues have continued to expand since the company's inception.
Marketing services offer services such as SNS operation support for X (formerly Twitter) and Instagram, website improvement, and marketing consulting. In SNS operation support, we carry out branding and customer attraction promotion through the customer's SNS. In website improvement, we improve websites and LPs (web pages specialized in customer attraction) that lead to customer and sales promotion respectively. In marketing consulting, we support from strategy consideration to execution in digital marketing, and are responsible for organizing customer journeys, strategies for each advertising media, KPI design, hypothesis testing of appeal content, and more.
UIscope service utilizes UIscope for UI/UX (UI refers to information that touches the user's sight, such as website design and fonts, and UX refers to the experience the user gets through the product/service) and supports improvement and design of service experience. UIscope is specialized for smartphone apps and sites, and is a service that improves UI/UX by recording and analyzing the actions of UIscope monitors, who are test users. Based on the improvement know-how accumulated so far, it has its own uniqueness as a service that enables qualitative user usability evaluation, and has acquired about 80% of its order cases through inbound (orders from customers). It also proposes to customers who investigate and report on UI/UX on a spot basis to provide support for improving service experience in the medium to long term, and has succeeded in upselling from UIscope to continuous support for other services.
3. DX x Technology Business
We provide technology services that support system development/operation maintenance and software testing, and have resident engineers with programming skills as clients such as IT companies. The main affiliated company is Altwise.
In the process of business growth, a lot of work by system engineers, such as coding following requirement definition documents and design documents in the system development phase, Test item creation, execution, and resolution of extracted defects in the system test phase, and support for operating maintenance/function addition development after service release. Therefore, synergy is becoming apparent in downstream processes of new business development projects supported by digital transformation businesses.
4. DX x HR Business
We provide HR solutions and healthcare services to corporate human resources and labor departments, and the main affiliated companies are Project HR Solutions (already sold in May 2024), Potencial, and Dr. Health Management.
In HR solution services, we provide support for human resources and labor areas, such as conducting research and examining recruitment strategies for a wide range of industries, setting targets, and serving as a proxy for actual recruitment operations, designing and operating personnel evaluation systems, including skill assessments for DX personnel, and examining and executing initiatives to lower the resignation rate.
In healthcare services, we support the health and mental health of employees for customers, mainly through the industrial physician introduction service "Industrial Physician Concierge," and are expanding our business against Mandatory stress check systems, enforcement of work-style reform-related laws, and the spread of telework.
(Written by FISCO guest analyst Nozomi Kokushige).