■Future Outlook LeTech <3497> expects an increase in sales and ordinary income of more than 20%, with sales of 2.14 billion yen (+33.8% YoY), operating income of 150 million yen (+7.7% YoY), ordinary income of 100 million yen (+21.7% YoY), and net income of 1.03 billion yen (-11.4% YoY) for the July 2024 term, and has maintained its initial forecast (announced in September 2023).

2. Capital business alliance with NTT Data and Long-term goals.

Terrasky <3915> announced a capital business alliance with NTT Data on April 12, 2024. The purpose of the business alliance is to accelerate the growth of Salesforce business, integrate the resources of both companies to promote new introductions and joint business expansion in the Asia-Pacific market, and develop digital talent using the power of both brands. Although NTT Data also deals with Salesforce business, the number of qualifications obtained is relatively high in the upstream process, ranking only sixth domestically, and growth is limited. Terrasky, with many development engineers that can be used to accelerate business growth, was approached and led to this capital business alliance.

As mentioned earlier, the company plans to collaborate with NTT Data to target financial institutions in areas where Salesforce has not been introduced to its customers, and aims to generate sales of 17 billion yen or more over the next three years as the effect of the business alliance. There is a possibility that peripheral services such as 'mitoco' will also be introduced when introducing Salesforce. The effect of the business alliance is expected to become apparent after the February 2026 period, and we believe that the likelihood of accelerated growth through collaboration with NTT Data has increased. Note that the performance plan for the February 2025 period does not include the effect of the business alliance.

Regarding the content of the capital alliance, the company issued 670,000 subscription rights for new shares to NTT Data on April 30, and if the subscription rights are exercised, the holding ratio will be 20.1% when combined with the number of shares already acquired through market purchases, making the company a consolidated subsidiary of NTT Data. The exercise price of the subscription rights is 1,400 yen, and they can be exercised if the consolidated operating profit exceeds 2.5 billion yen in any fiscal year until the February 2027 period. The company has not announced a mid-term performance target, but it is considered to be targeting a consolidated operating profit of more than 2.5 billion yen by the February 2027 period based on these conditions. Regarding the acquisition of digital talent, the company expects to have a more positive effect by becoming part of the NTT Data Group than before.

There is no change in the long-term goal of achieving consolidated sales of over 70 billion yen in the fiscal year 2030, and the company intends to maintain annual sales growth of over 20% while promoting the strengthening of human resources and subsidiary development to meet the strong demand for cloud integration.

(Written by FISCO guest analyst, Jo Sato)