Alpha-Win Company Research Report
CUBE SYSTEM INC.
(2335 TSE Prime)● SummaryIssued: 11/14/2022

Alpha-Win Capital Inc. Research Department
http://www.awincap.com/◆ Independent, mid-tier system integrator with long-term, stable growth・CUBE SYSTEM INC. (hereinafter, the “Company”) is an independent, mid-tier system integrator listed on the
TSE Prime. Its main customers include the Nomura Research Institute (NRI) and the Fujitsu Group, and it develops
systems and provides services mainly for the financial, distribution, transportation, and telecommunicationindustries. Its strengths are its excellent customer base, extensive experience, high credibility, and the technology
and expertise that it has built over the years. Founded in 1972, it has 50 years of history.
・With the exception of one fiscal year, the Company has been continuously increasing sales YoY for the past 21
years. During this period, the annual sales growth rate (simple average of the rate of increase in sales) was +6.1%
and the annual recurring profit growth rate (simple average) was +7.3%; it has been steadily expanding its businessover the long term and has always maintained a profit. Its recurring margin has stably been around 7% and theincrease in sales has been contributing directly to increases in profit, dividend, and market capitalization. In FY
2022 (note that the Company’s fiscal year is March-ending, i.e., FY 2022 ended in March 2022), it achieved recordhigh sales and profits. It also increased dividend for the third year in a row.
・In April 2022, it transited from the TSE First Section to the newly established Prime Market.

◆ Results for the first half of this fiscal year (cumulative through Q2): Sales decreased by
2.1% YoY, and operating profit decreased by 19.9% YoY in a double-digit decline. The
main factors were changes in the IT investment policies of some of the customers anddelays in the effects of profit-improvement measures.
First Half: Overview
・In the first half of the fiscal year ending March 31, 2023 (April-September 2022; hereinafter, the “first half” or“H1”), sales were Y7,892 million (-2.1% YoY), operating profit was Y598 million (-19.9% YoY), recurring profit
was Y598 million (-21.0% YoY), and net profit attributable to owners of the parent (hereinafter, “net profit”) was
Y388 million (-22.6% YoY) (Figures 1-4 on page 2).
・Results fell short of the plan for the first half made at the beginning of the fiscal year: sales were Y263 million
lower (-3.2% compared to the plan), operating profit was Y151 million lower (-20.1%), and net profit was Y117
million lower (-23.1%) (center left column of Figure 1 on page 2).
・The factors behind this were (1) some of the customers changed their IT investment policy (theme), and as a result,the expected sales were not recorded in the first half due to the postponement of large projects (presumably
pertaining to upstream process development in the SI Business, whose orders had been received through major
SIers) and (2) measures to improve profitability had been less effective than expected (insufficient profit-improving
effects from reallocation of projects and resources, automation, and multitasking).
・Despite the lower sales and profits, the Company posted the second highest levels of sales and operating profit
for the first half, following the record-high sales and profit of the previous fiscal year’s first half.
・The gross margin declined by 0.4 percentage point from 21.3% in the first half of the previous fiscal year to 20.9%
in the first half of this fiscal year due to an increase in subcontracting cost and other costs. The SG&A expenses
increased by Y81 million (+8.4% YoY) from Y971 million to Y1,053 million (in the same order as above) as theCompany strengthened its management foundation (investment in people development and IT), and the SG&A
expenses ratio rose from 12.1% to 13.3%. As a result, the operating margin declined by 1.7 percentage points, from
9.3% to 7.6%.
・Regarding the SG&A expenses, personnel expenses increased by about Y30 million (+7.7% YoY) from Y380
million to Y410 million due to the increase in the number of employees, and the ratio of personnel expenses tosales rose by 0.5 percentage point from 4.7% to 5.2%. Non-personnel SG&A expenses also increased by Y51
million (+8.7% YoY), from Y591 million to Y642 million, due to the development of the management foundation
Short Report
1/9This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of thecompany presented in this Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of
investment. Contents of this Report are based on information current as of the issue date and are subject to change without notice. We do not warrant or represent thatthe information in this Report is accurate, reliable, complete, appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not
be liable for any consequences including direct or indirect loss, lost profit, or damage resulting from the use of or reliance on this Report. Investors who read this reportmust make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual property of this Report belongs to AlphaWin and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
CUBE SYSTEM INC. (2335 TSE Prime)

Issued: 11/14/2022(people development and IT investment).
・There was no significant change in non-operating profit or loss, but there was greater exchange loss on transactions
with the subsidiary in Vietnam in the first half of this fiscal year due to the weaker yen (from -Y5 million in theprevious first half to -Y9 million in this first half, due to the difference in exchange rate at the time of contract andsettlement). Consequently, although a profit of Y5 million was posted in the previous fiscal year’s first half, a lossof Y4 million was posted in this first half. With no extraordinary income or loss, net profit resulted in a decline ofabout 20%, much like the operating and recurring profits.
・Comparing results of the first quarter (April-June 2022; hereinafter “Q1”) with Q2 (July-September 2022), theYoY sales decline rate improved by 0.3% from -2.4% to -1.8% in the order of Q1 to Q2. Similarly, the rate of
decline in operating profit and net profit improved by 17.0%, from -28.1% to -11.1%, and by 24.5%, from -34.0%
to -9.5%, respectively (center right column of Figure 1).
【Figure 1】Summary of Results in the First HalfFirst Half
FY 2022First Half
FY 2023

YoY Change inAmount / Diff.

% Change

A: Results

B: Results

YoY Change:
C=B-A

YoY Ratio: C/A

Apr-Sept 2021

Apr-Sept 2022

YoY: million yen, %YoY: %First-Half Results
Unit: million yen, %

8,060
1,718
21.3
971
12.1
746
9.3
752
9.3
502
6.2

Consolidated Sales
Gross Profit

Gross Margin (%)
SG&A Expenses

SG&A Expenses Ratio (%)
Operating Profit

Operating Margin (%)
Recurring Profit

Recurring Margin (%)
Net Profit

Net Margin (%)

7,892
1,651
20.9
1,053
13.3
598
7.6
595
7.5
388
4.9

-168
-67
-0.4
81
1.3
-148
-1.7
-158
-1.8
-113
-1.3

First Half
FY 2023
D: Initial
Forecast
Apr-Sept 2022

-2.1
-3.9

First Half
FY 2023

Apr-Sept 2022

8,155
749
9.2
754
9.2
505
6.2

8.4
-19.9
-21.0
-22.6

Q1 FY 2022

Q1 FY 2023

YoY Change in Amount/ Diff.

% Change

Q2 FY 2022

Q2 FY 2023

YoY Change inAmount / Diff.

% Change

F: Results

G: Results

YoY Change:
H=G-F

YoY Ratio:
H/F

I: Results

J: Results

YoY Change:
K=J-I

YoY Ratio:
K/I

Apr-June 2021

Apr-June 2022

YoY: million yen, %YoY: %

July-Sept 2021

July-Sept 2022

YoY: million yen, %YoY: %

3,987
863
21.6
483
12.1
379
9.5
390
9.8
264
6.6

3,892
785
20.2
513
13.2
272
7.0
271
7.0
173
4.9

-94
-78
-1.4
30
1.0
-107
-2.5
-119
-2.8
-91
-1.7

4,073
856
21.0
488
12.0
367
9.0
362
8.9
238
5.8

4,000
866
21.6
540
13.5
326
8.2
324
8.1
215
5.4

-73
10
0.6
51
1.5
-41
-0.9
-39
-0.8
-23
-0.5

% Diff. from Plan

Diff. from Plan: Ratio of Diff. to Plan :
E=B-D
E/D
%

-263

-3.2
-20.1
-21.1
-23.1
-

-151
-159
-117

-2.4
-9.0
6.2
-28.1
-30.5
-34.0

-1.8
1.2
10.5
-11.1
-10.7
-9.5

(Note) Figures 1-4 have been prepared by Alpha-Win Research Dept. based on the financial results summary and the financial results briefing supplemental materials.
Forecasts are from the Company’ plan. Throughout this report, due to processing of data during calculations, values for the same item may slightly differ. The
same applies to the rest of this document. Figure 5 is from the financial results briefing supplemental materials, with partial revision.

【Figure 2】Quarterly Change in Sales (Unit: million yen)
4,500

【Figure 3】Quarterly Change in Operating Profit (Unit: million yen)
450

4,000

400

3,500

350

3,000

300

2,500

250

2,000

200

1,500

150

1,000

100

500

50

0
FY 2014

FY 2015

FY 2016

FY 2017

FY 2018
Ｑ1

FY 2019

Ｑ２Ｑ３

FY 2020

FY 2021

FY 2022

FY 2023

0
FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

Ｑ1

Ｑ４【Figure 4】Quarterly Change in Operating Margin(Unit: %)Ｑ２

FY 2019
Ｑ３

FY 2020

FY 2021

FY 2022

FY 2023

Ｑ４【Figure 5】Factors that Increased/Decreased Operating Profit
in the First Half of This Fiscal Year (YoY)

12.0%
Despite joining
upstream processdevelopment in the
SI Business,
operating profit
declined due to thedecrease in sales

10.0%
8.0%
6.0%

746

Expansion ofderivative
development
projects in the
Enhancement
Business

-130
+37

4.0%

Development ofmanagementfoundation(peopledevelopment and
IT investment)

Increase inadvertisingexpenses, etc.,
related to the50th anniversary(Unit: million yen)

Decrease in R&D
expenses

-77
-17

598

+40

2.0%
0.0%
FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023
Results
or
Forecast

Ｑ1

Ｑ２

Ｑ３

Ｑ４

YoY: “+” is profit growth factor,“-” is profit decline factor

FY
As of Sept. 2022
(First half of FY 2023)

As of Sept. 2021
(First half of FY 2022)-148 million yen YoY

Short Report

2/9This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of thecompany presented in this Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of
investment. Contents of this Report are based on information current as of the issue date and are subject to change without notice. We do not warrant or represent thatthe information in this Report is accurate, reliable, complete, appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not
be liable for any consequences including direct or indirect loss, lost profit, or damage resulting from the use of or reliance on this Report. Investors who read this reportmust make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual property of this Report belongs to AlphaWin and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
CUBE SYSTEM INC. (2335 TSE Prime)

Issued: 11/14/2022

First Half: Factors that Contributed to Increase/Decrease in Operating Profit
・The factors that increased or decreased operating profit in this fiscal year’s first half are as shown in Figure 5 onpage 2. The decrease in R&D expenses (+Y40 million to profit) and the expansion of derivative development
projects in the Enhancement Business (+Y37 million) had a total effect of Y77 million in increasing profit. On theother hand, although the Company joined upstream-process projects in the SI Business, factors including the
postponement of project and delays in starting a project caused a large negative impact on profit (-Y130 million).
In addition, there was an increase in cost to strengthen the management foundation as part of the strengthened
investment in people development and IT (-Y77 million) and an increase in advertising expenses associated withthe 50th anniversary commemoration project (-Y17 million), resulting in a decrease in operating profit by Y148
million YoY (-19.9% YoY).
First Half: Progress
・Progress in the first half in terms of the Company's full-year forecast was 45.6% for sales (50.1% in the first halfof the previous fiscal year) and 39.1% for operating profit (52.6% in the first half of the previous fiscal year). The
simple average of the progress in the first half over the past 10 years, including the previous fiscal year, was 48.8%
for sales and 43.5% for operating profit, indicating that the progress with both sales and profit in the first half ofthe current fiscal year is somewhat slow.
・The Company's financial performance has been characterized by quarterly fluctuations, although the rate ofvariation has become smaller due to the change in the revenue-recognition standard. Q4 (January-March) has
accounted for the highest percentage of the entire year (27.7% and 33.5% of sales and operating profit, respectively,
on average over the past nine years, including the previous fiscal year). This is followed by Q2 (July-September;
26.0% and 27.3%, respectively), Q3 (October-December; 23.5% and 23.1%, respectively), and Q1 (April-June;
22.8% and 16.1%, respectively). Consequently, the weight of the second half of the year (October-March) has
tended to be higher in past years (averaging 51.2% and 56.5%, respectively, over the same 10-year period). The
forecasted progresses in the second half of this fiscal year, which are 54.4% and 60.9%, are 3 to 4 percentage points
higher than these averages, respectively (Figures 2 and 3 on page 2).
First Half: Segments
・Overall, sales decreased by Y168 million YoY in the first half. In addition, costs increased and profit margin
worsened, and operating profit decreased by Y148 million YoY. Below are the results for the first half by segment.
Results by Service Category (three categories; Figure 6)
・Regarding the System Integration Services (SIS), which is its core business, sales fell by Y333 million YoY (5.5% YoY) to Y5,734 million. This was because the project for a shipping company in the transportation industry
was scaled down, despite the expansion of the system building project for a credit card company in the financial
industry. Operating margin fell from 9.7% in the first half of the previous fiscal year to 6.9％, and similarly
operating profit fell significantly by Y191 million YoY (-32.4% YoY) to Y398 million.
・In the System Outsourcing Services (SOS), too, although projects for retailers of the distribution industry had
expanded, it was not enough to compensate for the scaling down of system building projects for mass retailers. Its
sales therefore decreased by Y48 million (-5.1% YoY) to Y888 million and operating margin declined slightly
from 7.3% in the first half of the previous fiscal year to 7.1%. Operating profit also decreased slightly by Y6 million(-8.1% YoY) to Y62 million.
・On the other hand, in the Professional Services (ProS), sales increased by Y213 million (+20.2% YoY) to Y1,269
million and operating profit increased by Y49 million (+54.6% YoY) to Y137 million due to the expansion ofsystem building projects for a telecommunications company in the telecommunication industry and for a postal
service company. It was the only category in which the operating margin rose, specifically, from 8.4% to 10.8%.
【Figure 6】Change in Results by Service Category in the First HalfFirst-Half Results

Consolidated

Unit: million yen, %Category

Overall Sales

Service Name

Sales

System Integration: SIS
System Outsourcing: SOS
Professional: ProS

Overall Operating Profit
By Service
Category

System Integration: SIS
System Outsourcing: SOS
Professional: ProS

Operating Profit
Overall Operating Margin
Operating Margin (%)

System Integration: SIS
System Outsourcing: SOS
Professional: ProS

First Half
FY 2022
A: Results
Apr-Sept 2021

8,060
6,067
936
1,056
746
589
68
88
9.3
9.7
7.3
8.4

First Half
Change in Amount /% of Total Amount% Change% of Totalof Change
FY 2023
Diff.
B: Results
YoY Change: C = B - A YoY Ratio: C/A Breakdown of C Breakdown of B
Apr-Sept 2022 YoY: million yen, %YoY: %
%
%

7,892
5,734
888
1,269
598
398
62
137
7.6
6.9
7.1
10.8

-168
-333
-48
213
-148
-191
-6
49
-1.7
-2.8
-0.2
2.4

-2.1
-5.5
-5.1
20.2
-19.9
-32.4
-8.1
54.6

-100.0-197.8-28.5
126.5-100.0-129.5
-4.1
33.2

100.0
72.7
11.3
16.1
100.0
66.5
10.4
22.9

Q1 FY 2023

Change in Amount /Diff.

D: Results

E: Results

YoY Change: F = E - D YoY Ratio: F/D Breakdown of F Breakdown of E

Apr-June 2021

Apr-June 2022

YoY: million yen, %

3,987
2,985
493
508
379
311
37
30
9.5
10.4
7.5
6.1

3,892
2,821
440
631
272
172
34
64
7.0
6.1
7.9
10.3

-94
-163
-53
123
-107
-138
-2
34
-2.5
-4.3
0.4
4.2

Q1 FY 2022

% Change
YoY: %

-2.4
-5.5
-10.9
24.3
-28.1
-44.6
-5.6
111.3

% of Total
Amount of Change%% of Total%-100.0-173.4-56.4
130.9-100.0-130.2
-1.9
32.1

100.0
72.5
11.3
16.2
100.0
63.2
12.5
23.5

Q2 FY 2023

Change in Amount /Diff.

G: Results

H: Results

YoY Change: I = H - G

July-Sept 2021

July-Sept 2022

YoY: million yen, %

4,073
3,082
443
548
367
278
31
58
9.0
9.0
7.0
10.6

4,000
2,913
448
638
326
226
28
73
8.2
7.8
6.3
11.4

-73
-169
5
90
-41
-52
-3
15
-0.9
-1.3
-0.7
0.9

Q2 FY 2022

% Change% of Total
Amount of Change% of Total

YoY Ratio: I/G
YoY: %Breakdown of I%

Breakdown of H
%

-1.8
-5.5
1.1
16.4
-11.1
-18.7
-9.7
25.9

-100.0-230.46.8
122.7-100.0-127.6
-7.4
36.8

100.0
72.8
11.2
15.9
100.0
83.1
10.3
26.8

(Note) Prepared by Alpha-Win Research Dept. based on the financial results summary and financial results briefing supplemental materials. “% of Total
Amount of Change” is the proportion to the absolute amount of change; the same applies to Figures 7-10.

Short Report

3/9This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of thecompany presented in this Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of
investment. Contents of this Report are based on information current as of the issue date and are subject to change without notice. We do not warrant or represent thatthe information in this Report is accurate, reliable, complete, appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not
be liable for any consequences including direct or indirect loss, lost profit, or damage resulting from the use of or reliance on this Report. Investors who read this reportmust make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual property of this Report belongs to AlphaWin and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
CUBE SYSTEM INC. (2335 TSE Prime)

Issued: 11/14/2022

Results by Industry (four industries; Figure 7)
・Sales and profits decreased for all three industries excluding the financial industry. Regarding the financial
industry whose sales accounted for about 30% of the total in the first half, sales increased significantly by 25.5%
YoY to Y2,337 million due to the expansion of system building projects for a credit card company as mentioned
earlier and for an insurance company. In addition, of all four industries, this was the single industry whose operating
margin had improved, rising from 7.7% in the first half of the previous fiscal year to 8.7% in the first half of thisfiscal year. Its operating profit also grew significantly by 42.3% YoY (+Y60 million YoY) to Y202 million.
・Regarding the distribution industry, the transportation & telecommunication industry, and other industries, sales
decreased due to the scaling down of system building projects. Operating margin also fell, and operating profit
resulted in a decline for each. Particularly significant were the decrease in operating profit of the transportation &telecommunication industry, which had contributed significantly to profit in the first half the previous fiscal year,
by half from Y285 million to Y147 million, and the decrease in the operating profit of the distribution industry
from Y163 million to Y114 million.
【Figure 7】Change in Results by Industry in the First HalfFirst-Half Results

Consolidated

Unit: million yen, %Category

Overall Sales

Industry

Sales

Finance
Distribution
Telecommunication & Transportation
Manufacturing (other)Government (other)
Other (other)

Overall Operating Profit

By Industry

Finance
Distribution
Telecommunication & Transportation
Manufacturing (other)Government (other)
Other (other)

Operating Profit

Overall Operating Margin

Operating Margin (%)

Finance
Distribution
Telecommunication & Transportation
Manufacturing (other)Government (other)
Other (other)

First Half
FY 2022
A: Results
Apr-Sept 2021

First Half
FY 2023
B: Results
Apr-Sept 2022

8,060
1,861
1,696
2,166
657
476
1,201
746
142
163
285
34
40
80
9.3
7.7
9.6
13.2
5.2
8.6
6.7

7,892
2,337
1,658
1,571
723
427
1,173
598
202
114
147
17
23
91
7.6
8.7
6.9
9.4
2.5
5.5
7.8

Change in Amount /Diff.

% Change% of Total Amountof Change% of Total

Q1 FY 2023

Change in Amount /Diff.

Breakdown of C

Breakdown of B

D: Results

E: Results

YoY Change: F = E - D YoY Ratio: F/D%%

Apr-June 2021

Apr-June 2022

YoY Change: C = B - A YoY Ratio: C/A
YoY: million yen, %

-168
475
-37
-594
66
-49
-28
-148
60
-48
-138
-17
-17
11
-1.7
1.0
-2.7
-3.8
-2.7
-3.1
1.1

YoY: %

-2.1
25.5
-2.2
-27.5
10.1
-10.3
-2.4
-19.9
42.3
-29.5
-48.4
-48.5
-42.4
14.4

-100.0282.2-22.0-352.9
39.2
-29.1
-16.6
-100.0
40.7
-32.5
-93.5
-11.5
-11.5
7.5
-

Q1 FY 2022

100.0
29.6
21.0
19.9
9.2
5.4
14.9
100.0
33.8
19.0
24.6
2.8
3.8
15.2
-

3,987
934
815
1,062
318
244
610
379
75
84
148
20
24
24
9.5
8.1
10.4
14.0
6.5
10.2
4.0

YoY: million yen, %

3,892
1,128
785
826
344
206
601
272
101
49
70
5
11
34
7.0
9.0
6.3
8.5
1.7
5.4
5.7

% Change% of Total
Amount of Change% of Total

Q2 FY 2022

Q2 FY 2023

Change in Amount /Diff.

Breakdown of F%

Breakdown of E%

G: Results

H: Results

YoY Change: I = H - G

July-Sept 2021

July-Sept 2022

YoY: million yen, %-100.0205.3-30.9-250.0
27.7
-40.4
-9.6
-100.0
24.3
-32.8
-73.0
-14.0
-12.2
9.4

100.0
29.0
20.2
21.2
8.8
5.3
15.4
100.0
37.1
18.0
25.7
1.8
4.0
12.5

4,073
927
881
1,104
339
232
591
367
67
79
137
14
16
56
9.0
7.2
9.0
12.4
4.1
6.9
9.5

4,000
1,209
873
745
379
221
572
326
101
65
77
12
12
57
8.2
8.4
7.4
10.3
3.2
5.4
10.0

-73
282
-8
-359
40
-11
-19
-41
34
-14
-60
-2
-4
1
-0.9
1.1
-1.5
-2.1
-1.0
-1.5
0.5

YoY: %

-94
193
-29
-235
26
-38
-9
-107
26
-35
-78
-15
-13
10
-2.5
0.9
-4.1
-5.5
-4.8
-4.8
1.7

-2.4
20.7
-3.6
-22.2
7.9
-15.7
-1.5
-28.1
35.0
-42.2
-52.6
-72.1
-55.5
39.8
-

-

% Change% of Total
Amount of Change% of Total

YoY Ratio: I/G
YoY: %Breakdown of I%

Breakdown of H
%

-1.8
30.4
-0.9
-32.5
11.8
-4.7
-3.2
-11.1
50.7
-17.7
-43.8
-14.3
-25.0
1.8

-100.0384.5-10.9-489.5
54.5
-15.0
-25.9
-100.083.5-34.4-147.3
-4.9
-9.8
2.5

100.0
30.2
21.8
18.6
9.5
5.5
14.3
100.0
30.9
19.9
23.6
3.7
3.7
17.5

-

-

(Note) Prepared by Alpha-Win Research Dept. based on the financial results summary and financial results briefing supplemental materials.

Results by Business Model (three models; Figure 8)
・Regarding the Enhancement Business, which accounted for 74% of sales and 84% of operating profit, sales
increased by +3.2% compared to the previous fiscal year’s first half (+Y182 million YoY) to Y5,814 million due
to the expansion of projects for a credit card company, a telecommunications company, and retailers. In addition
to sales growth, operating margin rose from 8.0% to 8.6%, and operating profit increased by 11.4% YoY (+Y51
million) to Y502 million.
・In the SI Business (Lift & Shift: moving from the legacy environment to the cloud environment in “Lift,” andstepwise system restructuring with optimization for the cloud environment in “Shift”), which accounted for 23%
of sales and 15% of operating profit, the Company placed a focus on collaborating with cloud vendors. However,
due to the scaling down of the system building project for a shipping company, sales decreased by 19.9% (-Y455
million) compared to the first half of the previous fiscal year to Y1,833 million and operating profit decreased
significantly by 69.4% YoY (-Y204 million) to Y90 million. Operating margin fell sharply from 12.8% to 4.9%.
・The Digital Business is small in scale, accounting for only 3% of total sales. However, due to new orders for DX
projects in the distribution industry, new projects gained through the collaborative consultation business, andexpansion of projects in the existing areas of business, its sales grew by 75.0% YoY (+Y104 million) to Y243
million. Operating profit/loss was close to zero in the first half of the previous fiscal year (profit of Y1 million),but the profit slightly increased to Y5 million in the first half of this fiscal year.
・Both the Digital Business and the Enhancement Business are performing well, with both sales and profits
increasing. The overall decline in sales and profits in the first half of this fiscal year was mainly due to the SI
Business and its postponement of large projects as mentioned above.
【Figure 8】Change in Results by Business Model in the First HalfFirst-Half Results

Consolidated

Unit: million yen, %Category

Overall Sales

Business Model

Sales

Digital Business
SI Business
Enhancement BusinessOverall Operating Profit
By Business
Model

Operating Profit

Digital Business
SI Business
Enhancement BusinessOverall Operating Margin
Operating Margin (%)

Digital Business
SI Business
Enhancement BusinessFirst Half
FY 2022
A: Results
Apr-Sept 2021

First Half
FY 2023
B: Results
Apr-Sept 2022

8,060
139
2,289
5,632
746
1
294
451
9.3
0.7
12.8
8.0

7,892
243
1,833
5,814
598
5
90
502
7.6
2.1
4.9
8.6

Change in Amount /Diff.

% Change

YoY Change: C = B - A YoY Ratio: C/A
YoY: million yen, %

-168
104
-455
182
-148
4
-204
51
-1.7
1.3
-7.9
0.6

YoY: %

-2.1
75.0
-19.9
3.2
-19.9
454.1
-69.4
11.4

% of Total Amountof Change% of Total

Q1 FY 2023

Change in Amount /Diff.

Breakdown of C

Breakdown of B

D: Results

E: Results

YoY Change: F = E - D YoY Ratio: F/D%%

Apr-June 2021

Apr-June 2022

-100.061.8-270.3108.1-100.02.7-138.3
34.6
-

100.0
3.1
23.2
73.7
100.0
0.8
15.0
83.9
-

Q1 FY 2022

3,987
64
1,082
2,840
379
0
125
253
9.5
0.0
11.6
8.9

3,892
102
854
2,936
272
-4
34
242
7.0
-3.9
4.0
8.2

YoY: million yen, %

-94
37
-228
96
-107
-4
-91
-11
-2.5
-3.9
-7.6
-0.7

% Change% of Total
Amount of Change% of Total

Q2 FY 2022

Q2 FY 2023

Change in Amount /Diff.

Breakdown of F%

Breakdown of E%

G: Results

H: Results

YoY Change: I = H - G

July-Sept 2021

July-Sept 2022

YoY: million yen, %-100.039.4-242.6102.1-100.0
-3.7
-85.2
-10.3

100.0
2.6
21.9
75.4
100.0
-1.5
12.5
89.0

4,073
75
1,207
2,792
367
1
169
198
9.0
1.3
14.0
7.1

4,000
141
979
2,878
326
9
56
260
8.2
6.4
5.7
9

-73
66
-228
86
-41
8
-113
62
-0.9
5.0
-8.3
1.9

YoY: %

-2.4
58.3
-21.1
3.4
-28.1
To loss
-72.6
-4.4
-

-

% Change% of Total
Amount of Change% of Total

YoY Ratio: I/G
YoY: %Breakdown of I%

Breakdown of H
%

-1.8
88.0
-18.9
3.1
-11.1
800.0
-66.9
31.3

-100.090.0-310.9117.3-100.019.6-277.4
152.2

100.0
3.5
24.5
71.9
100.0
2.8
17.2
79.6

-

(Note) Prepared by Alpha-Win Research Dept. based on the financial results summary and financial results briefing supplemental materials.

Short Report

4/9This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of thecompany presented in this Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of
investment. Contents of this Report are based on information current as of the issue date and are subject to change without notice. We do not warrant or represent thatthe information in this Report is accurate, reliable, complete, appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not
be liable for any consequences including direct or indirect loss, lost profit, or damage resulting from the use of or reliance on this Report. Investors who read this reportmust make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual property of this Report belongs to AlphaWin and no part of this report may be copied, photocopied, cited, or translated without our consent.

-

Alpha-Win Company Research Report
CUBE SYSTEM INC. (2335 TSE Prime)

Issued: 11/14/2022

Sales by Customer Group (five customer groups; Figure 9)・Sales to NRI, which accounted for about 48% of total sales, declined by Y375 million (-9.0% YoY) from Y4,184
million in the first half of the previous fiscal year to Y3,809 million in the first half of the current fiscal year. Thisdecline accounted for 223% of the overall amount of sales decline (absolute amount of decline of Y168 million)
and was the largest downside factor (presumably due to the SI Business for the transportation industry). Sales to
the AEON Group also declined by Y23 million YoY.
・In contrast, sales to the Fujitsu Group (hereinafter, “G” stands for Group) were solid, increasing by Y74 million.
Sales to the Mizuho G also increased by Y37 million and sales to other customers increased by Y118 million.
【Figure 9】Change in First-Half Sales by Customer Group
Group
Unit
NRI
Fujitsu
Aeon
MizuhoOther
TotalFirst HalfFirst HalfFirst Half
FY 2021
FY 2022
FY 2023
Million yen Million yen Million yen
3,457
4,184
3,809
1,325
1,539
1,613
394
380
356
268
297
334
1,637
1,659
1,778
7,083
8,060
7,892

Percent of Total for the
Change inFirst Half of FY 2023
Amount%Million yen
48.3
-375
20.5
74
4.5
-23
4.2
37
22.5
118
100
-168

% Change
%
-9.0
4.8
-6.1
12.5
7.1
-2.1

% of Total Amountof Change%-223.2
44.0
-13.7
22.0
70.2
100.0

(Note) Prepared by Alpha-Win Research Dept. based on the financial results briefing supplemental materials.

Number of Employees and Productivity
・In the Company's business model, sales growth is generally directly correlated with the number of employees. Its
human resource capacity has been expanding, with the total number of employees in Japan and overseas steadily
increasing from 791 in September 2020 (end of month; the same applies to the rest) → 815 in September 2021(+24 or +3.0%) → 869 in September 2022 (+54 or +6.6%). However, since there is still strong potential demand
for system development (DX businesses and non-face-to-face businesses such as those related to remote work, EC,
and AI), the Company is somewhat short of staff. Since human resources seem to be the main bottleneck to further
growth, it has been working on increasing the number of employees through strengthened new-graduate and midcareer recruitment. It has also been improving productivity by raising the staff operation rate, based on
management indicators of sales per employee in Japan (in the order of H1 FY 2021 → H1 FY 2022 → H1 FY
2023: 10,033 thousand yen / person → 11,164 thousand yen / person → 10,494 thousand yen / person) andoperating profit per employee in Japan (in the same order: 782 thousand yen / person → 1,034 thousand yen /person → 795 thousand yen / person).
Balance Sheet
・There has been no significant change in the balance sheet as of the end of the first half. The Company has ample
liquidity on hand, with cash & deposits of Y5.0 billion (3.5 months’ worth of average monthly sales; its debt is
Y240 million and therefore it is essentially debtless). With also a current ratio of 384.0% and an equity ratio of
73.4%, its financial standing is firm. Going forward, the key points will be the enhancement of the return of profit
to shareholders and the effective utilization of its excess capital for future growth through, for instance, M&As,
business alliances, investments, and financing.

◆No change to the full-year forecast since the beginning of the fiscal year. Planning for alarge dividend hike including commemorative dividend.
Second Half: Company Forecast
・The Company expects a large increase in sales and profit in the second half of the fiscal year, with sales of Y9,408
million (+Y1,369 million or +17.0% YoY), operating profit of Y932 million (+Y261 million or +38.9% YoY),
operating margin of 9.9% (+0.8 percentage point YoY), and net profit of Y612 million (+Y169 million or +38.1%
YoY) (Figure A on page 8; “FY 2023 H2 CE”). In the second half of the fiscal year, the Company expects to post
record highs for sales and each of the profit consecutively, following the previous fiscal year.
・The order backlog at the end of this first half was Y4,506 million (+Y325 million or +7.8% YoY), having increased
from the previous fiscal year. The Company expects orders to remain strong in the second half due to strong demand.
By segment, the order backlog has been increasing in all business models, including the Digital Business, and for
all industries except the transportation & telecommunication industry (Figure 10 on page 6).
Short Report
5/9This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of thecompany presented in this Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of
investment. Contents of this Report are based on information current as of the issue date and are subject to change without notice. We do not warrant or represent thatthe information in this Report is accurate, reliable, complete, appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not
be liable for any consequences including direct or indirect loss, lost profit, or damage resulting from the use of or reliance on this Report. Investors who read this reportmust make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual property of this Report belongs to AlphaWin and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
CUBE SYSTEM INC. (2335 TSE Prime)

Issued: 11/14/2022

Full Year: Company Forecast
・The Company has not changed its full-year forecast since the beginning of the fiscal year. It plans to achieve salesof Y17,300 million (+7.5% YoY), operating profit of Y1,530 million (+7.9% YoY), net profit of Y1,000 million(+5.9% YoY), and operating margin of 8.8% (8.8% in the previous fiscal year; no change) (Figure A on page 8;“FY 2023 CE”). Continuing from the previous fiscal year, it expects sales and profits to increase during this full
fiscal year to hit consecutive record highs for both.
・In terms of the full-year sales forecast by industry, it expects to especially see sales growth in businesses with thefinancial industry in which orders from banks and insurance companies have been strong (Y3,909 million ⇒Y4,420 million; +Y510 million or +13.1% YoY; 42.5% of overall sales growth) and with the other industries inwhich orders for energy- and education-related projects are expected (Y4,562 million ⇒ Y5,420 million; +Y857
million or +18.8% YoY; 71.4% of overall sales growth) (Figure 10).
・Similarly, by business model, sales are expected to increase for all industries. The Digital Business, whose numberof orders are increasing, and the SI Business, whose demand has been strong, will be the growth drivers.
・It plans to increase the annual dividend to 50 yen per share, which includes the initially planned annual ordinary
dividend of 26 yen per share (11 yen in the first half and 15 yen at the end of the fiscal year) with an additionalcommemorative dividend of 12 yen per share in both the first and the second half (a total of 24 yen per share) forthe celebration of its 50th anniversary on July 5, 2022.
【Figure 10】Orders Received in Each Segment and Full-Year Sales Plan
Order Received

Unit: million yen
First Half
FY 2022

Segment

Order Backlog

Change% Change

First Half
FY 2022First Half
FY 2023

Sales (company plan for FY 2023)

Change% Change

FY 2022

FY 2023

Change% Change% of Total Amountof Change

Finance

1,890

2,407

27.3

1,094

1,269

16.0

3,909

4,420

Distribution

1,699

1,897

198

11.7

952

1,177

225

23.6

3,342

3,550

207

6.2

17.3

2,168

1,436

-731

-33.7

991

669

-321

-32.4

4,285

3,910

-375

-8.8

-31.3

Other

By Industry Telecommunication & Transportation

By Business
ModelFirst Half
FY 2023

516

174

510

13.1

42.5

2,179

2,380

201

9.2

1,142

1,390

247

21.6

4,562

5,420

857

18.8

71.4

Total

7,937

8,122

184

2.3

4,181

4,506

325

7.8

16,09917,3001,200

7.5

100.00Digital

174

326

151

86.6

91

271

180

198.6

350

780

429

122.6

35.8

SI Busines

2,317

2,164

-153

-6.6

1,123

1,221

98

8.8

4,645

5,140

494

10.6

41.2

Enhancement

5,445

5,631

186

3.4

2,966

3,012

46

1.6

11,103

11,380

276

2.5

23.0

Total

7,937

8,122

184

2.3

4,181

4,506

325

7.8

16,09917,300

1,200

7.5

100.0

(Note) Prepared by Alpha-Win Research Dept. based on the financial results briefing supplemental materials.

Full Year: Alpha-Win Research Department’s Forecast
・Due to concerns over another outbreak of COVID-19 (the eighth wave) and uncertainty over the global situation,some companies with deteriorating business performance have been holding down their IT investments. On theother hand, there are many companies with strong financial performance and that are actively making strategic DX
investments (business and process transformation). There seems to be a polarization in IT investment.
・In this environment, the Company has been strategically strengthening efforts to receive orders for system-related
projects from the latter group of companies. It has also been shifting to high-profit projects and improving resource
efficiency. As a result, the amount of orders received and the order backlog in the first half were solid and havebeen exceeding those of the same period of the previous fiscal year, as mentioned above.
・The Company has generally been seeing no sign of slowdown regarding negotiations or in receiving orders. There
has also been a recovery in demand from the previously stagnant industries such as the financial industry, and theCompany has been receiving more new orders for DX and upstream-process projects. It seems to have some leeway
in terms of controlling its results, and it has a stable business model based on orders received. Therefore, we had
believed that the downside risk is limited for both sales and profit this fiscal year. However, considering themacroeconomic risk factors, we had made a somewhat cautious forecast for the full year compared to the Company(Figure A on page 8; “FY 2023 CE” and “FY 2023 Old E”; “Old E” stands for Alpha-Win’s previous forecast).
・We have now revised our full-year forecast slightly downward, though, considering the underachievement of
results in the first half of this fiscal year and because the Company’s goals for the second half of the fiscal year
seem to be somewhat high for sales, operating margin, and operating profit. In the order of our previous forecast⇒ current forecast, we revised our forecasts from sales of 17,200 ⇒ 17,100 million yen (-100 ⇒ -200 million
yen compared to the Company’s plan), operating profit of 1,520 ⇒ 1,480 million yen (similarly, -10 ⇒ -50
million yen), net profit of 1,000 ⇒ 970 million yen (0 ⇒ -30 million yen), and operating margin of 8.8% ⇒8.7% (the Company’s plan is 8.8%) (Figure A on page 8; “FY 2023 Old E” and “FY 2023 New E”). However,even after this revision of financial performance, we believe that Company may be able to achieve a YoY increasein sales and profit, as well as consecutive record highs for both.
Short Report
6/9This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of thecompany presented in this Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of
investment. Contents of this Report are based on information current as of the issue date and are subject to change without notice. We do not warrant or represent thatthe information in this Report is accurate, reliable, complete, appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not
be liable for any consequences including direct or indirect loss, lost profit, or damage resulting from the use of or reliance on this Report. Investors who read this reportmust make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual property of this Report belongs to AlphaWin and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
CUBE SYSTEM INC. (2335 TSE Prime)

Issued: 11/14/2022

Medium Term: Forecast
・Over the medium to long term, the Company intends to build a stable and sustainable business foundation throughits proposal-based and contract-based businesses, and shift its business portfolio to the Digital Business and the SI
Business in which high growth is expected. In FY 2024, the final year of the current medium-term management
plan, the Company plans to achieve sales of Y19.0 billion (+Y1.7 billion from the forecasted sales of the current
fiscal year) and operating profit of Y1.71 billion (similarly, +Y180 million).
・ We have not changed our medium-term outlook and evaluation of the Company’s financial performance,
predicting that IT investments will continue to be solid in the next fiscal year onward too. We also have not changed
our medium-term forecast of dividend starting next fiscal year (annual increase of +2 yen/share for ordinary
dividend).
・IT investments are expected to continue to increase as customers develop new business model to adapt to DX andlife co-exiting with COVID-19, strengthen their competitive edge, work on solving employee shortages, andstreamline and speed up operations. Therefore, the Company’s growth potential is large. We believe that theCompany will be able to continue a stable sales and profit growth trend of about 6-10% growth per year, if
economic conditions normalize, through the expansion of its areas of business, acquisition of new customers, andimprovement of productivity through various measures.

◆ Stock price and characteristics: a domestic-demand-oriented and stable growth stockthat has been significantly outperforming the TOPIX over the long term. The level ofvaluation is about average.
Performance・Over the past approximately 13 years, the Company’s stock price has increased by about 5.2x thanks to its solid
financial performance, significantly outperforming the TOPIX (by about +286%). This fiscal year, its stock has
been outperforming the TOPIX by 4.5% since the announcement of dividend hike due to commemorative dividendin July. After the announcement of the first-half results (after the closing price on November 2), too, the stock pricehas been relatively solid compared to the TOPIX, fluctuating around Y1,000 (Figure C on page 9).
Comparison of Valuation and Results
・The current average valuations of all companies listed on the TSE Prime are as follows: forecasted P/E of 13.54(based on company plans), P/B of 1.17 (based on actual BPS), and forecasted dividend yield (simple average) of
2.35%. The Company’s valuation is about average in terms of the P/E and the actual dividend yield based on
ordinary dividend (2.3%).
・Compared to its competitors listed on the TSE Prime Market (HIMACS and Toho System Science; see Figure
11 on page 8), its valuation quite varies regarding the major valuation measures. P/E is about average, while theother valuation measures are somewhat high excluding P/S. In general, though, its stock price does not seem
overpriced.
・Its stock price and stock performance presumably reflect the evaluation that the Company has had solid profit
growth over the long term, has relatively low volatility in financial performance, and has high liquidity.
Stock Price Outlook
・Is stock price will likely be affected by the situation with orders received in response to the IT investment trendsof its end users (companies), its financial performance (especially the final results for this fiscal year and forecasted
level of profit for next fiscal year), and whether there will be a share buyback. Over the medium term, the following
should also be noted as key factors: numerical goals (sales, profit, and profit margin) of the second medium-term
management plan (which will start in FY 2025) as well as its strategies and contents; the amount of contribution
by the SI and the Digital Business to the results; and measures for returning profit to shareholders (level of dividend,
share buybacks, and stock splits).
・We believe that if the Company continues to show stable, double-digit annual profit growth rate as a domesticdemand-oriented, defensive, small-cap, and stable growth stock, then its stock price may rise over the medium tolong term due to the adjustment for the level of P/E and the increase in EPS.

Short Report

7/9This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of thecompany presented in this Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of
investment. Contents of this Report are based on information current as of the issue date and are subject to change without notice. We do not warrant or represent thatthe information in this Report is accurate, reliable, complete, appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not
be liable for any consequences including direct or indirect loss, lost profit, or damage resulting from the use of or reliance on this Report. Investors who read this reportmust make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual property of this Report belongs to AlphaWin and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
CUBE SYSTEM INC. (2335 TSE Prime)

Issued: 11/14/2022【Figure 11】Comparison of Valuation and Results with Competitors
Item

Company Name

CUBE SYSTEM(CS: consolidated)

HIMACS(HM: consolidated)Toho System Science(TS: non-consolidated)

2335 P

4299 P

4333 P

Code (P: TSE Prime Market)
Stock Price (at 11/11 closing)Market Cap (million yen)
P/E (forecasted price-to-earnings ratio)
P/B (price-to-book ratio)
Dividend Yield (%)
EV/EBITDA
P/S (price-to-sales ratio)
Daily Average Trading Value (million yen)
Sales (million yen)
Operating Profit (million yen)YoY Sales Growth Rate (%)
YoY Operating Profit Growth Rate (%)
Operating Margin (%)
This First Half's Progress with Sales Compared to Full-Year Forecast (%)
Similarly, Progress with Operating Profit (%)
Sales (million yen)
Operating Profit (million yen)YoY Sales Growth Rate (%)
YoY Operating Profit Growth Rate (%)
Operating Margin (%)

StockInformation

Valuation

Liquidity

This First Half's
Results

Full-Year Resultsfor This Fiscal
Year (company
forecast)

1,000
14,500
13.53
1.80
5.00
14.94
0.84
29
7,892
598
-2.1
-19.9
7.6
45.6
39.1
17,300
1,530
7.5
7.9
8.8

1,518
18,843
14.53
1.79
2.77
11.96
1.06
23
8,794
871
11.3
16.2
9.9
49.5
49.2
17,750
1,770
6.4
3.1
10.0

1,013
14,046
13.02
1.46
3.46
6.95
0.94
11
7,527
740
8.8
7.9
9.8
50.2
54.0
15,000
1,370
5.6
3.2
9.1

(Note) Prepared by Alpha-Win Research Dept. based on each company’s financial results summaryMarket cap= (shares outstanding) x (market share price [at 11/11/2022 closing])
The companies' planned EPS values for FY 2023 were used in all P/E calculations. Actual BPS values of the first half of FY 2023 were used in P/B calculations.
EV/EBITDA = (market cap + interest bearing debt - cash & deposits)/(operating profit + depreciation + intangible fixed asset amortization, etc.)
Interest bearing debt and cash & deposits are actual values of the first half of FY 2023.
Operating profit, depreciation, and intagible fixed asset amortization, etc., are each company's full-year forecast for FY 2023.
P/S=market cap / sales [the companies' forecasts for FY 2023]
Daily Average Trading Value: estimated daily average trading value over the past approx. nine months (million yen)

【 2335 CUBE SYSTEM

Sector: Information & Communication 】 Figure A

FY

2020
2021
2022
2023
2023
2023
2023
2024
2024
2024
2025
2022
2023
2022
2023
2022
2023
2022
2023

Initial Mid-Term Plan CE
CE
Old E
New E
Initial Mid-Term Plan CE
Revised Mid-Term Plan CE
E
E
Q1
Q1
Q2
Q2
H1
H1
H2
H2 CE

Sales

YoY

O.P.

YoY

R.P.

YoY

N.P.

YoY

EPS

BPS

Dividend(million yen)（%）(million yen)（%）(million yen)（%）(million yen)

(%)

(Y)

(Y)

(Y)

14,70814,78816,09917,20017,30017,20017,10018,50019,00018,70019,600
3,987
3,892
4,073
4,000
8,060
7,892
8,039
9,408

2.7
0.5
8.9
7.5
6.8
6.2
7.6
9.8
9.4
4.8
18.2
-2.4
9.8
-1.8
13.8
-2.1
4.3
17.0

959
1,174
1,417
1,340
1,530
1,520
1,480
1,480
1,710
1,700
1,800
378
272
368
326
746
598
671
932

4.1
22.5
20.7
7.9
7.3
4.4
10.4
11.8
14.9
5.9
56.5
-28.1
18.7
-11.4
35.1
-19.9
7.9
38.9

976
1,295
1,432

1.7
32.7
10.6

525
844
944

-11.9
60.7
11.9

38.69
62.11
69.82

411.96476.52531.14

18.0
20.0
23.0

1,545
1,535
1,495

7.8
7.2
4.4

1,000
1,000
970

5.9
5.9
2.8

73.91
73.90
71.69

Not disclosed
580.79578.57

50.0
50.0
50.0

(Operating margin of 9.0%; ROE of 13% or more)
14.7
1,100
13.4
81.29
612.08
6.1
1,180
7.3
87.21
671.29
57.1
262
59.0
19.35
487.51-30.5
173 -34.0
12.84
543.58
2.0
239
1.7
15.95
509.03-10.8
215 -10.0
15.89
556.76
24.6
501
25.3
35.30
-21.0
388 -22.6
28.73
-1.7
443
-0.2
34.52
39.9
612
38.1
45.18

28.0
30.0
0.0
0.0
8.0
23.0
8.0
23.0
15.0
27.0

1,715
1,820
390
271
362
323
752
594
680
951

(Note) CE: the Company’s forecast/estimate. Old E: Alpha-Win Research Dept.’s previous forecast/estimate. New E: Alpha-Win
Research Dept.’s current forecast/estimate. “Initial Mid-Term Plan” is the plan announced on June 11, 2021. “Revised Mid-TermPlan” is the plan announced on May 11, 2022. Q1: Apr-June. Q2: July-Sept. H1 (first half): Apr-Sept. H2 (second half): Oct-Mar.

【 Stock Price and Valuation Indicators: 2335 CUBE SYSTEM 】
Item

11/11/2022

Figure B

Item

P/E

P/B

Dividend Yield

Dividend Payout Ratio

Stock Price (Y)1,000Last FY (actual)

14.3

1.9

2.3%

32.2%

Shares Outstanding (thou.)

14,500This FY (est.)

13.9

1.7

5.0%

69.7%

Market Capitalizatoin (million yen)

14,500

Next FY (est.)

12.3

1.6

2.8%

34.4%

Equity Ratio at End of This FY's First Half

73.4%

Last FY's ROE

13.8%

Dilutive Shares (thou.)0(Note) Estimates have been made by Alpha-Win Research Department.

Short Report

8/9This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of thecompany presented in this Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of
investment. Contents of this Report are based on information current as of the issue date and are subject to change without notice. We do not warrant or represent thatthe information in this Report is accurate, reliable, complete, appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not
be liable for any consequences including direct or indirect loss, lost profit, or damage resulting from the use of or reliance on this Report. Investors who read this reportmust make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual property of this Report belongs to AlphaWin and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
CUBE SYSTEM INC. (2335 TSE Prime)

Issued: 11/14/2022【 Stock Chart (end-of-week prices): 2335 CUBE SYSTEM 】 Figure C
(Y)

1,600
1,500
1,400
1,300

Stock Price (left axis)
Price Relative to TOPIX (right axis)

1,200
1,100
1,000
900
800
700
600
500

09
/1
6
01
/1
7
05
/1
7
09
/1
7
01
/1
8
05
/1
8
09
/1
8
01
/1
9
05
/1
9
09
/1
9
01
/2
0
05
/2
0
09
/2
0
01
/2
1
05
/2
1
09
/2
1
01
/2
2
05
/2
2
09
/2
2
(M
M
/Y
Y)

400

2.00
1.90
1.80
1.70
1.60
1.50
1.40
1.30
1.20
1.10
1.00
0.90
0.80
0.70
0.60

(Note) From the first week of September 2016 to the second week of November 2022

【Performance】
PeriodReturn vs. TOPIX
1 month0.0%-2.5%
3 months
-4.2%
-5.0%
6 months
6.0%
2.6%
12 months
11.4%
8.8%
(Note)
・Reflects stock and index prices through theclosing price on 11/11/2022. “Vs. TOPIX” isthe relative value after subtracting the
TOPIX’s performance from the performanceof the Company’s stock.
・Performance for the 1-month period is thecomparison between the closing price on thelast day of October and the closing price on
November 11 (the same applies to the otherperiods).

＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊＊

Disclaimers
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital
Inc. (hereinafter “Alpha-Win”) on the request of the company presented in this Report.
This Report is not to be construed as a recommendation or solicitation of investment. Alpha-Win shall not beliable for any consequences including direct or indirect loss, lost profit, or damage resulting from the use ofor reliance on this Report. Investors who read this Report must make their own decisions on all investment
matters and take full responsibility regarding their investment.
This Report has been prepared with a focus on objectivity and neutrality based on the analysis of generally accessible
public information and supplemental information including interview(s) by the analyst. Alpha-Win, the writer,
and/or other persons involved in the publication of this Report may already hold, or buy and sell in the future, thestock of the company presented in this Report.
Contents of this Report are based on information current as of the issue date and are subject to change
without notice. For the latest (updated) report, please see our website (http://www.awincap.com/). We also do
not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate, or
fit for any purpose and do not accept any responsibility or liability.
Copyright of this Report belongs to Alpha-Win and no part of the publication may be copied, photocopied, cited, ortranslated without our consent. For inquiries regarding this Report, please send us an e-mail to info@awincap.com.
However, Alpha-Win and the writer of this Report do not have any obligation to reply to inquiries.
SV2022-11-17-1900

Short Report

9/9This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of thecompany presented in this Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of
investment. Contents of this Report are based on information current as of the issue date and are subject to change without notice. We do not warrant or represent thatthe information in this Report is accurate, reliable, complete, appropriate, or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not
be liable for any consequences including direct or indirect loss, lost profit, or damage resulting from the use of or reliance on this Report. Investors who read this reportmust make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual property of this Report belongs to AlphaWin and no part of this report may be copied, photocopied, cited, or translated without our consent.