9644.T

• Company Overview & Core Positioning
  • Founded in 1957, a pioneer of Japanese management consulting with dual headquarters in Osaka and Tokyo, 10 regional offices across Japan from Hokkaido to Okinawa, approximately 900 total employees, listed on the Tokyo Stock Exchange Prime Market.
  • Unique market position focused on mid-sized firms (annual revenue 3 billion yen to 300 billion yen), offering end-to-end consulting from upstream strategic planning to downstream on-the-ground implementation, with very limited direct competition in this niche.
  • Three core competitive advantages: 1) Top management approach focused on serving client CEOs; 2) Team consulting with custom cross-functional teams assembled for each client's unique needs; 3) End-to-end support from strategy to execution, resulting in high contract retention: 75% of contracts last over 1 year, 45% last over 5 years, with many multi-decade client relationships.
• Recent M&A & Portfolio Expansion
  • Acquired 54.9% of Peace Mind, a pioneer of Japanese EAP (Employee Assistance Program) services with ~100 specialized professionals including clinical psychologists and industrial counselors, entering the corporate wellness space to strengthen the HR consulting segment. This combination is unique among Japanese management consulting firms.
• Human Capital Management
  • Unique hiring model prioritizes industry experienced practitioners from non-consulting firms (e.g., corporate HR, accounting) rather than experienced consulting professionals, with in-house training via the internal TCG Academy that cuts consultant development time from 5 years to 2-3 years. The 50:50 gender split across the group is extremely rare for the global management consulting industry, supporting diversity and innovation.
• Shareholder Returns
  • Committed to a 100% total payout ratio target, 6%+ DOE, and opportunistic share buybacks. Introduced a revived shareholder QUO card benefit program in response to investor requests, and plans a 2-yen increase in annual dividend to 26 yen per share for FY2026, with a 79.4% payout ratio.

• Full-year FY2026 (ending March 2026) guidance has been upward revised twice: the original 15.0 billion yen revenue target was raised to 15.5 billion yen on stronger organic performance, then further increased to 16.0 billion yen after including the Peace Mind acquisition, for a total 10 billion yen upward revision from the original plan.
  • The full-year target breakdown is: 13.5 billion yen from organic growth, 2.5 billion yen from M&A, bringing total revenue to 16.0 billion yen. Full-year targets are 1.8 billion yen operating profit, 1.8 billion yen ordinary profit, and 1.07 billion yen net profit attributable to parent shareholders, targeting a new all-time record high annual revenue.
  • FY2026 is the final year of the 2021-2025 mid-term management plan, with management committed to hitting all plan targets.

For the 1Q FY2026 (ended June 2025), total company revenue was 3.3 billion yen, with 5 core consulting segments:

1. Strategy & Domain: 19.1% YoY revenue growth, the highest growth rate among all segments. All 5 segments delivered YoY revenue growth, with overall balanced revenue contribution across all segments, no extreme imbalance in revenue share. The stock-based Team Consulting segment posted all-time record high revenue, contract count, and client count, all exceeding prior year levels. Non-Team Consulting revenue totals approximately 0.6 billion yen, consisting of project-based work plus seminars and research workshops.

• No material operational risks or negative performance issues were explicitly discussed in the call. Management noted that mid-sized firms have unique, more complex management challenges compared to large or small businesses, which limits competition but also requires specialized localized expertise to serve effectively.

Q: Is the full-year upward revision driven entirely by the Peace Mind acquisition, or is organic growth also contributing? / A: The revision came in two steps. The original 150 billion yen target was first raised to 155 billion yen due to better-than-expected organic performance across existing business. The 160 billion yen final target adds the contribution from Peace Mind, so both organic growth and the acquisition contributed to the upward revision.

Q: What is your overall M&A strategy and target criteria? / A: We use M&A to complement and expand our consulting service segments. Historically, we were stronger in upstream strategy work and weaker in downstream implementation support, so M&A has helped fill this gap. We specifically target firms that can work with our top management approach, which most competing acquirers do not focus on. M&A targets add new specialized service capabilities (what we call new "clinical departments" for our business doctor model) to expand the range of support we can offer clients, while creating synergies where the acquired firm gains access to our top-level client network and we gain downstream implementation capabilities.

Q: What synergies do you expect from the Peace Mind acquisition? / A: Peace Mind adds employee mental health and corporate wellness capabilities, an area we could not fully serve with our existing HR consulting practice. We will frame this offering as corporate wellness, and position it as a top management issue (not just an HR operational issue), which is key to driving adoption, since without CEO-level focus, wellness initiatives cannot reduce turnover or improve organizational vitality. We will cross-sell our existing HR consulting services to Peace Mind's clients, and offer Peace Mind's EAP services to our existing clients, to maximize mutual synergies. Post-merger integration is already progressing well.

Q: Why is your profit margin lower than some other listed consulting firms, and do you plan to improve it? / A: Our margin is lower because we maintain full-service permanently staffed offices across 10 regions of Japan, while most other consulting firms only have offices in Tokyo and Osaka. This regional footprint creates higher fixed operating costs, but it is a core part of our strategy to serve mid-sized regional clients and manage risk. We also have some lower-margin service segments like brand and PR that require higher direct costs. We are continuing to shift all segments toward higher value-added services to improve margins over time, while maintaining our regional expansion strategy.