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