ENVALITH
株式会社東北新社 logo

TOHOKUSHINSHA FILM CORPORATION

2329・Standard Market・Information & Communication

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株式会社東北新社 logo
TOHOKUSHINSHA FILM CORPORATION2329

Business

Tohokushinsha Film Corporation is a video and creative production company founded in 1961, listed on the Standard Market of the Tokyo Stock Exchange. It has 9 subsidiaries and 4 affiliated companies, and operates in four segments: "Advertising Production," "Content Production," "Media," and "Property." In its core Advertising Production segment, the company handles TV commercial production and sales promotion with Dentsu and Hakuhodo as its main clients. In Content Production, it provides sound, subtitling, and digital production services for video streaming service companies and overseas game companies. In the Media segment, it operates CS channels such as Family Theater, Fishing Vision, and the Igo Shogi Channel, while in Property, it handles IP licensing business including the "GARO" series. In April 2026, the company made granif Inc., an apparel and IP merchandising company, a wholly owned subsidiary, expanding its business domain.

Business Model

Advertising production, which accounts for approximately 66% of net sales, is centered on a flow-type model in which CM production and promotion projects are received via major advertising agencies such as Dentsu and Hakuhodo. Content production secures stable revenue through recurring orders such as sound and subtitle production for video streaming and game companies. The Media segment builds up stock-type revenue from viewing contract fees and program sales for CS channels. Property aims for high profit margins through accrual-type revenue from IP licensing rights. With the consolidation of Graniph as a subsidiary in April 2026, merchandise sales and IP merchandising revenue will be added.

Company Strengths

In the FY2026 (ending March 2026) sales results, sales to Dentsu amounted to ¥9,967 million (20.9% of the total), while sales to Hakuhodo amounted to ¥6,234 million (13.1%), with the top two companies together accounting for 34% of the total. Compared to the previous period, the shares rose for both, with Dentsu increasing from 17.9% to 20.9% and Hakuhodo from 10.7% to 13.1%, confirming a deepening of relationships with major customers.

In the FY2026 (ending March 2026) order results, Advertising Production recorded orders received of ¥34,072 million (up 16.0% year on year) and an order backlog of ¥8,624 million (up 33.0% year on year), while Content Production recorded orders received of ¥10,424 million (up 16.4% year on year) and an order backlog of ¥4,974 million (up 4.2% year on year). The combined order backlog of these two core segments reached ¥13,599 million (up 20.8% year on year), a favorable level serving as a leading indicator for the following period's performance.

As of the end of FY2026 (ending March 2026), the balance of cash and cash equivalents stood at ¥50,742 million, while interest-bearing debt (including lease obligations) was only ¥317 million, maintaining effectively debt-free management. Against net assets of ¥86,886 million, the equity ratio is at a high level, providing a financial foundation capable of funding growth investments such as the acquisition of graniph and shareholder returns from internal funds.

ENVALITH's Perspective

Operating profit for FY2026 (ending March 2026) was ¥2,947 million (up 9.9% year on year), indicating improvement in the core business, but profit attributable to owners of parent was ¥6,965 million (down 16.7% year on year). This was mainly due to the reversal of gains recorded in the prior period—gain on sale of fixed assets of ¥8,271 million and gain on sale of shares of affiliates of ¥4,141 million—and does not reflect a structural deterioration in earnings. However, the profit structure in the current period continues to depend on extraordinary income (gain on sale of fixed assets of ¥2,096 million, gain on reversal of foreign currency translation adjustments of ¥2,029 million, etc.), and sustained improvement in core-business-based profit levels remains a challenge.

On April 30, 2026, the company made graniph a wholly owned subsidiary at an acquisition cost of ¥17,763 million. Synergies are expected between IP merchandising and the company's video production capabilities and licensing business, but the amount of goodwill and the assets and liabilities to be assumed remain undetermined at this time. Neither the consolidated earnings forecast nor the dividend forecast for FY2027 (ending March 2027) has been disclosed, and uncertainty for investors remains high until the impact on earnings has been fully assessed. The acquisition cost of ¥17,763 million corresponds to approximately 35% of cash on hand, and attention should also be paid to the resulting decline in the cash position.

Operating cash flow for FY2026 (ending March 2026) was ¥1,150 million (improved from ¥44 million in the prior period). However, payments of corporate income taxes, etc. of ¥5,025 million (versus ¥1,210 million in the prior period) and payments of extraordinary retirement benefits of ¥1,285 million (versus ¥2,413 million in the prior period) remain factors weighing on cash outflows. Investing cash flow was negative ¥6,778 million due to expenditure of ¥14,785 million for the acquisition of investment securities. Cash and cash equivalents decreased by ¥9,066 million year on year to ¥50,742 million, and close attention should be paid to the change in the effective level of liquidity on hand following the graniph acquisition.

Growth Strategy

The company aims for growth toward FY2029 (ending March 2029) based on three pillars: structural reform, securing a new revenue base, and financial and capital strategy.

The company is proceeding with the disposal of unprofitable businesses, including the transfer of shares in Star Channel, the sale of the broadcast transmission business, and the liquidation of overseas subsidiaries. In FY2026 (ending March 2026), sales in the Media segment shrank to ¥3,646 million (down 32.4% year on year), and the structural reform is now largely at the completion stage. The company recorded a gain on reversal of foreign currency translation adjustments of ¥2,029 million and also carried out the liquidation of overseas subsidiaries.

On April 30, 2026, the company made graniph Co., Ltd. a wholly owned subsidiary at an acquisition cost of ¥17,763 million. graniph plans, manufactures, and sells design products, and the company aims to pursue synergies between graniph's proprietary IP development and apparel business capabilities and TOHOKUSHINSHA's video production and licensing business capabilities. Goodwill and the assets/liabilities to be assumed have not yet been finalized.

The company continues to dispose of cross-shareholdings under its medium-term management plan, recording a gain on sale of investment securities of ¥1,820 million in FY2026 (ending March 2026). On the other hand, the balance of investment securities increased from ¥8,854 million to ¥20,068 million (new acquisitions of ¥14,785 million). The company paid an annual dividend of ¥27.06 (payout ratio of 53.5%), maintaining shareholder returns. The dividend for FY2027 (ending March 2027) is scheduled to be determined after the medium-term management plan is updated.

The segment profit margin for advertising production improved from approximately 9.5% in the prior period to 12.8%, while that for content production improved from 7.7% to 11.0%. Contributing factors included aggressive order-taking and talent development in the commercial production division, and expanded orders for video streaming and overseas games in the sound and subtitling production division. The company plans to continue measures to further improve profitability.

Last updated: July 19, 2026