Japan System Techniques Co., Ltd.

Business Details

Targeting a broad range of industries including finance, insurance, securities, telecommunications, manufacturing, distribution, and public sector, the segment provides system development, implementation, and maintenance across two fields: business applications (office processing systems) and engineering applications (telecommunications, control, and technical systems). Maintaining a fully independent-vendor position, its strength lies in its ability to make free proposals without dependence on any specific vendor. It is the largest segment, accounting for approximately 61% of the Group's total sales, and is promoting the establishment of a high-profitability style through the acquisition of large-scale prime contracts. Major customers include NTT DOCOMO Solutions Inc. (sales of ¥3,983,446 thousand).

Recent Overview

Achieved 12.9% sales growth and 12.3% operating profit growth on the strength of large-scale prime contracts in telecommunications, finance, and manufacturing.

In FY2026 (ending March 2026), the DX & SI Business achieved sales of ¥19,806 million (up 12.9% year on year) and operating profit of ¥3,186 million (up 12.3% year on year), representing an increase in both revenue and profit. The main driver was strong performance in large-scale prime contracts centered on telecommunications, finance/insurance/securities, and manufacturing. Sales to major customer NTT DOCOMO Solutions Inc. increased 34.1% year on year to ¥3,983 million. In addition, in the medium-term management plan beginning in FY2027 (ending March 2027), the company has announced a policy to transition from a region-based SI structure to an industry- and solution-based business structure, and to promote a shift from contract-development-centered operations to offering-type businesses.

Key Products

Growth Drivers

• Continued strength in large-scale prime contracts centered on finance/insurance/securities, telecommunications, and manufacturing
• Growth of the domestic IT services market driven by expanding corporate DX (digital transformation) investment
• Strengthening of proposal and negotiation capabilities across a wide range of industries and technology fields, leveraging its fully independent-vendor position
• Improved profitability through transition from a region-based SI structure to an industry- and solution-based business structure
• Provision of highly reproducible and scalable services through the shift from a contract-development-centered business model to an offering-type business that systematizes business knowledge and development assets
• Strengthening operational efficiency and competitive advantage through the use of generative AI

Risks

• Rising recruitment and personnel costs and increasing difficulty in securing engineers due to a worsening shortage of IT talent
• Intensifying international market competition and price pressure due to diversification of development methods such as no-code/low-code tools
• High dependence on large-scale prime contracts, creating a risk that performance is affected by order trends from specific customers (NTT DOCOMO Solutions Inc. accounts for approximately 12.3% of sales)
• Risk of a global economic slowdown due to U.S. policy trends and risk of client companies curbing IT investment amid rising prices
• Risk of deteriorating profitability on large-scale projects (risk of recording provisions for construction losses)
• Organizational and profit management risks during the transition period associated with the shift from a region-based to an industry- and solution-based business structure

Business Details

The segment's two core pillars are the proprietary strategic university management system "GAKUEN Series" and "BankNeo," an integrated information system for financial institutions. For universities, it comprehensively provides an integrated school administrative support system, web services, e-money payment, cloud infrastructure, and more; for financial institutions, it also offers cloud-based item custody management and sales productivity improvement solutions. In addition to developing and selling proprietary-brand products, it has built a high-value-added business model combining implementation consulting, EUC (custom contract development), and maintenance services.

Recent Overview

Sales increased 17.3% and operating profit increased 46.6% due to revenue growth in both the GAKUEN Series and BankNeo, marking a significant profit increase.

In FY2026 (ending March 2026), the Package Business achieved sales of ¥6,895 million (up 17.3% year on year) and operating profit of ¥2,293 million (up 46.6% year on year), the highest profit growth rate among all segments. Expansion of procurement sales and implementation support services in the GAKUEN Series, as well as an increase in PP (program product) sales for BankNeo, each contributed to the revenue growth. The operating margin improved significantly from 26.6% in the prior period to 33.3%, further solidifying the segment's position as the most profitable within the Group.

Key Products

Growth Drivers

• Continued expansion of procurement sales, implementation support services, and EUC (custom contract development) in the GAKUEN Series
• Increased PP (program product) sales for BankNeo and new customer acquisition through the promotion of cloud migration
• Building a stable revenue base through the shift to subscription-based software services for universities
• Expansion into education big data business and comprehensive education-sector DX services
• Strengthening competitive advantage through R&D investment in the GAKUEN Series and the use of generative AI, with the education and healthcare fields positioned as core areas of the Group under the medium-term management plan

Risks

• The university market may face a mid- to long-term risk of demand contraction due to the declining birthrate and shrinking student population
• BankNeo, targeted at regional financial institutions, carries an inherent risk of customer attrition due to consolidation and reorganization among financial institutions
• Possibility of profit margin pressure from increased R&D investment aimed at strengthening the functionality and quality of proprietary-brand products
• Risk of construction losses on EUC (custom contract development) projects (a provision for construction losses of ¥114 million was recorded on a consolidated basis in the fiscal year)
• Risk of intensifying price competition and the emergence of similar package products from competitors

Business Details

Based on the receipt (medical claims) automatic review system "JMICS" and the insurer operations support system "iBss," the segment provides one-stop services for health insurance societies and local governments. It operates multiple healthcare businesses including receipt review and analysis, data health plan support, and cloud services for public assistance programs. The business is operated by the Company (JAST), Shin Nihon Needs Co., Ltd., and Cship Co., Ltd., with growth driven by increased revenue from data utilization services, receipt review services, and the cloud service for public assistance, as well as improved profitability at Cship.

Recent Overview

Revenue and profit growth accelerated, with operating profit rising sharply by 33.9% year on year.

In FY2026 (ending March 2026), the segment achieved sales of ¥3,503 million (up 11.2% year on year) and operating profit of ¥887 million (up 33.9% year on year). In addition to revenue increases in data utilization services, receipt review services, and the cloud service for managing medical claims related to public assistance, the main driver of profit growth was improved profitability at Cship Co., Ltd., which joined the business in the prior fiscal year. The decline in profit margin that had been an issue in the prior period was resolved, and profitability improved significantly.

Key Products

Growth Drivers

• Continued expanding demand for receipt review services and data utilization services
• Revenue growth in the public assistance-related medical claims management cloud service "RezeptPlus" (in collaboration with Fujitsu Japan Limited)
• Emerging improvement in profitability following the business integration of Cship Co., Ltd.
• Expansion of the customer base through enhancement of the insurer one-stop service "iBss"
• Medium- to long-term expansion of demand for deeper DX, data utilization, and generative AI use (with education and healthcare positioned as core areas under the medium-term management plan)
• Entry into new markets through academic partnerships, M&A, and alliances (promoting comprehensive medical DX services)

Risks

• Risk of stricter laws and regulations concerning the handling of medical data and personal information protection
• Risk of budget cuts due to deteriorating financial conditions at health insurance societies and local governments
• Risk of demand fluctuation due to changes in medical expense optimization policy
• Intensifying competition with other companies (medical IT and healthcare data providers)
• Impact on profit margins from increased costs associated with further growth investment following the integration of Cship

Business Details

The Global Business is an overseas-focused segment that, with Malaysia and China as its main bases, provides ERP implementation consulting such as SAP, development, sales, and maintenance of the cloud-based HR management solution "AGHRM," and contract development/offshore development services. Consolidated subsidiaries including the Virtual Calibre group (Malaysia) and Guilin Anxin Software Co., Ltd. (China) operate the business. In FY2026 (ending March 2026), the slump in orders for SAP implementation support projects in Malaysia continued, and an impairment loss was also recorded.

Recent Overview

Recorded an impairment loss of ¥297 million at the Malaysian and Chinese subsidiaries, with the operating loss expanding significantly.

Full-year sales for FY2026 (ending March 2026) were ¥2,254 million (down 18.1% year on year), and the operating loss expanded significantly to ¥401 million (compared with a loss of ¥62 million in the prior period). The main cause was that order inquiries for SAP implementation support projects in Malaysia fell below the prior year's level. In addition, having determined that a recovery in profitability could no longer be expected at the Virtual Calibre group (Malaysia) and Guilin Anxin Software Co., Ltd. (China) due to a deteriorating business environment, the company recorded an impairment loss totaling ¥297 million for goodwill, customer-related assets, tangible fixed assets, and software as an extraordinary loss. Segment assets also declined to ¥1,854 million.

Key Products

Growth Drivers

• Mid- to long-term expansion of ERP/DX demand in the growing economies of ASEAN, the Middle East, and South Asia
• Strengthening competitiveness in the HR management solutions market through functional enhancements to AGHRM
• Diversification of revenue and reduced dependence on SAP through expanded implementation support for non-SAP ERP products (such as mcframe)
• Revenue diversification through the development and sale of new products leveraging alliances
• Improved profitability through business portfolio restructuring under the medium-term management plan (FY2026–FY2028)

Risks

• The continued slump in orders for SAP implementation support projects in Malaysia leaves the outlook for a short-term performance recovery unclear
• An impairment loss of ¥297 million was recorded in FY2026 (ending March 2026), significantly impairing the asset value of the Global Business
• Sales have declined for three consecutive fiscal years, from ¥3,354 million in FY2023 (ending March 2023) to ¥2,254 million in FY2026 (ending March 2026), signaling a serious structural decline in earning power
• The operating loss expanded sharply from ¥62 million in the prior period to ¥401 million, making fundamental business restructuring an urgent priority
• Foreign exchange risk (divergence between overseas subsidiaries' functional currencies and the yen) could affect performance
• Changes in the political and economic environment and regulatory risk in ASEAN countries could affect business operations