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
¥358 10,309,200 shares ¥3,690 million 15.5% 100 shares
DPS(Est) Dividend Yield(Est) EPS(Est) PER(Est) BPS(Act) PBR(Act)
¥0.00 - ¥18.33 19.5 times ¥85.81 4.2 times
* The share price is the closing price on January 10. 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 the first half of Fiscal Year March 2019 of Partner Agent, Inc.
 
Key Points
 
 
 
Company Overview
The company provides various services starting from marriage hunting support. 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." It also operates the "QOL Business" that supports new daily lives in each life stage after the marriage such as 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 <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 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 appropriate 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> About 3,000 marriage agencies etc. are engaged in marriage support activities across Japan. However, 90% of them are operated by individual business owners. There are only a few agencies including the company that run such 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 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 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. The company introduces about 2 to 6 members per customer per month, depending on the course chosen by customers. However, this figure is an obligation under the service contract and not the upper limit. Therefore, the company may introduce more members at its direction. (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. Having spaces for holding events within the company's stores makes it possible to flexibly hold parties without requiring expenses of 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 advisor, 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 casually." (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. (2) Alliance Model Marriage Support Service The company offers marriage support services by establishing alliances with other companies that have many customers and membership organizations and designing various services according to their needs. It manages to realize low price unique to online marriage hunting, while offering comprehensive support for marriage hunting activities from introduction of partners by a dedicated concierge to provision of support through "contact (marriage meeting)," "dating" and "marriage," based on the members' marriage conditions and activity status, etc. By using CONNECT-ship, it is striving to increase the number of matching and opportunities for meeting among the members and maximize the possibility of finding a partner and leading to marriage. 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 November 2018, 8 companies and 12 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 October 2018, there are 24,000 users registered, as anticipated by the company. (2) Operation of a website to share information on marriage hunting parties The company launched a website called "Parties" (URL: https: // parties.jp/) in July 2018 in collaboration with the Marriage Support Project, which is a general incorporated association and aiming to realize a society where marriage support services can be used more openly. The website "Parties" posts information on marriage hunting parties that are sound and in compliance with laws and regulations across Japan. The service is managed by ichie Co., Ltd., a newly established consolidated subsidiary of Partner Agent, through a joint investment with Partner Agent and Vector, Inc., which is in charge of the operation of the Marriage Support Project. (3) 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 hunting support 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 Consultation 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 "SUUMO Counter," which is operated by Recruit Sumai Company Ltd., to engaged members who are planning to buy custom-built houses. In addition, as of the end of June 2018, it has transferred the entire Nursery Business to Global Kids Co., Ltd., a wholly owned subsidiary of Global Group Corp., with which the company has entered a capital and business alliance. Currently, in collaboration with Global Kids, the company plans to start offering marriage support services for nursery teachers from the viewpoint of supporting improvement of their quality of life. 【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.
 
 
First half of Fiscal Year March 2019 Earnings Results
Both sales and profit grew. Profit significantly exceeded the forecast. Sales were 2,148 million yen, up 6.1% year on year. The sales from the Partner Agent Business, which is its mainstay, were at the same level as those in the same period of last year, while the sales from the Solution Business significantly increased as a result of the development of the marriage hunting support service targeting nursery teachers. Operating income was 139 million yen, up 259.4% year on year, due to reduction in personnel expenses associated with transfer of the Nursery Business and reduction in variable expenses associated with postponement of mass advertisement. Ordinary income also increased significantly to 125 million yen, up 87.7% year on year, due to increased operating income. Sales were almost as planned, and profit exceeded the forecast significantly due to temporary postponement of mass advertisement. Partner Agent Business Sales were almost the same as those in the previous year, but the progress has been made as planned. In April 2018, the company started a new marriage hunting service called "Team Marriage Hunting x Smart Marriage Hunting Program" and continued to improve service quality and enhance awareness. In addition, it promoted business management with emphasis on efficiency in the overall business. With these actions' success, the cumulative number of new members since April 2018 increased by 2.2% to 4,031, and the number of members as of the beginning of October is 11,784, up 0.7% from April 2018, and is on a recovery trend. The number of members as of the beginning of October was 2.0% smaller than the same period of last year, but this is because of the withdrawal associated with the end of the special course at the end of the previous term. Therefore, it will not affect sustainable growth of the company. Fast Marriage Hunting Business The company refurbished and expanded the space at its own 3 stores located in the popular areas (Shinjuku store, Shinsaibashi store, Yokohama store) to increase the party space while keeping costs down. It also worked on the planning and management of parties that contributed to the improvement of customer satisfaction. As a result, the total number of participants since April 2018 increased by 31.2% to 164,706, which is a significant increase compared with the same period of last year. In addition, for OTOCON, it is continually focusing on introducing partner agent services etc. to provide many marriage opportunities. Solution Business The "NOZZE" service began using CONNECT-ship, and the service was used by 7 companies to offer 11 services in the second quarter of the FY March 2019. Furthermore, the number of members as of the beginning of October 2018 was 23,715, up 130.8% year on year, and the number of marriage meetings for a single month in September 2018 was 28,340. The number of meetings also includes the number of meetings established in the Partner Agent member system which is planned to be integrated within 2018. (In addition, marriage partner introduction service "National Matchmaker Federation" operated by the Japan Federation of Matchmakers Co., Ltd. began using CONNECT-ship in November 2018. As a result, the service was used by 8 companies to offer 12 services as of November 2018.) Meanwhile, as a support for enterprises, from the viewpoint of supporting the improvement of the quality of life of nursery teachers, it has newly developed a system for marriage hunting support service for nursery teachers and began service operation. QOL Business As the "Anniversary Club" brand, the company enlarged the services for the members who withdrew from the membership after engagement and made efforts to expand its service areas. Furthermore, along with the transfer of the Nursery Business, the company carried out the consultation on the management of the transfer. In addition, as a new business, it established IROGAMI, Inc., a company that manages wedding receptions and after parties (i.e. party after returning from overseas wedding, second party). In October 2018, it also opened a venue for private parties (Ginza, Chuo-ku, Tokyo). Current assets increased 140 million yen from the end of the previous term to 1,692 million yen, due to the growth of cash and deposits. Noncurrent assets rose 58 million yen from the end of the previous term to 1,299 million yen, due to increases in investment securities. Total assets grew 199 million yen from the end of the previous term to 2,993 million yen. Total liabilities increased 102 million yen from the end of the previous term to 2,045 million yen, due to the increase in short and long-term debts, etc. Net assets increased 96 million yen from the end of the previous term to 948 million yen, due to an increase in retained earnings. As a result, equity ratio was 31.6%, up 1.2 points from the end of the previous term. The surplus of operating CF increased, due to profit growth. The deficit of investing CF shrank due to a decrease in purchase of property, plant and equipment. As a result, free CF turned positive. The surplus of financing CF decreased due to expansion of expenditure associated with bond retirement and a decrease in proceeds from sales of treasury shares. The cash position improved. (4) Topics a. A new business began targeting people who are not intending to have a wedding reception In September 2018, the company established IROGAMI Inc. (President: Shigeru Sato), which is a consolidated subsidiary, in cooperation with Authemotion Products Co., Ltd. (Tokyo), and on October 1, 2018, it opened the first "IROGAMI" store, a space dedicated to private parties in Ginza. With this, it started a new business targeting people who are not intending to have a wedding reception. (Background and purposes of the new business) In recent years, from the diversification of values concerning wedding ceremonies, the number of couples who choose "a marriage without a wedding reception" is increasing. They just submit marriage notification without having a wedding reception. The survey conducted by Cross Marketing Inc. in 2017 showed the rate of having a wedding reception among the couples who married in the last 5 years was 73 %, which has decreased from 84% 10 years ago. This is because there are an increasing number of couples who were not able to have a wedding reception for some reasons including "economic circumstances," "marriage with pregnancy" and "aversion to ceremonial acts" and couples who do not want to have conventional wedding styles. In response to these changes in needs, the company established IROGAMI Inc. in cooperation with Authemotion Products Co., Ltd. and decided to start the business to manage less expensive, casual parties after a wedding ceremony and "after-parties" which are parties after returning from overseas wedding or second parties, rather than conventional wedding ceremony and wedding reception. Authemotion Products, which produces about 5,000 couples annually, is in charge of attracting customers and producing the parties. (Overview of the store) The store "IROGAMI" located at a convenient location in Ginza, Chuo-ku, Tokyo, is a suitable venue for private events, centered on parties after a wedding ceremony and after-parties. It is equipped with a large screen and people can enjoy the view of Ginza from large windows. (Future outlook) Through IROGAMI, the company hopes to offer a service that many couples celebrating marriage can have their own wedding ceremonies without being tied down to custom. It will strive to respond to the increasingly diverse marriage values and hopes and realize the world full of smiles. Although the impact on business performance for the FY March 2019 is minor, the company will promptly disclose any matters to be disclosed in the future. b. New creative advertisement From January 2018, under the concept of "Meeting beyond imagination," the company uses "Doronjo" and "Black Jack" as the image characters. On November 1, 2018, as the latest version of the series, the first advertisement "Boat edition" started. It shows the real aspect of "Doronjo" and "Black Jack" during their first outdoor date. The second advertisement started on November 12. Both advertisements are published on the company's official website. Both were also placed in trains and stations of JR and Tokyo Metro.
 
 
Fiscal Year March 2019 Earnings Estimates
There is no change in the earnings forecast. Sales and profit estimated to grow. There is no change in the earnings forecast. Sales are estimated to be 4,381 million yen, up 6.8% year on year. Operating income is estimated to be 269 million yen, up 38.1% year on year. (2) Future Projects In the second half, the company will focus on measures to expand future business and earnings. Based on the recent trend of expansion of the number of new and existing members, it will revitalize advertisement development in the second half and advance infrastructure development for future business expansion. ① Partner Agent Business It is planning to have 12,000 members in the FY March 2019. In the second half, it will revitalize the advertisement development mentioned above, and launched "Marriage Concierge Diagnosis" as a tool to promote membership. It is a good start with more than 2,700 cumulative users in a month. With the revitalization of advertisement development in the second half, it expects to increase the number of existing and new members in the second half. ② Fast Marriage Hunting Business The company estimates that the number of party participants in the FY March 2019 will be 357,000. In addition to expanding the events in popular areas such as Shinjuku store, it will begin structural reform for further growth. ③ Solution Business The number of active members of CONNECT-ship has steadily expanded to 24,000 as of November 2018. The number of successful matches for November 2018 was 26,000. Although there are up and down, it is steady at around 27,000. It will continue to develop systems for marriage hunting support service for nursery teachers. It will start using CONNECT-ship in February 2019. ④ QOL Business The company launched a new service for the couples who are not intending to have a marriage reception. The total number of IROGAMI orders received for three months from the launch has steadily increased to 39.
 
 
Conclusions
The number of new members in the first half of the FY March 2019 in the Partner Agent Business, which is its mainstay, exceeded those in the first quarter of the current fiscal year and the fourth quarter of the previous fiscal year. According to the company, in addition to improving the response rate by renewing advertisement, various measures such as strengthening the structure centered on the marketing department and promoting signing-up for the membership among the marriage hunting party participants were successful. The increase in the number of new members despite postponement of mass advertisement in the second half is a good sign combined with the number of registered members which turned to a recovery trend. In that sense, we would like to pay attention to whether the latest creative action that started in November will be a further drive to expand the number of members.
 
 
<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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