KG Intelligence CO., LTD.

Advertising revenue related to HR solutions information is affected by job market trends and seasonal fluctuations in each prefecture. While September–November and February–April are peak periods, the number of issues published in January, May, and August tends to decrease due to the publication of combined issues during the year-end/New Year holidays, Golden Week, and summer vacation periods, leading to a decline in revenue during these months. Depending on job market trends, the magnitude of this fluctuation could widen further.

The Group is committed to actively pursuing new business development, but if plans do not proceed as originally scheduled due to prolonged development periods or intensifying competition, this could affect business performance. There is an inherent risk that investment burdens related to new businesses occur upfront while monetization is delayed.

If the timing of expansion into new regions is brought forward or delayed, or if changes to the expansion approach become necessary, this could affect business performance. Even when expansion proceeds as planned, the period of upfront costs incurred before gaining customer recognition may become prolonged, during which expenses exceeding revenue are deliberately borne as a matter of policy.

Multiple competitors exist in each region, creating a risk that changes in the competitive landscape could reduce the number of listings and advertising unit prices. While the Group seeks to differentiate itself through region-focused magazine publishing and enhanced websites, the declining share of paper media continues, and the Group's response to other media will be a key factor affecting its business performance.

The share of paper media across various content types is declining, with a shift toward other media such as websites. If the Group's response to this structural change is delayed, revenue from its existing paper-based media business could face continued pressure.

The paid job placement business is licensed by the Ministry of Health, Labour and Welfare under the Employment Security Act, and the worker dispatching business is licensed under the Worker Dispatching Act, both falling under regulated industries. Future amendments to related laws and regulations that tighten constraints on business operations could affect the Group's performance. The Group strives to provide appropriate information through membership in the Japan Association of Employment Information (a public interest incorporated association) and by establishing self-regulatory rules.

The price of printing paper, a key raw material, is significantly affected by trends in the international market. Rising raw material prices directly increase manufacturing costs and could adversely affect the Group's business performance and financial condition.

The proliferation of smartphones and the use of social media have diversified the means by which users gather information, intensifying the competitive environment centered on web-based services. If the Group fails to promptly develop new services and features in response to such technological innovation and market changes, its competitiveness could decline, affecting business performance and financial condition.

If natural disasters such as typhoons, earthquakes, or tsunamis, or infectious diseases such as novel coronavirus infections or new strains of influenza, occur or spread on a scale far exceeding expectations, there is a risk that office operations in the affected regions could become difficult to sustain over an extended period. Indirect deterioration in business performance through effects on industries to which customers belong is also anticipated. Although countermeasures are in place through the establishment of a crisis management system, the impact on business performance and financial condition cannot be entirely eliminated.