■Growth Strategy for BeeX (4270))

1. Business environment

The DX and cloud related markets are expected to expand in the medium to long term, as demand for cloud-conversion/modernization of core systems is rising. Furthermore, what is a particular impetus for the company is that standard support for the on-premise “SAP ERP 6.0,” which is SAP's current main product, and the “SAP Business Suite,” which includes the same product, will end in 2027, and extended support will end in 2030. Therefore, users using these products are forced to migrate to the cloud or to “S/4HANA,” which is SAP's next-generation ERP product. Also, a new version of “S/4HANA” is released every year, and since upgrades are required in a 5 to 7 year cycle, continuous upgrade demand occurs. Demand for cloud migration of SAP systems, which the company is strong, is expected to be in full swing in the future, and not only is cloud integration sales expected to expand due to cloud migration demand for large-scale systems including SAP, but it is also expected that it will lead to subsequent cloud license resales and MSP sales expansion, which are stock type profits. Thus, the business environment is considered favorable for the company.

2. Promote expansion of contract partners and expansion of high value-added services

The company has not disclosed a medium-term management plan, but it is a policy to continuously expand profits by promoting contract partner expansion for existing services through awareness raising, market development, cross-sell/upsell strategies, etc. as a growth strategy, and working to expand new services with high added value such as platform construction and application development that realizes DX, cloud license resale, and expansion of new services in MSP.

As for the SAP system, demand for migration to the cloud is expected to be in full swing in the future, and the cloud-conversion/S/4HANA support system will be strengthened. In platform construction and application development that realizes DX, we will strengthen the construction of data analysis/collaboration infrastructure, which is important in realizing DX, and modern application development utilizing generative AI. Lotte is an introduction example of building a data linkage infrastructure. Engineer training and in-house production of application development were supported through the construction of a data linkage infrastructure connecting core business systems to sales plans.

In the field of cloud license resale and MSP, the addition of new functions/services is being promoted, such as expanding services in the three categories (observability, security, automation) to promote DX in the multi-cloud compatible managed service “BeeXPlus.”

As for security-related services, a partner agreement was signed with Okta, Inc. in the US, which is a leading company in the cloud security field, in 2023/5 to support the introduction of the employee identity management solution “Okta Workforce Identity Cloud” and the customer identity management solution “Okta Customer Identity Cloud” started.

In the observability field, until now, services have been limited to monitoring whether the system is running without problems, but in the future, monitoring whether services can be continuously provided and a state where the cause can be known when an abnormality occurs (a state where there is observability) is required, so in 2023/8, we partnered with New Relic in the United States, which is a leading company in the observability field An agreement was signed, and the provision of SAP observability services began.

Also, as a new service to support corporate cloud migration and DX promotion, a “generative AI environment construction support service” where companies can safely and efficiently use generated AI was launched in 2024/4. Using Azure OpenAI Service as a foundation, it supports speeding up information gathering and significant improvements in work efficiency. The “AWS Cloud Accompanying Support Service” was launched in 2024/6. It consists of 3 services (continuous improvement service, FinOps implementation support service, in-house production support consulting), and comprehensively supports system improvement, in-house development and operation of enterprise companies, and promotion of DX after cloud migration, and contributes to enterprise cloud utilization and DX promotion.

3. Shareholder return policy

Regarding shareholder return measures, the basic policy is to comprehensively consider performance, business environment, etc., and implement stable and continuous return of profits to shareholders, but it is currently in a growth process, and it has been determined that prioritizing securing internal reserves necessary for future business development and strengthening financial position will lead to maximum return of profit to shareholders, and dividends have not been implemented since establishment. Furthermore, the possibility and timing of future dividend implementation are undecided.

4. sustainability management

Regarding sustainability management, although no specific materiality has been set at the moment, a sustainability promotion meeting composed of members of the management council has been established with the aim of contributing to the realization of a sustainable society through the utilization and implementation of advanced technology. Furthermore, it recognizes human capital investment as an important issue, and it is a policy to promote investment and development in human capital such as active recruitment of human resources, provision of growth opportunities, enhancement of personnel, evaluation, and reward systems, and health management.

Evaluate high growth

5. Our point of view

Since the establishment of the company in 2016/3, the company has grown to 7.7 billion yen in sales and 0.6 billion yen in operating income/ordinary income in 8 periods up to the 2024/2 fiscal year, and has obtained the highest level of “AWS Premier Tier Service Partner” certification in APN. Even considering that the business environment is good and that Terasky's AWS business has been taken over, etc., this continued high growth is thought to be proof that the company's strengths as a professional group specializing in cloud technology have been demonstrated, and we highly evaluate it. Future issues include building a system to respond to increased demand such as human resource recruitment and development, and improving profit margins by expanding high value-added services, etc., but they have indicated a policy to consider M&A alliances to expand profits, and I would like to pay attention to the progress of management strategies to continue high growth.

(Author: FISCO Visiting Analyst Masashi Mizuta Exhibition)