CHIIKISHINBUNSHA CO.,LTD.

Business Details

This segment comprises three businesses: sales of advertising space in the weekly free newspaper "Chiiki Shimbun," which is distributed to approximately 1.74 million households mainly in Chiba and Ibaraki prefectures (newspaper and other publishing business); the flyer insert distribution business; and the comprehensive sales promotion support business, which includes contracted production and distribution of municipal publications and planning of promotional events. The segment's customer base consists of approximately 7,000 client companies annually, with a proprietary distribution network of approximately 2,500 distribution staff and a geographic information system (GIS) serving as competitive advantages. This is the most critical segment, accounting for ¥2,376 million of the company's ¥2,524 million in cumulative Q3 FY2026 net sales.

Recent Overview

Net sales and operating profit both increased significantly year on year, but a ¥104 million extraordinary loss resulted in a quarterly net loss

In cumulative Q3 FY2026 (ending August 2026), net sales in the Advertising-related business were ¥2,376 million, and segment profit was ¥389 million. Company-wide net sales rose 7.9% year on year to ¥2,524 million, and operating profit increased 119.9% year on year to ¥69 million, both performing well. On the other hand, the recording of ¥104 million in extraordinary loss related to costs of responding to concerted action by specific shareholders resulted in a quarterly net loss of ¥67 million. Excluding one-time costs, underlying operating profit was ¥126 million, ordinary profit was ¥99 million, and quarterly net profit was ¥94 million. The company changed its market segment to the Tokyo Stock Exchange Standard Market (March 2026) and listed on the Fukuoka Stock Exchange Main Market (April 2026).

Key Products

Growth Drivers

• Continued recovery in advertising demand from lifestyle services, buy-back businesses, mail order, and funeral services, among others
• Development of national clients through insert proposals to nationwide free newspapers in cooperation with VC member companies
• Expansion of media other than "Chiiki Shimbun" (Hakken Tanken, Bu-Lab, Overture, etc.), up approximately 19% year on year
• Optimization of printing costs and improved profit margins from switching "Happiness" to publication incorporated within "Chiiki Shimbun"
• Higher value-added flyer insert distribution through GIS utilization and response to growing demand via introduction of an order-processing system
• Increase in the number of contracted projects in the comprehensive sales promotion support business due to strengthened organizational structure
• Acceleration of the regional co-creation platform and stronger alliances through the listing on the Fukuoka Stock Exchange
• Improved quality of sales activities through use of a data analytics platform and management-accompanied sales visits

Risks

• The declining trend of the free newspaper/free magazine market and persistent price competition with internet advertising
• Risk of economic deterioration due to heightened geopolitical risk, leading advertisers to curb advertising spend
• Corporate governance uncertainty and ongoing associated costs stemming from the response to concerted action by specific shareholders (re-designated as of July 14, 2026, with a free allotment of stock acquisition rights implemented)
• Rising costs to maintain and secure the distribution infrastructure (approximately 2,500 distribution staff)
• Risk of share dilution from the exercise of stock acquisition rights (the 6th, 8th, 9th, 10th, and 11th series of stock acquisition rights are outstanding)
• Fragile financial base due to accumulated deficit in retained earnings (-¥372 million as of end of May 2026)