COMPANY RESEARCH AND ANALYSIS REPORT
Cross Marketing Group Inc.
3675
Tokyo Stock Exchange Prime Market
27-Sept.-2022
FISCO Ltd. Analyst
Kimiteru Miyata
FISCO Ltd.
https://www.fisco.co.jp
COMPANY RESEARCH AND ANALYSIS REPORT
FISCO Ltd. https://www.fisco.co.jp
Cross Marketing Group Inc. | 27-Sept.-2022 | |
3675 Tokyo Stock Exchange Prime Market | https://www.cm-group.co.jp/en/ir/ | |
- Index
■ | 01 | ||||||
Summary---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | |||||||
1. | Supporting the entire range of marketing processes as a marketing DX partner......................................... | 01 | |||||
2. | Strengths include its business model, an abundant panel network, and detailed consumer data............... | 01 | |||||
3. | The FY6/22 results were driven by the Digital Marketing Business, including the full consolidation | ||||||
of DO HOUSE............................................................................................................................................. | 01 | ||||||
4. | The FY6/23 operating profit forecast is ¥3,000mn, which will achieve the numerical target in the | 02 | |||||
medium-term management plan ahead of schedule | |||||||
................................................................................... | |||||||
■ | 03 | ||||||
Company profile--------------------------------------------------------------------------------------------------------------------------------------------------------- | |||||||
1. | Company profile.......................................................................................................................................... | 03 | |||||
2. | History......................................................................................................................................................... | 03 | |||||
3. | Industry environment................................................................................................................................... | 05 | |||||
■ | 06 | ||||||
Business overview | ---------------------------------------------------------------------------------------------------------------------------------------------------- | ||||||
1. | Business activities....................................................................................................................................... | 06 | |||||
2. | Business model | 08 | |||||
........................................................................................................................................... | |||||||
3. | The Company's strengths............................................................................................................................ | 09 | |||||
■ | 10 | ||||||
Medium-term management plan | ---------------------------------------------------------------------------------------------------------------- | ||||||
1. | Medium-termmanagement plan "DX Action 2024"..................................................................................... | 10 | |||||
2. | The growth strategies of each segment | 10 | |||||
....................................................................................................... | |||||||
■ | 11 | ||||||
Business trends | ----------------------------------------------------------------------------------------------------------------------------------------------------------- | ||||||
1. | FY6/22 results.............................................................................................................................................. | 11 | |||||
2. | FY6/22 results by business segment........................................................................................................... | 13 | |||||
3. | New services and M&A in FY6/22................................................................................................................ | 16 | |||||
■ | 17 | ||||||
Results forecasts | ------------------------------------------------------------------------------------------------------------------------------------------------------- | ||||||
1. | FY6/23 outlook | 17 | |||||
............................................................................................................................................ | |||||||
2. | May review the medium-termmanagement plan......................................................................................... | 19 | |||||
■ | 20 | ||||||
Shareholder return policy---------------------------------------------------------------------------------------------------------------------------------- | |||||||
■ | 20 | ||||||
Information security | ------------------------------------------------------------------------------------------------------------------------------------------------ | ||||||
We encourage readers to review our complete legal statement on "Disclaimer" page.
COMPANY RESEARCH AND ANALYSIS REPORT
FISCO Ltd. https://www.fisco.co.jp
Cross Marketing Group Inc. | 27-Sept.-2022 | |
3675 Tokyo Stock Exchange Prime Market | https://www.cm-group.co.jp/en/ir/ | |
- Summary
Results are growing rapidly and will achieve the target in the medium-term management plan ahead of schedule
1. Supporting the entire range of marketing processes as a marketing DX partner
Cross Marketing Group Inc. <3675> (hereinafter, "the Company") supports customers as a DX* marketing partner and comprehensively engages in the three businesses of the Digital Marketing Business, the Data Marketing Business, and the Insight Business. The Digital Marketing Business provides media promotions and IT solutions, etc. The Data Marketing Business engages in online and offline research, etc., and the Insight Business provides other services such as analysis, reporting and consulting, etc. From a starting point of an original business of online research, the Company helps customers solve various issues that arise during all domains of the marketing process.
- DX (Digital Transformation): Transforming lives and work for the better by disseminating advanced digital technologies into companies and society.
2. Strengths include its business model, an abundant panel network, and detailed consumer data
The Company's business model is characterized by combining the research functions of its Data Marketing Business and Insight Business (its understanding of consumers) with support for execution through its Digital Marketing Business in order to provide customers comprehensive marketing solutions with high added value. The Company's strength is its business model-the combination of its understanding of consumers through market research and its support for marketing execution. Moreover, this business model is supported by the Company's assets and infrastructure, which include an enormous online survey panel network of 7.52 million people and detailed consumer data on a maximum of 2,500 items, and a customer base of 5,000 companies and 72,000 contacts. It is one of only a small number of companies capable of providing comprehensive marketing services across all marketing processes, which is also a strength.
3. The FY6/22 results were driven by the Digital Marketing Business, including the full consolidation of DO HOUSE
In the FY6/22 results, net sales were ¥24,899mn and operating profit was ¥2,522mn. Compared to the results from July 2020 to June 2021, which adds the 2H FY12/20 results to the irregular six-month fiscal period results of FY6/21, on an actual basis both sales and profits increased significantly, with net sales rising 30.7% and operating profit growing 38.0%. Within these results, the sales growth was driven by the Digital Marketing Business against the backdrop of the full consolidation of DO HOUSE Inc. that was made a subsidiary through an M&A in January 2021, the synergies through PMI (the integration process after an M&A), and the growth of D&M, Inc. Sales were strong in the other businesses as well due to factors such as the recoveries from the novel coronavirus pandemic (hereafter, COVID-19) and overseas. In profits, the gross profit margin improved through work process improvements, including the improved productivity due to the automation of in-house work by AI and the expansion of near shore (work at regions in Japan). As a result, the Company was able to absorb the upfront costs for growth, such as in human resources and systems.
We encourage readers to review our complete legal statement on "Disclaimer" page.
01 20
COMPANY RESEARCH AND ANALYSIS REPORT
FISCO Ltd. https://www.fisco.co.jp
Cross Marketing Group Inc. | 27-Sept.-2022 | |
3675 Tokyo Stock Exchange Prime Market | https://www.cm-group.co.jp/en/ir/ | |
Summary
4. The FY6/23 operating profit forecast is ¥3,000mn, which will achieve the numerical target in the medium- term management plan ahead of schedule
For the FY6/23 results, the Company is forecasting net sales of ¥28,000mn (up 12.5% year-on-year (YoY)) and operating profit of ¥3,000mn (up 19.0%). Based on its expansive panel network and detailed consumer data, it plans to secure growth greater than that of the market by addressing the marketing method evolution and to other changes occurring against the backdrop of the acceleration of DX. In this situation, the Digital Marketing Business, in which media and promotions are performing excellently, is expected to continue to drive sales. The operating profit margin is also expected to improve due to the work process improvements and other factors, and the Company is forecast to achieve the numerical target of ¥3,000mn in operating profit for FY6/24, the final fiscal year of the medium-term management plan, one year ahead of schedule. The Company is strengthening its growth capability by continuing to conduct proactive management for the expanding markets, and we can expect it to indicate its next targets at an early stage.
Key Points
- Marketing DX partner supporting the entire range of marketing processes for customers
- FY6/22 results achieved significant increases in sales and profits as a result of the consolidation of DO HOUSE and the strong performances of the existing businesses
- Is forecasting that the excellent results will continue in FY6/23 as well and expects to achieve the medium-term management plan's operating profit target ahead of schedule
Results trends
(¥mn) | Net sales (left) | Operating profit (right) | (¥mn) | |||||||||||
35,000 | 3,500 | |||||||||||||
3,000 | ||||||||||||||
30,000 | 3,000 | |||||||||||||
2,522 | ||||||||||||||
25,000 | 2,500 | |||||||||||||
20,000 | 2,000 | |||||||||||||
1,267 | ||||||||||||||
15,000 | 28,000 | 1,500 | ||||||||||||
986 | 1,007 | |||||||||||||
955 | 24,899 | |||||||||||||
10,000 | 1,000 | |||||||||||||
18,580 | ||||||||||||||
17,492 | 15,985 | 10,758 | ||||||||||||
5,000 | 500 | |||||||||||||
0 | 0 | |||||||||||||
FY12/18 | FY12/19 | FY12/20 | FY6/21 | FY6/22 | FY6/23 E | |||||||||
Note: FY6/21 was an irregular six-month fiscal period
Source: Prepared by FISCO from the Company's financial results
We encourage readers to review our complete legal statement on "Disclaimer" page.
02 20
COMPANY RESEARCH AND ANALYSIS REPORT
FISCO Ltd. https://www.fisco.co.jp
Cross Marketing Group Inc. | 27-Sept.-2022 | |
3675 Tokyo Stock Exchange Prime Market | https://www.cm-group.co.jp/en/ir/ | |
- Company profile
Marketing DX partner supporting the entire range of marketing processes
1. Company profile
The Company conducts businesses across all marketing processes and supports the marketing DX of its customers. It is a holding company and its businesses are conducted through its subsidiaries. It has three businesses: the Digital Marketing Business, which conducts the management of sales promotions support media, support for promotions and marketing, and outsourced systems development; the Data Marketing Business, which collects and analyzes various data centered on the original business of online research; and the Insight Business, which supports customers' decision making, including through analysis, reporting, and consulting. Currently, societies and economies around the world are in the middle of being transformed through DX and digitization is being progressed in various fields. In the marketing industry as well, the environment is changing, including the acceleration of the increase in the sophistication and diversification of customer needs due to DX, and up to the present time, the Company has been able to ascertain these changes in advance and expand its business scope and strengthen its constitution. The COVID-19 pandemic hit while the Company was working toward these goals, but currently the outcomes of its efforts are appearing such as the rapid growth of results, which is becoming a major strength toward achieving the targets in the medium-term management plan.
Evolution from solutions to DX partner
2. History
The Company can trace its roots back to Cross Marketing Inc., an online research company that was founded in April 2003 by Miki Igarashi, the current Representative Director, President and CEO. In May 2006, Cross Marketing Inc. entered into a capital and business alliance with EC Navi Inc. (currently CARTA HOLDINGS, INC. <3688>), the operator of an ad platform and point media businesses). In March 2007, it entered into capital alliances with major research companies such as Dentsu Research Inc. (currently DENTSU MACROMILL INSIGHT, INC.) and Video Research Ltd. In October 2008, the Company listed on the Mothers Section of the Tokyo Stock Exchange (TSE), and in August 2011, it received part of Index Inc.'s mobile solutions business (currently the Digital Marketing Business), and established a subsidiary in China (Shanghai) as it launched its overseas business, and otherwise actively worked to expand its business scope. In 2013, the Company became a holding company and changed its name to the current Cross Marketing Group. In March 2018, it changed its stock market listing to the First Section of the TSE. Then in April 2022, its listing was changed to the TSE Prime market following the TSE's reorganization of its market categories.
We encourage readers to review our complete legal statement on "Disclaimer" page.
03 20
This is an excerpt of the original content. To continue reading it, access the original document here.
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
Cross Marketing Group Inc. published this content on 27 September 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 September 2022 02:50:07 UTC.