COMPUTER ENGINEERING & CONSULTING LTD.
9692・Prime Market・Information & Communication
Business
CEC Inc. is an independent IT services company established in 1968 (listed on the TSE Prime Market). The group, comprising 8 consolidated subsidiaries, operates three segments: "Integration," "Connected," and "Solution." The Integration segment provides one-stop ICT services spanning everything from information system planning to infrastructure design, construction, and operation, accounting for 65.2% of sales composition. The Connected segment offers system development and data utilization services for mobility and smart factories, while the Solution segment provides proprietary products and services centered on security technology and data centers to diverse fields including public sector, education, logistics, and healthcare. Major customers span a wide range of industries, including the automotive industry, government agencies, and manufacturing.
Business Model
A composite model that maintains order-based system development and infrastructure construction (integration) as its revenue base while accumulating stock-type revenue from proprietary products (SmartSESAME series, Facteye series, etc.) and security monitoring services and data center services. Capturing DX investment demand, the company holds an order backlog of ¥22,952 million (142.0% year-on-year), providing a structure to convert this into revenue in the next period.
Company Strengths
Order backlog for FY2026 (ending January 2026) totaled ¥22,952 million (142.0% year-on-year). The Integration segment stood out with ¥14,716 million (171.9% year-on-year), and conversion to sales in future periods is highly likely. Orders received also expanded across all segments, reaching ¥72,671 million (128.4% year-on-year).
The Connected segment posted a high operating margin of 19.3%, while the Solution segment recorded 17.5%. In the Solution segment, both proprietary products (such as the SmartSESAME series) and security monitoring services grew at double-digit rates, with orders received of ¥11,676 million (130.6% year-on-year) and an order backlog of ¥5,868 million (111.1% year-on-year), indicating high visibility into future earnings.
Cash and cash equivalents at the end of FY2026 (ending January 2026) stood at ¥25,200 million. The interest-bearing debt ratio remains extremely low, with the cash flow to interest-bearing debt ratio at 0.1 years and the interest coverage ratio maintained at 1,425.6 times. The company maintained sound financial health even while implementing share buybacks (up to ¥2,000 million) and dividends (¥60 per share, totaling ¥1,901 million).
ENVALITH's Perspective
Performance Trend
Revenue over the past five fiscal periods grew from ¥45,221 million (FY2022) to ¥65,882 million (FY2026), maintaining an average annual growth rate of approximately 10%. In Q1 of FY2027 (ending January 2027), revenue was ¥16,794 million (+17.2% year-on-year), operating profit was ¥2,315 million (+29.7% year-on-year), and the operating margin was 13.8% (up 1.3 points from 12.5% in the same period last year), indicating accelerating growth. While external factors such as continued demand for DX investment and rising awareness of cybersecurity are providing a tailwind, the main driver of margin improvement is the concentration on high-margin focus businesses (migration, security, and data monetization). The full-year forecast of revenue of ¥68,000 million (+3.2% year-on-year) and operating profit of ¥7,750 million (+5.6% year-on-year) is conservatively set, leaving room for upward revision based on Q1 progress.
Growth Strategy
Under the Medium-Term Management Plan 2025-2027, the company aims to achieve VISION 2030 by focusing on priority businesses and strengthening proprietary products.
Capturing demand for cloud migration and modernization of legacy systems amid DX promotion, the results of prior-period initiatives have materialized as double-digit growth. Projects for OA-domain construction including Microsoft 365 are also growing, making this a core initiative for continuously capturing corporate system renewal demand.
Amid increasingly sophisticated cyberattacks, proprietary products for government agencies grew substantially. Orders received of ¥5,156 million (178.0% year-on-year) and order backlog of ¥8,613 million (143.9% year-on-year) show a notable buildup, making this the most critical initiative driving the shift toward recurring-revenue-based earnings.
Growth in line with plan, driven by construction of big-data utilization platforms for the automotive industry. The company continues to develop proprietary products such as the data utilization platform Resolana™ and the manufacturing equipment management system Facteye®, capturing demand for data utilization in the manufacturing sector. Orders received were stable at ¥3,338 million (105.1% year-on-year).
By resolution of the Board of Directors on June 11, 2026, the company decided to acquire treasury shares (up to 1,200,000 shares / ¥2,000 million) and to cancel all acquired shares (scheduled for January 15, 2027). Together with the projected annual dividend of ¥85 per share (a 21.4% increase from ¥70 in the previous period), this aims to achieve both improved capital efficiency and enhanced shareholder returns.
Last updated: July 17, 2026