Ryoyu Systems Co.,Ltd.

Business Details

Ryoyu Systems Co., Ltd. is a company specializing in information services, providing design, development, operation, and maintenance of information and communication systems, sales of system-related equipment, analysis and simulation of industrial products, and various information processing services. Its main customer is Mitsubishi Heavy Industries, Ltd. The group structure includes 3 consolidated subsidiaries, and operations are focused on the domestic market. The company is promoting business expansion in the areas of cloud shift response, generative AI, and information security.

Recent Overview

While net sales grew only slightly, margin improvement was notable, achieving an operating profit margin of 12.7%

In FY2026 (ending March 2026), net sales were ¥43,229 million (up 1.1% year on year), a limited increase, while operating profit rose to ¥5,488 million (up 13.9%) and ordinary profit rose to ¥5,619 million (up 15.4%), showing significant improvement on the profit side. The main factor was a decrease in cost of sales to ¥33,242 million (from ¥33,534 million in the prior period), which improved the gross profit margin. Investment securities increased significantly from ¥2,077 million to ¥4,185 million. A 2-for-1 stock split was implemented in October 2025. For FY2027 (ending March 2027), the company forecasts net sales of ¥45,000 million (up 4.1%), while profit attributable to owners of parent is expected to decrease to ¥3,600 million (down 7.9%).

Key Products

Growth Drivers

• Continued solid corporate IT investment: expanding demand driven by DX promotion, cloud migration, and generative AI commercialization
• Expanding demand for information security: continued demand growth driven by the increasing sophistication of cyberattacks
• Maintaining an expansionary trend in system development and analysis/design-related areas: thorough project management in large-scale system development and expansion of orders in adjacent areas
• Active investment in new areas such as generative AI and information security: research and development / product development expenses increased to ¥145 million
• Promotion of the FY2025 Medium-Term Management Plan "Ryoyu that Walks Alongside its Customers": 5 focus initiatives including launching new businesses, deepening relationships with existing customers, and enhancing human capital value
• Human capital enhancement measures: strengthening recruitment, revising the education system to strengthen technical capabilities, and enhancing management training programs

Risks

• Specific customer dependency risk: sales are highly concentrated on Mitsubishi Heavy Industries, Ltd., so changes in that company's business trends and IT investment policies directly affect performance
• Human resource acquisition and development risk: amid worsening IT talent shortages, securing and training advanced engineers could become a constraint on business expansion
• External environment risks such as U.S. trade policy: U.S. tariff policy and other factors could affect the IT investment plans of major customers (manufacturing industry)
• Project management risk: risk of recording provisions for losses on construction contracts in large-scale system development (the balance at the end of the current period was minor at ¥0 million, but continued monitoring is necessary)
• Risk of failing to respond to technological change: risk that service sophistication and talent development may not keep pace with rapid technological changes such as generative AI and autonomous AI agents
• Risk of decline in net profit in the next fiscal year's earnings forecast: the forecast for profit attributable to owners of parent for FY2027 (ending March 2027) is ¥3,600 million, a decrease of 7.9% year on year, and caution is warranted regarding declining profitability during a phase of expanded investment