enish, inc. (3667)
Kouhei Antoku, President
Kouhei Antoku,
Corporate Profile
enish, inc.
Code No.
First Section, TSE
Information, Communications
Kohei Antoku
HQ Address
Roppongi Hills Tower 39F, 6-10-1 Roppongi, Minato-ku, Tokyo
Stock Information
Share Price Shares Outstanding Market Cap. ROE (Act.) Trading Unit
¥993 7,801,600 shares ¥7,747 million - 100 shares
DPS (Est.) Dividend Yield (Est.) EPS (Est.) PER (Est.) BPS (Act.) PBR (Est.)
¥0.00 - - - ¥89.97 11.0x
*Stock prices as od close on February 14. The number of shares outstanding is the number of shares outstanding at the end of the most recent quarter less treasury shares. ROE, BPS are as of the end of the previous term.
Non-Consolidated Earnings Trends
Fiscal Year Sales Operating Profit Current Profit Net Profit EPS DPS
December 2013 6,624 1,109 1,078 653 121.89 22.00
December 2014 6,452 149 151 22 3.19 22.00
December 2015 5,482 -964 -1,004 -1,447 -207.53 0.00
December 2016 4,970 -361 -401 -340 -45.13 0.00
December 2017 4,382 -914 -911 -982 -125.99 -
* Non-disclosure of performance forecast.

This Bridge Report presents fiscal year December 2017 earnings results and the future strategies of enish, inc.
Key Points
Company Overview
enish is a social application planning, development and operations company that boasts of the highly popular restaurant management simulation game "Bokuno Restaurant II", apparel shop management simulation game "Galsho☆", and others. Under the motto "Link with Fun," the Company's mission is to cultivate enish fans all around the world. The company name "enish" is derived from the Japanese word "en ," meaning a link or bond that connects people.

As part of its basic strategy, enish will focus upon "business development targeting female users", "strengthening of the game business", and "investments in non-game businesses". The Company seeks to create a stable earnings generating structure based upon growth in games targeting female users and expansion of the non-game business. In the non-game business, enish will cultivate new realms related to the fashion rental service "EDIST.CLOSET", marriage support application "metune" and other services related to games.
The first official mobile game of the popular Japanese idol group "Keyakizaka 46" was released on October 18
Distribution of "Keyaki No Kiseki" across App Store, Google Play, and Yahoo! Game was started on October 18. This is a puzzle game with a documentary style that involves group growth trajectory enabled by the efforts of its members, that also has functions which allow fans to become more familiar with the group and the members including pictures and streaming video of members. The basic function of the game is free (paid tool items are available in the game). This game allows users to "become a new fledgling manager" and to allow them to cultivate and grow members from the time of their audition.

"Keyaki No Kiseki" saw over 2.50 million downloads in the first three months after its launch, and continued favorable trends in downloads are contributing to earnings. App Store awarded this title with a high "4.8" rating, including reviews from 94,000 users. Based upon the strong growth in popularity of this smartphone application title, it was nominated for the "App Ape Award 2017".
Existing titles
Battle RPG "12 Odins" is based upon the plot of a magical dragon that threatens to destroy the world and allows players enjoy real time battles with other players with flashy three dimensional effects and leverage their battle skills. This is a real time battle game that boasts of multiple functions including a job system and various skills which can be used to form game strategies, and ostentatious three dimensional effects. This game has gained over 2.00 million downloads during the first year since it was released in January 2017. Based upon the sole license agreement formed with Funmily Co., Ltd., this title is also distributed in Taiwan, Hong Kong and Macao.
<Non-Game Business>
enish is cultivating its non-game business through various new projects including fashion rental service "EDIST.CLOSET", providing users outfits matched to the seasons, fortune telling and marriage application "metune", and "Yahoo! Game Player".
Fiscal Year December 2017 Earnings Result
Distribution of "Keyaki No Kiseki" Launched on October 18, 2017
Distribution of the official game application of the popular idol group Keyaki 46 called "Keyaki No Kiseki" was launched on October 18, 2017 (iOS, Android and PC versions) across AppStore, Google Play, and Yahoo! Game Player platforms.
Due in part to the contribution from "Keyaki No Kiseki", sales during the fourth quarter (October to December) rose by 86.1% quarter-on-quarter to ¥1.589 billion. Despite an increase in variable expenses (Fee commissions, royalties, CS and so on) accompanying the higher sales, gross income turned to a profit of ¥186 million in the fourth quarter for an improvement of ¥247 million from the ¥79 million loss recorded during the third quarter. Advertising expenses including television commercials rose (¥84 million in third quarter to ¥203 million in the fourth quarter) and caused operating loss of ¥182 million to be recorded, but an operating profit was recorded in the month of December.
Full Year Sales Fell 11.8%, Operating Loss of ¥914 Million
The focus of development activities upon "Keyaki No Kiseki" forced enish to rely upon sales from three existing titles and caused sales to fall by 11.8% year-on-year to ¥4.382 billion. New title development expense amidst the lower sales is causing "Keyaki No Kiseki" to become a burden and caused operating loss to expand to ¥914 million in the current term from ¥361 million in the previous term.
Total Assets fell ¥495 Million to ¥1.682 Billion Compared to Previous Term End, Capital Adequacy Ratio Declines to 41.7% (77.4% at Previous Term End).
In an effort to improve the Company's financial foundation, enish issued 12,000 options for new shares as part of its 10th stock option with an exercise price reset clause through a third party placement managed by Daiwa Securities on January 10, 2018. The issuance price of the stock options is ¥1,130 per option (Total value of the options is ¥13.560 million). Each option can be exercised for 100 shares (Translates to 1.200 million latent shares) at an exercise price of ¥1,355 and a lower limit of the rest exercise price of ¥813. All of the options were exercised (1.200 million shares issued) as of February 15, 2018 raising ¥1.254 billion for the company.
Future Strategies
As part of its basic strategy, enish will focus upon 1) strengthening IP titles, 2) fortifying original titles, and 3) continuing investments in its non-game businesses.
Game Business
"Keyaki No Kiseki", the large IP title released in October, saw over 2.5 million downloads in the first three months after its launch, and continued favorable trends in downloads are contributing to earnings. App Store awarded this title with a high "4.8" rating, including reviews from 94,000 users. Based upon the strong growth in popularity of this smartphone application title, it was nominated for the "App Ape Award 2017" (Hosted by the smartphone application analysis platform "App Ape" Fuller, Inc.).
enish expects to continue to focus efforts upon "Keyaki No Kiseki" during fiscal year December 2018, whist leveraging its three existing titles of "12 Odins", "Boku No Restaurant II" and "Galsho☆".
Preparations are being made for introduction of VR functions and further fortification of contents of "Keyaki No Kiseki". In addition, original songs written by Yashushi Akimoto are also expected to be introduced. At the same time, a large scale update to expand the breadth of users of the game application "12 Odins" is anticipated, and detailed responses to "Boku No Restaurant II" and "Galsho☆" to improve operations are expected to be implemented.
enish will promote a strategy that strikes a balance between large IP titles made by other companies and its own original titles. With regard to IP titles of other companies, the Company is conducting negotiations with large IP holders for the release of one to two new titles based on these large IP titles. With regard to original titles, enish will leverage its in-house knowhow to release one new title per year.
Non-Game Business
enish is cultivating its non-game business to become another pillar of earnings through its various new services including the monthly fashion rental service "EDIST.CLOSET" that provides outfits matched to the seasons, fortune telling and marriage application "metune", and "Yahoo! Game Player". Ongoing investments in these three projects are expected to be continued during fiscal year December 2018.

With regards to the most promising "EDIST.CLOSET" service, nine new coordinated suit sets will be offered, along with the impending introduction of new services including "EDIST.SELECT" and "EDIST.KIDS". In addition, new systems and aggressive promotions will be implemented to help raise customer satisfaction. enish will implement measures to improve the service contents and functionality of "metune", and will launch "Dragon Quest Rivals" in the latter half of February and moreover, ongoing release of other new titles is anticipated.
Fitting Services for Women, "EDIST.SELECT" and "EDIST.KIDS"
"EDIST.SELECT" and "EDIST.KIDS" services will deliver trend fashion outfits to customers' homes to be tried on, and will allow customers to purchase only items they liked. "EDIST.SELECT" provides a service that customers are allowed to choose two long selling outfits (Four to five pieces of clothing) from "EDIST.CLOSET" based upon personal color analysis of the customer. "EDIST.KIDS" service provides child outfits from a private brand lineup to children aged two to five. Three different children sizes of 90, 100, and 110 are available for both boys and girls, and the service let customers choose outfits at their homes with their children.
President Kouhei Antoku believes that "while fiscal year December 2017 was a year of loss, fiscal year December 2018 will become a year where investments can be recovered", and "the focus in fiscal year December 2018 will be upon profits". Therefore, enish will adopt a more "neutral" stance towards its advertising spending, which was the main factor behind the loss in the fourth quarter of fiscal year December 2017, and seek to pursue a more cost effective strategy in the future. The number of new users of "Keyaki No Kiseki" continues to rise despite the fact that only four months have passed since its launch, and sustained usage remains high. Currently, the fee collection rate is trending within expectations. In addition, new investments for application development and services including "EDIST.CLOSET", "EDIST.SELECT" and "EDIST.KIDS" are being made, but enish was able to achieve profits in December.
Given that operating profit has been achieved during the month of December, operating profit is expected to be achieved during the first quarter of fiscal year December 2018 for the first time since the third quarter of December 2014 (While earnings are not announced on a monthly basis, making projections for the level of profits at this stage is difficult). Consequently, close attention should be paid to the announcement of first quarter earnings expected to take place around the Golden Week holiday.
<Reference: Regarding corporate governance>
◎ Corporate Governance Report
Updated on April 6th, 2017
Basic policies
In order to continuously enhance corporate value, it is extremely important for us to strengthen and function the management monitoring system that enhances the soundness and transparency of the management. Together with prompt decision-making and appropriate business execution we strive to enhance corporate governance in order to maintain the trust of our stakeholders.

<Reasons for Non-compliance with the Principles of the Corporate Governance Code (Excerpts)>
Principle 5-2 Establishment and disclosure of business strategies and business plans
Because of rapid changes in the environment surrounding social applications business, the Company's business results may also drastically change within a short period of time, which makes it difficult for the Company to calculate specific numeric targets. Therefore, although the Company will make efforts to conduct timely disclosure of financial results and business summary, it will not disclose specific numeric targets.

<Disclosure Based on the Principles of the Corporate Governance Code (Excerpts)>
Principle 1-4 So-called strategically held shares
In order to focus our business on the Mobile games and peripheral services development, the Company will not hold shares of the other listed companies for the time being. If the time comes when the Company may strategically hold such shares in the future, it will determine the pros and cons on a case-by-case basis from the perspective of a medium- to long-term corporate value enhancement.

Principle 1-7 Related parties transactions
Concerning related parties' transactions, the Company will deliberate the transaction conditions and validity of the decision-making method at the board and make a decision.
Furthermore, even after the decision is made at the board, the accounting department will examine the contents of the transaction, etc.

Principle 5-1 Policy for constructive dialogue with shareholders
The Company makes efforts to promote constructive dialogue between managerial executives and shareholders using various occasions.
Furthermore, for a wide range of IR activities, the Company assigns the Director and Executive Manager of the corporate administration group as the executive officer in charge of IR. This person leads administrative headquarter corporate planning at the IR department. The IR department also makes organic collaboration with relevant departments such as the accounting department and general affairs department.
The Company makes efforts to provide information in a timely manner to analysts, investors, and shareholders. It also ensures management of insider information during dialogues, while making efforts to promptly and appropriately respond to inquiries. The opinions and concerns from shareholders are reported to the senior management and the board.
This report is intended solely for information purposes, and is not intended as a solicitation to invest in the shares of this company. The information and opinions contained within this report are based on data made publicly available by the Company, and comes from sources that we judge to be reliable. However we cannot guarantee the accuracy or completeness of the data. This report is not a guarantee of the accuracy, completeness or validity of said information and or opinions, nor do we bear any responsibility for the same. All rights pertaining to this report belong to Investment Bridge Co., Ltd., which may change the contents thereof at any time without prior notice. All investment decisions are the responsibility of the individual and should be made only after proper consideration.
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