COMPANY RESEARCH AND ANALYSIS REPORT

Altech Corporation
4641
Tokyo Stock Exchange First Section

13-Apr.-2018
FISCO Ltd. Analyst

Ikuo Shibata

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

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

13-Apr.-2018
http://www.alpsgiken.co.jp/english/index.html■ Index■Summary --------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 01
1. Company profile.............................................................................................................................. ............

01

2. Establishment of a new company ...............................................................................................................

01

3. FY12/17 consolidated results......................................................................................................................

01

4. Outlook for FY12/18 .............................. ................................................................................................ ......

02

5. Medium- to long- term growth strategy ......................................................................................................

02■Company profile --------------------------------------------------------------------------------------------------------------------------------------------------------- 03
1. Company profile.............................................................................................................................. ............

03

2. Business overview ................................ ......................................................................................................

05

3. Establishing a new company (entering-into new businesses)......................................................................

06

4. History .................................................. ......................................................................................................

06■Business performance ----------------------------------------------------------------------------------------------------------------------------------------- 08
1. Overview of the FY12/17 consolidated results ............................................................................................

08

2. Summary of FY12/17 results ................. ......................................................................................................

10

3. Trends in past results (consolidated) ...........................................................................................................

11■Business outlook ------------------------------------------------------------------------------------------------------------------------------------------------------- 13
1. Outlook for FY12/18 .............................. ................................................................................................ ......

13

2. Plan for activities ................................... ........................................................................................... ...........

13

3. Industry trend and the Company’s position.................................................................................................

15■Medium- to long-term growth strategy ----------------------------------------------------------------------------------------------- 15
1. The new medium-term management plan (2018 to 2020) ...........................................................................

15

2. Medium to long-term growth vision ...... ......................................................................................................

16■Shareholder return policy---------------------------------------------------------------------------------------------------------------------------------- 17
1. Basic dividend policy .............................................................................................................................. . . . .

17

2. Dividend trend and plan ........................ ......................................................................................................

18■Information security ----------------------------------------------------------------------------------------------------------------------------------------------- 18

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

13-Apr.-2018
http://www.alpsgiken.co.jp/english/index.html█ SummaryIn the previous fiscal period’s results, sales and profits increased
and exceeded the forecasts.
On the 50th anniversary of its foundation, the outlook is also
for record highs in the current period’s results.
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
and consistently since its foundation, it has focused on human education from the idea 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 that it the source of one of its
strengths, of producing talented human resources. The Altech Corporation Group is comprised of the Company
and four subsidiaries, and since FY12/16, it has had two business segments, the Outsourcing Business and the
Global Business.
2. Establishment of a new company
Toward realizing its medium- to long-term growth vision, the Company has decided to enter into new businesses by
establishing a new company. In the agriculture-related field, which is considered to have high growth potential, andin the nursing care-related field, where the shortage of workers is conspicuous, it is aiming to create a new model for
the worker assignment market. It is said that in these fields, the keys are introducing state-of-the-art technologies,
such as AI, IoT, and robots, and utilizing an overseas labor force, and the Company’s strategy seems to be to aim
for the first-mover advantage in fields that utilize its advanced technological capabilities and expertise in developing
human resources (including the employment of non-Japanese) that it has cultivated up to the present time. It isconsidered that a long-term perspective will be necessary for these businesses’ full-fledged contribution to results,
but as they have enormous potential, we will need to pay attention to developments in the future.
3. FY12/17 consolidated results
In the FY12/17 results, sales and profits exceeded the forecasts and grew by double digits, with net sales increasing
13.1% YoY to ¥30,260mn and operating income rising 13.3% to ¥3,238mn. Against the backdrop of the favorable
ordering environment, results in the mainstay Outsourcing Business grew significantly, due to the high mobilization
rate being maintained, the rise in the contract unit price, and the increase in the number of mobilized employees.
Also, the full fiscal year contribution of PANA R&D, which entered the scope of consolidation in September 2016,
was a factor behind the higher sales. In terms of profits, in addition to the rise in cost prices in the Global Businessdue to temporary factors, costs relating to the 50th anniversary of its foundation and advertising costs also rose,
but the Company still realized an increase in operating income from the effects of the higher sales, and it kept theoperating margin the same as in the previous fiscal year, at 10.7%.

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01 18

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

13-Apr.-2018
http://www.alpsgiken.co.jp/english/index.html

Summary

4. Outlook for FY12/18
On the 50th anniversary of its foundation, the Company is forecasting new record highs for the FY12/18 consolidated
results, of net sales to increase 7.1% YoY to ¥32,400mn and operating income to rise 5.9% to ¥3,430mn. The reason
why the growth in results will be somewhat moderate compared to in the previous fiscal year is that the effectsof PANA R&D entering the scope of consolidation will have run their course, and an evaluation that growth will besustained at a cruising pace seems reasonable. In terms of profit-loss conditions also, although it is anticipated thatcosts will increase in relation to the operations to mark the 50th anniversary of its foundation, they will be absorbedby the higher sales and the increase in operating income will be maintained, while the operating margin is forecast
to remain basically unchanged YoY.
5. Medium- to long- term growth strategy
The Company announced its quantitative targets in the medium-term management rolling plan for the three years
from FY12/18 to FY12/20. The final targets in FY12/20 are for net sales of ¥37,200mn and operating income of¥3,840mn. It also forecasts that ROE will be maintained above 18%.
Moreover, as its medium- to long-term growth vision, the Company has set out a strategy on four axes, of 1)
strengthening existing businesses, 2) responding to state-of-the-art technologies, 3) developing globally, and 4)
taking on the challenge of new businesses. At FISCO, within a situation of the declining Japanese population andadvancing economic globalization, we evaluate that the Company’s direction for business development is a rational
strategy that has an eye to the changes to the industrial structure in the future. The point to focus on going forward
would seem to be how the Company will respond to the new technological fields where demand is increasing,including the progress in the new businesses (the nursing care and agriculture fields), and how it will connect these
responses to sustainable growth. We must also continue to pay attention to M&A that utilizes its strong financialbase.
Key Points
A group of highly skilled engineers specializing in upstream processes, including development and design
In the FY12/17 results, achieved higher sales and profits above the forecasts due to the increase in mobilized
employees• Aiming to enter into the growth fields of agriculture-related and nursing care-related through establishing a newcompany• Plans to commemorate its 50th anniversary in the FY12/18 with a record-high results (and dividend)• Aiming for sustainable growth through a strategy on the four axes of strengthening existing businesses,
responding to state-of-the-art technologies, developing globally, and taking on the challenge of new businesses••

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

13-Apr.-2018
http://www.alpsgiken.co.jp/english/index.html

Summary㻾㼑㼟㼡㼘㼠㼟㻌㼠㼞㼑㼚㼐㼟㻔㼰㼙㼚㻕㻺㼑㼠㻌㼟㼍㼘㼑㼟㻌㻔㼘㼑㼒㼠㻕㻟㻡㻘㻜㻜㻜
㻟㻘㻞㻟㻤㻟㻜㻘㻜㻜㻜

㻔㼰㼙㼚㻕㻻㼜㼑㼞㼍㼠㼕㼚㼓㻌㼕㼚㼏㼛㼙㼑㻌㻔㼞㼕㼓㼔㼠㻕
㻟㻘㻠㻟㻜

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㻝㻘㻢㻞㻢
㻝㻡㻘㻜㻜㻜
㻝㻜㻘㻜㻜㻜

㻞㻜㻘㻝㻢㻥

㻞㻞㻘㻣㻞㻟

㻠㻘㻜㻜㻜㻞㻢㻘㻣㻠㻟

㻟㻜㻘㻞㻢㻜

㻟㻞㻘㻠㻜㻜

㻞㻘㻜㻜㻜
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㻜

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㻲㼅㻝㻞㻛㻝㻠

㻲㼅㻝㻞㻛㻝㻡

㻲㼅㻝㻞㻛㻝㻢

㻲㼅㻝㻞㻛㻝㻣

㻲㼅㻝㻞㻛㻝㻤㻌㻱

Source: Prepared by FISCO from the Company’s financial results█ Company profile
From its predecessor of a design office, it has become a group of
high-level engineers that provides technologies according
to customer 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.

Based on its “Heart to Heart” corporate philosophy, consistently since its foundation the Company has focused onhuman education from the idea of maintaining the highest levels among its employees not only as engineers, butalso 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 dividend into the abilities development education system and career development support, the Company has establishedan education and training system to develop human resources to have advanced technical skills and expertise, including educationaccording 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).

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03 18

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

13-Apr.-2018
http://www.alpsgiken.co.jp/english/index.html

Company profile

In accordance with the Revised Worker Dispatching Act (enforced September 30, 2015), the employment-period
limitation was ended for indefinite-term employment, while incidental work was also ended on the abolition of
specialized work classifications, and these and other revisions have been positive developments for the Company.
At the end of December 2017, the Company had 3,175 engineers, and of these, 3,088 were mobilized (working at
customers), and it is maintaining a high mobilization rate. Also, looking at the percentages of engineers it assigns
according to the fields of customer companies, machinery-related accounts for around 40%, while electricity andelectronics-related and software/IT related are both approximately 30%. So it is maintaining a good balance,
centered on these 3 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 contributes 95% of net sales, but the policy is to grow the Global Business greatly in the future.
In net sales by industry, 40.0% is provided by automotive-related*, in which R&D investment is active, and a totalof 36.4% by electrical machinery, precision equipment, and semiconductor-related. So its customer industries arediverse and structured so that the Company is not easily affected by economic fluctuations. 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 Mitsubishi Electric <6503>, Toshiba Memory, and Canon <7751> is 19.4%, and this percentage is trending
downward year by year (FY12/17 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.”㻼㼑㼞㼏㼑㼚㼠㼍㼓㼑㼟㻌㼛㼒㻌㼚㼑㼠㻌㼟㼍㼘㼑㼟㻌㼎㼥㻌㼕㼚㼐㼡㼟㼠㼞㼥㻌㻔㻲㼅㻝㻞㻛㻝㻣㻌㼞㼑㼟㼡㼘㼠㻕㻭㼑㼞㼛㼟㼜㼍㼏㼑㻌㼐㼑㼒㼑㼚㼟㼑㻞㻚㻤㻑㻻㼠㼔㼑㼞㼟
㻹㼑㼐㼕㼏㼍㼘㻙㼞㼑㼘㼍㼠㼑㼐 㻢㻚㻝㻑㻥㻚㻟㻑㻾㼑㼚㼑㼣㼍㼎㼘㼑㻌㼑㼚㼑㼞㼓㼥 㻜㻚㻡㻑㻿㼛㼒㼠㼣㼍㼞㼑㻌㼐㼑㼢㼑㼘㼛㼜㼙㼑㼚㼠㻞㻚㻡㻑㻹㼍㼏㼔㼕㼚㼑㻌㼠㼛㼛㼘㼟㻙㼞㼑㼘㼍㼠㼑㼐㻞㻚㻠㻑㻭㼡㼠㼛㼙㼛㼠㼕㼢㼑㻙㼞㼑㼘㼍㼠㼑㼐
㻠㻜㻚㻜㻑㻿㼑㼙㼕㼏㼛㼚㼐㼡㼏㼠㼛㼞㻙㼞㼑㼘㼍㼠㼑㼐
㻝㻡㻚㻤㻑㻼㼞㼑㼏㼕㼟㼕㼛㼚㻌㼙㼍㼏㼔㼕㼚㼑㼞㼥㻙㼞㼑㼘㼍㼠㼑㼐㻝㻟㻚㻜㻑㻱㼘㼑㼏㼠㼞㼕㼏㼕㼠㼥㻙㼞㼑㼘㼍㼠㼑㼐㻣㻚㻢㻑

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

The consolidated subsidiaries are the ALPS BUSINESS SERVICE CORPORATION, which is a provider of total staffing
services; PANA R&D CO., LTD., which joined the Group in September 2016 and operates assignment of technicalexperts, and the two subsidiaries that conduct the Global Business, of ALPSGIKEN TAIWAN CO., LTD. (Taiwan)and Altech Shanghai CO., LTD. (China). In addition to the Head Office and the Back office and the training center,
the Company has 2 Techno Parks (monozukuri centers) where it conducts manufacturing, 22 sales offices within
Japan, and 1 overseas branch office (in Myanmar).

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

13-Apr.-2018
http://www.alpsgiken.co.jp/english/index.html

Company profile

Specializes in the development and design fields and is compliant
with high-level and advanced technologies
2. Business overview(1) The 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 the 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.
The central areas of the technology field include machinery design, electricity and electronics design, softwaredevelopment, and chemistry. Alongside the transition to high-level network society, the priority items have become
the development and design of a variety of advanced technologies such as for IoT and AI, 3D-CAD for whichfurther demand is expected, CAE technologies, aerospace-related, medical-related, and robot-development
technologies. Therefore, the Company’s customer companies are spread across a wide range of industries,
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 two overseas subsidiaries ALPSGIKEN TAIWAN CO., LTD. in Taiwan and Altech
Shanghai CO., LTD. in China. They conduct installation and maintenance work for the production facilities andequipment of Japanese companies overseas, and also provide human resources services ancillary to this work.
Within the advance of economic globalization, one strategic axis is expanding the Global Business.

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

13-Apr.-2018
http://www.alpsgiken.co.jp/english/index.html

Company profile

Entering-into the agriculture-related and nursing care-related fields,
which are considered to have growth potential
3. Establishing a new company (entering-into new businesses)
Toward realizing its medium- to long-term growth vision (described later), the Company had decided to enter-into
new businesses through establishing a new company* (the business launch is scheduled for August 2018). In the
agriculture-related field, which is considered to have high growth potential, and in the nursing care-related field,
where the shortage of workers is conspicuous, it is aiming to create a new model for the worker assignment market.
It is said that in these fields, the keys are introducing state-of-the-art technologies, such as AI, IoT, and robots, andutilizing an overseas labor force, and the Company’s strategy seems to be to aim for the first-mover advantage infields that utilize its advanced technological capabilities and expertise in developing human resources (including theemployment of non-Japanese) that it has cultivated up to the present time. In particular, it would seem that for the
agriculture-related business (agri-business), the Company is aiming to develop a business that only it, as a groupof engineers, is capable of. For the nursing care-related business also, it has already begun training nursing-carehuman resources in Myanmar and it is planning on creating a business in line with the establishment of a legal system
related to Japanese nursing care. Preparations are underway at the branch office in Yangon, Myanmar, toward theeducation and training of nursing care human resources and the construction of a scheme to send them to Japan.
* Agri & Care Corporation (head office, Yokohama City, Kanagawa Prefecture)

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, current Chairman and Director Toshio Matsui. At that time, electricaldesign and mechanical design were conducted separately, and to solve the various problems that arose from this,he proposed “mechanical and electrical 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 byfocusing on training human resources who are specialized in upstream processes, such as development and design,and the early mobilization of new-graduate engineers.
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.”

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

13-Apr.-2018
http://www.alpsgiken.co.jp/english/index.html

Company profile

Date

Major event

December 1989

Established Tateshina Techno Park in Chino City, Nagano Prefecture, started production of in-house developed products and thedesign and production of precision machinery

October 1990

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

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
July 2013
December 2014
April 2015
September 2016

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

Source: Prepared by FISCO from the Company’s materials

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

13-Apr.-2018
http://www.alpsgiken.co.jp/english/index.html█ Business performance
The growth in results is being driven by the active recruitment of
new graduates and the increase in the number ofmobilized employees through their early mobilization
1. Overview of the FY12/17 consolidated results
The Company exceeded its targets and achieved double digit growth in sales and earnings. Net sales were¥30,260mn, up 13.1% YoY, operating income was ¥3,238mn, up 13.3%, ordinary income was ¥3,275mn, up
11.1%, and profit attributable to the owners of parent was ¥2,367mn, up 19.1%.
In sales, against the backdrop of the favorable ordering environment (particular from the strongly performing
automotive and semiconductor industries), results in the mainstay Outsourcing Business grew significantly fromthe high mobilization rate being maintained, the rise in the contract unit price, and the increase in the number ofmobilized employees. Also, the full fiscal year contribution of PANA R&D, which entered the scope of consolidation in
September 2016, was a factor behind the higher sales (estimated to have contributed around ¥1.1bn). In particular,
the reason why the results exceeded the forecasts was that the employee retention rate increased more than
expected through various measures, such as improving employee benefits and enhancing the education system*(as a result, the number of engineer employees also increased more than expected).
* Includes the enhancement of OJT that can realize growth, such as through “team assignments,” and a mechanism that can form
careers autonomously

In terms of profit and loss, the cost-of-sales ratio remained basically unchanged YoY at 75.1% (75.0% in the previous
fiscal year) as in addition to the improved benefits for employees, costs in the Global Business rose due to temporary
factors, but this was absorbed by the growth in sales. SG&A expenses also grew due to higher costs, mainly
amortization costs relating to the commemoration of the 50th anniversary of its foundation and advertising costs(including the Company’s first ever TV commercial). However, it still achieved an increase in operating income fromthe effects of higher sales, and it was able to maintain the operating margin unchanged YoY, at 10.7% (the target
was a 10% level). The fact that the growth rate of final income (net income) was large was due to a gain on the saleof investment securities (extraordinary income), so it is necessary to be aware that this is also a temporary factor.
In the Company’s financial condition, total assets were up 12.0% on the end of the previous fiscal year to ¥18,435mn,
due to the increases in notes and accounts receivable and in work in progress alongside the business expansion,and also because of the rise in construction in progress (non-current assets) relating to the construction of the 2ndbuilding. Shareholders’ equity also increased 13.4% to ¥12,276mn, mainly due to the accumulation of retained
earnings, so the equity ratio improved slightly to 66.6% (65.8% on the end of the previous fiscal year). Interestbearing debt was down 2.8% on the end of the previous fiscal year to ¥700mn, while the current ratio is also at thehigh level of 240.5% (230.0% at the end of the previous fiscal year), so there are no concerns about the Company’s
financial stability. ROE, which shows capital efficiency, was maintained at the high level of 20.5% (19.4% at the endof the previous fiscal year)

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

08 18

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

Altech Corporation

13-Apr.-2018

4641 Tokyo Stock Exchange First Section

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

Business performance

Overview of FY12/17 results(¥mn)
FY12/16
results

FY12/17
results% ofsales
Net sales

% of
sales

26,743

FY12/17
initial forecast

YoY
%
3,516

13.1%

29,000Outsourcing Business

24,761

92.6%

28,745

95.0%

3,983

16.1%

-

-

Global Business

1,982

7.4%

1,515

5.0%

-466

-23.6%---

Cost of sales

20,05775.0%

22,737

75.1%

2,680

13.4%

-

-

-

SG&A expenses

3,828

14.3%

4,283

14.2%

455

11.9%

-

-

-

Operating income

2,857

10.7%

3,238

10.7%

380

13.3%

3,070

10.6%

105.5%

2,686

10.9%

3,191

11.1%

504

18.8%

-

-

-

168

8.5%

43

2.9%

-125

-74.0%---

Ordinary income

2,949

11.0%

3,275

10.8%

326

11.1%

3,170

10.9%

103.3%

Profit attributable to owners ofparent

1,988

7.4%

2,367

7.8%

378

19.1%

2,130

7.3%

111.1%

Number of engineers

2,897

3,175

278

9.6%

Number of mobilized employees

2,797

3,088

291

10.4%

Mobilization hours

173.5

171.8

-1.7

-1.0%

Contract unit price

3,856

3,903

47

1.2%

Outsourcing Business
Global Business

30,260

Achievement
rate

% of
sales

104.3%

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

FY12/17 financial condition(¥mn)
ChangeFY12/16

FY12/17

12,167

13,760

1,593

13.1%

(cash and deposits)

7,311

8,370

1,058

14.5%

(notes and accounts receivable - trade)

3,916

4,357

440

11.3%

4,290

4,675

384

9.0%

(goodwill)

462

394

-68

-14.8%

Total assets

16,45818,435

1,977

12.0%

Current assets

Current assets

Non-current assets

%

5,289

5,722

432

8.2%

(accounts payable - other)

1,396

1,265

-130

-9.4%

(short-term loans payable)

720

700

-20

-2.8%

325

417

92

28.3%

Total liabilities

5,614

6,139

524

9.3%

Net assets

10,843

12,295

1,452

13.4%

10,826

12,276

1,449

13.4%

Current ratio

230.0%

240.5%

10.5%-

Equity ratio

65.8%

66.6%

0.8%

-

Interest-bearing debt ratio

6.7%

5.7%

-1.0%

-

ROA (ratio of ordinary income to total assets)

19.0%

18.8%

-0.2%

-

ROE (ratio of profit to equity)

19.4%

20.5%

1.1%

-

Non-current liabilities

Shareholders’ equity

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

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

09 18

-

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

13-Apr.-2018
http://www.alpsgiken.co.jp/english/index.html

Business performance

Overview of each segment is outlined below.
(1) The Outsourcing BusinessResults grew greatly in the Outsourcing Business, with net sales increasing 16.1% YoY to ¥28,745mn and segment
income rising 18.8% to ¥3,191mn. In addition to the full fiscal year contribution of PANA R&D, which previously
entered the scope of consolidation, in the context of the favorable ordering environment, the increase in thenumber of mobilized employees and the improvement in the contract unit price from the success of the seriesof policies for recruitment*1, education, and sales, contributed to the growth in results. All of the indicators thatemphasize results increased, as the number of engineer employees became 3,175 people (up 278 people on theend of the previous fiscal year), the number of mobilized employees became 3,088 people (up 291 people), andthe contract unit price*2 became ¥3,903 (up ¥47). Moreover, the annual average mobilization rate was maintainedat the high level of 96.2% (95.6% in the previous fiscal year). However, the reason for the decrease in the average
number of hours worked per employee*3 to 171.8 hours (down 1.7 hours) seems to be as a result of the reforms
to ways of working, particularly at major companies.
*1 In 2017, in addition to the 242 new graduates (joined the Company in April), it recruited 37 global engineers (joined in October), andaround 160 mid-career recruits (joined in 2017).
*2 The unit price per hour based on the contract with the customer (does not include overtime fees)*3 Hours worked per month, corresponding to work as an engineer(2) Global BusinessIn the Global Business (which includes the design, manufacture, installation and maintenance of various plant
equipment and plant machinery, and human-resources services), net sales decreased 23.6% YoY to ¥1,515mn
and segment income fell 74.0% to ¥43mn. Sales and profits declined as a reaction to the fact that there wereorders for major projects in the previous fiscal year, and also due to the rise in cost prices for some projects.
However, on excluding these temporary factors, it can be said the results trended favorably, including due to thegrowth in demand from Japanese companies.
2. Summary of FY12/17 results
To summarize the FY12/17 results based on the above, in addition to the fact that results grew to levels above theforecasts, it can also be said that the Company was able to achieve some major outcomes through its measures,
which included 1) achieving the recruitment plan and advancing the early mobilization of new-graduate recruits, 2)
improving the employee retention rate by enhancing employee benefits (such as supplementing and newly establishing various allowances), and 3) implementing original measures to develop human resources (a mechanism to create
places for engineers to be active independently). In the Group companies also, the assignments, outsourcing, andintroductions businesses of ALPS BUSINESS SERVICE are performing strongly and contributing to the growth in
the Group’s results, while PANA R&D is starting to realize synergies, including for sales and education. In particular,
for sales, it seems to be functioning as a mechanism for the introduction of customers from the Company. However,recruitment is acting as a constraint (a bottleneck) for it to respond to the plentiful requests for assignments from
customers and to realize even further business expansion for the Group, so it can be said that an issue for the future(to realize growth) will be generating synergies at this place of entrance.

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

10 18

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

Altech Corporation

13-Apr.-2018

4641 Tokyo Stock Exchange First Section

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

Business performance

3. Trends in past results (consolidated)
Looking at results up to the present time, we see that they have steadily grown alongside the increase in thenumber of engineer employees. In particular, since FY12/14, despite the ongoing severe recruitment environment,
the Company has still been able to recruit around 250 new graduates a year and realize their early mobilization,and this has driven the growth in results. It can be said that recruiting around 250 new graduates every year andaround 40 global engineers in fields with high levels of specialism, and then completing their training at an earlystage and maintaining a high mobilization rate, is a growth model that only the Company is capable of. In addition,
it is coordinating with its consolidated subsidiary ALPS BUSINESS SERVICE and expanding its overseas business,while PANA R&D, which entered the scope of consolidation in September 2016, is also contributing to the growthin the consolidated results.
In terms of profit and loss, profits have trended upward alongside the growth in net sales. The operating margin has
also improved, and in the last few years it has trended at the high level of above 10%.
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 65%. On the other hand,
ROE, which indicates capital efficiency, is rising year by year, and in the last fiscal period 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 also expands
the range of strategies it can adopt for growth, so it will be necessary to pay attention to developments in the future.

㼀㼞㼑㼚㼐㼟㻌㼕㼚㻌㼚㼑㼠㻌㼟㼍㼘㼑㼟㻌㼍㼚㼐㻌㼛㼜㼑㼞㼍㼠㼕㼚㼓㻌㼕㼚㼏㼛㼙㼑㻌㼙㼍㼞㼓㼕㼚㻌㻔㼏㼛㼚㼟㼛㼘㼕㼐㼍㼠㼑㼐㻕㻺㼑㼠㻌㼟㼍㼘㼑㼟㻌㻔㼘㼑㼒㼠㻕㻔㼰㼙㼚㻕㻻㼜㼑㼞㼍㼠㼕㼚㼓㻌㼕㼚㼏㼛㼙㼑㻌㼙㼍㼞㼓㼕㼚㻌㻔㼞㼕㼓㼔㼠㻕㻟㻡㻘㻜㻜㻜

㻝㻜㻚㻣㻑

㻝㻜㻚㻣㻑

㻝㻜㻚㻢㻑

㻥㻚㻡㻑

㻟㻜㻘㻜㻜㻜

㻝㻞㻚㻜㻑

㻝㻜㻚㻜㻑

㻤㻚㻝㻑

㻞㻡㻘㻜㻜㻜

㻤㻚㻜㻑

㻢㻚㻣㻑
㻡㻚㻥㻑

㻞㻜㻘㻜㻜㻜

㻢㻚㻜㻑㻝㻡㻘㻜㻜㻜
㻠㻚㻜㻑㻝㻜㻘㻜㻜㻜

㻞㻚㻜㻑

㻡㻘㻜㻜㻜

㻜㻚㻜㻑

㻜
㻲㼅㻝㻞㻛㻝㻞

㻲㼅㻝㻞㻛㻝㻟

㻲㼅㻝㻞㻛㻝㻠

㻲㼅㻝㻞㻛㻝㻡

㻲㼅㻝㻞㻛㻝㻢

㻲㼅㻝㻞㻛㻝㻣

㻲㼅㻝㻞㻛㻝㻤㻌㻱

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

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

11 18

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

13-Apr.-2018
http://www.alpsgiken.co.jp/english/index.html

Business performance㼀㼞㼑㼚㼐㼟㻌㼕㼚㻌㼠㼔㼑㻌㼚㼡㼙㼎㼑㼞㻌㼛㼒㻌㼚㼑㼣㻙㼓㼞㼍㼐㼡㼍㼠㼑㻌㼞㼑㼏㼞㼡㼕㼠㼟㻌㼍㼚㼐㻌㼑㼚㼓㼕㼚㼑㼑㼞㼟㻔㼟㼠㼍㼚㼐㻙㼍㼘㼛㼚㼑㻌㼎㼍㼟㼕㼟㻕㻔㼜㼑㼛㼜㼘㼑㻕

㻔㼜㼑㼛㼜㼘㼑㻕
㻺㼡㼙㼎㼑㼞㻌㼛㼒㻌㼑㼚㼓㼕㼚㼑㼑㼞㼟㻌㻔㼞㼕㼓㼔㼠㻕㻺㼡㼙㼎㼑㼞㻌㼛㼒㻌㼚㼑㼣㻌㼓㼞㼍㼐㼡㼍㼠㼑㻌㼞㼑㼏㼞㼡㼕㼠㼙㼑㼚㼠㻌㻔㼘㼑㼒㼠㻕

㻡㻜㻜

㻟㻘㻡㻜㻜

㻟㻘㻝㻣㻡
㻞㻘㻤㻥㻣
㻞㻘㻡㻥㻢

㻠㻜㻜
㻞㻘㻝㻜㻞

㻞㻘㻝㻠㻟

㻟㻜㻜

㻞㻢㻠

㻞㻡㻣

㻞㻞㻥
㻞㻜㻜

㻞㻘㻤㻜㻜

㻞㻘㻟㻟㻜

㻞㻘㻝㻜㻜

㻞㻠㻞

㻝㻘㻠㻜㻜

㻝㻠㻥

㻥㻤
㻝㻜㻜

㻣㻜㻜

㻜

㻜
㻲㼅㻝㻞㻛㻝㻞

㻲㼅㻝㻞㻛㻝㻟

㻲㼅㻝㻞㻛㻝㻠

㻲㼅㻝㻞㻛㻝㻡

㻲㼅㻝㻞㻛㻝㻢

㻲㼅㻝㻞㻛㻝㻣

Source: Prepared by FISCO from the Company’s results briefing materials㼀㼞㼑㼚㼐㼟㻌㼕㼚㻌㼑㼝㼡㼕㼠㼥㻌㼞㼍㼠㼕㼛㻌㼍㼚㼐㻌㻾㻻㻱㻱㼝㼡㼕㼠㼥㻌㼞㼍㼠㼕㼛
㻤㻜㻚㻜㻑

㻣㻜㻚㻤㻑

㻢㻥㻚㻢㻑

㻾㻻㻱

㻢㻣㻚㻥㻑

㻢㻢㻚㻝㻑

㻝㻠㻚㻠㻑

㻝㻡㻚㻡㻑

㻲㼅㻝㻞㻛㻝㻠

㻲㼅㻝㻞㻛㻝㻡

㻣㻜㻚㻜㻑

㻢㻡㻚㻤㻑

㻢㻢㻚㻢㻑

㻝㻥㻚㻠㻑

㻞㻜㻚㻡㻑

㻲㼅㻝㻞㻛㻝㻢

㻲㼅㻝㻞㻛㻝㻣

㻢㻜㻚㻜㻑
㻡㻜㻚㻜㻑

㻠㻜㻚㻜㻑
㻟㻜㻚㻜㻑
㻞㻜㻚㻜㻑
㻝㻜㻚㻜㻑

㻣㻚㻝㻑

㻣㻚㻢㻑

㻲㼅㻝㻞㻛㻝㻞

㻲㼅㻝㻞㻛㻝㻟

㻜㻚㻜㻑

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

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

12 18

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

13-Apr.-2018
http://www.alpsgiken.co.jp/english/index.html█ Business outlook
On the 50th anniversary of its foundation,
the outlook is for record high results
1. Outlook for FY12/18
For the FY12/18 consolidated results, the Company is forecasting higher sales and profits, with net sales toincrease 7.1% YoY to ¥32,400mn, operating income to grow 5.9% to ¥3,430mn, ordinary income to increase 7.2%
to ¥3,510mn, and net income attributable to the owners of the parent to climb 0.1% to ¥2,370mn. Moreover, theforecasts are for new record highs.
Requests for assignments continue to be strong from the various major manufacturers, which are the Company
Group’s main customers, and this trend is expected to continue. The reasons why the growth in results will besomewhat moderate compared to in the previous fiscal year is that the effects of PANA R&D entering the scope of
consolidation will have run their course, and an evaluation that growth will be sustained at a cruising pace seems
reasonable. On the 50th anniversary of its foundation, the Company is aiming for growth in the Group as a whole.
In terms of profit and loss, although an increase* in costs relating to the operations to commemorate the 50th
anniversary of its foundation is expected, the Company is forecasting that this will be absorbed by the higher sales
and it will secure an increase in profits, while the operating margin is set to remain basically unchanged YoY. Final
income (net income) will only increase slightly on the end of the extraordinary-income item recorded in the previous
fiscal year (gain on the sales of investment securities).
* In addition to the construction of the 2nd building (to be utilized for the entry into new fields as a symbol of the 2nd foundation
period) and the donation of wheelchairs (as part of its CSR activities, it plans to donate around 450 heavy-duty wheelchairs to local
governments, welfare councils and other organizations throughout the country with which it has deep connections), it is planning
other spending, including on advertising to improve name awareness.

At FISCO, we think that on considering the favorable external environment (such as the plentiful requests for engineer
assignments), and also the internal factors (including the improvement in the employee retention rate and the early
mobilization of the new graduate recruits), it is fully possible that the Company will achieve its results forecasts.
2. Plan for activities
On approaching the 50th anniversary of its foundation, the Company will implement the following measures on thestart of the 2nd foundation period (to build foundations).
(1) Measures to create the next generation (individual)
The Company will reform the three pillars that support its growth (recruitment, education, and sales) and realize
a virtuous circle that produces mutually positive effects. In particular, its policy is to aim to ascertain in advancechanges to technologies and industries and to respond to growth fields.

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

13 18

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

13-Apr.-2018
http://www.alpsgiken.co.jp/english/index.html

Business outlooka) Recruitment
It is working on measures including 1) establishing long-term relations of trust with priority universities and colleges,2) strengthening recruitment through collaborations with engineers and within the Group, and 3) expanding
the recruitment of global engineers and the training scheme. Within the severe recruitment environment, theCompany will continue its policy of prioritizing quality for the recruitment of new graduates in 2019 (in addition
to the recruitment of quality human resources, this also means recruitment within the scope of its capabilities foreducation and training), and it plans to recruit 250 new graduates, which is the same number as in 2018. Also,in addition to (the target of) 120 mid-career recruits in 2018, it is actively working to recruit global engineers.
b) Education
It is working on measures including 1) providing education and training that utilizes the original education expertisethat it has cultivated over the last 50 years, and 2) providing training toward entering into growth industries. In
particular, it will incorporate customized training that is tailored to meet customer needs, starting with strengthening for the fields of state-of-the-art technologies, such as AI and IoT.
c) Sales
It is implementing measures including 1) conducting priority sales for growth-industry fields, 2) strengthening
sales toward improving CS (customer satisfaction), and 3) conducting rotation so that the engineers themselves
can realize growth. Particularly for 2), in a situation in which the Company individually is close to full operations,
it intends to create proposals together with all the other Group companies in order to respond to the plentiful
requests for assignments from customers.
* The Company is incorporating a mechanism that enables the engineers themselves to feel their own growth through creating a
database of the career plans of each individual engineer, and then matching them to the requests from customers.

(2) Measures for the Group
It is working to further enhance cooperation within the Group, to strengthen recruitment and education, and to
expand the business domains together with the Group as a whole. In particular, it is striving to create synergies
with its domestic subsidiaries and overseas business, and to launch new businesses.
a) Domestic business
For ALPS BUSINESS SERVICE, the aim is to increase the number of employees through Group cooperation andto expand its business (including the provision of one-stop services in its post-process assignments, outsourcing,and introduction businesses). It is also working on measures including establishing an education system as thebase for the education of Group human resources (such as training for interpersonal skills) and improving benefits.
For PANA R&D, it is working to further strengthen the Outsourcing Department and to establish and improve afoundation environment.
b) Overseas business
The Company is further expanding the Global Business (the installation and maintenance of production facilities
and related for Japanese companies and others, and human-resources services) through its local subsidiaries inShanghai and Taiwan. In addition, in the Yangon branch office (Myanmar), it is working to launch new businesses(agriculture and nursing care) through the education and training of human resources. It is also continuing to aim
to expand the routes for recruiting global engineers in China and Vietnam.

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

14 18

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

13-Apr.-2018
http://www.alpsgiken.co.jp/english/index.html

Business outlook

3. Industry trend and the Company’s position
The number of assignment workers nationwide peaked at 2.02 million people in 2008, which was around the timeof the bankruptcy of Lehman Brothers, and then trended downward after that and had bottomed out in 2013
falling to 1.29 million people by 2017. Also, the environment surrounding the worker assignment business seems
to have reached a major turning point due to factors including the revisions to the Worker Dispatch Act (enforced
on September 30, 2015) and the guidelines on equal pay for equal work. It is considered that the situation in thisbusiness will change greatly in the future, depending on what assignment companies expect of the assignment
employees, such as their technical capabilities and expertise. In short, the need for new human resources withhigh-level technical capabilities and expertise will remain steady, but it seems there will be major changes in thework in downstream processes, for example due to economic trends.
In the Company, the position of engineers is stable as they are employed indefinitely (full-time employees) and theyacquire high-level technical capabilities and expertise from the education and training they receive, and therefore
they earn the trust of the customer companies. The results of the Company, which specializes in the assignment ofindefinitely employed engineers, are expected to steadily expand in the future. Of course, in order to be assigned
upstream processes, the Company will need to strive ceaselessly so that its engineers may utilize their technicalcapabilities and expertise and meet the needs of customers in industries such as electricity and machinery, automotive, and aerospace and space. Supported by its long-term education for its engineers, it is considered that theCompany will be able to continuously expand its business by earnings its customers’ trust.

█ Medium- to long-term growth strategy
Aiming to expand its portfolio by developing new technologies andfor new markets
1. The new medium-term management plan (2018 to 2020)
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). As the FY12/17 results exceeded
their forecasts, it upwardly revised the amounts for the previous quantitative targets* and also formulated a new
three year medium-term management plan. The targets for FY12/20, which is the plan’s final year, are net salesof ¥37,200mn, operating income of ¥3,840mn, ordinary income of ¥3,960mn and net income attributable to theowners of the parent of ¥2,680mn. It also plans to secure ROE of above 18%.
* Through raising the assumption for the number of engineer employees, which was a factor behind the FY12/17 results exceeding
their forecasts.

The major themes for the tenth five-year plan are “Expand the corporate scale through innovation – accelerating
growth as we move toward our 50th anniversary,” and the Company has implemented the following three measures.
(1) Anticipate changes to technologies and industries and provide a variety of high-level technological services(2) Accelerate the expansion in the scale of the Company Group through the independence and growth of affiliatedcompanies(3) Making a leaping forward to become a global corporate group developing businesses in Asia

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15 18

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

13-Apr.-2018
http://www.alpsgiken.co.jp/english/index.html

Medium- to long-term growth strategy

The Company plans to announce the next five-year plan (the 11th Five-year Plan) on the occasion of the 50th
anniversary of its foundation in July 2018.
At FISCO, we think that the targets in the newly announced medium-term management plan are fully achievable,
as they assume growth at the same cruising pace as the Company has achieved so for. Therefore, we are focusing
on the possibility that the further development of Group synergies and the early launches of the new businesses(mainly the nursing care and agriculture businesses) will become factors causing results to exceed their targets.
2. Medium to long-term growth vision
Together with the medium-term management plan, the Company has explained its direction for its next businessdevelopment in the process after the 50-year anniversary in terms of a portfolio with 4 quadrants divided on 2 axes,of markets and businesses / technologies, and also into existing and new areas for each axis.
(1) 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.
(2) 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 the corresponding markets.
(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) Investigating potential new businesses (new markets, new business / technologies)
The Company intends to advance various measures, including developing 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-related field and nursing care-related field, and it has begun specificmeasures toward the development of a new worker assignment business.

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

16 18

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

Altech Corporation
4641 Tokyo Stock Exchange First Section

13-Apr.-2018
http://www.alpsgiken.co.jp/english/index.html

Medium- to long-term growth strategy

The medium- to long-term growth vision (direction of the business development)

Source: From the Company’s results briefing materials

At FISCO, within a situation of the declining Japanese population and advancing economic globalization, we evaluatethat the Company’s direction for business development is a rational strategy that has an eye to the changes to theindustrial structure in the future. Up to the present time, it has responded at high levels to the changes to technological needs, and the point to focus on going forward would seem to be how it will respond to new technologicalfields in which demand is expanding, and how these responses will connect to sustainable growth. Particularly for the
new businesses, including in the agriculture-related field (agri-business) and the nursing care-related field, becauseof their great potential from societal demands, it seems fully possible that the Company will grow these businessto become its profit drivers in the future, as it will be able to utilize its expertise and networks for developing humanresources that it has acquired overseas. It is expected that some time will be required for the nursing care-related
business, but it is possible that it will be able to launch the agri-business in some form at a comparatively earlystage, so we will be watching the developments closely. We must also continue to pay attention to M&A that utilizes
its strong financial base.

█ Shareholder return policy
In FY12/18, plans to pay a record-high dividend,
including a commemorative dividend.
1. Basic dividend policy
The Company pays dividends as its policy to return profits to shareholders. It aims for a payout ratio on a consolidated basis of 50%, and its basic policy is to pay an annual dividend of ¥20, regardless of results.

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

17 18

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

Altech Corporation

13-Apr.-2018

4641 Tokyo Stock Exchange First Section

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

Shareholder return policy

2. Dividend trend and plan
On looking at how dividends have trended in the past, we see that the Company has continued to steadily increase
the dividend against the backdrop of the favorable results. It has maintained the dividend payout ratio at around 50%.
For FY12/17, the Company decided to upwardly revise the initial dividend forecast and pay an annual dividend of¥116 (interim ¥52, end-of-term ¥64) which is an increase of ¥18 YoY and also a new record high (dividend payout
ratio, 50.1%) It also implemented a (2 for 1) share split on January 1, 2018, with the aim of expanding its investor
base and improving the liquidity of the Company’s shares.
The FY12/18 dividend (after the share split) will include a commemorative dividend of ¥10 to mark the 50th anniversary of its foundation. After adjusting for the share split, it is planning an annual dividend of ¥68 (interim ¥39,
end-of-term ¥29), which is a ¥10 increase YoY (dividend payout ratio, 58.6%).

㻯㼛㼚㼢㼑㼞㼟㼕㼛㼚㻌㼠㼛㻌㼎㼑㼒㼛㼞㼑㻌㼠㼔㼑㻌㼟㼔㼍㼞㼑㻌㼟㼜㼘㼕㼠㻌㻔㼘㼑㼒㼠㻕㻯㼛㼙㼙㼑㼙㼛㼞㼍㼠㼕㼢㼑㻌㼐㼕㼢㼕㼐㼑㼚㼐㻌㻔㼘㼑㼒㼠㻕㻰㼕㼢㼕㼐㼑㼚㼐

㻻㼞㼐㼕㼚㼍㼞㼥㻌㼐㼕㼢㼕㼐㼑㼚㼐㻌㻔㼘㼑㼒㼠㻕㻔㼰㻕㻰㼕㼢㼕㼐㼑㼚㼐㻌㼜㼍㼥㼛㼡㼠㻌㼞㼍㼠㼕㼛㻌㻔㼞㼕㼓㼔㼠㻕
㻣㻠㻚㻞㻑

㻞㻜㻜

㻤㻜㻚㻜㻑

㻡㻤㻚㻢㻑
㻝㻡㻜

㻡㻜㻚㻣㻑

㻡㻜㻚㻝㻑

㻡㻜㻚㻝㻑

㻡㻜㻚㻠㻑

㻢㻜㻚㻜㻑

㻡㻜㻚㻝㻑

㻯㼛㼚㼢㼑㼞㼟㼕㼛㼚㻌㼠㼛㻌㼎㼑㼒㼛㼞㼑㻌㼠㼔㼑㻌㼟㼔㼍㼞㼑㻌㼟㼜㼘㼕㼠

㻝㻟㻢

㻝㻜㻜

㻡㻜

㻥㻤

㻞㻤

㻠㻡

㻢㻜

㻣㻝

㻲㼅㻝㻞㻛㻝㻠

㻲㼅㻝㻞㻛㻝㻡

㻝㻝㻢

㻠㻜㻚㻜㻑

㻝㻜
㻞㻜㻚㻜㻑
㻡㻤
㻜㻚㻜㻑

㻜
㻲㼅㻝㻞㻛㻝㻞

㻲㼅㻝㻞㻛㻝㻟

㻲㼅㻝㻞㻛㻝㻢

㻲㼅㻝㻞㻛㻝㻣

㻲㼅㻝㻞㻛㻝㻤㻌㻱Note: For FY12/18 (scheduled), the amounts converted to before the split are additionally shown.
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.

18 18

Disclaimer
FISCO Ltd. (the terms “FISCO”, “we”, mean FISCO Ltd.) has legal agreements with theTokyo Stock Exchange, the Osaka Exchange,and Nikkei Inc. as to the usage of stock priceand index information. The trademark and value of the “JASDAQ INDEX” are the intellectual
properties of the Tokyo Stock Exchange, and therefore all rights to them belong to the Tokyo
Stock Exchange.
This report is based on information that we believe to be reliable, but we do not confirm or
guarantee its accuracy, timeliness,or completeness, or the value of the securities issued bycompanies cited in this report. Regardless of purpose,investors should decide how to use
this report and take full responsibility for such use. We shall not be liable for any result of its
use. We provide this report solely for the purpose of information, not to induce investment or
any other action.
This report was prepared at the request of its subject company using information provided
by the company in interviews, but the entire content of the report, including suppositions andconclusions, is the result of our analysis. The content of this report is based on informationthat was current at the time the report was produced, but this information and the content of
this report are subject to change without prior notice.
All intellectual property rights to this report, including copyrights to its text and data, areheld exclusively by FISCO. Any alteration or processing of the report or duplications of thereport, without the express written consent of FISCO, is strictly prohibited. Any transmission,
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The final selection of investments and determination of appropriate prices for investment
transactions are decisions for the recipients of this report.
FISCO Ltd.