BRIDGE REPORT
(6181)

東証マザーズ

Partner Agent, Inc. (6181)
President Shigeru Sato
President
Shigeru Sato
Corporate Profile
Company
Partner Agent, Inc.
Code No.
6181
Exchange
TSE Mothers
Industry
Service industry
President
Shigeru Sato
Address
Imasu Osaki Building, 1-20-3 Osaki, Shinagawa-ku, Tokyo
Year-end
End of March
URL
Stock Information
Share Price Shares Outstanding Market cap ROE (actual) Trading Unit
¥377 10,246,800 shares ¥3,863 million 15.5% 100 shares
DPS (Est.) Dividend Yield (Est.) EPS (Est.) PER (Est.) BPS (Act.) PBR (Act.)
¥0.00 - ¥18.33 20.6 times ¥85.81 4.4 times
* The share price is the closing price on July 2. 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
      Income
Ordinary
      Income
Net
    Income
EPS DPS   
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) 3,812 204 231 107 11.37 0.00
Mar. 2018 (Actual) 4,102 195 325 117 12.15 0.00
Mar. 2019 (Forecast) 4,381 269 276 181 18.33 0.00
*The forecasted values were provided by the company. On January 1, 2017, the company conducted a 3-for-1 stock split. EPS was adjusted retroactively.
*From the term ended March 2016, net income is profit attributable to owners of the parent. Hereinafter the same shall apply.

We would like to report an overview of earnings results for Fiscal Year 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" manages planning and operation of marriage hunting events. The "Solution Business" provides "CONNECT-ship," an open platform that enables the matchmaking between its members and those of other competitors' marriage hunting support services, and to corporations and local governments that are promoting marriage hunting, it organizes marriage hunting events as well as provides a matching system called "parms." The "QOL Business" includes introduction of wedding halls, sales of marriage rings and revision of insurance contracts. 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 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 "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> 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 , 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 ages 18 and 34, respectively. These data indicate that there are still many unmarried people who "want to marry." Although the percentages of unmarried men and women who responded "Never intend to marry" have been rising, among them, 44.1% of men and 49.8% of women responded that they might eventually change their intention to "Intend to marry." This indicates that about half of the people who currently do not intend to marry may change their mind and look for their marriage partners in the future. Reasons for being single: Unable to find the right person for marriage after 25 years of age The reasons for the unmarried people between ages 18 and 24 to stay single were "I am still too young" and "I do not feel the necessity," indicating that their motivation for marriage is not so high. On the other hand, a higher percentage of unmarried people between ages 25 and 34 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> 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 run such businesses across Japan. 1-4 Business contents As a reporting segment, the company carries out four businesses, 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, develops 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 March 2018, there are 144 concierges. As for the concierge's activities, the company has the motto of "pursuing customers' goals" and the concierges are evaluated based on the "customer satisfaction" including the engagement rate and early withdrawal rate. <Image of support based on the PDCA cycle> (1) Before sing-up: Clarifying 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 in cases where they cannot reach a contact (meeting) or go steady with a partner, even though they pay monthly membership fees. (2) After sign-up: Support by a concierge who is exclusively assigned to a member Once a customer signs up for the membership, an interview will be 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 identify the customer’s expectations and ideal model of marriage as clearly as possible. This way, instead of helping the customers find their partners abstractly, the concierges can help them find someone based on 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 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, providing consultation to the members during dating period in addition to follow-ups after engagement (*) to walk with the members until they reach engagement. The follow-up period after the engagement is 1 year. This way, they can support the members for a long time until marriage. (*) Engagement (Withdrawal from the membership) This means that members withdraw from the membership after both members expressed their intention to continue dating with the intent to marry the partners they are dating. (3) Setting up contact (marriage meeting):Support by the staff other than the exclusive 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 have their meetings set up 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 partners are introduced to the members within the fee structure. In principle, the company introduces at least two 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. 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 a photo shoot (fee-based) for the members with extra charges. Since the first impression is crucial for marriage hunting, in collaboration with professional photographers and make-up artists, the company offers photo shoots in their studios or within the company's premises. Because the photography is specifically for marriage hunting, the company can offer advice concerning appropriate clothing and facial expressions based on their experiences. To provide the preliminary knowledge and information about marriage hunting to the members, the company offers seminars (fee-based) on color coordination, fashion advisory, communication and others for the members. ② Fast Marriage Hunting Business The Fast Marriage Hunting Business is based on the concept of offering affordable marriage hunting services, enabling the members to start using the service without hesitation. It consists of three 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 functioning 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. ③ Solution Business (1) "CONNECT-ship," a platform for mutual introduction of members among agencies The "CONNECT-ship" is an open platform that enables mutual introduction of members between marriage hunting support agencies. It launched in June 2017. (Overview) The platform started off with 6 companies and 7 services. As of April 2018, 7 companies and 11 services are participating. 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 office 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 office (the company). The revenue source of the company, which provides and operates the system, is the remuneration for realizing the arranged meeting (contact) between members, which is received from enterprises using this system. (Purposes) 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 competition on service quality will be created. As of March 2018, there are 20,000 users registered, as anticipated by the company. (2) Consultation services for business enterprises and local governments The company, as ASP, offers the original marriage supporting system called "parms" to both enterprises considering entering into the marriage hunting industry and local governments planning to offer hunting support activities to residents. "Parms" is a system that combines several functions, such as supporting its user activities and streamlining tasks of operating staff in addition to basic functions such as member registration, membership management and partner matching, which are all necessary in the marriage supporting business. Customization of the system depending on the needs of the system operators is available. The major achievements with the local governments are as follows. ④ Quality of Life (QOL) Business To the customers who became members through the Partner Agency Business, the company offers various services at their major life events by maintaining relationship with the members even after they withdraw from the membership for 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. As for introducing wedding halls, the company had tied up directly with wedding halls and introduced them to engaged members in the Kanto area so far, but they began introducing them to the "Zexy Konkatsu Counter" operated by Recruit Zexy Navi. With this, it became possible to offer a 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. 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 2018 was 27.2%, which recorded the second highest rate since its startup. 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.
 
 
Fiscal Year March 2018 Earnings Results
Sales grew, but profit declined as the sales growth could not offset the augmentation of expenses. Sales were 4,102 million yen, up 7.6% year on year. The sales from the Partner Agent Business, which is its mainstay, decreased, due to the sluggish growth of the number of members, but it was offset by the thriving Fast Marriage Hunting Business, resulting in the growth of total sales. While the increase of members was stagnant, SGA, including the personnel cost for medium/long-term growth and expenditures for opening new stores, such as rents, augmented 2.6% year on year. Accordingly, operating income was 195 million yen, nearly unchanged from the previous term. Net income rose 9.4% year on year to 117 million yen, as ordinary income increased 40.6% year on year to 325 million yen, thanks to the revenue from the subsidy for operating childcare facilities amounting to 123 million yen, but an extraordinary loss of 131 million yen was posted because it became necessary to handle the subsidy equivalent for the already received equipment in impairment accounting, because of the restriction on the transfer of enterprise-led childcare business in the transfer of the childcare business. Partner Agent Business As for the advertisement for improving popularity, which has been an issue for the company, the company attempted to improve and enhance its advertisement by changing creative ads in April 2017 and January 2018, but its major indicators decreased from the previous term. The new creative ads featuring the anime characters Doronjo and Blackjack released in January 2018 are well-received, stopping the decrease of new members and increasing visitors to the website. The number of married members was the second largest since its business startup, keeping the rate of marriage high. The company opened five stores: Yaesu, Shibuya, Gifu, Nara, and Hiroshima Stores. Hiroshima Store is the first one in the Chugoku region. All of the stores have a party hall for OTOCON. Fast Marriage Hunting Business The cumulative number of attendees in the marriage hunting party "OTOCON" is increasing steadily, and nearly doubled from the previous term (up 98.3%). In order to meet the strong demand for marriage hunting parties, the company opened Osaka and Sakae (Aichi) Stores as dedicated stores, and also established Yaesu, Shibuya, Gifu, Nara, and Hiroshima Stores as the stores that also offer the Partner Agent Business. Hiroshima Store is the first one in the Chugoku region. Solution Business The number of the users of "CONNECT-ship" in the previous term was approximately 20,000. The number of business clients and operating services rose to 6 businesses and 10 services. In April 2018, it grew to 7 businesses and 11 services. QOL Business Mebae Childcare Room was opened in Kameido, Roka-koen, Chitose-funabashi, and Yoga, but enterprise-led childcare facilities have been transferred as mentioned later. Current assets increased 229 million yen to 1,568 million yen, due to the growth of cash and deposits and trade receivables. Noncurrent assets rose 317 million yen to 1,241 million yen, due to the establishment of new systems and equipment investment for opening new stores. Total assets grew 547 million yen to 2,811 million yen. Total liabilities augmented 356 million yen to 1,959 million yen, due to the increase in short and long-term debts, etc. Net assets increased 191 million yen to 852 million yen, due to the posting of net income and the decrease of treasury shares. As a result, equity ratio was 30.3%, up 1.2 points from the end of the previous term. Operating CF became positive, due to profit growth, the refund of income tax, etc. The deficit of investing CF expanded due to the augmentation of equipment investment. Financing CF and the cash position were nearly unchanged. (4) Topics ◎ Conclusion of capital and business tie-ups with Global Group Corp. Transfer of the enterprise-led childcare business. In May 2018, the company concluded capital and business tie-ups with Global Group Corp. (first section of Tokyo Stock Exchange, 6189), which operates childcare facilities and offers consulting services for opening nursery schools, and transferred the enterprise-led childcare business. Reasons for and purposes of the tie-ups Partner Agent operated the enterprise-led childcare business (nursery schools) to expand its business portfolio, but it concluded that by transferring the business to a large-scale corporate group, such as Global Group, and entrusting it with the operation of the business, it would become possible to stabilize the operation of nursery schools and mitigate the problem of the waiting list for nursery schools. On the other hand, Global Group had the merit of achieving an organization in which employees can work for a long period of time, by facilitating the resumption of work of nursery staff, who took a childcare leave, by increasing childcare facilities, and enriching its enterprise-led childcare business in response to social needs. The alliance was formed for the purpose of mutually developing their businesses by utilizing their respective specialties. Outline of the tie-ups and business transfer In June 2018, Partner Agent transferred all of the enterprise-led childcare business to Global Kids Co., Ltd., which is a 100% subsidiary of Global Group and specializes in the operation of nursery schools and childcare facilities. From the viewpoint of improving the quality of life of nursery staff, Global Group has the intention to assist them in finding their spouses as part of its welfare program in addition to the support for resumption of work. Partner Agent will cooperate and start matchmaking services targeted at nursery staff, although its release date is still to be determined.
 
 
Fiscal Year March 2019 Earnings Estimates
Sales and profit estimated to grow Sales were 4,381 million yen, up 6.8% year on year. Operating income was 269 million yen, up 38.1% year on year. (2) Future Projects ① Partner Agent Business <Service> Under the new service concept, on April 16, 2018, the company launched a team marriage hunting and a smart marriage hunting program. Through these two services, they can support marital success even more effectively. What is the team marriage hunting? For the occasional tough times in marriage hunting, a strongly organized team works with a dedicated concierge to provide marriage hunting support. What is the smart marriage hunting program? Based on various types of data the company has accumulated while supporting the activities of its many members, a dedicated concierge will guide clients through a marriage hunting program fitted to their needs, and prepare 8 matchmaking variations. By applying scientific approaches such as the Plan/Do/Check/Act (PDCA) cycle to marriage hunting, smart marriage hunting is possible. (Introduction of AI) Also, from June 2018, with the goal of providing higher quality marriage hunting support services, the company began utilizing "KIBIT," an artificial intelligence engine developed independently by FRONTEO, Inc. (based in Tokyo), to aid in the matching process for marriage support services. The concierge supports marriage hunting through "team marriage hunting" and the "smart marriage hunting program." By adding in the use of AI, there is a synergistic effect with the concierge, improving matching accuracy and consequently leading to greater client satisfaction. Using KIBIT ① KIBIT reads and analyzes the free text of members' self-introduction and profile information (hobbies, values, etc.). ② Using the accumulated marriage data, KIBIT scores match candidates and creates a list. ③ Taking into account the members' wishes and appeal points, the concierge will use the list to make an introduction. <Marketing and shop openings> The company continues to invest in mass marketing to improve awareness, and promotes marketing policies linked with the Fast Marriage Hunting Business. In particular, as a result of advertising that emphasized the engagement rate, the company reflected on its inadequacies in meeting the needs of expanding marriage hunting market, and will consider ways to appeal with more intuitive services. The company will put new shop openings on hold this term and focus instead on growing existing shops. <Main Indicators> Figures are expected to exceed the previous term, with 8,632 annual members, 12,551 registered members, and 3,299 married members. The decreasing number of registered members will begin increasing, but because increases in members who cancel membership after engagement temporarily lag behind, the engagement rate is expected to stay flat. ② Fast Marriage Hunting Business In order to make the current process even more successful, the company will plan and hold new parties to capture demand. In addition to renovating existing locations (4 currently scheduled), they will increase the number of party venues and decide whether to open new venues based on each situation. The number of party attendees in the current term is expected to increase 30% year on year to 357,696. Also, as introduced in the previous report, in November 2017, the company invested 100 million yen into Mrk & Co., the company which provides the matching application "Dine" in the USA and Canada in consideration of the expanding online matchmaking market. "Dine" is awarded the App Store Top Featured app in both countries, and Mrk & Co. plans to offer an online matching application for the Japanese smartphone market in the future. Partner Agent supported them with this investment, and conducted the first collaborative project, "OTOCON" in December 2017. In the future, the company will strengthen this collaboration so that it leads to business expansion, including marriage hunting services and the release of their own matchmaking application. ③ Solution Business ◎ CONNECT-ship Began charging for the service from April 2018. In the event that a contact (marriage meeting) has been set up between Partner Agent and another company, Partner Agent will receive a marriage meeting fee from the other party. In the event that two other companies are involved, Partner Agent will receive fees from both parties. Currently, the number of contacts established monthly by Partner Agent has increased to about 29,000. The company strives to raise the number of users and other companies using the service by continuously aiming for "an open platform with the most successful matchmaking in Japan." They will strengthen cooperation with other companies, maximizing marriage opportunities and client success. ◎ Marriage hunting support solution for local government The company will focus on planning, introduction, and support for the marriage matching system "parms." In June 2018, the company began offering "parms" in Saitama Prefecture. The birthrate in Saitama is lower than the national average, and the percentage of unmarried people has risen year after year for both men and women. In order to improve this situation, Saitama Prefecture established the "SAITAMA Encounter Support Center" to stop the declining birthrate. In addition to offering "parms," the company also provides operational support for the center. They are also considering launching a service for local governments that publishes information about marriage hunting parties. ④ QOL Business The company plans to expand their service area and number of services offered in order to increase the number of users. Continuing to improve services for married and soon-to-be-married members, the company partnered with Recruit Zexy Navi Co., Ltd. to provide nationwide services such as "Wedding venue introduction service," "In-house bridal ring sales," and "Reviewing insurance contracts based on changes in life stages." In addition, due to diverse values and their relation to marriage, demand for marriages that forego the wedding reception and instead have a party with close friends and relatives are increasing, and as a new business, the company is considering managing venues and handling party and event services for such people as they make their marriage debut to their friends. As stated above, the operation of all of the childcare facilities in the childcare business has been transferred. The company will begin a new marriage hunting support service for nursery staff.
 
 
Conclusions
The business performance did not reach the revised forecast, but as shown in the graph, both sales and profit bottomed out in the 4th quarter of FY March 2017, and the sales for the 4th quarter of the previous term were the largest in the past three years. The total number of new members in the Partner Agent Business for the full term dropped from the previous term, but the quarterly number has recovered to the level three quarters before, seemingly thanks to the effects of new creative ads. The company thinks that its popularity is still to be improved, and it will implement various measures this term, too. As CONNECT-ship became a fee-charging service, we would like to watch major quarterly indicators, sales and profit, while paying attention to how quickly the company will recover to the level in FY March 2016, which saw the best performance.
 
 
<Reference: Regarding corporate governance>
◎ Corporate Governance Report The latest update: June 26, 2018 <Reasons for Non-Compliance with the Principles of the Corporate Governance Code (Excerpts)> The company states that it will carry out all basic principles of corporate governance code as a company listed on the TSE Mothers.
 
Disclaimer
This report is intended solely for information purposes, and is not intended as a solicitation for investment. The information and opinions contained within this report are made by our company based on data made publicly available, and the information within this report comes from sources that we judge to be reliable. However, we cannot wholly guarantee the accuracy or completeness of the data. This report is not a guarantee of the accuracy, completeness or validity of said information and 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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