Sakai Moving Service Co.,Ltd.

The Moving Business is subject to legal regulations such as the Motor Truck Transportation Business Act, the Freight Forwarding Business Act, and the Automobile NOx/PM Act. If laws are amended or new environmental regulations are introduced, business activities may be restricted. There is a risk that compliance costs will arise and sales may decline, and the Company is responding by developing its compliance framework and thoroughly educating employees.

Moving demand is subject to large seasonal fluctuations, with a tendency to concentrate at the end of the month and on weekends, leading to inefficient allocation of personnel and vehicles and lower utilization rates. Although the Company conducts active advertising and strengthens corporate sales to level out demand, fluctuations in demand may affect business performance.

Since the Moving Business accounts for more than 80% of net sales, a deterioration in the performance of the Moving Business has a direct and significant impact on the performance of the Group as a whole. If unforeseen events cause a loss of competitiveness or if unit prices fall more than expected due to price competition among competitors, the impact on business performance would be particularly large.

The trend toward smaller moving shipment volumes, driven by the increase in nuclear families and changes in lifestyle, continues and is a risk directly linked to a decline in moving unit prices. Since service content, transport distance, price competition, and other factors also affect unit prices, the impact on business performance may expand when multiple factors overlap.

The moving and transportation business is a labor-intensive industry requiring a large number of personnel, but declining birthrates and an aging population may make it increasingly difficult to secure young workers in the future. If an absolute labor shortage occurs, it could hinder the opening of new branches and constrain the execution of business expansion strategies. The Company is responding by introducing labor-saving equipment and reviewing work formats.

Due to the nature of the Moving Business, the Company handles a large amount of sensitive personal information, including new residence information. If an information leak occurs due to inadequate management or system deficiencies, the Company would bear liability for damages and suffer a loss of customer trust. Although the Company has established an information management system with meticulous care as an operator subject to obligations under the Act on the Protection of Personal Information, it is difficult to completely eliminate this risk.

As business operations become increasingly dependent on IT, the risk of cyberattacks and computer virus infection is also increasing. If computer systems are shut down due to attacks exceeding expectations, business operations could be disrupted, potentially affecting business performance. Although the Company states that it is taking thorough countermeasures, responding to increasingly sophisticated and diverse threats remains an ongoing challenge.

The fixed assets held by the Group that are subject to impairment accounting are of high monetary significance, and depending on future land price fluctuations and the performance trends of each branch, substantial impairment losses may need to be recorded. Because the Company's assets are held broadly across branches nationwide, there is a risk that the financial impact could be significant in the event of a deterioration in the economic environment.

The Moving Business involves various types of work depending on on-site conditions in addition to vehicle operation, so if a serious accident occurs, the Company could bear liability for damages and be subject to administrative dispositions such as business suspension. This could also lead to a loss of customer trust, posing a risk of a serious impact on business performance, and the Company thoroughly conducts safety education covering both vehicle driving skills and work skills.

The Group's competitive advantage is based on unique know-how accumulated through human resource development, but this know-how is difficult to protect legally and carries a risk of leaking outside the Company along with personnel turnover. If this know-how were to leak to competitors, the Company's differentiation advantage could decline, potentially affecting business performance.