DENSAN CO.,LTD.

Business Details

Provides package system development and sales, operational support, equipment sales, and various information processing services mainly to local governments and related organizations. The flagship product is the Comprehensive Administrative Information System "Reams," with customers among local governments nationwide, centered on Nagano and Niigata prefectures. In FY2026 (ending March 2026), this core segment accounted for approximately 80.5% of consolidated net sales.

Recent Overview

Sales and profit grew significantly with completion of standard-compliant Reams migration for 168 municipalities; a rebound decline is expected next period

In FY2026 (ending March 2026), the completion of migration to the government-mandated standard-specification-compliant "Reams" within the original deadline (March 2026) for all 168 municipalities significantly contributed to sales and profit, achieving net sales of ¥22,529 million (up 58.7% year on year) and segment profit of ¥5,765 million (up 172.8% year on year). Responses to various legal and regulatory revisions, implementation of the Family Registry Comprehensive System at 62 municipalities, and equipment replacement demand also contributed. On the other hand, for FY2027 (ending March 2027), a decrease in orders received and net sales is expected due to a decline in replacement projects following the completion of migration. The government has announced a policy to extend the deadline for systems that have not yet completed migration, designating them as "Specific Migration Support Systems," until the end of FY2030, and the company is working to capture this as an opportunity to acquire new customers.

Key Products

Growth Drivers

• Development of new "Reams" customers among Specific Migration Support System target municipalities (deadline extended to end of FY2030)
• Continued demand for responses to various legal and regulatory revisions (child and childcare support benefit system, fixed-rate tax reduction, long-term care insurance premium revisions, etc.)
• Demand from the equipment replacement cycle for the Basic Resident Register Network System, financial accounting systems, etc.
• Expansion of "Municipal Counter DX" (paperless counters, resident information apps, etc.)
• Promotion and expansion of administrative operations outsourcing by multiple municipalities
• Continued expansion of administrative DX investment driven by the government's "Priority Plan for Realizing a Digital Society"
• Expansion of tourism solutions (VR/AR/NFT/digital stamp rallies) to new municipalities
• Provision of migration/settlement data visualization and analysis services utilizing EBPM (Evidence-Based Policy Making)

Risks

• Risk of a rebound decline following completion of standard-compliant system migration in FY2026 (ending March 2026) (significant decreases in net sales and operating income expected in FY2027, ending March 2027)
• Risk of investment restraint due to deteriorating financial conditions of local governments
• Impact on the company's own data center business from government-led promotion of Government Cloud
• Regional dependency risk due to geographic concentration in Nagano and Niigata prefectures
• Risk of man-hour overruns and quality issues in system development
• Impact on development capacity due to difficulty securing DX talent and intensifying recruitment competition
• Risk of intensifying competition to acquire new customers among Specific Migration Support System target municipalities