ENVALITH
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HIKARI TSUSHIN, INC.

9435・Prime Market・Information & Communication

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株式会社光通信 logo
HIKARI TSUSHIN, INC.9435

Business

Koukuu Tsushin Co., Ltd. is a holding company overseeing a large group comprising 170 consolidated subsidiaries and 108 equity-method affiliates. It operates seven businesses—Electricity & Gas, Telecommunications, Beverage (home-delivered water), Insurance, Financial (microfinance), Solutions (industry-specific SaaS), and Agency Sales—with SMEs and individuals as its primary customer base. Since its founding in 1988, the company started with OA equipment and mobile phone sales, and has since expanded into electricity liberalization, insurance, and finance. In FY2026 (ending March 2026), consolidated revenue is projected to reach ¥734,791 million, with operating profit of ¥116,664 million.

Business Model

The Hikari Tsushin group secures ongoing contracts with customers across services such as Electricity & Gas, Telecommunications Line, home water delivery, Insurance, and Financial services, and uses "stock profit" — monthly basic fees, usage charges, insurance premiums, etc. minus customer retention costs — as its key management indicator. The company leverages its robust sales network to acquire new contracts, building a structure in which accumulating contract counts expands the stable revenue base for the future. High-margin segments such as the Financial Business (operating margin of 48.5%), Insurance Business (29.8%), and Telecommunications Business (23.0%) drive overall profit.

Company Strengths

The Hikari Tsushin Group has built and operates a proprietary sales network targeting small-and-medium enterprises and individuals across seven businesses: Electricity & Gas, Telecommunications, Beverage, Insurance, Financial, Solutions, and Agency Sales. By leveraging this sales capability for cross-selling across each business, the Group achieved revenue of ¥734,791 million and operating profit of ¥116,664 million in FY2026 (ending March 2026), a track record that underscores the competitive advantage of its sales network.

The Group holds multiple subscription-based businesses—Electricity & Gas (revenue of ¥319,571 million), Telecommunications (¥127,540 million), Beverage (¥85,314 million), Insurance (¥31,478 million), and Financial (¥45,526 million)—resulting in low dependence on any single business. Customer contract counts are increasing across each business, forming a stable profit base built on the accumulation of monthly recurring revenue.

As of the end of FY2026 (ending March 2026), the ratio of equity attributable to owners of the parent stood at 41.5% (up 2.9 percentage points year on year), with cash and cash equivalents at fiscal year-end of ¥539,854 million. Against total assets of ¥2,853,866 million, total equity of ¥1,217,650 million has been secured, and the Group is also diversifying its funding sources, including through bond issuances. In September 2025, equity capital reached ¥1 trillion.

ENVALITH's Perspective

In FY2026 (ending March 2026), revenue was ¥734,791 million (up 7.0% year on year), operating profit was ¥116,664 million (up 11.1%), and profit attributable to owners of parent was ¥151,014 million (up 28.5%), achieving increases at every profit stage. The main reason for the sharp recovery in net income, which had declined in the previous period, was a surge in finance income from ¥41,604 million to ¥77,619 million and an increase in share of profit of investments accounted for using the equity method from ¥18,141 million to ¥26,850 million. As an external factor, improvement in the market environment contributed to the boost in finance income, and the sustainability of this level warrants caution.

The company's forecast for FY2027 (ending March 2027) calls for revenue of ¥775,000 million (up 5.5%) and operating profit of ¥130,000 million (up 11.4%), continuing the increase at the operating profit stage, while profit attributable to owners of parent is expected to decline sharply to ¥120,000 million (down 20.5%). The company cites "a decrease in foreign exchange gains, etc." as a factor, which appears to mainly reflect the drop-off of the one-time finance income and equity-method bargain purchase gain (¥5,565 million) recorded in FY2026 (ending March 2026). While the growth trend in operating profit is maintained, investors should recognize that the earnings structure carries a high risk of volatility in net income.

Interest-bearing debt (current and non-current combined) at the end of FY2026 (ending March 2026) rose sharply to ¥1,088,472 million from ¥934,320 million in the previous period. During the period, the company issued ¥199,460 million in corporate bonds, and as a subsequent event, it also issued the 56th and 57th unsecured corporate bonds (¥10,000 million each) in May 2026. Meanwhile, cash flow from operating activities decreased from ¥84,836 million to ¥57,073 million. Active investment activity continued, with purchases of investment securities of ¥424,230 million against sales and redemptions of ¥342,199 million, and ongoing monitoring of rising financial leverage and cash flow trends is necessary.

Growth Strategy

Focusing on continued expansion of stock-type profit and pursuit of high capital efficiency, the company is driving increases in customer contracts and cost reductions across each business

Increase customer contracts across the Electricity & Gas, Telecommunications, Beverage, Insurance, and Financial segments to build up monthly stock-type profit. In FY2026 (ending March 2026), revenue growth was achieved in all major segments, confirming the effectiveness of the strategy. Revenue of ¥775,000 million (+5.5%) is forecast for FY2027 (ending March 2027) as well.

The Financial Business recorded its highest growth rate in FY2026 (ending March 2026), with revenue of ¥45,526 million (+37.4% year on year) and operating profit of ¥22,086 million (+23.6% year on year). The Insurance Business also maintained high growth, with revenue of ¥31,478 million (+16.9% year on year). The company will continue to expand its customer base by leveraging Group sales capabilities.

Created the Eco-Friendly Electricity Service, which effectively provides renewable energy through the use of non-fossil certificates, advancing initiatives toward realizing a decarbonized society. The company aims to enhance the added value of the Electricity & Gas Business and expand its customer base. Revenue of the Electricity & Gas Business in FY2026 (ending March 2026) continued to expand, reaching ¥319,571 million (+10.8%).

In FY2026 (ending March 2026), the company issued ¥199,460 million in corporate bonds (including US dollar-denominated bonds) and acquired ¥424,230 million in investment securities. The balance of equity-method investments expanded to ¥319,720 million (+¥114,235 million year on year). As a subsequent event, the 56th and 57th unsecured corporate bonds (totaling ¥20,000 million) were additionally issued in May 2026.

Last updated: July 19, 2026