■Performance trends of Creek & River Co., Ltd. ＜4763＞

(5) Other businesses

Sales of other businesses composed of 18 subsidiaries were 2426 million yen, up 37.7% from the same period last year, and operating losses were 24 million yen (loss of 113 million yen in the same period last year). Sales increased at 10 out of 16 companies, excluding 2 companies that have become new subsidiaries. Meanwhile, in terms of profit, there was an increase in profit for 11 companies (120 million yen increase), and a decrease in profit due to an increase in investment burdens for 5 companies (45 million yen decrease), which was a factor of 21 million yen increase in profit for the 2 companies that were newly made subsidiaries.

Looking at trends in major subsidiaries, Leading Edge Co., Ltd. (investment ratio 99.99%), which mainly develops agency businesses such as IT engineers, etc., strengthened its sales system and actively promoted inter-group cooperation to respond to strong demand for IT engineers, but profit declined as costs increased. Inter Bell Co., Ltd. (90.9%), which mainly develops agency businesses in the fashion field, saw an increase in sales and profit due to the revival of inbound demand, demand for dispatching sales staff expanded to department stores and commercial facilities.

For VR Japan Co., Ltd. (same 84.21%, December settlement), which provides domestic sales, operation, and maintenance services for VR goggles, agency sales have been steady. Also, a prototype for thoracic drainage using the world's first AR technology, which has been undergoing joint research and development with Juntendo University since 2022, has been completed, and trial operation will begin in the winter of 2024 for simulations before doctors' surgery, and if there are no problems, it is planned to sell it to medical institutions nationwide after fall 2025. Thoracic drainage indicates a treatment method for excreting (drainage) stored gas or liquid (pleural fluid, blood, pus) from the body by inserting a drain (tube) into the chest cavity. The AR chest drainage developed this time is a technology that creates an environment as if the patient's body is being seen through by processing CT images taken in advance as 3D image data for three-dimensionally grasping position information of organs, blood vessels, and nerves, and superimposing them on images of patients on AR glasses worn by doctors. The drain tube can be safely inserted into the chest cavity, and the effect of reducing the risk of medical accidents occurring is expected. After putting it into practical use with thoracic drainage, the company is also considering expansion in the neurosurgery field.

Idrasys Co., Ltd. (investment ratio 80.11%), which plans, develops, sells, operates, and maintains AI systems, is working to expand sales of the AI cloud platform “Forecasting Experience*1” developed independently, the document search system “ChatGPT+SmartKMS*2” linked to the generative AI ChatGPT, and the chatbot service “ChatGPT+SmartROBOT*2.” I'm doing it. There is no significant growth, but we are at the stage where we are gradually building up results.

*1 The feature of “Forecasting Experience” is that learning data can be easily created on an Excel basis, and prediction models can be constructed relatively easily even without specialized knowledge.

*2 AI system manufactured by Taiwan Inzmit, a joint venture.

ForGift Co., Ltd. (investment ratio 77.5%), which develops a brand marketing business centered on the apparel industry, saw a decline in sales and profit due to sluggish growth in large-scale promotion projects ordered in the previous fiscal year, and the sample production service “sture (stura)” utilizing 3DCG technology was also sluggish.

Connect Around Co., Ltd. (investment ratio 100.0%) is working to promote diversity and inclusion using technology in the agricultural field and regional employment centered on agriculture. From 2022/2, the sixth-order agricultural business “FUN EAT MAKERS” business, which manufactures and sells indoor cultivation and secondary processed products by employing people with disabilities, began operating at a facility in Kawasaki City, Kanagawa Prefecture, and profitability has been achieved. Also, as part of the regional revitalization business, it is planned to open a smart agricultural facility “FUN EAT MAKERS in Okuma” in Okuma-machi, Fukushima-ken in 2025/2. The facility consists of a building composed of 3 areas: a “high value-added agricultural production area (cherry tomatoes, pesticide-free cultivated leaf lettuce),” “an area to enjoy food (restaurant),” and a “workcation stay area where various professionals are connected,” and a semi-outdoor area and an outdoor area where local people are connected, and construction costs etc. are covered by state subsidies.

C&R Incubation Lab Co., Ltd. (investment ratio 100.0%), which conducts the CVC business, has invested in 9 companies by 2024/2, using 0.3 to 0.1 billion yen per case as a guide, for companies that can be expected to have business synergy with the group, and when these investment companies have an IPO, some shares are sold and applied to investment funds. It seems that there are investors that have already decided on IPOs. Also, the CXO business, which dispatches and introduces experienced management personnel, has also been transferred from the company to the C&R Incubation Laboratory since the 2025/2 fiscal year.

Shiftall (investment ratio 100.0%), which acquired shares from Panasonic Holdings ＜6752＞ in 2024/2 and became a subsidiary, is a fabless company that develops planning/development/sales/support businesses for VR headsets, metaverse, and IoT products. Annual sales are just over 1 billion yen, and profits are in surplus of tens of millions of yen, and over 50% of sales are for overseas markets. Sales of “HaritORax※,” which is the main product, were strong, and sales seem to have increased compared to the previous fiscal year.

* A sensing device that motion-tracks lower back and foot movements compatible with SteamVR (a service where you can enjoy VR on a computer). It operates for 10 hours with a built-in battery, and wireless full-body motion tracking (full tracking) is possible by combining it with a wireless VR headset. It is used for gaming purposes, etc.

Levi (investment ratio 100.0%), which became a subsidiary in 2024/3, is a venture company established in 2023, and is developing membership services and seminar management that disseminates information on generative AI, and consulting businesses utilizing generative AI. Although the sales scale is still small, in the future, in addition to aiming to level up by fusing generative AI with creators that the company networks, the idea is to maximize group synergy by developing consulting services utilizing generative AI to client companies of the group. In August of the same year, provision of the next-generation generative AI human resource development training program “iSil*” specialized for small and medium-sized enterprises also began. By providing a curriculum specialized in the 5 fields of sales, marketing, engineering, human resources, and customer support, and supporting the improvement of AI utilization skills in each department, it is a service that leads to improved productivity, reduced turnover, and improved customer satisfaction of introduced companies.

※ The tuition fee is 0.3 million yen (excluding tax) per person. It is eligible for the Ministry of Health, Labor, and Welfare's “Human Resource Development Support Grants (Business Development Reskilling Support Course),” and small and medium-sized enterprises can receive subsidies of up to 75% of training costs by utilizing this grant.

(Author: FISCO Visiting Analyst Joe Sato)