Capital Asset Planning, Inc.

Business Details

The company's main customers are life insurance companies, banks, securities firms, and IFAs, and its core business is developing front-end and back-office systems such as insurance design/application systems, asset management platforms, and goal-based planning systems. The revenue model consists of contract development income (approximately 94.5% of sales) and licensing/maintenance income (approximately 5.4%). Backed by the government's "Asset Management Nation" policy, the company is promoting expansion into next-generation financial platforms utilizing generative AI and AI agents.

Recent Overview

Achieved record-high sales and profit for an interim period, and revised the full-year forecast upward

In the first half of FY2026 (ending March 2026) (October 2025 to March 2026), sales reached ¥5,487 million (up 16.2% year-on-year) and operating income reached ¥638 million (up 66.3% year-on-year), both record highs for an interim consolidated fiscal period. Contract development for life insurance companies (up 13.4% year-on-year) and for banks, securities firms, and IFAs (up 33.8% year-on-year) both performed well. As the growth rate of cost of sales and SG&A expenses was lower than the growth rate of sales, the operating margin improved significantly from 8.1% to 11.6%. In response, the company revised upward its full-year forecasts for operating income, ordinary income, and net income from its previously announced forecasts. The interim dividend was also raised by ¥2.00 year-on-year to ¥10.50, and the full-year dividend forecast was revised to ¥21.00 (up from ¥18.00 in the previous fiscal year).

Key Products

Growth Drivers

• Expansion of IT system investment by financial institutions driven by the government's "Asset Management Nation" policy and the new NISA (continued demand for DX promotion and business process restructuring at financial institutions)
• Continued expansion of contract development for life insurance companies (system integration accompanying organizational restructuring, response to new third-sector insurance products, and new orders accompanying the release of asset-building products)
• Diversification of the business portfolio for banks, securities firms, and IFAs (high growth of 33.8% year-on-year in the first half of FY2026, ending March 2026)
• Rapid expansion of demand from financial institutions for operational efficiency and value-added improvements through generative AI and AI agents
• Growing demand for sophisticated inheritance, asset succession, and asset management consulting functions against the backdrop of the era of 100-year lifespans and mass inheritance
• Expansion of licensing and maintenance income (stock-type revenue) (up 23.2% year-on-year in the first half of FY2026, ending March 2026)
• Establishment of a stock-type business model for IFAs and securities firms through the release of the Trust Engine integrated platform
• Productivity improvements in internal development processes through the use of generative AI tools (time reductions of up to approximately 60% depending on the process)

Risks

• Customer concentration risk, with the majority of sales derived from life and non-life insurance companies (a structure in which Sony Life Insurance alone accounts for 40.1% of sales)
• Risk of quarter-to-quarter performance fluctuations due to sales concentration around life insurance companies' new product launch periods (April and October)
• Increase in labor costs and outsourcing expenses accompanying the expansion of contract development (cost of sales of ¥4,010 million in the first half of FY2026, ending March 2026, up 12.5% year-on-year)
• Burden of upfront investment in new business subsidiaries such as Trust Engine and Wealth Engine (interim net loss attributable to non-controlling interests of ¥10 million)
• Recording of valuation losses on investment securities (special loss of ¥29 million in the first half of FY2026, ending March 2026) and a significant decrease in valuation difference on other securities (down ¥208 million)
• Risk of delayed response to the rapid evolution of advanced technologies such as generative AI
• Difficulty securing talented programmers and financial specialists (intensifying competition for talent in the information services industry)
• Impact of geopolitical uncertainties such as U.S. trade policy and the situation in the Middle East on the IT investment plans of financial institutions