BIKE O & COMPANY Ltd.

Business Details

Demand is generated through web and TV advertising, used motorcycles are procured via free on-site purchasing, and sales are conducted through two channels: Wholesale (Auction Sales to Dealers) and the company's own stores/web (Retail). The core products are vehicles of second-class mopeds and above, which have high market value. Overseas export sales and Parts Sales are also conducted. Motorcycle-related business accounts for over 90% of net sales, with the main customer being Japan Bike Auction Co., Ltd. Since there are no other significant segments besides the Motorcycle Business in the current interim period, disclosure of segment information has been omitted.

Recent Overview

In the interim period, net sales and net profit increased significantly while operating profit declined, with rising SG&A expenses weighing on profit

Consolidated net sales for the interim period of FY2026 (ending November 2026) (December 2025 to May 2026) increased to ¥19,595 million (up 4.9% year on year). Gross profit also increased to ¥6,692 million (up 4.3%), but due to advance strategic investments in marketing, systems, and human resource training, SG&A expenses expanded to ¥6,429 million (up 5.5%), resulting in a decline in operating profit to ¥262 million (down 18.0%). On the other hand, due to an increase in equity in earnings of affiliates (¥75 million, versus ¥39 million in the same period of the prior year), the recording of ¥80 million in extraordinary income from damages received, and the resolution of the prior-period reversal of deferred tax assets (income tax adjustment amount of ¥137 million), ordinary profit increased significantly to ¥433 million (up 0.3%), and interim net profit increased significantly to ¥339 million (up 83.0%). The full-year earnings forecast remains unchanged (net sales of ¥38,700 million, operating profit of ¥710 million).

Key Products

Growth Drivers

• Solid underlying demand in the retail and auction markets due to the increasing trend in the number of high market value vehicles owned (second-class mopeds and above) (approximately 6.10 million units as of end of March 2024, up 2.2% year on year; approximately 6.18 million units as of end of March 2025)
• Future increase in inflow into the used vehicle market due to growth in new vehicle sales volume (approximately 330,000 units in 2025, up 5.8% year on year; approximately 230,000 high-priced vehicles, up 10.0% year on year)
• Significant improvement in Wholesale's per-vehicle sales unit price and gross profit amount due to the sustained high level of auction market prices and progress in securing high-quality vehicle inventory
• Significant increase in units sold and improved inventory turnover in Retail sales due to improvements in inventory management and sales negotiation processes
• Maximization of ordinary profit per employee and improved operational efficiency through advanced utilization of CRM and promotion of digital transformation (DX)
• Development of multi-format stores and new services through RIDE&LINK Co., Ltd., a joint venture with Premier Group Co., Ltd. (commenced from the current interim period)
• Establishment of ongoing relationships with customers after sales and a stable earnings foundation through strengthened maintenance capabilities
• Expansion of equity in earnings of affiliates (from ¥39 million in the same period of the prior year to ¥75 million in the current interim period)

Risks

• Increase in SG&A expenses due to advance investment in marketing, systems, and human resource training, putting short-term pressure on operating profit (SG&A expenses up 5.5% in the current interim period, with operating profit down 18.0%)
• Although the purchase conversion rate is improving, improving sales productivity to convert increased customer contact into higher results remains an ongoing key challenge
• Downward pressure on per-vehicle sales unit price and average gross profit per unit in Retail due to an increased proportion of first-class mopeds, among other factors
• Risk of the cost ratio remaining elevated due to the continued high level of auction market prices
• Changes in economic conditions including yen depreciation and rising interest rates, and external environment changes such as environmental regulations, technological innovation, and revisions to the moped license system
• Impact on the economy from geopolitical risks including the situation in the Middle East
• Impact on consumer purchasing intent from continued price increases (overall index up 1.4% year on year in April)
• Startup costs and operational risks associated with the new RIDE&LINK Co., Ltd. business