■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).

1. Performance forecast for the February 2025 term.

Papanehtsu's operating profit for the February 2025 term is expected to be ¥355 million, up 5.4% from the previous year, with sales of ¥5,004 million, up 11.4% from the previous year. There is expected to be a further increase in demand from foreign tourists due to factors such as exchange rate fluctuations. In response, in the 'Management Company Support' business, we are promoting the joint development of human resources and recruitment, and expecting to gain further customer acquisition by combining practical efficiency with DX utilization. In addition, due to the continued increase in demand for monthly apartments due to increased foreign tourist numbers, there is also expected to be an increase in new construction and post-vacancy cleaning in the Monthly Apartment Support Service. In the 'Interior Total Support Business', we are planning to expand new services for house makers and grow our business beyond the normal furniture delivery business.

From June 2021, under the Rental Housing Management Law, companies that manage more than 200 assumed management units and engage in real estate rental management are required to register with the Ministry of Land, Infrastructure, Transport and Tourism and are obliged to provide a document explaining important issues by experienced practitioners or qualified persons. Even management companies that have not been conducting regular inspections will have an obligation to report to property owners, so it is expected that inquiries will continue to increase.

2. Mid-term Business Plan.

The company has formulated a 'mid-term business plan' aimed at expanding its business by providing a wide range of customer services while strengthening its existing business under the slogan 'Greatest Listening Company'.

As mid-term management objectives, the company lists 1) a company that connects people to solve social problems, 2) a company that can respond to information and change, 3) a company that can provide support for those involved in the future, 4) a discovery that can become 'the greatest listening', and 5) a first step for small things to become big things, things that cannot do small things cannot do big things. The company aims to increase sales by 15% by the 32nd term as a company that connects people and solves social issues, expand its share of the rental housing management market from 0.76% to 3%, and become a necessary and useful company by providing future-oriented support. Furthermore, through new business, it will create an environment in which partners can play an active role and enhance its sustainability efforts.

(1) Securing and nurturing human resources.

The industry in which the company operates is a labor-intensive industry, and securing and nurturing human resources is the most important issue for continued development. We hire people in a timely manner taking into account business development and other factors, and actively incorporate unique 'human resources co-education' programs, the use of external know-how, and so on. In April 2024, we plan to hire four of the five target individuals, and we plan to continue hiring in the future. For partners, we are increasing our staff to create a system that can operate in a short period of time, but in some areas, we are short of staff and are working to address this issue. As for human resource development for partners, company employees provide guidance during outings, and we are considering increasing the number of training centers in various locations for future increases in freelancers.

(2) Improvement of existing services.

The company aims to improve existing services by sharing requests from transaction partners throughout the company and developing services that improve enterprise value. Currently, we are renewing Jun-kun, the company's system, to be available on any device. The target for completion of the renewal is during the February 2025 period.

(3) Market expansion.

The company has been good at small tasks such as cleaning and weeding, known as "Goyochouki", and aims not only to expand its existing BtoB business, but also to develop BtoC business targeting end users in general households in the future. They will utilize the know-how of "Goyochouki" they have acquired so far for the BtoC business. With the enforcement of the Rental Housing Management Act, the Ministry of Land, Infrastructure, Transport and Tourism has already started its patrol guidance and has been pointing out increasing issues of incomplete reports to the owners by the management companies, which has been leading to a steady increase in inquiries to the company.

One noteworthy change in the company's business operations in the fiscal year ending February 2024 is the expansion of the final check before the tenants move in. This is based on the feedback from the clients. The clients asked the company to solve the problem of claims caused by insufficient check of the restitution before the tenants move in. The company accepted the task of final check before the tenants move in, which led to business expansion. Due to the increasing demand for "Goyochouki" services, the company is planning to strengthen its orders, seeing it as an opportunity to respond to market needs, improve customer satisfaction and explore new revenue sources.

The company has been supporting sales events and exhibitions organized by major house makers and property management companies. In the future, as a new strategy, they plan to provide planning, coordination in cooperation with small and medium-sized house makers and property management companies. This initiative has already been taken with two companies. The company aims to acquire new customer segments, enhance its presence in the market and diversify its operations through this initiative.

(Reported by FISCO guest analyst Hiroshi Nakayama)