COMPANY RESEARCH AND ANALYSIS REPORT

Cross Marketing Group Inc.
3675
TSE Mothers

20-Apr.-2017
FISCO Ltd. Analyst

Sakura Shimizu

FISCO Ltd.
http://www.fisco.co.jp

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

Cross Marketing Group Inc.
3675 TSE Mothers

20-Apr.-2017
http://www.cm-group.co.jp/ir/■ Index■Summary---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 01
1. Business segments................................ ......................................................................................................

01

2. FY12/16 results............................................................................................................................................

01

3. FY12/17 forecast.. .................................. ......................................................................................................

01■Company profile---------------------------------------------------------------------------------------------------------------------------------------------------------- 02
1. Company profile.. ................................... ......................................................................................................

02

2. History................................................... ......................................................................................................

03■Business overview---------------------------------------------------------------------------------------------------------------------------------------------------- 05
1. Research business................................. ......................................................................................................

06

2. IT solutions business.. ............................ ......................................................................................................

07

3. Other businesses................................... ......................................................................................................

07■Results trends--------------------------------------------------------------------------------------------------------------------------------------------------------------- 08
1. Consolidated Results for FY12/16...............................................................................................................

08

2. Company forecasts for FY12/17............ ......................................................................................................

12■Medium-term management plan----------------------------------------------------------------------------------------------------------------- 13
1. Positioning of the medium-term management plan. ....................................................................................

13

2. Business segment strategies.......................................................................................................................

13

3. Progress made. . ...........................................................................................................................................

14■Share supply-demand balance--------------------------------------------------------------------------------------------------------------------- 14■Shareholder return policy---------------------------------------------------------------------------------------------------------------------------------- 15

We encourage readers to review our complete legal statement on “Disclaimer” page.

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

Cross Marketing Group Inc.
3675 TSE Mothers

20-Apr.-2017
http://www.cm-group.co.jp/ir/██Summary
Adjusted operating profit up 28.9% YoY in FY12/16
Cross Marketing Group Inc. <3675> (hereafter, also “the Company”) is an integrated marketing group offering total
one-stop support for online services, from marketing research to the development of smartphone apps and website
construction, as well as promotion services.
1. Business segments
The Company has three business segments: research business, IT solutions business, and other businesses. The
research business handles a wide range of business domains including online research and marketing research. The
IT solutions business handles services such as planning, development, operation and engineer dispatch for mobile
platforms and smartphones. The other businesses segment mainly handles the web marketing business and thepromotion business. In FY12/16, the research business supplied 83.7% of the Group’s total consolidated net sales(68.9% of segment sales were from domestic operations and 31.1% were from the overseas market), the IT solutions
business accounted for 11.9%, and other businesses, for 4.3%. In terms of profit, the research business supplied
168.2%, the IT solutions business accounted for 13.0%, other businesses for 5.5%, and adjustments for -86.7%.
2. FY12/16 results
In FY12/16, the Group’s consolidated net sales grew 7.5% year on year (YoY) to ¥15,969mn, operating profit rose
8.9% to ¥1,342mn, ordinary profit was up 6.9% to ¥1,267mn, and profit attributable to owners of parent jumped
49.8% to ¥837mn. Operating profit surpassed the Group’s target in its medium-term management plan of ¥1,249mn
in FY12/16 by 7.4%. While sales decline overseas in the research business and changes to the IT solutions businessstructure had negative impacts on gross profit, this was outweighed by growth in gross profit from sales growth in
the domestic research business and other businesses and lower companywide costs and SG&A expenses, resulting
in YoY operating profit growth of 8.9%. However, in FY12/15, changes in accounting methods used by subsidiary
Kadence boosted operating profit by ¥191mn to ¥1,233mn. Adjusted for this factor, FY12/15 operating profit wastherefore ¥1,041mn and FY12/16 operating profit therefore rose by a more sizable 28.9% YoY.
3. FY12/17 forecast
For FY12/17, the Group forecasts net sales of ¥17,350mn (up 8.6% YoY), operating profit of ¥1,400mn (up 4.3%),
ordinary profit of ¥1,382mn (up 9.1%), and profit attributable to owners of parent of ¥825mn (down 1.4%). While
the Company expects a negative impact on income from rising labor costs and other costs under SG&A expenses,
it forecasts income growth as these negative factors are outweighed by growth in gross profit from sales growth in
the research business and the IT solutions business. The Company now expects to fall slightly short of the targets
set out in its current medium-term management plan for FY12/17, the final year covered by the plan, but expects
the trend of growth in sales and income to continue.

We encourage readers to review our complete legal statement on “Disclaimer” page.

01 15

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

Cross Marketing Group Inc.
3675 TSE Mothers

20-Apr.-2017
http://www.cm-group.co.jp/ir/

Summary

Key Points
Integrated marketing group offering total one-stop support for online services, from marketing research to thedevelopment of smartphone apps and website construction, as well as promotion services.
• FY12/16 net sales up 7.5% YoY to ¥15,969mn, operating profit rose 8.9% to ¥1,342mn, surpassing mediumterm plan target by 7.4%. Operating profit up 28.9% YoY when adjusted for changes in accounting methods in
FY12/15• Forecasts FY12/17 net sales of ¥17,350mn (up 8.6% YoY), operating profit of ¥1,400mn (up 4.3%), slightly shortof medium-term plan target, but maintaining income growth trend•㻾㼑㼟㼡㼘㼠㼟㻌㼠㼞㼑㼚㼐㼟㻔¥㼙㼚㻕㻺㼑㼠㻌㼟㼍㼘㼑㼟㻌㻔㼘㼑㼒㼠㻕㻔¥㼙㼚㻕㻻㼜㼑㼞㼍㼠㼕㼚㼓㻌㼜㼞㼛㼒㼕㼠㻌㻔㼞㼕㼓㼔㼠㻕㻞㻜㻘㻜㻜㻜

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Source: Prepared by FISCO from securities reports and the Company’s financial results██Company profile
Aims to expand into new business areas through proactive M&A
1. Company profile
Cross Marketing Group is a holding company. Its subsidiaries engage in research, IT solutions and other businesses,
primarily in the field of marketing, and offer a wide range of services, including in the fields of mobile devices andsmartphones and web marketing. With facilities in Japan and more than 20 offices in 10 other countries in Europe,
the Americas, and Asia, the Group is proactively expanding into new business areas and new geographical markets
with the aim of becoming Asia’s No.1 marketing group.
At the end of FY12/16, the Group was made up of 5 affiliate companies and 29 group companies including 6
companies in the domestic research business, 19 companies in the overseas research business, 3 companies in
the IT solutions business, and one in the other businesses segment. At that time, it had 758 employees in Japanand 656 overseas.

We encourage readers to review our complete legal statement on “Disclaimer” page.

02 15

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

Cross Marketing Group Inc.
3675 TSE Mothers

20-Apr.-2017
http://www.cm-group.co.jp/ir/

Company profile

Business Activities

Source: From the Company’s results briefing materials

2. History
The Group can trace its roots to Cross Marketing Inc., a marketing research company that was founded in April
2003. In May 2006, Cross Marketing entered into a capital and business alliance with EC Navi (currently VOYAGEGROUP, Inc. <3688>: the operator of the EC Navi integrated online shopping site) and its subsidiary Research Panel,Inc. (a research monitor management company). Cross Marketing holds a 40% stake in Research Panel, Inc., and
VOYAGE GROUP holds a 60% stake. In October 2008, Cross Marketing listed its shares on the Mothers section of
the Tokyo Stock Exchange. Thereafter, the company aggressively expanded its business base through M&A. In 2013,
a decade after the company's establishment, Cross Marketing converted to a holding company, Cross MarketingGroup, in what it refers to as its second founding. The Group then launched new businesses and expanded into
Asian countries. At the time of its founding, Cross Marketing Inc.’s main customers were major market researchfirms such as the former Dentsu Research Inc. However, from around the time of its listing on the Mothers sectionof the Tokyo Stock Exchange in 2008, the Company’s customer base has been expanding tremendously as a resultof its focus on driving growth in business with corporate clients.
At the same time, the Company expanded its business base in Japan and overseas through M&As. In Japan, theCompany bought part of Index Inc.’s mobile solutions business in August 2011 and started its own IT solutions
business through subsidiary Cross Communication Inc. In February 2015, the Group converted Japanese affiliate
Research and Development, Inc., which plans, designs, implements and consults about marketing research, into a
consolidated subsidiary. In September 2015, in order to strengthen its ability to respond to users’ needs in terms oftechnological capacity and engineer training capabilities, subsidiary Cross Communication bought JIN SOFTWARE,
which develops systems and dispatches engineers to other companies, making it a wholly-owned subsidiary. In
December 2015, JIN SOFTWARE changed its name to Cross J Tech Inc. In April 2016, the Group acquired shares inmixi research, Inc., which is strong in mystery shopper surveys and other forms of undercover surveys, to strengthen
the service lineup of its research business. mixi research became a consolidated subsidiary and changed its nameto Shopper’s Eye, Inc.

We encourage readers to review our complete legal statement on “Disclaimer” page.

03 15

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

Cross Marketing Group Inc.
3675 TSE Mothers

20-Apr.-2017
http://www.cm-group.co.jp/ir/

Company profile

Overseas, the Group set up consolidated subsidiaries in Shanghai, China in May 2012 and in Singapore in
September 2013. In January 2014, Union Panels Pte. Ltd. was established in Singapore, as a business site mainly
to provide a framework for supplying a research panel exchange service that links partner local research panels in
multiple countries, primarily in Asia, with research panels created in-house. Moreover, in August 2015, consolidated
subsidiary Cross Marketing (Thailand) Co., Ltd. was established in Thailand, marking the Group’s entry into its sixth
Asian country. In January 2016, the Group established Cross Marketing Group USA, Inc. in the U.S.
In August 2013, the Group acquired shares in Markelytics Solutions India Private Limited (“Markelytics”) and in
Medical World Panel Online Inc. (“Medical World Panel”). Following on from these acquisitions, in November 2014
the Group converted Kadence International Business Research Pte. Ltd. (active in marketing research businessand management of subsidiaries and other entities, “Kadence”), a marketing research group conducting a market
research business in eight countries in North America, Europe and Asia, into a subsidiary. Furthermore, the Groupmade Jupiter MR Solutions Co., Ltd. (Jupiter) of Thailand a subsidiary (voting interest: 24.2%) in August 2015. In
addition, in an effort to cultivate the North American market and make it one of the Group’s growth platforms, Cross
Marketing Group USA (established January 2016) entered into a memorandum of understanding agreement on thetransfer of business from Japan Publicity Inc. in November 2015. With this move, the Group put in place a frameworkfor supplying services focused on marketing research in North America.
History
Date

History

April 2003

Founded in Shibuya, Tokyo

May 2006

Entered into a capital and business alliance with VOYAGE GROUP, Inc. and its subsidiary Research Panel, Inc.

October 2008

Listed on the Mothers section of the Tokyo Stock Exchange

August 2011

Subsidiary Cross Communication Inc. commenced operations after succeeding to a portion of Index Inc.'s mobile solution business

May 2012

Established subsidiary Cross Marketing China Inc. in Shanghai, China and commenced operations

April 2013

Established UNCOVER TRUTH Inc.

June 2013

Transitioned to a holding company framework by establishing Cross Marketing Group Inc. through a sole-share transfer

August 2013

Acquired shares in Markelytics Solutions Private Limited and Medical World Panel Online Inc.

September 2013

Established subsidiary Cross Marketing Asia Pte. Ltd. in Singapore and commenced operations

November 2013

Converted UTIL Inc. into a wholly owned subsidiary by simplified share exchange

November 2014

Converted Kadance Group, which operates in eight countries in North America, Europe, and Asia, into a wholly owned subsidiary

February 2015

Converted affiliate Research and Development, Inc. into a consolidated subsidiary

April 2015

Cross Communication Inc. established subsidiary Cross Propworks Inc. in Hakodate

July 2015

Established Medilead Inc. and D&M, Inc. and commenced operations

August 2015

Established Cross Marketing (Thailand) Co., Ltd. and converted Jupiter MR Solutions Co., Ltd. of Thailand into a subsidiary

September 2015

Cross Communication Inc. converted JIN SOFTWARE (renamed Cross J Tech Inc.) into a subsidiary

November 2015

Accepted transfer of marketing business from Japan Publicity Inc.

January 2016
April 2016

Established Cross Marketing Group USA, Inc.
Began operations at Shopper’s Eye, Inc.

Source: Prepared by FISCO from the Company’s results briefing materials

We encourage readers to review our complete legal statement on “Disclaimer” page.

04 15

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

Cross Marketing Group Inc.
3675 TSE Mothers

20-Apr.-2017
http://www.cm-group.co.jp/ir/██Business overview
Providing a wide range of services through the core researchbusiness
The Group has three main business segments: research business, IT solutions business, and other businesses. In
FY12/16, the research business supplied 83.7% of the Group’s total consolidated net sales and 168.2% of operating
profit, followed by the IT solutions business which accounted for 11.9% of net sales and 13.0% of operating profit.
Other businesses supplied 4.3% of net sales and 5.5% of operating profit, while adjustments accounted for -86.7%
of operating profit.

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Source: Prepared by FISCO from the Company’s financial results

The research business in Japan is carried out by Cross Marketing Inc., Research Panel, Inc., Research andDevelopment, Inc., Medilead Inc., UTIL Inc., Envirosell Japan Inc., and Shopper’s Eye, Inc. Meanwhile, the overseas
research business is carried out by Kadence, Markelytics, Medical World Panel Online Inc., Jupiter MR solutions
Co., Ltd., Union Panels Pte. Ltd., Cross Marketing Asia Pte. Ltd., Cross Marketing China Inc. (Shanghai), Cross
Marketing (Thailand) Co., Ltd., and Cross Marketing Group USA, Inc. The IT solutions business is carried out mainly
by Cross Communication Inc., Cross Propworks Inc., and Cross J Tech Inc. In the other businesses segment, theweb marketing business is carried out by UNCOVER TRUTH Inc. and the promotion business by D&M, Inc.

We encourage readers to review our complete legal statement on “Disclaimer” page.

05 15

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

Cross Marketing Group Inc.
3675 TSE Mothers

20-Apr.-2017
http://www.cm-group.co.jp/ir/

Business overview

The Group’s business activities and main group companies
Name of businessBusiness activities

Main group companies
Cross Marketing Inc.
Research Panel, Inc.
Research and Development, Inc.
Medilead Inc.
UTIL Inc.
ENVIROSELL
Shopper’s Eye, Inc.

All aspects of business related tomarketing research, including online
researchResearch business

Kadence International Business ResearchMarkelytics Solutions India
MedePanel Online
Jupiter MR Solutions
Union Panels
Cross Marketing Asia
Cross Marketing China
Cross Marketing (Thailand)
Cross Marketing Group USA

Planning, development and operationof services for mobile devices andpromotion

IT solutions business

Cross Communication Inc.
Cross Propworks Inc.
Cross J Tech Inc.

Web marketing

Web and mobile marketing and UI andUX consulting services

UNCOVER TRUTH Inc. (affiliate)

Promotion

Businesses related to marketing
support, such as promotions

D&M, Inc.

Other businesses

Source: Prepared by FISCO from securities reports and the Company’s financial results

1. Research businessNet sales in the research business in FY12/16 amounted to ¥13,372mn, of which ¥9,213mn was from domestic
operations (68.9% of research business net sales) and ¥4,160mn was from overseas (31.1%).
The Group conducts marketing research, including online research. Online research involves preparing questionnaire
programs in line with research requests and hosting them on questionnaire servers. Then, data collection andanalysis is conducted by screening registered monitors (respondents), administering the questionnaire, and applying
data cleaning techniques. The results are then delivered to the client. The monitor recruitment fee is then paid to theresearch panel. Online research offers many advantages as results are available in a few days, easy to processing due
to digital data, there are no costs for printing, postage, or labor costs for survey administrators, and compensation
for respondents is much lower than for other survey methods. This allows clients to quickly hear from hundredsof thousands of respondents and makes it possible to survey “rare targets” that tend to have low response rates.
Online research is becoming more widely used owing to its speed, low cost, and scalability. In marketing research,
after consulting with clients regarding the background and goals of the research to be conducted, the Groupdevelops research methods to achieve these goals, then assists in questionnaire design and, after assuring thatthe questionnaire will achieve the desired goals, conducts market research surveys. The data is then analyzed anddetailed in a research report and then discussions are held with the client to determine what actions should betaken to resolve any issues.
The Group has top-level questionnaire collection capabilities in Japan with more than 1.9 million questionnairemonitors. These monitors are classified based on their basic attributes, and are also grouped into around 20
easy-to-use categories such as non-seniors, mobile phone users, automobile owners and cosmetics users. The
Group’s customers include market research firms, consulting firms, and advertising agencies as well as direct
corporate clients.

We encourage readers to review our complete legal statement on “Disclaimer” page.

06 15

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

Cross Marketing Group Inc.
3675 TSE Mothers

20-Apr.-2017
http://www.cm-group.co.jp/ir/

Business overview

Recruitment of monitors is conducted through EC Navi, an integrated online shopping site managed by VOYAGEGROUP, parent company of Research Panel. In addition, the Group has an agreement with Credit Saison <8253>
wherein Credit Saison members that wish to participate in surveys are recruited through a service operated by
Research Panel called Eikyufumetsu Research.
The research business has launched a new service based on RDIT (Random Domain Intercept Technology). RDIT
is the only survey method that can randomly intercept online survey respondents (Internet users who are notmembers of survey panels) based on Internet traffic. Unlike other services, RDIT provides data from randomized
fresh samples taken from all Internet users. Clients may conduct surveys in different countries or regions based on
the same specifications. The data capture method used by RDIT results in samples that are representative of theInternet user population. Sales of RDIT services have been steadily increasing since RIWI Corp., which provides
RDIT services, conducted daily tracking polls ahead of the 2016 US presidential election and correctly predicted
the result on November 4.
2. IT solutions business
The IT solutions business handles services such as planning, development, operation and engineer dispatch formobile platforms and smartphones. Subsidiary Cross Communication mainly provides a wide range of products andservices including website construction, smartphone app development, tools and packages, surveys and analysis,
operations outsourcing, infrastructure and server construction and operation, online promotion, and security services.
Main customers range from financial institutions engaged in securities and foreign exchange trading and otheractivities to major travel agencies. Moreover, Cross Propworks, a subsidiary of Cross Communication, conducts
outsourcing services such as data processing and other tasks within the Group. In addition, subsidiary Cross J
Tech provides system engineering services where engineers are staffed and stationed at the offices of customers.
3. Other businesses
The other businesses segment is made up of the web marketing business and the promotion business. In the
web marketing business, UNCOVER TRUTH uses USERDIVE, a tool that uses a heat map and video to visualize
the activity of users visiting websites to provide websites and smartphone sites UI and UX analysis and consulting
services. The promotion business is conducted by consolidated subsidiary D&M and consists of marketing support
services including promotion.
In September 2016, UNCOVER TRUTH conducted a capital increase of roughly ¥400mn with Draper Nexus Ventures
as the lead investor. The purpose of the capital increase was to accelerate growth by securing human resources
to conduct more product development and strengthen the company's business and expand overseas operations.
In addition to Draper Nexus Ventures, Nippon Venture Capital, CyberAgent, Inc. <4751>, Accord Ventures Inc.,
Mizuho Capital Co., Ltd., and NISSAY CAPITAL Co., Ltd. provided capital. UNCOVER TRUTH was converted to an
equity-method subsidiary at end-3Q FY12/16 because the Company’s ownership ratio was reduced as a result of
this capital increase and the Group posted an extraordinary gain of ¥159mn (consolidated basis).

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COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

Cross Marketing Group Inc.
3675 TSE Mothers

20-Apr.-2017
http://www.cm-group.co.jp/ir/██Results trends
13 Consecutive years of sales growth, second consecutive year ofrecord-high recurring income
1. Consolidated Results for FY12/16
In its consolidated business results of for FY12/16, Cross Marketing Group posted net sales of ¥15,969mn, up
7.5% YoY, operating profit of ¥1,342mn, up 8.9%, ordinary profit of ¥1,267mn, up 6.9%, and profit attributable toowners of parent of ¥837mn, up 49.8%. While net sales fell short of the Group’s forecast, operating profit surpassed
its forecast by 7.3% and sales and profit both reached record highs for the second consecutive year. While sales
decline overseas in the research business and changes to the IT solutions business structure had negative impacts
on gross profit, this was outweighed by growth in gross profit from sales growth in the domestic research businessand other businesses and lower companywide costs and SG&A expenses. Profit attributable to owners of parent
showed a sizable increase because, although the Group posted an extraordinary loss of ¥38mn on write downs at
Kadence Vietnam, it also posted an extraordinary gain of ¥159mn from recognition of a gain on change in equity
associated with the capital increase through third-party allocation at UNCOVER TRUTH in September 2016.

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growth: +¥134mn

㻷㼍㼐㼑㼚㼏㼑
㻗¥191mn㻵㼀㻌㼟㼛㼘㼡㼠㼕㼛㼚㼟㻌㼎㼡㼟㼕㼚㼑㼟㼟㻾㼑㼟㼑㼍㼞㼏㼔㻌㼎㼡㼟㼕㼚㼑㼟㼟㻵㼙㼜㼍㼏㼠㻌㼛㼚㻌㼓㼞㼛㼟㼟㻌㼜㼞㼛㼒㼕㼠㻌㻔㼐㼛㼙㼑㼟㼠㼕㼏㻕㻭㼐㼖㼡㼟㼠㼑㼐㻌㼒㼞㼛㼙㻌㼎㼡㼟㼕㼚㼑㼟㼟㻌㼟㼠㼞㼡㼏㼠㼡㼞㼑㻌㼛㼜㼑㼞㼍㼠㼕㼚㼓㻌 㻵㼙㼜㼍㼏㼠㻌㼛㼚㻌㼓㼞㼛㼟㼟㻌㼏㼔㼍㼚㼓㼑㼟㻦㻌㻙¥6mn
㼜㼞㼛㼒㼕㼠㻌㼒㼞㼛㼙㻌㼜㼞㼛㼒㼕㼠㻦㻌
㼟㼍㼘㼑㼟㻌㼓㼞㼛㼣㼠㼔㻦¥1,041+¥201mn㻲㼅㻝㻞㻛㻝㻡
㻔㼞㼑㼟㼡㼘㼠㻕
Adjusted operating profit: +¥299mn

㻻㼜㼑㼞㼍㼠㼕㼚㼓㻌㼜㼞㼛㼒㼕㼠¥1,342mn
㻔㼛㼜㼑㼞㼍㼠㼕㼚㼓㻌㼙㼍㼞㼓㼕㼚㻦㻌㻤㻚㻠㻑㻕㻵㼙㼜㼍㼏㼠㻌㼒㼞㼛㼙㻌㼏㼔㼍㼚㼓㼑㼟㻌㼕㼚㻌㼏㼛㼙㼜㼍㼚㼥㼣㼕㼐㼑㻌㼏㼛㼟㼠㼟㻘㻌㻿㻳㻒㻭㻌㼑㼤㼜㼑㼚㼟㼑㼟㻦㻌+¥104mn㻲㼅㻝㻞㻛㻝㻢
㻔㼞㼑㼟㼡㼘㼠㻕

Source: Prepared by FISCO from the Company’s results briefing materials

Consolidated operating profit surpassed the Company’s forecasts by ¥90mn. While a shortfall in sales in the IT
solutions business and changes to the structure of the other businesses segment had negative impacts on grossprofit, this was outweighed by positive impacts on gross profit from sales growth in the domestic research businessand restructuring of the overseas research business and lower companywide adjustments and SG&A expenses,
resulting in the Group surpassing its forecast.

We encourage readers to review our complete legal statement on “Disclaimer” page.

08 15

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

Cross Marketing Group Inc.
3675 TSE Mothers

20-Apr.-2017
http://www.cm-group.co.jp/ir/

Results trends㻲㼍㼏㼠㼛㼞㻌㼍㼚㼍㼘㼥㼟㼕㼟㻌㼛㼒㻌㼐㼕㼒㼒㼑㼞㼑㼚㼏㼑㻌㼎㼑㼠㼣㼑㼑㼚㻌㻲㼅㻝㻞㻛㻝㻢㻌㼏㼛㼚㼟㼛㼘㼕㼐㼍㼠㼑㼐㻌㼛㼜㼑㼞㼍㼠㼕㼚㼓㻌㼜㼞㼛㼒㼕㼠㻌㼞㼑㼟㼡㼘㼠㼟㻌㼍㼚㼐㻌㼒㼛㼞㼑㼏㼍㼟㼠(¥mn)

㻾㼑㼟㼑㼍㼞㼏㼔㻌㼎㼡㼟㼕㼚㼑㼟㼟㻔㼐㼛㼙㼑㼟㼠㼕㼏㻕㻵㼙㼜㼍㼏㼠㻌㼛㼚㻌㼓㼞㼛㼟㼟㻌㼜㼞㼛㼒㼕㼠㻌㼒㼞㼛㼙㻌㼟㼍㼘㼑㼟㻌㼛㼡㼠㼜㼑㼞㼒㼛㼞㼙㼍㼚㼏㼑㻦
+¥5mn

㻝㻘㻠㻜㻜
㻝㻘㻟㻡㻜
㻝㻘㻟㻜㻜

㻝㻘㻞㻡㻜

㻵㼀㻌㼟㼛㼘㼡㼠㼕㼛㼚㼟㻌㼎㼡㼟㼕㼚㼑㼟㼟㻵㼙㼜㼍㼏㼠㻌㼛㼚㻌㼓㼞㼛㼟㼟㻌㼜㼞㼛㼒㼕㼠㻌㼒㼞㼛㼙㻌㼟㼍㼘㼑㼟㻌㼡㼚㼐㼑㼞㼜㼑㼞㼒㼛㼞㼙㼍㼚㼏㼑㻦㻙¥38mn㻝㻘㻞㻜㻜㻻㼜㼑㼞㼍㼠㼕㼚㼓㻌㼜㼞㼛㼒㼕㼠
¥1,251mn㻔㼛㼜㼑㼞㼍㼠㼕㼚㼓㻌㼙㼍㼞㼓㼕㼚㻦㻣㻚㻢㻑㻕

㻝㻘㻝㻡㻜
㻝㻘㻝㻜㻜
㻝㻘㻜㻡㻜

㻾㼑㼟㼑㼍㼞㼏㼔㻌㼡㼟㼕㼚㼑㼟㼟㻌㻔㼛㼢㼑㼞㼟㼑㼍㼟㻕㻵㼙㼜㼍㼏㼠㻌㼛㼚㻌㼓㼞㼛㼟㼟㻌㼜㼞㼛㼒㼕㼠㻌㼒㼞㼛㼙㻌㼞㼑㼟㼠㼞㼡㼏㼠㼡㼞㼕㼚㼓㻦㻌+¥101mn㻝㻘㻜㻜㻜㻲㼅㻝㻞㻛㻝㻢
㻔㼒㼛㼞㼑㼏㼍㼟㼠㻕㻵㼙㼜㼍㼏㼠㻌㼒㼞㼛㼙㻌㼐㼕㼒㼒㼑㼞㼑㼚㼏㼑㻌㼕㼚㻌㼏㼛㼚㼟㼛㼘㼕㼐㼍㼠㼑㼐㻌㼍㼐㼖㼡㼟㼠㼙㼑㼚㼠㼟㻌㼍㼚㼐㻌
SG&A expenses: +¥107mn

㻻㼜㼑㼞㼍㼠㼕㼚㼓㻌㼜㼞㼛㼒㼕㼠
¥1,342mn

㻻㼠㼔㼑㼞 㼎㼡㼟㼕㼚㼑㼟㼟㼑㼟㻵㼙㼜㼍㼏㼠㻌㼛㼚㻌㼓㼞㼛㼟㼟㻌㼜㼞㼛㼒㼕㼠㻌㼒㼞㼛㼙㻌㼞㼑㼟㼠㼞㼡㼏㼠㼡㼞㼕㼚㼓㻦㻙¥84mn㻲㼅㻝㻞㻛㻝㻢
㻔㼞㼑㼟㼡㼘㼠㻕

Operating profit: +¥90mn

Source: Prepared by FISCO from the Company’s results briefing materials

Simplified consolidated statements of income(\mn)
FY12/12FY12/13

FY12/14

FY12/15

FY12/16

FY12/17(forecast)

Net sales

5,446

6,293

8,141

14,85915,96917,350

YoY

23.1%

15.6%

29.4%

82.5%

7.5%

8.6%

3,443

3,765

5,063

8,542

9,430

Cost of sales
YoY

20.8%

9.3%

34.5%

68.7%

10.4%

Gross profit

2,003

2,528

3,079

6,318

6,539

YoY

27.4%

26.2%

21.8%

105.2%

3.5%

1,448

1,803

2,543

5,085

5,197

27.4%

24.5%

41.1%

100.0%

2.2%

555

725

536

1,233

1,342

27.3%

30.8%

-26.1%

129.9%

8.9%

4.3%

581

751

521

1,185

1,267

1,382
9.1%

SG&A expenses
YoY
Operating profit
YoY
Ordinary profit

1,400

YoY

6.7%

29.2%

-30.5%

127.3%

6.9%

Profit

313

438

245

559

837

825

YoY

-5.1%

40.1%

-44.0%

127.6%

49.8%

-1.4%

Source: Prepared by FISCO from securities reports and the Company’s financial results

We encourage readers to review our complete legal statement on “Disclaimer” page.

09 15

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

Cross Marketing Group Inc.
3675 TSE Mothers

20-Apr.-2017
http://www.cm-group.co.jp/ir/

Results trends(1) Segment performancea) Research business
Sales rose and profit declined in the research business as net sales rose 3.6% YoY to ¥13,372mn and segment
profit declined 5.0% to ¥2,256mn. Domestic sales were ¥9,213mn and overseas sales were ¥4,160mn. In addition
to strong growth in domestic sales, newly consolidated subsidiaries such as Shopper’s Eye contributed to sales
growth. Shopper’s Eye began operation in April 2016 and has been expanding the research business by launchingundercover survey services and securing its own survey panel of 100,000 members. In the overseas researchbusiness, operations in the US and Thailand, which began in 2016, got off to a smooth start, but overall overseas
sales declined owing to forex factors and YoY deterioration in the economic environment in some countries andregions. The Group estimates consolidated annual forex sensitivity for every ¥1 change versus the US dollar
at ¥42mn for net sales and ¥3mn for profit. As the Group’s overseas businesses are still in the early stages ofdevelopment and are based in a wide range of countries, exchange rate trends for any single currency do nothave a large impact on earnings. Segment profit declined owing to factors such as upfront investment costs.
b) IT solutions businessIn the IT solutions business, net sales increased 11.9% YoY to ¥1,907mn while segment profit declined 8.8% to¥175mn. Cross Communication, which handles systems development and maintenance, achieved steady growthand Cross J Tech, which handles engineer dispatch, made its first full-year contribution to earnings as shares wereacquired in FY12/15. These factors resulted in strong sales growth. Segment profit declined as costs increased
because the Group prioritized the hiring of human resources to drive medium- to long-term growth.
c) Other businesses
In the others business, net sales rose 172.7% YoY to ¥690mn and segment profit was ¥74mn (loss of ¥55mn in
FY12/15). As a result of the capital increase conducted at UNCOVER TRUTH, the company was converted into an
equity-method affiliate starting in 4Q and D&M, which handles the promotion business, got off to a smooth start,
with sales skyrocketing roughly 700% YoY. D&M is working toward a full-scale launch of its promotion services byleveraging knowledge gained from the research business. The company has made steady progress in customer
development since it began operations in July 2015 and sales are rising.
(2) Financial position and cash flow
Looking at the Group’s financial position at the end of FY12/16, total assets were ¥9,932mn, a decrease of ¥38mn
YoY. Current assets rose by ¥135mn YoY while non-current assets declined by ¥173mn. The decline in non-current
assets was from a ¥253mn reduction in goodwill, which we attribute to a write down at Kadence Vietnam.
Liabilities were ¥5,459mn, down ¥566mn YoY. While interest-bearing debt declined by ¥432mn to ¥2,405mn as ofend-FY12/16, liabilities declined YoY on lower income taxes payable and a decrease in the provision for bonuses.
Net assets increased by ¥529mn to ¥4,474mn due to recording profit attributable to owners of parent. The equity
ratio was 43.6% and the current ratio was 177.4%, indicating that the Group’s financial position is strong. ROE
rose from 17.2% in FY12/15 to 20.7% in FY12/16.

We encourage readers to review our complete legal statement on “Disclaimer” page.

10 15

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

Cross Marketing Group Inc.
3675 TSE Mothers

20-Apr.-2017
http://www.cm-group.co.jp/ir/

Results trends

Simplified balance sheet(\mn)
FY12/12FY12/13

FY12/14

FY12/15

FY12/16

2,047

2,479

4,164

6,423

6,557

Cash and deposits

862

779

1,407

2,384

2,160

Notes and accounts receivable - trade

941

1,410

1,800

2,993

3,386

1,041

1,533

3,708

3,548

3,375

Property, plant and equipment

74

100

496

462

457

Intangible assets

366

803

2,336

2,283

1,918

Goodwill

177

601

2,056

1,956

1,703

600

630

876

802

1,000

3,088

4,012

7,872

9,970

9,932

986

1,438

4,343

4,090

3,697

423

614

898

1,048

1,198

Current assets

Non-current assets

Investments and other assets
Total assets
Current liabilities
Accounts payable - trade
Short-term loans payable andother short-term borrowings
Non-current liabilities
Long-term loans payable andother long-term borrowings

79

135

320

608

895

1,071

16

632

1,935

1,762

52

-

52

1,687

1,510

1,071

1,454

4,975

6,025

5,459

Interest-bearing debt

131

135

372

2,295

2,405

Subscription rights to shares

1

-

-

16

15

Non-controlling interests

16

97

183

156

133

1,826

2,558

2,897

3,945

4,474

Total liabilities

Total net assets

Source: Prepared by FISCO from securities reports and Company’s financial results

Cash and cash equivalents as of the end of FY12/16 were ¥2,159mn, a decrease of ¥224mn from the previous
fiscal year-end. Net cash provided by operating activities was ¥437mn. The main components increasing cash
were ¥1,391mn of profit before income taxes, ¥187mn of, depreciation costs, an increase in accounts payable of¥174mn, and an amortization of goodwill of ¥152mn which outweighed negative factors including a ¥676mn inincome taxes paid, an increase of ¥486mn in notes and accounts receivable-trade, and ¥159mn from recognitionof a gain on change in equity. Net cash used in investment activities was ¥220mn including ¥84mn for purchaseof property, plant and equipment, ¥80mn for purchase of intangible assets, and payment for lease deposit of¥58mn. Net cash used in financial activities was ¥127mn. While there was inflow of ¥434mn from proceeds fromshare issuance to non-controlling shareholders, this was outweighed by outflows of ¥620mn for repayment oflong- term loans payable and ¥273mn for net decrease in short-term loans payable.
Simplified cash flow statement(\mn)
FY12/12FY12/13

FY12/14

FY12/15

FY12/16

Cash flows from operating activities (a)

503

445

453

801

437

Cash flows from investing activities (b)

156

-362

-2,271-18-220

Cash flows from investing activities

-206

-178

2,435

204

-127

Free cash flow (a) + (b)

659

83

-1,817783

217

Cash and cash equivalents at end of period

862

779

1,407

2,384

2,159

Source: Prepared by FISCO from securities reports and the Company’s financial results

We encourage readers to review our complete legal statement on “Disclaimer” page.

11 15

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

Cross Marketing Group Inc.
3675 TSE Mothers

20-Apr.-2017
http://www.cm-group.co.jp/ir/

Results trends

2. Company forecasts for FY12/17
For FY12/17, the Group forecasts consolidated net sales of ¥17,350mn (up 8.6% YoY), operating profit of ¥1,400mn(up 4.3%), ordinary profit of ¥1,382mn (up 9.1%) and profit attributable to owners of parent of ¥825mn (down 1.4%).
While the Group expects a negative impact on profit from an increase in SG&A expenses owing to higher labor costs
and other expenses, it expects this to be outweighed by growth in gross profit from sales growth in the domestic
and overseas research businesses and the IT solutions business.

㻲㼍㼏㼠㼛㼞㻌㼍㼚㼍㼘㼥㼟㼕㼟㻌㼛㼒㻌㻲㼅㻝㻞㻛㻝㻣㻌㼏㼛㼚㼟㼛㼘㼕㼐㼍㼠㼑㼐㻌㼛㼜㼑㼞㼍㼠㼕㼚㼓㻌㼜㼞㼛㼒㼕㼠㻌㼒㼛㼞㼑㼏㼍㼟㼠㻌㻔㼅㼛㼅㻌㼏㼔㼍㼚㼓㼑㻕
(¥mn)
㻞㻘㻠㻜㻜
㻞㻘㻞㻜㻜

㻾㼑㼟㼑㼍㼞㼏㼔㻌㼎㼡㼟㼕㼚㼑㼟㼟㻌㻔㼐㼛㼙㼑㼟㼠㼕㼏㻕㻵㼙㼜㼍㼏㼠㻌㼛㼚㻌㼓㼞㼛㼟㼟㻌㼜㼞㼛㼒㼕㼠㻌㼒㼞㼛㼙㻌㼟㼍㼘㼑㼟
growth: +¥684mn

㻞㻘㻜㻜㻜㻾㼑㼟㼑㼍㼞㼏㼔㻌㼎㼡㼟㼕㼚㼑㼟㼟
㻔㼛㼢㼑㼞㼟㼑㼍㼟㻕㻵㼙㼜㼍㼏㼠㻌㼛㼚㻌㼓㼞㼛㼟㼟㼜㼞㼛㼒㼕㼠㻌㼒㼞㼛㼙㻌㼟㼍㼘㼑㼟㻌
growth: +¥22mn

㻝㻘㻤㻜㻜
㻝㻘㻢㻜㻜
㻝㻘㻠㻜㻜
㻝㻘㻞㻜㻜
㻝㻘㻜㻜㻜

㻵㼀㻌㼟㼛㼘㼡㼠㼕㼛㼚㼟㻌㼎㼡㼟㼕㼚㼑㼟㼟㻵㼙㼜㼍㼏㼠㻌㼛㼚㻌㼓㼞㼛㼟㼟㼜㼞㼛㼒㼕㼠㻌㼒㼞㼛㼙㻌㼟㼍㼘㼑㼟㻌
growth: +¥103mn

㻿㻳㻒㻭㻌㼍㼚㼐㻌㼘㼍㼎㼛㼞㻌㼑㼤㼜㼑㼚㼟㼑㼟㻦㻌+¥257mn㻻㼠㼔㼑㼞㻌㼏㼛㼟㼠㼟㻦㻌+¥476
㻻㼠㼔㼑㼞㻌

㼎㼡㼟㼕㼚㼑㼟㼟㼑㼟㻛㼏㼛㼚㼟㼛㼘㼕㼐㼍㼠㼑㼐㻌㼍㼐㼖㼡㼟㼠㼙㼑㼚㼠㼟㻰㼕㼒㼒㼑㼞㼑㼚㼏㼑㻌㼕㼚㻌㼓㼞㼛㼟㼟㻌㼜㼞㼛㼒㼕㼠㻦㻌㻙¥18mn

㻻㼜㼑㼞㼍㼠㼕㼚㼓㻌㼜㼞㼛㼒㼕㼠¥1,400mn
㻔㼛㼜㼑㼞㼍㼠㼕㼚㼓㻌㼙㼍㼞㼓㼕㼚㻦㻌㻤㻚㻝㻑㻕㻻㼜㼑㼞㼍㼠㼕㼚㼓㻌㼜㼞㼛㼒㼕㼠¥1,342mn
㻔㼛㼜㼑㼞㼍㼠㼕㼚㼓㻌㼙㼍㼞㼓㼕㼚㻦㻌㻤㻚㻠㻑㻕㻲㼅㻝㻞㻛㻝㻢
㻔㼞㼑㼟㼡㼘㼠㻕

Operating profit: +¥58mn

㻲㼅㻝㻞㻛㻝㻣
㻔㼒㼛㼞㼑㼏㼍㼟㼠㻕

Source: Prepared by FISCO from the Company’s results briefing materialsGroup-wide measures planned for 2017 include expanding into new research businesses including medical researchand shopper research, investment in the digital marketing field, strengthening of global partnerships, and strengthening of human resource development.

We encourage readers to review our complete legal statement on “Disclaimer” page.

12 15

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

Cross Marketing Group Inc.
3675 TSE Mothers

20-Apr.-2017
http://www.cm-group.co.jp/ir/██Medium-term management plan
While the Group expects to fall slightly short of the operating profit
target for FY12/17, the final year covered by its medium-term
management plan, it expects to reach its target for cumulative
ordinary profit.
1. Positioning of the medium-term management plan
The three years covered by the medium-term management plan, FY12/15 to FY12/17, have been positioned asa period for accelerating efforts to lay the groundwork for becoming Asia’s No.1 marketing group by proactively
working to expand business fields and business areas. In existing businesses, the Group will work to drive steady
growth and establish an earnings base in the research business and, in human resources strategies, will promotenurturing and enhancement of staff recruited in large numbers. In new businesses, they will promote nurturing andexpansion of business fields and, regarding overseas expansion, will establish a network spanning all Asian regions.
2. Business segment strategies(1) Research businessa) Domestic
1) Work to drive steady growth and establish an earnings base for this core earnings-generating business2) Strengthen development of services using the newest technologies and trends to make online research a corebusiness3) Conduct integrated consulting and planning and provide higher-added-value services that meet clients’ needsb) Overseas
1) Focusing on Asia, establish networks in accordance with the pace of growth of the marketing research market
in each country2) Accelerate business development through strengthening of ties with new M&A additions to the Group such as
Markelytics and Kadence(2) IT solutions business
1) Strengthen systems for development to ensure steady growth of existing businesses
2) Strengthen connections between Group businesses by working to develop systems for new services(3) Other businesses
1) Expand overseas deployment of Web analysis tool USERDIVE, in use since FY12/13
2) Provide new services and advance into related fields

We encourage readers to review our complete legal statement on “Disclaimer” page.

13 15

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

Cross Marketing Group Inc.

20-Apr.-2017

3675 TSE Mothers

http://www.cm-group.co.jp/ir/

Medium-term management plan

3. Progress madeIn FY12/15, the first year covered by the current medium-term management plan, the Group targeted net salesof ¥14,733mn and ordinary profit of ¥900mn and surpassed these targets with net sales of ¥14,859mn andordinary profit of ¥1,185mn. In FY12/16, the second year covered by the plan, net sales were ¥15,969mn, slightly
short of the target of ¥16,287mn but ordinary profit of ¥1,267mn surpassed the Group’s target (¥1,200mn) for
the second consecutive year. In FY12/17, the Company forecasts net sales of ¥17,350mn and ordinary profit of¥1,382mn, slightly below the medium-term management plan targets of net sales of ¥17,985mn and ordinary profitof ¥1,500mn. However, both sales and profit remain on an uptrend. The three years covered by the plan remain
positioned as a period for accelerating efforts to lay the groundwork for becoming Asia’s No.1 marketing group.
Medium-term management plan targets, results, and Company forecasts(\mn)
FY12/15
targetFY12/15
resultFY12/16
targetFY12/16
resultFY12/17targetFY12/17
forecast

14,733

14,85916,287

15,96917,985

17,350Operating profit

945

1,233

1,249

1,342

1,545

1,400

Ordinary profit

900

1,185

1,200

1,267

1,500

1,382

Net sales

Source: Prepared by FISCO from the Company’s results briefing materials and financial results██Share supply-demand balanceHigh ratio of individual investors
Looking at a breakdown of shareholders as of December 31, 2016, we see 3.1% ownership by financial institutions,
4.0% by financial instruments business operators, 18.2% by other companies, 0.8% by overseas corporations, andan overwhelming majority of 73.9% by individual investors and others. Moreover, as of December 31, 2016, the top
shareholder was President and CEO, Miki Igarashi with 42.27% ownership and the second-largest shareholder was
VOYAGE GROUP, with which the Group has a capital and business tie up, with 13.21%.
Ownership ratio by shareholder type (as of December 31, 2016)(%)
Governments
and local
public bodies

Financial
institutions

Financial
instruments
business
operators

-

3.1

4.0

Ownership ratio

Other
companies

Overseas
corporations

Individual
investors andothers

Total

18.2

0.8

73.9

100.0

Source: Securities reports

We encourage readers to review our complete legal statement on “Disclaimer” page.

14 15

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

Cross Marketing Group Inc.
3675 TSE Mothers

20-Apr.-2017
http://www.cm-group.co.jp/ir/

Share supply-demand balance

Major Shareholders (as of December 31, 2016)
Ranking

Name

No. of shares held

Ratio of total shares issued (%)

1

Miki Igarashi

8,256,500

42.27

2

VOYAGE GROUP, Inc.

2,580,000

13.21

3

Shigeki Hitomi

751,200

3.85

4Dentsu Macromill Insight, Inc.

480,000

2.46

5Video Research Ltd.

480,000

2.46

6

The Master Trust Bank of Japan, Ltd. (trust account)

448,700

2.30

7

Hisako Igarashi

390,000

2.00

8

SBI SECURITIES Co., Ltd.

308,800

1.58

9

Chihiro Yoshida

267,600

1.37

10

Tomoko Igarashi

210,000

1.08

14,261,400

73.02

Total
Source: Quarterly securities reports██Shareholder return policy
Commitment to payout ratio of around 15%
The Company targets a consolidated dividend payout ratio of approximately 15%. However, the Company calculates
its payout ratio based on adjusted profit. In other words, distributable funds are calculated based not on actual
profit, but on profit excluding extraordinary gains and losses. In FY12/16, the Group posted an extraordinary gainof ¥159mn from recognition of a gain on change in equity and an extraordinary loss on write downs of ¥38mn.
Therefore, distributable funds were calculated based on income adjusted for extraordinary factors of ¥717mn,
applying a payout ratio of 15% to the number of shares issued for a year-end dividend of ¥3.0 per share, combinedwith the midterm dividend for total annual dividend distributions of ¥5.5 per share.

㻰㼕㼢㼕㼐㼑㼚㼐㻌㼜㼑㼞㻌㼟㼔㼍㼞㼑㻌㼍㼚㼐㻌㼐㼕㼢㼕㼐㼑㼚㼐㻌㼜㼍㼥㼛㼡㼠㻌㼞㼍㼠㼕㼛㻰㼕㼢㼕㼐㼑㼚㼐㻌㼜㼑㼞㻌㼟㼔㼍㼞㼑㻌㻔㼘㼑㼒㼠㻕
㻟㻟㻚㻝

㻔¥㻕
㻣㻚㻜

㻰㼕㼢㼕㼐㼑㼚㼐㻌㼜㼍㼥㼛㼡㼠㻌㼞㼍㼠㼕㼛㻌㻔㼞㼕㼓㼔㼠㻕

㻢㻚㻜

㻔㻑㻕
㻟㻡㻚㻜
㻟㻜㻚㻜

㻡㻚㻜

㻞㻡㻚㻜
㻝㻥㻚㻡

㻠㻚㻜
㻟㻚㻜

㻝㻞㻚㻢

㻝㻟㻚㻡

㻢㻚㻜

㻝㻞㻚㻤

㻞㻜㻚㻜
㻝㻡㻚㻜

㻢㻚㻡

㻠㻚㻡

㻞㻚㻜
㻝㻚㻜

㻝㻡㻚㻠

㻝㻜㻚㻜

㻡㻚㻡

㻟㻚㻟
㻞㻚㻝

㻡㻚㻜

㻜㻚㻜

㻜㻚㻜

㻲㼅㻝㻞㻛㻝㻞

㻲㼅㻝㻞㻛㻝㻟

㻲㼅㻝㻞㻛㻝㻠

㻲㼅㻝㻞㻛㻝㻡

㻲㼅㻝㻞㻛㻝㻢

㻲㼅㻝㻞㻛㻝㻣㻌㻱

Source: Prepared by FISCO from securities reports and the Company’s financial results
Note: The Group conducted a 2-for-1 stock split on February 18, 2013, and a 3-for-1 stock split on June 1, 2014. Dividends
per share for prior years are adjusted for these stock splits retrospectively, rounded down to the first decimal place.



We encourage readers to review our complete legal statement on “Disclaimer” page.

15 15

Disclaimer
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This report is based on information that we believe to be reliable, but we do not confirm or
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This report was prepared at the request of its subject company using information provided
by the company in interviews, but the entire content of the report, including suppositions andconclusions, is the result of our analysis. The content of this report is based on informationthat was current at the time the report was produced, but this information and the content of
this report are subject to change without prior notice.
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The final selection of investments and determination of appropriate prices for investment
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FISCO Ltd.