4301.T

• Company Overview & Core Identity
  • Founded in 1978, 47-year history with 244 artist groups across musicians, actors, voice actors, athletes, and other specialists; 18 consolidated subsidiaries including new 2025 Bangkok, Thailand and Singapore overseas locations; total group headcount of ~800 employees, annual revenue of 65-70 billion yen, prime listed on the Tokyo Stock Exchange.
  • Core philosophy: "Only emotion can pierce the human heart", focused on delivering memorable long-lasting emotional experiences. Key off-balance sheet assets include 17,000+ owned copyrighted songs, long-term artist relationships, and 47 years of accumulated fan data from in-house fan club operations.
  • Artist management prioritizes long-term optimal outcomes for artists' careers over short-term profit, enabled by a diversified 244-artist portfolio that buffers against variable activity cycles or popularity shifts. Over 30% of artists have 10+ year tenures with the company, with ~50 artists having 21+ year tenures.
• Core Competitive Strengths
  • 360-degree in-house production: All management and support functions are completed within the group, capturing external third-party margins internally and aligning all teams on long-term artist growth goals. This creates a positive cycle: diverse artists develop diverse staff capabilities, which support further diverse artist activity.
  • Live-ism (live-first focus): Consistently draws 1.5-2 million annual event attendees, with long expertise in domestic and international live production including early success bringing international musicals to Japan and successful sold-out headline shows for BABYMETAL at London's O2 Arena. The live viewing business (cinema broadcasts of concerts) is a key growth area, with a new Singapore-based subsidiary established in 2025 to expand this business across Asia.
  • Data advantage from in-house fan operations: 47 years of in-house fan club operations have accumulated high-quality fan preference data tied to the cross-service A!-ID common platform, a key asset for AI-era marketing that competitors have not matched. Cross-genre artist development also lets artists pursue cross-discipline projects (e.g. musicians acting, actors recording music) within the company, expanding creative opportunities.
• Interim Period Operational Highlights
  • Large-scale successful events included Southern All Stars, Gen Hoshino, Masaharu Fukuyama, Perfume, and the Broadway musical Kinky Boots. Overseas artist inbound management (managing overseas artists' Japanese activities) drew 160,000 attendees to arena shows for IVE, CRAVITY, and D-LITE (of BIGBANG). Overseas revenue grew 37% year-over-year, now representing ~10% of total revenue.
  • Original IP development: The film National Treasure starring lead actor Ryo Yoshizawa became the highest-grossing live-action Japanese film of all time. The first original anime Hikarikidori will premiere in January 2026, with a second co-production anime Elexeed with bilibili scheduled for 2026 global distribution.
  • New technology service: KLEW, an AI-powered fan community platform that authenticates ticket buyers to create event-specific fan communities for pre- and post-show discussion, with direct super chat functionality from fans to artists. The platform has patent-protected AI authentication and will be expanded to musicals, sports, and film events beyond artist concerts.

• Full-year 2026 March term guidance was upward revised from initial estimates following strong first-half performance, with updated targets of: 65 billion yen operating revenue, 4.3 billion yen operating profit, 4.3 billion yen ordinary profit, 2.8 billion yen net profit. All three segments are expected to deliver full-year profit growth compared to the prior year.
• Lower half of the fiscal year is expected to report a net loss on a standalone basis, but this is purely due to the concentration of large-scale events in the first half of the year, driven by artist activity cycles, not structural weakness. The lower half will be used for seeding activities for future periods, and investors are encouraged to evaluate performance on a full-year basis.
• Mid-term management plan has already hit its 65 billion yen operating revenue target ahead of schedule, but the 5 billion yen operating profit target remains unmet, as faster-than-expected growth in lower-margin external live and program production contracts has pulled down aggregate margins. Management will not curtail this lower-margin growth, and instead aims to build a stable base to hit 5 billion yen in annual operating profit through growth in higher-margin IP, fan solution, and new artist hit projects over the remaining two years of the plan.
• Capital allocation prioritizes business investment first: 5 billion yen is allocated for capital expenditure to improve creative environments for artists and staff, plus budget for M&A to strengthen group functions. Minority startup investment in anime, AI, and technology related businesses with synergy potential is also ongoing. Shareholder return targets a 2% dividend on equity (DOE) stable dividend policy, with a planned full-year dividend of 40 yen per share (20 yen interim, 20 yen year-end), and share buybacks will be considered flexibly based on business conditions. Stockholder benefits were expanded in the current term for shareholders holding 300+ shares, adding 5000 A!-POINT service points and occasional special benefits.

Amuse operates three business segments, with the 2025 March term revenue contribution split as follows: 60% Event-related, 30% Music & Video, 10% Appearance & CM. For the 2026 March interim period:

1. Event-related Business: Achieved increased revenue and profit, driven by large-scale tours/dome performances from top artists and strong 1.5x year-over-year growth in high-margin fan club and merchandise revenue. Profit grew much faster than revenue, as the prior year period saw strong performance from lower-margin external artist live production contracts, while the current period benefited from higher-margin internal revenue streams. This segment is the largest by revenue but has structurally lower relative margins.
2. Music & Video Business: Reported decreased revenue but increased profit. The revenue decline was due to the deconsolidation of former subsidiary A-Sketch (label business). Offsetting this, strong growth in both new and back catalogue royalty income from top artists, plus strong program production revenue from consolidated subsidiary Kyokuto TV (including large Netflix projects), drove overall net profit growth. This segment has moderate revenue size and high margins, with strong synergies with the event business.
3. Appearance & CM Business: Achieved increased revenue and profit, led by strong CM revenue from large contracts for top artists including Masaharu Fukuyama, Yo Oizumi, and Yuriko Yoshitaka. However, the total number of artists with active CM contracts declined, so growing the pool of young artists with CM deals is identified as a key priority for future growth. This segment is the smallest by revenue and has the highest margins, delivering stable annual profit contributions.

• Revenue volatility from artist activity cycles: Large-scale tours and events are concentrated based on artist production and preparation cycles, leading to natural uneven distribution of revenue and profit between half-year periods, which can create misleading near-term performance signals.
• PBR below 1x: Management recognizes that the current share price does not fully reflect the company's medium-long term growth potential, and that investor growth expectations are not sufficiently high. The core priority to address this is growing profit to lift ROE to the 8% cost of capital target, with capital policy adjustments under active internal discussion.
• Rising input costs: Personnel and logistics costs have increased, pressuring margin levels.
• Dependence on large established artists: The pipeline of young artists securing CM contracts needs expansion to support long-term profit growth, as the total number of artists with active CM contracts declined in the interim period.
• Revenue concentration: The current 10% overseas revenue share is heavily dependent on large one-off overseas tours from major domestic artists, so stable sustained growth in overseas revenue remains a work in progress.

Q: How is Amuse strengthening its business portfolio and artist development to reduce volatility from artist cycles and popularity shifts?

A: External artist partnerships (including inbound management of overseas artists' Japanese activities) are a key tool to buffer volatility from domestic artist activity cycles. Amuse has also increased investment in new artist discovery, holding 3 open auditions in the first half of the current fiscal year alone. The company implemented a new internal 9-unit management company structure last year, where each unit has its own unique focus and identity, and autonomously runs its own auditions to discover talent matching its strategy, leading to a steady pipeline of newly signed emerging artists. Artist debut timelines are flexible, varying from 6 months to 3 years post-signing based on individual readiness.

Q: What new revenue streams is Amuse developing beyond its core live, distribution, and merchandise businesses?

A: Live viewing is the largest near-term new revenue opportunity; it already has meaningful scale in Japan, and expansion across Asia could grow the business 5x to 10x from its current size. The KLEW fan community platform is another key new growth area: it currently serves 37 artist groups mostly external to Amuse, and has potential for expansion across all live event types beyond music concerts. Once widely adopted, it will become an additional stable revenue pillar that diversifies Amuse's overall business portfolio.

Q: What target does Amuse have for the share of overseas revenue in total revenue, and how is this measured?

A: When the mid-term plan was created, the target was 10%, and the first half of the current fiscal year is already very close to this 10% mark, driven by BABYMETAL's global tour and other large international events. The key priority is not just hitting the 10% target in a single strong year, but building a business model that can sustain this 10% share annually over time. Inbound management of overseas artists' Japanese activities is counted as domestic revenue, not overseas revenue, since these events are held in Japan.

Q: How will Amuse address PBR below 1x, and will it adopt more aggressive capital policy like larger dividends or share buybacks?

A: Management recognizes the current share price does not reflect Amuse's medium-long term growth potential and takes this issue seriously. The core solution is delivering sustained profit growth through executing the current growth strategy to lift ROE to the 8% cost of capital target. Share buybacks and dividend policy adjustments are under active internal discussion, and updated guidance on capital allocation will be provided when the mid-term plan is updated in the near future.