HIKARI BUSINESS FORM CO., LTD.

Business Details

Koh Business Forms Co., Ltd. consists of a single segment: the Printing-Related Business. Its core operations are form printing (Printing-Related) and the Data Print Service (DPP), with WEB and BPO being nurtured as growth areas. The company leverages its strong track record in handling personal information for local governments and financial institutions, capturing public-sector demand such as benefit payments and regional gift certificates as well as corporate outsourcing demand. It is working to improve its earnings structure through consolidation of printing functions to enhance production efficiency and by promoting sales at appropriate prices.

Recent Overview

In the first quarter of FY2026 (ending December 2026), sales rose 12.6% and the company swung from an operating loss to a significant profit

In the first quarter of FY2026 (ending December 2026) (January to March), sales were ¥1,916 million (up 12.6% year on year) and operating income was ¥189 million, a major improvement from an operating loss of ¥51 million in the same quarter of the previous fiscal year. While cost of sales decreased by ¥12 million year on year, selling, general and administrative expenses also decreased by ¥15 million, resulting in a significant improvement in the gross profit margin. The DPP segment grew 17.9% and the WEB segment grew 28.9%, both showing high growth. Other fixed assets (net) increased from ¥436 million to ¥1,007 million, reflecting progress in capital investment. There has been no change to the full-year earnings forecast, and the annual dividend is planned to increase from ¥45 in the previous fiscal year to ¥50.

Key Products

Growth Drivers

• Capture of public-sector demand such as benefit payments and regional gift certificates, as well as special demand related to laws and regulatory changes, in the DPP segment (up 17.9% in the first quarter)
• Improved production efficiency and utilization rates through consolidation of printing functions, and reduced operating costs (contributing to a year-on-year decrease in cost of sales)
• Improvement in gross margin through promotion of sales at appropriate prices (first-quarter gross margin of 28.8%, a significant improvement from 19.1% in the same quarter of the previous year)
• Expansion of digitally integrated services through high growth in the WEB segment (up 28.9% year on year)
• Capture of BPO outsourcing demand amid corporate needs for labor-saving and efficiency improvements
• Enhanced production capacity through progress in capital investment (other tangible fixed assets increased by ¥570 million from the end of the previous fiscal year)

Risks

• Structural decline in printing demand due to progress in digitalization and paperless initiatives (a long-term headwind across the entire form printing industry)
• Continued cost pressure from rising raw material and logistics costs as well as rising labor costs
• Risk of crude oil and petroleum product supply instability and price increases due to U.S. trade policy trends and escalating tensions in the Middle East
• Dependence on sales to a major customer, Daiwa Institute of Research Ltd. (10.8% of sales in the previous fiscal year actual results), and the risk of fluctuations in sales to that customer
• Risk of cyberattacks such as ransomware and information leaks (high information security requirements as a business handling personal information)
• The full-year sales forecast of ¥7,700 million represents a 0.6% decrease from the previous fiscal year actual of ¥7,743 million, carrying a risk of falling short of the forecast depending on demand trends in the second half
• The equity ratio declined from 81.1% at the end of the previous fiscal year to 77.8% (mainly due to an increase in fixed liabilities)