NETSTARS Co., Ltd.

Business Details

The core business is StarPay (Multi QR Code Payment), a service that integrates 40 or more domestic and overseas QR code payment brands. Merchants can contract for and operate multiple payment brands under a single agreement, and the service has been implemented in approximately 700,000 accounts domestically (as of the end of December 2025). Revenue is based on a net fee model tied to payment transaction value. The company also cross-sells DX Products (Self-Checkout, Mobile Ordering, etc.) and offers the Inbound Promotion Service. Three subsidiaries (in China, Singapore, and Vietnam) are responsible for development and overseas expansion. From 1Q FY2026, the newly established subsidiary StarPay-Entertainment Co., Ltd. was added to the scope of consolidation.

Recent Overview

1Q FY2026 got off to a strong start, with revenue up 26.6% and a return to operating profit

In 1Q FY2026 (January to March 2026), revenue was ¥1,331 million (up 26.6% year on year), and operating profit was ¥116 million, marking a return to profitability from an operating loss of ¥2 million in the same period last year. Ordinary profit rose sharply to ¥161 million (up 207.8%), and quarterly net profit surged to ¥137 million (up 204.6%). Payment transaction value continued to grow to ¥549.7 billion (up 17.6% year on year), driven by a steady increase in the number of merchants. On the other hand, cost of sales increased 50.0% year on year, causing gross profit margin to decline to 72.7% (from 76.9% in the same period last year). As a subsequent event, on April 30, 2026, the company entered into an overdraft agreement with Sumitomo Mitsui Banking Corporation with a limit of ¥6.0 billion, diversifying its funding methods for the rollout of an early settlement service for merchants. The newly established subsidiary StarPay-Entertainment Co., Ltd. was also added to the scope of consolidation. There is no change to the full-year earnings forecast (revenue of ¥5,760 million, operating profit of ¥500 million).

Key Products

Growth Drivers

• Expansion of payment transaction value driven by a steady increase in the number of merchants (1Q FY2026: ¥549.7 billion, up 17.6% year on year)
• Government-led promotion of cashless payments (cashless payment ratio of 58.0% in 2025, with a target of 65% by 2030)
• Increased use of payment services driven by the recovery and expansion of inbound demand accompanying the increase in foreign visitors to Japan
• Strengthened merchant acquisition capability through multi-payment support integrating QR code payments, credit cards, and electronic money
• Efficient expansion of the merchant network through OEM partners and referral agents (for PayPay, NTT DOCOMO, etc.)
• Rollout of an early settlement service for merchants (utilizing a ¥6.0 billion overdraft facility with Sumitomo Mitsui Banking Corporation)
• Business expansion into the entertainment domain through StarPay-Entertainment Co., Ltd.

Risks

• Risk of revenue concentration in specific customers (PayPay Corporation 25.5%, NTT DOCOMO, Inc. 17.9%, with the top two combined accounting for 43.4%)
• System risk and security risk related to the stable operation of the payment system
• Intensifying competition in the cashless payment market (competition with existing payment companies, payment terminal companies, POS vendors, etc.)
• Declining trend in DX-related revenue (from ¥360 million in FY2024, ending December 2024, to ¥317 million in FY2025, ending December 2025)
• Decline in gross profit margin due to increased cost of sales (72.7% in 1Q FY2026, down from 76.9% in the same period last year)
• Increase in payment advance funds and credit risk associated with the rollout of the early settlement service for merchants
• Covenant risk related to financial restriction clauses in the overdraft agreement (maintaining net assets at 75% or more of the prior-year level and prohibition on recording an ordinary loss)
• Risk of delayed global expansion due to the limited scale of overseas operations (Asia)