Alpha-Win Company Research Report
PCA(9629 TSE First Section)● SummaryIssued: 11/24/2020

Alpha-Win Capital Inc. Research Department
http://www.awincap.com/

Business Description
・ PCA CORPORATION (hereinafter, the “Company”) is an independent software manufacturer specialized inpackaged enterprise system software. It is a major specialized player in the industry.
・The Company was founded in 1980. Since then, it has been providing on-premises or cloud-based software mainly
to small/medium-sized companies. The Company’s mission is to contribute to society as a “Management Support
Company” that supports other companies conduct smooth management and operation, mainly by providing enterprisesystem software that realizes high-level automatization.
Current Financial Performance
・The Company's results for the first half of the current fiscal year (cumulative through the second quarter of FY 2021;
hereinafter “H1”; note that the Company’s fiscal year is March-ending) were as follows: sales of Y5,980 million (16.6% YoY) and operating profit of Y938 million (-47.0% YoY). The drop from the event-driven spike of demandin the previous FY’s H1 (demand prior to the consumption tax revision, termination of Windows 7 support, etc.) had
caused a double-digit decline in sales and profit. The Company has not disclosed its forecast for H1, but the results
have most likely slightly exceeded its internal target values. Despite the COVID-19 crisis, sales of the cloud service(its growth driver) and maintenance had continued to grow. In fact, sales of the subscription business accounted for
62.3% of the total – a record-high ratio.
・The Company made no changes to its initial forecast for this full fiscal year (FY 2021) that it will post sales ofY13,280 million (-6.9% YoY), an operating profit of Y2,034 million (-26.9% YoY), and a net profit of Y1,358
million (-25.2% YoY). Sales and profit are expected to drop as part of the decline following last FY’s event-driven
spike of demand and due to the rise in investment costs for future growth. However, the negative impact on results
has not been as large as the previous period of decline following an event-driven high demand (last time, a net loss
was posted), and the achieved levels of sales and profit have been relatively high compared to the FY before theprevious (FY 2019) when the event-driven high demand had not arrived yet (both were the second highest in the
Company’s history, following the previous FY’s record high). Excluding the temporary impact of the event-driven
high demand, the Company seems to be on a steady growth trend regarding both sales and profit.
Competitiveness・The Company has a customer base of approx. 240,000 companies. It has a high brand recognition and top-levelmarket share in accounting and finance software targeting small/medium-sized companies. It has an especially highcompetitive advantage with cloud-based enterprise system software in those fields, taking a lead in the market. In
fact, it is the top player in cloud services, whose market is rapidly expanding. Going forward, it would be key towatch the Company’s competition with its major competitors who have entered the cloud service business at a laterstage and with other competitors that are focused on low-price-range services.
・Its strength is its concentration of resources in its field of expertise as a specialist to develop products and services
that meet various customer needs, including those related to changes in tax and other regulations, ahead of its
competitors. It also has a stable customer base and can provide high-quality products and services at reasonable prices.
Business Strategy
・As the basic business strategy for its corporate group, the Company aims to create a strong earnings base for its main
businesses (reinforce and increase the sales of PCA Cloud and strengthen the PCA Subscription business for the onpremises), create new business opportunities (development of new technology and businesses), and strengthen thebusiness management structure to become a highly profitable company. As a new goal, it also plans to strengthen its
monozukuri (“creation of things”; improving the development system to create unique products and services).
Through these strategies, it hopes to further develop its businesses.
・ Its challenges are the acquisition of talents and putting Keepdata, Dreamhop, and the new businesses (PCA
Subscription, Hyper, etc.) on growth curves. This October, the Company acquired Dreamhop Co., Ltd., a company
that provides stress check services, for approx. Y108 million. This acquisition was part of the Company’s strategy to
1/40
This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate, or fit
for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting from the use ofor reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual property of thisReport belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
PCA (9629 TSE First Section)

Issued: 11/24/2020

expand its HR (human resources) business. Dreamhop is a small company with a net loss, and its synergy with theCompany regarding business development and financial performance should be closely watched. The Company does
not disclose the results of individual acquired companies, though, so the consolidated subsidiaries will need to beassessed through the difference in the consolidated and standalone results.
・The Company had previously revised up its consolidated target values for FY 2022, the final year of the mediumterm management plan (target values: sales of Y13.5 billion with Y7.5 billion coming from the subscription business,
operating profit of Y2.1 billion, and operating margin of 15%). Going forward, the Company plans to further expand
its business with those target values as the bottom line.

Alpha-Win Research Department’s Forecast of Financial Results
・Since the decline following the event-driven spike of demand and the actual impact of COVID-19 were hard to
predict, points of concern over the short term had been the potential delays in negotiations and new services and thenegative impact on the financial performance of the Company’s small/medium-sized corporate users. Considering
these risk factors, we had predicted that sales for this fiscal year will be slightly below the Company’s forecast.
・However, although a temporary drop in sales and profit is inevitable, the impact of COVID-19 on this FY’s results
has not been as large as expected. In fact, in H1, both sales and profit were greater than our previous forecast. The
subscription business is continuing to grow, and the Company is starting to see positive results from the shift to thisnew business model and the improvement in the management structure. Its forecast for sales (cloud and maintenance)and costs for the second half (H2) seems rather conservative, so we made an upward revision to the full-year forecast.
・Next FY onward, although the impact of COVID-19 will probably remain, the environment is expected to graduallynormalize, allowing the Company to return to a trend of rising sales and profit. Over the medium to long term, we
expect the annual profit growth rate (on a normalized basis) to be 8-10%.
Stock Price・A defensive, domestic-demand-related, small-cap growth stock that is positively affected by the transition to thesubscription-based business model, the workstyle reform, and tax reforms. Stock price has been rising since the latter
half of FY 2018, largely outperforming the TOPIX. Its valuation seems cheap compared to the average of TSE First
Section and its competitors. We believe its stock price still has an upside since the Company has a subscription-based
business with high stability and continuity, has a high likelihood of achieving its conservatively decided forecast forthis FY’s profit, has significant potential to improve the return to shareholders through dividend hikes and stock splits,
and is expected to achieve solid financial performance over the medium to long term with the cloud business as thegrowth driver.
Return to Shareholders
・The Company has been stably paying dividend (targeted dividend payout ratio of about 33%) and has been buying
back its shares. Last fiscal year, it raised its dividend by Y23 per share per year (ordinary dividend by Y3 plus
commemorative dividend of Y20) to Y54 in total. This FY, it plans to continue with the ordinary dividend of Y34.
Last FY’s dividend yield was 1.2% and this FY’s dividend yield will be 0.8% based on current data. Since the levelof dividend, DOE, and other related values are expected to be largely below the Company’s target values, further
enhancement of return to shareholders may be expected over the medium to long term to reflect its positive financial
performance.
【 9629 PCA
FY
2018
2019
2020
2021
2021
2022
2023
2020
2021
2020
2021
2020
2021
2020
2021

CE
E
E
E
Q1
Q1
Q2
Q2
H1
H1
H2
H2 CE

Sector: Information & Communication 】 Figure A
Sales

YOY

O.P.

YOY

R.P.

YOY

N.P.

YOY

EPS

BPS

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

（%）

(Y )

(Y )

（Y ）

174.1
105.5
100.4
-25.2
-21.3
6.3
11.8
945.3
-25.1
404.8
-61.1
500.8
-50.0
-10.0
20.4

64.37
133.25272.92204.70214.88228.41
255.4554.76
40.99
122.2847.58
177.0488.57
95.88
116.13

1,644.39
1,789.76
2,027.42
2,188.29
2,382.70
2,604.15
1,848.46
2,029.56
2,027.42
2,108.24
2,027.42
2,108.24
2,027.42
―

31.00
31.00
54.00
34.00
34.00
34.00
36.00
―
―
―
―
―
―
―
―

9,785
11,43914,266
13,28013,35014,00014,650
3,073
2,789
4,097
3,191
7,169
5,980
7,096
7,299

4.5
16.9
24.7
-6.9
-6.4
4.9
4.6
31.0
-9.2
59.4
-22.1
45.8
-16.6
8.8
2.9

807
1,248
2,781
2,034
2,150
2,280
2,600
587
465
1,184
473
1,771
938
1,010
1,095

86.8
54.7
122.8
-26.9
-22.7
6.0
14.0
917.5
-20.7
535.5
-60.1
625.8
-47.0
0.6
8.4

834
1,277
2,808
2,055
2,170
2,300
2,620
598
471
1,192
488
1,789
959
1,018
1,095

79.9
53.0
119.9
-26.8
-22.7
6.0
13.9
754.6
-21.2
501.6
-59.0
567.7
-46.4
1.0
7.6

441
906
1,816
1,358
1,430
1,520
1,700
364
272
814
317
1,177
589
638
768

Dividend(Note) The Company’s fiscal year is
March-ending.
(Note) In this Report, values for thesame item may not match completely
due to rounding and other processingof values during calculations,differences in the standard used indisplaying values, etc.

(Note) CE: the Company's forecast. E: Alpha-Win Research Dept.'s forecast. Q1: Apr-June. Q2: July-Sept. H1: Apr-Sept. H2: Oct-Mar.

2/40
This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate, or fit
for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting from the use ofor reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual property of thisReport belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
PCA (9629 TSE First Section)

Issued: 11/24/2020【 Stock Price and Valuation Indicators: 9629 PCA 】 Figure B
Item

11/20/2020

Item

P/E

P/B

Dividend Yield

Dividend Payout Ratio

4,430

Last FY (actual)

16.2

2.2

1.2%

19.8%

Shares Outstanding (thou.)

7,700This FY (est.)

20.6

2.0

0.8%

15.8%

Market Capitalization (million yen)

34,111

Next FY (est.)

19.4

1.9

0.8%

14.9%

Stock Price (Y)Dilutive Shares (thou.)

058.7% Last FY’s ROE

Equity Ratio at Last FY-End

14.3%(Note) Estimates/forecasts were made by Alpha-Win Research Dept.

【Stock Chart (end-of-week prices) : 9629 PCA】

Figure C

(Y)

5.00

6,400
5,900
5,400
4,900

4.50

Stock price (left axis)
Price relative to TOPIX (right axis)

4.00

4,400

3.50

3,900

3.00

3,400
2,900

2.50

2,400

2.00

1,900

1.50

1,400
08
/1
6
12
/1
6
04
/1
7
08
/1
7
12
/1
7
04
/1
8
08
/1
8
12
/1
8
04
/1
9
08
/1
9
12
/1
9
04
/2
0
08
/2
0
(

‘

1.00
M
M
/Y
Y
)

900

(Note) From the fourth week of August 2016 to the third week of November 2020

【Performance】
Period1 month
3 months
6 months
12 months

Return
-5.7%
-7.1%
5.5%
2.0%

vs. TOPIX-13.8%-13.0%-4.5%
0.3%(Note) Reflects stock price and index
values up through the closing priceon 11/20/2020. The return for the 1month period is the comparison
between the closing price on the last
day of October and November 20.
The same applies to the otherperiods. Prepared by Alpha-Win
Research Dept.

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

Disclaimers
This Alpha-Win Company Research Report (hereinafter “this Report”) has been prepared by Alpha-Win-Capital Inc.
(hereinafter “Alpha-Win”) on the request of the company presented in this Report.
This Report is not to be construed as a recommendation or solicitation of investment. Alpha-Win shall not beliable for any consequences including direct or indirect loss, lost profit, or damage resulting from the use of or
reliance on this Report. Investors who read this Report must make their own decisions on all investment mattersand take full responsibility regarding their investment.
This Report has been prepared with a focus on objectivity and neutrality based on the analysis of generally accessible
public information and supplemental information including interview(s) by the analyst. Alpha-Win, the writer, and/or
other persons involved in the publication of this Report may already hold, or buy and sell in the future, the stock of thecompany presented in this Report.
Contents of this Report are based on information current as of the issue date and are subject to change without
notice. For the latest (updated) report, please see our website (http://www.awincap.com/). We also do not
warrant or represent that the information in this Report is accurate, reliable, complete, appropriate, or fit forany purpose and do not accept any responsibility or liability.
Copyright of this Report belongs to Alpha-Win and no part of the publication may be copied, photocopied, cited, ortranslated without our consent.
For inquiries regarding this Report, please send us an e-mail to info@awincap.com. However, Alpha-Win and thewriter of this Report do not have any obligation to reply to inquiries.
PFV20201124-2000

3/40
This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate, or fit
for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting from the use ofor reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual property of thisReport belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
PCA (9629 TSE First Section)

Issued: 11/24/2020

Contents
1．Company Overview .......................................................................................................................... P5
Major Specialized Player in the Enterprise System Software Industry ............................................. P5
Business Philosophy .......................................................................................................................... P7
2．Business Description and Business Model ..................................................................................... P8
Enterprise System Software Necessary for Efficient Business Operations ....................................... P8
Business Model with High Continuity and Marginal Profit Ratio .................................................... P8
Expansion of Highly Stable and Profitable Subscription-Based Businesses .................................... P9
Cloud Business as the Growth Driver ............................................................................................. P10
Topic 1: Impact of COVID-19 and the Company’s Response ........................................................ P12
Topic 2: Acquisition of Dreamhop Co., Ltd. and Development of HR Business ............................. P13
3．Shareholder Composition .............................................................................................................. P14
Major Shareholder Composition ..................................................................................................... P14
4．ESG .................................................................................................................................................. P16
Environment, Society, and Governance .......................................................................................... P16
5．History of Growth .......................................................................................................................... P17
Company History ............................................................................................................................. P17
Past Transition in Financial Results ................................................................................................ P17
6．Business Environment ................................................................................................................... P20
Trends of Enterprise System Software Market ................................................................................. P20
Recent Trends of Small/Medium-Sized Companies (the Company’s users) .................................. P21
Comparison with Competitors ......................................................................................................... P21
7．First-Half Results and Full-Year Forecast .................................................................................. P24
Consolidated Financial Results for the First Half of FY 2021 .......................................................... P24
PCA’s Full-Year Financial Forecast for FY 2021 ............................................................................. P28
Alpha-Win Research Dept.’s Full-Year Financial Forecast for FY 2021 ......................................... P30
8．Growth Strategy ............................................................................................................................. P33
Management Indicators and Areas of Focus ................................................................................... P33
New Medium-to-Long-Term Vision“PCA Vision 2030: First Stage – 2022 Medium-Term Management Plan” ................... P33
Alpha-Win Research Dept.’s Financial Forecast for the Medium Term ......................................... P34
9．Analyst’s View ................................................................................................................................ P36
PCA’s Strengths and Challenges ..................................................................................................... P36
Shareholder Return and Shareholder Benefit Program ................................................................... P36
Stock Price and Factors that May Affect Stock Price ..................................................................... P38

Note: 1) Upon translating to English, when the page numbers differed from the original Japanese version, they were
adjusted to those of the English version of the report. 2) The Company’s fiscal year is March-ending; i.e. FY 2021
ends in March 2021.

4/40
This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
PCA (9629 TSE First Section)

Issued: 11/24/2020

1. Company Overview
w Major specialized
player in the industry
with 40 years of history,
developing andproviding packaged
enterprise system
software for domestic
small/medium-sizedcompanies(1) Enterprise system: a partof a company’s information
system that deals with matters
directly affecting business,such as financial accounting,production control, sales andinventory control, purchases,
HR, and payroll. A generalterm for back-officeapplications. Also called themission-critical system, it
serves as an important coresystem for
operations/services.
w The PCA Group iscomposed of theCompany and 3
subsidiaries.
(2) Work management
system: also called theattendance management
system, it manages/utilizes
various info on working
hours. Can automaticallyaggregate data on working
hours, etc., and prepare data
to link with payroll software.
Provided as on-premises orby cloud.
w Acquired Keepdata, acompany withtechnology development
capability, expertise,and proven record, as afoothold for the datautilization business◆ Major Specialized Player in the Enterprise System
Software Industry
PCA CORPORATION (hereinafter, the “Company”) is an independent,
mid-tier, specialized company in the software industry. The Company is a
specialist in developing and selling packaged software (software preparedfor use in certain operations) for enterprise systems1, such as those foraccounting and tax. It is a major player as a specialist in such software forsmall/medium-sized companies.
About 240,000 companies are active users of the Company’s products.
Sales toward ordinary companies comprise greater than 90% of the total
sales. With regards to the size of the corporate customers, the Company isespecially strong in business toward small/medium-sized companies with50 to 100 employees. 80% of the Company’s sales are made via distributors(the remaining 20% are direct sales). It has the largest transaction with the
distributor RICOH (sells the Company’s software along with its own
hardware such as office appliances), which contributes to about 21% of theCompany’s total sales. The Company’s customers are diversified. Bymonetary value, many of its major customers are large corporations. It
ranks No. 1 in the accounting software industry for public benefit
corporations; its software has been implemented at over 8,000 publicbenefit corporations.
As of the end of September 2020, the Company’s group was composed ofa total of four companies: the Company and three consolidated subsidiaries.
The consolidated subsidiaries are Xronos Inc. (development/sales of work
management system2 and time recorders; the Company founded thissubsidiary in 2001 and owns 80% of the shares), KEC Corporation(implementation support, operation, maintenance, and other services for
PCA’s products/services; wholly owned and founded in 1998 by theCompany), and the recently acquired Keepdata Ltd. (hereinafter,“Keepdata”) (these companies’ website addresses are listed on the very last
page of this Report as reference).
The Company acquired Keepdata in March 2019 and made it its subsidiary(acquired 66.8% of the shares for approximately Y44 million). The
subsidiary has been fully included in the consolidated financial results
starting last fiscal year (FY 2020). Keepdata’s strength is its originallydeveloped system (KeepData Hub: cloud service targeting large
companies) that enables real-time integration of various big data such as
IoT and one-stop management of the accumulation, aggregation, andvisualization of data to facilitate effective data utilization. As aManagement Support Company, the Company intends to use this system asa foothold for the new service of providing data utilization platform tosmall/medium-sized companies.
Keepdata posted sales of Y120 million, a net loss of Y262 million, andnegative net assets of Y66 million in FY 2018 (ended September). Upfront
investment costs associated with system development had caused this net
loss and an excess of debt. Since this system development had been
completed, the Company had expected profit and loss to balance out in theprevious fiscal year after its acquisition. However, sales did not expand asmuch as expected and a net loss seems to have been posted. The subsidiary
may continue to post a net loss for a while, but it will most likely gradually
improve and have limited impact on the Group’s financial performance.
5/40

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

Alpha-Win Company Research Report
PCA (9629 TSE First Section)

Issued: 11/24/2020
Concerning MACS System Corporation (development/sales of computer
software for medical office use such as electronic medical records), which
had been a consolidated subsidiary up through the fiscal year before theprevious (FY 2019), it was sold in February 2019 since its business was
unprofitable. Thus, the Company is making progress with the restructuringof its business portfolio.

w The medical system
subsidiary was sold aspart of the restructuringof the businessportfolio.
w Consolidated-to-parentcompany sales ratio has
stably been around 1.1.
The summed recurring
profit of theconsolidated
subsidiaries(consolidated minus
parent) has been asurplus.

The ratio of consolidated-to-parent-company sales has stably remained
around 1.1, indicating that a greater weight is placed on the parent
company’s financial results (Figure 1). Although the subsidiaries’ profits
and losses are not disclosed, the ratios of consolidated-to-parent-company
recurring profit have been in the range of 1.0-1.6 during the fiscal years that
the Company has been in the black (including this fiscal year’s forecast).
Additionally, the summed profit/loss of the three subsidiaries, calculated byconsolidated minus parent-company recurring profit, has been a surplus
since FY 2016 (Figure 2).
Among the subsidiaries, Xronos seems to be continuing to contribute themost to the financial results, thanks to the work-style reform. Its sales havebeen following a solid trend, with Y500 million in FY 2013, Y1 billion in
FY 2017, Y1.5 billion in FY 2019, and Y2.1 billion in FY 2020. In FY 2025,
sales of Y4 billion are expected (announced on Xronos’s former website).
Although its profits have not been disclosed, the subsidiary has mostly
likely been staying in the black and contributing positively to theCompany’s consolidated profit like KEC.

[Figure 1] Ratio of Consolidated-to-Parent-Company Sales (ratios shown on upper portion of graph)
Unit: million yen

Sales of parent company

Consolidated sales minus parent company sales

16,000

1.1

1.1

1.1

1.1

1.1

1.1

14,000

1.1

1.1

887

Consolidated
to parent
company
ratio

1,361

12,000712
782

10,000

732
8,000

681

825

680
13,379

6,000
9,693
4,000

11,91910,727
7,487

7,761

FY 2015

FY 2016

8,628

8,960

FY 2017

FY 2018

2,000
0FY 2014

FY 2019

FY 2020

FY 2021 (E )(Ref) Figures 1 and 2 were both prepared by Alpha-Win Research Dept. based on the securities
report. Estimates/forecasts (E) are from the Company’s business plan.

[Figure 2] Ratio of Consolidated-to-Parent-Company Recurring Profit (ratios shown on upper portion of graph)
R.P. of parent company

Consolidated R.P. minus parent company R.P.

Unit: million yen

3,000

1.2

N.A

1.6

1.1

1.0

1.2

1.2

1.1 Consolidated
to parent
company
ratio

402

2,500

2,000

192

1,500

1,000

500

238

221
59

918
26

0

2,406
1,863

34

-139
-19

41

FY 2015

FY 2016

800

1,039

405

-500
FY 2014

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021 (E )6/40This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
PCA (9629 TSE First Section)

Issued: 11/24/2020
The name of the Company comes from the five founders who were certified
public accountants (CPA); the letters CPA were shuffled into themeaningful name P (Professional) C (Computer) A (Automation).

w Founded by certified
public accountants in
1980

The Company’s finance is firm, rich in cash and debt-less. Relative to its
sales of Y13.3 billion (the Company’s plan for this fiscal year), total assetsof Y22.6 billion, and market capitalization of Y36.7 billion, its cash anddeposits are abundant, at Y11.0 billion (values as of the end of September2020).

w Rich in cash. Debt-lessmanagement.

Free cash flow (FCF) has been positive except for a certain period, and cash
and deposits on the B/S have been increasing (Figure 3). The financial
ratios, including the equity ratio of 62.0% and the current ratio of 267%,
also indicate financial soundness (values as of the end of September 2020).
[Figure 3] Transition in Cash Flow (CF) (unit: million yen)
Unit: million yen
Operating CF ①
Investing CF
Financing CF
FCF (①+②)
Cash and Deposits (on B/S)FY 2010
627
-405
-207
222
6,817

FY 2011

FY 2012

488
-127
-210
361
5,970

141
185
-205
326
5,493

FY 2013

FY 2014

847
-407
-215
440
6,621

1,048
-750
-216
299
6,606

FY 2015
547
-606
-284
-60
6,154

FY 2016
1,427
-627
-214
800
6,612

FY 2017
1,533
-395
-215
1,137
7,487

FY 2018

FY 2019

FY 2020

1,270
1,715
-216
2,985
7,269

2,141
-80
-572
2,061
7,280

3,328
-719
-225
2,609
10,716

Period Ended Sept
2020 (this H1)

Period Ended Sept2019 (last H1)

487
163
-377
650
10,991

1,402
-2
-225
1,400
9,505

(Ref) Prepared by Alpha-Win Research Dept. based on the financial results summary(Note) Cash and deposits shown are values from the balance sheet, not values used in the CF calculation.

w The Group’s basic
business policy is to“aim for a morerational business
management withclear vision.”w The mission statement
is to “contribute tosociety by developing
and providing
packaged enterprisesystem software thatrealizes advanced
automation.”◆ Business Philosophy
The Company’s business philosophy was announced as “customer-first”
when it made its first public offering in March 1994. Then, in 2010, it laidout the three key ideas of its business philosophy and 34 rules for the codeof conduct and announced that the basic business policy of the PCA Group
is to “aim for a more rational business management with clear vision.”
The Company’s mission statement is to “contribute to society by
developing and providing packaged enterprise system software that realizes
advanced automation.” While its corporate culture is down-to-earth andhomely, the Company is also characterized as having a pioneering spirit in
the rather conservative industry, conducting R&D and launching new
products ahead of its competitors.
The following are the three key ideas of the Company’s businessphilosophy:
1) We will always make our best effort to be customer-first.
2) We will aspire to become a highly profitable company with soundmanagement over the long term.
3) We will treat our employees like a family and create a homely culture.

7/40
This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
PCA (9629 TSE First Section)

Issued: 11/24/2020

2．Business Description and Business Model◆ Enterprise System Software Necessary for Efficient
Business Operations
w Enterprise systems are
mission-critical.
Stability and reliability
are critical elements
since they are used
inside companies.

The Company’s core business is enterprise systems that support internalbusiness operations. Unlike systems that simply work on personal
computers, an enterprise system is a computer system that supports a seriesof processes throughout all business operation flows within a company.
Since it is mission-critical for business operations, it is required to bereliable, efficient, stable, user-friendly, secure, and expandable.
The main methods for building an enterprise system are package-based
system development and original system development. Generally, themethod of combining sold packaged software into a system has advantages
such as short development time, cheapness, and having relatively few bugs.
On the other hand, its disadvantage is the difficulty in customizing thesystem to a company’s business conditions, operations, management styles,
and other specific needs.
As for original software development and implementation, outsourced
development and in-house development are the two options. In either case,the advantage of an original system is that it is user-friendly since it can becustomized to a company’s needs and operations. However, development
cost and time are larger and longer, and it requires revisions, addition offunctions, and maintenance after implementation. Micro-sized, small-sized,
medium-sized, and mid-tier companies especially tend to find thedevelopment, implementation, and operation of original software difficult
due to financial, staff, and time constraints.

(3) Accounting software:
application software forrecording, processing, andintegrated management ofaccounting data
(4) HR and payroll software:
software for payroll
calculations and HR
management

In response to this situation, the Company has been developing original
enterprise system software that specifically meets the needs of one-person
businesses and micro-sized (SOHO), small-sized, medium-sized, and midtier companies in areas such as accounting3, finance, HR and payroll4, sales
management, purchasing and inventory management, and tax. The
enterprise system software is either packaged (on-premises: conventional
products operated in-house by a corporate user) or cloud-based (a service
where a corporate user can use the enterprise system software via theInternet easily and at a low cost without having to prepare its own server).
The Company sells and provides its software through either direct orindirect channels.
Additionally, the Company has not only been developing and sellingenterprise system software but has also been expanding its business byproviding consulting services based on solution proposals. With its
subsidiaries, the Company has also been providing various support services
such as maintenance service and implementation/operation support. Goingforward, the Company plans to further strengthen these businesses.

w Provides about 27 typesof originally developed
packaged enterprisesystem software◆ Business Model with High Continuity and Marginal
Profit Ratio
The Company provides a total of about 27 types of software (counted byproduct name, including options) and its business model is based on themass production of a limited number of types of products. Due to the natureof its business, its marginal profit ratio is high.

8/40This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
PCA (9629 TSE First Section)
w About 70% of sales
comes from originallydeveloped products andservices

w Entry barrier is highsince reliability andproven track record are
required.

Issued: 11/24/2020
Its original products and services (products/maintenance/cloud) account for
greater than 70% of the total sales, while the remaining 30% comes fromother companies’ products (purchased merchandise) in the merchandise /other operating revenue categories. From the development to the release of
a new product, approximately two years and a corresponding amount ofcost are necessary per product. Version upgrades (revision updates), which
are prepared as needed, are released usually in a one- to two-year cycle. In
recent years, however, software functions have become so enhanced thatthe customers seem to be purchasing less in response to this version upgrade
cycle.
Since these types of software are related to operations that are required tobe highly reliable, and since software replacements give rise to issues ofcost, labor, and data continuity, their users show little interest in actively or
frequently replacing their current software with an alternative of a different
company. Therefore, customer loyalty is high, and contracts have highrepeat rates (50% to 90% or greater depending on the type of software). The
barrier to market entry is high because trust and brand recognition are amust in this industry and its companies are currently mostly being able toexist alongside one another by taking strong positions in different niches.

◆Expansion of Highly Stable and Profitable SubscriptionBased Businesses
w Sales are divided into
five categories. Focusedon the subscriptionbased businesses.

The Company only has one business segment, but it discloses sales for fivesales categories (types): “products,” “merchandise,” “maintenance service,”“cloud service,” and “other operating revenue” (also called “solutions andother”) (Figure 4, and Figure 5 on page 10). Profit and loss for each sales
category are not disclosed.

[Figure 4] Sales Classification (by category)
FY 2020 (results)

Sales Classification by
Category
Product ｓ
Merchandise
Maintenance Service
Cloud Service
Other Operating Revenue

Contents
Sales of original packaged software (accounting, sales management, purchasing and inventory
management, payroll, HR, etc.) (includes version upgrades)
Sales of other companies’ products such as ledger sheets
By signing up to PSS membership, users can receive inquiry and support services from call centers
Subscription service for software provided via the cloud
Sales of other companies’ products such as software/hardware combined with its original products; also
called “solutions”

Total & AverageSales(million yen)

% of Total Sales Est. Gross Margin

H1 FY 2021 (results)
Sales(million yen)

% of Total Sales

3,166

22.2

approx. 70%

727

12.2

552
3,471
3,374

3.9
24.3
23.7

approx. 40%
80-90%
60-70%

175
1,777
1,949

2.9
29.7
32.6

3,701

25.9

approx. 25%

1,350

22.6

14,266100.0 Actual: 60.3%

5,980

100.0

(Ref) Prepared by Alpha-Win Research Dept. based on the securities report and interview. Includes estimates. Sales for each category arebased on the new standards.
(Note) Maintenance service and cloud service are the subscription-based businesses.

w Subscription-based
businesses(maintenance & cloud)account for about 60%of the total sales.

In recent years, the service of providing cloud versions of the Company’s
packaged software has become the Company’s growth driver with regards
to both the overall sales and profit. In the first half (H1) of FY 2021, salesof the cloud service continued to grow, surpassing the sales of themaintenance service and becoming the largest sales category for the firsttime. Subscription-based revenue (sum of the cloud service and themaintenance service; also called the “stock business” in Japanese) accounts
for about 60% of the total sales and has helped improve the stability ofmanagement and profit through its high gross margin and continuity.
Consolidated sales breakdown by the operation type of software is notdisclosed. However, sales seem to be diversified, with the sales foraccounting software predicted to be the largest by composition (about 15%of the total sales), followed by sales/purchase/inventory management
software, and then by payroll/HR software.

9/40
This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
PCA (9629 TSE First Section)

Issued: 11/24/2020
Currently, the Company primarily sets internal target values for softwaresales (or the sold number of products) by operation type. Target values are
not set for the profit/loss of each software operation type. However, in linewith the medium-term plan, the Company has been consulting with an
external IT consultation firm and is now working on creating and adopting
new performance management indicators to make a transition from salesbased management to profit-based management. The Company hascommented that the profit/loss values for each software operation type do
not greatly differ between one another, but the main accounting software
business is presumably generally highly profitable.
The percentage of new software sales or version upgrade sales over the total
sales changes every year, but the percentage of version upgrades has always
been greater than 50%. As a side note, the Company’s on-premises products
tend to be installed and used by users on a single PC (stand-alone).

[Figure 5] Change in Full-Year Sales and Sales Breakdown (unit: million yen, %)16,00014,000Cloud

Maintenance

Solutions

Merchandise

11,43912,000Full-Year
10,000

9,360

8,000

2,069

6,000

955
1,740

4,000
3,098

9,785

1,954
988

2,516
563

% of Total Sales

3,109

3,166

13,280

93.1％

2,539

80.2％

552

445

80.6％

3,701

2,889

78.1％

3,388

97.6％

One-TimePayment-Based
Income
44.2%

2,781

1,878

2,000
0

YoY Change

14,266

Products

3,471

Subscription-BasedIncome

3,124

1,496

1,854

2,452

FY 2017

FY 2018

FY 2019

3,374
FY 20204,019

119.1％

55.8%

FY 2021
Forecast(Ref) Excerpt from the Company’s financial results briefing materials and financial results summary, reworked by
Alpha-Win Research Dept. Forecast is from the Company’s plan.
(Note) In FY 2020, the accounting standard for the products and the solutions segments were partially revised (newstandard). This new standard was retroactively reflected in FY 2019. However, for the two segments, there is no
continuity in data with the period before FY 2018.

◆ Cloud Business as the Growth Driverw Rapidly shifting frompackaged software sales
to thecloud/subscriptionbased model

For many years, the Company had been focused on the business of selling
conventional packaged software, also known as on-premises. However, as
the Internet became more sophisticated and more widely used, theCompany predicted that the demand for the cloud will rise due to its userfriendliness and cost performance. Therefore, in 2008, the Company started
providing cloud-based services more than ten years ahead of its competitors.
Since then, it has been providing cloud versions for all of its on-premises
software.
In the cloud business, users pay fees continuously for a certain period to use
the software (subscription-based business model). It is attractive as a stable,
subscription-based business model similar to the maintenance service(average monthly payment of 20-30 thousand yen per corporate user). As
the cost of this cloud business is largely fixed and the amount of its variable
costs such as those related to server maintenance, manufacturing, sales, andlogistics is small, it has a high marginal profit ratio.

10/40
This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
PCA (9629 TSE First Section)

Issued: 11/24/2020
The Company leads the industry as No. 1 in cloud-based enterprise system
software for small/medium-sized companies. The advantages listed below
seem to be making the Company stand out from its competitors in the field.
In recent years (2017-2018), its competitors have also entered the cloudmarket in full scale as their “first year of the cloud,” but the Company is
expected maintain its advantages for the meanwhile.

w The rapidly growing
cloud business is basedon a subscription-based,stable business model.
Taking a lead in theindustry, the Company
has a high competitive
advantage.

・ Providing a wide variety of advanced software for business operations
・ Originally developed open architecture and low cost・ Economies of scale are in effect, with more than 15,000 corporate users of
the cloud service as of the end of September 2020; a significant source ofprofit・ Consequently, it has a very strong price advantage compared to its
competitors
・ More than ten years’ worth of operation expertise・ User-friendly, with WebAPI5 allowing linkage with other companies on
the cloud (linkage already possible with about 60 companies, including
Kintone6 of Cybozu)(5) API (Application
Programming Interface):interface/network to operate
software; connects thesoftware and the program.
(6) Kintone: cloud service forbuilding business app on a
web database, provided by
Cybozu. Allows easy systembuild-up and linkage withother systems.

The Company has recently been focusing its business on the cloud service,and the number of contracts as well as sales has been growing steadily(Figure 6). The business’s growth rate has been accelerating along with the
expansion of scale, making it the Company’s main driver of businessgrowth.
[Figure 6] Change in the Sales of PCA Cloud and the Number of Companies
that Have Implemented PCA Cloud
18,0004,500

Sales of the cloud service (right axis: million yen)
16,000# of companies that have implemented PCA Cloud(left axis: companies)

4,000

14,0003,500

12,0003,000

10,000

2,500

8,000

2,000

6,000

1,500

4,000

1,000

2,000

500

0

0

FY
FY
FY
FY
FY
FY
FY
FY
FY
FY
FY
FY
FY
FY
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 E(Note) Sales from FY 2008 to FY 2010 have not been disclosed. Estimates are partially included in the number of companies thathave implemented PCA Cloud.

(Ref) Prepared by Alpha-Win Research Dept. using information including those from the Company’s financial
results briefing materials and interviews. (E) represents estimates/forecasts made by Alpha-Win Research Dept.

w 製品開発は、あたり約年の期間と億円の開発費を要
する。

11/40
This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
PCA (9629 TSE First Section)

Issued: 11/24/2020◆ Topic 1: Impact of COVID-19 and the Company’s
Response(7) New coronavirus diseaseor COVID-19: a viral
respiratory disease caused
upon the infection of humans
by the new coronavirus. It
has become a worldwide
pandemic.

In February 2020, the COVID-19 Response Headquarters was establishedwith president Sato as the chief director. Internally, the Company has beenencouraging remote work and staggered working hours among its
employees. Since April 8th, a day after the emergency declaration on the
new coronavirus disease7 (hereinafter, “COVID-19”), the Company has
been on remote work in principle.
It replaced a few hundred PCs, supplied all employees with mobile devices
such as iPhones, provided remote work preparation stipend and remote
work allowance, and improved its communication infrastructure andremote-work environment. Currently, about 70% of its officers andemployees work from home. It also strengthened its user support system bystarting remote call-center operation. To fulfill its social mission to provide
enterprise system software while ensuring the safety of its officers andemployees, it has also been on a shift-work system.
Toward its customers and business connections, the Company has beencancelling or postponing events, seminars, and in-person meetings, and has
been switching to online negotiations. However, recently, it has gradually
begun combining them with some face-to-face sales activities.

w Due to the nature of its
business, the impact of
COVID-19 has overallbeen minimal. However,sales activities foracquiring new contracts,business development,
and support services
have been somewhat
affected.

w PCA Subscription, its
new business, wasreleased about twomonths behindschedule.

(8) Client-API: an API(application interface) on
which PCA software
functions can be used fromexternal applications.

Since the Company has been making a large shift to the subscription-based
business model and providing its enterprise system software in cloud format
too, the impact of COVID-19 has been small for the short term.
However, undeniably, there has been impact on new customer acquisition,
its support services (visiting customers to help implement software), newbusiness development, and version upgrades for the on-premises software.
Its main users are small/medium-sized companies who are financiallysusceptible to the impact of the self-restraint request under the emergency
declaration and the stagnation of economic activities. If the situation
becomes prolonged, there is likely to be a negative impact on the sales
expansion of the existing services and the development of new businesses.
In fact, the Company had initially planned to launch the new business PCA
Subscription, a subscription service for its on-premises software, on May
11, but due to COVID-19, this was pushed back to July 1. Also, although
it launched the Hyper Series (described on page 33; a new product targeting
mid-tier companies) according to its original schedule, sales expansion so
far seems to be slower than expected.
PCA Subscription is an alternative to the conventional packaged versionsof software (one-time sales of PCA series products). By paying a monthly
or annual fee, the user becomes subscribed to use the Company’s enterprisesystem software (subscription: selling/billing method where software usage
right is periodically updated). The service’s features are described below(edited/reworked excerpt from the Company’s news release). The
Company intends to actively expand the sales of this service.
・Can use PCA software without initial cost・Latest program version always available
・Enhanced automatic updating function (download, not packaged)
・Client-API8 is a standard feature (need to pay in packaged version)・Operated under a public cloud environment (Iaas/Paas)

12/40
This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
PCA (9629 TSE First Section)

Issued: 11/24/2020◆ Topic 2: Acquisition of Dreamhop Co., Ltd. andDevelopment of HR Businessw Acquired Dreamhop, acompany focused onstress check services.
Plans to expand the HR
business.
(9) The revision in the
Industrial Safety and HealthAct has required workplaces
with 50 or more employees
to conduct stress checks of
its employees starting in
December 2015.

w Expecting synergy withthe existing HR
businesses

This October, the Company acquired Dreamhop Co., Ltd. (hereinafter,
Dreamhop; headquartered in Shinjuku-ku, Tokyo; Toshiyuki Mukuno as
the new president; established in June 2005; capital of Y56.5 million after
capital increase; a little less than 20 employees) for approx. Y108 million
as a wholly owned subsidiary. Dreamhop is a small-sized company
specialized in services and business management related to mental healthand health management, with a focus on stress check services9. It has
unique programs and expertise and offers full management of the programs
on behalf of its customers. The Company had previously used Dreamhop’s
services as a customer and had been in a collaborative partnership.
The PCA Group already has a lineup of HR (human resources) solutions,such as PCA Salary, PCA Personnel Management series, and its subsidiary
Xronos’s work management system. The Company believes that its HR
solutions must be urgently be strengthened to sustainably grow as aManagement Support Company. For this purpose, the Company decided toacquire Dreamhop, with whom it can also expect synergetic effects in thedevelopment and expansion of business connections as well as cross-sellingand up-selling. Its rationale is that with the drastically changing working
environment amidst the COVID-19 crisis, mental health care of employees
will become crucial and become a key area in HR solutions.
Dreamhop's financial performance disclosed in its news release issummarized in Figure 7. In the most recent fiscal year ended May 2020,
sales were Y129 million (+16.5% YoY) but a net loss of Y38 million was
posted (a net profit of Y0.2 million was posted in the previous fiscal year).
There was also an excess of debt by Y20 million. Judging from its financial
condition and the balance with sales, the acquisition price seems to beslightly expensive (P/S: 0.84) and goodwill is estimated to be about 150 to
200 million yen (estimated by Alpha-Win based on an amortization periodof five years and total amortization of Y175 million).

w Dreamhop has a net loss
and excess of debt; will
be included in the
consolidated results.

Dreamhop will most likely be treated as a consolidated subsidiary starting
this fiscal year, but since it was acquired in late October, its impact on thisfiscal year’s results should be limited (Dreamhop's financial forecast forthis fiscal year is not disclosed). Next fiscal year, Dreamhop will be fully
included in the consolidated results, so its trends in financial performanceand impact on consolidated results, including the amortization of goodwill,
should be watched.

[Figure 7] Change in Dreamhop’s Financial Performance
Unit: million yen
Sales
Operating Profit
Net Profit
Net Assets
Total Assets
Net Assets Per Share (yen)FY Ended May 2018
104
2
0
17
102
10,507

Rounded to the nearest million yen

FY Ended May 2019
111
4
0
18
86
10,645FY Ended May 2020
129
-39
-38
-20
74
-12,383(Ref) Prepared by Alpha-Win Research Dept. based on the news release

13/40
This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromtheuse of8）Client-API：PCA
or reliance on this Report. Investors
who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual（注
ソフpropertyof this Report belongs to Alpha-Win
and no part of this report may be copied, photocopied, cited, or translated without our consent.

トの機能を外部アプリケーシ
ョンから利用できる API（アプリケーションインターフェイス） 。

Alpha-Win Company Research Report
PCA (9629 TSE First Section)

Issued: 11/24/2020

3．Shareholder Composition◆ Major Shareholder Composition
Major shareholders as of the end of September 2020 are shown on Figure 8
on page 15. Compared to the end of March 2020, the top ten list of major
shareholders has changed, excluding the five shareholders who arepresumably stable shareholders.

w The founder family’s
asset managementcompany is the largest
shareholder with greaterthan 40% of all shares.
This, combined with thetreasury shares and the
Employee Stock
Ownership Plan,
amounts to more than
50% of all shares,
indicating stability.
w No change to the stableshareholders but a few
new shareholders haveentered the top ranking

The largest shareholder has not changed and is Kawashima Co., Ltd., theasset management company of two directors of the Company (president
Sato and director Hiroshi Kumamoto) and their relatives (descendants tothe founder Masao Kawashima).
The second largest shareholder MSIP CLIENT SECURITIES and thefourth, fifth, sixth, and tenth largest shareholders are all custodians (ranking
excluding treasury shares; the same applies below). Their final investors
and purpose of investment are unknown, but some of the accounts have ahistory of investment in several Japan stocks and many of them are most
likely pure investment by institutional investors, funds, etc., made throughtrustees (their number of shares and ranking tend to change frequently due
to the trading of shares).
The Company’s stock is also included in index funds managed bycompanies such as Mitsubishi UFJ Kokusai Asset Management, Nomura
Asset Management, and Sumitomo Mitsui Trust Asset Management.
The shareholding ratio of Credit Suisse Securities exceeded 5% at the endof January 2020 and a Report of Possession of Large Volume had been
submitted. However, it has been incrementally selling its shares since then.
Below is supplemental information:
・The Company itself has essentially been the second largest shareholder for
many years. After Kawashima Co., Ltd. indicated its intention to sell its
shares, the Company additionally acquired 200,000 shares (equivalent to2.6% of outstanding shares) in a tender offer by December 2018. As a result,
the Company currently owns a total of approx. 13.6% of its own shares.
The Company has not decided on how to use its treasury shares, but somehave already been sold to the Employee Stock Ownership Plan as part of its
new incentive program. Some possibilities for the use of treasury shares
include additional stock-based renumeration for its officers and employees
and stock-swap in a tie-up or an M&A.

w Its rival OBC is also amajor shareholder.

・The third largest shareholder Obic Business Consultants Co., Ltd. (OBC)
is a competitor with no transaction with the Company. Shigefumi Wada,
the current president of OBC, had also been a major shareholder under his
personal account, but he has been gradually selling his shares. Meanwhile,
there has been no change in the number of shares held under the corporate
account. In either case, the purpose of shareholding is unknown.
・The seventh largest shareholder Logic Systems Co., Ltd.’s purpose is also
unknown.
・The shareholding ratio of the PCA Employee Stock Ownership Plan, ateighth place, has been decreasing due to the selling of shares in response to
the recent rise in stock price.
・The nineth largest shareholder Nagoya PCA Co., Ltd. is a company towhich the Company outsources a part of its software development(SHOKON and other products).

14/40
This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

w 現状ではアクティビスト的な動きはない。なお、
買収防衛策は導入していAlpha-Win Company Research Report
PCA (9629 TSE First Section)

Issued: 11/24/2020
・Currently, there seems to be no activist-like behavior among the major
shareholders. Also, the Company has not adopted any anti-takeovermeasures.

[Figure 8] Major Shareholders’ Status

Unit for shares owned: thou. shares
End of Mar.
2015

Kawashima Co., Ltd.
PCA CORPORATION (treasury shares)
MSIP CLIENT SECURITIESObic Business Consultants Co., Ltd.
JP MORGAN CHASE BANK 385632
The Master Trust Bank of Japan, Ltd. (trust account)
JP MORGAN LUXEMBOURG S.A. 1300000
Logic Systems Co., Ltd.
PCA Employee Stock Ownership Plan
Nagoya PCA Co., Ltd.
MSCO CUSTOMER SECURITIESCredit Suisse Securities
Japan Trustee Services Bank, Ltd. (trust account)
SSBTC CLIENT OMNIBUS ACCOUNTAPPLIED SYSTEM LABORATORY Inc.
Mizuho Bank, Ltd.
BNYM SA/NV FOR BNYM FOR BNY GCM CLIENT ACCOUNTS M LSCB RD
Shigefumi Wada (individual)
GOLDMAN SACHS INTERNATIONAL
State Street Bank and Trust Company 505001

KBL EPB S.A. 107704
Reiko Sato (individual): Heir to the founder Masao Kawashima
Tomoko Kumamoto (individual): Heir to the founder Masao Kawashima
Hiroko Wada (individual)% of treasury shares over all outstanding shares

For ratios: %End of Mar.
2016

End of Mar.
2017

End of Mar.
2018

End of Mar.
2019

End of Mar.
2020

End of Sept.
2020% of Total Shares

848

848

2,935
848

2,935
849

2,736
1,049

254

254

254

254

254

2,735
1,045
295
254

114
110

114
119
100

114
127
100

114
127
100

114
135
100

114
100
100

2,735
1,045
294
254
205
148
131
114
101
100
90

41.11
13.57
4.43
3.82
3.09
2.23
1.97
1.71
1.52
1.50
1.36

1
―
2
3
4
5
6
7
8
9
10

472
89
87
86

121

121

86
121

86
121

181

181

181

151

244

249

266

266
90

112
303
174
94

1,467
1,467
358
11.0

1,467
1,467
11.1

11.0

13.6

11.0

Ranking

121

13.6

13.6

(Note 1) The percent of shares held by shareholders other than PCA (treasury shares) are the percent over all outstanding shares excluding
treasury shares.
(Note 2) The official English name could not be verified for some.
(Ref) Prepared by Alpha-Win Research Dept. based on the securities report.

15/40
This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
PCA (9629 TSE First Section)

Issued: 11/24/2020

4．ESG

w Shifting to remote work
to ensure safety andcontinue business
operation.
Implementing various
measures against the
COVID-19 crisis.

This fiscal year, there has so far been no large change with regards to ESG
and the Company has been conducting ESG activities on a steady basis as
usual. With the COVID-19 crisis, it has been encouraging remote work,
working on ensuring the safety of its employees and customers, ensuringsmooth business operations, and helping support its customers.

◆ Environment
Although the Company does not directly own any production facility andtherefore does not necessary harm the environment, it still makes
consideration for energy/electricity conservation.
◆ SocietyAs its mission statement, the Company has declared to “support thecustomers’ business through enterprise system software.” The idea is thatby contributing to the improvement of user convenience and efficiency, it
is fulfilling its responsibility as a member of the society. It plans toespecially focus on supporting small/medium-sized corporate users andhelping them become digitalized (remote work, going paperless, building
digital infrastructure, etc.).

w Proactively supporting
the disabled and thespotting and training of
IT talents

By sponsoring events, the Company supports the spotting and training oftalented programmers who will shape the future as well as promoting
athletics such as the marathon.
In the past, it had donated to the incorporated non-profit organization
Médecins Sans Frontières (MSF) Japan to support reconstruction after theGreat East Japan Earthquake and help the people who suffered from it.
The Company also operates a farm in Chiba Prefecture where it proactively
hires physically disabled staff. It also purchases flowers, lunchboxes,
bakeries, etc., from companies that hire physically disabled staff.

w Promoting diversity by
improving gender mix.
Has set goals to increase
the percentage ofwomen. Two out of ten
executive officers are
women.

In the general employer action plan pursuant to the Act on Promotion of
Women’s Participation and Advancement in the Workplace, the Company
has set goals to “continue to hire female employees at a ratio of 40% or
greater for new hires, raise the percentage of female full-time employees
from the current 25% to 30%, and create a foundation for raising thenumber of future female managers by raising the percentage of women in
the company.” The Company is promoting the workplace retention of
women and making efforts to promote greater female participation. One
outside director and one outside auditor are women.

◆ Governance
For internal control, the Company has set up an internal audit office directly
under control of the president that is operated in coordination with twooutside directors. It has also set up a risk control committee with thepresident as the chairperson and has created a risk control system thatallows flexible, quick, and appropriate response to risks.
As of the end of September 2020, the Company has not adopted an
executive officer system. The management team consists of six directors(including two outside directors) and four auditors (including three outside
auditors, one tax accountant, one CPA, and one lawyer).

16/40
This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
PCA (9629 TSE First Section)

Issued: 11/24/2020

5．History of Growth◆ Company History
w Founded uponrecognizing theimportance andpromising future ofcomputers andenterprise system
software in Japanw With a pioneering spirit,
became the first to
begin cloud services in
the industry(10) SaaS (Software as aService): software where, as aservice, one can use thenecessary function in thenecessary amount whenneeded; or the method ofproviding such service.
Instead of the user installingthe software, the vendor
operates the software andprovides the necessaryfunction to the user via a
network.
w Changed its market
listing from the Second
to the First Section of
the TSE in Dec. 2014

w Has been generally
increasing sales over thelong term. Meanwhile,
profit had not changed
significantly.

A group of five certified public accountants with the late Masao
Kawashima as the leader founded the Company in 1980 upon recognizing
the importance and the promising future of computer and software
businesses in Japan. At first, they developed and sold business accounting
software for small business computers. In 1995, in anticipation of shifting
away from small business computer users in the future, the Company began
the development and marketing of packaged software for personal
computers (PC) in full scale.
Then, with the emergence of the PC era, the Company began growing andhas continued to grow mainly through the following four strategies: 1)
creation of a greater variety of domestic packaged software as well as theirversion upgrades, 2) expansion of the maintenance service, 3) developmentof the cloud business, and 4) expansion of the solutions business which
includes providing other companies’ products. Furthermore, by increasing
the number of offices and cooperating with manufacturers and distributors,
the Company has developed a nationwide sales/support system that hascontributed to the rapid expansion of its business. It is seen as a pioneer inthe conservative industry, having been the first in the industry to begin
providing cloud services (SaaS10) in 2008.
Regarding stock, the first public offering was made in 1994. The Company
became listed on the Second Section of the TSE in 2000 and then on theFirst Section in 2014. Upon becoming listed on the First Section of the TSE,
the Company changed its logo to the current one.

◆ Past Transition in Financial Results
As described above, the Company has been expanding its business since
foundation until now as a specialist in the development and marketing ofenterprise system software and related businesses. The transition in
financial results since its first public offering is described in Figure 9 on
page 18. The following is supplemental information on the financial resultsin chronological order:
・Aside from certain periods such as the post-Lehman economic downturnand the decline following the spike of high demand stimulated by revisions
in tax and other regulations, the Company has generally kept increasing
sales since 1994. On the other hand, profit had not significantly improved,
being unable to maintain or exceed the level of profit that it had once
achieved.
・Consecutive decline in sales and profit from FY 2001 to FY 2002 was due
an economic downturn and the decline following the spike of high demand
stimulated by the year 2000 problem.

・The decline in sales for four consecutive years from FY 2007 to FY 2010
and the decline in profit for seven consecutive years from FY 2007 to FY
2013 were caused by decreased demand (due to the post-Lehman economic
downturn, etc.) and increased personnel, R&D, and sales promotion
expenses, as well as worsened profitability due to intensified competition.

17/40
This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
PCA (9629 TSE First Section)w Achieved record-highsales of Y10 billion in
FY 2014 thanks to theevent-driven highdemandIssued: 11/24/2020
・In FY 2014, record-high sales (Y10,475 million) were achieved thanks to
the high demand driven by two events: the termination of Windows XP
support (support ended in April 2014) and the change in consumption tax(from 5% to 8% in April 2014). The large growth of the cloud service also
contributed to this record high.
・Decreased sales in FY 2015 were due to the decline following the spike ofhigh demand caused by the two events described above. From FY 2016 tothis fiscal year, the Company has again been on a trend of increasing sales
thanks to the continued growth of the cloud, new products, strengthened
sales force, and economic recovery.
[Figure 9] Long-Term Transition in Financial Results
Sales (left axis)

Recurring Profit (right axis)(million yen)(million yen)

16,00014,266

14,00012,000

1,539
1,290

6,000 660 565

13,2802,500

11,4391,783

10,000

8,000

3,000

2,808

1,396

1,565

1,227

1,218

1,582
1,392

1,181

1,084

794

10,475

6,383
6,336

935

5,441
5,095
4,827
4,762
4,867
3,5414,551
4,000
3,232
5,026
3,017

7,551

1,181
6,269

6,006
5,597

798

9,785
9,360
8,441
1277
8,168

6,805

1,500

834

1,139

724

2,000
2,055

6,275

1,000

463
6,167
5,867

500
501 384

67
0

2,000
-158

-500

FY

1
FY 994
1
FY 995
1
FY 996
1
FY 997
1
FY 998
1
FY 9992
FY 0002
FY 001
2
FY 002
2
FY 003
2
FY 0042
FY 0052
FY 0062
FY 0072
FY 0082
FY 0092
FY 0102
FY 011
2
FY 012
2
FY 013
2
FY 0142
FY 0152
FY 0162
FY 0172
FY 0182
FY 019
FY 20
2
20 0
21
E

0

(Ref) Prepared by Alpha-Win Research Dept. based on the securities report.
Estimate/forecast (E) for FY 2021 is from the Company’s business plan.

(11) ERP (integrated
enterprise system): stands forEnterprise Resource
Planning. Management
concept based on the
integration and real-timeprocessing of core businessinformation to efficiently
optimize as a whole. Provided
as IT solutions software for
integrating enterprisesystems.

w In FY 2006, record highs
at that time for
operating and recurring
profits were achieved.

Regarding profit, record-high net profit (Y937 million) was achieved in FY
2000, thanks to the high demand stimulated by the year 2000 problem.
Additionally, in FY 2006, record highs were achieved for operating profit
and recurring profit (Y1,747 million and Y1,783 million, respectively).
These record highs were achieved through the improvement in profitability
from the demand stimulated by the revision of the accounting regulation for
public benefit corporations and the drastic change in regulations due to the
new Companies Act, as well as the Company’s ERP11 (integrated enterprisesystem) product Dream 21 (former product name).
For many years, the Company’s gross margin and operating margin had
been gradually decreasing (Figure 10). The gross margin declined due toincreased price competition from intensified competition among packaged
software developers during the economic downturn, worsened product mix
from a rise in the percentage of other companies’ less-profitable goods, andhigher costs especially for labor costs, production expenses (subcontractor
costs), and R&D costs.
Gross Margin（%）

Operating Margin

80.0[Figure 10] Long-Term Transition in
Gross Margin and Operating Margin

70.1

70.0

66.4

66.8

66.1

63.2

63.0

60.3

60.0

53.5

51.0

54.5

57.0

60.3

60.4

50.0

(Ref) Prepared by Alpha-Win Research Dept.
based on the securities report. The Company’s
estimate/forecast (E) used for FY 2021.

40.0
30.0
20.0
10.0
0.0
-10.0

19.5

17.8
12.7

15.3
11.1
6.9

10.6
4.7

4.6
-2.2

8.2

10.9

0.5

FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021
E

18/40
This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
PCA (9629 TSE First Section)
w In the previous period
of decline following an
event-driven spike ofhigh demand, a net loss
was posted for two years
in a row.
w Sales/profit began togrow again starting in
FY 2016 and theCompany has been
staying in the blacksince then, thanks to thenew products, growth ofthe cloud, and cost
reduction. Operating
margin improved.
w Partly due to thestructural reform,
financial performancerecovered in a V-shaped
curve.
w Consecutive large
growth in sales andprofit in FY 2019 and FY
2020 due to the highdemand caused by the
consumption tax
revision and thetermination of Windows
7 support.
w Record-high sales andprofit achieved in FY
2020

Issued: 11/24/2020
Despite efforts to cut down on cost, a net loss was consecutively posted in
FY 2015 and FY 2016 (net loss for the year: Y207 million in FY 2015 andY93 million in FY 2016) due to a drop in sales caused by the decline
following the event-driven spike of high demand as described above andthe postponed revision of consumption tax to 10%.
However, since FY 2016, the Company has been increasing sales again andits gross margin had stopped declining. Operating margin bottomed out andis now gradually increasing thanks to increased sales of the new products
and the cloud and cost reduction. The Company has also recently beenworking on structural reform, including the disposal of assets with
impairment risk (real estate and securities) and shortened softwareamortization period, and has been starting to see positive results from these
efforts. When domestic sales were dwindling just below Y10 billion inrecent years, cost reduction and sales growth of the cloud and themaintenance service had supported the Company’s growth and recovery offinancial performance.
Since FY 2017, the Company has been continuously making profit as wellas increasing it. In FY 2019 (the fiscal year before the previous), theCompany achieved an increase in sales and a significant increase in profit
for the fourth consecutive year. Due to an event-driven high demand of
about a billion yen in the second half (H2) of the fiscal year, the financial
results were revised largely upward during the fiscal year. Sales increased
in all categories, but the sales of the cloud service, the products, and thesolutions especially grew – by about 20-30% each – thanks to the eventdriven high demand (rise in the consumption tax rate, termination of
Windows 7 support, version upgrades related to the change in the name ofthe era, etc., led to a demand of almost a billion yen prior to those events,
as estimated by the Company). As a result, it achieved record-high full-yearsales for the first time in five years since the record of Y10,474 million
attained in FY 2014 when a high demand was induced by two events. Thishigh demand continued into FY 2020 (last fiscal year), mainly in H1,leading to the achievement of record-high sales and profit.
As reference, the Company's initial forecast and actual results in the past
were compared in chronological order (Figure 11). Although the actual
results have sometimes greatly deviated from the initial forecast, since FY
2017, the actual profits have tended to largely exceed the initial forecast.
Past announcements of revisions to financial forecasts have often been
made in September or February to April of the following year.

[Figure 11] Comparison of the Company’s Initial Financial Forecast and Actual Results in Chronological Order
Sales

Consolidated

Operating Profit

Recurring Profit

Net Profit Attributable to
Owners of the Parent (hereinafter "netprofit")InitialActualInitial
InitialActualInitialActual result
Actual result
forecast
resultforecast
forecast
resultforecast
FY 2001
5,026
1,224
1,227
695
FY 2002
5,634
4,762
925
1,215
935
533
FY 2003
5,104
5,095
1,073
1,015
1,083
589
576
FY 2004
5,521
5,595
1,170
1,125
1,181
653
682
FY 2005
6,096
6,005
1,551
1,293
1,565
769
915
FY 2006
6,870
6,383
1,747
1,780
1,783
1,059
327
FY 2007
6,860
6,336
1,533
1,550
1,582
922
852
FY 2008
6,790
6,274
1,321
1,325
1,365
1,391
812
644
FY 2009
6,800
6,268
1,294
1,117
1,360
1,181
809
680
FY 2010
6,500
5,867
1,141
744
1,200
797
714
436
FY 2011
5,908
6,166
878
686
927
724
519
411
FY 2012
6,505
6,805
806
468
835
501
381
75
FY 2013
7,025
7,550
56
354
84
383
29
181
FY 2014
8,641
10,474
284
1,110
311
1,138
141
604
FY 2015
9,198
8,168
453
-179
483
-157
283
-207
FY 2016
8,880
8,440
242
40
272
66
131
-93
FY 2017
9,731
9,360
165
432
187
463
51
160
FY 2018
9,876
9,785
645
807
669
834
425
441
FY 2019
10,486
11,439
825
1,248
842
1,277
588
906
FY 2020
12,783
14,266
1,478
2,781
1,499
2,808
976
1,816
FY 2021 (CE)13,280
2,034
2,055
1,358
Simple average of difference (unit: %), calculated based on the longest period with available data for sales & profits(excluding this FY) →Blue highlight:
Green highlight:
From initial forecast, upward revision : downward revision (unit: # of times)→
Previous record
Record highUnit: million yen

w 過去の業績修正は、9 月
あるいは翌年の 2～4 月になされることが多い。
直近の 3 期間は、期初の利益計画を上回る実績。

Sales

Operating
ProfitRecurring
Net Profit
ProfitOperating Recurring
Net Profit
ProfitProfitSales

Difference from initial forecast

YoY change in actual results-15.5%
-0.2%
1.3%
-1.5%
-7.1%
-7.6%
-7.6%
-7.8%
-9.7%
4.4%
4.6%
7.5%
21.2%
-11.2%
-5.0%
-3.8%
-0.9%
9.1%
11.6%

0.3%
-13.7%-34.8%-21.9%-41.9%
532.1%
290.8%-139.5%-83.5%
161.8%
25.1%
51.3%
88.2%

-23.0%
6.7%
5.0%
21.0%
0.2%
2.1%
1.9%
-13.2%-33.6%-21.9%-40.0%
356.0%
265.9%-132.5%-75.7%
147.6%
24.7%
51.7%
87.3%

-2.2%
4.4%
19.0%
-69.1%-7.6%-20.7%-15.9%-38.9%-20.8%-80.3%
524.1%
328.4%-173.1%-171.0%213.7%
3.8%
54.1%
86.1%

-5.3%
7.0%
9.8%
7.3%
6.3%
-0.7%
-1.0%
-0.1%
-6.4%
5.1%
10.4%
10.9%
38.7%
-22.0%
3.3%
10.9%
4.5%
16.9%
24.7%

-24.4%
16.0%
9.0%
32.6%
12.6%
-12.2%-13.6%-15.7%-33.4%-7.8%-31.8%-24.4%
213.6%-116.1%-122.3%980.0%
86.8%
54.6%
122.8%-23.8%
15.8%
9.0%
32.5%
13.9%
-11.3%-12.1%-15.1%-32.5%-9.2%-30.8%-23.6%
197.1%-113.8%-142.0%601.5%
80.1%
53.1%
119.9%-23.3%
8.1%
18.4%
34.2%
-64.3%
160.6%-24.4%
5.6%-35.9%-5.7%-81.8%
141.3%
233.7%-134.3%-55.1%-272.0%175.6%
105.4%
100.4%

-1.7%

60.5%

30.2%

32.2%

5.3%

55.8%

32.7%

10.3%

7 ： 12

7：6

12 ： 7

9 ： 10↑(Ref) Prepared by Alpha-Win
Research Dept. based on thefinancial results summary andsecurities report. The FY 2021
forecasts/estimates (CE) arefrom the Company’s plan.

Simple average for each period(excluding this FY)

19/40
This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
PCA (9629 TSE First Section)

Issued: 11/24/2020

6．Business Environmentw Decreasing number ofsmall/medium-sizedcompanies (its current
and potential users) inJapan(12) Small-sized company:
defined differently for eachindustry, but essentially thesame as “small/medium-sizedcompanies” in staff size andsales◆ Trends of Enterprise System Software Market
The number of companies in Japan is on a downward trend, falling below
four million companies (Figure 12). The number of small/medium-sizedcompanies is especially declining because of small-sized companies12
closing their businesses. With the decreasing population and aging societyof Japan, the total number of small/medium-sized companies, theCompany’s current and potential customers, is decreasing. In fact, the total
number of companies as of June 2016 was approximately 3.59 million,
having decreased by 0.62 million (-14.7%) since 2009.
[Figure 12] Change in the Number of Companies in Japan(ten thou. companies)

500

4.21 million
comapnies-0.62 million
companies
3.59 million
companies

400

300

Small-sized

423

410

305
378

366

367

200

334

325
Midsized

100

0

53

61

59

55

53

54

51

56

1999

2001

2004

2006

2009

2012

2014

54
2016

Largesized

1.1(year)(Ref) Data aggregated by the Small and Medium Enterprise Agency based on the “2016 Economic Census for
Business Activity” by the Ministry of Internal Affairs and Communications and the Ministry of Economy, Trade,and Industry

w Enterprise system
software market size is
expected to steadily
grow over the medium
to long term.

However, facing aggravating needs for human resources, operational
efficiency, and improved corporate financial performance, companies andother corporate bodies have been working on rebuilding or strengthening
their enterprise systems. Although the number of small/medium-sizedcompanies will likely continue to decrease, we predict that the size of theenterprise system software market will steadily increase over the medium
to long term as the demand for software to streamline business operations
increases.
Also, according to the “WHITE PAPER Information and Communicationsin Japan” by the Ministry of Internal Affairs and Communications, the sizeof the packaged software market (excluding game software, embedded
software, etc.) in 2017 was approximately Y1.1 trillion and its size has been
gradually increasing in recent years.

w Stably growing
enterprise system
software market.
Transitioning from onpremises to the cloud.
w Market potential of
cloud-based enterprisesystem software in
Japan is still large.

We estimate the current size of the enterprise system software market in
Japan specifically related to the Company’s business to be approx. Y500
billion and the size of the ERP market to be approx. Y100 billion. Annual
growth rate is predicted to be about 3% and 10%, respectively, over the
medium term. The cloud-based enterprise system software market may
grow at an especially high rate of 20-30% per year over the long term as it
replaces a part of the packaged software (on-premises) market. In fact,compared to the U.S. where the cloud-based enterprise system software
market is said to be several years ahead of Japan, the penetration rate inJapan is about ½ to ⅓ (ref: “WHITE PAPER Information andCommunications in Japan” by the Ministry of Internal Affairs andCommunications, etc.). With regards to software development method, theshare of packaged software in Japan is about 12%, and the proportion of

20/40
This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
PCA (9629 TSE First Section)

Issued: 11/24/2020
outsourced software development is still large compared to the US (Figure13). Therefore, the growth potential of the packaged software market in
Japan is believed to be large (according to the year 2017 version of the“WHITE PAPER,” the penetration rate of the cloud in Japan isapproximately 26% for “payroll / financial accounting / HR” and only 68% each for “production management / logistics management / store
management,” “purchasing,” and “sales on order”).

[Figure 13] Share of Each Software Type in Japan and the USA
USA

Japan
Packaged

11.7%

In-house
Development

Outsourced
Development

33.8%

37.2%
Outsourced
Development

88.3%

Packaged

29.0%(Note) Monetary amount of software developed inhouse is not disclosed in Japan’s official statistics(System of National Accounts). Therefore, data fromsoftware providers are used, but data on in-housedeveloped software are not included. To compare data
between the two countries, the total of packaged
software and outsourced development software for the
USA needs to be set to 100%, upon which theproportion of packaged software comes out to be 46.2%
for the USA, which is about four times that of Japan.

(Ref) Ministry of Internal Affairs and Communications: “WHITE PAPER Information and Communications for 2019” (Japan: Ministryof Internal Affairs and Communications and Ministry of Economy, Trade, and Industry) (USA: US Department of Commerce)◆ Recent Trends of Small/Medium-Sized Companies (theCompany’s users)
w Market sentiments aregradually and slightly
improving but theeconomic situation
remains difficult forsmall/medium-sizedcompanies.

According to the Bank of Japan Tankan for September 2020, software
investment (planned amount) in 2020 by small/medium-sized companies(all industries) improved by 0.5 percentage points since the previous survey
in June and is expected to increase by 2.8% YoY (breakdown: -9.9% formanufacturing and +8.4% for non-manufacturing). For the survey on thebusiness sentiment of small/medium-sized companies, although the “recent”
sentiment slightly improved from the June 2020 survey to the September
2020 survey, it was still -44 for manufacturing and -22 for nonmanufacturing. “Outlook” was also -38 and -27, respectively, indicating thecontinued severity of the situation.

◆ Comparison with Competitors
Figure 14 is an overview of the various positions and main players of theindustry, categorized by customer zone. The players in the industry aremostly being able to exist alongside one another by taking strong positions
in different niches, segregated by the size of the companies/organizations
that are their users or by the operation targeted by their software.
[Figure 14] Customer Zones and Main Players of the Enterprise System Software Market(Ref) Excerpt from the financial results briefing material, partially edited by Alpha-Win Research Dept.

21/40
This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
PCA (9629 TSE First Section)

Issued: 11/24/2020

w Its key product or theaccounting software has
the third largest share in
the market.

Three Major Listed Companies
The Company has different rivals for each type of operation targeted by its
software. Regarding its key accounting software and business in general,
its rivals among listed companies are thought to be Obic Business
Consultants (OBC: 4733), directly, and Miroku Jyoho Service (MJS: 9928),
indirectly. OBC is the greatest rival since it has almost the same productlineup and business model as the Company. Among private companies,
Yayoi (subsidiary of ORIX), OHKEN (independent company), and OSK(subsidiary of OTSUKA CORPORATION) are its direct competitors. The
Company stands out in that it provides high-quality but reasonably priced
products and services.

w OBC, MJS, Yayoi, and
OHKEN are its rivals.
w The Company provides
high-quality products
and services atreasonable prices.

The accounting software market size is approximately Y200 billion. The
market is reaching maturity and its size has not largely changed in recent
years. In this market, the Company is estimated to be third from the top(about 10% of the total market share). It also seems to have a similar levelof market share and position with its payroll and HR software. In the cloud
accounting market, the two companies described below are also its rivals
among listed companies. Both target one-person businesses and small
companies such as small/medium-sized companies and SOHOs. They
directly compete with the Company in specific areas.
w In addition to OBC, it
partially competes with
Money Forward andfreee in its accounting
software business. Both
rivals have a net loss but
have rapidly growing
their sales.

Money Forward (TSE Mothers: 3994)
・Providing cloud services such as household accounting application for
individuals and accounting software, etc., for companies
・Market capitalization of Y211.8 billion and stock price of Y8,950（closing
price on 11/20）
・FY 2020 (November-ending) forecast by the company: sales of Y11,272
million and net loss of Y3,151 million (median values, since both wereannounced as ranges); no dividend
freee (TSE Mothers: 4478)
・Providing ERP services for small businesses (cloud accounting software)・Market capitalization of Y431.9 billion and stock price of Y8,900（closing
price on 11/20）
・FY 2021 (June-ending) forecast by the company: sales of Y9,657 million,
adjusted operating loss of Y2,212 million (adjusted operating profit/loss =operating profit/loss + stock-based compensation + amortization of
intangible assets acquired through M&As + other one-time expenses), andno dividend
A comparison of the long-term transition in gross margin and operating
margin of the three major listed companies (the Company, OBC, and MJS)
is shown in Figures 15 and 16 on page 23. Compared to the Company, bothmargins are stable for OBC and MJS, presumably due to the merit of scale(the sales of OBC and MJS are about 2.3x and 2.5x greater than the
Company, respectively, and similarly their operating profit is about 6.2x
and 2.2x greater, respectively, based on this fiscal year’s company
forecasts) and the difference in efficiency and sales composition. Bothcompanies used to have a lower subscription rate for the maintenancesupport service but succeeded in raising this rate, resulting in a greater
earning power. However, the Company’s profit margins have alsobottomed out in recent years and have been increasing as it aims for greater
earning power.

22/40
This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
PCA (9629 TSE First Section)

Issued: 11/24/2020
Similarly, the transition in the Company’s ROA and ROE shown in Figure
17 on page 23 indicates that the ratios have been sharply improving inrecent years, bringing the Company to the top level among the threecompanies in the most recent period. Consequently, its asset efficiency aswell as earning power has also been significantly improving. (Actual resultsfor FY 2020, in the order of ROA to ROE: compared to 13.0% and 14.3%
for PCA, 9.9% and 8.5% for OBC and 13.9% and 9.9% for MJS.）

w Margins and asset
efficiency largely
improved. Top-level
ROA and ROE among
the three competingcompanies.

[Figure 15] Long-Term Transition in the Gross Margin of Three Major Listed Companies(PCA, OBC, and MJS)
PCA

（ %）

OBC

MJS

90.0
85.0

83.4

84.2

84.0

66.4

66.8

66.1

65.9

65.0

84.4

83.7

84.7

63.0

64.0

84.3

84.8

65.2

66.3

84.4

84.0

82.5

83.6

60.3

60.4

79.0

80.0
75.0

70.1
70.0
65.0
60.0

64.4
63.2

61.8

62.3

59.5

55.0

66.3

63.6

57.0
60.3

54.5

53.5

57.8

57.8

51.0

50.0
45.0
40.0

FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 E[Figure 16] Long-Term Transition in the Operating Margin of Three Major Listed Companies(PCA, OBC, and MJS)
PCA

（％）

50.0

46.7

45.6

40.9

43.4

OBC

45.0

43.2

MJS

41.7

42.7

44.4

43.2

41.4

41.6

40.0

28.0

30.0

16.3

20.0

16.5

19.5

15.6
17.8

10.0

12.7

11.1

10.3

10.9

10.8

11.3

8.2

6.2

4.3

8.0

6.9

0.0

15.3

12.9
4.6

10.6

14.7
10.9

13.1

0.5

4.7
-2.2

-10.0
FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021
E

[Figure 17] Transition in the Company’s ROA and ROE
（ %）

ROA

16.0

ROE
14.3

14.0
12.0
10.0

13.0
8.8
7.2

8.0
6.0
4.0

5.8

5.2

6.3

4.8
3.5

4.0

2.0

4.0

0.0

0.7

2.6

FY
2010

FY
2011

FY
2012

FY
2013

1.5

-1.0
-1.8

FY
2009

3.9

0.4

1.7

FY
2014

6.8

2.9

5.2

-2.0
-4.0

7.8

FY
2015

-0.9
FY
2016

FY
2017

FY
2018

FY
2019

FY
2020

＊ROA is the ratio of recurring profit to total assets.

(Ref) Figures 15-17 were prepared by Alpha-Win Research Dept. based on the securities reports. Estimates/forecasts (E) are from the companies’
business plans.

23/40
This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
PCA (9629 TSE First Section)

Issued: 11/24/2020

7．First-Half Results and Full-Year Forecast◆ Consolidated Financial Results for the First Half of FY
2021
w Last fiscal year, there
was a high demand
driven by two events(version upgrades
following the revisionin consumption tax rateand demand prior to thereplacement of software
related to thetermination of Windows
7 support). Due to thedecline following thisspike of demand, thisH1’s sales and operating
profit decreased, but
this was not a surprisesince they were still
within an expected
range.

Summary of the First Half
Consolidated results for the first half of FY 2021 were as follows: sales
were Y5,980 million (-16.6% YoY), operating profit was Y938 million (47.0% YoY), recurring profit was Y959 million (-46.4% YoY), and net
profit attributable to owners of the parent was Y589 million (-50.0% YoY;
hereinafter “net profit”) (Figure 18). There was a significant decline in sales
and profit. In the previous fiscal year, sales and profit reached their record
highs due to an event-driven high demand (estimated to be 1 to 1.2 billion
yen; mainly in H1). The drop during this fiscal year’s H1 was part of thedecline following this spike of demand. However, this was not a negative
surprise, since the amount of decline was mostly within an expected range.
Due to the COVID-19 crisis, the Company did not disclose its financial
forecast for H1 at the beginning of this fiscal year, but its sales and profit
have presumably reached or slightly exceeded the internal target values. In
addition, compared to H1 of the fiscal year before the previous which was
unaffected by any event-driven high demand, sales had increased by 21.6%
and operating profit had increased by 284.4%. In fact, relative to past H1
results over the long term, its achievement during this H1 can be judged as
being high. Progress against the full-year forecast was also comparable toprogress during the same period in recent years; progress was 45.0% forsales and 46.1% for operating profit.

[Figure 18] Financial Results for the First Half of FY 2021 (unit: million yen, %)H1 Results
Unit: million yen

Consolidated Sales

Sales Category

Products
Merchandise
Maintenance Service
Cloud Service
Other Operating Revenue

Gross Profit
Gross Margin (%)
SG&A Expenses
SG&A Expenses Ratio (%)
Operating Profit
Operating Margin (%)
Net Profit
Net Margin (%)

H1 FY 2020
Apr-Sept 2019
7,169
1,842
219
1,699
1,568
1,840
4,343
60.6
2,572
35.9
1,772
24.7
1,177
16.4

H1 FY 2021
Apr-Sept 2020
5,980
727
175
1,777
1,949
1,350
3,665
61.3
2,727
45.6
938
15.7
589
9.8

% Change
Difference% of Total Sales Growth
YoY: %
YoY: million yen%-16.6-1,188-100.0-60.5-1,114
-93.8
-19.9
-44
-3.7
4.6
78
6.6
24.3
380
32.0
-26.6
-490
-41.2
-15.6
6.0
-47.1
-50.0

-678
0.7
155
9.7
-834
-9.0
-588
-6.6

-

% of Total Sales
%
100.0
12.2
2.9
29.7
32.6
22.6
-

(Ref) Prepared by Alpha-Win Research Dept. based on the financial results summary.
(Note) “Other operating revenue” is the same as “solutions.” The sales categories of “merchandise” and “other operating revenue” are based on
the new standards.

w Subscription-based
income increased,accounting for a little
more than 60% of thetotal sales.

Sales in the First Half
Breakdown of the total sales decline of Y1,188 million (YoY) by businesstype is as follows: one-time-payment-based income (products +merchandise + solutions) decreased by Y1,650 million and subscriptionbased income (maintenance service + cloud) increased by Y458 million. As
a result, the percentage of the subscription-based income (over total sales),which is one of the Company’s KPIs, ended up being 62.3%, a significant
rise from the past years when the percentage had been about 50%.
For the one-time-payment based income, breakdown by sales category wereas follows in the order of increasing amount of YoY decline: -1,114 million
yen for the products (-60.5%), -490 million yen for the solutions (-26.6%),
and -43 million yen for the merchandise category (-19.9%). These
decreases in sales were most likely mainly due to the decline following the
24/40

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

Alpha-Win Company Research Report
PCA (9629 TSE First Section)

Issued: 11/24/2020
large rush demand in the previous year’s September before the consumption
tax revision. Sales of the products especially fell in large amount, as wellas the solutions whose sales tend to follow the same trend as the products(-117 million yen for implementation support and -373 million yen for thesales of other companies’ products). Also, due to the trend of going
paperless, sales of ledger sheets had continued to decline (Figure 19).

w Sales of “products” and“solutions and other”
significantly declined inreaction to the previous
event-driven highdemand.

On the other hand, for the subscription-based income, sales of the cloud
were solid and grew by Y380 million, maintaining a growth rate of greaterthan 20% (+24.3%). Sales of the maintenance service also increased by Y78
million (+4.6%) in a steady growth, thanks to the rise in the number ofcompanies that are subscribed to the service.

w On the other hand,subscription-based
income (cloud +maintenance) grew andstayed solid.

[Figure 19] Factors that Increased/Decreased Sales in the First Half of FY 2021 (unit: million yen)(million yen)

7,500

7,169

Increase

Decrease

7,000

380

6,500

78
6,000

-1,114

-490

5,500

PCA
+290
Xronos +101
Other -10

PCA
-918
Xronos -195

5,000

5,980

-43

Support
Other

-117
-373

4,500
4,000

H1 FY 2020

Products

Merchandise

Main tenance

Cloud

Solutions andOther

H1 FY 2021

(Ref) Prepared and partially edited by Alpha-Win Research Dept. from the financial results briefing materials.

w Corporate users of PCA
Cloud have beensteadily increasing. Now
over 15,000 users.

Cloud Service
The number of corporate users of PCA Cloud reached 10,000 on 1/11/2018
and has been steadily increasing since then from 11,331 at the end of
September 2018, 12,313 at the end of March 2019 (compared to half a year
ago: +982 or +8.7%), 13,343 at the end of September 2019 (+1,030 or+8.4%), 14,388 at the end of March 2020 (+1,045 or +7.8%), and mostrecently 15,262 at the end of September 2020 (+874 or +6.1%) (Figure 6
shown previously on page 11).

w Percentage of the salesof the subscriptionbased business overtotal sales was a little
over 60% during this H1
and is planned to be
56% for the full year.

In this fiscal year’s H1, the growth and growth rate of the number of usersof the cloud service had somewhat slowed down, but this may have been atemporary slowdown due to COVID-19. Over the past six months, thenumber of corporate users has increased by 874 in a net increase of about
146 companies per month (simple average). This positive trend seems to becontinuing into H2. About 40% of new contracts are with new customers.
For the full fiscal year, the total amount of increase in sales is planned to be
Y645 million. Y381 million was achieved in H1, so a growth of Y263
million seems to be expected in H2. Also, it should be noted that sales of
the cloud include the results of the recently acquired Keepdata (estimatedannual sales of Y100 million; contribution will be proportionate to thecorresponding period).
XronosUp through the previous fiscal year, the work management system of thesubsidiary Xronos had been contributing significantly to the results thanks
to the work-style reform. There are still many small/medium-sizedcompanies that have not started using any work management software, so

25/40This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
PCA (9629 TSE First Section)

w In a reaction to theprevious event-driven
high demand, sales ofthe product version of
the work management
system declined, but
sales of the cloudversion increased.

Issued: 11/24/2020
the potential demand is large. Since Xronos can provide work management
software both as on-premises and as cloud-based software (service name:X’sion), we had expected its sales to grow by about 10-20% YoY this fiscal
year too. However, in this fiscal year’s H1, the decline following the eventdriven spike of demand seems to have had a significant impact on the
results; its product-type software sales decreased by Y195 million andcloud-type software sales grew by Y101 million in a total decline of Y94
million. This sales decline seems to be temporary, though, and Xronos plans
to work on expanding sales again in H2 (Figure 19 on page 25).
Profit for the First Half
Factors that increased or decreased consolidated operating profit aresummarized in Figure 20. Since the Company’s business model has a highmarginal profit ratio, the sales decline directly caused a decline in profit.
[Figure 20] Factors that Increased/Decreased Operating Profit in theFirst Half of FY 2021
Increase
Decrease(million yen)

2,000
1,800

1,771

Sales

Operating profit

SG&A expenses

Cost of sales

1,600

Decreased by 833 million yen （-47.0％） YoY

1,400
1,200

458

2

1,000

-113

800

4

938

-58

63

600

-1,189

Cost of purchase
Cost of cloud
Cost of maintenanceRoyalties paid

400
200

+421
-22
+19
+40

0

H1 FYa2020

Decrease
a in
sales

Decreasea insoftwareamortization

a in cost
Decreaseof purchase andsales (royalties
paid, etc.)a
Maintenanceexpensea
Increaseinpersonnel
expenseR&D
aexpenses

Other
a
SG&A
expensesa 2021H1 FY(Ref) Prepared by Alpha-Win Research Dept. from the financial results briefing materials.

w Gross margin improved
but profit declined dueto the sales drop.

w The change in bonus
policy caused profit todecrease by Y110
million (temporary).

Gross margin improved by 0.7 percentage points from 60.6% in theprevious fiscal year’s H1 to 61.3% in this fiscal year’s H1 due to cost
control and solid support from the sales growth of the cloud, which isestimated to have a high profit margin, as well as the maintenance service(profit by sales category is not disclosed) (Figure 18 on page 24). Despite
the improvement in the gross margin, gross profit decreased by Y678
million YoY (-15.6%) to Y3,665 million due to the large sales decline.
SG&A expenses increased by Y155 million (+6.0%) from Y2,572 million
to Y2,727 million. This had been caused by the increase in personnel
expenses (+113 million yen) due to the change in the bonus policy, etc., toreflect the previous fiscal year’s strong performance on compensation
toward officers and employees, as well as the rise in R&D expenses (+58
million yen) as part of the increased investment for future growth.
Consequently, the SG&A expenses ratio rose from 35.9% to 45.6%.
As a result, operating profit significantly decreased by 47.0% from Y1,771
million in the previous H1 to Y938 million and operating margin decreasedby 9 percentage points from 24.7% to 15.7%. If the bonus policy had notbeen changed, the SG&A expenses would have only increased by Y43
million and operating profit would have been Y1,051 million (operating
margin of 17.6%).

26/40
This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
PCA (9629 TSE First Section)

Issued: 11/24/2020
In the past, though, the Company's operating margin in H1 rarely exceeded
10%. Therefore, both the profit margin and amount have been maintained
at high levels despite the decline from the previous fiscal year’s eventdriven spike of demand and the impact of COVID-19.
Since no significant non-operating profit/loss or extraordinary profit/loss
were posted, recurring profit and net profit both decreased at about the samerate as the operating profit.

w Regarding quarterly
results, sales and profit
decreased in both Q1and Q2. The impact ofthe decline following
the event-driven spikeof high, rush demand inlast year’s September
seems to have reached
its peak in this FY’s Q2.
w Profit and sales
increased in Q2
compared to Q1 partly
due to seasonalvariations.
w Continued strong salesof the cloud.
w Gross margin decreased
but has still stayedstable at around 60%.
w Operating margin wasessentially maintainedat over 15%.

Quarterly Results
Analyzing the results of this fiscal year’s H1 based on a quarterlycomparison (Figure 21), we can see that sales and profit declined YoY bothin the first quarter (April to June 2020: Q1) and the second quarter (July to
September 2020: Q2). The rate of decline in both sales and profit was larger
in Q2 than in Q1 mostly due to the large, event-driven, rush demand in theprevious year’s September.
Partly due to seasonal variations, sales of all sales categories other thanmaintenance increased from Q1 to Q2, resulting in an overall sales growthof 14.4% (last fiscal year, sales increased by 33.3% from Q1 to Q2). Salesof the cloud were particularly strong, having increased from Y957 million
in Q1 (+25.2% YoY) to Y992 million in Q2 (+23.4% YoY; +35 million
yen or +3.7% compared to Q1). In fact, sales of the cloud had continued to
grow at a high rate of more than 20% YoY. Also, although sales of the
products and the solutions declined YoY, compared to Q1, their sales
increased from Y307 million → Y420 million and Y546 million →Y804 million, respectively.
From Q1 to Q2, gross margin decreased from 63.0% → 59.8% andoperating margin also decreased from 16.7% → 14.8%. In Q2, an increasein personnel expenses (about Y110 million) was recorded as SG&A
expenses due to the revision of bonus policy. Excluding this factor, theoperating margin would come out to be 18.4% in Q2, which is greater than
the target ratio of 15%.

[Figure 21] Quarterly Transition in Financial Performance
Q1 Results
Unit: million yen
Consolidated Sales

Products
Merchandise
Maintenance Service

Sales Category

Cloud Service

Other Operating Revenue

Gross Profit

Gross Margin (%)
SG&A Expenses

SG&A Expenses Ratio (%)

Operating Profit
Operating Margin (%)

Net Profit

Net Margin (%)
Q2 Results
Unit: million yen

Consolidated Sales

Sales Category

Products
Merchandise
Maintenance Service
Cloud Service

Other Operating Revenue
Gross Profit
Gross Margin (%)
SG&A Expenses

SG&A Expenses Ratio (%)
Operating Profit
Operating Margin (%)

Net Profit
Net Margin (%)

Q1 FY 2020
Apr-June 2019
3,073
652
102
865
764
688
1,868
60.8
1,281
41.7
587
19.1
364
11.8
Q2 FY 2020
July-Sept 2019
4,096
1,190
117
833
804
1,153

Q1 FY 2021
Apr-June 2020
2,789
307
77
899
957
546
1,756
63.0
1,290
46.3
465
16.7
272
9.8
Q2 FY 2021
July-Sept 2019
3,191
420
98
878
992
804

% Change
Difference% of Total Sales Growth
YoY: %
YoY: million yen
%
-9.2
-284
-100.0-52.9-345-121.5
-24.4
-25
-8.7
4.0
34
12.0
25.2
193
68.0
-20.6
-142
-50.0
-6.0
-112
2.2
0.7
9
4.6
-20.7
-122
-2.4
-25.1
-92
-2.1
% Change
Difference% of Total Sales Growth
YoY: %
YoY: million yen
%
-22.1
-905
-100.0
-64.7
-770
-85.1
-16.4
-19
-2.1
5.4
45
5.0
23.4
188
20.8
-30.3
-349
-38.6

2,475
60.4
1,291
31.5

1,909
59.8
1,437
45.0

-22.9

1,184
28.9
813
19.8

473
14.8
317
9.9

-60.1

11.3

-61.0

% of Total Sales
%
100.0
11.0
2.8
32.2
34.3
19.6
% of Total Sales
%
100.0
13.2
3.1
27.5
31.1
25.2

-566
-0.6
146
13.5

-

-

-711
-14.1
-496
-9.9

-

-

(Ref) Prepared by Alpha-Win Research Dept. based on each quarter’s financial results summary

27/40
This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
PCA (9629 TSE First Section)

Issued: 11/24/2020◆ PCA’s Full-Year Financial Forecast for FY 2021
Summary of the Full-Year Financial Forecast
The Company has not changed its full-year financial forecast for FY 2021
(this fiscal year) that was announced at the beginning of the fiscal year. It
expects sales and profit to decrease YoY as part of the decline following
the event-driven spike of demand; it is anticipating sales of Y13,280 million(-6.9% YoY), operating profit of Y2,034 million (-26.9% YoY), recurring
profit of Y2,055 million (-26.8% YoY), and net profit of Y1,358 million (25.2% YoY) (Figure 22). However, these expected values are greater than
the sales and profit achieved in the fiscal year before the previous (FY 2019)
when there was no event-driven high demand, and would in fact be thesecond largest in the Company’s history following last fiscal year’s record
highs. Excluding the temporary impact of the event-driven high demand,
the Company has been increasing sales and profits in a steady trend.

w This FY, in a decline

following the eventdriven spike of demand,sales and profit are
expected to decrease.
However, both sales andprofit are still expected
to be the second highest
in the Company’s
history following theprevious FY’s record
highs.

[Figure 22] Financial Forecast for This Full Fiscal Year (the Company’s plan)
Consolidated (unit: million yen)
Sales
Gross Profit
Gross Margin

SG&A Expense
SG&A Expenses Ratio

Operating Profit
O.P. Margin

Recurring Profit
R.P. Margin
Net Profit Attributable to Owners of the
ParentN.P. Margin
Annual Dividend Per Share (yen)FY 2020
Result14,266
8,599
60.3%
5,817
40.8%
2,781
19.5%
2,808
19.7%

FY 2021
Company Forecast
Change/Diff.
13,280
-986
8,019
-580
60.4%
0.1%
5,985
168
45.1%
4.3%
2,034
-747
15.3%
-4.2%
2,055
-753
15.5%
-4.2%

% Change
-6.9%
-6.7%
ー
2.9%
ー
-26.9%
ー-26.8%
ー

1816

1,358

-458

-25.2%

12.7%
54

10.2%
34

-2.5%
-

ー
-

(Ref) Prepared by Alpha-Win Research Dept.

Summary of Second Half’s Forecast (the Company’s sales forecast)
The Company's plan for H2, which can be deduced by subtracting the H1
results from its full-year plan, is as follows: sales of Y7,299 million (+2.9%
YoY), operating profit of Y1,095 million (+8.4% YoY), recurring profit ofY1,095 million (+7.6% YoY), and net profit of Y768 million (+20.4%
YoY) (Figure 23). It seems to be expecting both sales and profits to growcompared to the previous fiscal year’s H2.
[Figure 23] Financial Forecast for the Second Half of FY 2021 (the Company’s plan)
H2 Results

H2 FY 2020 Results

H2 FY 2021 Company Forecast

Unit: million yen

Oct 2019 - Mar 2020

Oct 2020 - Mar 2021

Consolidated Sales

Sales Category

Products
Merchandise
Maintenance Service
Cloud Service
Other Operating Revenue

Gross Profit
Gross Margin (%)
SG&A Expenses
SG&A Expenses Ratio (%)
Operating Profit
Operating Margin (%)
Net Profit
Net Margin (%)

7,096
1,325
333
1,772
1,807
1,861

7,299
1,812
270
1,611
2,070
1,539

4,255
60.0
3,245
45.7
1,010
14.2
638
9.0

4,354
59.7
3,259
44.6
1,095
15.0
768
10.5

% Change
Difference% of Total Sales Growth
YoY: %
YoY: million yen
%
2.9
203
100.0
36.8
487
239.9
-18.9
-63
-31.0
-9.1
-161
-79.3
14.6
263
129.6
-17.3
-322
-158.6
2.3
0.4
8.4
20.4

99
-0.3
14
-1.1
85
0.8
130
1.5

-

% of Total Sales
%
100.0
24.8
3.7
22.1
28.4
21.1
-

(Ref) Prepared by Alpha-Win Research Dept.

w In H2, sales decline ofsolutions is expected to
be offset by the recoveryof the products (onpremises) and the solid
growth of the cloud, sothat sales/profit growth
will be achieved again.

Forecasted sales for each sales category in H2 are summarized in Figure 24
on page 29. Overall, the Company expects sales to increase by Y203 million
YoY (net amount). Since the decline following the event-driven spike ofdemand is expected to have mostly ended by then, it is expecting a large
recovery in the sales of products in H2 by Y487 million YoY (+36.8%);
specifically, Y1,842 million in H1 of the previous fiscal year → Y1,325
million in H2 of the previous fiscal year → Y727 million in H1 of this fiscal
year → Y1,812 million in H2 of this fiscal year (planned). It is also

28/40This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
PCA (9629 TSE First Section)

Issued: 11/24/2020
expecting cloud’s sales to grow by Y263 million (+14.6%) due to continued
growth of the number of corporate users.
On the other hand, sales of solutions (other operating revenue) are expected
to continue to fall (-322 million yen; -17.3%) due to the nature of thebusiness which makes it difficult for distributors to make active sales efforts
amidst the COVID-19 crisis, the time lag inherent to implementation
support (like last fiscal year, a few months of time lag are expected during
busy seasons), and the decrease in sales of other companies’ products, etc.,
as part of the decline following the event-driven spike of demand. Similarly,
sales of maintenance are expected to decrease by Y161 million (-9.1%).
[Figure 24] Factors that Are Expected to Increase/Decrease Sales in the
8,500
Second Half of FY 2021 (the Company’s plan)(million yen)

Increase
Decrease

8,000

263

487
7,500

-63

7,299
-161

7,096

-322

7,000

6,500

6,000

H2 FY 2020
ResultProducts

Merchandise

Main tenance

Cloud

Solutions andOther

H2 FY 2021
Forecast(Ref) Prepared by Alpha-Win Research Dept. based on the financial results briefing materials

w In H2, the Company
expects the gross margin
to decline but expects tomaintain an operating
margin of 15% throughthe improvement of
SG&A expenses.

Summary of Second Half’s Forecast (the Company’s profit forecast)In H2, the Company plans to increase operating profit by 8% and net profit
by 20.4% through an increase in sales. Gross margin is expected to decreaseslightly from 60.0% in the previous fiscal year’s H2 to 59.7% in the current
fiscal year’s H2, but the SG&A expenses are planned to be held down sothat the SG&A expenses ratio will fall from 45.7% to 44.6%. In
consequence, operating margin is expected to improve by 0.8 percentage
points from 14.2% to 15.0%. No large non-operating profit/loss or
extraordinary profit/loss are expected.
The Company’s analysis of the factors that may increase or decrease
operating profit in H2 (YoY) is shown in Figure 25. The increase in thepayment of royalties, maintenance expenses, and personnel expenses are
expected to be offset by the growth in sales and the decline in softwareamortization.

[Figure 25] Factors that Are Expected to Increase/Decrease Operating Profit in
the Second Half of FY 2021 (the Company’s plan)(million yen)

1,300

203

Increase
Decrease

38

SG&A expenses

1,200
1,100

-98

1,010

900

1,095

26
-45

1,000

-1

-39

Cost of sales

800
700
600
500
400

H2 FYa 2020
ResultaIncreasein salesaDecreaseinsoftwareamortizationaaIncreasein Increaseincost ofmaintenancepurchase
expense(royalties
paid, etc.)aIncreaseinpersonnel
expensea
Decreasein R&D
expense

a
Other
SG&A
expensesa 2021H2 FY
Forecast(Ref) Prepared by Alpha-Win Research Dept. based on the financial results briefing materials

29/40
This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
PCA (9629 TSE First Section)

Issued: 11/24/2020◆ Alpha-Win Research Dept.’s Full-Year Financial
Forecast for FY 2021
w H1 results were stronger
than expected.
w We believe that the fullyear profit forecast ishighly likely to beachieved.

SummaryThis fiscal year, due to direct and indirect impact by COVID-19 in addition
to the decline following the event-driven demand of just over 1 billion yen,
we believe that a temporary drop in sales and profit is inevitable. However,since the H1 results had been stronger than expected, we reviewed ourforecast for H2 and revised the forecast for the fiscal year upward to reflect
the current situation (Figure 26).
In the previous forecast (the report published in June 2020), we had madea cautious forecast for the sales of each sales category based on the potential
risks of the COVID-19 crisis. Specifically, we were concerned that theCompany’s self-refraining of sales and marketing activities could cause
cancellation or postponement of negotiations, launching of new products,
software upgrades, and software implementation support.

w The previous forecast
for sales wasconservative, having
considered the various
risk factors

However, sales in H1 ended up exceeding our forecast by several hundred
million yen. The Company’s forecast for H2 is somewhat ambitious for the
products’ sales but seems to be on the conservative side regarding theincrease in cloud’s sales, the decrease in the sales of maintenance, and thegross margin. Therefore, we revised the forecast for sales and profit in H2
upward compared to the Company’s forecast (Figure 27 on page 31).

w We revised our full-year
forecast upward,
expecting results that are
somewhat greater thanthe Company’s plan.

We consequently also revised up the full-year forecast for sales andoperating profit from our previous forecast. The following are the changes
in our forecast (previous forecast → new forecast): Y12,840 million →Y13,450 million for sales (+510 million yen; +4.0%) and Y2,050 million→ Y2,150 million for operating profit (+100 million yen; +4.9%). These
new forecasted values are greater than the values of the Company’s plan by
Y70 million (+0.5%) and Y116 million (+5.7%), respectively.

[Figure 26] Comparison of Financial Forecasts for FY 2021 (the Company’s plan vs. Alpha-Win’s forecast)
Consolidated (unit: million yen)
Sales
Gross Profit
Gross Margin

SG&A Expense
SG&A Expenses Ratio

Operating Profit
O.P. Margin

Recurring Profit
R.P. Margin
Net Profit Attributable to Owners of the
ParentN.P. Margin
Annual Dividend Per Share (yen)FY 2021
FY 2021 Alpha-Win's Forecast
Diff. from Company Forecast Diff. from Previous Forecast
Company Forecast New Forecast
Previous Forecast
Change/Diff.
% Change
Change/Diff.
% Change
13,28013,35012,840
70
0.5%
510
4.0%
8,019
8,130
7,755
111
1.4%
375
4.8%
60.4%
60.9%
60.4%
0.5%
ー
0.5%
ー
5,985
5,980
5,705
-5
-0.1%
275
4.8%
45.1%
44.8%
44.4%
-0.3%
ー
0.4%
ー
2,034
2,150
2,050
116
5.7%
100
4.9%
15.3%
16.1%
16.0%
0.8%
ー
0.1%
ー
2,055
2,170
2,060
115
5.6%
110
5.3%
15.5%
16.3%
16.0%
0.8%
ー
0.2%
ー
1,358

1,430

1360

72

5.3%

70

5.1%

10.2%
34

10.7%
34

10.6%
34

0.5%
-

ー
-

0.1%
-

ー
-

(Ref) Prepared by Alpha-Win Research Dept.

w In H2, sales and profit
are expected to grow
YoY again.

Our Forecast for the Second Half
Sales of product sharply decreased by Y1,114 million in H1 of this fiscal
year as part of the decline following the event-driven spike of demand in
the previous fiscal year’s H1. However, since this high demand had peakedout and was mostly gone in the previous fiscal year’s H2, the Company
expects the decline against this past demand to be smaller during this fiscal
year’s H2. Therefore, assuming that more progress will be made with its
sales activities, it expects sales to increase significantly by Y487 million in
H2 (Figure 27 on page 31).

30/40
This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
PCA (9629 TSE First Section)

Issued: 11/24/2020
Considering the current situation with sales and the new products, we
judged that the Company’s forecast for the sales of the products in H2 aresomewhat ambitious and revised its sales to a more conservative one.

w The Company predicts
that sales of products
will recover sharply
when the period of
decline following theevent-driven highdemand ends, but thisprediction seems
somewhat ambitious.

For the cloud’s sales, which were Y1,807 million in the previous fiscal
year’s H2 (+483 million yen or +36.5% YoY) and Y1,949 million in thisfiscal year’s H1 (+380 million yen or +24.3% YoY), the Company expects
Y2,070 million in H2 (+263 million yen or +14.6% YoY). However,
although the cloud’s growth rate has slowed down compared to the periodof event-driven high demand, its sales are still growing by more than 20%.
Also, with the steady net increase in the number of cloud users leading to agreater total number of users, there seems to be no particular reason for its
sales or sales growth rate to fall significantly from H1 to H2. Considering
these factors, the Company’s forecast seems conservative, so we estimatethat sales will grow by about 20% from the previous fiscal year’s H2.

w The Company’s forecast
for the subscriptionbased business in H2
seems to be on theconservative side.

Similarly, for maintenance, whose sales increased by Y78 million YoY in
H1 (grew YoY in both Q1 and Q2), the Company expects its sales todecrease by Y161 million YoY in H2. However, we judged that this too
was a conservative forecast in considering the current situation and raised
the forecast. For merchandise and solutions, our forecasts are about thesame as those of the Company.
The Company predicts that sales in H2 will increase by Y203 million andgross profit will increase by Y99 million, meaning that its expected grossmargin with respect to its forecasted sales growth is 48.8% (we predict it to
be about 60%). We revised up the H2 sales of the cloud and maintenancecompared to the Company’s forecast and also predict these categories’
gross margin to be greater than 60%. The profit margin may also increase
from an improvement in the product mix.
w Its planned gross margin
is also conservative.

Therefore, the Company’s forecasted gross margin of 59.7% for this fiscal
year’s H2 seems conservative compared to 60.0% achieved in the previous
H2 and 61.3% during this H1, and we predict that it will be 60.6%.
Although the results will ultimately depend on cost control, we believe that
if sales reach the upwardly revised value and lead to a greater increase inprofit and gross margin, profit may potentially end up being greater thanthe Company’s forecast.

w We predict H2 sales andprofit to be greater thanthe Company’s plan.

Based on the above, we predict that sales in H2 will be Y7,370 million(+3.9% YoY), which is greater than the Company's forecast of Y7,299
million. Similarly, we predict operating profit and net profit in H2 to begreater than the Company’s forecast; our forecast for operating profit isY1,212 million compared to the Company's Y1,095 million and net profit
is Y841 million compared to the Company’s Y768 million.

[Figure 27] Comparison of Financial Forecasts for the Second Half of FY 2021 (the Company’s plan vs. Alpha-Win’s forecast)
H2 Results

H2 FY 2020
ResultH2 FY 2021
Company Forecast

Unit: million yen

Oct 2019 - Mar 2020

Oct 2020 - Mar 2021

7,096
1,325
333
1,772
1,807
1,861

7,299
1,812
270
1,611
2,070
1,539

4,255
60.0
3,245
45.7
1,010
14.2
638
9.0

4,354
59.7
3,259
44.6
1,095
15.0
768
10.5

Consolidated Sales

Sales Category

Products
Merchandise
Maintenance Service
Cloud Service
Other Operating Revenue

Gross Profit
Gross Margin (%)
SG&A Expenses
SG&A Expenses Ratio (%)(Ref) Prepared by Alpha-Win
Research Dept.

Operating Profit
Operating Margin (%)
Net Profit
Net Margin (%)% Change

Difference

YoY: %
YoY: million yen
2.9
203
36.8
487
-18.9
-63
-9.1
-161
14.6
263
-17.3
-322
2.3
0.4
8.4
20.4

99
-0.3
14
-1.1
85
0.8
130
1.5

% of Total Sales
GrowthH2 FY 2021
Diff. from Company
Alpha-Win's Forecast
Forecast (%)%

Oct 2020 - Mar 2021

100.0
239.9
-31.0
-79.3
129.6
-158.6

7,370
1,743
270
1,673
2,156
1,530

-

4,465
60.6
3,253
44.1
1,212
16.4
841
11.4

YoY: %

Diff. from Company
Forecast (amount)
YoY: million yen

1.0
-3.8
0.0
3.8
4.2
-0.6

71
-69
0
62
86
-9
111

0.9
-6
-0.5
117
1.4
73
0.9

31/40
This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
PCA (9629 TSE First Section)

w Shift to thesubscription-based
businesses helped
strengthen its earnings
structure.

Issued: 11/24/2020
Comparison with the Previous Decline Following an Event-Driven
High DemandCompared with the previous period of decline following an event-driven
spike of demand, we expect the negative impact on sales and profit during
this fiscal year to be much smaller. The key difference is the improvementin the Company’s earnings structure from its shift to the subscription-based
business focused on the cloud service which has high profitability andcontinuity.
In the previous period of decline following an event-driven spike of demand,sales decreased from Y10,474 million → Y8,168 million (-22% YoY) fromFY 2014 to FY 2015 and recurring profit similarly decreased from Y1,139
million → recurring loss of Y158 million. The bottom line also fell from a
net profit to a net loss (-207 million yen).

w The impact of COVID-

19 on sales activities is aconcern.

Risk Factors
With the government-led Go-To campaigns, recovery of the Chinese
economy, and US-led rise in stock prices, corporate and consumer acitivites
had been beginning to show signs of recovery. However, the rebound of the
COVID-19 outbreak (the third wave) and its prolongation may cause
negotiations to become stagnated, potential and current corporate users torefrain from purchasing products and services due to worsened financial
performance, and software implementation to become postponed; these
seem to be the Company’s main risk factors.
Another risk factor is the potential deterioration of the financial
performance of the acquired companies. However, the impact of this risk
on consolidated profit and loss is expected to be limited since the companies
are small in size.

32/40This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
PCA (9629 TSE First Section)

Issued: 11/24/2020

8．Growth Strategy◆ Management Indicators and Areas of Focus
w As its management
indicators, it has set
goals for sales, DOE,
and the number of cloudusers.
w Five areas of focus

In 2012, the Company announced goals of Y20 billion in sales (as reference,
the actual result in FY 2020 was Y14.3 billion), 2.5% in DOE (FY 2020
result: 2.8%), and 80,000 corporate users of the cloud (a little over 15,000
companies as of the end of September 2020) as the PCA Group’s
management indicators, and has been developing its business in line withthis plan. To achieve these goals, it has set out five areas of focus: 1) groweven greater as the No. 1 player in the cloud-based enterprise system
software market, 2) enhance the solutions business to provide more thansimple functionality, 3) enhance PCA Cloud with more leading-edge
technologies, 4) pursue new services, and 5) actively conduct M&As.

w Announced “PCA
Vision 2030: First Stage –2022 Medium-Term
Management Plan” inNovember 2018

◆New Medium-to-Long-Term Vision “PCA Vision 2030:
First Stage – 2022 Medium-Term Management Plan”

w Its medium-to-long-term
vision is to contribute tosociety as a
“Management Support
Company”

In June 2018, Fumiaki Sato was promoted to president and created a new
operating framework for the Company. In November of the same year, hetook this a step further and announced “PCA Vision 2030: First Stage –2022 Medium-Term Management Plan.”(12) PCA Hyper: a newsoftware for mid-tiercompanies as a successor toDream21. Targets theapprox. 90,000 companies
in Japan with sales of 1 to
当調査部では、中期の年
w 10billion yen, less than orequal
to 1,000 employees,
間利益成長率を5~8％予and
想。less than 10 subsidiaries
in the corporate group. A
superior version of the DX
Series. Its unique features:the user can flexibly selectbetween the on-premises
and the cloud according totheir stage of growth, makeflexible linkage with othersystems using API, andstreamline data
management within an
entire corporate group(consolidated accounting).
w Target values for FY
2022, the final year of
the current mediumterm plan, had beenrevised largely upward
but may becomeachieved earlier thanplanned.

Since the Company will reach a milestone in the year 2030 as its 50th
anniversary, it announced its new vision, “New Medium-Term/Long-Term
Vision PCA Vision 2030.”

In the Medium-Term Management Plan, the Company described its
medium-to-long-term vision to continue to contribute to society as aManagement Support Company that supports other companies conduct
smooth management and operation mainly by providing enterprise system
software that realizes high-level automatization.
The Company’s basic policy over the medium term set forth in the First
Stage of the Medium-Term Management Plan (FY 2020 – FY 2022) is to“conduct structural reforms and develop a business foundation throughwhich business can continue and develop stably over the long term.”
Aiming to become a solution-providing service providor, the Company’splan over the medium term is to focus on creating a firm earnings base andmanagement structure to realize its medium-to-long-term vision.
The basic strategies and priority measures of the current medium-term planand their execution status were described in the previous report (please referto the original Japanese report published in June 2020 or the English
translation of the same report published in July 2020). No changes weremade to the Medium-Term Management Plan during this fiscal year’s H1.
The Company has created an executaion roadmap for each priority measureand has been making steady progress with their execution, mostly onschedule. It has lauched the Hyper12 Series, has started the PCA
Subscription service, is preparing for the implementation of a new KPI andmanagement system, and is strengthening its R&D system.
Since last fiscal year’s results had been much greater than the Company had
initially expected, it had revised up the target values for FY 2022 (fiscal
year ending March 2022), the final year of the medium-term plan (Figures
28-30 on page 34). However, even those revised values may be achieved
ahead of schedule, perhaps within this fiscal year.
33/40

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

Alpha-Win Company Research Report
PCA (9629 TSE First Section)

Issued: 11/24/2020[Figure 28] Target Values of the Medium-Term Management PlanFY 2019 Result

FY 2020 Result

FY 2021 Target

FY 2022 Target

・Consolidated Sales

Target Items of the Medium-Term Plan

Y 11.439 billion

Y14.266 billion

Y13.280 billion≥ Y13.5 billion

Of which are sales from subscription-based businesses(maintenance & cloud)Y5.577 billion

Y6.845 billion

Y7.407 billion

Achieve Y7.5 billion

・Consolidated Operating Profit

Y1.248 billion

Y2.781 billion

Y2.034 billion≥ Y2.1 billion

・Consolidated Operating Margin

10.90%

19.49%

15.32%≥ 15%(Ref) Figures 28–30 were prepared by Alpha-Win Research Dept. based on the financial results briefing
materials. Target values / estimates are those announced by the Company.

[Figure 29] Financial Forecast in the Medium-Term
Management Plan (consolidated)(million yen)

Sales (left axis)

O.P. (left axis)

15,000(million yen)Margin (right axis)

Y13.5+ billion

10,000[Figure 30] Forecasted Sales of the SubscriptionBased Business

15+ %

25.0%

10,000

20.0%

8,000

15.0%

6,000

10.0%

4,000

5.0%

2,000

0.0%

0

Total subscription-based sales

Main tenance fee (on-premises)

Cloud

Y7.5+ billion

5,000
Y2.1+ billion

0
FY 2019

FY 2020

FY 2021 E

FY 2022 E

FY 2019

FY 2020

FY 2021 E

FY 2022 E◆ Alpha-Win Research Dept.’s Financial Forecast for the
Medium Term
w We revised upward the
medium-term financial
forecast for the 3 fiscal
years starting this fiscal
year.

w We expect the cloud andwork management
software to continue tobe the growth drivers.
We also expect theCompany to return to atrend of increasing sales
and profit starting in FY
2022 when the decline
from the event-driven
spike of demand will
have ended and the
COVID-19 impact willprobably have settled
down to some extent.

We revised the medium-term financial forecast for the three fiscal years
starting this fiscal year (Figure 31 on page 35). Considering the H1 results
and the current situation as well as the expectations for H2, we reviewed
and revised up the forecast for the three fiscal years from this fiscal year to
the fiscal year after the next.

Next Fiscal Year (FY 2022)
Previously, we had mentioned, “next fiscal year (FY 2022), although therisk of prolonged impact by COVID-19 is a concern, since the decline
following the event-driven spike of demand will most likely end by then,we expect sales to increase by 5.1% and profit to increase by about 8.0%
(compared to our previous forecast for FY 2021).” We revised thisprevious forecast and prepared a new forecast; sales were revised fromY13,500 million → Y14,000 million (difference between the two
forecasts: +4.9%), operating profit was revised from Y2,215 million →Y2,280 million (+6.0%), and net profit was revised from Y1,470 million→ Y1,520 million (+6.3%).
We have reviewed our assumptions for the sales of each sales category(growth rate and breakdown) and the costs (we expect the on-premises in
the products category to be gradually be switched to PCA Subscription;
sales of PCA Subscription are included in the “cloud” category). The
growth potential of the cloud and the work management software is large,
so we believe that they will continue to be the growth drivers, absorbing
costs such as upfront investment, sales promotion expense, and personnel
expense and contributing to the growth in sales and profit. We have notincluded the potential contribution from the new businesses and theacquired subsidiaries in our assumptions.
34/40

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

w 中期的には、既存のクラAlpha-Win Company Research Report
PCA (9629 TSE First Section)

Issued: 11/24/2020[Figure 31] Medium-Term Financial Forecast
Unit: million yen, %Sales
Category

Products
Merchandise
Maintenance Service
Cloud Service
Other Operating Revenue

Gross Margin
SG&A Expense(% over sales)

Operating Profit(% over sales)

Recurring Profit(% over sales)

Net Profit for the Year(% over sales)

Sales (% YOY growth for all values)
Category

Products
Merchandise
Maintenance Service
Cloud Service
Other Operating Revenue

Gross Margin (% YOY diff.)
SG&A Expense (% growth)
Operating Profit (% growth)
Recurring Profit (% growth)
Net Profit for the Year (% growth)

FY 2019 AR
11,439
2,516
563
3,125
2,452
2,780
57.0%
5,274
46.1%
1,248
10.9%
1,277
11.2%
906
7.9%

FY 2020 AR
14,266
3,166
552
3,471
3,374
3,701
60.3%
5,817
40.8%
2,781
19.5%
2,808
19.7%
1,816
12.7%

FY 2021 CE
13,280
2,539
445
3,388
4,019
2,889
60.4%
5,985
45.1%
2,034
15.3%
2,055
15.5%
1,358
10.2%

FY 2021 E
13,350
2,470
445
3,450
4,105
2,880
60.9%
5,980
44.8%
2,150
16.1%
2,170
16.3%
1,430
10.7%

FY 2022 E
14,000
2,550
400
3,300
4,850
2,900
59.9%
6,100
43.6%
2,280
16.3%
2,300
16.4%
1,520
10.9%

FY 2023 E
14,650
2,650
350
3,200
5,500
2,950
59.9%
6,180
42.2%
2,600
17.7%
2,620
17.9%
1,700
11.6%

FY 2021 PE
12,840
2,500
440
3,300
4,000
2,600
60.4%
5,705
44.4%
2,050
16.0%
2,060
16.0%
1,360
10.6%

FY 2022 PE
13,500
2,550
400
3,200
4,700
2,650
60.4%
5,940
44.0%
2,215
16.4%
2,230
16.5%
1,470
10.9%

FY 2023 PE
14,300
2,600
350
3,100
5,500
2,750
60.4%
6,180
43.2%
2,460
17.2%
2,470
17.3%
1,630
11.4%

16.9%
28.8%
3.2%
0.5%
32.3%
23.6%
2.5%
16.5%
54.6%
53.1%
105.4%

24.7%
25.8%
-2.0%
11.1%
37.6%
33.1%
3.3%
10.3%
122.8%
119.9%
100.4%-6.9%-19.8%-19.4%-2.4%
19.1%-21.9%
0.1%
2.9%-26.9%-26.8%-25.2%-6.4%-22.0%-19.4%-0.6%
21.7%-22.2%
0.6%
2.8%-22.7%-22.7%-21.3%

4.9%
3.2%-10.1%
-4.3%
18.1%
0.7%
-1.0%
2.0%
6.0%
6.0%
6.3%

4.6%
3.9%
-12.5%
-3.0%
13.4%
1.7%
0.1%
1.3%
14.0%
13.9%
11.8%

-10.0%-21.0%-20.3%-4.9%
18.6%-29.7%
0.1%-1.9%-26.3%-26.6%-25.1%

5.1%
2.0%
-9.1%
-3.0%
17.5%
1.9%
0.0%
4.1%
8.0%
8.3%
8.1%

5.9%
2.0%
-12.5%
-3.1%
17.0%
3.8%
0.0%
4.0%
11.1%
10.8%
10.9%

(Ref) Prepared by Alpha-Win Research Dept. (E = Alpha-Win’s new forecast; PE = Alpha-Win’s previous forecast). CE = the Company’s
estimate/forecast. AR = actual result. Accounting standards for the sales of merchandise and other operating revenue (solutions) had beenchanged starting in FY 2020 and adjustments were retroactively made according to the new standard (includes estimates).

w Expecting normalizationof economy,
improvement of costs,
and growth driven by
the cloud, we revised up
the forecast for FY 2023.

Fiscal Year After the Next (FY 2023)
Expecting the recovery of the solutions and the products as the COVID-19
crisis settles down, continued solid performance of the subscription-based
businesses, and overall improvement of SG&A expenses including those of
the subsidiaries, we also revised our forecast for FY 2023. Sales wererevised up from Y14,300 million → Y14,650 million, operating profit wasrevised up from Y2,460 million → Y2,600 milion, and net profit wasrevised up from Y1,630 million → Y1,700 million. We did not change ourforecast that dividend will be raised by 2 yen per share to a total of 36 yen.
We expect that the economy will normalize by FY 2023 and thesubscription-based businesses will continue to stably expand. In addition,
if the Company can put its newly started businesses and acquiredcompanies on growth curves, it may be able to sustain a growth trend forsales and profit over the medium to long term.

w With the subscriptionbased business as thegrowth driver, we expect
the annual profit growthrate to be about 8-10%
over the medium term.

Financial performance will most likely be affected by the growth rate of
PCA Cloud, as well as the PCA Subscription business which it will startdeveloping in full scale, PCA Hyper, expansion of the HR business, andwhether it will succeed in improving the earnings of Keepdata andDreamhop. The Company will probably continue to work on developing
new technologies, products, and businesses and conduct upfront investment
for M&As, etc., but we believe that the costs can be controlled.

Profit Growth Rate over the Medium/Long Term
Over the medium to long term, based on normalized figures excluding theimpact of the event-driven high demand and COVID-19, we expect anannual sales growth rate of around 6-8% and an even greater net profit
growth rate (8-10% per year). Since the Company’s business model has ahigh marginal profit ratio, sales growth will directly lead to profit growth,such that the profit growth rate will likely exceed the sales growth rate.
35/40
This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
PCA (9629 TSE First Section)

Issued: 11/24/2020

9．Analyst’s View
◆ PCA’s Strengths and Challenges
The Company’s SWOT analysis results are listed in Figure 32. Below are
the main points:
・Strengths: long years of trust from customers and proven track record;
taking a lead in the cloud market, which has a large growth potential, giving
it a high competitive advantage
・Volatility of business tends to increase before and after certain events suchas those related to revisions in accounting/tax laws.
[Figure 32] SWOT Analysis

Strength

Weakness

Opportunity

・ Brand recognition and trust earned over many years (major specialized player in the enterprise system software market for small/medium-sized companies)
・Firm financial standing (debtless management)
・Growth of the subscription-based business capable of continuously generating stable revenue
・ Strong and diversified customer base (240,000 corporate users in total)
・Taking a lead with the cloud (top-level financial performance, know-how, number of users, years in business for enterprise system software businesstargeting small/medium-sized companies)
・High barrier to market entry
・Very experienced call center staff and engineers (non-price competition through services)
・Rich product lineup; provides products both as on-premises and by cloud (non-price competition through products)
・ Sales network (13 sales offices in Japan; 2,000 partnered companies)
・Relatively somewhat low profit margins
・Financial results susceptible to revisions related to accounting and tax laws, termination of OS support, etc. (consumption tax, change in the name of theera, Windows 7, etc.)
・Maintenance service subscription rate is improving but could still be improved
・Absence of a major, next-generation, growth-driving product/service
・Domestic-demand oriented; overseas expansion difficult
・Increased demand from lack of human resources and for streamlining operation (for business software in general); work-style reform (work management
system)・Potential to increase users of cloud service; development potential (toward small/medium-sized companies and mid-tier companies)
・New products (Hyper & working with Keepdata), new services (transition of on-premises to subscription-based model), and innovations in technology
・ Development of HR businesses
・Revisions related to accounting and tax laws, etc.
・Emergence of an alternative as advanced AI technology becomes widely used, delayed product development, defects in products, etc.

Threat・High competition (maturation of on-premises market; other companies catching up with the Company in the cloud business)
・COVID-19 outbreak/prolongation
・Contract termination risk, etc.
・Information leakage
・Rise in personnel and development costs(Ref) Prepared by Alpha-Win Research Dept.

◆ Shareholder Return and Shareholder Benefit Program
The Company’s basic policy is to stably, constantly pay dividend while
improving the ratio of net profit to shareholders’ equity (ROE) undereffective business management. In returning profit to its shareholders, its
policy is to determine the level of dividend to be paid based on acomprehensive analysis of elements such as its financial results anddividend payout ratio.
w Has been increasing
dividend over the longterm

w Last FY, it paid acommemorative
dividend and raised its
ordinary dividend.

Regarding dividend, ever since the first public offering of the Company’s
stock, ordinary dividend has not been decreased and has been graduallyraised over the long term with several years of no change in between (Figure
33 on page 37).
Excluding commemorative dividend, ordinary dividend had been kept at
Y31 per share per year after FY 2011. A commemorative dividend of Y10
was paid in FY 2014 in celebration of “achievement of consolidated salesof Y10 billion,” which was added to the ordinary dividend of Y31 in anannual total of Y41 per share. Even in FY 2015 and FY 2016 when net
losses were posted, the Y31/year dividend was maintained in line with its
stable dividend policy. A dividend hike occurred in FY 2020; acommemorative dividend was paid (Y20 per share for the 40th anniversaryof foundation) and ordinary dividend was raised (by Y3 from Y31 to Y34).
36/40

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

Alpha-Win Company Research Report
PCA (9629 TSE First Section)

Issued: 11/24/2020[Figure 33] Change in Dividend and Dividend Payout Ratio
Dividend (right axis)（％）

Commemorative dividend (right axis)

Dividend payout ratio (left axis)

300.0

(Y)

60

54

281.1

250.0

50

41
200.0

20

150.0

30

132.0

100.0

30

30

31

31

31

31

31

31

31

31

50.0
0.0

40

10

116.9

30.9

47.8

FY 2009

FY 201023.3

47.2
FY 201131

46.5
FY 2012FY 2013

FY 2014

48.2

ＮＡ ＮＡ

34

34

34

36

12.5

16.6

15.4

14.7

20
10
0

FY 2015

FY 2016

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021 (E) FY 2022 (E) FY 2023 (E)(Ref) Prepared by Alpha-Win Research Dept. based on the securities report. Estimates/forecast (E)were made by Alpha-Win Research Dept.

The target dividend payout ratio is 33% but has not been achieved since FY
2019, as shown in Figure 33. The Company’s forecasted payout ratio forthis fiscal year (FY 2021) is 16.6%, which is also only about a half of thetarget ratio and indicates a large deviation. As for this fiscal year’s dividend
yield, it is expected to be about 0.8% when calculated based on a stock priceof Y4,430 (the closing price on November 20, 2020).

w The target dividend
payout ratio is 33% andthe target DOE is 2.5%.
Their difference fromthe actual results islarge, so dividend hikeis quite possible overthe medium to longterm.

Dividend on equity (DOE), which is one of the Company’s KPIs (keyperformance indicators), is expected to be about 1.5% based on the ordinary
dividend of Y34 planned for this fiscal year and will also mostly likely end
up being below the target ratio of 2.5%. Also, compared to the past, thelevel of profit achieved has become significantly larger due to the change
in the business model and the stabilization of business. Considering thisimprovement, as well as the current level of dividend payout ratio and DOE,
we believe that the Company has the capacity to raise its dividend over the
medium term. We predict that the Company will increase dividend by 2 yenfrom Y34 to Y36 in the fiscal year after the next, but this dividend hike may
occur earlier depending on next fiscal year’s results for profit.

w The actual annual net
yield including theshareholder benefit
program is about 1.2%
(at maximum).

The Company has a shareholder benefit program and gives out Quo Cards
to shareholders based on the number of shares held at the end of March of
every year. For example, shareholders with equal to or greater than 100
shares and less than 300 shares are granted Y2,000 worth of Quo Card.
Based on a stock price of Y4,430, the actual annual net yield for ashareholder owning 100 shares is about 1.2% (at maximum) including theordinary dividend of Y34 and the shareholder benefit (Figure 34). Similarly,
the actual annual net yield is estimated to be about 1.3% for OBC (including
its shareholder benefit program) and about 1.7% for MJS (same as thedividend yield since MJS does not have a shareholder benefit program).

[Figure 34] Shareholder Benefit Program and Net Yield
Number of Shares Owned(greater than or equal to)(less than)
100
300
500

300
500

Shareholder Benefit (Quo Card: Y)
2,000
3,000
4,000

Dividend: Y

Net Yield (maximum): %

34
34
34

1.22
0.99
0.95

Net yield = (dividend + benefit value) / (stock price) was calculated for the minimal amount of stock owned in each range
Stock price: Y4,430 (closing price on 11/20/2020)(Ref) Prepared by Alpha-Win Research Dept.

37/40
This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
PCA (9629 TSE First Section)

Issued: 11/24/2020
The Company’s financial standing is firm with essentially no debt. Its stock
price has increased by more than threefold over the past four years. Since
its stock price has reached the Y4,000 level, the Company is highly likely
to conduct a stock split (1-to-2 or 1-to-3) over the short/medium term inorder to expand its shareholder base. A stock split has not been conductedsince the 1-to-1.3 stock split in May 2000.

w Stock split is also
anticipated.

◆ Stock Price and Factors that May Affect Stock Price
Performance
The Company’s stock price and relative stock price compared to the
TOPIX for the past approximately four years are described in the summary
section (Figure C on page 3). The stock price has been rising since around
October 2018 and has been significantly outperforming the TOPIX.
However, over the short term, it has been underperforming the TOPIX in
the most recent month due to the news about the new progress in COVID19 vaccine development that has caused economically sensitive stocks torelatively increase in a return reversal.

w With solid performance,
has been significantly
outperforming the
TOPIX for the past
approx. 4 years

After the announcement of a significant upward revision to the financial
forecast in October 2019, the stock price soared, reaching Y6,240 as theclosing price on January 24, 2020, which is the highest price not only since
the beginning of the fiscal year but also since becoming listed on the First
Section of the TSE. Then, the stock price went through large fluctuations
until the middle of March, but after the announcement of full-year results,
the stock price has been on an increasing trend again. This rise seems tohave been caused by how the Company has received high evaluation as adomestic-demand-related, defensive stock since it was able to announce its
financial forecast for FY 2021 (this fiscal year) at the beginning of the
fiscal year while most other companies of the First Section of the TSE
could not disclose a forecast because of the various risks of the COVID-19
crisis. Although the Company forecasted that sales and profit will decline,
they were within an expected range, and its financial performance seems
to have been judged as having a relatively small downside risk.

w目 標 配 当 性 向 は33％、純資産配当率
は 2.5％が目標。実績と乖離が大きく、中長期的には増配余地
w Its
performance over the
がある。
last
3 years stands out
from its competitors. Its
stock price has beensignificantly
outperforming its 2
competitors.

Over the past approximately three years, the Company’s stock price has
increased by about 2.6 times, significantly outperforming its competitors
Obic Business Consultants (4733: OBC) and Miroku Jyoho Service (9928:
MJS) by 53% and 191%, respectively (Figure 35).

[Figure 35] Comparison of Stock Performance with Competitors(Note: stock price at of the end of March 2018 was set to zero upon creating the graph. Reflects prices up through theclosing price on November 20, 2020)
250%

PCA (9629)

OBC (4733)

MJS (9928)

200%

150%

100%

50%

11/2020

10/2020

09/2020

08/2020

07/2020

06/2020

05/2020

04/2020

03/2020

02/2020

01/2020

12/2019

11/2019

10/2019

09/2019

08/2019

07/2019

06/2019

05/2019

04/2019

03/2019

02/2019

01/2019

12/2018

11/2018

10/2018

08/2018

07/2018

06/2018

05/2018

04/2018

03/2018

同業 2 社を大幅にアウト-50%
パフォーム。

09/20180%
w 過去 2 年間で同社株は、(Ref) Prepared by Alpha-Win Research Dept.

38/40
This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
PCA (9629 TSE First Section)
w Low P/E compared tothe average of TSE First
Sectionw Relatively cheap

valuation compared toits competitors
regarding the majorvaluation indicators

Issued: 11/24/2020

Valuation
Compared with the First Section of the TSE (this fiscal year’s forecast for
P/E is 26.5, P/B is 1.3, and weighted average dividend yield is 2.0%), theCompany’s current valuation is currently low for the forecasted P/E.
The Company’s forecasted P/E for this fiscal year is about 21.7 (based on
the EPS for FY 2021 forecasted by the Company). According to AlphaWin’s forecast, P/E is expected to be 20.6 this fiscal year, 19.4 next fiscal
year, and 18.1 the year after the next.
Compared with its major competitors OBC and MJS, the Company’svaluation seems cheap concerning the major valuation indicators such as
P/E, P/B, and EV/EBITDA (Figure 36).

[Figure 36] Comparison of Valuation with Competitors
Company Name

PCA
(consolidated)

Obic Business Consultants(OBC: nonconsolidated)[Figure 27] Comparisonof Valuation Indicatorswith Competitors
Code
9629
4733
Stock Price (at 11/20 closing)Market Cap (million yen)
P/E (price-to-earnings ratio)
P/B (price-to-book ratio)
Dividend Yield (%)
EV/EBITDA
P/S (price-to-sales ratio)

4,430
34,111
21.7
2.2
0.8
7.7
2.6

Miroku Jyoho Service(MJS: consolidated)
9928

6,930
559,279
52.3
4.4
0.7
34.0
18.3

2,063
71,805
29.4
3.3
1.8
9.0
2.1

Market cap = shares outstanding x market stock price [at 11/20 closing]
EV/EBITDA = (market cap + interest-bearing debt - cash & deposits) / (O.P. + depreciation + intangible fixed asset amortization, etc.)
P/S = market cap / sales [the companies' estimate for FY 2021]
The companies' estimated EPS for FY 2021 used in all P/E calculations(Ref) Prepared by Alpha-Win Research Dept. based on information including securities reports and financial results summary

Money Forward (TM: 3994) and freee (TM: 4478) described in theprevious section (page 22) are also the Company’s listed competitors. The
two companies have been rapidly growing and their stock price has been
starting to show a sharp increase, but they are not great targets for valuationcomparison since they have been posting net losses and paying no dividend(these companies’ P/S and P/B are significantly higher, at about 20-40).
w 株主優待制度を、一部拡充。優待を含めた実質年間利回りは、約 3％

w Next FY onward, theCompany is expected toreturn to a growth trendwith increasing sales
and profit

The following two companies listed on the First Section of the TSE also
partially compete with the Company in the software business.
・3763 Pro-Ship (packaged accounting software for fixed asset
management, etc.)
・3836 AVANT (packaged software for consolidated corporate
management and accounting)
Pro-Ship and AVANT’s P/E (company forecast) is expected to be 20.1 and
24.8, P/B (actual result) is 2.6 and 5.4, and P/S (company forecast) is
expected to be 4.3 and 2.4, respectively. PCA is about midway between
these two companies and does not seem expensive in valuation.

Stock Forecast
Starting next fiscal year, we predict that the Company will return to a
growth curve and increase its sales and profit with the cloud and work
management system as the growth drivers, since the decline following theevent-driven spike of demand is expected to end and the products andsolutions businesses are expected to return to normal conditions.

39/40
This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

Alpha-Win Company Research Report
PCA (9629 TSE First Section)
w Defensive, domestic-

demand-related growthstock. Valuation does
not seem expensive.
Stock price may riseover the medium termwith stable profit
growth.

w The impact of COVID19 seems to be limited
but its influence on sales
activities should be
carefully watched.

w Points to watch: growthrate of the cloudbusiness, whether
M&As and new
businesses will succeed,
measures to enhance
return to shareholders,and change incompetition

Issued: 11/24/2020
The Company’s valuation does not seem expensive and it has received
positive evaluation as a defensive, domestic-demand-related, and smallcap growth stock. Therefore, there seems to be an upside potential to its
stock price over the medium term granted that it maintains a stable profit
growth.

Factors that May Affect Stock Price
Going forward, the following events or factors may have an impact on thestock price.
The first key point is this fiscal year and next fiscal year’s financial
performance. As described above, we believe that the Company is highly
likely to achieve its target values for this fiscal year as well as increasing
sales and profit next fiscal year thanks to its transition to the more stablesubscription model and the limited impact of COVID-19 on its business.
However, if the COVID-19 outbreak cannot be contained over the medium
term, its sales and marketing activities may be impacted, such as in theacquisition of new customers. In that case, short-term (quarterly) financial
performance may be affected, causing the volatility of stock price toincrease.
Over the medium to long term, the key points are 1) trends of the cloud andthe work-style reform (the cloud’s number of contracts with companies andits sales growth rate, etc.), 2) whether the transition of on-premises to thesubscription-based business model (PCA Subscription) will succeed, and3) the creation and development of new products and businesses (especiallyregarding the profitability and financial trends of the data utilization
business with the acquired Keepdata and the HR businesses including thosewith Dreamhop, progress with Hyper’s sales, etc.). The contribution ofeach of these points to profit as well as the market competition should bewatched.
Other factors that may affect stock price are the following: the overall
improvement in the top-line growth rate and profit margins; the subsidiary
Xronos’s progress with its work management system business; measures
to increase return to shareholders including dividend hikes and stock splits;
new tax reforms or changes in regulations; progress with the M&A
strategy; changes in competition, particularly for the cloud business; andthe introduction of business management and profit management systems
and their effects.
Websites of the Company and Its Key Subsidiaries
・PCA CORPORATION: https://corp.pca.jp/
・Xronos Inc.: https://www.xronos-inc.co.jp/corporate/index.html
・Keepdata Ltd.:
https://www.keepdatahub.asia/login/_view_page.php?i=company&c=uSt
JNnivNS4!eq
・KEC Corporation: https://www.kec-sp.com/page1
・Dreamhop Co., Ltd.: https://www.dreamhop.com/company-3/

w 株主優待制度を、一部拡

40/40This Alpha-Win Company Research Report (hereinafter “this "Report”) has been prepared by Alpha-Win-Capital Inc. (hereinafter “Alpha-Win”) on the request of the company presented in thisReport for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are based on
information current as of the issue date and are subject to change without notice. We do not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate,or fit for any purpose and do not accept any responsibility or liability. Alpha-Win shall not be liable for any consequences including direct or indirect loss, lost profit, or damage resulting fromthe use of or reliance on this Report. Investors who read this report must make their own decisions on all investment matters and take full responsibility regarding their investment. Intellectual
property of this Report belongs to Alpha-Win and no part of this report may be copied, photocopied, cited, or translated without our consent.

充。優待を含めた実質年間利回りは、約 3％