COPRO-HOLDINGS | 7059
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Sessa Investment ResearchNovember 15, 2023

FY24/3 2Q achieved significant increases in both sales and profits
Profits soundly beat initial forecasts and the firm increased the 2H
dividend

2Q Flash Earnings Summary
COPRO-HOLDINGS. Co., Ltd., (COPRO) announced its 2Q FY24/3 results after market closeon Tuesday, November 14, 2023. Key consolidated figures included net sales of ¥11,137 mn(+28.5% YoY), operating profit of ¥737 mn (+56.9% YoY), ordinary profit of ¥810 mn (+71.8%YoY), and net income attributable to the parent company of ¥510 mn (+81.9% YoY). Sales
were largely in line with initial forecasts, while profits were more than 10% higher than initialforecasts, mainly due to lower back-office-related labor costs. The company's full-year
forecast for FY24/3 was also revised up from the initial forecast, reflecting 2Q upswing.
 2Q Trends by Business Segment
COPRO-ENGINEERED, which operates the company's core business of construction
technician dispatching, saw a significant increase in sales due to record numbers of recruits.
Operating profit increased by ¥169 mn year-on-year, absorbing an increase in standby laborcosts during the training period, recruitment fees and labor costs due to the 1Q increase in
the number of new graduate engineers. ATMOS, which provides mechanical design anddevelopment engineer dispatching and contracting services, recorded a significant increase in
net sales and gross profit owing to improved unit sales prices and a lower cost of sales ratio,
while a lower SG&A ratio also contributed to a ¥29 mn increase in operating profit YoY. Value
Ark Consulting, a system engineering services (SES) company, reported an operating profit
decline of ¥20 mn YoY, due to prior expenses from aggressive advertising and promotionalspending. In head office relations, although SG&A expenses increased by 10.2% YoY in 2Q,
they were significantly lower than the increase in sales. This was due to lower personnel andstock-based compensation costs as a result of streamlining back-office operations. Thus, theSG&A-to-sales ratio was 20.9%, down significantly from 24.4% in the previous 2Q.
 FY24/3 full-year forecasts
The FY24/3 full-year forecast was revised up from the initial forecast due to exceeded 2Qresults. Although demand for human resources will remain strong from 3Q onwards andadministrative costs will continue to be controlled, the company cites its policy of flexibly
investing in recruitment and other costs to ensure that it can capture growing demand inline with the application of overtime caps to the construction industry in April 2024. Further,it needs to secure as many engineers as possible, who are the foundation of businessgrowth. These are the reasons that the firm left its 2H forecasts unchanged. Also, theCompany decided to increase 2H DPS by 5 yen, resulting in 45 yen for full-year DPS. SIR
plans to issue a follow-up report after an interview with the company.
FYNet Sales(¥mn)

FY2019/3
FY2020/3
FY2021/3
FY2022/3(1)FY2023/3(2)FY2024/3 CE
FY2023/3 2Q
FY2024/3 2Q

10,81913,122
14,836
15,58918,791
24,298
8,670
11,137

YoY
Oper. profit
YoY Ordin. Profit YoY
(¥mn)
(¥mn)
（％）
（％）
（％）

20.7
21.3
13.1
5.1
20.5
29.3
17.1
28.5

1,344
1,592
1,437
1,6211,321
2,042
469
737

50.3
18.4
-9.7
12.8
-18.5
54.5
-25.7
56.9

1,336
1,585
1,439
1,619
1,324
2,115
472
810

51.1
18.6
-9.2
12.5
-18.2
59.7
-25.2
71.8

Net profit
(¥mn)

938
1,084
1,009
962
864
1,361
280
510

YoY

（％）

54.4
15.5
-6.9
-4.6
-10.2
57.4
-14.6
81.9

EPS*(2)

DPS*(2)

113.8
115.1
53.4
51.1
46.5
72.3
14.9
26.2

21.0
30.0
37.5
20.0
25.0
45.0
5.0
15.0

(yen)

(yen)

Team coverage

research@sessapartners.co.jp

Source: Compiled by SIR from TANSHIN financial statements.

*(1) The percentage change from the previous year is not shown due to the adoption of the “Accounting Standard for Revenue Recognition” fromthe beginning of 1Q FY2022/3. Note*(2) : A two-for-one stock split of common stock was conducted on October 1, 2022. Note(3): EPS and DPS are
retroactively adjusted to reflect a 1-for-2 stock split.

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such as trading in securities issued by the company, or they may have the possibility of doing so in
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