GENDAI AGENCY INC.
2411・Standard Market・Information & Communication
Business
Gendai Agency Co., Ltd. was established in 1995 and is listed on the Standard Market of the Tokyo Stock Exchange as an advertising company. The company comprises itself and six consolidated subsidiaries. In its core advertising business, it primarily serves pachinko halls, providing internet advertising (DSP advertising and its proprietary site "Pachi7"), inserted flyer advertising, promotional materials, creative services, media placement, and event planning. In recent years, the company has been pursuing customer diversification into sectors such as fitness facilities, housing-related businesses, and franchise industries. It also operates a real estate business (leasing and brokerage of real estate for pachinko halls) through its consolidated subsidiary Land Support Co., Ltd. Consolidated net sales for FY2026 (ending March 2026) were ¥7,531 million.
Business Model
The main revenue source is fees for outsourced advertising planning and production, and the company is undergoing a structural shift from paper media such as inserted flyers and promotional materials to more profitable internet advertising, including DSP advertising and its own site "Pachi7". Internet advertising has a low cost-of-sales ratio, which directly contributes to improving gross margin. In the real estate business, revenue sources are land lease income and brokerage fees. In FY2026 (ending March 2026), the cost-of-sales ratio was 64.1% (a 4.4-point improvement year on year), and the operating margin reached 9.0%.
Company Strengths
Since its founding in 1994, the company has developed a nationwide network of offices in Sendai, Kanto, Kansai, Tokai, Western Japan, Eastern Japan, Hiroshima, and other locations, building over 30 years of track record in the advertising market for pachinko halls. This customer base and nationwide network constitute a proprietary asset that competitors cannot easily replicate in the short term, underpinning the stable order base behind advertising business revenue of ¥7,431 million in FY2026 (ending March 2026).
The proprietary services and DSP advertising on the company's own site "Pachi7" are more profitable than print media, driving internet advertising revenue to ¥3,329 million in FY2026 (ending March 2026), up 116.3% year on year. This improved the cost of sales ratio by 4.4 percentage points, achieving an operating margin of 9.0% and ROE of 11.7%. Ownership of a proprietary brand media platform is a source of competitive advantage.
At the end of FY2026 (ending March 2026), the equity ratio stood at 71.9%, the current ratio at 357.9%, and cash and cash equivalents at ¥3,220 million, reflecting a high degree of financial soundness. The company has consistently maintained an "asset-light management" approach since its listing, resulting in low reliance on borrowings. This financial foundation enables the company to secure capacity for growth investment while also returning capital to shareholders (share buybacks of ¥526 million and dividends of ¥255 million).
ENVALITH's Perspective
Performance Trend
Net sales came to ¥7,531 million (down 1.9% year on year), a slight decline, but a reduction in cost of sales (from ¥5,259 million to ¥4,828 million) expanded gross profit to ¥2,702 million (up 11.7% year on year). Operating profit rose to ¥674 million (up 61.2% year on year), ordinary profit to ¥680 million (up 63.3% year on year), and profit attributable to owners of parent to ¥473 million (up 32.0% year on year), with substantial improvement across all profit items. Growth in internet advertising (116.6% year on year) drove profitability, while a sharp decline in inserted flyer advertising (75.8% year on year) weighed on net sales. As an external factor, revitalization of the pachinko hall industry driven by the spread of smart pachinko/pachislot machines supported advertising demand. For the next fiscal year (FY2027, ending March 2027), the company forecasts net sales of ¥8,000 million (up 6.2% year on year) and operating profit of ¥800 million (up 18.6% year on year).
Growth Strategy
Transforming the revenue structure along three axes: expansion of digital advertising, diversification into new industries, and rollout of new generative AI services
Internet advertising sales expanded to ¥3,338 million (up 116.6% year on year), accounting for approximately 44.9% of advertising segment sales. As high-margin services penetrate the market, repeat orders have increased, functioning as the core driver of the shift in revenue structure to offset the decline in print media.
In addition to fitness facilities and housing-related businesses, the company plans to strengthen its expansion into the franchise industry in the next fiscal year to diversify its revenue base. While the current sales contribution is limited, the company continues to actively develop customers in sectors where advertising demand is on an increasing trend.
The development and rollout of new services utilizing generative AI tools has been explicitly stated as a strategy for the next fiscal year. The company aims to secure profitability by enhancing the value-added of existing services and appropriately adjusting sales prices in response to factors such as rising prices. The policy is to leverage the human capital investments made in the current fiscal year (recruitment and wage increases) to strengthen organizational capabilities and improve sales productivity.
The company is focusing on developing and selling customer-acquisition measures in line with the "Advertising Guidelines Third Edition," capturing increased demand for in-store visit promotion campaigns featuring industry talent and digital advertising. Clarification of the guidelines has reduced the risk of sudden voluntary restrictions, helping to establish a more stable order-taking environment.
Last updated: July 19, 2026