Property Data Bank,Inc.

The main cloud service "@property" accounts for approximately 86% of net sales, creating a risk that any decline in the service's competitiveness or an increase in cancellations would directly affect business performance. While the entry of competing services is not currently perceived as a threat, the situation could change if well-funded companies enter the market. As countermeasures, the company is expanding new services on the "PDB-Platform" and diversifying its customer industries to spread risk.

There is a risk that the business environment could change significantly due to the entry of companies with greater financial strength and brand power than the Group, or the emergence of competing systems utilizing new technologies. The company recognizes a reasonable likelihood of this materializing in the coming fiscal year, and a decline in competitive advantage could affect sales and profits. As countermeasures, the company is promoting service quality improvements that reflect user feedback and strengthening entry barriers as a "real estate DX platform".

If customer information leakage or system outages occur due to cyberattacks such as ransomware or human error, there is a risk of loss of social credibility and large-scale damages claims. The company recognizes that this risk could materialize at any time in the coming fiscal year, and as a cloud service provider, the impact on trustworthiness could be substantial. The company has implemented measures such as multi-layered defense, multi-factor authentication, PDCA management of information security, and insurance coverage.

In the cloud services field, new technology development including AI technology is proceeding one after another, creating a risk that delayed responses could reduce competitiveness and affect business performance. The company recognizes a reasonable likelihood of this materializing in the coming fiscal year, and progress in AI utilization in particular is directly linked to differentiation from competitors. The company has established a next-generation strategy project team reporting directly to the President and Representative Director to work on providing competitive services.

If unexpected events cause system failures or communication infrastructure trouble, there is a risk of decreased sales due to service suspension or usage fee reductions, as well as damages claims from customers. The company recognizes a reasonable likelihood of this materializing in the coming fiscal year, and given the nature of cloud services, dependence on the internet communication environment is high. The company has implemented measures such as multiplexing data centers at three domestic locations, equipment redundancy, and internal system development.

Large-scale system development projects exceeding one year are on an increasing trend, and the company recognizes a heightened risk of cost overruns, deteriorating profitability, and delayed acceptance due to estimation errors or work delays. There is a reasonable likelihood of this materializing in the coming fiscal year as well, and large-scale projects are more difficult to manage than small and medium-sized projects. The company conducts monthly budget performance management in coordination between business divisions and administrative divisions based on ISO9001, working to prevent deteriorating profitability.

Subsidiary services such as the data science business and document digitization business are expected to make certain profit contributions under the medium-term management plan (FY2022 to FY2026 (ending March 2026)), but there is a risk that Group performance could be affected if growth does not proceed as planned. The company recognizes that this risk could materialize at any time in the coming fiscal year, and there is uncertainty inherent to the launch period of new businesses. The company addresses this through regular information sharing between executive directors and subsidiary representative directors, holding audit liaison meetings, and support from the Frontier Business Promotion Team.

Securing excellent human resources is a critical issue for achieving the medium-term management plan and maintaining the competitiveness of the "PDB-Platform", but there is a risk that business and performance could be affected if hiring and training do not proceed as planned or if key personnel leave. The company recognizes a reasonable likelihood of this materializing in the coming fiscal year, and because the organization is small in scale, dependence on specific personnel is high. The company is promoting active recruitment activities, education and training for each level, and a transition to a job-based personnel evaluation system.

Functional enhancements and customization development for the "PDB-Platform" are outsourced to three main external vendors, resulting in a high degree of dependence on specific outsourcing partners. If a suspension of transactions occurs for some reason and continues for a long period, this could lead to a decline in the competitiveness of the services provided, affecting business performance. The company recognizes a reasonable likelihood of this materializing in the coming fiscal year, and is considering reducing dependence through the accumulation and transfer of in-house development know-how and the promotion of standardization.

If laws and regulations targeting the cloud services field or the internet are revised, there is a risk that business could be regulated, affecting performance. The company recognizes a reasonable likelihood of this materializing in the coming fiscal year, and currently responds appropriately through compliance with Ministry of Internal Affairs and Communications guidelines and acquisition of certification systems. The company has established a system for collecting information on legal and regulatory changes through membership in IT and real estate-related organizations, and for considering countermeasures at the management and board of directors level.