COMPANY RESEARCH AND ANALYSIS REPORT

Altech Corporation
4641
Tokyo Stock Exchange First Section

8-Apr.-2021
FISCO Ltd. Analyst

Ikuo Shibata

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

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

8-Apr.-2021
https://www.alpsgiken.co.jp/english/index.html■ Index■Summary---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 01
1. Company profile.. ................................... ......................................................................................................
2. FY12/20 consolidated results.. ............... ......................................................................................................
3. Outlook for FY12/21. . ............................. ......................................................................................................
4. Medium- to long-term growth strategy.. ......................................................................................................

01
01
02
02

■Company profile---------------------------------------------------------------------------------------------------------------------------------------------------------- 03
1. Company profile.. ................................... ......................................................................................................
2. Group structure (and bases). . ................. ......................................................................................................
3. Business overview................................. ......................................................................................................
4. History................................................... ......................................................................................................

03
05
06
07

■Business performance------------------------------------------------------------------------------------------------------------------------------------------ 09
1. Trends in past results (consolidated)............................................................................................................
2. Overview of FY12/20 results........................................................................................................................
3. Summary of FY12/20 results. . ......................................................................................................................

09
11
13

■Main activities and achievements ------------------------------------------------------------------------------------------------------------ 14
1. Measures in response to the coronavirus.....................................................................................................
2. Recruitment results......................................................................................................................................
3. Strengthening the Group structure. . .............................................................................................................
4. Progress made in new businesses (agriculture- and nursing care-related fields). ........................................

14
14
15
15

■Business outlook-------------------------------------------------------------------------------------------------------------------------------------------------------- 16
1. Outlook for FY12/21. . ............................. ......................................................................................................
2. Plan for activities. . ........................................................................................................................................
3. View of FISCO’s analysts.............................................................................................................................

16
16
17

■Medium- to long-term growth strategy------------------------------------------------------------------------------------------------ 18
1. Medium- to long-term growth vision...... ......................................................................................................
2. The medium-term management plan (rolling-type).......................................................................................
3. Industry trends and the Company’s position. ...............................................................................................
4. Points to focus on from FISCO’s analysts . ..................................................................................................

18
19
20
21

■Shareholder return policy---------------------------------------------------------------------------------------------------------------------------------- 21
1. Basic dividend policy............................. ......................................................................................................
2. Dividend trend and plan...............................................................................................................................

21
21■Information security------------------------------------------------------------------------------------------------------------------------------------------------ 22

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

8-Apr.-2021
https://www.alpsgiken.co.jp/english/index.html█ SummaryIn FY12/20, sales declined slightly due to the impact of thecoronavirus, but still realized a higher-than-anticipated increase inordinary profit due to cost reductions, etc. The mobilization rateis also recovering, mainly in strongly performing fields such as
semiconductors
1. Company profile
Altech Corporation <4641> (hereafter, also “the Company”) is a comprehensive engineering outsourcer that provides
high-level technological services to major manufacturing companies in fields such as machinery, electricity andelectronics, software, IT, and chemistry. It places great importance on its “Heart to Heart” corporate philosophy andconsistently since its foundation, it has focused on human education from the standpoint of maintaining the highest
levels among its employees not only as engineers, but also as members of society, in addition to strengthening
their technical abilities. This can be described as its corporate organizational culture, which is the source of its
strength of producing talented human resources. The Altech Corporation Group is comprised of the Company, sevensubsidiaries, and one affiliated company and since FY12/16, it has had two business segments, the Outsourcing
Business and the Global Business. The Company observed its 50th anniversary and second foundation period in
July 2018, and it is undertaking initiatives to create next-generation strengths, including strengthening its operationalbase, as well as entering new business fields (agriculture- and nursing care-related markets), while also working on
SDGs (Sustainable Development Goals).
2. FY12/20 consolidated results
In the FY12/20 consolidated results, net sales decreased 1.7% year on year (YoY) to ¥35,753mn, operating profit
declined 9.3% to ¥3,640mn, and ordinary profit increased 12.1% to ¥4,595mn, so although sales decreased slightly
and operating profit declined, the Company still secured an increase in profits at the ordinary profit stage. For net
sales, Digital Spice Corporation, which was made a consolidated subsidiary on July 1, 2020, and the growth of
the results of Agri & Care Corporation, which is conducting new businesses (agriculture- and nursing care-related
fields), both contributed. However, net sales declined overall YoY and fell short of the target due to the novel
coronavirus pandemic (hereafter, “the coronavirus”) causing a decline in mobilization hours (increase in temporary
closures, restrictions on overtime, etc.) and decline in sales from the Global Business. While the temporary decline
in the mobilization rate due to the coronavirus was a factor causing results to be less than forecast, it is currently
gradually recovering. In profits, profits were kept down by the decline in sales, but the Company reduced SG&A
expenses and allocated “employment adjustment subsidies” as cost of sales to maintain employment, and it wastherefore able to secure an increase in profits at the ordinary profit stage. In particular, the reduction in costs fromproactive cost-cutting measures and the effects of anti-infection measures (including not holding training and events)
contributed greatly to the increase in profits, and the ordinary profit margin improved significantly to 12.9% (11.3%
in the previous period). The Company increased the dividend by ¥5.0 compared to the forecast, paying an annual
dividend per share of ¥75.0.

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01 22

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

8-Apr.-2021
https://www.alpsgiken.co.jp/english/index.html

Summary

3. Outlook for FY12/21
For the FY12/21 results, the Company is forecasting a major increase in net sales and operating profit, with net
sales to increase 11.9% YoY to ¥40,000mn and operating profit to rise 9.9% to ¥4,000mn. Its policy is to return to a
growth track in the medium term from recovering from FY12/20 when results were impacted by the coronavirus. Net
sales are expected to grow significantly against the backdrop of strong customer needs, including for cutting-edge
technologies and next-generation vehicles. However, it has set conservative estimates due to concerns about an
economic slowdown, and it seems to be anticipating that the number of hours worked will be kept down. Also, in
addition to the recruitment of new graduates in 2021, which will exceed that in 2020, it will continue to increaseengineers through recruitment throughout the year, including of global engineers. Moreover, for new business (in the
agriculture-related field), its policy is to progress in a planned manner the recruitment and training of human resources
for agri-tech (agriculture cutting-edge technologies) and agriculture (farm work), for which demand is growing on anationwide scale, and at the same time, to acquire customers for assignments.
4. Medium- to long-term growth strategy
As its medium- to long-term growth vision, the Company has set out a strategy on five axes: 1) strengthening existing
businesses, 2) responding to state-of-the-art technologies, 3) developing globally, 4) providing high-tech services
and 5) taking on the challenge of new businesses. In particular, in the eleventh five-year plan (qualitative targets),
its policy is to promote the Reinvestment of Management Resources toward the New Industrial Revolution. Toward
solving societal problems also, it intends to continue to contribute in the agriculture- and nursing care-related fields
that are suffering from serious labor shortages, including by providing advanced technologies, which will lead tothe further improvement of its enterprise value. In the three-year (rolling) medium-term management plan, it has set
targets for FY12/23 of net sales of ¥45,660mn, operating profit of ¥4,900mn, and ROE of 20% or above.
In the situation of the declining Japanese population and economic globalization, we at FISCO evaluate that thedirection the Company is taking for its business development is a rational strategy that anticipates future changes
in the industrial structure. Due to the impact of the coronavirus, the growth of net sales has temporarily stalled,
but there has been no change to the evaluation of the Company’s medium- to long-term growth potential. Goingforward, it is aiming to respond to new technological fields in which demand is growing, including by progressing
new businesses (in the agriculture- and nursing care-related fields), and it would seem that the point to focus on
going forward will be how it will connect this to sustainable growth. We will also need to continue to pay attention
to M&A that utilizes its solid financial foundation.
Key Points
In FY12/20, sales declined slightly due to the impact of the coronavirus, but still secured an increase in ordinary
profit by reducing costs• The mobilization rate is currently recovering, mainly in strongly performing fields such as semiconductors,
medical-related, and software development• The FY12/21 results forecasts are for major increases in sales and profits, and the outlook is for a return to a
growth path in the medium term
• It is progressing the eleventh five-year plan’s qualitative target to “promote the Reinvestment of Management
Resources toward the New Industrial Revolution.” Its policy is to actively work toward the SDGs (Sustainable
Development Goals) in fields related to agriculture and nursing care by leading the times to promote theactivities of global human resources.
•

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02 22

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

8-Apr.-2021
https://www.alpsgiken.co.jp/english/index.html

Summary

Results trends
Net sales (left)（¥mn）
50,000Operating income (right)

4,014
40,000

4,000
3,640

3,586

（¥mn）
5,000

4,000

3,238
30,0003,000

20,00030,26032,78136,37135,75340,00010,000

2,000

1,000

0

0
FY12/17

FY12/18

FY12/19

FY12/20

FY12/21 E

Source: Prepared by FISCO from the Company’s financial results█ Company profile
From its predecessor of a design office, it has become a groupof high-level engineers that provides technologies according tocustomer requests
1. Company profile
The Company is a comprehensive engineering outsourcing company that provides advanced technological services
to major manufacturing companies in fields such as machinery, electricity and electronics, software, IT, and chemistry.
Its features include that unlike fixed-term employment-based employment agencies, the Company only employs
full-time engineers*, and it is a group of highly skilled engineers specializing in upstream processes, such as
development and design.
*	For example, even during recession periods such as the bankruptcy of Lehman Brothers, it has not dismissed a single
employee.

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03 22

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

8-Apr.-2021
https://www.alpsgiken.co.jp/english/index.html

Company profile

Based on its “Heart to Heart” corporate philosophy, consistently since its foundation the Company has focused onhuman education from the standpoint of maintaining the highest levels among its employees not only as engineers,
but also as members of society, in addition to strengthening their technical abilities. In particular, its strengths include
that it has a corporate organizational culture that produces high-quality human resources and an original educationand training system*, and its results are steadily growing, supported by its excellent reputation among its customers
and the favorable ordering environment.
*	Broadly divided into the abilities development education system and career development support, the Company has
established an education and training system to develop human resources to have advanced technical skills and expertise,including education according to level and needs, and follow-up from career supporters (senior engineers). Moreover,long-term education and training plans become possible when the employment period is indefinite (full-time employees).

In accordance with the Revised Worker Dispatching Act (enforced on September 30, 2015), the employment
period limitation was ended for indefinite-term employment, while incidental work was also ended on the abolitionof specialized work classifications. Also, the acceptance of foreign workers (the establishment of a new residency
status) is to be expanded following the revision to the Immigration Control and Refugee Recognition Act (enforcedon April 1, 2019), and these and other revisions have been positive developments for the Company. Also, the equalpay for equal work regulation enacted in April 2020 does not have a negative effect, as since the past high unit
prices have been realized in the development and design areas.
At the end of December 2020, the Company had 3,897 engineers, and of these, 3,555 (2020 average) were
mobilized (working at customers). In FY12/20, it was able to maintain an overall high mobilization rate despite thetemporary impact of the coronavirus. Also, looking at the breakdown of assigned engineers according to the fields
of customer companies, machinery-related accounts for around 40%, while electricity and electronics-related andsoftware/IT-related are both approximately 30%. So, it is maintaining a good balance, centered on these three fields.
The Company has two business segments, the Outsourcing Business, which is mainly an assignment and outsourcing business in Japan, and the Global Business, which supports Japanese companies’ operations overseas.
The Outsourcing Business generates the majority of net sales, but the policy going forward is to grow the Global
Business, for which there is strong demand primarily from Japanese companies located in East Asia, as well as new
businesses, which are considered to have high growth potential.
In net sales by industry, 34.0% is provided by automotive-related*, in which R&D investment is active, and a totalof 36.1% by semiconductor, precision equipment and electrical machinery-related. So, its customer industries
are diverse and structured so that the Company is not easily affected by economic fluctuations. Also, recently its
market shares of strongly performing fields such as semiconductors, medical-related, and software development
have been trending upward. It also has around 700 customer companies, and the extent of its reliance on the top
10 customers for sales (mainly major manufacturers, such as Tokyo Electron Technology Solutions Ltd., Mitsubishi
Electric <6503>, Kioxia Holdings Corporation (formerly Toshiba Memory), and Tokyo Electron Miyagi Ltd.) is 18.2%,
without relying on a single company (FY12/20 result).
*	For example, even if the technological field is electrical machinery, if the final product is an EV (electric vehicle), it is classified
as “automotive-related.”

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

8-Apr.-2021
https://www.alpsgiken.co.jp/english/index.html

Company profile

Composition of net sales by industry (FY12/20 results)
Renewable energy
0.2%
Aerospace defense
2.8%

Machine tools-related
4.1%

Others
11.4%

Automotiverelated
34.0%

Softwaredevelopment
6.7%
Medical-related
6.7%

Electricity-related
7.7%
SemiconductorPrecision
relatedmachinery-related
17.7%
10.7%
Source: Prepared by FISCO from the Company’s briefing materials

2. Group structure (and bases)
In total, there are six consolidated subsidiaries: ALPS BUSINESS SERVICE CORPORATION, a provider of total
staffing services; PANA R&D CO., LTD., which joined the Group in September 2016 and carries out the assignmentof technical experts; ALPSGIKEN TAIWAN CO., LTD. (Taiwan) and Altech Shanghai Co., Ltd. (China), the two
subsidiaries that conduct the Global Business; Agri & Care Corporation, which was established in April 2018 withthe aim of entering new business fields; and Digital Spice Corporation, which joined the Group in July 2020. The
Group also includes the non-equity-method affiliate DONKEY Corporation, which received an increase in capitalin May 2020, and ALPSGIKEN MYANMAR CO., LTD., which was established in October 2020. The generation ofsynergies with high added value by these eight Group companies forms a “spiderweb-type network organization.”
In addition to the Head Office (Yokohama City), Altech Corporation Building No. 1 (Sagamihara City, formerly theback office and training center), and Altech Corporation Building No. 2 (Sagamihara City), it also has 2 techno parks
for manufacturing, 23 sales offices in Japan, and 1 overseas branch (Myanmar).

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05 22

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

Altech Corporation

8-Apr.-2021

4641 Tokyo Stock Exchange First Section

https://www.alpsgiken.co.jp/english/index.html

Company profile

Group structure (spiderweb-type network organization)• Human resource development business• Engineering business (design, manufacturing and installation of plant facilities, etc.)

ALPSGIKENMYANMARCO., LTD.

• Assignment of engineers• Human resource referrals

ALPS BUSINESSSERVICECORPORATIONALPSGIKENTAIWAN
CO., LTD.

Securing diverse humanresources with an eye to changes• Assignment of engineers• Outsourcing• Contracting• Engineering business(design, manufacturing and installation of plant facilities, etc.)• Human resource services

Business expansion
within Southeast Asia

• Engineering business(design, manufacturing and installation of plant facilities, etc.)• Human resource services

AltechCorporation

PANA R&D
CO., LTD.

Strengthening standing
in the manufacturing field

AltechShanghaiCo., Ltd.

Solving problems
in the agriculture industry• Outsourcing business in the agriculture and nursing care fields• Assignment of engineers• Software development• Design and manufacturing

Agri & Care
Corporation

Digital SpiceCorporation

DONKEY Corporation(affiliate: non-consolidated)• Development, research and sales of agriculture robots, provision of data

Source: Reprinted from the Company’s briefing materials

3. Business overview(1) Outsourcing BusinessThis is the Company’s core business. It specializes in the development and design fields, which are manufacturing
upstream processes, and it positions the provision of high-level technological services by design and development
engineers as the center of its business model.
The Company provides services in the form of assignment engineers and outsourcing, and its engineers
demonstrate high-level performance when responding to a wide variety of customer needs with applicable form.
Assignment services take the form of spot assignments (assignment of a single engineer) and team assignments(assignment of a team of engineers whose members have various high-level skills and who conduct productdesign and development work). The outsourcing services take the form of on-site (the engineer is stationed at
the customer’s site) and off-site (the engineer returns to the Company’s techno park or other site) for project
outsourcing (outsourcing of design, prototyping, manufacturing, and evaluation, either on a single or collective
contract basis).
Since it was founded as a design office, the Company has met the technical needs of its customers in the fieldof mechatronics through its concept of “machinery and electrical integrated design.” In particular, it utilizes its
strength of having a unique business form with its own manufacturing bases (own factories), and the Group as awhole has in place a structure able to handle all of the manufacturing processes, from development, prototyping,
manufacturing to evaluation. Even within this structure, the Company’s main area of technological expertise is
upstream processes, where it possesses competitive advantages in the processes requiring high-level technological capabilities, including basic research, product planning, concept design, detailed and mass production
design, prototypes and experiments, and evaluation and analysis.

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06 22

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

8-Apr.-2021
https://www.alpsgiken.co.jp/english/index.html

Company profile

The central areas of the technology field include machinery design, electricity and electronics design, softwaredevelopment, and chemistry. Alongside the transition to a high-level network society, the priority items havebecome the development and design of a variety of advanced technologies such as for IoT and AI, 3D-CAD
for which further demand is expected, CAE technologies, and aerospace-related, medical-related, and robot
development technologies. Therefore, the Company’s customer companies are spread across a wide range ofindustries, including automotive, semiconductors and LSI, industrial equipment, digital precision equipment,
aerospace, space and defense, and medical and welfare equipment.
(2) Global Business
The Company currently has three overseas subsidiaries, ALPSGIKEN TAIWAN CO., LTD. in Taiwan, Altech
Shanghai Co., Ltd. in China, and ALPSGIKEN MYANMAR CO., LTD., which was established in October 2020. In
addition to work to install production facilities and other facilities for Japanese companies overseas and providing
maintenance and ancillary human resource services, ALPSGIKEN MYANMAR CO., LTD. is conducting a businessto develop human resources who can be active in various fields, including the technologies, agriculture and nursing
care fields, through the management of the Altech Higher Vocational Training College. Within the advance ofeconomic globalization, one strategic axis is expanding the Global Business.
(3) New businesses (agriculture- and nursing care-related fields)
These businesses are being developed by Agri & Care, which was established in April 2018. As they have only
just been launched, at the current point in time, they are included in the Outsourcing Business segment. The goal
is to create a new model for the worker assignment markets for the agriculture-related field, which is a growthindustry, and the nursing care-related field, where the shortage of human resources is conspicuous. It is said thatin these fields, the keys are introducing state-of-the-art technologies, such as AI, IoT, and robots, and utilizing anoverseas labor force, and the Company’s strategy seems to be to aim for the first-mover advantage in fields thatutilize its advanced technological capabilities and expertise in developing human resources (including recruitmentof global human resources) that it has cultivated up to the present time.
4. History
The Company’s predecessor, the Matsui Design Office, was founded in 1968 based on the concept of “mechanicaland electrical integrated design” of its founder, Toshio Matsui. At that time, electrical design and mechanical design
were conducted separately, and to solve the various problems that arose from this, he proposed “mechanical andelectrical integrated design” to customer companies as a proprietary and innovative method. The Company has
encountered various difficulties, including the oil crises, but through constant efforts it has steadily gained an excellent reputation among its customers for being a comprehensive engineering outsourcer “that provides technologies
according to customer requests.” Further, under the leadership of the current President and Representative Director
Atsushi Imamura, it is aiming to improve results and expand its business, including by focusing on training humanresources who are specialized in upstream processes, such as development and design, and the early mobilizationof new graduate engineers.

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

8-Apr.-2021
https://www.alpsgiken.co.jp/english/index.html

Company profile

History
Date
July 1968
January 1971

Major event
Matsui Design Office was founded in Sobudai, Sagamihara City, Kanagawa Prefecture
Started the first five-year plan, “Develop the Company”
Renamed the Matsui Design Office as Altech Inc., and established it in Sobudai, Sagamihara City, Kanagawa Prefecture

July 1973

Started the second five-year plan, “Increase Business with Prime Customers and Maintain Internal Capital”

July 1978

Started the third five-year plan, “Implement an Institutionalization of the Company and Improve Technical Capabilities”

January 1981

Moved head office to Kyowa, Sagamihara City, Kanagawa Prefecture

March 1981

Reorganized the organization and transferred it to Altech Corporation

July 1983

Started the fourth five-year plan, “To be an International company and Develop Human Resources”

April 1984

Opened the Tohoku business office in Koriyama City, Fukushima Prefecture

April 1985

Opened the Shinshu business office in Shiojiri City, Nagano Prefecture

July 1985

Constructed a building in Nishi-Hashimoto, Sagamihara City, Kanagawa Prefecture and relocation of Head Office toFebruary 1986

Established Kita Kanto business office in Fukaya City, Saitama Prefecture

April 1986

Established subsidiary Technical Training Center CO., LTD. (currently, ALPS BUSINESS SERVICE CORPORATION) from thetechnical training department

July 1988

Started the fifth five-year plan, “Restructuring of the Organization and Developing the Company’s own Technology.”

December 1989
October 1990

Established Tateshina Techno Park in Chino City, Nagano Prefecture, started production of in-house developed products and thedesign and production of precision machinery
Adopted a divisional organization structure to utilize profit center management and accounting systems.
Established six business division below the Tohoku business division

July 1993

Started the sixth five-year plan, “Nurture High-quality Human Resources for High-quality Companies”

June 1996

Altech is listed on the OTC market of the Japan Securities Dealers Association (currently, JASDAQ)
Increased capital to ¥832,619,000

July 1997

Increased capital to ¥1,502,219,000

January 1998

July 1998

The Tokyo Business Division was separated from the Kanto Division, and the West Japan Division divided into the Osaka Division,
the Nagoya Division and the Kyushu Division, and the Tateshina Techno Park was newly established from the Chubu Division. In
addition to Tohoku Division, the Company became an eight-business division structure
Started the seventh five-year plan, “Restructuring our Business Field and our Core Competencies.”

September 1998

Completed the new building of Chubu business division as own property in Shiojiri City, Nagano Prefecture

December 1998

Established the Taiwanese subsidiary (currently, ALPSGIKEN TAIWAN CO., LTD.), in Taipei City, Taiwan

October 1999
July 2000
September 2000
July 2001
March 2003
July 2003
October 2004
December 2004

Utsunomiya Factory (now Utsunomiya Techno Park) opened in Yaita City, Tochigi prefecture
Tateshina Techno Park No. 2 factory completed
Listed on the second section of the Tokyo Stock Exchange (listing date September 28, 2000)
Completed a new building and the Training Center
Relocated the Head Office
Introduced a business headquarters system from the business division system (four blocks nationwide)
Started the eighth five-year plan, “Creation of New Corporate Value”
Entered-into a technical alliance with Qingdao University of Science Technology in China, opened the “Machinery Design
Education Program”
Listed on the Tokyo Stock Exchange First Section. (first section designation date, December 1, 2004)

July 2005

Introduced the central organization structure to upgrade risk management capabilities.

April 2006

Entered-into a technical alliance with China University of Petroleum, established the China University of Petroleum ALPS
International Engineer Education Center

July 2006

Issued 1st unsecured convertible bond type bonds with stock acquisition rights of ¥2 billion

January 2007

Opened the Atsugi Sales OfficeFebruary 2007

Participated in the establishment of the Nippon Engineering Outsourcing Association (currently, NEOA (public interest incorporated
association))

March 2007
July 2007
October, 2007
July 2008
January 2009

Established subsidiary ALTECH QINGDAO CO., LTD. in Qingdao City, China
Opened the ALPS Qingdao Education Development Center (Qingdao City, China)
Opened the Tsukuba Sales Office (currently, the Hitachi Sales Office)Started the ninth five-year plan “Leap to be a Leading Company”
Established the subsidiary Altech Forest Corporation.

March 2009

Opened the Takasaki Sales Office

March 2010

Established the subsidiary Altech Shanghai CO., LTD. (CHINA) in Shanghai, China

March 2011

Relocated Head Office to Minato Mirai, Nishi Ward, Yokohama City, Kanagawa Prefecture
Opened the Hitachi Sales OfficeFebruary 2012
August 2012

Opened the Kyoto Sales Office
Established the subsidiary Alps Career Designing Corporation in Chiyoda Ward, Tokyo

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08 22

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

8-Apr.-2021
https://www.alpsgiken.co.jp/english/index.html

Company profile

Date
July 2013
December 2014
April 2015
September 2016
April 2017
September 2017

Major event
Started the tenth five-year plan “Expansion of Enterprise Scale through Innovation”~ Accelerate growth as we move toward our 50th anniversary ~Subsidiary Altech Forest Corporation removed from the scope of consolidation on the transfer of shares
Opened Yangon branch office in Myanmar (Yangon city)
Made PANA R&D CO., LTD. a consolidated subsidiary
Alps Business Services Corporation merged with Alps Career Designing Cooporation
Start of broadcasts of TV commercials
Divided the Nagoya Sales Office into the Nagoya Office I and the Nagoya Office II, and opened the Himeji Sales Office

April 2018

Established Agri & Care Corporation in order to enter-into new business fields (agriculture- and nursing care-related fields)

July 2018

Started eleventh five-year plan, the Reinvestment of Management Resources toward the New Industrial Revolution

September 2018

Opened the Shizuoka Sales Office, completed the Altech Corporation Building No. 2

May 2020

Conducted a capital increase for DONKEY Corporation and made it an affiliate

July 2020

Made Digital Spice Corporation a consolidated subsidiary (capital: ¥27,500,000)

October 2020

Established the subsidiary ALPSGIKEN MYANMAR CO., LTD. in Myanmar (Yangon City)

Source: Prepared by FISCO from the Company’s website█ Business performance
Increasing the number of mobilized employees by actively recruiting
new graduates and mobilizing them at an early stage, while thegrowth in results is being driven by improvement in the contract unit
price
1. Trends in past results (consolidated)
Looking at results up to the present time, we see that they have steadily grown alongside the increase in the numberof engineer employees. In particular, since FY12/14, despite the ongoing severe recruitment environment, theCompany has still been able to recruit around 250 new graduates a year and realize their early mobilization, andthis has driven the growth in results. It can be said that recruiting around 250 new graduates every year and around80 global personnel in fields with high levels of specialism, and then completing their training at an early stage by
promoting the team formation*1 and maintaining a high mobilization rate is a growth model that only the Company iscapable of. For the contract unit price*2 also, a performance indicator just as important as the number of mobilized
employees, the market value is steadily rising every year from the skills development programs and planned rotations
based on the carrier plans of each worker. Moreover, the collaboration with consolidated subsidiary ALPS BUSINESSSERVICE, expansion of overseas business, and performance of PANA R&D and Agri & Care contributed to thegrowth in the consolidated results. Even in FY12/20 when results were impacted by the coronavirus, there wereno major changes to the trends of the performance indicators that the Company prioritizes, which can be said toconfirm the robustness of its businesses.
*1	By utilizing team assignments (consisting of multiple people), new employees can work while being guided, educatedand trained by senior engineers, enabling a strategy for their early mobilization. It seems that this framework is also highly
evaluated by customers, as it gives them peace of mind.
*2	The unit price per hour based on the contract with the customer. Unlike the actual unit price that constitutes sales, itdoes not include overtime.

In profit-loss, profits have trended upward alongside the growth in net sales. The operating profit margin has also
improved, and in the last few years, it has trended at a high level of above 10%.

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09 22

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

Altech Corporation

8-Apr.-2021

4641 Tokyo Stock Exchange First Section

https://www.alpsgiken.co.jp/english/index.html

Business performance

For the Company’s financial condition, total assets grew following the increases in cash and deposits and otheritems, and while the equity ratio is trending downward slightly, it remains at a level of above 60%. On the other
hand, ROE, which indicates capital efficiency, is rising year by year, and in FY12/17, it reached a level of above
20%. Therefore, the Company’s financial condition can be evaluated as being extremely good. It also has plentiful
liquidity on hand (cash and deposits), which serves as a buffer against unforeseen circumstances and expands therange of strategies it can adopt for growth, so it will be necessary to pay attention to M&A and other developmentsin the future.

Trends in net sales and operating profit margin (consolidated)
Net sales(left)（¥mn）

Operating profit margin(right)（%）

40,000

10.7

11.0

10.9

10.7

12.0
10.2

10.0

9.5
8.1

30,0009.0

20,00022,723

20,16910,00026,74332,78130,26036,371

6.0

40,00035,7533.0

00.0
FY12/14

FY12/15

FY12/16 FY12/17

FY12/18 FY12/19

FY12/20 FY12/21 E

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

Trends in the number of new graduate recruits and engineers(stand-alone basis)(people)New graduate recruits (left)(people)Engineers (right)

400

5,000

320

3,518
2,897

240

2,330

3,897

4,000

3,175

2,596

3,000
314

160
257

80

3,783

264

229

288

233

2,000

242

1,000

0

0
FY12/14

FY12/15

FY12/16

FY12/17

FY12/18

FY12/19

FY12/20

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

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

10 22

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

Altech Corporation

8-Apr.-2021

4641 Tokyo Stock Exchange First Section

https://www.alpsgiken.co.jp/english/index.html

Business performance

Trends in equity ratio and ROE
Equity ratio

（%）

ROE

80.0

67.9

66.1

70.0

65.8

66.6
61.1

62.4

60.7

25.6

24.6

FY12/19

FY12/20

60.0
50.0
40.0
30.0

20.0

14.4

15.5

FY12/14

FY12/15

19.4

20.5

FY12/16

FY12/17

23.3

10.0
0.0
FY12/18

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

In FY12/20, although sales declined slightly due to the impact of thecoronavirus, still realized an increase in ordinary profit, including by
reducing costs. The mobilization rate, which temporarily declined, isgradually recovering
2. Overview of FY12/20 results
In the FY12/20 consolidated results, net sales decreased 1.7% YoY to ¥35,753mn, operating profit declined 9.3%
to ¥3,640mn, ordinary profit increased 12.1% to ¥4,595mn, and profit attributable to owners of parent grew 5.1%
to ¥3,057mn. So, although net sales decreased slightly and operating profit declined, the Company was still able
to secure an increase in profits at the ordinary profit stage.
For net sales, the effects of the addition of Digital Spice, which was made a consolidated subsidiary on July 2020*,
and the growth of the results of Agri & Care, which is conducting new businesses, both contributed. However, it fell
short of the target due to the coronavirus causing a decline in mobilization hours (increase in temporary closures,
restrictions on overtime, etc.) and decline in sales from the Global Business. Also, the number of working hours did
not grow as much as expected due to the decline of the mobilization rate because of the impact of the coronavirus,
and this was a factor causing results to be below forecast. However, the mobilization rate is currently gradually
recovering.
*	At FISCO, we estimate this to be an increase factor of slightly less than ¥500mn.

In profits, profits were kept down by the decline in sales, but the Company reduced SG&A expenses and allocatedemployment adjustment subsidies as cost of sales to maintain employment, and it was able to secure an increase inprofits at the ordinary profit stage. In particular, the reduction in costs through the proactive cost-cutting measuresand the effects of anti-infection measures (including not holding training and events) can be said to have contributed
greatly to the increase in profits, and the ordinary profit margin improved significantly to 12.9% (11.3% in the previous
period).
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11 22

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

Altech Corporation

8-Apr.-2021

4641 Tokyo Stock Exchange First Section

https://www.alpsgiken.co.jp/english/index.html

Business performance

Financially, total assets were up 7.8% compared to the end of the previous fiscal year to ¥20,996mn, mainly due
to the increase in cash and deposits. Shareholders’ equity increased 5.0% to ¥12,746mn, including due to theaccumulation of internal reserves, and therefore the equity ratio was maintained at a level of above 60%, at 60.7%(62.4% in the previous period).
Overview of FY12/20 results(¥mn)
FY12/19
Results

FY12/20

% of
sales

Results

36,371

YoY

% of
sales

ChangeRate ofchangeForecast

% of
sales

Difference

Achievement
rate

-617

-1.7%

38,320-2,56693.3%

Outsourcing Business

33,911

93.2%

34,715

97.1%

804

2.4%

-

-

-

-

Global Business

2,460

6.8%

1,038

2.9%

-1,421-57.8%----

Cost of sales

27,173

74.7%

27,289

76.3%

116

0.4%

-

-

-

-

SG&A expenses

5,183

14.3%

4,823

13.5%

-359

-6.9%

-

-

-

-

Operating profit

4,014

11.0%

3,640

10.2%

-374

-9.3%

4,270

11.1%

-629

85.3%

3,831

11.3%

3,430

9.9%

-401

-10.5%

-

-

-

-

180

7.3%

207

20.0%

27

15.1%

-

-

-

-

Ordinary profit

4,098

11.3%

4,595

12.9%

497

12.1%

4,270

11.1%

325

107.6%

Profit attributable to owners ofparent

2,908

8.0%

3,057

8.6%

149

5.1%

2,910

7.6%

147

105.1%

Number of engineers

3,783

3,897

114

Number of mobilized employees

3,506

3,555

49

Mobilization hours*1

165

162

-3

Contract unit price*2

4,027

4,066

39

Net sales

Outsourcing Business
Global Business

35,753

FY12/21*1 Hours worked per month, corresponding to work as an engineer*2 The unit price per hour based on the contract with the customer. Unlike the actual unit price that constitutes sales, it does not include overtime.
Note: Percentages related to operating profit represent the ratio of operating profit to net sales for each segment
Source: Prepared by FISCO from the Company’s financial results and briefing materials

FY12/20 financial condition
(¥mn)

YoY

End-FY12/19

End-FY12/20

13,405

14,657

1,252

9.3%

Cash and deposits

7,442

8,619

1,178

15.8%

Notes and accounts receivable - trade

Current assets

ChangeRate of change

5,382

5,227

-154

-2.9%

Work in process

155

267

112

72.0%

Non-current assets

6,066

6,339

273

4.5%

Goodwill

277

411

133

48.3%

Total assets

19,471

20,996

1,525

7.8%

Current liabilities

6,988

7,768

778

11.2%

Accounts payable - trade

1,559

1,630

71

4.6%

Short-term loans payable

700

1,058

358

51.2%

317

457

140

44.2%

Total liabilities

7,305

8,225

920

12.6%

Net assets

12,165

12,771605

5.0%

12,142

12,746603

5.0%

Current ratio

191.8%

188.7%-3.1pt-Equity ratio

62.4%

60.7%

-1.7pt-Interest-bearing debt ratio

5.8%

9.2%

3.4pt

-

Non-current liabilities

Shareholders’ equity

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

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12 22

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

8-Apr.-2021
https://www.alpsgiken.co.jp/english/index.html

Business performance

Overview of each segment is outlined below.
(1) Outsourcing BusinessNet sales increased 2.4% YoY to ¥34,715mn and segment profit decreased 10.5% to ¥3,430mn. The addition of
the results of Digital Spice, which was made a consolidated subsidiary in July 2020, and the growth of the resultsof Agri & Care, which conducts new businesses, both contributed to the increase in sales. However, looking at theCompany on a stand-alone basis, net sales declined slightly, down 0.2% YoY, due to the decrease in mobilization
hours (increase in temporary closures, restrictions on overtime, etc.) because of the impact of the coronavirus.
Each of the performance indicators (stand-alone) that the Company prioritizes increased, with 3,897 engineers
at the end of the period (up 114 engineers compared to the end of the previous period), an average of 3,555
mobilized engineers (up 49 engineers), and an average contract unit price of ¥4,066 (up ¥39). However, averagemobilization hours per engineer declined to 162 hours (down 3 hours YoY). There were two main reasons for thisdecrease in mobilization hours: 1) a trend-type structural factor due to workstyle reforms in the last few years and2) the impact of the coronavirus, a temporary, special factor. The second factor is currently having a significant
impact, so it is considered that the downward trend will halt once the coronavirus situation settles down. Also, thereason why the increase in the average number of mobilized engineers was only 49 engineers YoY was that delays
occurred in decisions to mobilize new graduate recruits (233 people in total) due to the impact of the coronavirus.
However, it seems that the mobilization rate, which temporarily declined, is gradually recovering*. By industry, thecomposition ratios are increasing in strongly performing fields in which demand is growing during the coronavirus
pandemic, such as semiconductors, medical-related, and software development.
*	The annual average mobilization rate declined to 92.1% (95.4% in the previous period). In particular, the average fell to89.2% in 2Q, but recovered to 92.2% in 4Q.

In the Group companies, results were basically strong in ALPS BUSINESS SERVICE and PANA R&D. In addition,in Agri & Care, which is conducting new businesses, results steadily grew in the previously launched agriculture-related business due to the assignments for agriculture (farm work) workers, for which demand is increasing
on a nationwide scale.
For profits, although profit decreased due to the downward swing in the mobilization rate caused by the coronavirus, the Company secured an overall profit due to reductions in SG&A expenses and using employment
adjustment subsidies to cover costs to maintain employment.
(2) Global BusinessNet sales decreased 57.8% YoY to ¥1,038mn and segment profit increased 15.1% to ¥207mn, so although sales
declined, profits grew. Net sales declined compared to FY12/19, in which there was a large-scale project in theengineering business. But in profits, an increase in profits was secured, mainly due to the contribution of highly
profitable human resource services.
3. Summary of FY12/20 results
To summarize FY12/20, the Company can be highly evaluated on the point of securing an increase in ordinary profit,
mainly by reducing SG&A expenses, while increasing the number of engineers through active, continuous recruitment
even during the coronavirus pandemic. Also, in a situation in which demand is growing in strongly performing fields
such as semiconductors, medical-related, and software development, the mobilization rate, which had temporarily
declined, has been gradually recovering. In addition, new businesses (particularly in the agriculture-related field)
have made steady starts, which can be said to have created a solid foothold for the future.

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13 22

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

8-Apr.-2021
https://www.alpsgiken.co.jp/english/index.html█ Main activities and achievements
While implementing measures in response to the coronavirus,
strengthened standing in the manufacturing field through M&A,
while a new business (agriculture-related field) is also steadily
achieving results
1. Measures in response to the coronavirus
In order to respond to the coronavirus pandemic, the Company established a response headquarters and is implementing measures with the safety of customers (assignment destinations) and employees as the highest priority.
In particular, in addition to responding flexibly and speedily to conditions and requests of customers (assignment
destinations), it is promoting employees work from home and commute outside peak hours, prohibiting overseas
business trips in principle, utilizing video conferencing, and conducting online training. In such ways, it intends
to continue to responsively conduct measures for changes to workstyles and operations until the time when thecoronavirus pandemic is considered to have settled down. It is also using this opportunity to work to convert to a
structure that is adapted to the new normal, including conducting online recruitment, enhancing online courses,
and responding to remote working.
2. Recruitment results
For the recruitment of human resources who will drive the Company’s growth, it recruited 233 new graduates (314people in the previous fiscal year) and 100 global human resources* (80 people in the previous fiscal year) in 2020.
However, the recruitment of mid-career hires which put a priority on quality, was slightly less than in the previous
fiscal year at 80 people (150 people in the previous period), but overall recruitment can be said to have been steady,even during the coronavirus pandemic. It seems that it intends to recruit more new graduate recruits in 2021 thanin 2020 through progressing new recruitment methods, including online recruitment. In general, the recruitment
environment can be said to be difficult, but an advantage for the Company is that the awareness of job seekers
has gradually changed from being completely orientated toward manufacturers to being orientated toward mainly
prioritizing career formation. It seems that job seekers feel that the Company is meeting their needs for this throughits efforts that include improving name recognition through active advertising activities and communicating the appealof working for it through various recruitment activities. Moreover, its subsidiaries, ALPS BUSINESS SERVICE and
PANA R&D, seem to have achieved significant results for recruitment by strengthening collaboration within the Group.
*	Of whom, it seems it recruited approximately 50 global engineers (50 people in the previous fiscal year) and around 50
agriculture (farm work) workers (30 people in the previous fiscal year) through the newly established residency status.

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14 22

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

8-Apr.-2021
https://www.alpsgiken.co.jp/english/index.html

Main activities and achievements

3. Strengthening the Group structure
Through a joint investment by five companies, including the Company, DONKEY*1 was established in March 2020
to conduct work from R&D through to sales of autonomous multifunctional robots and made it an affiliate in May
2020 (equity-method affiliate). The Company then acquired all of the shares of Digital Spice*2 in July 2020, and newly
added to the Group (as a consolidated subsidiary). Moreover, in October 2020, ALPSGIKEN MYANMAR CO., LTD.
was established to conduct a business to develop human resources who can be active in various fields, including thetechnologies, agriculture and nursing care fields, through the management of the Altech Higher Vocational Training
College. So the Company also implemented measures for a new Group structure.
*1	T he Company is participating in and creating a business for the Next-Generation Agricultural Robot Development
Consortium launched by The Japan Research Institute, Limited and Keio University in November 2017. The Company’s
policy is to contribute to reducing the labor burden and improving efficiency through the provision of small, autonomous,
multifunctional robots and related services toward solving various problems in domestic agriculture, which is facing
problems including a labor shortage and declining profitability. In addition to the Company, the consortium is being
conducted through a joint investment by T.D.I. CO., LTD., The Japan Research Institute, YUASA TRADING CO., LTD.
<8074>, and Watanabe Pipe Co., Ltd. (in the order of the Japanese alphabet).
*2	Over approximately 20 years, it has been involved in outsourcing operations and assigning engineers in the fields ofmachinery, electricity and electronics, and software, and with the motto of “From Shinshu to the World,” it has carriedout a series of operations for design and development, with digital technologies as its core technologies. In recent
years, it has supported customers’ manufacturing as a group of professionals with advanced technological capabilities,
including cooperating in the development of Hayabusa, the small-scale exploration spacecraft. Through the Company’s
manufacturing centers and the creation of synergies (human resources, technologies, exchanges, etc.) and the coalescingof their expertise, the aims are to create high added value and to expand the manufacturing areas.

4. Progress made in new businesses (agriculture- and nursing care-related fields)
In new business fields, the agriculture-related business was launched first, and in September 2019, a Group humanresources assignment company was the first company in all of Japan to acquire the new “Specified Skilled Worker(i)” residency status for foreigners, and it has been assigning agri-tech and agriculture (farm work) workers from
China, Myanmar, and Vietnam to various work nationwide. On entering 2020, restrictions were placed on accepting
overseas human resources due to the impact of the coronavirus. But within Japan, the shortage of agriculture(farm work) workers has become a conspicuous problem, and by steadily progressing the training and assigning ofoverseas human resources that were accepted before the coronavirus started to spread, the Group’s track recordof transactions nationwide has been steadily increasing. It is working to acquire new customers for assignments inadvance of the restart of the acceptance of overseas human resources.
Track record of transactions in the agriculture business

Source: From the Company’s briefing materials

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15 22

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

8-Apr.-2021
https://www.alpsgiken.co.jp/english/index.html█ Business outlook
Outlook is to return to a growth path in the medium term througha significant increase in sales and an increase in operating profit in
FY12/21
1. Outlook for FY12/21
For the FY12/21 results, the Company is forecasting a major increase in net sales and operating profit, with net
sales to increase 11.9% YoY to ¥40,000mn, operating profit to rise 9.9% to ¥4,000mn, ordinary profit to decrease
4.3% to ¥4,400mn, and profit attributable to owners of parent to grow 0.1% ¥3,060mn. Its policy is to return to a
growth track in the medium term from recovering from FY12/20 when results were impacted by the coronavirus.
Net sales are expected to grow significantly against the backdrop of strong customer needs, including for cutting-edge technologies and next-generation vehicles. In particular, although the coronavirus is expected to have an
impact to a certain extent in 1H FY12/21, it seems that a recovery toward fully fledged growth in 2H is expected. For
the Company on a stand-alone basis, the outlook is that results growth will continue to be driven by the increases
in engineers and mobilized engineers (the recovery of the mobilization rate) and improvement in the contract unit
price. (However, it has set conservative estimates due to concerns about an economic slowdown, and it seems
to be anticipating that the number of hours worked will be restricted.) The plan is for more new graduate recruits
to join the Company in April 2021 than in 2020 and to recruit 120 mid-career hires throughout the year. The planis also to recruit about 100 global human resources in total, including global engineers and agriculture (farm work)
workers. In addition, the effects of making Digital Spice a consolidated subsidiary and the growth of the results ofAgri & Care in the agriculture-related field seen in FY12/20 are expected to continue.
2. Plan for activities(1) Measures to create next-generation strengths (individual)
The Company continues to realize a virtuous circle for the three main pillars (recruitment, education, and sales)that support its growth. In particular, its policy is to recruit and train appropriately for the new normal, and aim toascertain in advance changes to technologies and industries, and to respond to growth fields.
a) Recruitment
The Company will work on measures including 1) building new recruitment channels, such as online recruitment;2) strengthening the employee referral system to acquire work-ready recruits; and 3) acquiring overseas bases
as training and recruitment candidate sites. It plans to recruit 300 new graduates in 2022 and 120 mid-careerhires in 2021.
b) Education
With the aim of educating human resources who are adapted to the new normal, the Company will work on measures including 1) enhancing online courses, 2) educating advanced human resources in cutting-edge technologies
and growth fields, and 3) conducting technology training that meets customer needs.
c) SalesAims include 1) increasing transactions with growth companies and in growth fields, 2) strengthening collaborations with engineers and proposing team recruitment, and 3) speeding up the process from proposal to closing.

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16 22

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

8-Apr.-2021
https://www.alpsgiken.co.jp/english/index.html

Business outlook(2) Measures for the Group
Measures include predicting changes before they occur and further strengthening collaboration in the Group witha sense of speed.
a) Domestic business
ALPS BUSINESS SERVICE is working to improve results and employee treatment through measures to strengthen
people and companies. On the other hand, PANA R&D is aiming to utilize its advanced technological capabilities
to expand contracts and outsourced work in growth fields, such as CASE*. Also, Agri & Care, which has made a
steady start, is aiming to strengthen its sales capabilities and improve the quality of services by following-up on
and developing overseas human resources. In Digital Spice, which has newly joined the Group, the policies are tocontinue to strengthen sales of own-brand products and to steadily implement measures for the space business.
*	An acronym for Connected, Autonomous (driving), Shared & Services (car sharing and services), and Electric (electricvehicles). It has been attracting attention as a keyword indicating the direction that the automotive industry will take onentering a new era of reforms. It can be said to be a field in which PANA R&D, whose main product is a genuine carnavigation device that requires advanced technological capabilities and reliability, is in a unique position to utilize its trackrecord and expertise.

b) Overseas businessIn addition to further expanding the existing businesses (installing production facilities, etc., for Japanese companies and others, and providing maintenance and human resource services), the Group is working to increase
recruitment through practical education. Also, for the acceptance of global human resources within Japan, it iscontinuing to strengthen recruitment and seems to be planning to work to build a foundation for the nursing carebusiness.
3. View of FISCO’s analysts
At FISCO, although the future remains unclear due to the impact of the coronavirus, we evaluate that the assumptions
for the Company’s results forecasts are sufficiently rational, including for the following reasons: 1) the R&D investmentareas that the Company is targeting are long-term investment fields directly connected to its competitiveness inthe future and in which strong demand is expected going forward; 2) even during the coronavirus pandemic, it has
expanded its business foundation, including by recruiting and educating human resources; 3) the mobilization rate
is currently recovering, mainly in strongly performing fields such as semiconductors, medical-related, and softwaredevelopment; 4) it is also working on recruitment and reforms to its educational system with an eye to the newnormal; and 5) benefits from making Digital Spice a consolidated subsidiary are expected. The point to focus on is
the progress made in the agriculture-related business, which has made a steady start. It appears that some time
will still be required before its fully fledged contribution to results, while regarding business expansion in the future, itwould seem necessary to follow up on two aspects: conditions for the recruitment and training of human resources
locally and acquisitions of customers for assignments within Japan. We shall also be paying attention to what kindof synergies are created through the collaborations with Digital Spice (collaborations for sales, expansion of the
manufacturing areas, etc.).

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17 22

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

8-Apr.-2021
https://www.alpsgiken.co.jp/english/index.html█ Medium- to long-term growth strategy
Aiming to expand the portfolio by developing new technologies
and opening up markets, while also aiming for sustainable growththrough solving societal problems
1. Medium- to long-term growth vision
The Company has explained its direction for its next business development in terms of a portfolio with 4 quadrants
divided on 2 axes, of markets and businesses / technologies, and into existing and new areas for each axis.
(1) State-of-the-art technologies’ (high-unit-price zone) development and design work (new markets,
existing business / technologies)
This is development and design work in various advanced-technology areas, including AI and IoT, robots, hybrid
and EV vehicles, aerospace-related, and medical-related, and the Company is responding to changes in technologies to meet societal needs to expand into corresponding markets. It is already actively training human resources
toward increasing the number of mobilized employees in the AI and cutting-edge technology fields.
(2) Investigating potential new businesses (new markets, new business / technologies)
The Company intends to advance various measures, including utilizing nursing care human resources, opening-up
other fields (including the agri-business), and conducting M&A. As previously mentioned, it has decided toestablish a new company for the agriculture- and nursing care-related fields, and it has begun specific measures
toward the development of a new worker assignment business.
(3) Global development (existing markets, new business / technologies)
Basically, this is the provision of services like the construction and management of production facilities locallyalongside the overseas expansion of its customer companies. For the time being, the Company’s regional focus
is on China and Asia, and it is also aiming to utilize global engineers, such as to act as bridging engineers.
(4) Provision of high-level technological services (existing markets, existing business / technologies)
These are existing services, such as for machinery design, electricity and electronics design, and development.
They are the Company’s stable source of earnings and going forward, it is aiming to strengthen the project
management structure and other structures for business expansion.
(5) Obtaining the first-mover advantage (existing markets and new businesses)
The Company will obtain the first-mover advantage from its expertise in the recruitment and training of humanresources and utilization of overseas human resources in the technologies, agriculture and nursing care fields.

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18 22

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

8-Apr.-2021
https://www.alpsgiken.co.jp/english/index.html

Medium- to long-term growth strategy

The medium- to long-term growth vision

Source: From the Company’s briefing materials

2. The medium-term management plan (rolling-type)
Since its foundation, the Company has been formulating qualitative targets for every five years and quantitative
targets for every three years (rolling targets in the medium-term management plan). On the 50th anniversary of its
foundation in July 2018, it announced the next five-year plan (updated the qualitative targets) on the fully fledged
start of the second foundation period. With the Reinvestment of Management Resources toward the New Industrial
Revolution as the theme, it is implementing the three measures described below. A point particularly worthy of praiseis that the Company is specifically conducting activities toward solving societal problems, such as investing in the
agriculture- and nursing care-related fields.
*	The Company’s Group supports the Sustainable Development Goals (SDGs) advocated by the United Nations and basedon its “Heart to Heart” management philosophy, it is aiming to contribute to the achievement of the SDGs through its
Outsourcing Business and other businesses, including by developing technologies. In August 2019, the Company newly
established a page on its website on its promotion of SDGs, while it is also listed on the website of the Ministry of Foreign
Affairs as a company that is promoting SDGs.

(1) Create sustainable competitive advantages in the outsourcing market(2) Accelerate growth and strengthen the earnings foundation by increasing investment(3) O ptimize human resource development and the organization in response to changes in the businessenvironment
In the three-year (rolling) medium-term management plan, it has set quantitative targets for FY12/23 of net salesof ¥45,660mn, operating profit of ¥4,900mn, and profit attributable to owners of parent of ¥3,280mn, while it also
intends to secure ROE of 20% or above.

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

19 22

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

8-Apr.-2021
https://www.alpsgiken.co.jp/english/index.html

Medium- to long-term growth strategy

Medium-term management plan targets
Net sales (left)
Operating income (right)
Profit attributable to owners of parent （right）
4,900
4,700

（¥mn）
50,000
4,014

（¥mn）
5,000

4,000
3,640

40,000
2,908

3,057

3,060

3,180

3,280

30,00020,000

4,000
3,000

36,37135,75340,00043,92045,66010,000

2,000
1,000

0

0
FY12/19

FY12/20

FY12/21(forecast)

FY12/22(target)FY12/23(target)Source: Prepared by FISCO from the Company’s briefing materials

3. Industry trends and the Company’s position
The number of assignment workers nationwide peaked at 2.02mn at the time of the Lehman Shock in 2008 andthen trended downward, but this decline bottomed-out in 2013 and by 2019 it had recovered to 1.56mn. Also,
due to developments such as the revisions to the Worker Dispatching Act and the introduction of the equal pay for
equal work system (both on April 1,2020)*, the environment surrounding the assignment business is approaching amajor turning point. This is that it is considered that aspects such as the technological capabilities and expertise of
the assignment employees, and what the companies that they are assigned to expect from these employees, willchange greatly in the future. Simply put, needs will be strong for human resources who possess new and advanced
technological capabilities and expertise, but work in downstream processes is likely to change greatly, dependingon economic trends and other factors.
*	The equal pay for equal work system was introduced with the aim of eliminating the unfair differences in treatment between
so-called regular employees (full-time workers recruited for an indefinite period) and non-regular employees (employees
recruited for a fixed period, part time workers, and assignment workers) working in the same company or organization.
Generally, there are concerns about the effects of introducing this system, such as that the wages of non-regular employees
will increase and that wage differences will grow among non-regular employees.

In the Company, engineers have a stable position through being recruited for an indefinite period (regular employees),
and they receive education and training to have advanced technological capabilities and expertise. Therefore, they
are trusted by customer companies. The results of the Company, which specializes in assignments of engineers
recruited for an indefinite period, are expected to grow solidly. Of course, efforts will be needed to capture customer
needs and to undertake upstream processes in industries requiring technological capabilities and expertise, suchas the electricity and machinery, automotive, aviation and space industries. But it is considered its businesses cancontinuously grow through acquiring the trust of customers, supported by long-term human resources education.

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

20 22

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

8-Apr.-2021
https://www.alpsgiken.co.jp/english/index.html

Medium- to long-term growth strategy

Also, while the number of working hours per engineer is decreasing due to the impact of workstyle reforms, thenumber of engineers being requested is increasing. In addition to supplementing the labor shortage at manufacturers,
it seems that a characteristic trend is that demand is increasing in cutting-edge technological areas that require skillsin specific technologies. Therefore, going forward, whether the Company can acquire (develop) excellent engineers
in the fields with the most cutting-edge technologies, which it has positioned as its priority fields, is likely to become
an increasingly important factor for its success in the future.
4. Points to focus on from FISCO’s analysts
In a situation of a declining population in Japan and economic globalization, at FISCO we evaluate the Company’s
strategy for the direction of its business development, of ascertaining changes to the industrial structure and societal
problems in the future, to be rational. Due to the impact of the coronavirus, the growth of net sales temporarily
stalled in FY12/20, but there has been no change to the evaluation of the Company’s medium- to long-term growthpotential. Including the progress made in new businesses, the point to focus on in the future would seem to be how
will its responses to the new technological fields in which demand is growing and its measures to solve societal
problems connect to sustainable growth. In particular, it seems that its success or failure in the agriculture- andnursing care-related fields will be determined by whether or not the Company itself can go ahead of other companies
to create new markets, and whether or not its utilization of cutting-edge technologies and accumulation of expertise
will lead not only to solving the labor-shortage problem, but also to improving productivity (and securing profitability).
So it will continue to be necessary to pay attention to M&A that leverages its solid financial foundation.

█ Shareholder return policy
Aims for a dividend payout ratio of 50% on a consolidated basis. In
FY12/20, increased the dividend by ¥5.0 compared to the forecast
for an annual dividend of ¥75.0
1. Basic dividend policy
The Company pays dividends as its policy to return profits to shareholders. It aims for a dividend payout ratio on aconsolidated basis of 50%, and its basic policy is to pay an annual dividend of ¥10.0, regardless of results.
2. Dividend trend and plan
Even during the coronavirus pandemic, profits increased more than forecast, mainly due to cost reductions.
Therefore, for the FY12/20 dividend per share, the Company upwardly revised the period-end dividend by ¥5.0
compared to the initial forecast and paid an annual ordinary dividend of ¥75.0 (interim dividend ¥35.0, period-end
dividend ¥40.0).
At the current time, for FY12/21 the Company plans to pay an annual dividend per share of ¥75.0 (interim dividendof ¥37.0 and period-end dividend of ¥38.0)*, the same amount as the previous fiscal year, (for a dividend payout
ratio of 50.1%).

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

21 22

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

8-Apr.-2021
https://www.alpsgiken.co.jp/english/index.html

Shareholder return policy

Dividend and dividend payout ratio
Conversion to before the share split / excluding commemorative dividend (left)Commemorative dividend (left)
Ordinary dividend (left)
Dividend payout ratio (right)

（¥）
180.0
74.2%
150.0
120.0

50.7%

50.1% 50.1%

90.0 (Commemorative dividendon the 45th anniversary
60
60.0 of its foundation)

30.0

28

71

50.4%

116
50.1%

140
58.6%

153.6
50.3%

165

165

90.0%
75.0%

50.3%

50.1%

98

60.0%
45.0%

10

(Commemorative
dividend on the 50th
anniversary of its
73
foundation)

45
15
30

30.0%
75

75

70

0.0

15.0%
0.0%

Note: Figures have been retroactively revised to take into account the Company having conducted a 2 for 1 share split on
January 1, 2018, and a 1.1 for 1 share split on July 1, 2019.
Source: Prepared by FISCO from the Company’s financial results█ Information security
The Company Group works on maintaining information security as a priority, because its engineers work externallyat the places to which they are assigned. Specifically, it is constructing a system to thoroughly ensure information
security through establishing a personal information protection policy, an information security basic policy, andrelated regulations, and it is managing these policies and regulations appropriately and educating all employeeson them. It also regularly provides thorough guidance on compliance with security rules at the places to which its
engineers are assigned.

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

22 22

Disclaimer
FISCO Ltd. (“FISCO”) offer stock price and index information for use under the approval of theTokyo Stock Exchange, the Osaka Stock Exchange and Nikkei Inc.
This report is provided solely for the purpose of offering information, and is not a solicitationof investment nor any other act or action.
FISCO prepared and published this report based on information which it considered reliable;
however, FISCO does not warrant the accuracy, completeness, fitness nor reliability of thecontents of this report or the said information.
The issuers’ securities, currencies, commodities, securities and other financial instruments
mentioned in this report may increase or decrease in value or lose their value due to influence
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not make any promises regarding any future outcomes. If you use this report or any information
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This report has been prepared at the request of the company subject hereto based on theprovision of information by such company through telephone interviews and the like. However,
the hypotheses, conclusions and all other contents contained herein are based on analysis
by FISCO. The contents of this report are as of the time of the preparation hereof, and are
subject to change without notice. FISCO is not obligated to update this report.
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◾ For inquiry, please contact: ◾

FISCO Ltd.
5-13-3 Minami Aoyama, Minato-ku, Tokyo, Japan 107-0062
Phone: 03-5774-2443 (IR Consulting Business Division)
Email: support@fisco.co.jp