FinTech Global Incorporated Q4 FY2025 earnings call

• Strategic Positioning

  • After the 2008 Lehman Shock, Fintech Global pivoted to focus on regional/local market projects, filling the gap left by megabanks that avoid low-margin regional projects and regional banks that lack required investment/securities licenses.
  • Core mission is to act as a regional investment bank that solves difficult local financial and infrastructure projects by sharing risk across multiple stakeholders, structured finance, and collective project execution.
  • Long-term goal is to become an indispensable financial institution for regional Japan by combining investment banking capabilities and public consulting relationships to source and execute local projects, rather than relying on large single projects for growth.

• Business Model and Synergies

  • Core operations combine three linked functions: investment banking (project arrangement, risk analysis, financial structuring), principal investment (direct self-investment when projects face funding gaps), and investment management (entrusted asset management for third-party investors).
  • The firm is pursuing synergies between public consulting and investment banking: public consulting identifies local infrastructure project needs, and investment banking provides structured financing solutions for these projects.
  • Business succession M&A is a core growth line: the firm acts as a buyer for small and difficult business succession deals that cannot find other buyers, and has built a strong track record of steady deal flow.

• Capital and Shareholder Return Policy

  • The firm maintains a long-term target ROE of 20% and uses a pragmatic approach to balance shareholder returns and growth.
  • To address excess share liquidity and low historical stock prices, the firm uses a flexible policy of increasing dividends and buying back shares when stock prices are low, while holding off on large buybacks when prices stabilize, instead of pursuing stock consolidation.

• Key Operational Updates

  • The firm holds 84.6% of Moomin Monogatari Co., Ltd. (operator of Moomin Valley Park), treats the business as a consolidated but operationally independent regional project, and provides no debt guarantees for its borrowings. The Metsä Village commercial complex adjacent to the park is owned by Fintech Global, which earns rental income, and the firm will now accelerate the securitization/liquidation of this real estate to compress the balance sheet and realize gains.

1. Investment Banking Business: This is the core growth driver, with 5 consecutive years of revenue and profit growth. In the 2025 September fiscal year (previous period), the firm arranged approximately 52 billion yen of funds for business succession M&A funds. The firm holds 7.93 billion yen in total self-invested capital, of which 2.249 billion yen is principal investment and approximately 4.5 billion yen is held in fixed real estate assets related to the Moomin Valley Park project. Total entrusted assets under investment management reached 161.7 billion yen, with over 161 billion yen invested primarily in real estate, and only 5.13 billion yen in cash/equity mandates. This segment has driven the firm's overall consecutive profit growth, especially from business succession M&A activities.

2. Public Consulting Business: This segment has grown steadily and expanded its service scope, shifting from pure consulting to outsourcing and personnel secondment. The firm is the market leader in Japan with nearly 500 local government clients, holding the largest market share in local government fixed asset ledger preparation and public facility management consulting. Driven by local government personnel shortages, demand for technical outsourcing (including project management for public facility renovation) has grown sharply.

3. Entertainment Service Business: This segment operates the Moomin Valley Park and Metsä Village complex in Hannō, Saitama. After opening in 2019, it suffered large losses from COVID-19 (a 1.6 billion yen loss in 2019 alone), and required repeated capital injections from Fintech Global. It returned to full-year net profit in the 2025 September fiscal year, with sustained recovery in visitor numbers following the end of COVID-19 restrictions.

• For the 2026 September fiscal year, Fintech Global maintains guidance for steady continued growth, projecting total revenue of 18.2 billion yen, operating profit of 4.2 billion yen, ordinary profit of 4.0 billion yen, and net income of 2.7 billion yen.
• Business succession M&A is expected to remain the core growth driver: deal flow remains steady with no signs of slowing, as the structural shortage of business successors in Japan will keep demand high long-term. The firm will continue adding headcount to this segment to support growth, and deepen cooperation with major securities firms like Daiwa Securities.
• Public consulting is expected to continue expanding rapidly: growing demand for outsourcing driven by local government technical personnel shortages will push the segment to grow both in scope and scale, expanding from accounting consulting to technical project management outsourcing.
• Entertainment services are projected to deliver another year of revenue and profit growth on the back of continued recovery in visitor numbers.
• The firm plans to increase the annual dividend per share from 3 yen (2025 September fiscal year) to 5 yen for the 2026 September fiscal year.
• The firm will accelerate the liquidation of the Metsa Village real estate asset to compress the balance sheet and realize latent profits.

• The firm's strategy of committing to see regional projects through to completion means there is no formal retreat policy for struggling projects; while this aligns with the firm's mission of supporting regional communities, it can lead to prolonged capital tie-up in underperforming projects.
• The Moomin Valley Park project required repeated capital injections during COVID-19, which diverted capital away from the core investment banking business and negatively impacted core operating performance in prior years.
• The firm faces a structural challenge of securing enough qualified personnel to meet growing demand for both investment banking and public consulting services, which could limit growth if hiring and retention cannot keep pace.

Q: How does Fintech Global position itself against competitors, and what is its key competitive advantage?

A: Management believes the firm is a one-of-a-kind player in the Japanese market. No other firm combines the ability to operate in regional markets, partner with local regional banks, hold all the required investment and securities licenses that regional banks lack, and commit principal capital to local low-margin projects. Megabanks avoid these low-margin deals, so there are no direct competitors; regional banks are primarily cooperation partners rather than competitors, and the number of partnering regional banks grows annually.

Q: What is the firm's approach to staffing and employee retention, and what policies are in place for new graduate/hiring mid-career hires and compensation?

A: The firm prioritizes long-term employee development, follows a slow-growth hiring model focused on retaining staff rather than mass hiring for turnover. New graduate hires are trained in-house from entry level, while mid-career hires are primarily used to fill specialized roles required to maintain the firm's multiple financial licenses. In the 2025 fiscal year, the firm implemented a 30% base salary increase for all employees (after raising entry-level pay) to prevent talent outflow, which increased selling, general and administrative expenses by more than 0.2 billion yen, a cost management accepts as necessary.

Q: Do you plan to increase investment in the entertainment service (Moomin Valley Park) business going forward?

A: Management personally has interest in growing the entertainment business, as it is a tangible real-world operation that differs from the firm's core financial business and has been rewarding to build. However, the firm's core mission remains supporting stakeholders in need via investment banking, so the firm will prioritize core business investment over expanding the entertainment segment for the foreseeable future.

Q: What is the firm's stance on exiting underperforming projects, and what rules govern project exit?

A: Management acknowledges the firm is not focused on exiting projects, and notes the firm would have exited the Moomin project long ago if it prioritized quick exits. The firm's culture is built around seeing difficult regional projects through to completion: most employees share the mission of helping solve regional problems, prioritizing that over quick profit/loss, and there have been almost no voluntary project exits in the firm's history. This patient commitment is core to the firm's identity, even if it appears risky to outsiders.