TOUMEI CO.,LTD.

Business Details

Provides a one-stop fiber-optic collaboration service, "Office Hikari 119," based on NTT East/West fiber-optic lines, to small and medium-sized enterprises and sole proprietors nationwide. In addition to fiber-optic lines and provider services, the company offers multi-functional services incorporating proprietary offerings such as PC trouble support. The company operates its own call center, customer center, and billing/collection departments in-house, standardizing the entire process from sales promotion to cancellation. The business focuses on accumulating stock-type revenue while also promoting ARPU improvement measures.

Recent Overview

Revenue increased 5.1% year-on-year, but segment profit declined 1.2% due to higher personnel expenses

In the cumulative first nine months of FY2026 (ending March 2026), the number of contracted lines held increased steadily, supported by a stable inflow of customers from web advertising and agency channels. ARPU improvement measures were also promoted. On the other hand, personnel expenses increased significantly year-on-year due to a substantial increase in effective staffing resulting from job rotation aimed at optimizing personnel allocation, and segment profit came to ¥1,250 million, down 1.2% year-on-year. Regarding the target of 148,000 contracts held at the end of FY2026 (ending March 2026), the company disclosed that there remain many challenges at present and that achieving the target is expected to take considerable time. In addition, the Office Hikari 119 Business recorded an impairment loss of ¥3 million related to sales office assets.

Key Products

Growth Drivers

• Increase in new agency-referred contracts through strengthening of the agency channel
• Continued promotion of a sales strategy centered on telemarketing
• Expansion of customer acquisition through continued investment in digital marketing (web advertising) (target of maintaining a customer acquisition ratio of 50% or more via web through the end of FY2027, ending March 2028)
• Maintaining a low cancellation rate through regular review and improvement of retention activities
• Promotion of measures to increase average revenue per user (ARPU) through cross-selling and up-selling
• Strengthening web-based customer acquisition using the subsidiary Digital Creators Co., Ltd.

Risks

• Pressure on profit margins from increased personnel expenses associated with staffing increases (significant increase compared to the same quarter of the previous year)
• Risk of delay relative to the target number of contracts held (148,000 contracts) (currently many challenges remain, and achievement is expected to take considerable time)
• Risk of increased cancellations due to seasonal factors (trend expected to continue as in previous years)
• Rising customer acquisition costs due to intensified pricing strategies by competitors
• Pressure on profit margins from increased selling expenses such as web advertising costs
• Risk of erosion of existing stock revenue due to a rising cancellation rate
• Risk of failing to achieve the target of maintaining a web-based customer acquisition ratio of 50% or more