RVISION / 9416

COVERAGE INITIATED ON:

2016.09.01

LAST UPDATE:

2019.12.19

Shared Research Inc. has produced this report by request from the company discussed in the report. The aim is toprovide an “owner’s manual” to investors. We at Shared Research Inc. make every effort to provide an accurate,
objective, and neutral analysis. In order to highlight any biases, we clearly attribute our data and findings. We will
always present opinions from company management as such. Our views are ours where stated. We do not try toconvince or influence, only inform. We appreciate your suggestions and feedback. Write to us at
sr_inquiries@sharedresearch.jp or find us on Bloomberg.

Research Coverage Report by Shared Research Inc.

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

INDEX
How to read a Shared Research report: This report begins with the trends and outlook section, which discusses the company’s most recent
earnings. First-time readers should start at the business section later in the report.

Executive Summary ----------------------------------------------------------------------------------------------------------------------------------- 3
Key financial data ------------------------------------------------------------------------------------------------------------------------------------- 5
Recent updates ---------------------------------------------------------------------------------------------------------------------------------------- 7
Highlights ------------------------------------------------------------------------------------------------------------------------------------------------------------7
Trends and outlook ----------------------------------------------------------------------------------------------------------------------------------- 8
Quarterly trends and results -----------------------------------------------------------------------------------------------------------------------------------8
Business ------------------------------------------------------------------------------------------------------------------------------------------------ 22
Business segments ---------------------------------------------------------------------------------------------------------------------------------------------- 27
Key group companies------------------------------------------------------------------------------------------------------------------------------------------ 34
Profitability analysis --------------------------------------------------------------------------------------------------------------------------------------------- 35
Market and value chain ---------------------------------------------------------------------------------------------------------------------------------------- 36
Strengths and weaknesses------------------------------------------------------------------------------------------------------------------------------------ 40
Historical performance and financial statements ------------------------------------------------------------------------------------------ 41
Historical performance ---------------------------------------------------------------------------------------------------------------------------------------- 41
Income statement ----------------------------------------------------------------------------------------------------------------------------------------------- 55
Balance sheet ----------------------------------------------------------------------------------------------------------------------------------------------------- 56
Cash flow statement -------------------------------------------------------------------------------------------------------------------------------------------- 58
Other information ---------------------------------------------------------------------------------------------------------------------------------- 59
History -------------------------------------------------------------------------------------------------------------------------------------------------------------- 59
News and topics ------------------------------------------------------------------------------------------------------------------------------------------------- 59
Major shareholders (as of December 31, 2018)------------------------------------------------------------------------------------------------------- 60
Shareholder returns--------------------------------------------------------------------------------------------------------------------------------------------- 60
Corporate governance and top management --------------------------------------------------------------------------------------------------------- 60
Employees --------------------------------------------------------------------------------------------------------------------------------------------------------- 61
By the way --------------------------------------------------------------------------------------------------------------------------------------------------------- 61
Profile---------------------------------------------------------------------------------------------------------------------------------------------------------------- 62

02/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Executive Summary
Business overview◤ Vision has two main businesses: Global WiFi (63% of sales and 66% of operating profit), in which it rents out mobile WiFi

routers, and Information and Communications Service (36% of sales, 33% of operating profit), in which it provides

telecommunications services and sells office equipment. Since its launch in 2012, the Global WiFi business has been increasing
its share of both sales and operating profit. (figures as of FY12/18)◤ In the Global WiFi business, Vision rents out mobile WiFi routers* to both outbound (Japanese travelers going overseas) andinbound (people visiting Japan) travelers. The company procures mobile network access directly from telecommunications
companies in Japan and abroad, enabling it to offer high-quality internet services at low prices. In FY12/18, roughly 63% ofrental customers were individuals, and 37% were companies (by number of rentals). In FY12/18 the company rented out
approximately 2,231,000 routers.

*Wireless LAN (WiFi) routers enable direct connection to mobile networks on the go via smartphones, tablets, laptops, or game consoles.

◤ In the Information and Communications Service business, the company mainly targets new businesses (startups). It arranges

telephone lines and other information and communication services, and sells office equipment. Main sources of revenue:

equipment sales, commissions from telecommunications companies, and revenue from office equipment maintenance. The
company initially provides equipment at low prices, aiming to grow revenue per customer by expanding the number ofservices provided in line with customers’ growth. Under this business model, most revenues are recurring monthly revenues.
The company’s marketing activities focus on customers who have demonstrated interest by reaching out to the company, andleverage customer referrals from other divisions as well as web marketing, call centers, and a Customer Loyalty Team (CLT;
supporting existing customers). Marketing can be seen as effective: for example, sales of copiers per salesperson were roughly
four times the industry average.

Trends and outlook◤ In FY12/18, sales came to JPY21.5bn (22.5% YoY), operating profit to JPY2.5bn (+38.9% YoY), recurring profit to JPY2.5bn(+39.3% YoY), and net income attributable to owners of the parent of JPY1.5bn (26.5% YoY). The company posted record
sales and profits at all levels. Progress toward full-year target was 101.0% for sales, 125.0% for operating profit, 125.7% forrecurring profit, and 121.3% for net income.

◤ FY12/19 forecast: When it released its 1H results, the company also revised upward its full-year forecast. The revised forecast

calls for sales of JPY25.8bn (+19.9% YoY), operating profit of JPY3.3bn (+31.4% YoY), recurring profit of JPY3.2bn (+29.9%
YoY), and net income attributable to owners of the parent of JPY2.1bn (+38.3% YoY). It expects sales and profits to reachrecord highs. For the Global WiFi business, it forecasts sales of JPY16.4bn (+21.4% YoY) and segment profit of JPY2.9bn(+20.8% YoY); for the Information and Communications Service business, it expects sales of JPY8.6bn (+10.5% YoY) andsegment profit of JPY1.5bn (+26.6% YoY). The initial forecast was for full-year sales of JPY24.5bn (+13.8% YoY), operating
profit of JPY3.0bn (+21.2% YoY), recurring profit of JPY3.0bn (+20.5% YoY), and net income attributable to owners of theparent of JPY2.0bn (+31.0% YoY).
◤ Vision has not released a medium-term plan, but it aims for sharp expansion in profit alongside sustained investment in future

growth. To this end, it has positioned the Global WiFi business as the growth driver and the Information and Communications
Service business as a source of stable growth, and is pursuing expansion in its operations accordingly. To prepare for futurebusiness development in its group, the company will partially change its Articles of Incorporation and plans to develop
services for travelers, who are its primary customers. It will expand into business fields it can pursue independently, andincrease its ratio of in-house development including for services. The company envisions three growth stages in the mainstay
Global WiFi business: targeting the outbound market, then the inbound market, followed by the overseas-to-overseas(non-Japanese travelers going to countries other than Japan) markets. In the outbound market, the company aims to increase

03/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

the number of regions where it operates. In the inbound market, it plans to increase the number of locations in Japan where
customers can pick up routers to capture more demand.

Strengths and weaknesses
Shared Research believes that Vision has three strengths: a niche market focus, an efficient marketing model using web marketing,and direct network access from major telecom carriers that allows it to provide high-quality internet service at low prices.
Weaknesses: little technological differentiation, limited time to prove itself to clients, and relationships with telecom carriers in
the Information and Communications Service business. (See Strengths and Weaknesses section for details.)

04/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Key financial data
Income statement

FY12/10

FY12/11

FY12/12FY12/13

FY12/14

FY12/15

FY12/16

FY12/17

FY12/18

Par.

Par.

Par.

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

Est.

Sales

6,462

6,999

6,527

9,204

10,185

12,485

14,844

17,55521,50425,793

YoY

-

8.3%

-6.7%

(JPYmn)Gross profit

FY12/19

41.0%

10.7%

22.6%

18.9%

18.3%

22.5%

19.9%

5,199

5,652

6,910

8,622

10,161

12,65015,094
19.3%

YoY

-

8.7%

22.3%

24.8%

17.8%

24.5%

GPM

56.5%

55.5%

55.3%

58.1%

57.9%

58.8%

58.5%

10

286

805

1,290

1,789

2,484

3,264

YoY

-

2742.1%

181.2%

60.3%

38.6%

38.9%

31.4%

OPM

0.1%

2.8%

6.4%

8.7%

10.2%

11.6%

12.7%

Operating profit

Recurring profit

345

57

285

30

324

808

1,298

1,795

2,500

3,248

YoY

-

-83.5%

399.6%-89.5%

987.9%

149.3%

60.8%

38.3%

39.3%

29.9%

RPM

5.3%

0.8%

4.4%

0.3%

3.2%

6.5%

8.7%

10.2%

11.6%

12.6%

147

1

-216

75

275

585

814

1,209

1,529

2,116

-

-99.1%--

264.9%

112.6%

39.0%

48.5%

26.5%

38.3%

2.3%

0.0%

-3.3%

0.8%

2.7%

4.7%

5.5%

6.9%

7.1%

8.2%

16,278.0

Net income attributable to owners of the parent
YoY
Net margin

Per share data (JPY; adjusted for stock splits)
Shares issued (year-end; '000)

56.4

56.4

59.0

59.0

59.0

8,118.7

8,118.7

16,278.0

EPS

26.02

0.24

-37.19

12.78

46.64

97.89

100.24

74.30

94.20

130.38

-

-

-

-

-

95.88
-

98.87
-

72.62
-

92.00
-

-

260.70261.81

258.10267.35321.69800.16900.64526.19602.84

EPS (fully diluted)
Dividend per share
Book value per share
Balance sheet (JPYmn)

-

-

-

1,328

1,546

5,774

6,242

6,256

7,563

Total current assets

Cash and cash equivalents

-

-

-

2,835

2,777

7,404

8,130

8,995

10,455

Tangible fixed assets

-

-

-

70

229

282

481

859

1,072

Investments and other assets

-

-

-

458

626

516

901

1,038

1,348

Intangible fixed assets
Total assets
Short-term debt
Total current liabilities

-

-

-

319

286

327

423

591

677

2,762

2,962

3,283

3,683

3,917

8,528

9,935

11,484

13,552

-

-

-

328

313

27

10

2

-

-

-

-

1,879

1,904

2,019

2,600

2,895

3,749

Long-term debt

-

-

-

213

100

13

2

-

-

Total fixed liabilities

-

-

-

225

113

13

23

2

Total liabilities
Net assets
Total interest-bearing debt

-

-

-

2,104

2,017

2,032

2,623

2,897

3,749

1,471

1,477

1,524

1,579

1,899

6,496

7,312

8,586

9,803

-

-

-

541

413

40

60

25

2

Statement of cash flows (JPYmn)
Cash flows from operating activities

-

-

-

317

553

799

1,493

1,617

3

Cash flows from investing activities

-

-

-

83

-312

-629

-473

-1,416

4

Cash flows from financing activities

-

-

-

26

-128

3,667

-38

-8

6

ROA (RP-based)

12.5%

2.0%

9.1%

0.9%

8.5%

13.0%

14.1%

16.8%

20.0%

ROE

10.5%

0.1%

-

5.0%

15.8%

13.9%

11.8%

15.2%

16.7%

Equity ratio

53.3%

49.9%

46.4%

42.9%

48.5%

76.2%

73.6%

73.6%

72.2%

Financial ratios

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.
Note: Consolidated data from FY12/13
Note: The company issued a 100-for-1 stock split in December 2014, and issued a 2-for-1 stock split in July 2017. Per share data have been retroactively restated.
However, a 3-for-1 stock split scheduled with the record date of September 30, 2019 is not incorporated into the data above.

05/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Segment earnings
Performance by segment(JPYmn)Sales
Global WiFi
Information and Communications Service
Other

FY12/10Par.

FY12/11Par.
-

FY12/12Par.
-

FY12/13 FY12/14 FY12/15 FY12/16 FY12/17 FY12/18 FY12/19
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Est.
9,204
10,185
12,485
14,844
17,55521,50425,793
1,887
3,756
6,035
7,882
10,392
13,506
16,395
7,312
6,411
6,440
6,948
7,104
7,774
8,587
5
18
10
13
58
224
814
10.7%

22.6%

18.9%

18.3%

22.5%

19.9%

Global WiFi

99.0%

60.7%

30.6%

31.8%

30.0%

21.4%

Information and Communications Service-12.3%

0.5%

7.9%

2.2%

9.4%

10.5%

Other

278.7%-46.9%

33.5%

345.8%

283.8%

263.3%

YoY% of sales

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

Global WiFi

20.5%

36.9%

48.3%

53.1%

59.2%

62.8%

63.6%

Information and Communications Service

79.4%

62.9%

51.6%

46.8%

40.5%

36.2%

33.3%

Other

0.1%

0.2%

0.1%

0.1%

0.3%

1.0%

3.2%

10
-184
566
-8
-364

286
180
724
8
-626

805
594
904
-12
-681

1,290
1,141
1,025
-54
-821

1,789
1,593
1,173
-103
-874

2,484
2,414
1,219
-194
-954

3,264
2,916
1,543
-69
-1,126

Operating profit
Global WiFi
Information and Communications Service
Other
Adjustment

-

-

-

YoY
Global WiFi
Information and Communications Service
Other
Operating profit (excl. adjustments)

0.1%

2,741.8%

181.2%

60.3%

38.6%

38.9%

31.4%

-197.8%230.5%

92.2%

39.7%

51.5%

20.8%

27.9%

24.8%

13.4%

14.4%

3.9%

26.6%

-

-

-

-

-

-

2.8%

6.4%

8.7%

10.2%

11.6%

12.7%

Global WiFi

-9.7%

4.8%

9.8%

14.5%

15.3%

17.9%

17.8%

Information and Communications Service

7.7%

11.3%

14.0%

14.7%

16.5%

15.7%

18.0%

-

45.8%

-

-

-

-

-8.5%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

Global WiFi

-49.1%

19.7%

40.0%

54.0%

59.8%

70.2%

66.4%

Information and Communications Service

151.3%

79.4%

60.8%

48.5%

44.0%

35.4%

35.1%

-2.2%

0.9%

-0.8%

-2.6%

-3.9%

-5.6%

-1.6%

Other
% of OP (incl. adjustments)

Other

Global WiFi usage(units)Total

FY12/10 FY12/11 FY12/12 FY12/13 FY12/14 FY12/15 FY12/16 FY12/17 FY12/18 FY12/19
Par.
Par.
Par.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
Est.
55,507

241,737

516,199

783,050

1,144,045

1,650,969

2,231,775

Overseas use

49,027

223,706

462,953

648,475

886,824

1,302,646

1,759,514-

Domestic use

244

7,511

35,51290,906

190,665

285,708

407,517-

6,236

10,52017,734

43,66966,556

62,61564,744-

Overseas business (excl. domestic use)-

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.

06/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Recent updates
Highlights
On December 19, 2019, Shared Research updated the report following interviews with Vision Inc.

On November 8, 2019, the company announced earnings results for Q3 FY12/19; see the results section for details.

For previous releases and developments, please refer to the News and topics section.

07/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Trends and outlook
Quarterly trends and results
FY12/17

Quarterly earnings(JPYmn)
Sales
YoY

Q1

FY12/18

FY12/19

FY12/19

4,326

Q2
4,024

Q3
4,827

Q4
4,377

Q1
4,922

Q2
4,933

Q3
5,962

Q4
5,687

Q1
6,470

Q2
6,467

Q3
7,610

Q4
-

24.1%

16.1%

18.2%

14.9%

13.8%

22.6%

23.5%

29.9%

31.4%

31.1%

27.7%

-

Gross profit

2,521

2,330

2,790

2,520

2,931

2,889

3,579

3,251

3,798

3,699

4,474

-

YoY

25.9%

16.7%

15.9%

13.6%

16.2%

23.9%

28.3%

29.0%

29.6%

28.0%

25.0%

-

GPM

58.3%

57.9%

57.8%

57.6%

59.5%

58.6%

60.0%

57.2%

58.7%

57.2%

58.8%

-

2,008

1,994

2,101

2,270

2,194

2,389

2,679

2,903

2,818

2,988

3,194

-

SG&A expenses
YoY

18.9%

13.9%

11.1%

13.4%

9.3%

19.8%

27.5%

27.9%

28.4%

25.1%

19.2%

SG&A ratio

46.4%

49.5%

43.5%

51.9%

44.6%

48.4%

44.9%

51.1%

43.6%

46.2%

42.0%

-

Operating profit

513

337

689

249

736

500

900

348

980

710

1,280

-

YoY

64.0%

37.4%

33.2%

16.1%

43.4%

48.4%

30.7%

39.6%

33.1%

42.0%

42.2%

-

OPM

11.9%

8.4%

14.3%

5.7%

15.0%

10.1%

15.1%

6.1%

15.1%

11.0%

16.8%

-

505

346

690

254

746

500

901

354

981

693

1,338

-

55.1%

67.9%

34.3%

0.6%

47.8%

44.6%

30.5%

39.0%

31.6%

38.6%

48.6%

-

11.7%
342
61.0%

8.6%
230
77.3%

14.3%
468
36.7%

5.8%

15.1%

10.1%

15.1%

6.2%

15.2%

10.7%

17.6%

-

170

514

295

623

97

669

406

911

-

30.5%

50.4%

28.6%

33.2%

-42.8%

30.2%

37.5%

46.3%

-

Recurring profit
YoY
RPM
Net income attributable to owners of the parent
YoY
Net margin

7.9%

5.7%

9.7%

3.9%

10.4%

6.0%

10.5%

1.7%

10.3%

6.3%

12.0%

-

Cumulative
Sales

Q1
4,326

Q2
8,351

Q3
13,178Q4
17,555

Q1
4,922

Q2
9,856

Q3
15,817Q4
21,504

Q1
6,470

Q2
12,937Q3
20,547

Q4
-

YoY

24.1%

20.1%

19.4%

18.3%

13.8%

18.0%

20.0%

22.5%

31.4%

31.3%

29.9%

-

Gross profit

2,521

4,852

7,641

10,161

2,931

5,819

9,399

12,650

3,798

7,496

11,971

-

YoY

25.9%

21.4%

19.3%

17.8%

16.2%

19.9%

23.0%

24.5%

29.6%

28.8%

27.4%

GPM

58.3%

58.1%

58.0%

57.9%

59.5%

59.0%

59.4%

58.8%

58.7%

57.9%

58.3%

-

2,008

4,001

6,102

8,372

2,194

4,583

7,262

10,166

2,818

5,806

9,000

-

SG&A expenses
YoY

18.9%

16.3%

14.5%

14.2%

9.3%

14.5%

19.0%

21.4%

28.4%

26.7%

23.9%

46.4%

47.9%

46.3%

47.7%

44.6%

46.5%

45.9%

47.3%

43.6%

44.9%

43.8%

-

Operating profit

513

850

1,539

1,789

736

1,236

2,136

2,484

980

1,690

2,970

-

YoY

64.0%

52.3%

43.1%

38.6%

43.4%

45.4%

38.8%

38.9%

33.1%

36.7%

39.0%

-

OPM

11.9%

10.2%

11.7%

10.2%

15.0%

12.5%

13.5%

11.6%

15.1%

13.1%

14.5%

-

505

850

1,541

1,795

746

1,246

2,146

2,500

981

1,674

3,012

-

55.1%

60.1%

47.4%

38.3%

47.8%

46.5%

39.3%

39.3%

31.6%

34.4%

40.3%

-

11.7%
342
61.0%

10.2%
571

11.7%
1,039

10.2%

15.1%

12.6%

13.6%

11.6%

15.2%

12.9%

14.7%

-

1,209

514

809

1,433

1,529

669

1,075

1,987

-

67.2%

51.9%

48.5%

50.4%

41.6%

37.9%

26.5%

30.2%

32.9%

38.7%

-

7.9%

6.8%

7.9%

6.9%

10.4%

8.2%

9.1%

7.1%

10.3%

8.3%

9.7%

-

YoY
RPM
Net income attributable to owners of the parent
YoY
Net margin
Quarterly(JPYmn)FY12/17

FY03/18

1H Est.
11,614111.4%

17.8%

1,437

117.6%

16.2%
12.4%

1,439

116.3%

15.5%
12.4%

962

111.8%

18.9%
8.3%% of FYFY Est.
25,793

79.7%

19.9%

-

SG&A ratio

Recurring profit% of 1H

FY03/19

3,264

91.0%

31.4%
12.7%

3,248

92.7%

29.9%
12.6%

2,116

93.9%

38.3%
8.2%

FY12/19

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

4,326

4,024

4,827

4,377

4,922

4,933

5,962

5,687

6,470

6,467

7,610

111.4%

Global WiFi

2,506

2,227

3,023

2,637

3,090

2,898

3,929

3,589

4,076

4,109

5,085

-

-

Information and Communications Service

1,810

1,782

1,787

1,725

1,818

2,009

1,976

1,970

2,302

2,207

2,330

-

-

Sales

Other
Operating profit

Q4% of 1H

1H Est.
11,614

10

15

17

15

15

26

57

127

92

151

195

-

-

513

337

689

249

736

500

900

348

980

710

1,280

117.6%

1,437

Global WiFi

466

271

631

224

701

448

769

495

871

725

1,275

-

-

Information and Communications Service

282

317

288

286

296

338

372

213

482

350

342

-

-

Other, adjustments
OPM

-235

-251

-230

-261

-262

-286

-241

-360

-374

-365

-337

-

-

11.9%

8.4%

14.3%

5.7%

15.0%

10.1%

15.1%

6.1%

15.1%

11.0%

16.8%

-

12.4%

Global WiFi

18.6%

12.2%

20.9%

8.5%

22.7%

15.5%

19.6%

13.8%

21.4%

17.6%

25.1%

-

-

Information and Communications Service

15.6%

17.8%

16.1%

16.6%

16.3%

16.8%

18.8%

10.8%

20.9%

15.9%

14.7%

-

-

Cumulative

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

4,326

8,351

13,17817,555

4,922

9,856

15,81721,504

6,470

12,937

20,54779.7%

25,793Global WiFi

2,506

4,733

7,755

10,392

3,090

5,988

9,917

13,506

4,076

8,185

13,27080.9%

16,395

Information and Communications Service

1,810

3,592

5,379

7,104

1,818

3,827

5,803

7,774

2,302

4,509

6,839

79.6%

8,587

10

26

43

58

15

41

97

224

92

243

438

54.0%

811

513

850

1,539

1,789

736

1,236

2,136

2,484

980

1,690

2,970

91.0%

3,264

Sales

Other
Operating profit

Q4% of FYFY Est.

Global WiFi

466

738

1,369

1,593

701

1,149

1,919

2,414

871

1,596

2,871

98.5%

2,916

Information and Communications Service

282

599

887

1,173

296

634

1,006

1,219

482

832

1,175

76.1%

1,543

Other, adjustments

-235

-486

-716

-977

-262

-547

-789

-1,149-374-738-1,075--1,195

11.9%

10.2%

11.7%

10.2%

15.0%

12.5%

13.5%

11.6%

15.1%

13.1%

14.5%

-

12.7%

Global WiFi

18.6%

15.6%

17.6%

15.3%

22.7%

19.2%

19.3%

17.9%

21.4%

19.5%

21.6%

-

17.8%

Information and Communications Service

15.6%

16.7%

16.5%

16.5%

16.3%

16.6%

17.3%

15.7%

20.9%

18.5%

17.2%

-

18.0%

OPM

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.
Note: Quarterly earnings data for FY12/15 are for reference purposes only; the company has not officially compiled quarterly data for the period.
Note: Company estimates are latest figures.

08/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Cumulative Q3 FY12/19 results (out November 8, 2019)▷

Sales:

JPY20.5bn (+29.9% YoY)▷

Operating profit:

JPY3.0bn (+39.0% YoY)

Recurring profit:

JPY3.0bn (+40.3% YoY)

Net income*:

JPY2.0bn (+38.7% YoY)▷▷

* Net income attributable to owners of the parent

▷
▷

▷

▷

The company posted record sales and profits at all levels in cumulative Q3.
Against its full-year FY12/19 forecast, progress rates in cumulative Q3 were 79.7% for sales (versus 73.6% of full-year FY12/18
results in cumulative Q3 FY12/18), 91.0% for operating profit (86.0%), 92.7% for recurring profit (85.9%), and 93.9% for net
income attributable to owners of the parent (93.7%).
Sales up 29.9% YoY: The Global WiFi business generated 33.8% YoY sales growth on an increase in the number of rentals andhigher ARPU due to rising demand for the Global WiFi Unlimited Plan. The Information and Communications Service businessalso posted a solid 17.8% sales increase with ongoing contributions from cross-selling and upselling.
Operating profit up 39.0% YoY: Despite sustained efforts to improve cost efficiency, GPM declined 1.2pp YoY to 58.3% as aresult of changes in the service mix (of the Information and Communications Service segment). The SG&A expense ratio fell
2.1pp YoY to 43.8% thanks to enhanced operational efficiency through the utilization of artificial intelligence (AI) and robot▷

process automation (RPA). OPM rose 1.0pp YoY to 14.5%.
Full-year forecast: No changes have been made to the full-year forecast that was revised upward on August 9, 2019. If we
subtract cumulative Q3 results from the full-year company forecast, results in Q4 (October–December 2019) would be
JPY5.2bn (-7.8% YoY), assuming performance exactly matches the forecast. However, the company does not expect any
particular negative impact on results, nor does it project any significant changes to earnings trends. Vision may be capable ofusing any profit it generates in excess of its forecast for investment in anticipation of growth in FY12/20 and beyond (increased
procurement of Wi-Fi routers, etc.), but the extent to which this is possible may be limited. Adjustments to sales are notpossible. It is natural to think that the company has the capacity to perform above projections.

Global WiFi▷

Cumulative Q3 FY12/19 segment sales were JPY13.3bn (+33.8% YoY) and segment profit was JPY2.9bn (+49.6% YoY).
Segment profit margin rose 2.3pp YoY to 21.6%.
 Sales grew due in part to an increase in rentals and a rise in ARPU caused by higher demand for the Global WiFi Unlimited
Plan (more details below). Contributing to the improved profit margin were reductions in CoGS and operational costs by
utilizing cloud WiFi, improvement in procurement terms and conditions associated with an increase in the procurementof communication lines (volume discounts), and the application of artificial intelligence and robotic process automation.
 Overall ARPU had been falling but now seems to be recovering as both corporate and private demand for the Global
WiFi Unlimited Plan (fees per day are two to three times that of the normal plan) rise. The company broke out of adownward trend in ARPU that had been the result of growth in individual users outpacing that of corporate users, which▷bring higher ARPU (ARPU in cumulative Q3 was roughly level YoY).
Despite uncertainties surrounding the Japanese economy, the travel market remained brisk. Both the number of Japanese
traveling overseas and the number of foreigners visiting Japan, driven by travelers from East Asia led by China in particular, hit
record highs during cumulative Q3 (source: Japan National Tourism Organization [JNTO]). The upward YoY trend in the

09/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

number of Japanese traveling overseas has continued for 19 consecutive months since March 2018, and the monthly numberof foreign visitors to Japan from China exceeded one million for the first time in July 2019 and then again in August. The Rugby
World Cup provided additional tailwind.
 The company estimates that the Rugby World Cup had a minimal positive impact on results.
 According to the company, the decline in tourists from South Korea and Hong Kong had a negligible negative impact on
results, as they each accounted for only 2–3% of earnings.
 Results in Q3 FY12/18 were affected by the closing of Kansai International Airport due to a typhoon (Terminal One, oneof its core terminals, did not open for 17 days). In contrast, several typhoons struck Japan in cumulative Q3 FY12/19, but▷

no such airport closings occurred.
Sales and profit were both up as a result of investment aimed at capturing significant travel demand and becoming thecompany of choice for users for the long term.

Customer profile in cumulative Q3 FY12/19▷ Individual users accounted for 64.5% of rentals (60.7% in Q3 FY12/18), and corporate users accounted for 35.5% (39.3%). In
terms of monetary value generated, individual users accounted for 55.8% (51.9%), and corporate users accounted for 44.2%(48.1%).
 On a cumulative basis, individual customers accounted for higher percentages of both rentals and monetary value generated
YoY.
 In Q3 (July–September 2019), corporate customers accounted for a higher percentage of both rentals and monetary value
generated YoY (+0.4pp YoY in terms of rentals and +0.7pp YoY in terms of monetary value generated). The company
encouraged continued corporate use through “GLOBAL WiFi for Biz,” a model through which devices are permanently kept at
offices (enabling constant availability without the need for rental agreement procedures for each use). This has also led to a
reduction in operational costs.

▷ New users accounted for 45.6% of rentals (45.9% in Q3 FY12/18) and repeat users accounted for 54.4% (54.1%). In terms ofmonetary value generated, new users accounted for 47.3% (46.4%) and repeat users for 52.7% (53.6%).

Details of initiatives and investment▷▷

Vision boosted ARPU through the popularity of its unlimited data plan, especially among corporate users.
It responded to significant demand by increasing its procurement of WiFi routers and SIM cards. On August 1, 2019, thecompany began offering rentals and, on an OEM basis, supplying GW01, a cloud-compatible smartphone-type WiFi router(reduced thickness from previous models by 59%, weight by 25%). Shipments for “GLOBAL WiFi for Biz,” a permanent
in-house mobile Wi-Fi router for offices, increased as it gained a positive reputation. Up until Q3 FY12/19, cloud-compatible
routers accounted for an average of 93.8% of routers rented out (These routers cannot be used in certain countries dependingon the telecommunications operators involved, so the company does not expect rentals of routers of this type to account formuch more than 90% of all rentals).

▷

It controlled the rise in cost ratio by improving procurement terms via volume discounts and reducing telecommunications▷

The company worked to relieve congestion and improve operational efficiency by making stores smarter through measures

CoGS by utilizing cloud WiFi.

such as Smart Pickup automated lockers, Smart Entry self-service kiosks, and Smart Check QR code reception counters.

10/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp▷

At Kitakyushu Airport and Miyako Shimojishima Airport, Vision launched fully automated stores that can deliver devices to▷

The company, through its strategy of making stores smarter, the use of cloud WiFi, and coordination of databases, has madecustomers and accept returns from them, as well as vending machines for selling prepaid SIM cards for use in Japan.

possible on-the-spot (even at the counter) online applications to capture business from even customers who have been
enticed by advertisement for the company’s service on the way to the airport, thus improving the efficiency of procedures atairport sales counters.

Global WiFi Unlimited Plan
▷ Vision offers a range of data plans tailored to customer needs. It has also responded to calls from customers seeking to break freefrom data usage limits by offering the Global WiFi Unlimited Plan, which offers unlimited usage volume, on a trial basis starting in
February 2019. The company began gradually expanding the plan’s area of availability in March of the same year. As of
November 30, 2019, the company was offering this plan in 73 countries. Daily fees for the plan range from JPY2,070–3,170 (feesvary by country; the fee in Japan is JPY1,170). With early reservation discounts, these fees range from JPY1,870–2,970 (JPY970 in
Japan). These fees are two to three times higher than those of normal plans with limited data usage (average daily fees of
JPY1,000).

▷ Background: Recently, users have tended to consume large volumes of data due to the diversification of smartphone apps, thesending and receiving of large or high-resolution images and videos, and SNS posting. In some cases, several friends, family
members or acquaintances will share the same device.

▷ According to the company, the Global WiFi Unlimited Plan contributes to higher ARPU (as it is offered at a price two to threetimes higher than normal plans) while also encouraging users of normal plans with limited data usage (daily limits of 300MB,
600MB, and 1.1GB) to step up to the next higher plan, which also raises ARPU.

Expansion of mid-travel services (optional services)▷ In response to customer requests, the company expanded mid-travel services (optional services) in August 2019. Service details
are as follows: Addition of data volume during travel: When traveling, users have the option of adding additional data volume when they
have reached their daily limit (this option is possible thanks to cloud-based SIM management).
 Layover option: This option allows users to send and receive data during layovers at airports. The fee for this option is only an
additional JPY1,500, regardless of the number of layovers or the number of days it is used.

Information and Communications Service▷

Segment sales were JPY6.8bn (+17.8% YoY) and segment profit was JPY1.2bn (+16.7% YoY). Segment profit fell 0.1pp YoY to17.2%.
 Despite sluggish performance in infrastructure-related communication and lines and in orders the company receives as a
new power sales agent, both sales and profit posted double-digit growth YoY thanks to an increase in revenue per ordercaused by the sale of sets packaging multiple products together and higher profitability due to in-house handling of officeequipment installation work and website production. However, the segment profit margin fell somewhat due to an increase▷in the sales ratios of products that accompany procurement costs, such as office equipment (multifunction devices).
The main activities in this business are for arranging landline, mobile, and broadband telecommunications services, selling andleasing office equipment, and building websites for startups and SMEs.

11/63

R VISION / 9416
Coverage▷

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Vision makes cross-selling and upselling proposals suited to the growth stages and needs of its key target customers (startups
and venture firms). The company aims for long-term customer interaction and stable growth by having customers sign up for
its support and maintenance services. It saw sluggish growth in infrastructure-related communication lines and in orders as a
new power sales agent, but sales and profit were up on an increase in revenue per order with the sale of sets of multiple
products and on improved profitability attributed to in-house handling of office equipment installation work and website▷▷▷

production.
In response to diverse customer needs, Vision increased the number of products and services it handles, diversifying its
monetization sources and enhancing its price competitiveness.
With increased demand for its new labor consulting service (subsidies consulting service), the company steadily increased thenumber of contracts by promoting its proprietary cloud-based Vision Workflow System (VWS), which operates on a monthly
fee basis.
Vision says one of its strengths is improved business efficiency owing to a system in which coordination between divisions
serves as a bridge in conveying customer needs to the relevant division.

Other▷ Sales in the Other segment were JPY438mn (x4.5 higher YoY), and segment loss was JPY219mn (segment loss of JPY96mn in Q3
FY12/18).

▷ The company indicates that ProDrivers, a chauffeur-driven car sharing service that it is prioritizing, began generating profit on amonthly basis in September–October 2019. This change occurred due to an increase in repeat users, which drove up theservice’s utilization rate, with the number of vehicles owned remaining unchanged and the number of drives increasing only
slightly.

Enhancement of initiatives for the future
As countermeasures for lost opportunities and declining profitability caused by a shrinking workforce and increased recruitment
costs, Vision is conducting the following initiatives to improve productivity.

▷▷

The company aims to leverage the latest technology to free itself of labor-intensive practices. In addition to its strategy to makestores smarter, it will promote the automation of its call centers using AI (bots) and the use of RPA for administrative
operations.
Vision will open Vision Kids nursery schools on the premises of its call centers to support employees who are also raisingchildren, with the aim of providing an environment accommodating of employee needs. It aims to achieve a competitive
advantage in the recruiting arena by improving the employment environment.

For details on previous quarterly and annual results, see the Historical financial statements section.

12/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Full-year company forecast
Cons. earnings(JPYmn)Sales
YoY
Cost of sales
Gross profit
Operating profit
YoY
OPM
Recurring profit
YoY
RPM
Net income attributable to owners of the parent
YoY

1H
9,856

FY12/18
2H
11,648FY
21,504

1H
12,937

FY12/19
2H Est.
12,856FY Est.
25,793

4,036
5,819
1,236

4,817
6,831
1,248

8,854
12,650
2,484

5,441
7,496
1,690

5,258
7,598
1,574

10,69915,094
3,264

18.0%

26.6%

45.4%
12.5%

33.0%
10.7%

46.5%
12.6%

41.6%

1,246
809

22.5%

31.3%

10.4%

19.9%

38.9%
11.6%

36.7%
13.1%

26.1%
12.2%

32.8%
10.8%

39.3%
11.6%

34.4%
12.9%

25.5%
12.2%

29.9%
12.6%

13.0%

26.5%

32.9%

44.5%

38.3%

1,254
720

2,500

1,529

1,674

1,075

1,574

1,041

31.4%
12.7%

3,248

2,116

Source: Shared Research based on company data
Note: Figures may differ from company materials due to differences in rounding methods.
Note: Quarterly earnings data for FY12/15 are for information purpose only; the company has not officially compiled quarterly data for the period.

▷ For FY12/19, Vision forecasts full-year sales of JPY25.8bn (+19.9% YoY), operating profit of JPY3.3bn (+31.4% YoY), recurring

profit of JPY3.2bn (+29.9% YoY), and net income attributable to owners of the parent of JPY2.1bn (+38.3% YoY). It expects sales

and profits to reach record highs.

▷ Forecast by segment: For Global WiFi, the company targets segment sales of JPY16.4bn (+21.4% YoY) and segment profit of

JPY2.9bn (+20.8% YoY); for Information and Communications Service, it expects segment sales of JPY8.6bn (+10.5% YoY) andsegment profit of JPY1.5bn (+26.6% YoY).

Revised FY12/19 full-year forecasts (announced August 9, 2019)
Sales:

JPY25.8bn (JPY24.5bn previously)

Operating profit:

JPY3.3bn (JPY3.0bn)

Recurring profit:

JPY3.2bn (JPY3.0bn)

Net income*:

JPY2.1bn (JPY2.0bn)* Net income attributable to owners of the parent

Global WiFi business▷ The company's revised forecast for the full year sees Global WiFi segment sales of JPY16.4bn (+21.4% YoY) and segment profit of

JPY2.9bn (+20.8% YoY). This compares with its initial forecast calling for segment sales of JPY15.6bn (+15.3% YoY) and a segment
profit of JPY2.7bn (+10.3% YoY). The upward revision, announced at the time of the company's 1H results release, merely added

the amount by which 1H results exceeded plan and made no changes to the company's initial forecast for 2H.

▷ With a favorable outlook toward increasing numbers of foreign and domestic travelers, the company is making efforts to continue
boosting the awareness and convenience of its services, as well as raising its profile. It will also maintain efforts to increase rentals,
underpinned by repeat users (mainly corporate users, i.e., secure a steady revenue stream) and acquiring new users.
 Initiatives aimed at capturing corporate demandSales promotion for Global WiFi for Biz service (with no equipment pickup or return)Strengthen alliances with partner companies (travel companies, airlines, etc.) and expand sales channels▷ In addition, the company will maintain efforts to reduce costs and operational efficiency to improve profitability.
 Lower line costs Accelerate use of cloud-based WiFi services
 Reduce operational costs

Increase automation of operations, including moving to chat-bots and using AI-RPI to respond to FAQReduce labor needed to facilitate device hand-offs (promote Global WiFi for Biz service, increase number of
automated lockers functioning as “Smart Pickup” points)

13/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Information and Communications Service business▷ The company's revised forecast for the full year sees segment sales of JPY8.6bn (+10.5% YoY) and segment profit of JPY1.5bn(+26.6% YoY). This compares with its initial forecast calling for segment sales of JPY8.0bn (+3.4% YoY) and a segment profit of

JPY1.4bn (+16.7%). The upward revision, announced at the time of the company's 1H results release, merely added the amountby which 1H results exceeded plan and made no changes to the company's initial forecast for 2H.

▷ As in this area most of the company’s major customers are startup companies, which are being established at the rate of roughly
110,000 every year, so the company expects to continue expanding its customer base in the years ahead. To help increase
revenues and earnings going forward, the company is undertaking a measures aimed at strengthening its sales channels,
stepping up CRM efforts using its customer database, increasing the efficiency of in-house service and marketing, and providing
client companies with the right products and services for their particular point in the growth stage.
 In additional to building up its line of high value-added services, the company is also looking to add to sales and earnings
through its up-selling and cross-selling sales strategy.

Other▷ The company's revised forecast for the full year sees Other segment sales of JPY814 (+263.3% YoY) and a segment loss of

JPY69mn (versus a loss of JPY194mn in FY12/18). Announced at the time of the company's 1H results release, this represents a
downward revision of the initial forecast calling for segment sales of JPY855mn (+281.6% YoY) and a segment profit of JPY62mn.

 The company is looking to quickly get this business area into the black with the creation of its ProDrivers chauffeur-driven car
sharing service and frontloaded spending in personnel
 ProDrivers provides comfortable chauffeured car service for traveling to and from airports, picking up executive staff, andgeneral use. The company is looking to draw new customers from the companies that use its Global WiFi service (this includes
domestic private and corporate users, as well as overseas visitors to Japan) and its Information and Communications Service.
 After starting in Tokyo, the company plans to link up with partner companies and gradually expand its ProDrivers service to all
major cities in Japan.
 Overseas, the company will expand the ProDrivers service in conjunction with the SmartRyde service operated by DLGB, Inc.,
with which it has a capital and business alliance.

14/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Medium-term outlook
Focusing upfront spending and growth
Vision has not released a detailed medium-term business plan. However, the exercise conditions for the share subscription rights(paid-in stock options) offered to its directors (excluding external directors), employees, and subsidiary employees (163 people
in total) on December 29, 2017, show the company is committed to sustaining strong profit growth (for details, see comments inthe box below.) The conditions are as follows.
◤ Exercise of 30% of the rights: If operating profit exceeds JPY2.1bn in FY12/18 and JPY2.6bn in FY12/19. (Note: The company

reported operating profit of JPY2.5bn in FY12/18 but is forecasting operating profit of JPY3.0bn for FY12/19. If the company
meets its FY12/19 forecast, then the conditions set for the exercise of the first 30% of the rights will have been met.)◤ Exercise of 30% of the rights: If operating profit exceeds JPY3.1bn in FY12/20◤ Exercise of 100% of the rights: If operating profit exceeds JPY3.6bn in any of the financial years from FY12/18 to FY12/21.

Vision looks to achieve substantial profit expansion while continuing to invest in future growth. To this end, it has positioned the
Global WiFi business as the growth driver and the Information and Communications Service business as a source of stable growth.
The company also partially revised its Articles of Incorporation to prepare for further business development in its group (asdiscussed below).

In order to enhance cohesion, motivation and morale for the purpose of increasing the company’s earnings and enterprise value over the long term,
Vision has resolved to issue stock options to directors and employees of the company, and employees of the company’s subsidiaries at the Board of
Directors meeting to be held on November 13, 2017.
The total number of the company’s common stock that will increase when all options are exercised is equivalent to 8.3% of outstanding shares. The
announcement stated that it will be possible to exercise 30% of the stock options if FY12/18 operating profit exceeds JPY2.1bn and FY12/19 operating
profit exceeds JPY2.6bn, or if FY12/20 operating profit exceeds JPY3.1bn: It will also be possible to exercise 100% of all stock options if operating profit
exceeds JPY3.6bn in any financial year from FY12/18 to FY12/21.
Since there are exercise conditions that prevent the exercise of all stock options in the event that Vision does not achieve an operating profit of
JPY3.6bn, which is regarded as a high level in light of past earnings, the company views achieving the target as a commitment to enhancing enterpriseand shareholder value. The company believes that the dilution impact on shares will be reasonable.
Number of stock options: 13,560 units
Payment amount in exchange for stock options: 1 unit per JPY1,600 issued (1 unit per 100 Vision common shares)
Payment date for amount paid in exchange for stock options: December 29, 2017
Application date: November 28, 2017
Persons to be allotted stock options and number of such persons: directors and employees of the company, and employees of the company’s
subsidiaries (190 persons and 13,560 units)

Expanding in-house services
Vision plans to expand into business fields it can pursue independently, while increasing its ratio of in-house development
including for services. In-house development is expected to accelerate its business and facilitate price control. Services thecompany is already operating will be used and improved internally, and provided as services to customers. We understand Vision
is also actively pursuing external sales of its expertise in sales force automation (SFA), which was developed in-house and ispresently used for its own sales. Having also built up in-house expertise and completed optimization of its RPA currently
deployed for in-house call centers, the company intends to provide such solutions to other companies and monetize themaccordingly.

Changing Articles of Incorporation
17th General Shareholders Meeting
In preparation for further business development in the Vision Group, a proposal to revise the company’s Articles of Incorporation
was approved by a resolution at the 17th annual general meeting of shareholders on March 29, 2018.

15/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

The operation of accommodation facilities for foreigners outside of National Strategic Special Zones and automobiletransportation business were added as new items under business purposes (refer to the following table). Management has
indicated it plans to expand into such businesses in the future. In the past, the company developed many new businesses via
partnerships, but it now also looks to move into new fields independently. In addition, Vision is examining areas in which it could
create mechanisms to enhance the satisfaction of its customers such as private room rentals (commonly referred to as minpaku), a
field that opened up after the lifting of existing restrictions in June 2018, and services related to transportation of inbound andoutbound travelers, who are the company’s primary customers. Vision has many customers who use Haneda Airport or Narita
Airport. Although it has no intention of creating its own restaurants or sightseeing spots, it plans to develop businesses that allow
customers to enjoy Japan and the world through travel and tourism.
Business purposes to be newly added as part of changes to Articles of Incorporation (effective on March 29, 2018)
Current Article of Incorporation

New(Purpose)(Purpose)

Article 2 The purpose of theCompany shall be to engage in thefollowing businesses:

Article 2 The purpose of the Company shall be to engage in the following businesses:(New addition)

2. Supporting other companies engaged in on-demand transportation business based on requests
via mobile devices and the internet(New addition)

10. Planning, design, undertaking, contracting and supervising construction work, carpentry,
plastering, scaffolding, earthwork, concrete work, stonemasonry, roofing, electrical, plumbing,plating, glass work, painting, interior construction, telecommunication work, joinery, water anddrainage, and sanitary facilities work

(New addition)

11. Extension, reconstruction, rebuilding and renovation of buildings and structures(New addition)

12. Planning, designing, undertaking, sales, maintenance, supervising, contracting of solar powersystem(New addition)

15. Management of accommodation facilities for foreigners in the National Strategic Special Zones(New addition)

16. Management of and brokerage of vacation rentals(New addition)

17. Support of day care centers for handicapped children, in line with the Child Welfare Law(New addition)

18. Support of consultation for handicapped children, in line with the Child Welfare Law(New addition)

19. Home nursing services in line with the Care Insurance Law(New addition)

20. Preventive care services in line with the Care Insurance Law(New addition)

21. General passenger care transportation business(New addition)

22. General chartered passenger car transportation business(New addition)

23. Motor truck transportation business(New addition)

24. Consigned freight forwarding business(New addition)

25. Car maintenance business(New addition)

39. Job placement business(New addition)

41. Brokerage related to leasing of idle assets

Source: Shared research based on news releases by the company

18th General Shareholdings Meeting
The company’s 18th general shareholders meetings is scheduled to be held on March 26, 2019. Resolutions to be voted on at themeeting include proposals to start the following new businesses:▷ Childcare service business▷ Small-truck delivery business▷ Warehousing and contract warehousing business

Global WiFi as growth driver
The company sees growth potential in the market where the Global WiFi business operates. Vision divided the segment into
three areas, and plans to expand operations in stages. In addition, the company plans to offer media services (through a media
service platform) providing information on various countries and creating more value for customers.

16/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Global WiFi business - growth model

Improve
services

Global market
Over 1.3bn people
Over JPY9tn- Expand supporters and acquire
new customers- Enhance customer loyalty,
aiming for increase in repeat use

Improveconvenience- Increase customer contact- Expand supporters and promote
service use

Expandbusinessand sales- Expand channels and increasesales- Develop market for businessexpansion

Add newcorebusinesses- Make use of customer base forsales increase- Develop market and expand
business

Stage3:
Overseas ⇒ Overseas

Over 31.19mn people in 2018
Government target
2020: 40mn

Stage 2:
Inbound (Overseas ⇒ Japan)

2030: 60mn

Current JapanesemarketApprox. 50mn
peopleStage 1: Outbound (Japan ⇒ Overseas)(Stays around 17–18mn people)

Source: Shared Research based on data released by the company, the United Nations World Tourism Organization (UNWTO), and the Japan National Tourism
Organization (JNTO)

In the first growth stage the company aims to target the outbound market (travelers from Japan going abroad). The number ofJapanese traveling abroad is roughly 17–18mn per annum and smartphone uptake is growing rapidly. In 2018, the number
reached about 19.0mn (+6.0% YoY). Assuming a unit price of JPY7,000 per user puts the potential market size at roughly
JPY132.6bn (JPY7,000 in unit price x 19.0mn users).
The target of the second growth stage is the inbound market (overseas visitors to Japan). In 2015, the number of travelers toJapan broke through the 19mn mark thanks to a series of measures by the government to encourage tourism (such as a relaxationof visa requirements and an expansion of the duty-free system). It reached 31.9mn in 2018. The government wants to increase
the number of visitors to Japan to 40mn by 2020 and 60mn by 2030. Vision, which estimates that the size of the potential market
is now roughly JPY220.0bn (JPY7,000 in unit price x 31.9mn), expects that the market will continue to expand.
The target of the third stage is the overseas market (travelers going from one overseas country to another). According to theUnited Nations World Tourism Organization (UNWTO), on a global basis, the number of such travelers now exceeds 1.3bn
travelers per annum. Assuming a unit price of JPY7,000 per user puts the potential market size at over JPY9tn (JPY7,000 X 1.3bn
users). The company has overseas subsidiaries for developing the business and procuring network access in regions with strong
travel demand including in popular tourist destinations such as South Korea, Hawaii, Hong Kong, Singapore, Taiwan, the UK,
Vietnam, Shanghai, France, and Italy. It also began operations in New Caledonia and the US (California) from 2016. Vision notedthat presently Verizon Communications, Inc., a major US mobile carrier, has not rolled out overseas roaming services at a low
flat-rate. Therefore, Vision believes that if customers become increasingly aware that they can use Vision’s flat-rate service
overseas, it could see an uptick in user numbers.
The company said that going forward it wants to tap into demand in Asian markets and major cities in the US and Europe by
expanding its network of subsidiaries and franchises at various locations overseas. Vision expects that gaining even a small portionof this market could substantially contribute to earnings.
While these markets are enormous, the company’s Global WiFi business only rented out 2,232,000 routers in FY12/18 (1,760,000
for customers traveling overseas; 408,000 for visitors to Japan; and 65,000 for those traveling from one foreign country toanother). Thus, the company sees ample room for growth in each of these markets.

17/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

As part of an effort to expand into these markets (inbound, outbound, and overseas markets) and increase the number of
end-users, in the Global WiFi business the company aims to strengthen ties with telcos in each country, increasing locations at
airport counters where customers can rent Vision’s equipment to increase convenience and improve quality.
Specific measures that the company is implementing are as follows.

Introduction of “Smart Pickup” lockers and “Smart Entry” kiosks to improve customer convenience
The company has “Smart Pickup” points where customers receive mobile WiFi routers from lockers installed at airports and otherlocations. Users can easily unlock the lockers by tapping their smartphones––registered on the web beforehand. This service ismore cost-effective and efficient (no waiting time for customers) than the company’s conventional face-to-face services. The newservice also allows the company to dedicate service counters to walk-in customers, along with other benefits.
According to Vision, Smart Pickup lockers at Haneda Airport counters can service a maximum of 184 pickups per day (as of end
December 2017, total 92 boxes with each box allowing for a morning and evening pickup; two rotations a day), with a pick up
taking less than ten seconds. The company initially set up Smart Pickup points only at Haneda Airport but has since expanded to
Narita Airport, Kansai International Airport, Itami Airport, and Chubu Centrair International Airport for a total of five airports and18 pickup points (as of end December 2018) and is looking to continue expanding the number of Smart Pickup points going
forward.
Vision stated that Smart Pickup had resulted in shorter lines at staffed counters, and increased the number of walk-in contracts itprocesses by improving the utilization rate at counters. In light of the results, the company stated that it planned to install
additional Smart Pickup lockers going forward.
Further, the company said that it was continuing to introduce “Smart Entry” (self-service kiosks that allow tourists wishing to rent
WiFi routers to process applications and make payments themselves; services available in six languages). The kiosks are initially forrenting NINJA WiFi® and are installed at counters in Haneda Airport, but going forward Vision plans to add GLOBAL WiFi® rentals
and install additional terminals, with increased functions. In conjunction with Smart Pickup, the service enables Vision to utilize
vending machines to further automate service counter services.

18/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Counters and Smart Pickup points /Smart Entry/Smart Check
Smart Pickup points (automated lockers for

Smart Entry (self-service kiosks: multi-lingual/includes

WiFi router pickup and return)payment features)

Smart Pickup user guide 1

Smart Pickup user guide 2

Smart Check (instant customer recognition counter: QR(unlock with your smartphone after preregistering)(Retrieve device)code reception counter)

Haneda Airport counterIn service

Stand-by

Source: Shared Research based on company data

Increasing customer contact points to attract more inbound customers (visitors to Japan)
As of the end of December 2018, in Japan, Vision had contact points (locations where customers can pick up rental devices) at
airport counters (15 locations total) and at tourist information centers and facilities. Going forward, the company plans to expand
the number of domestic contact points and strengthen initiatives to attract inbound customers (visitors to Japan) and initiatives
with local governments and municipalities.

Increasing counters at airports with international flights
In April 2016, the company added a counter at Kansai International Airport to target inbound tourists and established a new
counter at Mt. Fuji Shizuoka Airport. As of the end of December 2018, the company’s counters are installed in 15 airports in Japan.
There are three in Narita Airport and two in Haneda Airport. Already possessing such counters in the limited space of an airport
not only improves the convenience for customers, but also impedes entry by competitors, serving as a strength for the company.

Travel-related services platform
In addition to the three growth stages in the Global WiFi business, the company aims to develop a new business area as it targets
future opportunities: a travel-related service platform that will provide useful information (media service) and offer useful services
for travelers.
In FY12/18, users of the company’s Global WiFi® and NINJA WiFi® totaled roughly 3.6mn (outbound roughly 2.8mn and inboundroughly 0.8mn), and the total number of stays was 25.2mn (outbound 19.8mn and inbound 5.5mn). Generating an additional
JPY100 per day in ARPU from such users through a travel-related service platform would have boosted annual revenue by
JPY2.5bn (25.2mn stays multiplied by JPY100/stay). This would have raised FY12/18 sales (JPY13.5bn) in the Global WiFi businessby about 19%.

19/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

The company said a media business would provide information tailored to travelers’ destinations. For example, according to thecompany, many travelers visiting Japan are high net worth individuals (with plenty of purchasing power) that are not on group
tours. Most Japanese companies, tourist areas and facilities have not worked out how to approach these individuals. Because
Vision rents mobile WiFi routers (NINJA WiFi®) to those visiting Japan, it can reach out directly to such individuals. Further, thisallows the company to collect information directly from the travelers and in turn supply information to shops, companies, andregional tourism destinations to draw travelers to these spots.
Presently, Vision has started offering paper-based media, NINJA WiFi Travel Guide “SHINOBI” (guidebook directly distributed totravelers visiting Japan that use NINJA WiFi®), web media (homepage dedicated to certain select items), and video media,
DOGA.TV (special video website for foreign tourists). Vision said it was also considering expanding and offering additional service
content in the future, and was anticipating advertising fees, performance fees and data analysis revenues from these initiatives.
Being able to obtain accurate information is critical in order to take full advantage of one’s travel destination. As such, Visioncontinues to roll out several services that are useful for travelers, including ili, a new wearable translation device (the company
plans to gradually improve sophistication as a travel-assistance device) and an overseas restaurant reservation service capable ofhandling several languages, including Japanese. By combining these services, Vision will continue to provide services to tourists
before, during and after their travels.
Travel-related service platform

Source: Company data

Information and Communications Service as a source of stable growth
Recurring-revenue business model
In the Information and Communications Service segment, the company aims to continue its strategy of targeting startups. As
these client companies grow, it will be able to offer the appropriate additional or expanded (solutions) services in line with their
growth.
The company aims to deepen ties between its websites, which attract customers, and its Customer Loyalty Team (CLT), which
supports existing customers, to further improve marketing efficiency and boost revenue per customer by expanding the lineup of
products that it handles and proprietary products.

20/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

The Information and Communications Service is distinguished by its stable, recurring-revenue business model, which depends onthe closely coordinated efforts of its web marketing, sales team, and CLT to win orders by providing the optimal solutions(products and services) for companies at their particular growth stage.
Continuous stock model for Information and Communications Service business

Source: Company data

21/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Business
Business overview▷ The company has two main businesses: the Global WiFi business, and the Information and Communications Service business.
▷ In the Global WiFi business it rents out mobile WiFi routers*, targeting the outbound (travelers from Japan to overseas) andinbound (travelers to Japan from overseas) markets. Vision is the largest of the three major Japanese companies that rent out

mobile WiFi routers for use overseas, with a market share (sales basis) of more than 50% (as of FY12/18, Shared Research survey).

▷ In the Information and Communications Service business it targets mainly startups, and arranges telephone lines and othertelecommunications services, sells office equipment, and builds websites. The main source of revenue is sales commissions fromtelecoms and office equipment manufacturers.
* Refers to wireless LAN (WiFi) routers able to connect to mobile networks. Using these mobile WiFi routers, it is possible to connect to the internet via
smartphones, tablets, notebook computers and game consoles that have WiFi capability while on the move.

▷ For its primary two business segments in FY12/18, Global WiFi accounted for 63% (previous year: 59%) of sales, and Information
and Communications Service 36% (previous year: 41%) of sales, with the former accounting for 70% of profits. Since its launch
in 2012, the Global WiFi business has been accounting for a rising share of both sales and profits (refer to figure below).

Business model

Information and Communications

Arrangeaccess,equipment
sales

Domestic companies(Leasing companies)

Officeequipment

MaintenanceCommunication
services

WiFi routerrental,ancillary
services

Domestic
companies/individuals(landlines, mobiles etc.)

Sales revenue

Domestic/overseas
travelers(business/private)
Ancillary service
fees
Rental fees

Lending andcommission sales

Global WiFi

Worldwide
Telecommunications
companies
Router manufacturers

Domestic
telecommunications
companies(Primary distributors)

Maintenance
fees

Maintenanceincentives

Officeequipment

Revenue fromequipment sales

Communicationequipment

Incentives(new, ongoing)

Revenue frommobile handset
sales

Telco charges

Data
communication,
WiFi routers,
networks (SIM)

Communication
fees

Procurement

Vision Group

Office equipment
manufacturers andvendors

Source: Shared Research based on company data

22/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Sales by segment
40,00035,000Information and Communications Service
Global WiFi as % of total sales

Global WiFi Service
Other

30,00053.1%

25,00048.3%

20,00015,00010,0005,000
0(JPYmn)36.9%
10,185
18

9,204
5
7,312
20.5%

10

12,4856,440

13

14,844
6,948

59.2%

17,555
58

80.0%
62.8%
60.0%
21,504
224
7,774

7,104

20.0%
13,506

1,887

6,411
3,756

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

FY12/13

FY12/14

FY12/15

FY12/16

FY12/17

FY12/18

6,035

7,882

10,392

40.0%

0.0%

Source: Shared Research based on company data

Operating profit by segment
5,000
4,000

Global WiFi Service
Other
Global WiFi as % of total OP

54.0%

3,000

40.0%

2,000
1,000
0
-1,000(JPYmn)Information and Communications Service
Adjustments

805
10
566
-364

-184

286
19.7%
724
180
-626

904
594
-681

1,290
1,025
1,141
-821

70.2%

59.8%

2,484

1,789

1,219

1,173
1,593
-874

80%
70%
60%
50%
40%

2,414

30%
20%

-954

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

FY12/13

FY12/14

FY12/15

FY12/16

FY12/17

FY12/18

10%0%

Source: Shared Research based on company data
Note: The Global WiFi business ratio reflects the share of total segment profit before adjustments.

Business development
Origins: understanding customer needs
The company’s origins lie in discovering and meeting customer needs. After current company CEO Sano worked for Hikari
Tsushin (TSE1: 9435) for four years, he set up Vision LLC in Fujinomiya, Shizuoka, in April 1996. He discovered from some
Brazilian people that international calls were expensive, and started arranging and selling low-priced international telephoneservices to South American residents in Japan. Global WiFi® was launched in February 2012 in response to demand for affordable
and easy-to-use internet environments for people traveling overseas. The company has been renting out mobile WiFi routers inJapan since 2010, and used the expertise gained in this business to launch the Global WiFi service just six months after the idea
was born.

23/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Evolution of sales and service lineup

Started global WiFi
business

JPY21.5bn (Est.)

Started WiFi rental
business
Dec. 2016
Listed on TSE1

Started broadband businessStarted mobile
communication businessChange in FY end

Started business sellinginternational call services to SouthAmerican residents in Japan

Dec. 2015
Listed on Mothers

Source: Shared Research based on company data

Corporate services: improvements in marketing efficiency using websites
As the internet became more widespread from 2000, the focus of this business shifted to the corporate sector, and now almost all
customers in the Information and Communications Service business are corporate clients. An issue in providing services to thecorporate sector was improving selling efficiency, and the company has responded by adopting a new marketing strategy,
including the use of websites such as copyki.com.
Previously the company’s marketing strategy primarily involved telemarketing, which would then lead to in-person sales, which
was inefficient, and so many salespeople became frustrated and quit. Aware that the internet would become a commonplacemeans to gather information, Vision started to use websites in marketing activities from 2003. In 2004, the company launched a
website called copyki.com to attract customers by selling copiers. It started making appointments and meeting with potential
customers who sent enquiries and requested quotes through the website, and because these web customers have a highpropensity to purchase products, contract rates were improving.

Creates a number of websites following the success of copyki.com
Reflecting the success of copyki.com, the company launched a number of websites offering telephone line subscription(denwa-kanyuken.com), business phones (bizphone.com), corporate mobile phones (houjinkeitai.com) and phone lines(denwa-hikari.com) (in 2008). In addition to sites such as these (named after products), the company also created satellite sites
specifically related to demand for related search keywords to reach even more customers.
As a result, the ratio of telemarketing-based appointments is dropping (before the launch of these websites, these accounted for
all contracts won). Now, over half of contracts come from concierge operations for handling website enquiries and continuingbusiness with existing customers (CLT, explained later), add-ons from existing customers introduced by the sales team(upselling), and additional purchases of other products (cross-selling). According to the company, more efficient marketing alsomeans that marketing staff turnover has declined dramatically, leading to accumulated sales expertise among staff.

Core strategy
The three main strategies the company is following are outlined below.
◤ Focused, niche market strategy:

24/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Target: Overseas travelers and startup companies



Develop new markets by finding and serving the needs of those left behind by advances in information andcommunications technology

Focus management resources and services on carefully selected target markets◤ Price and quality leadership strategy:Emphasize productivity, superior pricing, and reputation for service quality

Relentlessly pursue increases in productivity by increase speed of organization and operations

Demonstrate superior price competitiveness while maintaining high quality service◤ Up-selling and cross-selling strategy:

Focus on in-house CRM as recurring-revenue business

Find new needs in information and communications services and consistently provide the right services at the rightprice at the right timeEstablish long-term relationships with customers

Key characteristics of two businesses
Global WiFi
The key feature of the company’s Global WiFi business is the ability to offer low-price and high-quality service, as Vision has direct
negotiations and contracts with overseas telcos.

Information and Communications Service
There are three key features of the Information and Communications Service business.

Mainly targeting startups
The main targets of the Information and Communications Service business are startups. According to Vision, this is because they
have more growth potential than major corporations. It is difficult for major corporations to double the number of employees,
but if a startup’s business goes well, there is plenty of scope for employee numbers to double or even grow by 10x. The company
said that the number and variety of services it can offer these startups can also grow.

Initial prices held low; recurring revenue model entails offering multiple services to each customer
In order to lighten the burden on startups, Vision sets low initial prices for equipment and other products. It aims to boost
revenue per customer by providing an increasing number and variety of services in line with the growth of its startup clients. Thisbusiness model means a relatively high proportion of ongoing monthly revenues in addition to one-time sales. The company
supplies pre-owned as well as new phones to startups. Although there are concerns about bankruptcy for startups, according to
Vision, its customers are highly cost-conscious, so the percentage that goes bankrupt is extremely low compared to the averagefor startups.

Leveraging web marketing and Customer Loyalty Team (CLT) to boost marketing productivity
The Information and Communications Service business targets corporate customers. In general, contracts are entered throughface-to-face marketing, so a challenge is how to reduce marketing staff costs. The company made sales activities more efficient bypromoting website-based marketing and conducting in-person sales focused on clients with high latent needs. The company has
an extremely high success rate of gaining contracts from inquiring clients who came from the company’s websites after searchingfor a service to fulfill their needs. For example, average copier sales per marketing employee for Vision are roughly 3x the industry
average.

25/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

The call center is another important marketing channel: the Customer Loyalty Team is involved in after-sales support for existingclients, and follows up with client companies as they reach certain growth stages.
* In addition to sites named after products, the company also created satellite sites specifically related to demand for search keywords relevant to the
products, to spread its customer acquisition net. Per the company, its websites are operated by teams, which has resulted in powerful customer
attraction through SEO** results. The keywords that the users input in their searches are not just single words, but mostly strings of words that combine
various needs. As a result, the company is able to tap into demand across a wide front and increase the number of users.
** SEO (Search Engine Optimization) refers to technology that positions a website in the upper rankings of search results on search engines such asYahoo! and Google.

Company’s major marketing channels and overview
Web channels

The company attracts customers by developing websites specific to certain products, such as copyki.com,
Denwakanyuken.com, Houjinkeitai.com, Bizphone.com, and SEOTaisaku.com. Information regarding customers who haverequested an estimate via the website is transferred to the call center.

Call center

Makes phone calls to customers with information obtained from the websites. Also uses telemarketing using client lists to tap
into customers with a high propensity to purchase products. Arranges sales visits by marketing staff responsible for relevant
product.

Customer
Loyalty Team
(CLT)

Responsible for after-sales support for existing clients. Taps into product purchasing needs through regular telephone calls withexisting customers. If a certain item is in high demand, the team makes an appointment for the marketing person in charge tomake a sales call. When marketing staff learn on a visit that the customer wishes to purchase products from another division,
they telephone the CLT, which makes an appointment for the responsible staff to make a sales call. The CLT is in charge ofafter-sales support for existing customers. This lowers marketing staff turnover and avoids missed business opportunities in caseof telephone calls from customers when the marketing staff are unavailable. It also becomes possible to have marketing staff
dedicated to customer acquisition activities. It appears that telephone calls from customers are responsible for more sales thanthe company initially anticipated.

Marketing staff

Based on appointments set up by the call center or CLT, sales staff visit clients and conduct marketing activities.

Source: Shared Research based on company data

26/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Business segments
Global WiFi segment
Global WiFi
(JPYmn)No. of rental contracts

FY12/12Par.

FY12/13Cons.

FY12/14Cons.

FY12/15Cons.

FY12/16Cons.

FY12/17Cons.

FY12/18
Cons.

55,507

241,737

516,199

783,050

1,144,045

1,650,969

2,231,775

Overseas use
Domestic use

49,027

223,706

462,953

648,475

886,824

1,302,646

1,759,514

244

7,511

35,51290,906

190,665

285,708

407,517

Overseas business (excl. domestic use)

6,236

10,52017,734

43,66966,556

62,61564,744Companies

-

-

-

-

50.8%

43.6%

43.6%

Individuals

-

-

-

-

49.2%

56.4%

56.4%

Sales
YoY

-

1,887

3,756

6,035

7,882

10,392

13,506

-

-

99.0%

60.7%

30.6%

31.8%

30.0%

% of total sales
Customer breakdown (% of Global WiFi)

-

20.5%

36.9%

48.3%

53.1%

59.2%

62.8%

-

-

-

-

54.4%

50.4%

46.4%

-

-

-

-

45.6%

49.6%

53.6%

-

12,697

9,911

9,290

8,181

7,436

6,957

-21.9%-6.3%-11.9%

-9.1%

-6.4%

Customer breakdown (% of Global WiFi)

Companies
Individuals
Customer spend per unit (JPY)YoY
Companies

-

-

-

-

-

8,052

7,404

YoY

-

-

-

-

-

-

-8.0%

Individuals

-

-

-

-

-

6,900

6,612

YoY

-

-

-

-

-

-

-4.2%

Operating profit
YoY

-

-184

180

594

1,141

1,593

2,414

-

-

230.5%

92.2%

39.7%

51.5%

OPM (excl. adjustments)% of total OP (incl. adjustments)

-9.7%

4.8%

9.8%

14.5%

15.3%

17.9%

-

19.7%

40.0%

54.0%

59.8%

70.2%

Source: Shared Research based on company data

Segment overview
The Global WiFi business accounted for 62.8% of consolidated sales and 70.2% of operating profit (FY12/18). Total number ofcontracts during FY12/18 was 2,231,775 (among overseas rental contracts, companies accounted for 37.4% and individuals
62.6%).
In this segment, the company procures local network access (mobile phone data access) by negotiating with telcos in countries
around the world in order to develop its usable data volume, connection quality (speed, etc.), and other proprietary services,and rents out mobile WiFi routers and other devices that provide access for people traveling to these countries. In addition to
Vision (parent company), consolidated subsidiaries Best Link, Vision Mobile Korea Inc., Vision Mobile Hawaii Inc., and Vision
Mobile Taiwan Ltd. carry out this business.
The company is expanding its service offerings rapidly in line with burgeoning demand for mobile access from travelers. Despite
only starting in FY12/12, the Global WiFi business has grown to account for half of the company’s sales. In FY12/18, segment
profit accounted for roughly 70% of total segment profit before adjustments, and the company has positioned the segment as a
growth driver.

Services
Classifications
The Global WiFi segment can be broadly broken down into overseas business (travelers from Japan to overseas andoverseas-to-overseas travelers) and domestic business (overseas visitors to Japan and domestic travelers). Services are provided
under the Global WiFi® brand overseas, and primarily under the NINJA WiFi® brand in Japan. With the help of partner companies,
the company provided overseas coverage in more than 200 different countries and regions (as of the end of December 2018).

27/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Global WiFi service overview
Overseas (Global WiFi®)

Domestic (mainly NINJA WiFi®)

TargetTravelers from Japan overseas andoverseas-to-overseas

Travelers from overseas visiting Japan (inbound)

Services

Mobile WiFi router rental (connected to the telco
network at the destination)
Ancillary services (repairs, batteries and accessories)

Mobile WiFi router rental (connected to domestic
telco network)
Ancillary services (repairs, batteries andaccessories)

Charges (fixed)

JPY300-1,970/day (single country plan).
JPY920-1,870/day (multi-country plan)

Procurement method

Usage of data telecommunications services inUsage of data telecommunications services in eachdomestic market (usage limits apply)
country (usage limits apply)
Routers purchased from manufacturers or as a set with Routers as a set with network accessnetwork access

Sales channels

Direct websites, smartphone apps, airport counters,
corporate sales, partners, affiliates

Operations

JPY900/day

Direct websites, airport counters, partners,
affiliates

Procurement optimized by region, based on demand forecasts.
Total procurement of telco data managed based on individual data usage volumes

Inventory optimized at individual shipping centers (collection ⇒ setup ⇒ shipping)
Source: Shared Research based on company data

Overseas (Global WiFi®) business features
The company has direct contracts with telcos worldwide. This enables it to provide a low-price, high-quality internet
environment for the mobile WiFi rental service it offers to outbound travelers (going from Japan to overseas). Per the company, inorder to boost customer satisfaction and capture repeat customer demand, it is important to pay attention not only to price, butalso to quality. As a result, Vision mainly obtains internet access overseas from major telcos, as it places importance oncommunication speed and breadth of coverage.
The company has subsidiaries in regions with strong travel demand including South Korea, Hawaii, Hong Kong, Singapore,
Taiwan, the UK, Vietnam, Shanghai, France, and Italy. These overseas subsidiaries primarily work to procure network access foreach respective region, but the subsidiaries in South Korea, Hawaii, and Taiwan—like in Japan—provide the Global WiFi® service toboth outbound and inbound customers. The company also opened offices in New Caledonia and the US (California) in 2016.
There are four steps in the process to rent a mobile WiFi router: web application/payment (credit card payment), device
handover, usage, and device return.
Devices may be picked up and returned at counters at 47 major airports around the world. In Japan, the company has a total of
15 pickup/drop-off counters at major airports. There is a home courier service for customers who cannot pick up or return thedevice to the airport. Local pickup is available in some areas (Hawaii, Korea, and Taiwan). Further, the company has a
24-hour/365-day support system via telephone, email, and social networking sites. In certain overseas countries, it has help desks
with Japanese-speaking staff.
According to the company, it offers the lowest prices in the industry. It also said that it operates in the most countries with accessto high-speed 4G-LTE communications and large data volumes (daily data caps of 600MB or 1.1GB [1200MB]). Further, Vision
said that it offers the most pickup points in the industry. As such, over 50% of the company’s contracts are from repeat clients,
although there is some seasonal variation.

Domestic (NINJA WiFi®) business features
The domestic and overseas operations are similar. The company procures domestic telecommunications access from threecompanies: NTT DoCoMo (TSE1: 9437), KDDI (TSE1: 9433), and Softbank, a unit of Softbank Group (TSE1: 9984). The service

28/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

flows are similar both in Japan and overseas (web registration and credit card payment) and is available in five languages:
Japanese, English, traditional Chinese, simplified Chinese, and Korean. The pickup and drop-off points are nine airports in Japan,
with courier services to clients’ hotels as well as the company’s Shinjuku office and partner hotels and tourist information centers.

Competition
Telco companies’ roaming services* compete with Vision’s services. Compared to roaming services, Vision said it had several
advantages: lower prices (up to 89.9% lower than fixed price international roaming plans), faster speeds (contracts andcollaboration with high-quality local telcos), ease of connection (merely requires switching power on), multi-device connectivity(possible to connect simultaneously with multiple people/devices). Compared with WiFi hot spots**, the company argues that it
has a wider coverage area (usable even on the move), faster speeds, ease of connectivity, and increased security. In particular,
corporations have strong security needs and this is a major factor in customer acquisition.

*Roaming service: refers to ability to access infrastructure of another telecommunications company that partners with a telco service provider outside
the contracted service provider’s service area.
**A WiFi hotspot is a shop or other public space where it is possible to connect to the internet using a wireless LAN (WiFi).

Future developments
The company aims to capture demand from increasing numbers of overseas visitors to Japan and Japanese travelers goingoverseas. It plans to leverage its customer data to expand media services (ads linked to the destination, local information for
inbound travelers) and data supply services (offer retail operators big data analysis based on location data). Through suchinitiatives, the company aims to increase user convenience and boost revenues. The company also said that it is putting a great
deal of effort into developing ancillary services (such as tablet services, 360° camera services, translation device, and suitcase
rentals) to boost ARPU.

Business model
The revenue of this business is a function of the number of mobile WiFi routers shipped multiplied by ARPU* (average revenue
per user). Costs are the sum of data telecommunications charges in individual countries + the cost of procuring mobile WiFi
routers + ancillary equipment procurement costs.
The company is focused on increasing customer numbers and improving procurement volumes, terms and conditions based onregional or seasonal demand forecasts. It also aims to increase turnover rates (utilization rates) for its mobile WiFi router rentals.

*ARPU: (telecommunications charges/day + ancillary service charges) times number of days

Number of contracts
In FY12/18, the business had 2,231,775 contracts (total rental deals). Of these, roughly 79% were overseas (travelers from Japan
going overseas). According to the company, 62.6% of its customers (rental contract basis) are individuals and 37.4% companies.

29/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Global WiFi business rental contracts
Overseas use

Domestic use

Overseas business (excl. domestic use)

2,231,775
64,7442,000,000

407,5171,650,969
62,6151,500,000

285,708
1,144,045
66,5561,000,000

500,000

55,5076,236
244
49,0270

FY12/12516,199
17,73435,512

241,737
10,5207,511

462,953

223,706
FY12/13

FY12/14

190,665

783,050
43,66990,906

1,759,514
1,302,646

886,824

648,475

FY12/15

FY12/16

FY12/17

FY12/18

Source: Shared Research based on company data

Vision’s global WiFi usage rate by overseas travelers

20.0%
14.9%

15.0%

11.7%

10.0%

6.4%
4.4%

5.0%
0.4%
0.0%

FY12/122.0%
1.4%
FY12/13

2.7%
0.7%

3.5%
1.2%

FY12/14

FY12/15

Vision's overseas share (outbound: Japan to overseas)

8.3%
4.7%

5.8%

7.1%

2.1%

2.2%

2.5%

FY12/16

FY12/17

FY12/18

Vision's domestic share (inbound: overseas to Japan)

Total share in Japan (outbound + inbound)
Source: Shared Research based on company data

ARPU
ARPU averages approximately JPY7,000 (daily charge is roughly JPY1,000, and average rental period is around seven days). ARPU
for individuals is lower than that for businesses. Sales to individuals tend to be concentrated in the spring and summer holidays.
Corporate demand is somewhat slow in the July–September quarter, but relatively stable throughout the year. Q3 is the busiest
period as it benefits from overlapping demand from both summer vacations and business trips.
ARPU tends to increase with distance and number of days users travel. ARPU is high in Europe and the US, lower in Southeast Asia,with inbound users in Japan somewhere in the middle. Sales from Japanese people traveling abroad are highest in the US, Korea,
and China, followed by Taiwan. Business expansion in the relatively low ARPU regions of Asia is a factor in the falling average
ARPU. However, from 2014, the company introduced a high-end plan with daily usage caps of 1.1GB (1200MB) and 600MB
versus the usual 300MB. This is making average ARPU rise. There is a tendency for ARPU to increase in seasons when corporations
heavily use these plans.
The company aims to improve ARPU by expanding its plans and enhancing its optional services.

Cost structure
Around two thirds of cost of sales are network-usage payments to telcos, with the remainder being device depreciation. The
company said that it was able to keep network utilization rates at nearly 100% through effective management. In order to suit
local conditions in various countries the company has more than 10 types of mobile WiFi router devices. Devices are expensed on

30/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

a two-year depreciation schedule. Note that the company is able to maintain its profit levels by controlling the cost of sales, since
it utilizes a system that adjusts network usage in line with busy or quiet periods, which in turn affects the cost of using those
networks. The company created this system by developing a proprietary management system and negotiating with telcos.
The company aims to reduce costs by improving operations and reducing procurement costs by expanding its business scale.

Reducing telecommunications CoGS
▷ Improve procurement contract terms by securing volume discounts*1 (lower rates as well as terms unique to Vision)▷ Utilize next-generation telecommunications technology that utilizes SIMs in the cloud*2▷ Reduce surplus inventory (including line accounts) with more accurate order forecasting*3*1 According to the company, Vision is the largest procurer of network access in the world. Through successful negotiations with network providers
around the world, it has worked to lower its network procurement costs.
*2, 3 The company has indicated that as of end FY12/17, roughly half of its total rental contracts made use of cloud WiFi routers. Conventional WiFi
routers need different SIM cards for each country in which WiFi service is used (in other words, a WiFi router with a maximum of nine SIM-card slots, canonly be used in nine countries). Conversely, server-based management of SIM cards ensures SIM cards are switched automatically to the appropriate
country as users travel around. This not only improves the efficiency of shipping operations, but also contributes to an increase in network usage (while
reducing surplus inventory). Vision presently operates a global IoT platform that allows it to monitor usage conditions for its customers across virtually
the entire world. This in turn allows the company to take various types of action in response to customer usage conditions.

Improving operational efficiency▷ Use AI systems to help reduce call centers’ operating costs▷ Increase use of automated systems, such as “Smart Pickup” (automated lockers for WiFi router pickup and return)*4 and “Smart
Entry” (self-service kiosks) *5 in some locations as well as install additional terminals (reduce service counter operation costs)
Increase operational efficiency of manned service counters to improve sales ratio for optional services*4 Within a matter of seconds, users can pick up and drop off a router from a locker that is automatically assigned to them online. The locker is opened
by tapping a QR code displayed on the screen of a user’s smartphone.
*5 The self-service kiosks feature multi-language support that is developed by the company. They have access to customers’ usage patterns and requests(e.g., first time or tenth time using the service, previous requests made to call centers), which contributes to superior service.

Sales channels
End users can apply to use the services through websites, apps, corporate sales, partners (companies that have concluded sales
agent contracts or franchise contracts), and airport counters.
Global WiFi (NINJA WiFi®) sales channels
Sales channel

Overview

Direct websites

Apply for Global WiFi® on the internet. The application website attracts users through the company’s homepage and web
marketing through product specialist websites

Apps

Apply via the company’s smartphone app downloaded by the end-user

Affiliates

Applications via websites operated by affiliates

Corporate sales

Ongoing applications for services by registered corporate users, such as government agencies, companies with frequent
overseas travel and other corporate users. (Price discounts and corporate billing services available.)Partners

Apply via partner companies (travel agents, insurance agents, credit card companies etc.), agents and franchisees

Airport counters

Apply at airport counters

Source: Shared Research based on company data

31/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Settlement service providers

Data communication
serviceEnd Users

Direct website
Apps
Affiliates
Corporate sales
Partners
Airport counters

Vision GroupWorldwide telecommunications companies

Service flows

Payment(credit card
settlement)

Shipping/return

Payment

Rental fees

Source: Shared Research based on company data

Information and Communications Service segment
Information and Communications Service(JPYmn)Sales

FY12/12Par.
-

YoY% of total sales

Operating profit
YoY
OPM (excl. adjustments)% of total OP (incl. adjustments)-

FY12/13
Cons.
7,312

FY12/14
Cons.
6,411

FY12/15
Cons.
6,440

FY12/16
Cons.
6,948

FY12/17
Cons.
7,104

FY12/18
Cons.
7,774

-

-12.3%

0.5%

7.9%

2.2%

9.4%

79.4%

62.9%

51.6%

46.8%

40.5%

36.2%

1,219

566

724

904

1,025

1,173

-

27.9%

24.8%

13.4%

14.4%

3.9%

7.7%

11.3%

14.0%

14.7%

16.5%

15.7%

151.3%

79.4%

60.8%

48.5%

44.0%

35.4%

Source: Shared Research based on company data

Segment overview
The Information and Communications Service segment accounts for 36.2% of sales and 35.4% of operating profit (FY12/18). It
targets mainly startups and ventures as well as SMEs, and arranges telephone lines and other types of telecommunications
services, mobile communication device sales, office equipment sales, and builds websites for its customers. The company andconsolidated subsidiary Best Link are involved in this business.
Sales in the segment fell temporarily in FY12/14 as the company changed the weightings of products it handled. Due to a rising
share of highly profitable products and increased productivity, profits have continued to rise.

Services and business model
Sales structure
As information and telecommunications technology continues to evolve, the segment makes use of web marketing activities as atool to target startups and general corporations. The idea is to grasp customer needs to offer the best products and services atthe optimal timing. The company also conducts door-to-door sales leveraging its seven sales offices across the country andnumerous partner corporations, which have given it a nationwide marketing presence.

Customers
Almost all of the segment’s customers are corporate clients. There are roughly over 30,000 new signups per year. Around 60% of
these new contracts are with startups, which numbered 17,000* in FY12/18. According to Ministry of Justice statistics, 118,811
new companies were newly established in 2017. This means Vision does business with one out of every six or seven of the newly
created companies every year. The company is focusing on capturing more startup clients. The aim is to increase the number andtype of services it provides them as their business grows. Per the company, bankruptcies amongst startups are declining, and its
clients tend to be particularly cost-conscious, so bankruptcy rates are lower than in the general market.

32/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp*FY12/16 figures for companies that have signed contracts for information and communication services with the company within six months ofestablishment (Vision survey).

Revenue
Revenues in this segment can be broadly divided into sales revenue from selling devices and office equipment, fees from telcos
for arranging services (one-time commissions, and monthly commissions or “stock incentives”), and revenue from officeequipment maintenance services. When contracts are signed, revenue from devices and office equipment and one-timecommissions are booked as sales; subsequent monthly revenues comprise the monthly stock incentives and office equipment
maintenance revenues.
The company’s business model entails setting low prices for devices and office equipment and collecting monthly revenues, tolighten the burden on startups. While the company has not disclosed details, we understand that monthly revenues such asmonthly commissions (“stock incentives”) and office equipment maintenance revenue significantly contribute to profits as thecompany’s business model emphasizes continued business with its clients.

Subsegments
The revenue breakdown for subsegments in the Information and Communications Service segment are high for office equipment
sales, mobile (cell phone) communications, and fixed telecommunications (landline) businesses, followed by the broadband(internet) business, and the internet media business (website development, etc.). Recently, the company has been adding new
products to meet customer needs, such as the electric power service Haluene Denki (power sales agent).

Telecommunications access intermediary services
In this market, the company operates mobile, landline, and broadband businesses. It involves the sale of devices and obtaining
network access (from telcos) for mobile phone, landline, and internet connections, as well as installations. Revenue comes fromhandset sales of landline and mobile phones (one-time revenue) and commissions for arranging network access (either one-timecommissions when contracts are signed or monthly commissions*).
*Monthly commissions: Payable by the telco, and based on monthly payments made by the customer to telcos. When handsets are upgraded, thepayment period is extended. When the customer cancels the contract, payments stop.

Office equipment sales and after-sales support
The office equipment sales business’s main source of selling copy machines (one-time revenue), and providing after-sales services(monthly revenues). The company procures copiers from manufacturers, which it sells to customers. While some sales involve asingle payment, they are typically five-year leases. For leasing sales, the company sells the copier to a leasing company andreceives revenue. The customer signs a contract with the leasing company, as well as an after-sales service contract for the copierwith Vision.
In addition to monthly base fees for using after-sales services, customers pay additional fees depending on frequency of use. The
company sets copier prices low to reduce the burden on customers, and recoups revenues through after-sales service fees. As aresult, revenue from copier sales comprises a substantial share of sales, but after-sales service revenues are a big contributor to
profits.

Website services
The internet media business provides MORPH, a service which develops PC and smartphone compatible websites as its mainstay
business. The company provides clients with the expertise it has built up operating its own websites to support their businesses.
While the contribution to profits is small, this business helps stabilize customers’ businesses, and contributes to expanding salesof Vision’s other products. Initial fees for creating a website start from JPY100,000, with monthly charges starting from JPY50,000(both as of December 2018 and excluding tax).

33/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Key group companies
Group companies and business areas
Vision and group companies Reporting
segment

Sub segment

Business description

Overseas business

Mobile WiFi router rental business. Access to overseas telco
networks aimed at travelers from Japan to overseas andoverseas-to-overseas travelers.

Domestic business

Mobile WiFi router rental business. Access to domestic telco
networks aimed at travelers from overseas to Japan anddomestic tourists and business travelers.

VisionBest Link Inc.
Vision Mobile Korea Inc.
Vision Mobile Hawaii Inc.
Vision Mobile Taiwan Ltd.
Vision Mobile Hong Kong
LimitedGLOBAL WIFI.COM PTE. LTD.
GLOBAL WIFI.UK LTD
Vision Mobile Shanghai Ltd.
Global WiFi France SAS
Vision Mobile Italia S.r.l.
Vision Mobile USA CORP.
(US; incorporated in California)
Vision Mobile New Caledonia
SAS

Global WiFi

VisionMembers Net Inc.

Information and Fixed telecommunications
Communications business
Service
Mobile telecommunications
business

VisionBroadband business

VisionBest Link Inc.
Member Net Inc.

Arranges access to Softbank’s Otoku Line landline services
Arranges sale of Softbank’s mobile handsets and access tomobile phone services
Arranges access to broadband services such as FLET’S,
offered by Nippon Telegraph and Telephone East
Corporation (NTT East) and Nippon Telegraph andTelephone West Corporation (NTT West).

VisionAlphatechno Co., Ltd.
BOS Inc.

Office equipment sales

VisionInternet media business

Sales of MFPs*, business phones and UTM** devices primarily
from Canon
Sales of advertising materials (website development) on theinternet

VisionRaPid Corporation
ProDrivers Inc.
Vision Ad Co., Ltd.

Other

Chauffeur-driven car sharing service (ProDrivers), media
business. Agent for ASKUL Corp.’s ASKUL telecommunication
sales business

Source: Shared Research based on company data
Note: Vision Vietnam One Member Limited Liability Company is involved in systems development and database construction for the company
Note: Sales from other segments comprise less than 1% of the total, so are not included above*MFP (multifunction printer): umbrella term for digital copier or laser facsimile, with several functions such as copying, printing, facsimile and scanning** UTM (Unified Threat Management): security measure available to companies, whereby one security device has multiple functions and whose use
enables all-inclusive, integrated solutions. Security devices used for these purposes are known as UTM devices

34/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Profitability analysis
Profit margins(JPYmn)Sales
Cost of sales
Cost ratio
Gross profit
GPM
SG&A expenses
SG&A ratio
Operating profit
OPM
EBITDAEBITDA margin
Net margin

Financial ratios
ROA (RP-based)
ROE
Total asset turnover
Working capital (JPY'000)
Current ratio
Quick ratio
OCF / Current liabilities
Net debt / Equity
OCF / Total liabilities
Change in working capital

FY12/10 FY12/11 FY12/12 FY12/13 FY12/14 FY12/15 FY12/16 FY12/17 FY12/18
Par.
Par.
Par.
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
6,462
6,999
6,527
9,204
10,185
12,485
14,844
17,55521,504
4,005
4,533
5,575
6,221
7,394
8,854
43.5%
44.5%
44.7%
41.9%
42.1%
41.2%
5,199
5,652
6,910
8,622
10,161
12,650
56.5%
55.5%
55.3%
58.1%
57.9%
58.8%
5,189
5,366
6,105
7,332
8,372
10,166
56.4%
52.7%
48.9%
49.4%
47.7%
47.3%
10
286
805
1,290
1,789
2,484
0.1%
2.8%
6.4%
8.7%
10.2%
11.6%
117
423
984
1,608
2,267
2,491
1.3%
4.2%
7.9%
10.8%
12.9%
11.6%
2.3%
0.0%
0.8%
2.7%
4.7%
5.5%
6.9%
7.1%
12.5%
10.5%
2.34

2.0%
0.1%
2.45

9.1%
2.09

0.9%
5.0%
2.64
555
150.9%
120.7%
0.17
0.15
555

8.5%
15.8%
2.68
470
145.8%
129.9%
0.29
0.27
-85

13.0%
13.9%
2.01
649
366.7%
344.6%
0.41
0.39
179

14.1%
11.8%
1.61
704
312.7%
289.5%
0.65
0.57
55

16.8%
15.2%
1.64
745
310.7%
268.3%
0.59
0.56
41

20.0%
16.7%
1.72
1,167
278.9%
255.0%
0.00
0.00
422

Source: Shared Research based on company data
Note: Figures may not match company numbers due to differences in rounding methods
Note: Debt ratios calculated based on net debt

Cost structure
The company has been posting double-digit sales increases since FY12/13 after launching the Global WiFi business (mobile WiFi
router rental services). The CoGS ratio rose slowly between FY12/13 and FY12/15, but has been coming down since then thanks
to economies of scale and efforts to further streamline operations. The CoGS ratio rose slightly in FY12/17, but was still 2.6pp
below the peak level in FY12/15, and then came down 0.9pp in FY12/18. The SG&A expense ratio has also been on the decline
due in part to implementation of web-based efficient marketing and improved operations as it improves the efficiency of device
delivery (Smart Pickup, Smart Entry, Smart Check) and establishes a system that manages SIMs in the cloud in its Global WiFi
business. The SG&A expense ratio was 47.3% in FY12/18, 9.1pp lower than in FY12/13.
Cost structure(JPYmn)Sales
Cost of sales
Cost ratio
SG&A expenses
SG&A ratio
Personnel expenses
Promotion expenses
Commission fee
Provisions for doubtful accounts
Provision for bonuses
OthersOperating profit
OPM

FY12/10

FY12/11

FY12/12

Par.
6,462

Par.
6,999

-

-

FY12/13
FY12/14
FY12/15
FY12/16
FY12/17
FY12/18
Cons.
Cons.
Cons.
Cons.
Cons.
Cons.
9,204
10,185
12,485
14,844
17,55521,504
4,005
4,533
5,575
6,221
7,394
8,854
43.5%
44.5%
44.7%
41.9%
42.1%
41.2%
5,189
5,366
6,105
7,332
8,372
10,166
56.4%
52.7%
48.9%
49.4%
47.7%
47.3%
1,300
1,436
1,577
1,810
1,999
1,150
782
873
983
1,131
498
673
839
1,062
47
27
21
22
34
19
21
77
161
210
2,673
2,602
2,884
3,518
3,937
10
286
805
1,290
1,789
2,484

Par.
6,527

0.1%

2.8%

6.4%

8.7%

10.2%

11.6%

Source: Shared Research based on company data
Note: Figures may not match company numbers due to differences in rounding methods

35/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Market and value chain
Market overview
The company receives fees from outbound (from Japan to overseas), inbound (from overseas to Japan) and overseas-to-overseas(travelers from a region where the company has an office to other countries abroad) travelers in its Global WiFi business. Startups
are the main target of the Information and Communications Service business.
The company said that in the Global WiFi business the key indicators are foreign and domestic traveler numbers, and in the
Information and Communications Service business, the number of companies established.

Japanese travelers abroad
From 2010 through 2015, the number of Japanese travelers abroad was influenced by various external factors: the Tohoku
earthquake in 2011, yen strength in 2012, and yen weakness in 2013. Since bottoming out at 16.2mn in 2015, the number ofJapanese travelers going overseas has been rising. According to statistics compiled by the Japan National Tourist Organization(JNTO), the number of Japanese travelers going overseas hit 18,954,000 in 2018, a 6.0% over the previous year and the highest
figure recorded since record-keeping began back in 1964. The 2018 total also topped the previous record of 18,490,000 set in2012, when the number of overseas travelers jumped sharply. The rise in overseas travel in 2018 was attributed to a number offactors, including strong corporate earnings that permitted more overseas business travel and promotion of work style reformthat increased the amount of leisure time and led to more individuals traveling overseas as well.
According to the Japan National Tourist Organization, 2019 might be a slow year for overseas travel but the overall numbers arestill expected to hold up well as consumers remain ready and willing to spend as the long expansion in the economy continues
and the baby boomers that had been the main drivers of overseas travel numbers pass the baton to younger generations.
Notwithstanding, the rate of smartphone ownership is expected to continue rising steadily in 2018. As shown in the graph below,
the household penetration rate for smartphone in Japan was stuck around 72% through 2016 then jumped to 75.1% in 2017.
Japanese travelers abroad and smartphone penetration

Household penetration of smartphones (right axis)

Number of travelers('000)

20,000
16,637

16,994

18,49017,472

16,903

16,214

17,11615,00062.6%

10,00071.8%

18,954

50.0%

25.0%

29.3%
9.7%
2010

2011

100.0%

75.0%

75.1%

49.5%

5,000

0

64.2%

72.0%

17,889

2012

2013

2014

2015

2016

2017

2018

0.0%

Source: Shared Research based on JNTO materials, and Ministry of Internal Affairs and Communications, 2016 Communications Usage Trend Survey (released June 8,
2017)

Number of overseas travelers to JapanThe number of foreign visitors to Japan in 2018 was 31.2mn (+8.7% YoY). The increase comes even as a series of natural disasters
worked to hold down the number of travelers coming to Japan during part of the year, as by the end of the year the numbers had
bounced back. The number of foreign visitors has now increased for seven consecutive years starting in 2011, and in 2018
reached the highest level it has ever been since the Japan National Tourist Organization (JNTO) started tracking foreign visitor
numbers in 1964.

36/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

With the Summer Olympics due to be held in Tokyo in 2020, both the public and private sector have been expanding measures
to attract overseas visitors to Japan. As such, the trend of rising foreign visitors to Japan is likely to continue.
The government has stated a goal of attracting 40mn overseas travelers to Japan in 2020 and 60mn in 2030. JTB, one of the top
travel agencies in the country, estimates that there will be 32mn overseas travelers to Japan in 2018 due to the increase intravelers from Southeast Asia and changes to the framework to more effectively invite inbound visitors.
Foreign visitors to Japan (mn)
(mn)

47.0%

80.0

50%

8.7%

40.0
20.0
0.0

60

22.0% 19.4%

60.0

5.2

6.1

6.7

7.3

8.4

8.4

6.8

8.6

6.2

8.4

10.4

2003

04

05

06

07

08

09

10

11

12

13

13.4

19.7

24.0

40%
30%
20%

40

10%

28.7 31.2

0%
-10%
-20%

14

15

16

17

18

20F

30F

-30%

Source: Shared Research based on Japan National Tourist Organization (JNTO) materials and the Japanese government’s Council for the Development of a Tourism Vision
to Support the Future of Japan meeting (held in March 2016)

Global tourism numbers
According to the United Nations World Tourism Organization (UNWTO), the number of travelers between countries is rising
globally, and in 2018 represented a substantial market of over 11.4bn persons. Although it currently does not cover parts ofAfrica, the company’s Global WiFi service can be used in over 200 regions worldwide, so if it opens an office in a given region, it
already has the base to meet demand of that area. In addition to its current market expansion in Asia (Taiwan and South Korea),
Vision aims to continue expanding its presence by increasing the number of local bases beyond North America and otherlocations with many overseas travelers, to capture burgeoning demand.
International tourist arrivals
(mn)

1,500

1,000

500

0

949

993

1,039

1,087

2010

2011

2012

2013

1,133

1,195

1,240

2014

2015

2016

1,326

1,400

2017

2018

Source: Shared Research based on UNWTO and other materials

Number of registered companies
According to Ministry of Justice figures, the number of companies being established in Japan has been on a rising trend since2009. In 2017, 118,811 companies were established (91,379 joint stock companies and 27,270 limited liability* companies).
Compared to 2009, when the number bottomed, the number of registered companies has grown by 1.38x (1.14x for joint stockcompanies and 4.73x for limited liability and other types of companies). Vision said that its main targets in the Information andCommunications Service business are startup companies, because startups need more information and communications services
as their business grows. Vision aims to maximize profits by offering low-priced telecommunications services including pre-owned
equipment in the initial stages, and subsequently providing various additional services as the startup grows. The company figuresthat it does business with one out of every seven to eight of the new companies started each year.

37/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp*A new company format established in the 2006 corporate law revisions. The key advantages versus joint stock companies and individually owned
businesses are low setup costs and limited liability. As a result, the number of small startups and SMEs has been on a rising trend.

Company registrations('000）

Limited liability company

Stock company

Other

140
120
100

6.1

91.6
5.4

80.0

80

3.4
95.4

60
40

106.6

101.4

76.6

2006

2007

86.2

2008

96.7

111.2

114.3

22.2

23.8

118.8

27.3

87.9

89.7

91.9

5.8

7.2

9.1

10.9

79.9

80.5

80.2

80.9

81.9

86.6

88.8

90.4

91.4

2009

2010

2011

2012

2013

2014

2015

2016

2017

85.7

19.8

14.6

Source: Shared Research based on Ministry of Justice materials

Competition
Global WiFi
Operators involved in mobile WiFi router services for the outbound market similar to Vision include Telecom Square, Inc. (notlisted) and XCom Global (formerly Inter Communications, not listed). In the past, competitors oftentimes procured networks
through intermediaries. In contrast, Vision has been—and prioritizes—directly negotiating with local telcos to procure network
access since it first started its business. The company says that this gives it an advantage over its two competitors, as it purchases
network access based on its own terms, allowing the company to control costs and develop original services such aslarge-volume plans. Vision’s sales are higher despite being a late entrant. In FY12/15, Vision’s Global WiFi segment sales wereover 1.6x sales of its two main competitors, giving it clout to negotiate prices. Other competition is primarily roaming services
offered by major telcos, but Vision’s prices are roughly 1/3 of these services.
Free WiFi hotspots also compete, but Vision’s advantages are broad coverage and connectivity on the go. Further, there is no
hacking risk due to the way it is set up, and having highly secure connections helps capture the corporate user market.
Comparison of major mobile internet services
Connection
methodology

Price

Service area

Communication
speed

Management

Security

Free WiFi hotspots

Good

Poor

Average

Good

Poor

Security concerns. Usable in limited areas, and slow speeds in some places.
Internationalroaming (overseas
packet)Poor

Average

AverageGood

SIM (local
procurement)

Average

Knowledge needed to purchase locally. Operation complex with regular recharges necessary on cheap plans.

Global WiFi® (NINJA

Good

Good

Pricey (JPY1,980–2,980 versus JPY1,000 for Vision) and quality can be patchy. Risk of usurious charges.
Average

Good

Good

Good

Poor

Good

Good

Good

38/63

R VISION / 9416
Coverage

WiFi®)LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Procures quality network access in collaboration with local telcos as a rule. This means low prices and fastest local
service speeds. Mobile WiFi routers already set up, so use is simple and no trouble to operate.

Source: Shared Research based on company data

Information and Communications Service
There are many companies involved in selling telecommunications access and office equipment. Some of the majors are Otsuka
Corp. (TSE1: 4768) and Hikari Tsushin (TSE1: 9435). However, Otsuka Corp. targets major corporations while Hikari Tsushincovers a broad range of customers including individuals. Vision differentiates itself by targeting startups.

39/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Strengths and weaknesses
Strengths◤ Niche market focus: The company operates two key businesses: the Global WiFi business, which rents WiFi routers, and theInformation and Communication Service business, which sells OA equipment and provides IT and communications services. In
the Global WiFi business, the company possesses more than 50% share of the market, boasting an advantage by procuringcommunication lines with the support of scale merit. In the Information and Communication Service business, the company iscultivating its key customer base among newly established companies and SMEs. This is a distinctly different segment than thelarge corporations targeted by major competitors. Because Vision’s customers are startups and SMEs, sales of a single productto any one customer are low. However, by selling multiple additional services to customers as they grow, Vision has been able
to increase revenue per customer. Startups and SMEs are attracted by the low initial setup costs, enabling Vision to expand its
customer base and achieve stable growth.
◤ Highly efficient sales model using Web marketing: The company conducts sales visits focusing on customers that havedemonstrated interest. In 2003, it gradually shifted from telemarketing-focused sales to utilization of web marketing, and has
been able to conduct efficient sales activities to potential customers who make enquiries from the website. Customers
acquired from websites tend to be more active and have a strong propensity to contract, which has increased the contract
rate. (For example, copier sales per employee are roughly 3x the industry average). This leads to a virtuous cycle of reduced
employee turnover and accumulated sales knowledge by marketing staff. The company’s concierge operations (CLT) for
continuing business with existing customers and the sales team’s ability to create demand for other products lead to effective
upselling and cross-selling.

◤ Direct network access allows provision of high-quality internet service at low prices: In the Global WiFi business, thecompany offers unique low cost and high quality (faster and more data) telecommunications services compared tocompetitors. This is because Vision has been procuring mobile network access directly from major telcos in Japan and abroad
since the inception of its business, while competitors often purchased networks through intermediaries. In order todistinguish itself from companies who entered the business before it, Vision negotiates directly with telcos to expand its
services and lower costs. To achieve this, the company has been establishing local subsidiaries to acquire telecom businesspermits in different countries. The company also benefits from having the leading market share and purchasing clout. This ispartly because Vision used cash flow from its Information and Communications Service business to help it get the Global WiFi
business up and running in a short period of time.

Weaknesses◤ Little technological differentiation at present: The company differentiates itself by focusing on target customer segments,

direct procurement, low prices, marketing prowess, and operational initiatives. However, the products and services that

Vision sells are developed and manufactured by third parties. As such, the company has not yet established high barriers toentry such as in-house technical development and manufacturing processes. The company is therefore striving to distinguishitself further from others by developing an increasing number of value-added services in-house, such as in the media sector.
◤ Limited time to prove itself to clients: The company is cultivating its key customer base among startups and SMEs. This is adistinctly different segment than customers targeted by major competitors (large corporations). The company’s core strategy

in the Information and Communications Service business is to focus on startups, and as these companies grow, increase thenumber of provided services. However, Vision will ultimately have to compete in the same arena as major rivals as startups
grow into medium and large companies. The company aims to maintain continuous customer contact through CRM initiatives,primarily through the efforts of its Customer Loyalty Team (CLT), a concierge for customers.
◤ Relationships with telcos in the Information and Communications Service business: Vision receives commissions ascompensation for its work as an agent arranging telecoms services provided by telcos. However, commission terms arechanging as this market matures. Telcos’ management policies could change, and they may make major changes to theirterms. In such a case, the company would be unable to avoid an impact on its earnings and finances. For this reason, Vision is
working to expand its range of products, including proprietary products, and improve marketing efficiency.

40/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Historical performance and financial statements
Historical performance
1H FY12/19 results (out August 9, 2019)
Overview▷ Sales:

JPY12.9bn (+31.3% YoY)

▷ Recurring profit:

JPY1.7bn (+34.4% YoY)

▷ Operating profit: JPY1.7bn (+36.7% YoY)
▷ Net income*:

JPY1.1bn (+32.9% YoY)

* Net income attributable to owners of the parent▷ The company posted record sales and profits at all levels in 1H.

▷ Against its 1H FY12/19 forecast, the company surpassed targets by 11.4% for sales, 17.6% for operating profit, 16.3% forrecurring profit, and 11.8% for net income attributable to owners of the parent.

▷ Against its full-year FY12/19 forecast (upward revision*), the 1H progress rate was 50.2% for sales (versus 45.8% of full-year
FY12/18 results in 1H FY12/18), 51.8% for operating profit (49.8%), 51.5% for recurring profit (49.8%), and 50.8% for net
income attributable to owners of the parent (52.9%).

▷ Sales up 31.3% YoY: The Global WiFi business generated 36.7% YoY sales growth on an increase in the number of rentals. The
Information and Communications Service business also posted a solid 17.8% sales increase with ongoing contributions fromcross-selling and upselling.

▷ Operating profit up 36.7% YoY: Despite sustained efforts to improve cost efficiency, GPM declined 1.1pp YoY to 57.9% as aresult of changes in the service mix. The SG&A expense ratio fell 1.6pp YoY to 46.2% thanks to enhanced operational efficiency

through the utilization of artificial intelligence (AI) and robot process automation (RPA). OPM rose 0.6pp YoY to 13.1%.

▷ Upwardly revised full-year forecast: Having surpassed its 1H forecast, the company raised its outlook for the full year. The upwardrevision involved nothing more than adding the amount by which 1H results surpassed its initial forecast, however, as thecompany made no changes to its initial forecast for 2H (sales, +10.4% YoY; operating profit, +26.1% YoY) even though 2H
includes its busiest season (Q3, the July–September quarter). As a result, the revised full-year forecast shows YoY growth in sales
and operating profit slowing from 1H to 2H; this does not seem likely, though, for while there is some risk from hurricanes andother factors, the company did not indicate any factors that are expected to slow sales growth during 2H.
* Revised FY12/19 full-year forecasts (announced August 9, 2019)
Sales:

JPY25.8bn (previous target was JPY24.5bn)

Operating profit:

JPY3.3bn (JPY3.0bn)

Recurring profit:

JPY3.2bn (JPY3.0bn)

Net income*:

JPY2.1bn (JPY2.0bn)* Net income attributable to owners of the parent

Global WiFi
1H results summary▷ 1H FY12/19 segment sales were JPY8.2bn (+36.7% YoY) and segment profit was JPY1.6bn (+38.9% YoY).

▷ 1H results gave the Global WiFi segment 49.9% of the upwardly revised full-year forecast for segment sales (JPY16.4bn) and
54.7% of the upwardly revised full-year forecast for segment profit (JPY2.9bn).

41/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Number of outbound travelers, inbound travelers, and rental contracts in the Global WiFi business▷ Despite the many uncertainties surrounding the Japanese economy, the travel market remained brisk.

▷ According to statistics from the Japan National Tourism Organization, during the first half of 2019 (January–June) there were atotal of some 9,542,000 Japanese traveling abroad (+8.6% YoY) and 16,634,000 foreigners visiting Japan (+4.6% YoY); both
figures represent new record highs for the first half of the calendar year.

▷ The strong growth in Japanese traveling abroad was driven in part by the large outbound crowds during the extended Golden
Week holiday period in early May; on the inbound tourism side, travelers from East Asia, particularly China, led the way.

▷ With the help of investments aimed at capturing this surge in travel demand and engendering long-term customer loyalty, Vision
saw rentals of mobile WiFi routers at its Global WiFi business jump 44.8% YoY to 1.39mn units in 1H FY12/19.

▷ The market penetration of the company's Global WiFi service also increased, with 17.9% of outbound Japanese travelers rentinga mobile WiFi router from Vision during 1H FY12/19 versus 14.9% in full-year FY12/18 (company estimate).

Global WiFi business rental contracts('000)

Overseas use

Domestic use

Overseas business (excl. domestic use)

2,000

2,232
65
408

1,651
63
1,500

1,000

500

56
6
0

0

1,390
30

286
1,144
67

49
FY12/12

783
44
91

516
18
36

242
11
8

FY12/13

FY12/14

960
30
180

1,760
1,303

1,060

887

648

463

224

280

191

FY12/15750

FY12/16

FY12/17

FY12/18

1H FY12/18

1H FY12/19

Source: Shared Research, based on company data

Vision’s global WiFi usage rate by overseas travelers
Vision's overseas share (outbound: Japan to overseas)

20.0%

17.9%

Vision's domestic share (inbound: overseas to Japan)
Total share in Japan (outbound + inbound)

15.0%

14.9%
11.7%

10.0%

8.3%
6.4%
4.4%

5.0%
0.4%
0.0%

FY12/12

2.7%

2.0%

0.7%

1.4%
FY12/13

FY12/143.5%
1.2%
FY12/15

4.7%

5.8%

7.1%

8.2%

2.1%

2.2%

2.5%

2.9%

FY12/16

FY12/17

FY12/18

1H FY12/19

Source: Shared Research, based on company data

Customer profile in 1H FY12/19▷ Corporate versus individual customers: During 1H FY12/19, the company saw individual customers increase relative to corporate
customers both in numerical and monetary terms. Of the total number of rental contracts, individuals accounted for 65.9%

42/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp(versus 59.2% in 1H FY12/18) and corporate customers 34.1% (versus 40.8%). Of total revenue from rental contracts, individuals
accounted for 57.1% (versus 49.8%) and corporate customers 42.9% (versus 50.2%).

▷ New versus repeat customers: During the period the company saw repeat customers account for a growing proportion of rentals
both in numerical and monetary terms. Of the total number of rental contracts, new customers accounted for 53.9% (versus

54.9% in 1H FY12/18) and repeat customers 46.1% (versus 45.1%). Of the total revenue from rental contracts, new customers
accounted for 52.6% (versus 55.0%) and repeat customers 47.4% (versus 45.0%).

▷ Details of initiatives and investments: Vision responded to significant demand during Golden Week by increasing its procurementof WiFi routers and SIM cards.

▷ Global WiFi Unlimited Plan (launched in February 2019; can be used in 71 countries) was well received, especially amongcorporate users, and led to higher average revenues per user*. The Global WiFi Unlimited Plan gained a strong following amongindividual users as well, especially among those who travel frequently or arrive at the airport without advanced reservations for a
WiFi router. The company commented that the number of people using the Global WiFi Unlimited Plan has increased every
month since the service was launched; it noted that Global WiFi Unlimited Plan users now account for roughly 10% of all users.
*For example, users of the Global WiFi Unlimited Plan in the United States would pay JPY2,370 [JPY2,170 with early reservation discount], or JPY700
more than the JPY1,670 [JPY1,470 with early reservation discount] paid by users of the company's large data plan (with the limit of 1.1GB per day).

▷ The company also increased shipments in connection with Global WiFi for Biz, offering internet service in 107 countries andregions with no need for rental applications for individual use, since routers are kept on hand internally.

Measures aimed at reducing telecommunications costs and improving operational efficiency▷ Steps taken to control telecommunications costs include negotiating with carriers to secure volume discounts and using

next-generation telecommunications technology of Cloud WiFi, which manages SIM on the cloud (no need to insert or replace
SIM cards; provides access to the company's cloud network in 107 countries and regions with a single device). Of the total
number of global WiFi routers rented out in June 2019, Cloud WiFi accounted for 93% versus 77% in June 2018. Cloud WiFi
using proprietary SIM cards is one of the ways Vision is seeking to differentiate itself from competitors, but the company does notexpect rentals of this type of router to account for much more than 90% of rentals because there are some countries in whichthese new routers will not work, depending on telecommunications operators. For this reason, the boost provided by these newrouters to YoY growth can be expected to gradually diminish going forward.

▷ On the operating efficiency front, steps taken to improve efficiency include the installation of automated Smart Pickup lockers,
Smart Entry self-service kiosks, and Smart Check QR code reception counters, all of which help improve efficiency by relieving
congestion at the company's service counters.
 As of the end of June 2019, Vision had a total of 25 domestic service counters (where rental units can be picked up andreturned) with locations at 17 Japanese airports*1; the company says it has one of the largest global service counter networks
in the industry.
 At Japan's six largest airports, Vision has a total of 20 sets of automated Smart Pickup lockers*2.
 At Kitakyushu Airport (the only airport in Kyushu that operates 24/7), the company opened its first unmanned service center(automated Smart Pickup lockers where customers could both pickup and return devices) and installed the first vending
machine selling prepaid SIM cards for domestic use in a Japanese airport. The company selected Kitakyushu Airport to test the
new service counter format because it is a busy airport with lots of arrivals and departures in early mornings and late nights,
and since the cost of staffing English-speaking staff at service counter there would be prohibitive. In addition, with the

43/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

combination of automated Smart Pickup lockers and SIM card vending machines, the company thought it would be able tocapture demand not only from Asian travelers who were already familiar with the Vision name as a provider of pocket WiFi
services, but also from US and European travelers who were familiar with using prepaid SIM cards. Because the automated
Smart Pickup lockers and SIM card vending machines require less space, they are less costly to operate, and with the rollout ofadditional touch-screen operated lockers the company has been able to increase profitability while increasing convenience tocustomers. The company reported that the number of users steadily increased in the first and second month of the service
launch.
Last-minute online application filing has become possible thanks to the company’s strategy of increasing the automation of its service centers, using
cloud WiFi, and linking databases. As a result, the company has been able to capture impulse demand from travelers who have been enticed by ads
they saw on the way to the airport and improve the efficiency of its airport service counter operations.*1 Total 25 service counters, locations at 17
different Japanese airports: Asahikawa Airport, New Chitose Airport, Sendai Airport, Narita Airport, Haneda Airport, Shizuoka Airport, Chubu Centrair
International Airport, Niigata Airport, Komatsu Airport, Itami Airport, Kansai International Airport, Oita Airport, Kitakyushu Airport, Fukuoka Airport,
Miyazaki Airport, Kagoshima Airport, Naha Airport, Shibuya Chikamichi, and JR Miyazaki Station.
*2 Smart Pickup locker locations and number of locker sets (as of June 30, 2019): Haneda Airport (three), Narita Airport (six), Chubu Centrair
International Airport (three, with one more being added), Kansai International Airport (six), Itami Airport (one), Kitakyushu Airport (one, with one more
being added).

Information and Communications Service
Overview of 1H FY12/19 results▷ Segment sales were JPY4.5bn (+17.8% YoY) and segment profit was JPY832mn (+31.2% YoY).

▷ Compared with the upwardly revised full-year forecast, 1H results gave the segment 52.5% of its full-year target for sales(JPY8.6bn) and 53.9% of its full-year target for segment profit (JPY1.5bn).

▷ The main activities in this business include arranging landline, mobile, and broadband telecommunications services, selling andleasing office equipment, and building websites for startups and SMEs.

External operating environment: trends in corporate startups▷ Vision said that its main targets in the Information and Communications Service business are startup companies. The company

figures that it does business with one out of every seven to eight of the new companies started each year. (For further details, seediscussion in the "Market and Value Chain" section).

▷ According to a survey done by Tokyo Shoko Research, there were 128,610 companies started in 2018. Down 2.8% versus 2017,
this represents the first decline in the number of Japanese startup companies since 2009, when the number of startups fell in thewake of the global financial crisis. That said, the number of startup companies is still relatively high, second only to the 132,291
figure recorded in 2017, which marked the first time the number of startup companies had exceeded 130,000 since in 2007.

▷ According to Ministry of Justice statistics, there were a total of 49,066 registrations of new companies during the five-month

period from January to May 2019; as this represents a modest 1.3% decline versus the same period last year, it is fair to say that

registrations of new companies are coming down at a slow rate but are still holding near the high levels marked last year.

Details of initiatives and investments▷ Vision makes cross-selling and upselling proposals suited to the growth stages and needs of its key target customers (startups

and venture firms). The company aims for long-term customer interaction and stable growth by having customers sign up for its

support and maintenance services. It saw sluggish growth in infrastructure-related communication lines and in orders as a new
power sales agent, but sales and profit were up on an increase in revenue per order with the sale of sets of multiple products andon improved profitability attributed to in-house handling of office equipment installation work and website production.

44/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp▷ In response to diverse customer needs, Vision increased the number of products and services it handles, diversifying its
monetization sources and enhancing its price competitiveness.

▷ With increased demand for its new labor consulting service (subsidies consulting service), the company increased the number ofcontracts by promoting its proprietary cloud-based Vision Workflow System* (VWS), which operates on a monthly fee basis.

▷ Vision says one of its strengths is improved business efficiency owing to a system in which coordination between divisions serves
as a bridge in conveying customer needs to the relevant division.

*Vision Workflow System (VWS): A proprietary workflow management tool, not only developed by but also used by the company for workflow
management over a prolonged period of time. This all-in-one business process efficiency and sales support tool includes an employee attendance
management function, an internal company calendar sharing function, an internal memo circular function, and an expense calculation system. Because
work hours, employee schedules, internal company memos, and expense calculations can all be managed on the web, the system helps reduce
unnecessary data collection work. The Vision Workflow System is especially strong when it comes to functions designed to improve employee
productivity and give management a good handle on the status of their business. The system is affordable even for small companies because the fixed
costs associated with the system are low (eligible for the government subsidy for implementing IT systems). The company also offers its VWS Web Call
System as a total solutions package to support telemarketing operations.

Measures aimed at enhancing future growth prospects
As countermeasures for lost opportunities and declining profitability caused by a shrinking workforce and increased recruitment
costs, Vision is conducting the following initiatives to improve productivity.

▷ The company aims to leverage the latest technology to free itself of labor-intensive practices. In addition to its strategy to makestores smarter, it will promote the automation of its call centers using AI (bots) and the use of RPA for administrative operations.

▷ Vision will open Vision Kids nursery schools on the premises of its call centers to support employees who are also raising children,with the aim of providing an environment accommodating of employee needs. It aims to achieve a competitive advantage in the

recruiting arena by improving the employment environment.

Starting rentals of GW01, the world's first cloud-based smartphone-type WiFi router▷ In August 1, 2019, Vision began rentals of GW01, the world's first cloud-based smartphone-type WiFi router▷ Compared with the cloud WiFi routers previously used by the company, GW01 is 59% thinner and 25% lighter, weighting in at
180 grams with a width of 76mm, height of 154mm, and thickness of 7.9mm.

▷ Similar to the cloud WiFi routers previously used by the company, a single unit is able to automatically make connections withpoints in more than 108 different areas and can be used continually for up to 12 hours without recharging the battery. Thismeans users do not have to worry about their battery level, which in any case can be monitored on the devices large screen.
Because the device has a large display, advertisements can also be run on the device to good effect.

▷ According to the company, the cost of GW01 is no different than the cost of its old cloud WiFi routers because the additional costof the large screen has been offset by the cost-savings stemming from the elimination of an auxiliary battery.

Important developments since the end of 1H FY12/19
Share buybacks
On July 3, 2019, the company bought back a total of 243,500 shares at a total cost of JPY1.1bn (average cost of JPY4,600 per
share) through a tender offer.

Share split
The company announced a 3-for-1 share split of its common stock for shareholders of record as of September 30, 2019

▷ Total number of shares outstanding prior to the split:

16,341,000

45/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19▷ Increase in shares as a result of the split:▷ Total number of shares outstanding after the split:▷ Total number of shares company is allowed to issue after the split:

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

32,682,000
49,023,000
123,000,000

Q1 FY12/19 results▷ Sales:

JPY6.5bn (+31.4% YoY)

▷ Recurring profit:

JPY981mn (+31.6% YoY)

▷ Operating profit:▷ Net income*:

JPY980mn (+33.1% YoY)

JPY669mn (+30.2% YoY)

* Net income attributable to owners of the parent▷ The company posted record sales and profits at all levels in Q1.

▷ Progress toward targets was high compared with Q1 FY12/18. Against 1H FY12/19 targets, the company had achieved 55.7% of
the target for sales (versus 49.9% in Q1 FY12/18), 68.2% for operating profit (59.6%), 68.2% for recurring profit (59.9%), and69.6% for net income attributable to owners of the parent (63.5%). Against full-year FY12/19 forecasts, the progress rate was
26.4% for sales (versus 22.9% in Q1 FY12/18), 32.5% for operating profit (29.6%), 32.6% for recurring profit (29.8%), and33.4% for net income attributable to owners of the parent (33.6%).

▷ Sales up 31.4% YoY: The Global WiFi business made a strong contribution, recording 31.9% YoY sales growth. The main factor
was an increase in rentals, underpinned by a stable ratio of repeat users (accounting for approximately 51% of the total),

combined with the acquisition of individual tourists (accounting for approximately 70% of the total), such as student tourists(graduation trips). The Information and Communications Service business also posted a solid 26.6% sales increase. Vision steadily
added new clients (such as startups and venture firms) and also continued to renew contracts with more clients thanks to its
successful customer relations management (CRM) strategy.

▷ Operating profit up 33.1% YoY: Despite sustained efforts to improve cost efficiency, GPM declined 0.8pp to 58.7% as a result of

upfront procurement costs for securing communication lines, routers and equipment (pouches) ahead of the busy Golden Week
period. The SG&A expense ratio fell 1.0pp to 43.6% as a result of greater operational efficiency through the utilization of artificial
intelligence (AI) and robot process automation (RPA). OPM rose 0.1pp to 15.1%▷ No changes to 1H and full-year FY12/19 forecasts.

Global WiFi segment earnings
Q1 FY12/19 segment sales were JPY4.1bn (+31.9% YoY) and segment profit was JPY871mn (+24.2% YoY). Rentals increased,
underpinned by a stable ratio of repeat users (accounting for approximately 51% of the total), combined with the acquisition ofindividual tourists (accounting for approximately 70% of the total), such as student tourists (graduation trips). The company alsosteadily captured corporate and inbound traveler demand, and continued to take measures to raise profitability by improving thecost efficiency and operations. These factors combined led to sales and profits increasing by wide margins. Despite the decline in
ARPU due to the rise in the ratio of individual customers, rental contracts were up sharply, leading to a significant increase in sales
and profits.
The rise in ratio of individual customers largely reflects the success of company measures, including discounts for student tourists
going on graduation trips. These measures looked to encourage repeat usage once a customer has tried the service once. Sales tocorporate clients also grew, even though corporate demand decreased as a proportion of total sales due to pronounced growth
in individual demand. Global WiFi for Biz, which has a high proportion of recurring revenue, saw continued growth in usage

46/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

thanks to its convenience (always available in the office without the need for separate rental agreement procedures for each use)
and operational cost reduction measures at corporate clients.
The company has been working to grow last-minute online orders through utilizing Smart Pickup (automated lockers for WiFi
router pickup and return), Smart Entry (self-service kiosks), cloud WiFi, and databases. Being able to offer last-minute services tocustomers (seeking to use the service on the day of) whom the company was not able to capture previously has also led to anincrease in the number of rental contracts. Further, linking to the company’s database has enabled the company to promptly
process web applications completed at the airport counter. Even if there is a line at the counter of roughly 50 meters, processing
and usage guidance can be completed in about 10 minutes, thereby reducing opportunity losses.
Market share of cloud WiFi was over 90% in Q1 (rising from 67% in March 2018 to 95% in March 2019) as the company
continued to make progress with cost reduction measures. However, the increase in operating profit (+24.2% YoY) was below
the rate of sales growth (+31.9% YoY) because of higher upfront procurement costs (temporary cost increase) for
communication lines and routers and equipment (pouches) ahead of the busy Golden Week period (the operating profit margin
dropped to 21.4% in Q1 from 22.7% in Q1 FY12/18). With Golden Week reservations growing since February 2019 and in lightof the impact of one-time large transactions in the Information and Communication Service business that were not factored into
the initial company plan, the company increased procurement costs on a one-time basis. Equipment (pouches) cost is booked
under the bullet method, but costs for communication lines and routers will remain in Q2 onward because of depreciation.
In this business the company rents out mobile WiFi routers to people traveling to various countries.
According to the Japan National Tourism Organization the number of Japanese traveling overseas (i.e., outbound travelers) over
January–March 2019 hit 4.9mn (+6.4% YoY), and the number of foreign travelers coming to Japan (i.e., inbound travelers) hit
8.1mn (+5.7%). This steady increase in the number of Japanese traveling overseas was owing to increased demand for leisureamid modest economic recovery. In the case of foreign travelers coming to Japan, as well, the number of travelers hit record
highs in each month of Q1 (January–March 2019) owing to the success of inbound travel promotions ahead of spring, when thenumber of visitors to Japan tends to increase for the purpose of viewing the cherry blossoms, in addition to increased airline
seating capacity.

Reducing telecommunications CoGS
▷ Improve procurement contract terms by securing volume discounts (lower rates as well as terms unique to Vision)▷ Market share (sales basis) for cloud WiFi that utilizes next-generation telecommunications technology that manages SIMs in thecloud increased from approximately 67% in March 2018 to 95% in March 2019 (efficient operation of WiFi routers and network
access)▷ Reduce surplus inventory (including line accounts) with more accurate order forecasting
Improving operational efficiency▷ Use AI systems to help reduce call centers’ operating costs▷ Increase use of automated systems, such as “Smart Pickup” (automated lockers for WiFi router pickup and return) and “Smart
Entry” (self-service kiosks) in some locations as well as install additional terminals (reduce service counter operation costs)
Increase operational efficiency of manned service counters to improve the sales ratio for optional services*.
A Smart Pickup point was newly installed at Chubu Centrair International Airport in Q1, making a total of 19 Smart Pickup points at five airports(Haneda, Narita, Itami, Kansai International, Chubu International).

▷ Utilization of cloud WiFi (labor saving for freight and shipping)
In addition, the company moved forward with the following initiatives to expand its platform for travel-related services with “niceto have” items that can solve the problems existing customers and new (potential) customers may face when traveling abroad:

47/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp▷ New counter at Oita Airport (making 16 domestic airport counters)▷ Provision of Global WiFi for Biz service, offering internet service in 107 countries and regions with no need for application, device
handover, and return for each use▷ Strategy of making stores smarter through measures such as Smart Pickup, Smart Entry, and Smart Check (storefront reception

counters capable of identifying customers instantly by using QR codes) and enhancement of the web application system for just-before use (even at the counter) enabled by linking with cloud WiFi and database (increasing the convenience of services)

Information and Communications segment earnings
Segment sales were JPY2.3bn (+26.6% YoY) and segment profit was JPY482mn (+62.7% YoY). Q1 results include one-off largetransactions that were not factored into the initial company plan (both sales and profits increased by approximately JPY150mn).
The main activities in this business are for arranging landline, mobile, and broadband telecommunications services, selling andleasing office equipment, and building websites for startups and SMEs.
Vision steadily added new clients (such as startups and venture firms) and also continued to renew contracts with more clients
thanks to its successful customer relations management (CRM) strategy. The successful renewal of contracts with more clientswas the result of capturing demand in line with the company’s financial results and up-selling and cross-selling strategies.
The company has succeeded in attaining stable growth on the strength of high customer satisfaction and long-term relationships
with customers by providing attractive services and products in a timely manner at the right price in line with each clientcompany’s stage of development, size, and needs. To efficiently win orders, the company relies on the closely coordinated efforts
of its web marketing, sales team, and Customer Loyalty Team (CLT). The highly effective web marketing program finds
businesses with demonstrated interest that are likely to generate an order, while the Customer Loyalty Team, the cornerstone of
Vision’s service management efforts, identifies issues and customer requests through interface with the existing customers. The
sales team tailors proposals to the potential customers cultivated through web marketing on the apparent needs discovered by
the CLT. Through this mechanism, the company wins orders at a higher probability and runs an efficient business operation
overall.

Other
Sales in this segment were JPY92mn (+531.5% YoY) and operating loss was JPY87mn (vs. a loss of JPY29mn in Q1 FY12/18). Thisbusiness segment is not included in the company’s reporting segments. It includes the ProDrivers chauffeur-driven car
timesharing service, media businesses, catalog sales business, and research into and development of other new businesses.

TopicsCampaign to celebrate reaching over 10mn users
To celebrate breaking through 10mn cumulative users in the Global WiFi business, Vision ran a campaign that gave away
JPY10mn worth of presents to customers by lottery during February 14–March 26, 2019. Those who have added Global WiFi as
friends on the instant messaging app LINE (including those who became friends during the campaign period) were eligible toparticipate. The first prize was a holiday travel voucher worth JPY1mn (one person); the second prize was a holiday travel voucher
worth JPY100,000 (10 people); and the third prize was a gift (to be chosen from a catalogue) worth JPY10,000 (50 people).

Unlimited plan
Since February 2019, Vision has been providing Global WiFi Unlimited Plan on a trial basis, offering unlimited daily data in four
countries (China, Korea, Taiwan, and Philippines). It expanded the service to 31 additional countries in April and 28 more in May,
making the plan available in a total of 63 countries (as of May 27, 2019). The company offers a range of data plans tailored tocustomer needs. It decided to launch the Unlimited Plan on a trial basis as consumers tended to use increased amounts of data
due to the diversification of smartphone applications, sending and receiving of data-intensive images and videos, as well as social

48/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

media posts. Multiple users can also take advantage of the plan to share and use the same device (for example, friends and family
members).
Users tend to select a plan that is in the middle of the overall range of different plans. By launching the Unlimited Plan, Vision not
only expects ARPU to increase as users select the unlimited option, but also believes there is a greater likelihood that users will
select higher-end data plans even among those that are not unlimited.

Full-year FY12/18 results▷ Consolidated results for FY12/18: Sales was JPY21.5bn (+22.5% YoY), operating profit was JPY2.5bn (+38.9% YoY), recurring

profit was JPY2.5bn (+39.3% YoY), and net income attributable to owners of the parent came to JPY1.5bn (+26.5% YoY). Bothsales and operating profit reached record highs.

▷ The company posted above-plan sales and profits at all levels, with sales finishing 4.4% above plan, operating profit 10.3% aboveplan, recurring profit 10.9% above plan, and net income 0.6% above plan. Sales up 22.5% YoY: The Global WiFi business made astrong contribution, recording 30.0% YoY sales growth. The main factor was a 35.2% increase in rentals, underpinned by repeat
users (mainly corporate users) combined with acquisition of new users. The Information and Communications Service businessalso posted a solid 9.4% sales increase.

▷ Operating profit up 38.9% YoY: GPM improved 0.9pp to 58.8% as a result of sustained cost efficiency improvement measures.

The SG&A expense ratio fell 0.4pp to 47.3%, and OPM rose 1.4pp to 11.6% as a result of greater operational efficiency throughthe utilization of artificial intelligence (AI) and robot process automation (RPA).

Working under the slogan for FY12/18 Aiming at Further Evolution: Part II the group pushed ahead with initiatives aimed at▷ Further distinguishing itself from competitors through business expansion and monetization of peripheral businesses▷ Establishing a dominant position within the industry in terms of productivity, market share, and profitability

Global WiFi segment earnings▷ FY12/18 segment sales were JPY13.5bn (+30.0% YoY) and segment profit was JPY2.4bn (+51.5%). Sales and profits increased bywide margins due to new and repeat contract growth () (+35.2% YoY) and ongoing measures to improve telecommunication
costs and operations.

▷ In this business the company rents out mobile WiFi routers to people traveling to various countries.

▷ According to the Japan National Tourism Organization in 2018 the number of Japanese traveling overseas (i.e., outboundtravelers) hit 19.0mn (+6.0% YoY), and the number of foreign travelers coming to Japan (i.e., inbound travelers) hit 31.2mn(+8.7%). Outbound travelers from Japan reached a record high, exceeding 18.7mn in 2012 (a peak year for overseas travel) as aresult of an uptick in overseas business trips and holidays due to increased leisure time in the context of working style reforms.
Inbound travelers also reached a record high, topping year-ago levels before December 2018 despite the slew of natural
disasters discouraging some travelers.

▷ Thanks to successful measures aimed at increasing corporate demand (Global WiFi for Biz service) and capturing more demand

from inbound tourists, the company was able to completely offset the impact of a series of natural disasters that occurred during
the year, including the torrential rains in Western Japan and an earthquake in Hokkaido, and the weather-related shutdown of the

Kansai International Airport.

Reducing telecommunications CoGS
▷ Improve procurement contract terms by securing volume discounts (lower rates as well as terms unique to Vision)

49/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp▷ Market share (sales basis) for cloud WiFi that utilizes next-generation telecommunications technology that manages SIMs in thecloud increased from approximately 51% in December 2017 to 88% in December 2018 (efficient operation of WiFi routers andnetwork access)▷ Reduce surplus inventory (including line accounts) with more accurate order forecasting
Improving operational efficiency▷ Use AI systems to help reduce call centers’ operating costs▷ Increase use of automated systems, such as “Smart Pickup” (automated lockers for WiFi router pickup and return) and “Smart
Entry” (self-service kiosks) in some locations as well as install additional terminals (reduce service counter operation costs)
Increase operational efficiency of manned service counters to improve the sales ratio for optional services*.

A Smart Pickup point was newly installed at Chubu Centrair International Airport, making a total of 18 Smart Pickup points at five airports (Haneda,
Narita, Itami, Kansai International, Chubu International).

▷ Utilization of cloud WiFi (labor saving for freight and shipping)Measures aimed at increasing convenience to users
In addition, the company moved forward with the following initiatives to expand its platform for travel-related services with “niceto have” items that can solve the problems existing customers and new (potential) customers may face when traveling abroad:▷ 4G-LTE standard service expanded from 82 to 87 countries and regions, and large data plans offered in more areas (improved
service convenience)▷ Rentals of voice-based translation devices ili and POKETALK offering language support to travelers, and of mobile batteries tocompensate for the shortage of convenient charging while travelling (increasing the convenience of services)▷ Expansion of optional services such as suitcase rental and peace-of-mind compensation packages to insure against problems suchas loss or theft of rental items and belongings (increasing the convenience of services)▷ Significant revision of Global WiFi for Biz service, offering internet service in more than 100 countries and regions with no needfor application, device handover, and return for each use. Revisions include the new provision, free of charge, of domestic

communication up to 3GB per month, expansion of areas served (53 countries and regions prior to expansion, 105 countries andregions after), and expansion of services geared toward the corporate sector (emergency location information service; increasing
the convenience of services)▷ Strategy of making stores smarter through measures such as Smart Pickup, Smart Entry, and Smart Check (storefront reception
counters capable of identifying customers instantly by using QR codes) and construction of a web application system for just-before use (even at the counter) enabled by linking with cloud WiFi and database (increasing the convenience of services)▷ Delivered inflight commercials on ANA international flights and exhibited in events and trade fairs related to travel and mobile
service businesses (raise profile)

Information and Communications segment earnings▷ Segment sales were JPY7.8bn (+9.4% YoY) and segment profit was JPY1.2bn (+3.9%). The smaller rise in segment profit was
attributed to higher LED sales▷ In the case of LED sales (office equipment sales business), the cost of equipment is booked under CoGS at the time the sale ismade and the customer pays in monthly installments over a 3–5 year usage period; as a result, the more sales the company

makes the larger the losses in the initial period. LED sales were strong in FY12/18. Starting in FY12/19, the company will change

50/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

its accounting methodology for LED sales and will instead book the cost of equipment under rental assets on its balance sheet
and depreciated it over three years.

▷ The main activities in this business are for arranging landline, mobile, and broadband telecommunications services, selling andleasing office equipment, and building websites for startups and SMEs.

▷ Vision steadily added new clients (such as startups and venture firms) and also continued to renew contracts with more clients

thanks to its successful customer relations management (CRM) strategy. In addition, new customer signups for Haluene Denki,
the electric power service, continued to grow favorably, underpinned by cross-selling.

Company initiatives at Information and Communications Service segment▷ The company has succeeded in attaining stable growth on the strength of high customer satisfaction and long-term relationships
with customers by providing attractive services and products in a timely manner at the right price in line with each clientcompany’s stage of development, size, and needs.

▷ To efficiently win orders, the company relies on the closely coordinated efforts of its web marketing, sales team, and Customer
Loyalty Team (CLT). The highly effective web marketing program finds businesses with demonstrated interest that are likely togenerate an order, while the Customer Loyalty Team, the cornerstone of Vision’s service management efforts, identifies issues
and customer requests through interface with the existing customers. The sales team tailors proposals to the potential customers
cultivated through web marketing on the apparent needs discovered by the CLT. Through this mechanism, the company wins
orders at a higher probability and run an efficient business operation overall.

Other▷ Sales in this segment were JPY224mn (+283.8% YoY) and operating loss was JPY194mn (vs. a loss of JPY103mn in FY12/17). Thisbusiness segment is not included in the company’s reporting segments. It includes ProDrivers (chauffeur-driven car sharing

service), the company's media businesses, catalog sales business, and research into and development of other new businesses.

Company initiatives at Other segment
The company implemented the following initiatives.

▷ In the Media business, formed alliance with leading WiFi router rental groups in China and South Korea.

▷ Launched ProDrivers, a chauffeuring service for comfortable business and private travel, including destinations such as airports,
service for company executives, etc. Reservations for travel to and from airports can be made for domestic travel (Tokyo) andoverseas trips (covers more than 500 cities in 150 countries).

Cumulative Q3 FY12/18 results▷ Sales

JPY15.8bn (+20.0% YoY)

▷ Recurring profit

JPY2.1bn (+39.3% YoY)

▷ Operating profit▷ Net income*

JPY2.1bn (+38.8% YoY)

JPY1.4bn (+37.9% YoY)

* Net income attributable to owners of the parent

Cumulative Q3 FY12/18 sales and profits reached record highs. Cumulative Q3 OPM improved by 1.8pp YoY to 13.5%, due toongoing measures to improve cost efficiency and operational efficiency through the utilization of AI (artificial intelligence) andRPA (robot process automation).

51/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Progress on profits improves YoY
Measured against the company’s full-year FY12/18 forecasts, cumulative Q3 sales reached 76.8％ (cumulative Q3 FY12/17 sales
reached 75.1% of full-year FY12/17 result), operating profit 94.9% (86.1%), recurring profit 95.2% (85.8%), and net income
attributable to owners of the parent 94.2% (86.0%). Progress rates for operating profit, recurring profit, and net income
attributable to owners of the parent in Q3 FY12/18 surpassed figures for Q3 FY12/17. Vision says sales were in line with andprofits were ahead of its forecasts.

Sales and profits
Sales increased 20.0% YoY primarily due to large growth of 27.9% YoY in the Global WiFi business. Against the backdrop ofincreased sales and the implementation of ongoing measures to improve cost efficiency, gross profit rose to JPY9.4bn (+23.0%
YoY) and GPM improved by 1.4pp to 59.4%. Reflecting ongoing initiatives to achieve greater operational efficiency such theutilization of AI and RPA (robot process automation), the SG&A expense ratio improved 0.4pp YoY, from 46.3% to 45.9%. As aresult, operating profit rose 38.8% YoY. The OPM for cumulative Q3 FY12/18 also improved to 13.5% (+1.8pp YoY).

Global WiFi segment earnings
Segment sales were JPY9.9bn (+27.9% YoY), segment profit was JPY1.9bn (+40.2%), and segment profit margin was 19.3%(17.6% in Q3 FY12/17). Sales and profit increased by wide margins due to new and repeat contract growth (cumulative total
user numbers exceeded 8.0mn people in July 2018 underpinned by stable repeat customers) and ongoing measures to improve
telecommunication costs and operations. ARPU is on a downward trend and the rate of decline increased during Q3 FY12/18 on arise in the ratio of individual customers to 62.7% (on the basis of number of rental contracts). However, the increase in thenumber of rental contracts covered the decline in ARPU, pushing sales up 27.9% YoY.
In this business the company rents out mobile WiFi routers to people traveling to various countries.
Sales have increased with diversification of sales channels (greater inflow from SNS channel) and “very last minute” online orders(providing service on the day of departure) based on a strategy for making stores smarter through measures such as Smart Pickup(automated lockers for WiFi router pickup and return), Smart Entry (self-service kiosks), and Smart Check (storefront reception
counters capable of identifying customers instantly by using QR codes). Higher corporate demand due to development ofcustomers for Global WiFi for Biz and the capture of demand from inbound travelers have contributed to increased number of
new and repeat customers.

Customer attributes in cumulative Q3 FY12/18▷ Corporate vs. individual customers: Of the total number of rental contracts, individuals accounted for 62.7% (vs. 57.0% in Q3
FY12/17) and corporate customers 37.3% (vs. 43.0% in Q3 FY12/17). Of total revenue from rental contracts, individuals
accounted for 53.8% (vs. 50.0% in Q3 FY12/17) and corporate customers 46.2% (vs. 50.0% in Q3 FY12/17).
 The share of individual customers increased YoY in both the total number of rental contracts and revenue.

▷ New vs. repeat customers: Of the total number of rental contracts, new customers accounted for 47.1% (vs. 48.3% in Q3
FY12/17) and repeat customers 52.9% (vs. 51.7% in Q3 FY12/17). Of total revenue from rental contracts, new customers
accounted for 48.7% (vs. 48.8% in Q3 FY12/17) and repeat customers 51.3% (vs. 51.2% in Q3 FY12/17).
 The share of repeat customers increased YoY in both the total number of rental contracts and revenue.

According to the Japan National Tourism Organization, from January to September, 2018 the number of Japanese travelingoverseas (i.e., outbound travelers) hit 14.0mn (+4.4% YoY), and the number of foreign travelers coming to Japan (i.e., inboundtravelers) hit 23.5mn (+10.7%). However, the number of foreign travelers coming to Japan was 5.3% less in September 2018
than in September 2017, the first time in five years and eight months that monthly inbound traveler figures declined YoY (since
January 2013). The decline was due to flight and trip cancellations resulting from the closure of Kansai International Airport
caused by Typhoon Jebi in September, as well as the closure of New Chitose Airport caused by the 2018 Hokkaido Eastern Iburi
earthquake. Even so, the Global WiFi business continued to perform well.

52/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Reducing telecommunications CoGS
▷ Improve procurement contract terms by securing volume discounts (lower rates as well as terms unique to Vision)▷ Market share (sales basis) for cloud WiFi that utilizes next-generation telecommunications technology that manages SIMs in thecloud increased from approximately 41% in September 2017 to 92% in September 2018 (efficient operation of WiFi routers andnetwork access). However, Vision says 92% is probably close to the upper limit given that there are likely cases in which cloud
WiFi devices cannot be used in some countries or regions▷ Reduce surplus inventory (including line accounts) with more accurate order forecasting
Improving operational efficiency▷ Use AI systems to help reduce call centers’ operating costs▷ Increase use of automated systems, such as “Smart Pickup” (automated lockers for WiFi router pickup and return)* and “Smart
Entry” (self-service kiosks) in some locations as well as install additional terminals (reduce service counter operation costs).
Increase operational efficiency of manned service counters to improve the sales ratio for optional services*.
*Smart Pickup points were newly installed at Chubu Centrair International Airport, making a total of 13 Smart Pickup points (+3 units in Q3 FY12/18) atfive airports (Haneda, Narita, Itami, Kansai International, Chubu International).

▷ Utilization of cloud WiFi (labor saving for freight and shipping)
In addition, the company moved forward with the following initiatives to expand its platform for travel-related services with “niceto have” items that can solve the problems existing customers and new (potential) customers may face when traveling abroad:▷ Rentals of voice-based translation devices ili and POKETALK offering language support to travelers, and of mobile batteries tocompensate for the shortage of convenient charging while travelling (increasing the convenience of services)▷ Expansion of optional services such as suitcase rental and peace-of-mind compensation packages to insure against problems suchas loss or theft of rental items and belongings (increasing the convenience of services)▷ Significant revision of Global WiFi for Biz service, offering internet service in more than 100 countries and regions with no needfor application, device handover, and return for each use. Revisions include the new provision, free of charge, of domestic

communication up to 3GB per month, expansion of areas served (69 countries and regions prior to expansion, 107 countries andregions afterward), and expansion of services geared toward the corporate sector (emergency location information service;increasing the convenience of services)▷ Strategy of making stores smarter through measures such as Smart Pickup, Smart Entry, and Smart Check (storefront reception
counters capable of identifying customers instantly by using QR codes) and construction of a web application system for just-before use (even at the counter) enabled by linking with cloud WiFi and database (increasing the convenience of services)

Information and Communications segment earnings
Segment sales were JPY5.8bn (+7.9% YoY), segment profit was JPY1.0bn (+13.5%), and segment profit margin was 17.3%(16.5% in Q3 FY12/17).
The main activities in this business are for arranging landline, mobile, and broadband telecommunications services, selling andleasing office equipment, and building websites for startups and SMEs.
Vision steadily added new clients (such as startups and venture firms) and also continued to renew contracts with more clients
thanks to its successful customer relations management (CRM) strategy. In addition, new customer signups for Haluene Denki,
the electric power service, continued to grow favorably, underpinned by cross-selling.

53/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

The company has succeeded in attaining stable growth on the strength of high customer satisfaction and long-term relationships
with customers by providing attractive services and products in a timely manner at the right price in line with each clientcompany’s stage of development, size, and needs. To efficiently win orders, the company relies on the closely coordinated efforts
of its web marketing, sales team, and Customer Loyalty Team (CLT). The highly effective web marketing program finds
businesses with demonstrated interest that are likely to generate an order, while the Customer Loyalty Team, the cornerstone of
Vision’s service management efforts, identifies issues and customer requests through interface with the existing customers. The
sales team tailors proposals to the potential customers cultivated through web marketing on the apparent needs discovered by
the CLT. Through this mechanism, the company wins orders at a higher probability and run an efficient business operation
overall.

Other
Sales in this segment were JPY99mn (+130.9% YoY) and operating loss was JPY96mn (vs. a loss of JPY70mn in Q3 FY12/17). Thisbusiness segment is not included in the company’s reporting segments. It includes catalog sales business, media businesses, andresearch into and development of other new businesses. In addition, (for-hire) transport services, which are part of initiatives toexpand the travel-related services platform, are included in this segment.

ProDrivers
Using a taxi company it acquired, Vision operates the ProDrivers transport service in Japan, providing comfortable transport forbusiness or general use, including transfer to and from airports and golf courses and transport for employees.
Initial target customers include existing customers of the Global WiFi business (for airport transfer), presidents and executives ofexisting corporate clients in the Information and Communications Service business and their visitors from overseas (for airport
transfer and business transfer). By taking advantage of its customer base of active users (about 2.69 million in the Global WiFi
business in FY12/17 and about 200,000 corporate clients in the Information and Communications Service business), the company
plans to expand its transfer service. One-way fee (including toll charges) from Tokyo area A (e.g., Chiyoda-ku) to Narita Airport isabout JPY20,000 (tax included), and one-way fee to Haneda Airport (including toll charges) is about JPY14,000 (tax included).

FY12/18 company forecast
The company’s FY12/18 company forecast remains unchanged.

54/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Income statement
Income statement(JPYmn)Sales

FY12/10

FY12/11

FY12/12FY12/13

FY12/14

FY12/15

FY12/16

FY12/17

Par.

Par.

Par.

Cons.

Cons.

Cons.

Cons.

Cons.

Cons.

6,462

6,999

6,527

9,204

10,185

12,485

14,844

17,55521,504

8.3%

-6.7%

22.5%

YoY

-

FY12/18

41.0%

10.7%

22.6%

18.9%

18.3%

Cost of sales

4,005

4,533

5,575

6,221

7,394

8,854

Gross profit

5,199

5,652

6,910

8,622

10,161

12,650
24.5%

YoY

-

8.7%

22.3%

24.8%

17.8%

GPM

56.5%

55.5%

55.3%

58.1%

57.9%

58.8%

SG&A expenses

5,189

5,366

6,105

7,332

8,372

10,166

SG&A ratio

56.4%

52.7%

48.9%

49.4%

47.7%

47.3%

10

286

805

1,290

1,789

2,484

Operating profit
YoY

-

-

-

-

-

181.2%

60.3%

38.6%

38.9%

OPM

-

-

-

0.1%

2.8%

6.4%

8.7%

10.2%

11.6%

Non-operating income

20

38

3

8

7

15

Financial income

-6

-4

-0

7

1

2

Subsidy income

33

42

48

5

4

-

Other

-7

0

-45

-4

1

14

Recurring profit

57

285

30

324

808

1,298

1,795

2,500

YoY

345
-

-83.5%

399.6%-89.5%

987.9%

149.3%

60.8%

38.3%

39.3%

RPM

5.3%

0.8%

4.4%

0.3%

3.2%

6.5%

8.7%

10.2%

11.6%

Extraordinary gains (losses)

194

70

120

-53

-41

-308

Income taxes

148

119

343

432

546

667

66.3%

30.1%

36.9%

34.7%

31.1%

30.4%

Implied tax rate
Net income attributable to non-controlling interests
Net income attributable to parent company shareholders
YoY
Net margin

147

1

-

-

-

-

-

-

-4

-216

75

275

585

814

1,209

1,529

-

-

-

-

264.9%

112.6%

39.0%

48.5%

26.5%

2.3%

0.0%

-

0.8%

2.7%

4.7%

5.5%

6.9%

7.1%

Source: Shared Research based on company data
Note: Figures may not match company numbers due to differences in rounding methods

Since the launch of the Global WiFi business in FY12/12, sales have been expanding steadily. Earnings dipped due to launchingcosts of the Global WiFi business, but since this segment became profitable from FY12/14, profits have been expanding steadily.
Consolidated OPM rose from 0.1% in FY12/13 to 11.6% in FY12/18.
Subsidies booked as non-operating income mainly relate to subsidies from public authorities for the opening of the Vision Future
Business Center in Saga. However, the subsidies were finished in FY12/15. There have also been receipts from public authorities
relating to language training for employees, but the amount is negligible and this item is likely to shrink considerably from
FY12/16.

55/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Balance sheet
Balance sheet(JPYmn)FY12/10

FY12/11

FY12/12FY12/13

FY12/14

FY12/15

FY12/16

FY12/17

FY12/18

Par.

Par.

Par.

Cons.

Par.

Cons.

Cons.

Cons.

Cons.

AssetsCash and deposits

1,328

1,546

5,774

6,242

6,256

7,563

Accounts receivable

896

875

1,144

1,229

1,485

1,967

Inventories

80

73

59

83

64

78

Other

567

303

446

602

1,228

895

Allowance for doubtful accounts
Total current assets

-

-

-

-36

-19

-19

-26

-38

-47

2,835

2,777

7,404

8,130

8,995

10,455259

Buildings (net)

42

67

63

71

214

Tools, furniture and fixtures (net)

28

36

32

45

52

83

Rental assets (net)

0

126

186

325

543

650

Lease assets (net)

0

0

0

39

13

2

70

229

282

481

859

1,072

Software

187

206

327

423

591

563

Goodwill

132

80

-

-

-

113

319

286

327

423

591

677

Investment securities

124

206

103

518

616

566

Long-term loans receivable

20

20

48

-

-

-

Deferred tax assets

33

87

31

26

35

255

Other

302

360

355

372

410

570

Allowance for doubtful accounts

-21

-47

-22

-16

-22

-42

458

626

516

901

1,038

1,348

Total tangible fixed assets

Total intangible fixed assets

Investments and other assets
Total fixed assets

-

-

-

-

-

-

-

-

-

-

-

-

847

1,140

1,124

1,805

2,488

3,097

2,762

2,962

3,283

3,683

3,917

8,528

9,935

11,484

13,552

Accounts payable

420

478

554

608

805

877

Short-term debt

328

313

27

10

2

-

Lease obligations

-

-

-

27

20

2

Total assets
Liabilities

Other

1,131

1,113

1,438

1,955

2,068

2,869

1,879

1,904

2,019

2,600

2,895

3,749

Long-term debt

213

100

13

2

-

-

Lease obligations

-

-

-

21

2

-

12

14

-

-

-

0

225

113

13

23

2

0

541

413

40

60

25

2

Total current liabilities

-

-

-

Other
Total fixed liabilities

-

-

-

Total interest-bearing debt
Total liabilities

-

-

-

2,104

2,017

2,032

2,623

2,897

3,749

150

150

300

Net assets
Capital stock

300

300

2,337

2,337

2,347

2,360

Capital surplus

332

332

2,370

2,370

2,380

2,393

Retained earnings

882

1,157

1,765

2,579

3,788

5,317

-

-

-

-

-2

-311

1,514

1,790

6,472

7,285

8,513

9,759

64

110

25

-

-

-8

-

-

-

-

-

-

1,579

1,899

6,496

7,312

8,586

9,803

Working capital

555

470

649

704

745

1,167

Total interest-bearing debt

541

413

40

60

25

2

Net debt-787-1,133-5,734-6,182-6,231-7,561

Treasury stock
Total shareholders' equity

-

-

-

Valuation difference on securities
Non-controlling interests
Total net assets

1,471

1,477

1,524

Source Shared Research based on company data
Note: Figures may not match company numbers due to differences in rounding methods

Assets
The company’s Information and Communications Service business is involved primarily in intermediary services and equipment
purchase and sales, so tangible fixed assets form a small proportion of total assets. Rental assets booked as tangible fixed assets
are mobile WiFi routers for rent in the Global WiFi business. Previously, the entire amount was expensed when mobile WiFi
routers were rented out, but from FY12/13, in addition to being accounted for as rental assets in tangible fixed assets,

56/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

depreciation was changed to the straight-line method over two years. In FY12/15, current assets grew rapidly year-over-year. Thiswas due to an increase of JPY4.2bn in cash and deposits accompanying the issue of shares upon listing on the stock market. Since
then the company's growing business has led to further increases in current assets, driven for the most part by increase in cash
and deposits and trade accounts receivable.

Liabilities
Since consolidated reporting started in FY12/13, cash and deposits have exceeded interest-bearing liabilities (i.e. the company
has been in a net cash position). In FY12/15 there was a large increase in cash and deposits due to the issue of sharesaccompanying the stock market listing. Meanwhile, a decline in corporate bonds and long-term borrowings meant that the net
cash position grew by roughly 5x from the previous year to JPY5.7bn. In FY12/18, robust earnings contributed to net cash of
JPY7.6bn.

Net assets
The share of valuation and translation adjustments in net assets is negligible, with shareholders’ equity the main component.
Shareholders’ equity has been rising due to accumulated retained earnings. The dramatic increase in net assets in FY12/15 wasdue to the issuance of new shares accompanying Vision’s stock market listing in December 2015. As a result of this fundraising,capital and capital reserves rose by JPY2.0bn each as of end December 2015. The funds raised were earmarked for investments
related to the overseas expansion of the Global WiFi business, development expenses for databases and business systems,
training of new recruits, debt repayments and working capital to support business expansion and to accelerate business growth.
As of the end of FY12/18 net assets were up to JPY9.8bn, thanks in large part to additions to internal reserves and the resulting
increase in shareholders equity.

57/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Cash flow statement
Cash flow statement(JPYmn)Cash flows from operating activities (1)Cash flows from investing activities (2)Free cash flow (1+2)
Cash flows from financing activities
Depreciation and amortization (A)Capital expenditures (B)Working capital changes (C)Simple FCF (NI + A - B - C)FY12/10Par.

FY12/11Par.

FY12/12Par.

FY12/13
Cons.
317
83
400
26
107
-100
555
-273

FY12/14
Cons.
553
-312
241
-128
137
-251
-85
749

FY12/15
Cons.
799
-629
170
3,667
179
-408
179
994

FY12/16
Cons.
1,493
-473
1,020
-38
318
-572
55
1,649

FY12/17Cons.
1,617-1,416201-8479-1,25341
2,899

FY12/18Cons.
2,889-1,458
1,431
-312
850
-863
422
2,821

Source: Shared Research based on company data
Note: Figures may not match company numbers due to differences in rounding methods

Cash flows from operating activities
The main components of operating cash flows are net income and depreciation. Operating cash flows are on a rising trend due togrowth in net income and increased depreciation expenses on growing tangible fixed assets.

Cash flows from investing activities
The main elements affecting investing cash flows are the purchase of tangible fixed assets and inflows to term deposits. In
FY12/14 and FY12/15, investing cash flows were negative (outflows) due to the acquisition of fixed assets in the Global WiFi
business and term deposits. In FY12/16, despite revenue (JPY486mn) from funds recouped from term deposits, investing cash
flows were negative due to cash outlays to acquire fixed assets and marketable securities. In both FY12/17 and FY12/18, investing
activities (including the acquisition of fixed assets, purchases of investment securities) resulted in net outflows of more thanJPY1.4bn.

Cash flows from financing activities
The key element in financing cash flows is increases and decreases in interest-bearing liabilities. In FY12/14, financing cash flows
were negative (outflows), primarily due to the repayment of long-term loans and redemption of corporate bonds. In FY12/15, thecompany repaid long-term loans, but the issue of shares raised JPY4.1bn, so financing cash flows were positive (inflows). Notethat as of the end of FY12/15, the shareholders’ equity ratio had risen to 76.2% (from 48.5% previous year) due to fundraising. In
FY12/16, though the shortfall was narrow due to the repayment of short and long-term loans (outflows), it turned negative. In
FY12/17, outflows widened modestly, reflecting the exercise of stock options and proceeds from issuance of subscription rights
to shares, alongside repayments of long-term loans, repayments of lease obligations, and listing related costs. In FY12/18,
financing activities resulted in a net outflow of more than JPY300mn, most of which went to share buybacks.

58/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Other information
History
June 1995

Current CEO Sano established Vision LLC, the backbone of the company

April 1996

Vision Co., Ltd. founded to act as an agency for international telephone subscription

December 2001

Established subsidiary Vision Business Solutions Inc. to sell office equipment

December 2003

Started Internet advertising business (Internet media business)

November 2004

Vision Business Solutions Inc. merged with Vision Co., Ltd. and trade name changed to Vision Inc.

February 2007

Started corporate cellphone business

January 2008

Established Members Net Inc., a subsidiary (now consolidated subsidiary)

July 2008

Established Best Communications (now consolidated subsidiary Best Link Inc.)
Started agency service for broadband subscription

January 2010

Started “e-ca” mobile WiFi router rental service for inbound business travelers and tourists

June 2011

Started “Vision WiMAX” high-capacity mobile WiFi router rental service for domestic business travelers and inboundtourists

July 2011

Opened helpdesk/call center Saga Vision Future Business Center (VFBC) in Saga city, Saga

February 2012

Started “GLOBAL WiFi®” mobile WiFi router rental service for overseas travelers

December 2012

Started “WIFI-HIRE” short-term rental service for inbound business travelers and tourists

October 2013

Transferred consumer broadband business from Best Link

December 2013

Started MVNO (mobile virtual network operator) business for inbound business travelers and tourists

March 2015

Started “NINJA WiFi®” rental service for inbound business travelers and tourists (merged with WI-FI HIRE)

December 2015

Listed on Tokyo Stock Exchange Mothers Index

December 2016

Moved to the First Section of the Tokyo Stock Exchange

Source: Shared Research based on company data

News and topics
August 2019
On August 9, 2019, the company announced earnings results for 1H FY12/19 and an upward revision of its full-year forecast.
On the same day, the company announced a stock split and substantial expansion of the shareholder incentive plan.

Stock split▷ Vision will conduct a three-for-one stock split for all shareholders recorded in the register of shareholders as of end September 30,
2019, as the date of record. The effective date of the stock split will be October 1, 2019.

Substantial expansion of shareholder incentive plan
▷ Under its shareholder incentive plan, Vision presents shareholders with tickets to use its Global WiFi router rental service and its
ProDrivers domestic chauffeur-driven car sharing service.

▷ As a substantial expansion of the incentive plan accompanying the stock split, the company will present shareholders recorded in
the register of shareholders as of December 31, 2019, with “shareholder incentive tickets” corresponding to the number ofshares they hold, according to the same criteria in place before the split, effectively tripling the reward as a result of the split.

59/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Major shareholders (as of December 31, 2018)
Top shareholders

Shares held Shareholding('000)
ratio
4,318,000
26.6%
3,100,000
19.1%
1,992,300
12.3%
1,160,500
7.2%
346,300
2.1%
269,700
1.7%
192,678
1.2%
187,400
1.2%
180,800
1.1%
161,200
1.0%
11,908,878
73.4%

Kenichi Sano
Member's mobile Inc.
Japan Trustee Services Bank, Ltd. (Trust account)
The Master Trust Bank of Japan, Ltd. (Trust account)
Trust & Custody Services Bank, Ltd. (Securities investment trust account)
The Nomura Trust and Banking Co., Ltd. (Trust account)
Morgan Stanley & Co. LLC
Vision Employees Shareholding Association
Credit Saison Co., Ltd.
Government of Norway
Sum of top 10 shareholders
Source: Shared Research based on Bloomberg and company data

Shareholder returns
The company is currently prioritizing strengthening its balance sheet and growing the business as it thinks that further
improvement of corporate value will generate the most returns for shareholders. As a result, it has not paid a dividend yet but
recognizes shareholder returns as a key management priority. The company intends to enact a stable and continuous program of
returning profits to shareholders while retaining enough internal reserves to strengthen its financial structure and grow thebusiness, with due consideration to the operating environment. Per the company, the possibility of paying a dividend andpotential timing is still undetermined.

Corporate governance and top management
Top management
CEO Kenichi Sano (born in 1969) joined Hikari Tsushin (TSE1: 9435) in 1990 after graduating from Kagoshima Commercial HighSchool. He became a leading salesperson and after heading the key sales division founded Vision LLC as CEO in 1995. The
company was reorganized to its current status as Vision Co., Ltd. in 1996.
Corporate governance system
Organization and capital structure
Controlling interests

None

Parent company ticker

N/A

Directors
Organizational typeCompany with Audit & Supervisory Board

Number of directors under Articles of Incorporation

8

Directors' terms under Articles of Incorporation

2 years

Number of directors

5

Number of independent outside directors

2

Voluntary committee equivalent to Nomination Committee or Compensation Committee None
Number of Audit & Supervisory Board members under Articles of Incorporation

4

Number of Audit & Supervisory Board members

3

Number of independent outside members of Audit & Supervisory Board

3

Independent officers (outside directors and Audit & Supervisory Board members)

5

Other
Participation in electronic voting platform

None

Disclosure of directors' compensation

Total amount disclosed

Disclosure of executive officers' compensation

None

Policy on determining amount of compensation and calculation methodology

In place

Corporate takeover defenses

None

Source: Shared Research based on company data

60/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

Employees
Employees by segment
FY12/10

FY12/11

FY12/12FY12/13

FY12/14

FY12/15

FY12/16

FY12/17Par.
232 (63)Par.
209 (70)Par.
229 (88)Cons.
325 (153)Cons.
356 (164)Cons.
388 (149)Cons.
452 (139)

Cons.
Cons.
497 (136) 563（145）

GLOBAL WiFi Service

-

-

-

-

117 (72)

116 (72)

164 (74)

202 (73)

Information and Communications Service
Other

-

-

-

-

196 (74)5 (-)

198 (73)5 (-)

196 (62)3 (-)

202 (59)
13 (1)

Company-wide

-

-

-

-

62 (4)

69 (4)

89 (3)

80 (3)

Employee countFY12/18

Employees by segment

Source: Shared Research based on company data
Note: Numbers in brackets are average number of temporary employees

Employees (unconsolidated, as of December 31, 2017)
Employee countAvg. age

Avg. years employed

Avg. annual salary (JPY'000)

423（122）

31.9

5.30

5,156

Source: Shared Research based on company data
Note: Numbers in brackets are average number of temporary employees

By the way
The company name, VISION, was chosen for a sense of being future-oriented, and easy to remember. It also ties in with thecompany’s current corporate slogan: More vision, More success.

61/63

R VISION / 9416
Coverage

LAST UPDATE: 2019.12.19

Research Coverage Report by Shared Research Inc. | www.sharedresearch.jp

ProfileCompany
VISION INC.

Head office
5F Shinjuku i-Land Tower,
6-5-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo

Phone

Listed on+81-3-5325-0344

Tokyo Stock Exchange First Section

EstablishedExchange listing

December 4, 2001

December 21, 2015

WebsiteFinancial year-end

https://www.vision-net.co.jp/en/

December

IR Contact

IR Web

-

-

62/63

R About Shared Research Inc.
Coverage

We offer corporate clients comprehensive report coverage, a service that allows them to better inform investors and other stakeholders by presenting a continuously
updated third-party view of business fundamentals, independent of investment biases. Shared Research can be found on the web at https://sharedresearch.jp.
Current Client Coverage of Shared Research Inc.
Accordia Golf Trust

Digital Garage Inc.

Kenedix, Inc.

RYOHIN KEIKAKU CO., LTD.

Advance Create Co., Ltd.

Dream Incubator Inc.

KFC Holdings Japan, Ltd.

SanBio Company Limited

ADJUVANT COSME JAPAN CO., LTD.

Earth Corporation

KI-Star Real Estate Co., Ltd.

SANIX INCORPORATED

Aeon Delight Co., Ltd.

Elecom Co., Ltd.

Kondotec Inc.

Sanrio Company, Ltd.

Aeon Fantasy Co., Ltd.

en-Japan Inc.

Kumiai Chemical Industry Co., Ltd.

SATO HOLDINGS CORPORATIONAi Holdings Corporation

euglena Co., Ltd.

Lasertec Corporation

SBS Holdings, Inc.

and factory, inc.

Evolable Asia Corp.

LUCKLAND CO., LTD.

Seikagaku Corporation

ANEST IWATA Corporation

FaithNetwork Co., Ltd.

MATSUI SECURITIES CO., LTD.

Seria Co.,Ltd.

AnGes Inc.

Ferrotec Holdings Corporation

Medical System Network Co., Ltd.

SHIFT Inc.

Anicom Holdings, Inc.

FIELDS CORPORATIONMEDINET Co., Ltd.

SHIP HEALTHCARE HOLDINGS, INC.

Anritsu Corporation

Financial Products Group Co., Ltd.

MedPeer,Inc.

SIGMAXYZ Inc.

Apaman Co., Ltd.

FreeBit Co., Ltd.

Mercuria Investment Co., Ltd.

SMS Co., Ltd.

ARATA CORPORATIONFRONTEO, Inc.

Micronics Japan Co., Ltd.

Snow Peak, Inc.

Artspark Holdings Inc.

Fujita Kanko Inc.

Milbon Co., Ltd.

Solasia Pharma K.K.

AS ONE CORPORATION

Gamecard-Joyco Holdings, Inc.

MIRAIT Holdings Corporation

SOURCENEXT Corporation

Ateam Inc.

GameWith, Inc.

Monex Goup Inc.

Star Mica Holdings Co., Ltd.

Aucfan Co., Ltd.

GCA Corporation

MORINAGA MILK INDUSTRY CO., LTD.

Strike Co., Ltd.

AVANT CORPORATIONGood Com Asset Co., Ltd.

NAGASE & CO., LTD

SymBio Pharmaceuticals Limited

Axell Corporation

Grandy House Corporation

NAIGAI TRANS LINE LTD.

Synchro Food Co., Ltd.

Azbil Corporation

Hakuto Co., Ltd.

NanoCarrier Co., Ltd.

TAIYO HOLDINGS CO., LTD.

AZIA CO., LTD.

Hamee Corp.

Net Marketing Co., Ltd.

Takashimaya Company, Limited

AZoom, Co., Ltd.

Happinet Corporation

Net One Systems Co.,Ltd.

Take and Give Needs Co., Ltd.

BEENOS Inc.

Harmonic Drive Systems Inc.

Nichi-Iko Pharmaceutical Co., Ltd.

Takihyo Co., Ltd.

Bell-Park Co., Ltd.

HOUSEDO Co., Ltd.

Nihon Denkei Co., Ltd.

TEAR Corporation

Benefit One Inc.

IDOM Inc.

Nippon Koei Co., Ltd.

Tenpo Innovation Inc.

B-lot Co.,Ltd.

IGNIS LTD.

NIPPON PARKING DEVELOPMENT Co., Ltd.

3-D Matrix, Ltd.

Broadleaf Co., Ltd.

i-mobile Co.,Ltd.

NIPRO CORPORATIONTKC Corporation

Canon Marketing Japan Inc.

Inabata & Co., Ltd.

Nisshinbo Holdings Inc.

TKP Corporation

Career Design Center Co., Ltd.

Infocom Corporation

NS TOOL CO., LTD.

TOKAI Holdings Corporation

Carna Biosciences, Inc.

Infomart Corporation

OHIZUMI MFG. CO., LTD.

TOYOBO CO., LTD.

CARTA HOLDINGS, INCIntelligent Wave, Inc.

Oisix ra daichi Inc.

Toyo Ink SC Holdings Co., Ltd

CERES INC.

ipet Insurance CO., Ltd.

Oki Electric Industry Co., Ltd

Toyo Tanso Co., Ltd.

Chiyoda Co., Ltd.

istyle Inc.

ONO SOKKI Co., Ltd.

Tri-Stage Inc.

Chugoku Marine Paints, Ltd.

Itochu Enex Co., Ltd.

ONWARD HOLDINGS CO.,LTD.

VISION INC.

cocokara fine Inc.

JSB Co., Ltd.

Pan Pacific International Holdings Corporation

VISIONARY HOLDINGS CO., LTD.

COMSYS Holdings Corporation

JTEC Corporation

PARIS MIKI HOLDINGS Inc.

WirelessGate, Inc.

CRE, Inc.

J Trust Co., Ltd

PIGEON CORPORATIONYELLOW HAT LTD.

CREEK & RIVER Co., Ltd.

Japan Best Rescue System Co., Ltd.

QB Net Holdings Co., Ltd.

YOSHINOYA HOLDINGS CO., LTD.

Daiichi Kigenso Kagaku Kogyo Co., Ltd.

JINS HOLDINGS Inc.

RACCOON HOLDINGS, Inc.

YUMESHIN HOLDINGS CO., LTD.

Daiseki Co., Ltd.

JP-HOLDINGS, INC.

Raysum Co., Ltd.

Yume no Machi Souzou Iinkai Co., Ltd.

DEMAE-CAN CO., LTD

KAMEDA SEIKA CO., LTD.

RESORTTRUST, INC.

Yushiro Chemical Industry Co., Ltd.

DIC Corporation

Kanamic Network Co.,LTD

ROUND ONE Corporation

ZAPPALLAS, INC.

Digital Arts Inc.

Kawanishi Holdings, Inc.

RVH Inc.

Attention: If you would like to see companies you invest in on this list, ask them to become our client, or sponsor a report yourself.
Disclaimer: This document is provided for informational purposes only. No investment opinion or advice is provided, intended, or solicited. Shared Research Inc. offers
no warranty, either expressed or implied, regarding the veracity of data or interpretations of data included in this report. We shall not be held responsible for any damage
caused by the use of this report. The copyright of this report and the rights regarding the creation and exploitation of the derivative work of this and other Shared
Research Reports belong to Shared Research. This report may be reproduced or modified for personal use; distribution, transfer, or other uses of this report are strictly
prohibited and a violation of the copyright of this report. Our officers and employees may currently, or in the future, have a position in securities of the companies
mentioned in this report, which may affect this report’s objectivity.
Japanese Financial Instruments and Exchange Law (FIEL) Disclaimer: The report has been prepared by Shared Research under a contract with the company
described in this report (“the company”). Opinions and views presented are ours where so stated. Such opinions and views attributed to the company areinterpretations made by Shared Research. We represent that if this report is deemed to include an opinion from us that could influence investment decisions in thecompany, such an opinion may be in exchange for consideration or promise of consideration from the company to Shared Research.
Contact Details
Shared Research Inc.
3-31-12 Sendagi Bunkyo-ku Tokyo, Japan
https://sharedresearch.jp
Phone: +81 (0)3 5834-8787
Email: info@sharedresearch.jp

63/63