Hakuten Corporation

Business Details

The sole segment operated by the Hakuten Group. It provides integrated planning, production, and management of various events and marketing tools associated with the advertising and promotional activities of companies and organizations. Centered on the real event field, and combined with the digital field and commercial environment field, the segment's value proposition is Experience Marketing, which resolves clients' communication challenges through experiential value.

Recent Overview

Net sales increased +13.5% year-on-year, but operating profit fell sharply by -53.2% due to higher SG&A expenses

In Q1 (January to March) of FY2026 (ending December 2026), net sales were ¥4,811 million (+13.5% year-on-year), securing an increase in sales. On the other hand, cost of sales expanded to ¥3,428 million (+19.9% year-on-year), causing the gross profit margin to decline from 32.6% to 28.7%, and selling, general and administrative expenses increased to ¥1,245 million (+14.8% year-on-year), resulting in a significant decline in operating profit to ¥138 million (-53.2% year-on-year). Order intake grew to ¥6,247 million (+7.1%) and order backlog increased to ¥9,118 million (+1.8%), and there has been no change to the full-year earnings forecast (net sales of ¥23,750 million, operating profit of ¥2,248 million), with performance progressing generally in line with plan.

Key Products

Growth Drivers

• Accumulation of order backlog of ¥9,118 million (+1.8% versus the end of the prior-year period), contributing to sales in subsequent periods
• Continued project acquisition, with order intake up +7.1% year-on-year
• Robust event and marketing demand, as reflected in the +13.5% year-on-year increase in net sales
• Steady trend in sales from named/designated orders won based on recognition of "experiential value"
• Continued demand in the real events field

Risks

• For FY2026 (ending December 2026), full-year operating profit is forecast to decline -13.3% (to ¥2,248 million) due to the drop-off of unique demand related to the World Expo and World Athletics Championships
• Risk of profit pressure from increased selling, general and administrative expenses (+14.8% year-on-year)
• Upward pressure on material costs and labor costs, as reflected in the rise in cost of sales ratio (from 67.4% in the prior-year period to 71.3% in the current period)
• High sensitivity to economic conditions due to the business's characteristics, which correlate with corporate activity, human mobility, and visitor trends
• Risk that uncertainty in overseas economies could lead domestic companies to curb marketing investment
• Seasonality and project concentration risk, as reflected in the Q1 operating profit margin of 2.9% (versus 7.0% in the prior-year period)