BASE CO., LTD.

Business Details

The BASE Co., Ltd. group operates two service lines: "System Development," comprising open-systems development, Operations & Maintenance, and Employee Support (Staffing/Dispatch); and "Solutions," centered on ERP/CRM/BASIS with SAP SE. Major clients include leading SIers and financial institutions such as Fujitsu, Nomura Research Institute, and Mizuho Securities. A collaborative Japan-China structure leveraging two recruitment pipelines in Japan and China is a source of competitive advantage. In FY2025 (ending December 2025), net sales reached ¥21,787 million (up 7.7% year on year) and operating profit reached ¥5,749 million (up 10.0% year on year), both record highs.

Recent Overview

Q1 saw lower sales and profit due to organizational restructuring during the transition to the new mid-term plan "BASE2030"; full-year forecast left unchanged

In Q1 of FY2026 (ending December 2026), net sales were ¥5,472 million (down 1.6% year on year) and operating profit was ¥1,437 million (down 8.4% year on year), reflecting lower sales and profit. Due to major organizational restructuring under the new mid-term management plan "BASE2030" and the establishment of a new AI Promotion Office, time was required for organizational setup and internal coordination during the initial launch of the new structure, temporarily slowing order-taking activity. The Chinese subsidiary also underperformed due to temporary cost factors, among others. Meanwhile, selling, general and administrative expenses increased to ¥299 million from ¥253 million in the same period of the prior year. The full-year earnings forecast (net sales of ¥24,099 million, operating profit of ¥6,349 million) remains unchanged from the figures announced on February 13, 2026. The annual dividend forecast is ¥186 (ordinary dividend of ¥126 plus a commemorative dividend of ¥60), a substantial increase from ¥117 in the prior fiscal year.

Key Products

Growth Drivers

• Continued expansion of corporate IT investment demand driven by DX promotion and cloud migration (BOJ Tankan, March 2026: software investment across all industries up 4.4% year on year)
• Continued capture of migration demand arising from the expiration of SAP/ERP maintenance support periods
• Capturing demand for AI implementation support amid the rapid adoption of generative AI across industry sectors (newly established AI Promotion Office)
• Transition toward AI-driven, knowledge-intensive, high-value-added IT services under the new mid-term management plan "BASE2030"
• Securing global talent and strengthening the Japan-China collaborative structure by leveraging the two recruitment pipelines in Japan and China
• Expansion of coverage areas through SAP skill acquisition by open-systems SEs (multi-talent development plan)
• Industry tailwind from information and communications industry sales increasing for 47 consecutive months (Ministry of Internal Affairs and Communications Service Industry Trends Survey, February 2026: up 5.7% year on year)

Risks

• Risk of recruitment difficulty and rising labor costs due to the structural issue of systems engineer shortages
• Risk of revenue concentration among major clients (Fujitsu, Nomura Research Institute, Mizuho Securities), which together account for approximately 35.6% of net sales
• Impact of China's economic slowdown and geopolitical risk on the Chinese subsidiary (which also performed sluggishly in the current Q1)
• Risk of temporary stagnation in order-taking activity during the organizational transition to the new mid-term management plan "BASE2030"
• Risk of downside to client IT investment due to concerns over a global economic slowdown and factors such as U.S. tariff policy
• Structural impact of advances in AI technology on the contract development business model (risk of AI substitution in the manufacturing/development domain)