3559.T

• Core Business & Competitive Position

  • The company operates P板.com, Japan's first internet-based printed circuit board ordering service, exclusively focused on custom printed circuit boards with integrated end-to-end service from design to manufacturing and mounting.
  • Holds an industry No.1 position in the online custom printed circuit board segment in Japan, with heavy exposure to high-growth megatrends including decarbonization, automotive, semiconductors, space development, robotics/physical AI, and harsh-environment/medical applications. The overall global printed circuit board market is projected to nearly double in size by 2037, driven by growth in AI, robotics, EV, and digital transformation.
  • Implements a "dual operating" (ambidextrous) management structure: CEO Goto leads expansion of existing business, while founder Chairman Tasaka leads exploration of new business lines.
  • Differentiates from lower-cost competitors by focusing on high-complexity, high-reliability, high value-added products rather than commodity price competition, with proven track record in demanding applications including JAXA space station drones, space debris capture research, deep sea exploration drones, and medical BMI devices.

• Key Quarterly Initiatives

  • Launched the "Delivery Zero Course" same-day motorcycle delivery service for urgent prototype orders, and implemented uniform lead time reduction across all core services (raw board manufacturing, mounting) via process improvement. This allows customers to faster iterate prototypes, directly improves their competitiveness, enables higher average selling prices, reduces operational costs, and drives overall margin improvement.
  • Developing GUGEN Hub, a new growth platform focused on inventory management for customer-held semiconductors and electronic components: the service stores customer components in company warehouses, supports on-demand replenishment, and integrates components directly into mounting for finished printed circuit board delivery. This reduces customer inventory management costs and prevents order errors.
  • Expanding international footprint: after launching North American e-commerce, the company is now expanding into Thailand (ASEAN), responding to existing customer demand from local production bases for small-lot production jigs and modules. Currently focused on Japanese customers with plans to expand to local manufacturers long-term. Shifting global supply chains post-trade tariffs are expected to increase demand in Southeast Asian markets including the Philippines, Vietnam, and India.
  • Expanding upstream engagement in the development and design phase: joined ROHM's Engineer Social Hub to build new customer contacts, and hosts regular technical seminars for customers on AI-assisted design and high-difficulty topics like EMC, to drive downstream prototype and mass production conversion.
  • Long-term AI roadmap: aims to build a system that generates full required circuit diagrams and component lists from a user text description of a desired product, leveraging 20 years of accumulated historical order data.

• Three Core Growth Strategies

  • 1. Leverage DX to penetrate mid-sized and large enterprises: the company's core value is end-to-end digital management of all processes from quoting to design, manufacturing, and mounting (unique globally for full design-to-delivery digital integration). The company addresses legacy analog business customs (e.g. FAX ordering, trading house account requirements) by combining fully digitalized processes with proactive inside sales to convert customers.
  • 1. Expand into electronic component procurement after core printed circuit board sales: currently only 3% of printed circuit board orders use the company's component procurement service, with a target to reach 15% penetration, corresponding to 400 million yen in additional annual component sales. The company is building a full e-commerce service for online quoting and ordering to replicate its core printed circuit board model for components.
  • 1. Upstream consulting service S-GOK: supports customers from ideation and requirement definition through to mass production, helping customers refine unformed ideas into feasible products that fit customer budgets, and preventing customers from abandoning projects due to unmanageable complexity or cost.

• Long-Term Transformation: Second Founding

  • Aims to evolve into an integrated "Electronic Manufacturing OS" via the GUGEN Hub platform, expanding beyond printed circuit boards to support procurement of all required components (harnesses, cables, enclosures) and end-to-end final assembly, becoming a full production infrastructure for manufacturing customers. The platform will leverage the flywheel effect: accumulated data improves services, which drives more users and more data accumulation, to enable AI-powered value added services and turn the platform into a self-growing ecosystem.

• Maintains the medium-term management plan target of reaching 2.9 billion to just under 3.0 billion yen in total annual sales by the March 2028 fiscal year, described as a conservative near-term target with plans to pursue more aggressive growth after achieving this goal.
• The company expects the current trend of profit growth outpacing sales growth to be sustainable, driven by continued expansion into higher value-added product segments and mass market penetration, combined with cost efficiency improvements.
• The company will continue to actively pursue growth investment while improving profitability, with the goal of growing cumulative profit to enable increased shareholder value and shareholder returns over time, with no specific dividend guidance announced at this time.
• International expansion is still in the preparation phase, with revenue contribution not expected in the near term as the company adapts its strategy to the specific requirements of each national market.

The company is specialized in a single core product segment: printed circuit boards (P板 / プリント基板) with associated peripheral value-added services. For the 3rd quarter of the 2026 March fiscal year: Total net sales reached 1.667 billion yen, a 5.4% increase year-over-year. Operating income reached 0.121 billion yen, a 32.8% increase year-over-year. Ordinary income reached 0.121 billion yen, a 28.9% increase year-over-year. Quarterly net income reached 83 million yen, a 31.6% increase year-over-year. Gross profit margin increased 2.2 percentage points year-over-year to 37.7%. Higher-margin high value-added services (including high-layer complex boards, CAD design, component procurement and mounting, inventory management, and upstream consulting) drove disproportionate profit growth compared to sales growth, with average order value increasing from expansion into higher complexity products.

• Raw material price volatility: copper prices (a key input for printed circuit boards) have risen sharply due to supply chain tightness, and the company has partially passed through these higher costs to customers via price increases.
• Increased competition: Chinese competitors have emerged in online printed circuit board sales with strong price competitiveness, but the company notes it operates in a different market segment focused on high-complexity, high-reliability products and mass production, so it does not view these players as direct competitors at this time.
• AI power consumption: widespread deployment of AI-driven physical AI and manufacturing automation is constrained by high current AI power consumption; low-power AI advances will be required to enable full market growth of the segment.
• International expansion uncertainty: each international market has very different competitive dynamics and customer requirements, requiring custom strategy development that carries execution risk.

Q: When will ASEAN and North American overseas expansion contribute to sales?

A: Expansion is still in preparation. We partnered with Mitsui in North America last year and are currently launching in Thailand, and we have found that competitive strategy needs differ dramatically across markets. Post Trump tariffs, there is a broader global trend of shifting towards domestic production, which we expect will make other Southeast Asian markets (Philippines, Vietnam, India) increasingly attractive expansion opportunities going forward.

Q: Have you passed through rising raw material costs to customers?

A: Raw materials, particularly copper which is used for conductor traces, have seen significant price increases, and we have partially passed these higher costs through to our customers.

Q: Is the company's ability to serve high-difficulty, harsh-environment applications your core identity, and how is customer perception of the company changing?

A: This is exactly the area we want to emphasize more going forward. Initially the market saw us as only able to produce simple 2-layer prototype boards, but customer demand for high-difficulty products has grown under the surface, and customer perception is gradually shifting. Customers are increasingly expecting us to be able to handle high-difficulty prototypes and even mass production, and we are working to raise our quality standards to meet these expectations.

Q: Is physical AI a key target market for your company?

A: Yes, robotics is a pure hardware industry and a high-growth segment we expect to continue expanding. We have many startup customers, and there are also many major established industrial robotics manufacturers in Japan, and we plan to continue proactively selling to all of these companies. A key barrier to full realization of the physical AI vision is power consumption: once AI can run on very low power, fully capable autonomous robots will become a reality. Currently AI consumes far more power than human intelligence (humans operate on just 2 watts, while modern AI consumes massive power that contributes heavily to global CO2 emissions), so low-power innovation is needed.

Q: Can printed circuit board design support device power reduction, and is there demand for this?

A: Yes, there is strong demand for power optimization via printed circuit board pattern routing, and there are many existing low-power devices that require this design expertise, so this is a very important growing area for our business.

Q: What advantage does your service have over traditional printed circuit board ordering, that makes it popular with customers?

A: The core advantage is simple: customers can get an immediate quote and place an order any time, anywhere, directly through our website.

Q: How do you plan to use AI to grow your business and enable design automation?

A: First, we will use AI on the GUGEN Hub platform to improve service accuracy using our accumulated historical data. Second, our long-term goal is to fully automate printed circuit board design: when a customer inputs their product requirements, the AI will automatically generate the full design, and we can immediately start manufacturing. This would eliminate all the time customers currently spend on design, and this goal is now much closer to realization than ever before. We have been working on this internally for a long time, and the technology has advanced dramatically.

Q: Is the current 32.8% year-over-year operating profit growth (far outpacing 5.4% sales growth) sustainable?

A: Yes, it is sustainable. We are focused on expanding into higher value-added segments by increasing product complexity and expanding into mass production, which naturally grows our top line. We are also continuously improving our cost structure. We currently hold very low market share, so as we gain additional share, we can continue to improve margin steadily, and we operate with a lean, small-team structure that supports this profit growth trajectory.

Q: How do you compete with Chinese online printed circuit board sellers?

A: We expected this question. Chinese competitors do have very strong price competitiveness, but this is a broader issue for all of Japanese manufacturing, not unique to us. We are no longer competing in the commodity segment; we compete in high-complexity multi-layer boards and mass production, so we do not see these players as direct competitors, as we target different customer segments with different value propositions.

Q: What drove the 2.2 percentage point year-over-year improvement in gross profit margin?

A: Two main factors: First, our high value-added services like the Delivery Zero Course allow us to charge higher average prices by turning speed into value. Second, we reworked our entire value chain to reduce lead times across all services, which also delivered unexpected cost improvements that flow directly to the bottom line. We have been able to implement the same-day delivery service without major operational issues to date, by aligning our processes to match customer demand.

Q: What is your approach to the balance between growth investment and shareholder returns like dividend increases?

A: We cannot share specific details at this time, but balancing growth investment and shareholder return is a key management priority for us, and we will announce our policy when we are able to do so.

Q: Is now the right time for accelerated overseas expansion?

A: Previously we did not have enough people and resources, so we focused on expanding our service offering and building capability in the Japanese market first. Now our team has matured, and we have built out the required enabling technology including AI-powered systems, so the timing is right to start active international expansion.