Partner Agent, Inc. (6181)
President Shigeru Sato
President Shigeru Sato
Corporate Profile
Partner Agent, Inc.
Code No.
TSE Mothers
Service industry
Shigeru Sato
Imasu Osaki Building, 1-20-3 Osaki, Shinagawa-ku, Tokyo
End of March
Stock Information
Share Price Shares Outstanding Market cap ROE (actual) Trading Unit
¥347 9,823,200 shares ¥3,476 million yen 14.8% 100 shares
DPS (Est.) Dividend Yield (Est.) EPS (Est.) PER (Est.) BPS (Act.) PBR (Act.)
¥0.00 - ¥21.20 16.4times ¥70.05 5.0times
* The share price is the closing price on December 21st. The number of shares issued was taken from the brief financial report for the latest period.
ROE and BPS are those for the previous term.
Earnings Trends
Fiscal Year Net Sales Operating
Mar.2014 (Actual) 2,164 51 39 17 2.04 -
Mar.2015 (Actual) 2,664 146 132 79 8.98 -
Mar.2016 (Actual) 3,644 445 434 285 30.95 -
Mar.2017 (Actual) 3,812 204 212 107 11.37 0.00
Mar.2018 (Forecast) 4,331 205 315 202 21.20 0.00
*The forecasted values were provided by the company. On Jan. 1, 2017, the company conducted 3-for-1 stock split. EPS was adjusted retroactively.
*From the term ended Mar. 2016, net income is profit attributable to owners of the parent. Hereinafter the same apply.

We would like to report an overview of the financial statement of the second quarter of fiscal year (FY) March 2018 of Partner Agent, Inc.
Key Points
Company Overview
The Company offers various services to support marriage hunting activities. Their key business, "Partner Agent Business", supports the marriage hunting efforts of the registered members. The "Fast Marriage Hunting Business" includes planning and operation of marriage hunting events and affordable marriage hunting support services. The "Solution Business" organizes marriage hunting events, provides matching systems for the corporations and local governments that are promoting marriage hunting, help companies to establish new marriage hunting support businesses, and create local environment that is conducive to marriage. The "QOL Business" includes introduction of wedding halls, sales of marriage rings, revision of insurance contracts, and operation of a childcare facility. The Company offers various services based on the corporate philosophy of "Bringing more smiles and more happiness to the world." The Company's major feature is its high marriage rate which is achieved by marriage hunting supports through detailed follow-ups by dedicated concierges and unique systems.
1-1 Corporate history
In June 2004, the Company was established to start a marriage hunting support business as a 100% subsidiary of Take and Give Needs, Co. Ltd. (4331, Tokyo Stock Exchange 1st Section, hereinafter "T&G"), which is specialized in wedding planning and wedding hall operation. At the time of the Company's establishment, Mr. Shigeru Sato was appointed to be the President for his abundant experiences and achievements at a major marriage hunting company.
Later, when the business of T&G slowed down and continuous investment became difficult, President Sato, the executive staff and the employees collaboratively purchased the shares of Partner Agent, Inc., and the Company became independent from the T&G Group in May 2008.
The customers highly regard the Company's high marriage rate, which is the result of "pursuing customers' goals" and the Company's business has been growing steadily. It was listed on the TSE Mothers in October 2015.
1-2 Corporate ethos, etc.
"Pursuing the customers' goals" has been the philosophy of President Sato since the establishment of the Company. Based on this philosophy, the Company holds the following mission and visions.
President Sato believes that these philosophies will penetrate into the employees only when they return to and think about the philosophy whenever they encounter specific issues or troubles.
1-3 Market environment
<Situations of unmarried people&Gt;
Growing percentage of unmarried people
According to the national census conducted by the Ministry of Internal Affairs and Communications, the percentage of unmarried people between 25 and 34 years of age has been increasing for both men and women in Japan.
Intention to marry among unmarried people: "Intention to marry" remains at a high level.
According to the "2015 National Institute of Population and Social Security Research <National Survey on Marriage and Childbirth>, the 15th Basic Survey on Childbirth Trend", the percentage of unmarried people who want to marry were 85.7% and 89.3% among male and female between the ages 18 and 34, respectively. These data indicate that there are still many unmarried people who "want to marry."
Although the percentages of unmarried people who responded "Will never marry" have been rising, among them, 44.1% of men and 49.8% of women responded that they might eventually change their intention to "Will marry." This indicates that about half of the people who are currently not intending to marry may change their mind and look for their marriage partners in the future.
Reasons for being single: It is hard to meet an appropriate person for marriage after 25 years of age
The reasons for the unmarried people between 18 and 24 years of age to stay single were "I am too young" and "I do not feel the need," indicating that their motivation to marry is not so high. On the other hand, a higher percentage of unmarried people between 25 and 34 years of age responded that "I have not met an appropriate person yet," indicating that the needs for the opportunities to meet potential partners are high in this age group.
<Other companies in the industry&Gt;
There are about 3,000 marriage hunting agencies in Japan. 90% of them are operated by individual business owners. There are only a few agencies including the Company that runs the businesses across Japan.
Following are the companies listed on the stock exchange in the marriage hunting industry, including Partner Agent.
1-4 Business contents
As a reporting segment, the Company carries out 4 business which are Partner Agent Business, Fast Marriage Hunting Business, Solution Business and QOL Business.
① Partner Agent Business
The Partner Agent Business provides information to the members, introduces potential partners and provides opportunities to meet.
Each member has a concierge who is exclusively assigned to the member to support their marriage hunting activities, develop plans for actions and supports the customers professionally. Also, in order to provide opportunities to meet, the Company plans and hosts events for the members.
There are more female members, with the member composition ratio of male to female being between 4:6 and 3:7.
(Characteristics of services)
A concierge with high coaching skills works with a "customer who wants to find a marriage partner within 1 year". The concierge responds to the needs of the customer who desires cost-effective services without wasting time and effort. The activities are designed based on the PDCA cycle.
The concierges are mostly women who are done raising children, willing to help others through marriage hunting support and share joys. As of the end of June 2016, there are 171 concierges.
As for the concierge's activities, the Company has the motto of "pursuing customers' goals" and the concierges are evaluated based on the "customers' satisfaction" including the engagement rate and early withdrawal rate.
<Image of support based on the PDCA cycle&Gt;
(1) Before becoming a member: Clearly show service contents and fee structures
A customer who is considering to be a member and comes to the store for the first time is greeted by an account executive whose role is to encourage him/her to become a member. The account executive explains the service contents and fee structures in details so that the customer can accurately understand them.
If it seems difficult to continue introducing partners to the customers based on certain criteria, the customer may be declined to be a member.
This is to avoid the situations where the customers are not satisfied with the services such as they cannot reach a contact (meeting) or go steady with a partner, even though they pay monthly membership fees.
(2) After becoming a member: Support by a concierge who is exclusively assigned to a member.
Once a customer becomes a member, an interview is conducted by a designated concierge in charge of the customer to understand the customer's sense of value and expectations.
At this time, using the coaching skills, the concierge tries to have the customer's expectations and ideal model of marriage as clear as possible. This way, instead of helping the customers to find their partners abstractly, the concierges can help them find someone with specific criteria.
In addition to the conventional matching mechanism through data, the Company offers concierge services. This has differentiated the Company's service from the others. With this system, the Company can offer cost-effective services without making a detour and wasting time and efforts of the customers.
During the marriage hunting process, the designated concierges help the members to modify the path as needed using a PDCA cycle. This way, the members can proactively work on the marriage hunting activities, even if they fail in the process.
Furthermore, the concierges ask for comments and impression after each contact meeting from the members, provide consultation to the members during dating period and provide follow-ups after engagement (*) to walk with the members until they reach engagement.
The follow-up period after an engagement is 1 year. This way, they can support the members for a long time until they marry.
(*) Engagement (Withdrawal from the membership)
This means that a member withdraws from the membership after both members expressed their intention of continuation of dating with the intent to marry the partners they are dating.
(3) Setting up contact (marriage meeting) : Support by the staff other than concierges
As the process advances, the members have contacts (marriage meetings) with the matched members. The specialized team supports them to coordinate the date, time and place of these contacts so that they can set up the meetings effortlessly and efficiently.
The support team helps the members to carry out the activities smoothly. For example, even if the members are lost on the way to the contact venue or cannot find the person that they are supposed to meet, the Company's staff provides support via phone or e-mail so that the members do not miss the chance to meet. Furthermore, when the customers seek second opinions, the Company provides third-party advice through a service desk.
An unlimited number of potential partner is introduced to the members within the fee structure. In principle, the Company introduces at least 2 cases per month.
(Additional services)
(1) Events for the members
In addition to the introduction by a concierge, the Company develops and hosts various events such as marriage hunting parties.
They are organized by the staff members who are specialized in organizing events to provide opportunities to meet among the members. Many members have met their partners through these events and reached engagement.
Since the company's stores have space for holding events, they can hold events flexibly, without renting a hall for events.
(2) Option services
The Company offers photography (fee-based) for the members with extra charges. The first impression is crucial for marriage hunting. Therefore, in collaboration with professional camera operators and make-up artists, the Company offers photo sessions in their studios or within the Company's premises. Because the photography is specifically for marriage hunting, the Company can offer advices concerning appropriate clothing and facial expression based on their experiences.
To provide the preliminary knowledge and information about marriage hunting to the members, the Company offers seminars (fee-based) on such as color coordination, fashion advisory and, communication for the members.
② Fast Marriage Hunting Business
The Fast Marriage Hunting Business is based on the concept of offering affordable marriage hunting services to enable the members to start using the service without hesitation. It consists of 3 types of services.
(1) "OTOCON" marriage hunting parties
Marriage hunting parties for general members are called "OTOCON" and planned and operated under this business.
Although these parties are targeting general members, some non-members show interest in the Company through these events and become members. Thus, OTOCON is also working as a venue to increase new members.
Furthermore, similar to the event services for the members of the Partner Agent Business, there are staff members who are dedicated to event planning, and the events take place in the spaces within the Company's premises. The events promote efficient utilization of the Company facilities and also work as a channel to solicit new members. In other words, the OTOCON parties not only bring earnings to the Fast Marriage Hunting Business but also work in synergy with other services.
(2) "OTOCON Members marriage hunting counter"
This affordable service began in May 2016 for single people who are interested in both marriage hunting parties and matching services.
As dedicated stores, the company opened Shinjuku Store (in Tokyo) and Shinsaibashi Store (in Osaka) in May 2016, and then Nagoya Store (in Aichi). As party participants are increasing more steadily than expected, the company is opening stores at an accelerated pace, and improving them. As of the end of Mar. 2017, the company is running 20 stores.
(3) Yahoo! Marriage hunting concierge plan
This is a marriage information service of the Company offered on the "Yahoo! Marriage Hunting Concierge" site, a marriage hunting portal site operated by Yahoo! Japan Corporation. The high-quality meeting opportunities supported by a marriage agency are offered for a reasonable price, and it is a collaborative business model.
The characteristics of this plan are "Support from a designated concierge," "Highly accurate matching system," "On-line registration," "Credible members," and "Affordable cost (i.e. the initial cost is less than 10% of the general marriage agencies)."
Announcement to the users and gathering customers are done online, which reduces the cost for operating stores. The service is provided only by the cost for customer support to achieve the low price.
③ Solution Business
(1) Consultation services for business enterprises and local governments
The Company, as ASP, offers the original marriage supporting system called "parms" to both enterprises that are entering into the marriage hunting industry to start their business and local governments that are planning to offer hunting support activities to the community people.
The "parms" is a system that comprehensively has several functions such as supporting its users` activities and streamlining tasks of operating stuffs in addition to basic functions such as registering as a member, managing its membership and matching with one`s partner which are all necessary in the marriage supporting business

The major achievements with the local governments are as follows.
(2) "CONNECT-ship", a platform for the members to introduce each other
The "CONNECT-ship" is a platform for marriage hunting support agencies to introduce the members each other. It has been launched in June 2017.
Started with the 6 companies and 7 services. As of December 2017, 9 companies and 11 services.
The "CONNECT-ship" has more than 50,000 members (total members of all participating agencies). It is the first attempt in the marriage hunting support industry to enhance marriage rate through the mutual introduction of a large number of members between businesses with a certain scale to find their partners and enhance the results and customer satisfaction.
The platform (system) to achieve mutual introduction among members was developed by the Company. The other agencies will use the "CONNECT-ship" service which is being operated and maintained by the Company. The Company is also in charge of operating the executive secretariat of the "CONNECT-ship."

It will increase its scale by including other companies that have the same vision (i.e. to maximize the marriage opportunities), which is the ultimate goal of the customers.
Each participating agency can offer its unique services and operations without being interfered by other participating agencies including the executive secretariat (the Company).

The revenue sources of the Company which provides and operates the system are 1) monthly usage fees per member and 2) marriage meeting fee when a marriage meeting is established from each participating company.
The purposes of the "CONNECT-ship" for the Company are to develop the industry by facilitating sales competition among the participating companies and by learning from each other in an effort to promote marriage among the members to raise customer satisfaction, within a new framework. At the same time, the Company is aiming to bring about changes in the industry so that healthy service quality competition is created.
As of December 2017, there are 16,000 users. The company aims to achieve 20,000 users by the end of FY March 2018.
④ Quality of Life (QOL) Business
To the customers who become members through the Partner Agency Businesses, the Company offers various services at their major life transition by maintaining relationship with the members even after they withdraw from the membership after their engagement. This is to enhance customer satisfaction and increase revenue opportunities.

The members of the "Anniversary Club" are the ones who withdrew from the membership after their engagement. To those members, the following services are provided.
Regarding wedding ceremony introduction, until now, the company had tied up directly with wedding halls and introduced them to engaged members in the Kanto area, but they began introducing them to the "Zexy Konkatsu Counter" operated by Recruit Zexy Navi. With this, it became possible to offer wedding hall introduction service to engaged members nationwide. Also for housing, the company had been sending customers to rental housing brokerage services only, but it started introducing "Zexy Konkatsu Counter," which is operated by Recruit Sumai Company Ltd. to engaged members who are planning to buy custom-built houses.

As for the business of operating enterprise-led childcare facilities, which is promoted by the Cabinet Office, the company opened "Mebae Childcare Room Mitakadai" in Jun. 2016, and plans to open 7 facilities in FY March 2018. The company is planning to open other facilities to meet the needs for childcare services. In cooperation with local communities, the company aims to improve the childcare environment.
1-5 Characteristics and strengths
High engagement rate as a result of "pursuing customers' goal".
One of the key features of the Company is its "high engagement rate."
The engagement rate for FY March 2017 was 28.6%. The engagement rate is steadily increasing every year.
Although other companies in the industry are not announcing exact figures, the average engagement rate is suspected to be about 10%. In comparison, the Company's engagement rate is exceptionally high.

The "engagement rate" shows a rate of members who withdrew from the membership after their engagement during a specific period. Because the rate may also raise a question about the need for marriage hunting companies, many companies in the marriage hunting industry prefer not to use the engagement rate as an indicator.
However, President Sato has been focusing on the idea of "pursuing customers' goals" as a corporate strategy and philosophy from the foundation of the Company.
He believes that the goal that the customers want to reach through the Company's services is the "marriage." Thus, making efforts to reach the highest rate of "getting married" is the social value of the Company.
In order to achieve this purpose, the Company carries out all activities including employment, education, development, training, knowledge sharing, management, and evaluation system based on the philosophy of "pursuing customers' goals". This stance leads to the outstanding "engagement rate" in this field.
2Q of Fiscal Year March 2018 Earnings Results
Although sales increased, expenditure was too large, resulting in decreased profit
Sales were 2,025 million yen, up 1.7 % year on year. Its Fast Marriage Hunting business managed to cover the decrease in sales in its core business, the Partner Agent business. However, gross profit and gross margin ratio dropped year on year, and due to the investment for medium- to long-term growth, labor costs, advertising expenses, and SG&A expenses including the rents for new shops grew by 13.8% year on year. This ate up the increment in sales and its operating income decreased considerably by 83.4% year on year.
This was below the forecast at the beginning of the term, but sales were roughly the same level as the revised forecast as of July 2017, and helped by its effort to cut costs as well as the fact that the marketing cost will be incurred in 3Q onwards and because the subsidy (non-operating income) towards the opening of the enterprise-led childcare business "Mebae Childcare Room" was granted earlier than expected, profit was considerably greater than the forecast.
(Partner Agent Business)
The number of new members decreased 10.2% year on year, and the number of existing members decreased slightly. The number of members who cancelled the membership after getting engaged decreased year on year but increased from the previous month, and the improved service quality has been received favorably by the members.
Engagement rate - the most prioritized indicator by the company - was down year on year but maintained a high level.
With the new openings in Yaesu (Tokyo, May 2017), Shibuya (Tokyo, Jul 2017), Gifu (Aug 2017) and Nara (Aug 2017), the total number of shops has risen to 29 at the end of the quarter. All of these shops are equipped with the OTOCON Party venue for the Fast Marriage Hunting business.
(Fast Marriage Hunting Business)
The total number of attendees at its marriage hunting parties "OTOCON" continues to grow strongly with 125,496 participants, an increase of 117.3% year on year.
The company opened its Osaka and Sakae (Aichi) branches as the OTOCON-exclusive shops in April 2017, while the Yaesu (Tokyo), Shibuya (Tokyo), Gifu, and Nara branches were opened as the Partner Agent business combined outlets. The total number of shops at the end of the term was 26.
(Solution Business)
The number of the users of "CONNECT-ship" started in June 2017 exceeded 10,000. The numbers of business clients and operating services have risen to 9 businesses and 11 services.
(QOL Business)
In July 2017, "Mebae Childcare Room Kameido" - the second of its enterprise-led childcare facilities - was opened.
Total assets were 2,625 million yen, up 362 million yen from the end of the previous term, as cash and deposits increased and noncurrent assets grew due to opening of new shops.
Total liabilities grew 283 million yen from the end of the previous term to 1,885 million yen, due to the increase in long-term interest-bearing debts.
Net assets were 740 million yen, down 79 million yen from the end of the previous term.
As a result, equity ratio dropped 1.0% from 29.1% to 28.1%.
Profit decreased but with the refund of corporate tax etc., the surplus of operating CF increased.
As purchase of property, plant and equipment increased, augmenting the deficits of investing CF and free CF.
With the issuing of corporate bonds and no need to acquire treasury shares as in the previous term, the surplus of financing CF increased. Its cash position has also increased.
(4) Topics
◎ Investment into a dating app operator
In November 2017, the company made an investment into Mrk & Co, the operating company of dating app "Dine" in the USA and Canada. Its app "Dine" has gained the Top Featured status in App Store in both countries and it is planning to start offering the online dating app aimed at the Japanese domestic smartphone market.
With this investment, Partner Agent has indicated its support for Mrk & Co and the willingness to build a collaborative relationship with them so that this will lead to business expansions including its own marriage hunting support business in the future. The total investment was in the region of 100 million yen.
Fiscal Year March 2018 Earnings Estimates
No change to earnings forecast - increase in sales & slight increase in profits
No revision to the earnings forecast. Sales are estimated to grow and profit is forecasted to slightly increase.
Sales are forecasted to be 4,331 million yen, up 13.6% year on year. Operating income is projected to be 205 million yen, up 0.3% year on year.
(2) Future Projects
① Partner Agent Business
The advertisement reaction rate - one of its major indicators - has been bottoming out in the last few months while the rate of customers visiting the shops and the actual contract ratio among the visiting customers are improving, and the company is confident that its recognition rate is consistently improving.
In the second half of the term, it will continue to improve on the advertisement reaction rate and roll out new marketing methods to increase the new members as well as approaching new customer bases, while looking into opening more shops to expand its total service area.
Its targets for this term are as follows - annual new members: 9,443; annual number of engagements: 3,614; and registration members at the end of the term: 12,979.
② Fast Marriage Hunting Business
Deciding on the new shop openings according to the regional supply and demand:
The total number of attendees to its Marriage Hunting Party "OTOCON" was up 57.4% year on year to 214,793 and the company is confident that this positive trend will continue.
③ Solution Business
Increasing the number of members as well as the business clients for CONNECT-ship: boost the membership number from current 16,000 to 20,000 by the end of the term. Also planning to start charging for its service from April 2018.
④ QOL Business
The company is planning further opening of the enterprise-led childcare facilities as follows: Roka Koen (Nov 2017), Chitose-Funabashi (Jan 2018), Yoga (Mar 2018) & Kasuga (Apr 2018).
In its core business, the Partner Agent business, the advertisement reaction rate is seemingly bottoming out and it would be interesting to see how the rate of customers visiting the shops and the actual contract ratio among the visiting customers will behave from the 3Q onwards.
On the other hand, one of the key points for the company is how quickly it can improve on its recognition rate. According to the company's research, however, it is still lagging behind the market leaders therefore it will still need to invest a certain amount of time and money. The company itself is optimistic that as soon as it reaches a certain level, it will be victorious with its biggest selling point: engagement rate. Our view is that the investors should perhaps watch its top line growth for the time being rather than profit.
Incidentally, as for the President Sato's decision to sell about 7% of the company shares, this was due to his personal capital requirement, and as seen in the press release in December 2017, the sales method was manicured carefully so to minimize its effect on the market after taking into consideration the past turnovers etc. regarding the daily business volume. Even after this sale, the rate of held shares is over 31% and it looks as though the company is intending to hold onto them as the stable long-term shareholder and there is no apparent source of concern.
<Reference: Regarding corporate governance&Gt;
◎ Corporate Governance Report
The latest update: June 28 2017

<Reasons for Non-compliance with the Principles of the Corporate Governance Code (Excerpts)&Gt;
The Company states that it will carry out all basic principles of corporate governance code as a company listed on the TSE Mothers.
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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