■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. Global strategy
Yamada Consulting Group <4792> announced its three-year mid-term management goals for the fiscal year ending March 2024. The goal for the final year, March 2026, is to achieve sales of 22.7 billion yen, gross profit of 17.8 billion yen and operating profit of 4.2 billion yen. While the consulting business is growing steadily, the high volatility investment business intends to stabilize its revenue by maintaining investment balance above a certain amount. However, due to the increase and decrease of exit numbers in the high volatility investment business, it is planned to decrease sales and operating profit in the fiscal year ending March 2025. In terms of the initial forecast for the mid-term management goal for the fiscal year ending March 2024, the sales are ¥2,180 million, gross profit is ¥1,552 million, and operating income is ¥350 million. However, the performance for the fiscal year ending March 2024 exceeded the goal, with sales of ¥2,217.7 million, gross profit of ¥1,628.3 million and operating income of ¥366.2 million, an increase of 1.7%, 4.9%, and 4.6%, respectively compared to the plan.
(1) Basic policy by major business
The 'Management Consulting Business' (including 'Business Revitalization Consulting Business') aims to achieve a target gross profit of ¥753 million for the fiscal year ending March 2026, and aims to transition from quantitative expansion to qualitative expansion. Specifically, it promotes the expansion and strengthening of services such as consulting for listed companies, consulting for organizational strategy and human resources strategy, and DX consulting. It promotes the promotion of long-term relationship building with customers by providing a wide range of solutions, strengthening the cooperation of projects and sharing of knowledge and know-how. Furthermore, it aims to promote standardization of quality at local bases and cases by strengthening the collaboration of foreign bases under the basic policy of providing customer-centered services.
(2) Promotion of DX consulting
From the fiscal year ending March 2024, we established the DX promotion Business Unit, gathered and developed knowledge and know-how of DX consulting individually conducted by consultants, and promoted the establishment of a system that can provide uniform services as an organization. The ratio of DX consulting sales to total sales of the 'Management Consulting Business' is planned to increase from 5% in the fiscal year ending March 2023 to 20% in the fiscal year ending March 2026, and the plan to increase the number of project managers from 30 in the fiscal year ending March 2023 to 100 in the fiscal year ending March 2026 will be continued.
(3) Expansion of overseas consulting
The company has been expanding its overseas consulting business since 2009, and uses a network of more than 200 professionals from over 30 countries around the world to support customer companies' overseas expansion from the collection of local information to implementation. Under the basic policy of providing customer-centered services, we are strengthening support for customer's overseas expansion, using the cooperation of each country's base to provide a wide range of services.
In addition, the company has developed a proprietary system that supports strategic planning to execution from obtaining primary information from overseas, and has established its own unique system by sticking to the deployment of its own base. With more than 20 years of experience in market research, we use our own bases to collect information and conduct market research and strategy planning through a bottom-up approach and interview surveys. It has bases in Asia, including Singapore, Indonesia, India, Thailand, Vietnam, South Korea, Malaysia, China, the United States, and the UAE, and also utilizes resources and experience in greenfield research to support execution and alliance building by supporting partner searches, condition negotiations, and alliance negotiations and implementations, and providing comprehensive support in collaboration with internal and external experts.
The business is divided into three phases, with phase 1 supporting the overseas expansion of Japanese companies and focusing on specific industries and segments. Phase 2 provides support for local employees to contribute to the growth of domestic companies, and in the final phase 3, overseas expansion of local companies is supported by mutual support of each foreign base, thus promoting growth on a global scale. Through these phased approaches, the overseas consulting business contributes not only to customer companies but also to the sustainable growth of the company.
The company expands to various parts of Asia based on their own bases, and strengthens their global network, such as making Takenaka Partners a subsidiary in the United States in April 2024. In Europe, they provide services based on M&A with local partners and promote international business expansion. The company's strengths are the research capabilities of primary information acquired by 175 local employees (out of 238 overseas business department employees) in local languages and the support system provided by dispatched headquarters members who handle everything from strategy formulation to execution support. By cooperating with each country's bases and providing the best practices for overseas business expansion of local companies, they are helping their customers' global growth.
(4) Promotion of overseas real estate investment business Domestic wealthy individuals and excellent corporations should consider creating a long-term portfolio with a partial investment in overseas real estate, due to the increase in vacant houses and decrease in residences caused by the declining population in Japan. Therefore, the company focuses on proposing American real estate development projects suitable for investment purposes, rather than overseas real estate investment for conventional tax and tax needs. The company has formed a joint venture with Marubeni <8002> and Crow Holdings and is partnering with Japanese mega-banks to build a yen carry trading system secured by real estate in several states, with plans to make overseas real estate assetization for Japanese wealthy individuals and corporations a pillar of their business within five years. In addition, they are also working on proposing investment opportunities to funds centered around real estate-related matters to respond to a wider range of asset management needs. At present, many customers are watching for the timing to invest while considering the exchange rate, but the company is actively promoting their business, such as sending real estate employees to the United States.
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※A transaction in which an investor borrows the low interest currency, yen, and invests it in a high interest currency.
(Reported by FISCO guest analyst Hiroshi Nakayama)