ENVALITH
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Systems Engineering Consultants Co.,LTD.

3741・Prime Market・Information & Communication

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株式会社セック logo
Systems Engineering Consultants Co.,LTD.3741

Business

SEC Co., Ltd. is a real-time technology specialist company founded in 1970. Centered on its core technology of "developing computer systems that closely interact with a constantly changing external environment," the company conducts software development across four business fields: Social Infrastructure Systems BF, Space Advanced Systems BF, Mobile Network BF, and Internet BF. Its major clients span a wide range, including government agencies, national research institutions, mobile network operators, electronics manufacturers, automobile manufacturers, and heavy industry manufacturers. The company provides highly reliable systems that support the safety and development of society, ranging from expressway traffic control and satellite-mounted software to medical AI and quantum computing. It is listed on the Prime Market of the Tokyo Stock Exchange.

Business Model

The majority of net sales consists of contracted software development for government agencies and private companies. Building on QCD (Quality, Cost, Delivery) capabilities, the company differentiates itself through high-value-added proposals centered on New Elements (innovative technologies, solution products, patents, etc.), achieving quantitative expansion through repeat orders and horizontal deployment. In addition, the company has a compound revenue structure that earns subsidy income (¥109 million in FY2026 (ending March 2026)) from joint research with national research institutions such as JAXA, NEDO, and AMED.

Company Strengths

Since its founding in 1970, the company has accumulated over 50 years of development experience in social infrastructure and space fields, including expressway traffic control systems, rocket testing, and onboard satellite software. Its real-time technology, centered on interrupt processing, priority processing, and concurrent processing, represents a specialized domain that competitors find difficult to replicate in the short term, and multiple certifications such as ISO 9001, ISMS, and ISO 22301 underpin its quality and reliability.

The order backlog at the end of FY2026 (ending March 2026) reached ¥9,065 million (144.8% year-on-year), of which Social Infrastructure Systems BF alone accounted for ¥7,247 million (149.9% year-on-year). This represents approximately 77% of the ¥11,800 million net sales plan for the following fiscal year already secured through orders, giving the company extremely high earnings predictability. Continued receipt of large-scale orders from government agencies underpins this structure.

As of the end of FY2026 (ending March 2026), the equity ratio stood at 82.9% (improved from 79.2% in the previous fiscal year), with net assets of ¥10,313 million and cash and cash equivalents of ¥3,321 million. Interest-bearing debt consists only of a portion of short-term borrowings for bonus funds, maintaining an essentially debt-free management structure. Operating cash flow was ample at ¥1,697 million, giving the company the financial strength to fund continued investment in human resources, R&D, and working environments from its own funds.

ENVALITH's Perspective

The Social Infrastructure Systems BF recorded net sales of ¥5,537 million (49.3% of the total), the largest sales composition ratio, and its order backlog of ¥7,247 million accounted for approximately 80% of the total. Demand from the medical, environmental, judicial, and public sector markets remains solid as an external environment factor, but the rising dependence on this specific BF entails the risk of earnings volatility should budget cuts or policy changes occur in this field. The forecast for the next fiscal year also anticipates continued growth in the Social Infrastructure Systems BF, requiring ongoing monitoring of concentration risk.

Net sales of the Mobile Network BF declined to ¥740 million (down 19.7% year on year), continuing its downward trend, with its share of total sales falling from 8.9% to 6.6%. The forecast for the next fiscal year explicitly states an expectation of an "overall decrease," indicating the business is in a phase of structural contraction. While the Internet BF and Social Infrastructure Systems BF have been driving alternative growth, the Internet BF is also expected to decline next fiscal year due to optimization of personnel allocation, making it necessary to continuously verify the effectiveness of the strategy to diversify sources of growth.

The recovery of operating cash flow from a negative ¥250 million in the previous fiscal year to ¥1,697 million in the current fiscal year is commendable from the standpoint of financial soundness. However, corporate tax and other tax payments increased to ¥654 million (from ¥433 million in the previous fiscal year). In the next fiscal year, the effective tax rate is expected to return to the statutory level due to the expiration of the wage increase promotion tax system, and the growth rate of net income (forecast at up 4.3%) is expected to fall short of the growth rate of net sales (forecast at up 5.2%). Attention should also be paid to substantial base pay increases in addition to regular pay raises, as well as an increase in research and development expenses (¥217 million, up 44% year on year), as factors that will constrain the upside of profit margins.

Growth Strategy

Pursuit of sustained business growth through deepening advanced technology and open innovation

Development for government agencies, particularly in the medical, environmental, and judicial fields, increased substantially. Orders received in FY2026 (ending March 2026) grew sharply to ¥7,950 million (up 145.0% year on year), with the order backlog expanding to ¥7,247 million (up 149.9% year on year). Continued strength is expected in the next fiscal year as well, and this business is positioned as a core pillar of company-wide growth.

In addition to steady progress in autonomous vehicle driving R&D projects, an increase in space astronomy-related development pushed FY2026 (ending March 2026) sales to ¥3,159 million (up 3.1% year on year). Further growth is expected in the next fiscal year, driven additionally by increased development for national research institutions. Subsidy income from commissioned research by national research institutions (¥109 million in FY2026, ending March 2026) also supports ordinary profit.

To "master advanced technologies," the company continues to implement substantial base pay increases in addition to regular pay raises, expanded advanced technical education, and R&D investment (¥217 million in FY2026, ending March 2026, up 44% year on year). It is promoting joint research with universities, national institutions, and corporate research organizations to sustainably strengthen technological superiority. The company aims to expand operating profit while absorbing increased investment through productivity gains.

Driven by increased contactless IC-related development and expanded DX-related development for private companies, Internet BF sales in FY2026 (ending March 2026) grew sharply to ¥1,784 million (up 33.5% year on year). A temporary decline is expected in the next fiscal year due to optimization of personnel allocation across business fields, but the company intends to capture the medium- to long-term expansion of DX demand.

Last updated: July 19, 2026