Broadmind <7343> operates a financial partner business that provides solutions for insurance brokerage, residence loan agency, financial product brokerage, and real estate transactions for individuals and corporate clients in a one-stop manner. It has built a stable revenue base through the accumulation of recurring fees (stock income) for its main product, life insurance contracts.

Originally rooted in insurance brokerage, the company has obtained registrations or approvals for financial product brokerage, lending business, and bank agency business since its establishment. While specializing in insurance, securities, and residence loans, the company is one of only 14 domestic entities that can independently guide customers in these areas (according to the company's research). Despite specialized intermediaries in insurance, securities, and residence loans being the main players, there is a perceived shortage of experts who can comprehensively address consultations on household finance, protection, home purchases, and asset formation for the general income bracket (household income of 3 million yen or more but less than 20 million yen), who are the main target customers. By attracting customers primarily in the 20s to 40s family segment through customer acquisition focused on life insurance contracts, the company expands sales of other products tailored to different life stages. The company's group customer base in the previous fiscal year was 118,859 households, with 6,519 new customer households acquired.

In the first quarter of the fiscal year ending March 2025, the revenue was 1470 million yen, a 42.7% increase year-on-year, while the operating profit landed at 109 million yen, a 27.5% decrease. The first quarter's revenue reached a record high and the number of new consultation requests seems to be progressing well. Sales of asset formation products have been strong due to favorable macroeconomic conditions, contributing to increased life insurance fees and real estate sales. Although the profit before operating profit is declining mainly due to the impact of office relocation, it is already factored into internal plans. The full-year revenue is expected to increase by 18.2% to 6170 million yen compared to the previous period, with the operating profit expected to increase by 13.5% to 820 million yen. The annual dividend for this fiscal year is expected to increase by 40 yen to 80 yen on an ordinary dividend basis, with a dividend yield exceeding 5%.

The company enhances productivity by leveraging its unique digital tools – "Broadtalk," "Manepass," and "FP Omusubi" – to increase consultants' productivity. Additionally, by recruiting and nurturing excellent new graduate students, the company differs significantly from typical insurance agencies with a new graduate recruitment rate of 90% for its sales positions. By promoting learning and teaching within teams, high retention rates have been achieved, with a turnover rate of 13% for sales employees within 3 years, significantly lower compared to 58% at major domestic life insurance companies.

Despite having an established mid-term management plan for a 3-year period ending in March 2025, the company accelerated the achievement of its performance targets for the year ending in March 2025, centered around the growth of its main financial partner business. As a result, a new 10-year mid-term management plan has been disclosed. For the fiscal year ending in March 2027, the company aims for total revenue of 8 billion yen, an operating profit margin of 16%, and an ROE of 20%. Looking ahead to the fiscal year ending in March 2034, the company is targeting total revenue of 20 billion yen, an operating profit margin exceeding 20%, and an ROE of 25-30%. The company plans to hire 30 consultants annually, focusing on their early efficiency through enhanced educational structures to acquire new customers. By proposing cross-cutting optimal products for customers in different life stages, the company continues to improve LTV for existing customers. Furthermore, the company plans to expand its services to financial planners, financial education, and call center-related services, targeting affluent individuals to drive growth. Starting from the 3 years ending in March 2025, the dividend payout ratio will be changed to 100%, funding necessary for growth investments will be generated mainly from cash and borrowing. The company's business model, which is primarily focused on intangible assets, generally requires minimal balance sheet investments and maintains cash reserves between 1.5 billion yen and 2 billion yen, ensuring financial stability while balancing growth investments and shareholder returns.

The life insurance industry is a mature sector but remains a huge market. Among them, the participation rate from insurance agencies has doubled to approximately 15% compared to 10 years ago. The estimated annual new contract premium for the entire insurance agency industry is around 320 billion yen, with the company's share being around 1.4%, leaving ample room for growth through further market expansion. The custody asset balance through the financial product brokerage (IFA) industry is estimated to exceed 3 trillion yen. However, the company's estimated market share is currently less than 1%, indicating potential for significant share growth in the future. With licenses obtained for providing various products, the company is set to steadily increase profits as revenue rises, capturing the growth of individual markets. Interested parties should keep an eye on future developments to assess the medium-term management plan achievement.