Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)
Issued: 12/15/2022● SummaryAlpha-Win Capital Inc. Research Dept.
http://www.awincap.com/

Business Description
・YRGLM Inc. (hereinafter referred to as the “Company”) plans, develops, and sells software related to Internet
marketing. Its president Susumu Iwata started the business as a college student and founded the Company in 2001.
・Its main product is its originally-developed Internet advertising effectiveness measurement system (AD EBiS), which
has an incredibly high market share (No.1 in the market). It is a leading company in a niche field. It provides thesystem as a cloud service to mid-tier and large companies.
・Its strengths are its technological skills enabling highly accurate data measurement, employees with expertise in DX,
the big data that it has been accumulating as the frontrunner in the field, and its network with more than 500 partnercompanies.
・Its main business is based on a continuous and stable subscription model.
・Since 2016, it had been working on a business model shift and the selection/focus of its business portfolio. Thisbusiness restructuring has already come to an end of a phase and has improved its business foundation and earning
power. Indeed, in recent years, it has been growing sales at a double-digit rate and stably posting a profit, as well as
maintaining profit growth and increasing dividend.
・Currently, it is in the phase of making upfront investments to prepare for the next stage of growth, developing
original products using its accumulated know-how, technologies, and big data and actively expanding into new
businesses through M&As.
・It became listed on the previous market segment of TSE Mothers in September 2014. In August 2019, its name waschanged from LOCKON CO., LTD., to YRGLM Inc. Due to the restructuring of market segments, its listing waschanged to TSE Growth in April 2022.
Last Fiscal Year’s Results
・ Last fiscal year (FY 2022; note that the Company’s fiscal year is September-ending, i.e., FY 2022 ended in
September 2022), sales grew to Y3,334 million (+12.7% YoY) and operating profit grew to Y392 million (+7.4%
YoY), but net profit declined slightly to Y236 million (-1.5% YoY) due to an impairment loss recorded under
extraordinary losses. The Company had revised down its initial plan in May, but sales fell short of this plan by Y66
million (-1.9% compared to the revised plan). On the other hand, operating profit and net profit were Y52 million(+15.3%) and Y26 million (+12.4%) greater than the plan, respectively (dividend of 7 yen/share was unchanged).
・The previous fiscal year's results exceeded Alpha-Win Research Department's previous forecast by Y34 million(+1.0% compared to our forecast) for sales, by Y42 million (+12.0%) for operating profit, and by Y18 million (+8.3%)
for net profit.
・Thanks to the M&As and the in-house developed services, overall sales have remained strong and hit a record highfor the ninth fiscal year since becoming listed on the market. Meanwhile, operating profit increased for the fourthconsecutive year and hit a record high for the second consecutive year. However, operating margin worsened by 0.6
percentage points from 12.4% in the fiscal year before the previous to 11.8% in the previous fiscal year, due toincreased costs associated with M&As and enhanced promotions. This led to a slowdown in the rate of profit growth.
This Fiscal Year’s Financial Forecast
・Like last fiscal year, the Company announced its full-year forecast for the current fiscal year (FY 2023) at the
beginning of the fiscal year (the forecast for the first half was not announced).
・For the current fiscal year, the Company forecasts sales of Y3,900 million (+17.0% YoY), operating profit of Y400
million (+1.9% YoY), net profit of Y240 million (+1.7% YoY), and dividend of 7.8 yen (+0.8 yen/share) (operating
margin of 10% and DOE of 2.5% are planned).
・The Company had previously set financial targets for the current fiscal year, which is the final year of its mediumterm business plan, of Y5,000 million in sales, Y750 million in operating profit (operating margin of at least 15%),
and a DOE of at least 3%. However, it has revised down all of these targets. This was presumably due to the lower1/47
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 theuse 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

than-expected sales of AD EBiS in the previous fiscal year, the anticipated increase in upfront investment tostrengthen investments for medium- to long-term growth, and the exclusion of undetermined factors, including new
M&As, from the plan.
・However, the new forecast for this fiscal year still aims to achieve record-high sales for the 10th consecutive fiscal
year since becoming listed on the market, as well as record-high operating profit and net profit, albeit at a slightincrease. Note that the Company has not factored in any effects of M&As or new services that may become added toits current service lineup into its forecast for this fiscal year.
・Alpha Win Research Department has revised the forecast for the next three years starting this fiscal year, considering
the results of the previous fiscal year and the current situation. Previously, the effect of M&As was factored into ourforecast to some extent, but in line with the Company’s forecast, we have excluded such effects from our forecast forthis fiscal year. Also, while we reflected the effects of acquisitions made through the previous fiscal year, we haverevised our forecast for this fiscal year downward from our previous forecast, mainly due to changes in the expected
number of accounts and unit price of AD EBiS. In our new forecast, we expect sales of Y3,800 million (+14.0%
YoY), which is Y100 million below the Company's forecast. On the other hand, since there seems to be some buffer
for the costs, we revised our forecast for operating profit to Y400 million (+1.9% YoY), net profit to Y240 million(+1.7% YoY), and dividend to 7.8 yen/share, which are about the same levels as the Company’s forecast. M&As
during the fiscal year may cause sales to become higher. However, depending on the performance of the acquiredcompany, the timing of the acquisition, and the timing of recording the acquisition costs (including goodwill
amortization), the Company's profit for the current fiscal year (single year) may be affected either positively or
negatively. Financial performance will also be impacted by whether the Company gains large contracts.

Business Strategy and Financial Forecast for Next Fiscal Year Onwards and the Medium Term・Under the “MXP strategy” to contribute to its customers’ DX through data integration, analysis, and utilization
support, the Company aims to become a “corporate group of comprehensive marketing DX support” that provides
the platform to support the marketing DX of Japanese companies. It will achieve this by accelerating the growth of
its existing services and developing multiple new services.
・The Company has recently updated its strategy, launching a plan to strengthen its e-commerce website building &operation support and increase resources in the EC PF business, and to increase investment in development to create
new services for the Marketing PF business.
・The Company has also set a new medium- to long-term goal of achieving sales of Y10 billion at an early stage,
although it has not specified when this goal should be achieved. It plans to achieve this goal through stable growth of
its existing businesses and expansion of new services in three areas (incubation and marketing process support
businesses in the Marketing PF and e-commerce website building & operation support in the EC PF). The numericaltargets presumably include the effect of expansion through M&As.
・Considering the current situation and the Company’s growth strategy that includes active engagement in M&As, wehave revised our forecast for the next fiscal year while including the effect of new M&As to some extent. We havealso newly prepared a forecast for the fiscal year after the next. We forecast higher sales, profits, and dividends,
expecting contribution to both sales and profits by the advertising agency DX and incubation businesses in theMarketing PF, as well as continued appropriate control of the costs and expansion of the e-commerce website building& operation support business in the EC PF.
・However, compared to our previous forecast, our current forecast is somewhat conservative. This is because we
expect a slowdown in the growth rate of the advertising effectiveness measurement business, since the Company willcontinue to invest for the next stage of growth for the time being, the number of accounts of AD EBiS is continuing
to decline, and the increase rate of AD EBiS’s unit price is slowing down too.
・Considering the large growth potential of Internet-marketing-related fields and the expectation that the Company
will actively engage in M&As, we predicted an annual sales growth rate of 10-20% over the medium to long term.
Also, we expect that the Company will most likely continue to restructure its business portfolio toward future growththrough selection (withdrawal from nonprofitable businesses), focus (shifting resources to growth areas), andexpansion (M&As) in response to changes in the environment. It should be noted that since the Company will most
likely continue with ambitious upfront investments for the meanwhile, its business performance will be impacted
over the short term.
・On the other hand, the Company seems to plan to control costs appropriately and avoid a sharp decline in profit ora posting of a net loss. Assuming that profit margins will remain flat or gradually increase, we expect that a profit
growth of 10-20%, which is about the same as the rate of sales growth, is possible over the medium term (in ourprevious forecast, we had expected an annual growth rate of around 20-30%).
2/47
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 theuse 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

Stock Price and Key Points to Watch Going Forward
・The Company is recognized as an AdTech-related, domestic-demand-oriented, and small-cap growth stock. Its stock
price has underperformed major indices such as the TOPIX, TSE Growth, and Mothers due to weak stock prices ofsmall growth stocks in general this year, as well as due to the downward revision of its financial performance.
・Comparing the forecasts of P/E, P/B, and dividend yield for this fiscal year made by the Company and Alpha-Win
with the average of all stocks of the TSE Prime, the Company's stock price does not seem undervalued at the moment.
It does not seem overvalued either when compared to valuations of the TSE Growth Market to which it belongs or ofsimilar companies. Since its stock price has already been corrected to close to the lower limit of a boxed range andthe Company's business performance for this fiscal year is firm, there seems to be limited downside risk to the stock
price.
・The shift to the subscription business model has helped stabilize its business. The Company is expected to maintaina long-term growth of sales and profits by continuing to invest in growth and expanding into new businesses while
maintaining profitability and balancing with the earnings. Its PEG ratio, which reflects its medium- to long-term
profit growth rate, suggests that the stock price is at a level at which one can consider investment.
・Going forward, the stock price is expected to change while reflecting changes in short- to medium-term businessperformance. Key points include the monthly sales trend, changes in quarterly profit/loss, announcements of M&As
or partnerships, announcements of new functions, financial performance of the new businesses and acquiredcompanies, the situation with the personal information protection regulations, and the contents of the next mediumterm business plan (will start next fiscal year). In addition, especially key points are the number of accounts of AD
EBiS (timing of conversion to a net increase), its churn rate (conversion to a declining trend), and its unit price (YoY
rate of change), which are the indicators directly correlated with business performance.

【3690 YRGLM Inc.

Sector: Information & Communication 】 Figure A

FY

Sales

YoY

O.P.

YoY

R.P.

YoY

N.P.

YoY

EPS

BPS

Dividend(million Y)(%)(million Y)(%)(million Y)(%)(million Y)

(%)

(Y)

(Y)

(Y)

2019

A

2,204

22.1

84

To profit79

To profit-34

Smaller loss

-5.5

168.7

0.0

2020

A

2,618

18.8

276

226.1

261

230.5

183

To profit

29.1

202.2

4.0

2021

A

2,957

12.9

365

32.0

364

39.5

239

30.7

38.0

257.5

5.2

2022

A

3,334

12.7

392

7.4

399

9.8

236

-1.5

37.7

283.3

7.0

2022

Initial CE

3,600

21.7

470

28.6

460

26.3

320

33.5

50.0

7.5

2022

Revised CE

3,400

15.0

340

-7.0

340

-6.7

210

-12.4

33.5

7.0

2022

Revised E (previous)

3,300

13.8

350

-4.1

350

-3.8

218

-8.8

34.8

7.0

2023

Mid-term Plan: Old CE

5,000

-

750

2023

New CE

3,900

11.6

400

1.9

390

-2.5

240

1.7

38.3

-

7.8

2023

New E

3,800

14.0

400

2.0

390

-2.3

240

10.1

38.3

314.5

7.8

2023

Old E (previous)

4,320

29.6

500

27.6

500

25.3

320

35.6

51.1

327.3

9.3

2024

Old E (previous)

4,740

9.7

580

16.0

580

16.0

380

18.8

60.7

378.7

10.8

2024

New E

4,320

13.7

460

15.0

450

15.4

300

25.0

47.9

367.4

9.2

2025

New E

5,000

15.7

530

15.2

520

15.6

340

13.3

54.3

412.5

10.3

OPM = 15% before ⇒ 10% now-

DOE = 3.0% before ⇒ 2.5% now(Note 1) A: actual results. CE: the Company’s estimate (forecast). E: estimate (forecast) by Alpha-Win Research Dept. Note that theCompany’s fiscal year is September-ending. For example, FY 2023 ends in Sept. 2023.
(Note 2) Since values used in this Report have generally been rounded to the nearest unit or may have gone through various calculation
processes, the values may differ from the same item disclosed by the Company or shown in this Report.

【 Stock Price and Valuation Indicators: 3690 YRGLM Inc.】
Item

12/9/2022

Item

Figure B
P/E

P/B

Dividend Yield

Dividend Payout Ratio

Stock Price (Y)699

Last FY (actual)

18.5

2.5

1.0%

18.6%

Shares Outstanding (thou.)

6,372This FY (est.)

18.2

2.2

1.1%

20.3%

Market Capitalization (million Y)

4,454

Next FY (est.)

14.6

1.9

1.3%

Dilutive Shares (thou.)

0.0

Equity Ratio at End of Last FY

57.1%

Last FY's ROE

19.2%
13.9%

(Note) Forecasts/estimates for this fiscal year and the next fiscal year were made by Alpha-Win Research Dept.

3/47
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 theuse 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18【 Stock Chart (end-of-week prices): 3690 YRGLM Inc.】

Figure C

(Y)

3,000

1.20

2,500

Stock price (left axis)

1.10

Price relative to TOPIX (right axis)

1.00
0.90

2,000

0.80
0.70

1,500

0.60
0.50

1,000

0.40
0.30
7

7

8

8

9

9

0

0

1

1

2

2

08
/1

02
/1

08
/1

02
/1

08
/1

02
/2

08
/2

02
/2

08
/2

02
/2

08
/2

(Note) From the fourth week of Aug 2016 to the end of the second week of Dec 2022

(M
M
/Y
Y
)

6

02
/1

0.20

08
/1

500

【Performance】
PeriodReturnvs. TOPIX
1 month1.5%
2.7%
3 months
-0.1%
-6.5%
6 months
-2.6%
-7.1%
12 months-41.9%-41.0%(Note) Prepared by Alpha-Win Research
Dept. Reflects stock price and TOPIX
values through the closing price on
12/9/2022 (most recent value). In thecalculation of performance for eachperiod, the stock price and TOPIX at theend of the last month of each period wascompared with their most recent values.

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

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
matters and take full responsibility regarding their investment.
This Report has been prepared with a focus on objectivity and neutrality based on the analysis of generally accessible
public information and supplemental information including interview(s) by the analyst. Alpha-Win, the writer,
and/or other persons involved in the publication of this Report may already hold, or buy and sell in the future, thestock of the company presented in this Report.
Contents of this Report are based on information current as of the issue date and are subject to change
without notice. For the latest (updated) report, please see our website (http://www.awincap.com/). We also do
not warrant or represent that the information in this Report is accurate, reliable, complete, appropriate, or fit
for any purpose and do not accept any responsibility or liability.
Copyright of this Report belongs to Alpha-Win and no part of the publication may be copied, photocopied, cited, ortranslated without our consent. For inquiries regarding this Report, please send us an e-mail to info@awincap.com.
However, Alpha-Win and the writer of this Report do not have any obligation to reply to inquiries. FV2022-1223-2100

4/47
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 theuse 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

Contents
1．Company Overview ........................................................................................................................ P6
A Leading Company in a Niche Market ............................................................................................ P6
Business Philosophy .......................................................................................................................... P9
2．Business Contents and Business Model ...................................................................................... P10
Business Portfolio ............................................................................................................................ P10
Business Details: I. Marketing Platform ......................................................................................... P12
Business Details: II. EC Platform .................................................................................................... P15
3．Shareholder Composition ............................................................................................................ P18
Change in Composition by Shareholder Type ................................................................................. P18
Major Shareholder Composition ..................................................................................................... P18
4．ESG and SDGs ................................................................................................................................ P20
Environment, Society, and Governance .......................................................................................... P20
SDGs (Sustainable Development Goals) ........................................................................................ P20
5．History of Growth ......................................................................................................................... P21
Past Transition in Financial Results ................................................................................................ P21
6．Market Environment .................................................................................................................... P22
Trends of Japan’s Advertising Market ............................................................................................ P22
Competitors ..................................................................................................................................... P23
Similar Services and Response to Regulations on Privacy Protection ........................................... P23
7．Last Fiscal Year’s Results, the Company’s Forecast for This Fiscal Year, and Medium-TermBusiness Plan .................................................................................................................................. P24
Financial Results for FY 2022 (last fiscal year) ................................................................................ P24
The Company’s Financial Forecast for FY 2023 (this fiscal year) ................................................... P32
Medium-Term Business Plan and Strategy ..................................................................................... P35
8．Alpha-Win Research Dept.’s Forecast for This Fiscal Year and the Medium Term ............. P38
Alpha-Win Research Dept’s Forecast for This Fiscal Year ............................................................ P38
Alpha-Win Research Dept.’s Forecast for the Medium Term ......................................................... P41
9．Analyst’s View ............................................................................................................................... P43
SWOT Analysis ............................................................................................................................... P43
Return of Profit to Shareholders ...................................................................................................... P44
Stock Price, Characteristics, and Factors that May Affect Stock Price ........................................... P45
Note: Upon translating to English, when the page numbers differed from the original Japanese version, they were adjusted to those of the
English version of this Report. Note that the Company’s fiscal year is September-ending (i.e. FY 2023 ends in September 2023).

5/47
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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

w Provides marketing DX

1. Company Overview

support services.

◆ A Leading Company in a Niche Market(1) DX (Digital Transformation)：transformation and innovations ofbusinesses and lifestyles using
digital technologies

Overview
YRGLM Inc. (hereinafter referred to as “the Company”) is a company thatprovides marketing DX1 support services. Its group plans, develops, and sells
software related to Internet advertising and e-commerce.

(2) Internet advertising
effectiveness measurement tool:
Tool for comprehensively
measuring and evaluating theeffect of various Internet ads and
SEO strategies.

With its originally developed software, it has grown rapidly through the fullscale development of the business of improving marketing efficiency. The
Company has an extremely high share in the Internet advertising
effectiveness measurement tools2 market and is a leading company in theniche field.

w Currently, its main service is
SaaS (cloud) for Internet ad
effectiveness measurement.
Evolving into a corporategroup of comprehensive
marketing DX support
through M&As.

(3) SaaS (software as a service): A
service in which software is used
via the Internet (mostly
synonymous with the cloud). Does
not need purchasing of packaged
products. Only the necessaryfunctions, contents, and quantityof service are used via the Internet
and paid for.
w Founded in Osaka in 2001.
Became listed on TSE
Mothers in 2014.
w Changed its company nameand logow The YRGLM Group is

Currently, its main service is the Internet advertising effectivenessmeasurement system, provided as a SaaS3 (cloud service). It has been
evolving into a corporate group of comprehensive marketing DX support
through active engagement in M&As in addition to in-house development.

History
Susumu Iwata, the Company’s president, started a web design business inOsaka as a college student. Following business expansion, he established theCompany in 2001. The Company became listed on the previous market
segment of TSE Mothers in September 2014. In April 2022, its listing waschanged to the new market segment of TSE Growth (“GRT”). Currently, it
has two headquarters, one in Osaka and one in Tokyo.
Change in Company Name
On August 1, 2019, the Company changed its name from the previous“LOCKON” (CO., LTD.) to “YRGLM Inc.” It renewed its company logo at
the same time.
Consolidated Companies
The YRGLM Group consists of a total of eight companies, including theCompany and six consolidated subsidiaries (Figure 1). It has acquired four
consolidated subsidiaries through M&As: TOPICA Inc. (“TOPICA”), Spoo!
Inc. (“Spoo”), Far End Technologies Corporation (“Far End”), and
BOKUBLOCK INC. (“BOKUBLOCK”). It also has two more consolidated
subsidiaries, YRGLM VIETNAM Co., Ltd. (based in Vietnam) and ECCUBE Co., Ltd. Lastly, it has one equity method affiliate (SAI Co., Ltd.). It
has been acquiring consolidated subsidiaries one after another, having
acquired Spoo and TOPICA in the fiscal year before the previous and Far End
and BOKUBLOCK in the previous fiscal year.

made of eight companies.

【Figure 1】Summary of Consolidated Companies
Name of consolidated company

Business and Characteristics

Form

Date of Acquisition
or Spin-off

Location

Stake

Capital(Acquisition price estimatedby Alpha-Win)

Consolidated subsidiaries (6 companies)
TOPICA

Planning and production of video contents and SNS
management service, provided in one stopSpoo

Web media planning, editing, and production

Far End Technologies

Internet services and information security support
services

EC-CUBE

Succeeded the EC-CUBE business from EC PF.
Capital and business alliance with Orico.

Company acquisition(Y220 million)
Company acquisition(several dozen million yen)Company acquisition(Y130 million)
Spin-off and business
transfer

BOKUBLOCK

E-commerce website building and cloud-based ecommerce service

Company acquisition(150-200 million yen)YRGLM Vietnam Co., Ltd.

Offshore software development site

FoundedFounded Date

Fiscal Year

Sales

Operating Profit

Net Profit

Total Assets Net Assets

Million yen
July 2021

Shinjuku-ku, Tokyo

Approx. 60%

37

June 2016

Ended Apr. 2021

December 2020

Chiyoda-ku, Tokyo

100%

10

March 2000

Ended Dec. 2021

156

4

February 2022

Matsue-shi, Shimane

100%

8 September 2008

Ended May 2021

117

10

January 2019

Osaka City, Osaka

89.5%

30

October 2018

Ended Sep. 2021

358

119

May 2022

Chiyoda-ku, Tokyo

100%

10

May 2007Ended Sep. 2021

139

-7

Socialist Republic of Viet Nam

100% 200,000 USD

483

Slight profit

15

8

21

77

29

249
0

171

63

December 2013

Equity method affiliate (1 company)
SAI Co., Ltd.

Transferred the Company's prevoius e-commerce
contract development businessSpin-off and business
transfer

September 201520

3

April 2004

(Ref) Prepared by Alpha-Win Research Department based on the securities report.

6/47
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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

Trends in Consolidated Financial Results
Until FY 2018 (note that the Company’s fiscal year is September-ending),
the parent company’s sales and profit both had accounted for an extremely
high proportion of the total. The consolidated-to-parent-company ratios had
stayed around 1 and the total recurring profit/loss of the consolidated
companies excluding the parent had been close to zero (Figure 2).

w Financial performance of theconsolidated companies(excluding the parent) also
recovered and has been solid.

During FY 2019, the EC-CUBE business was separated from the parent
company in a carve-out (became a consolidated subsidiary after the carveout), which changed the balance between the parent company’s results andconsolidated results. Due to the profitability and solid financial performanceof EC-CUBE Co., Ltd., as well as due to the acquisition of several companies
and their business expansion, sales growth and profitability have generally
been maintained for the consolidated companies excluding the parent(consolidated minus parent company) since FY 2019. This fiscal year, too,
the consolidated-to-parent-company ratio for sales and recurring profit are
expected to be at the same level as last fiscal year at 1.3-1.4.

w Carved out EC-CUBE as aseparate company.

w The recent consolidated-toparent-company ratio has
been around 1.3-1.4.

【Figure 2】Comparison of Consolidated vs. Parent-Company Business Performance (Sales and Recurring Profit)
by Fiscal Year
A
B
A-B=C
A/B
A
B
A-B=C
A/B

Unit: million yen, %Consolidated sales
Parent company sales
Consolidated sales - parent company sales
Consolidated sales / parent company sales
Consolidated R.P.
Parent company R.P.
Consolidated R.P. - parent company R.P.
Consolidated R.P. / parent company R.P.

FY 2014
1,360
1,360
0
1.00
233.6
245.2
-12
0.95

FY 2015
1,437
1,437
0
1.00
352.0
359.0
-7
0.98

FY 2016
1,613
1,613
0
1.00
250.3
252.1
-2
0.99

FY 2017
1,719
1,719
0
1.00
106.3
106.8
-1
1.00

FY 2018
1,804
1,804
0
1.00
-115
-110
-5
-

FY 2019
2,204
2,010
194
1.10
79
19
60
4.16

FY 2020
2,618
2,317
301
1.13
261
165
96
1.58

FY 2021
2,957
2,532
425
1.17
364
278
86
1.31

FY 2022
3,334
2,583
751
1.29
399
315
84
1.27

(Ref) Prepared by Alpha-Win Research Dept. based on the securities report. (Note) Consolidated results starting in FY 2014.

w Essentially debtless with soundfinancial standing.

Financial Standing
The Company had stayed debt-free for several years after becoming listed,
but in FY 2018, it raised about Y800 million in short- and long-term debt.
This capital was raised for investment in the development of the Marketing
PF and AI-related fields and for future M&As.
Accumulation of capital and improvement of finance have progressed dueto the steady posting of profit. As of the end of FY 2022, its short/long-term
debt totaled about Y880 million while its cash and deposits were about
Y1,320 million. Therefore, the Company is essentially debtless.

(4) FCF (Free Cash Flow): FCF =Operating CF + Investing CF.
Cash which can be “freely”
used. CF generated by acompany minus its investments,
etc., necessary to maintain its
business.
w FCF, which had beenconsecutively positive forthree and a half fiscal years
after recovering from anegative trend, turned
negative again in the first halfof the previous fiscal year due
to M&As and then turned
positive again in the second
half of the same year.

Its total assets are about Y3.1 billion and market capitalization is about Y4.5
billion (based on the closing price of Y700 on September 30, 2022), both
relatively small. However, its equity ratio is 57% and current ratio is 208%
so there does not seem to be an issue with its financial standing.

Semi-Annual Transition in Cash Flow and Change in the Amount of
Cash & Deposits
Thanks to the recovery of earning power and the completion of an investment
phase, its FCF4 (free cash flow) turned positive in the second half of FY 2020.
In FY 2021, too, it maintained a positive FCF both in the first and the second
half despite conducting M&As. Last fiscal year, while operating CF
decreased, the amount of investment increased due to the acquisition of Far
End and BOKUBLOCK. Consequently, FCF for the full year became
negative at -Y10 million (Figure 3 on page 8). However, this was due to thenegative cash flow of -Y121 million in the previous fiscal year’s first half,since cash flow turned positive again in the second half at Y111 million.
7/47

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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

Due to M&As, its cash & deposits decreased slightly from Y1,392 million at
the end of the previous fiscal year to Y1,321 million at the end of this fiscal
year. Although it would depend on the size of acquisitions, estimating thenormal working capital to be about two to three months of monthly sales, theCompany should be able to conduct several more M&As of similar sizes(about 10 to 300 million yen per acquisition) using its available cash &deposits and debt.

【Figure 3】Semi-Annual Change in Cash Flow
Unit: million yen
Operating CF ①
Investing CF ②
Financing CF
FCF（①+②）
Cash and Deposits (on B/S)FY 2015
H1
H2
15
148
-5
-27
-3
0
9
121
666
787

FY 2016
H1
H2
48
93
-80
-69
-16
3
-32
24
738
762

FY 2017
H1
H2
121
23
-88
-106
-31
-0
33
-83
764
681

FY 2018
H1
H2
7
9
-94
-118
169
542
-88
-110
760
1,194

FY 2019
H1
H2
99
109
-368
-158
162
-262
-269
-50
924
774

FY 2020
H1
H2
92
429
-409
-101
391
-56
-317
328
847
1,119

FY 2021
H1
H2
241
333
-35
-313
-1
-23
206
20
1,342
1,392

FY 2022
H1
H2
141
292
-262
-181
-195
-121
-121
111
1,214
1,321

(Ref) Prepared by Alpha-Win Research Dept. based on information including the financial results summary and briefing materials. H1 = first
half. H2 = second half.

w Goodwill is increasing but
is not at a concerning level.
In addition, the sum of
intangible fixed assets(goodwill plus capitalized
software) and deferred tax
assets total Y1 billion, which
within the amount of net
assets (56%).

(5) EBITDA = Operating profit+ depreciation + goodwill
amortization

Goodwill Balance and Progress with Amortization
The year-end balance of goodwill has been on the rise due to acquisitions ofcompanies and businesses (Y316 million at the end of FY 2020 ⇒ Y450
million at the end of FY 2021 ⇒ Y484 million at the end of FY 2022). Since
the Company uses the Japanese accounting standards and has been amortizing
goodwill at a fixed amount over five years in principle, the amount ofamortization of goodwill has also been rising along with the acquisitions.
Simply dividing the remaining balance of goodwill by the annual amount of
goodwill amortization shows that it would take about 4.5 more years tocomplete amortization (Figure 4).
Also, when the annual EBITDA5 (Y686 million in the previous fiscal year) is
divided by the amount of goodwill (balance), the ratio for the most recent
period comes out to be about 1.4x (even if goodwill is amortized in a lumpsum, a positive annual EBITDA can be maintained). Both factors indicatethat there is no particular concern at this point.
The Company has intangible fixed assets of about Y900 million, which
includes goodwill and capitalized software. Adding deferred tax assets ofY100 million, these total Y1 billion. Since this total is within the Company’s
net assets of Y1.8 billion (56%), the Company’s standing seems sound.

【Figure 4】Change in Yearly Balance of Goodwill and Amortization
Yearly Goodwill
Goodwill (balance on B/S: million yen) ①
Annual amortization of goodwill (on CF statement: million yen) ②
Average period of amortization (years) ③＝①/②
EBITDA ④
EBITDA/goodwill ⑤=④／①

FY 2014
0
0
0
273
0

FY 2015
0
0
0
373
0

FY 2016
0
0
0
286
0

FY 2017
0
0
0
174
0

FY 2018000
60

FY 2019
109
16
7.0
247
2.3

FY 2020
316
55
5.8
514
1.6

FY 2021
450
84
5.4
638
1.2

FY 2022
484
108
4.5
686
1.4

(Ref) Prepared by Alpha-Win Research Dept. based on information including the financial results summary and financial results briefing materials.

w Share value of the unlistedcompany EC-CUBE Co.,
Ltd., which the Company
owns, is estimated to be
Y1.3 billion. Since theCompany also has asimilar amount of cash &deposits (Y1.3 billion), it
has sufficient capital forthe meanwhile.

Share Value of the Private Subsidiary
The Company currently holds an 89.5% stake in its subsidiary EC-CUBE Co.,
Ltd. In December 2020, the Company sold 10% of the shares of EC-CUBE
Co., Ltd. to Orico for Y155 million. Simply estimating from the sale price atthe time, the value of the remaining shares held is equivalent to a market valueof about Y1.3 billion. At the time of sale, the subsidiary was valued at amarket value of about 5.2x its sales. If business continues to expand in the
future, the Company’s asset value is expected to further increase.
8/47

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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18
w Has earned a high reputationfrom external organizations.
Chosen as a Great Places toWork-Certified Company.

Awards and Reputation
In December 2022, the Company was chosen as a Great Places to WorkCertified Company in Japan's “Great Places to Work 2023” selected by theGreat Place to WorkⓇ Institute6 Japan.

(6) Great Place To Work®
Institute: An organization that
conducts surveys and announces“Great Places to Work” in about
60 countries around the world
every year.

It has also been chosen as a Best Company from the same organization in the“Great Place to WorkⓇ Best Workplaces Ranking for Medium-Sized
Companies (100 to 999 employees)” for the ninth consecutive year in
February 2021 (total of ten times). It has also won various other awards fromother external organizations as well. This high reputation is valuable since it
helps attract talents, which are crucial to the Company’s type of business.

w Its main products have also
earned top-level reputations.

Its products have also earned a high reputation. AD EBiS won the Leader
Award for the seventh time in a row in the Access Analysis and Attribution
Division of the “ITreview Grid Award 2022 Fall” by the IT product review
platform ITreview (review site for real users of IT products and cloudservices targeting corporations) managed by ITclowd Corp (headquarteredin Minato-ku, Tokyo) (the Leader Award is given to products with highcustomer satisfaction and recognition). This is the ninth time in a row that
the Company has been chosen in the “ITreview Grid Award.”
Furthermore, EC-CUBE, the open platform for e-commerce websites whichis the part of the EC Platform segment managed by EC-CUBE Co., Ltd.,was ranked as “the most used shopping cart system by online stores withmonthly sales of 10 million yen or greater” in a survey of online store trends
conducted in October 2020 by EC&Marketing Co., Ltd. (headquartered in
Minato-ku, Tokyo) (a high evaluation, winning by a large difference ofmore than 2.5x from 2nd place).

w The Company’s businessphilosophy: Impact on the
World◆ Business Philosophy
Under its mission, “Impact on the World,” the Company aspires to realize asociety in which companies can grow together with the society by creating
unique values. This philosophy encompasses the Company’s following
concept: “We shall continue to impact each and every thing that we are
involved in, because the accumulation of small impacts that move people’s
heart will eventually create a large momentum that will move the entire
world.”
Also, the Company’s vision (for the future) is to “become a company that
supports corporate marketing activities around the world through data andtechnology to bring happiness to both the sellers and the buyers.”

9/47
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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

2．Business Contents and Business Modelw Worked on restructuring its◆Business Portfolio

business portfolio.
Withdrew from non-corebusinesses andconcentrated businessresources on AD EBiS of
the Marketing PF segment.
In recent years, it had
acquired related businesses
to increase the YRGLMGroup’s comprehensive
strength.

Restructuring and Strengthening of Business Portfolio
Since FY 2016, the Company had been actively restructuring andstrengthening its business portfolio. It had been increasing its focus on thecore businesses (shifting to AD EBiS of the Marketing Platform segment) andseparating its non-core businesses (EC Platform segment).
This business restructuring has already reached the end of a phase, and theCompany is currently in the stage of expanding its business for the next levelof growth.

【Figure 5】Business Restructuring and Segments (businesses that it withdrew from or has significantly
scaled down are highlighted)
Segment NameBusiness Category(1) Advertising effectiveness measurement(2) Advertising agency DX
I. Marketing
Platform

Main Service (or company name)① AD EBiS: advertising effectiveness measurement tool
➁ THREe: paid-listing ad management

Withdrew (end of March 2020)① AdRepo: automatic report generation tool for advertising analysis

Business acquisition (August 2018)➁ Ad-Knowledge: cloud-based project management tool
① AD HOOP: marketing-specialized matching② eZCX: e-commerce-specialized CX improvement PF(3) Incubation(previously "new services")③ Spoo: web media/design & management services④ TOPICA: SNS and video marketing support⑤ Far End Technologies: project management tool

II. EC Platform

ChangesNote

ADPLAN business (acquired in Jan 2020; merged):closed in March 2021
Parentcompany

Started service in July 2020
Started service in May 2020; changed name to ADHOOP in Jan 2021
Official version released in July 2021
Acquired as a wholly owned subsidiary (Dec 2020)

Consolidated

Acquired as subsidiary with about a 60% stake (July 2021)
Acquired as a wholly owned subsidiary (Jan 2022)*OtherFormer "Professional Service" (DMP business)(Former "SOLUTION"; transferred from SOLUTION and scaled down)

Parentcompany(1) EC-CUBE

EC-CUBE and ec-cube.co: open-sourced e-commerce website
building

Transferred to EC-CUBE Co., Ltd., in Jan 2019; about 10% of shares soldto Orico

Consolidated(2) EC website building & operation support(new business; prrofessional services)① BOKUBLOCK: e-commerce webite building & operation supportand solutions

Acquired as a wholly owned subsidiary (end of May 2022)

Consolidated

Transferred to SAI Co., Ltd. (equity method; kept) and Radical Opti Co.,
Ltd. (removed from equity method after transfer)

EquitymethodTransferred to Marketing Platform's *Other

Parentcompany① E-commerce contract dev. + consulting, etc.

(3) SOLUTION → withdrew(Of which is DMP business)(Ref) Prepared by Alpha-Win Research Dept. based on information including the Company’s financial results summary and briefing materials.
Words in red indicate companies/businesses that changed or were acquired during the previous fiscal year.

w Composed of two segments.
Excluding the period ofbusiness restructuring, bothPF segments have been
posting operating profits.

Business Composition
Currently, the Company’s business is composed of two segments: I.
Marketing PF (short for “platform”) and II. EC PF (EC = e-commerce)(Figure 5).

w【Figure 6】Breakdown of Sales(outer circle) and Segment’s
Profit (inner circle) by Segment
in FY 2022
EC Platform

MarketingPlatform

12.4%
87.6%

The Marketing PF provides various tools and solutions for Internet marketing.
The EC PF provides open sources for e-commerce website building as wellas e-commerce website building & operation support services.
In FY 2022, the Marketing PF segment accounted for about 88% of total sales
and about 72% of the segments’ profit (Figure 6). This segment has been thedriver of the Company’s overall sales growth over many years (transition insales by PF: Figure 7 on page 11).

27.9%
FY 2022 Full YearSales (outer circle)
Operating Profit (inner circle)

72.1%

Each PF’s transition in operating profit over the years is as shown in Figure
8 on page 11. Excluding FY 2017 and FY 2018, during which businessrestructuring was conducted, operating profit (segment’s profit) has beenposted for both PF segments during each full fiscal year.

(Ref) Prepared by Alpha-Win Research Dept.
based on the financial results summary.

10/47
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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18【Figure 7】Transition in Sales by Business Segment (unit: million yen)(Ref) Prepared by Alpha-Win Research Dept.
based on the financial results summary.

(million yen)

4,000

Marketing Platform

EC Platform

414

3,000

358
301
253

2,000

1,000

422

883

911

1,074

FY 2014

FY 2015

FY 2016

666
0

526

477

FY 2013

275

465

539

FY 2017

1,951

1,530

1,255

FY 2018

FY 2019

2,925

2,599

2,318

FY 2020

FY 2021

FY 2022【Figure 8】Transition in Operating Profit by Business Segment(million yen)

Marketing Platform

300(Ref) Prepared by Alpha-Win Research Dept.
based on the financial results summary.

EC Platform

250
200
150

214

100

142

50

75

0

210
136

107

38

46

22

108

119

78

39

280

247

199

153

(1)

(50)

(60)

(100)

(121)

(150)
FY 2013

FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021

FY 2022

The Company’s current business portfolio is shown in Figure 9 (the numbers
in front of businesses in Figure 9 match the numbers in this section’s
description of businesses).

【Figure 9】Business Composition (as of end the of November 2022)
Marketing DX Support Busineses
I. Marketing Platform Segment(1) Advertising(2) Advertising

EffectivenessAgency DX

Measurement①(3) Incubation

measurement platform

Creative Agency

Automatic report

Advertising agency

generation tool formatching platform

programmatic ads

No. 1 sales
ad effectivenessmeasurement
market1

Ad-Knowledge:
Project management tool
for advertising agencies

e-commerce①
Various solutions for e-

Decentralized video media
management service⑤②

operation support
Open platform for④②

share in Japanʼs①③

AdRepo:Advertising effectiveness(2) E-commerce(1) EC-CUBE

website building &①①

II. EC Platform Segment

E-commercespecialized CXDeveloping and providing

improvement platformproject management tools

Cloud-based e-commercecommerce

platform
No.1 open-source
software for ecommerce website
building in Japan by
number of users2(Ref) Prepared by Alpha-Win Research Dept. based on the financial results briefing materials with some additions.
*1: According to the Japan Marketing Research Organization’s summary of its June 2021 survey on competition in designated areas*2: According to Information-technology Promotion Agency, Japan’s “3rd Open-Source Software Utilization Business Survey”

11/47
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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18◆ Business Details I. Marketing Platform
The change in the sales and profit of the Marketing PF segment over the years
is shown in Figure 10.

【Figure 10】Change in the Sales and Operating Profit of the Marketing Platform Segment
Sales (million yen)
I. Marketing Platform(1) Advertising Effectiveness Measurement(1) ➀AD EBiS + former ADPLAN (business acquired in Jan 2020)①AD EBiS's sales growth rate (YoY: %)② THREe (withdrew)(2) Advertising Agency DX(2) ①AdRepo➁Ad-Knwoledge(3) Incubation (previous "new services")(3) ①AD HOOP, ②EZCX, ③Spoo, ④TOPICA, ⑤Far End

FY 2014
FY 2015
FY 2016
Consolidated Consolidated Consolidated
883
911
1,074
883
911
1,074
722
822
1,012
27.3%
13.9%
23.1%
161
89
62

FY 2017
Consolidated
1,255
1,254
1,200
18.6%
54

FY 2018
FY 2019
FY 2020
FY 2021
FY 2022
Consolidated
Consolidated Consolidated Consolidated (A) Consolidated (B)
1,530
1,951
2,318
2,599
2,925
1,445
1,775
2,135
2,313
2,369
1,402
1,747
2,127
2,313
2,369
16.8%
24.6%
21.8%
8.8%
2.4%
43
28
8
0
0
124
152
182
175
(Business acquired in Oct 2018 →)
124
149
3
3
89
380

(Spoo acquired in Dec 2020; TOPICA acquired in July 2021; AD HOOP transferred from advertising agency DX startingin FY 2021; Far End acquired in Jan 2022 →)*Other: previously, Professional Service (DMP)
Segment's Operating Profit
Segment's Operating Margin (%)(Professional services, transferred from EC PF →)

142
16.1%

214
23.5%

210
19.5%

153
12.2%

84
-121
-7.9%

51
46
2.4%

FY 2022: YoY Change
B-A(B-A)/A
326
12.5
56
2.4
56
2.4
-6.3%
0
-7
-3.6

291

327.2

3

89

380

291

327.0

27
199
8.6%

247
9.5%

280
9.6%

33
0.1%

13.3

(Ref) Prepared by Alpha-Win Research Dept. based on financial results briefing materials and interview. Includes estimates.

I. The Marketing PF segment currently consists of the three main businesscategories (1) to (3) described below. During the previous fiscal year, thebreakdown of sales of this segment was as shown in Figures 10 and 11. AD
EBiS accounted for 81% of the Marketing PF segment’s sales (71% of theCompany’s entire sales).

w The Marketing PF segment
is composed of threebusiness categories.

【Figure 11】Breakdown of Sales of the Marketing PF by Business Category*Other(2) Ad Agency DX

AdRepoAd-Knowledge

6％(1) Ad EffectivenessMeasurement

13％(3) Incubation

Marketing
81％
PF
Sales
Breakdown(FY 2022)(Ref) Prepared by Alpha-Win Research Dept. based on the financial results briefing materials.

w Its core business, AD EBiS,
is an originally developed,
Internet ad effectivenessmeasurement system. It has
the top share in the market
and accounts for about 70%of the Company’s entire
sales. Highly stablebusiness based onsubscriptions.

w(7) Subscription model: fees arepaid periodically for the right touse the service for a certain
period. See page 17 forsupplemental descriptions.

Below are the current business categories of this PF and their main products(service or product name is in bold and underlined).

(1) Marketing Effectiveness Measurement① AD EBiS・Internet advertising effectiveness measurement system
・The Company’s originally-developed, core product (incredibly strong
position in the Japanese market with top share of 86.3%, according to
the Japan Marketing Research Organization’s summary of its June 2021
survey on competition in designated areas).
・ Enables the collective management, measurement, analysis, andvisualization of the effectiveness of Web ads, etc., and helps understandthe cost effectiveness of ads.
・Subscription-based business model7
12/47This 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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

・Business based on flat-rate, periodic payments. Its sales are determinedby average unit price × number of active accounts.

w Advertising Agency DX
consists of 2 businesses:
AdRepo, which fully
automates the creation ofreports for programmatic
advertising, and AdKnowledge, a cloud-based
project management
system specialized foradvertising agencies.
(8) Programmatic advertising:An advertising method inwhich optimization of ads is
conducted automatically or
supported immediately. After
submitting an ad, optimizationis conducted, leading to better
results.

(2) Advertising Agency DX
The business targeting advertising agencies consists of the two businesses
described below (AD HOOP has been moved to the incubation business).
This previous fiscal year’s sales were Y175 million in total, which was 6%of the entire Marketing PF’s sales. Most of the sales came from AdRepo,
although the specific sales of each of the two businesses were not disclosed.
① AdRepo
・Fully automatic report-generation tool for programmatic advertising8
・Developed to reduce the workload of advertising agencies in creatingsuch reports
・Provided as a cloud service. The Company plans to continue to focus
on expanding this business.
② Ad-Knowledge
・ A newly developed, cloud-based project management system
specialized for advertising agencies
・Supports advertising agencies that work with programmatic advertisingin improving operation and efficiency
・Service was started in July 2020. Provided as a subscription service(SaaS). Its sales are small and seem to be flat.

(3) Incubation (changed from the previous “new services”)
w The name of the previous“new services” category
was changed to“incubation.”w The Incubation businessconsists of the businesses
acquired through the
M&As of 3 companies andthe Company’s originallydeveloped products AD
HOOP and eZCX.
w Will rapidly expand thisbusiness category as its
future growth driver.

① AD HOOP
・Marketing-specialized matching platform that introduces the optimum
solution partner to corporate advertisers to solve their problems andmeet their needs. Released in May 2020. Moved from the advertising
agency DX category due to its expansion of business domain.
・In addition to advertising agencies, the business has been expanded toalso provide the service to SNS account management agencies and ecommerce website production companies (service limited to EC-CUBE).
Steady business expansion. In FY 2022, sales grew by more than 4x fromthe previous fiscal year.
② eZCX・E-commerce-specialized CX improvement platform
・Improves CX (customer experience) on websites. Leads to greater
efficiency in acquiring new customers.
・Based on the concept of “anyone can easily use”
・ Using the user behavior data that the Company has accumulated
through its AD EBiS business, the service analyzes the users’ emotions
to provide the most suitable experience at the most appropriate timing.
・Released in May 2021, but sales have been flat.
③ Spoo (Spoo! inc.): consolidated subsidiary
・Web media and design company. After its acquisition in December
2020, its business has been developing steadily with increasing numberof orders received. Securing employees will be the challenge.

13/47
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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022
2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18
w Has been acquiring
・ Leveraged Spoo’s creativity and talents to integrate with thecompanies in businesses
Company’s data and technology. It plans to thereby create new values,
related to Internet
expand into more areas of business, and strengthen its competitive edge.
marketing as consolidated
subsidiaries at a pace ofabout 1-2 companies per④ TOPICA: consolidated subsidiaryyear.

(Note) For details on eachbusiness of I. Marketing PF (1)① through (3)-④, see pages
13-19 of our report publishedon December 13, 2021. For
details on (3)-⑤ Far End
Technologies, see pages 7-8 ofthe report published on
February 14, 2022.

・Acquired in July 2021 with a stake of about 60%.
・Developing a marketing support business that utilizes SNS and videos.
Provides a series of services ranging from the planning and productionof video contents to SNS account management services in one stop.
・With the acquisition, the Company will expand its business domain into
the rapidly growing social media marketing market and cross-sell
TOPICA’s services to its current client companies (around 1,300
companies). In addition to this, it plans to integrate its data andtechnologies with TOPICA’s SNS marketing business to create andprovide new services.
・ This business has been solidly expanding as there has been an
increasing number of inquiries due to the proven track record andstrengths in SNS management service, especially for TikTok.

⑤ Far End Technologies Corporation (hereinafter, “Far End”):
consolidated subsidiary
・Provides Internet services (SaaS) and IT security support services.
Acquired in January 2022 as a wholly owned subsidiary.
・Its main business involves the development of the globally well-known,
open-source project management software Redmine and the paid,
cloud version of the software, My Redmine.
・In recent years, due to increasing remote work in response to the
COVID-19 crisis, there has been greater demand for project progress
management. The number of accounts has been increasing steadily anda large growth can be expected.
・By increasing development personnel, improving the products, andleveraging and integrating YRLGM and Far End’s technologies andexpertise, the Company plans to expand the business domain, increase
its competitive edge, and provide new value to customers.

14/47
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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022
2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18
w EC PF had been specialized◆ Business Details: II. EC Platform
in EC-CUBE, but reentered
Previously, the EC PF segment had only consisted of EC-CUBE. However,
the e-commerce website
with the acquisition of BOKUBLOCK INC., the Company reentered thebuilding & operation
support market by acquiring
professional services9 market (e-commerce website building & operation
BOKUBLOCK. The segment
support) (consolidated starting in June 2022; Figures 12 and 13). EC-CUBE
is now made of 2 businesses.
accounted for 80% of the sales of the EC PF in the previous fiscal year.
(9) Professional services: A
general term for services otherthan the cloud; includes
consulting, accountmanagement, and contractdevelopment.
【Figure 12】Breakdown of Sales of the EC PF by Business Category(Unit: % or million yen)
Other

Other
Other

14%
Subscription

8%

EC PF
Sales Breakdown(FIrst half of
FY 2022)

20％
E-commerce
website building &operation support(FY 2022)

10％

Shopping
settlement fee

10％

Shopping
settlement fee

7％

EC PF
Sales Breakdown 78%

Subscription

12％

Subscription

Shopping
settlement fee

EC PF
Sales Breakdown

61％

40％

(Company forecast
for
FY 2023)40％

E-commerce
website building &operation support(Ref) Financial results briefing materials.

【Figure 13】Change in Sales and Operating Profit of the EC Platform Segment
Sales
FY 2014
FY 2015
FY 2016
FY 2017
FY 2018
FY 2019
FY 2020
FY 2021(million yen)
Consolidated Consolidated Consolidated Consolidated Consolidated Consolidated Consolidated Consolidated (A)II. EC Platform
477
526
539
465
275
253
301
358
(1) EC-CUBE
245
230
219
208
254
253
301
358
EC-CUBE's sales growth rate (YoY: %)
18.3%
-6.1%
-4.8%
-5.2%
22.2%
-0.4%
19.0%
18.9%
①Shopping settlement fee
290②Subscription
12③Other54
New: (2) E-commerce website building &0
operation support (BOKUBLOCK)Previous: (3) SOLUTION (transferred/withdrew)
232
296
319
257
20
0
0
0
Previous: ① E-commerce contract development, e232
296
319
257
20
0
0
0
commerce website consulting, etc.
Of which is DMP (transferred)
104
Segment's operating profit
107
136
38
-60
22
39
78
119
Segment's operating margin
22.5%
25.8%
7.1%
-12.9%
8.2%
15.4%
26.1%
33.1%

FY 2022
Consolidated (B)
414
414
15.6%
253
29
50

FY 2022: YoY Change
B-A(B-A)/A
56
15.6
56
15.6
-3.3%
-37
-12.9
17
149.9
-4
-7.4

83

83

0

0

0

0

108
26.1%

-11
-7.0%

-9.0

(Ref) Prepared by Alpha-Win Research Dept. based on the financial results briefing materials. Includes estimates.

w The EC-CUBE businessprovides free software forcompanies to build andmanage e-commerce
websites on their own.
w In addition to thedownload version, thecloud version has beenreleased.
w Gained top share in theJapanese market.
(10) Freemium Model:“Freemium” is a coined wordthat combines “free” and“premium.” Refers to abusiness model that generates
revenue by offering basic
services free of charge whilecharging fees for moresophisticated or speciallyadded, related services.

(1) EC-CUBE: consolidated subsidiary
Service Overview
・ EC-CUBE is a software platform whereby companies can build andmanage e-commerce (EC) sites on their own.
・The Company provides EC-CUBE as web design software for companies
that will begin selling and providing products or services online. It isprovided as either as the open-source, packaged download version ECCUBE or the cloud version ec-cube.co.
・Characterized by low cost, high customization, and high usability, it has
the top share in the Japanese market and is the standard platform.
Business Model and Sales Breakdown
・EC-CUBE is based on a Freemium Model10 in which software is offered
for free but in return, revenue is earned from peripheral services.
・Revenue comes from shopping settlement fees from official partners using
the software for their Internet businesses (61% of total sales of this PF in
the previous fiscal year), ec-cube.co’s monthly subscription income
15/47This 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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18(similarly, 7% of total), and other revenue (function addition fees forplugins, or programs to add functions to software; similarly, 12% of total)(middle rows of Figure 12 on page 15).

(2) BOKUBLOCK INC.: consolidated subsidiary
Overview
・Acquired as a wholly owned subsidiary to strengthen the EC PF and expand
into new areas of business. Consolidated subsidiary starting in June 2022.
w Acquired BOKUBLOCK,an e-commerce website
building & operation
support company. Will
work with EC-CUBE Co.,
Ltd. to provide one-stop
services optimized for ecommerce.

w After the acquisition,synergies with EC-CUBE
Co., Ltd., helped gain largescale projects. Performancehas been solid.

w Aims to continuously
generate sales and improve
profitability through thelarge-scale, websitebuilding projects andfollow-up operation
support.
w Aims to further expand thebusiness domain andincrease revenue by adding
new solution services.
w Re-entry into theprofessional services. For
future expansion of areasof service, acquisitions in
the field of e-commerce
website contractdevelopment are also
possible in the future.

・Among the EC-CUBE Integrate Partners, BOKUBLOCK was one of the
top-tier partners. It had been developing a wide range of businesses frombuilding highly unique e-commerce websites using EC-CUBE to supporting
operation of those websites (had been working together with the Company on
different parts of its businesses as a partner).
・The acquisition united the two companies to provide an open platform for
e-commerce website building, as well as starting vertically integrated services
ranging from e-commerce website building to marketing support. Throughthe coordination between the two companies, it has become possible toprovide a one-stop service optimized for e-commerce (the rivals would be
EC-being and ec-force).
Business Model and Strengths
・Because the product is open-source and the source code is owned by theclient company, EC-CUBE Co., Ltd., has received many project requests.
Indeed, since the acquisition, BOKUBLOCK has been able to constantly gain
new projects through EC-CUBE Co., Ltd. Its track record as a top-tier partnerof EC-CUBE, as well as the competitive edge of EC-CUBE and the fact thatit has become a member of the YRGLM Group after the acquisition, havebecome its strengths.
・BOKUBLOCK has already received orders for large-scale projects (worth
over a total of 100 million yen) in the previous fiscal year, which contributed
to sales and brought better-than-expected results.
・Starting this fiscal year, the Company plans to focus on acquiring largescale projects and aims to continuously generate sales and improve
profitability through e-commerce website building and follow-up operation
support. In addition to acquiring new projects by strengthening recruitment,
it plans to propose a vertically integrated service lineup to its existing clients.
・In addition, the Company has reentered the professional services market byleveraging BOKUBLOCK’s expertise and talents and plans create new
solution services to further expand its business domain and increase profit.
・In expanding the professional services business, the Company may also
possibly conduct acquisitions in the field of e-commerce website contractdevelopment in the future.

16/47
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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

Subscription Business Model (supplemental description)
Summary
In the Marketing PF segment, which accounts for approximately 88% of theCompany's total sales, greater than 80% of its sales (a little more than 70%of the Company’s entire sales) are from the SaaS (cloud) business model with
flat-rate billing (subscription model).

w The subscription-based
business model enables
continuous and stable
generation of profit bycharging fees for every
certain period of use.

In the subscription-based business model, users pay a predetermined,
packaged price for the service contents or the use of system services such as
AD EBiS during a certain contract period, enabling continuous generation ofrevenue until the contract becomes cancelled. In addition to the core business
AD EBiS, this business model is also used in EC-CUBE and the advertising
agency DX businesses, although their sales are small.
In this business model, costs will precede at the beginning of a new contract,
including marketing and sales activity expenses for customer acquisition and
R&D expenses. However, over a customer’s lifetime (the period from thestart to the end of a transaction with a customer), revenue becomes
accumulated continuously, stabling increasing the customer lifetime value(LTV: cumulative profit generated within a contract period).

w Costs are incurred
immediately after new
contracts are made but aregradually offset over thecourse of time, so that profit
begins to accumulate
steadily.

Change in the LTV (cumulative profit/loss) per Customer
Figure 14 shows the model for the change in the Company's cumulative profit
and loss over the average subscription contract period of three years.

[Figure 14] Model of the Change in LTV (cumulative profit and loss) per Customer

LTV

 for
 Change


Model
in LTVper
Customer

1

2

3

4

5

6

7

8

9

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36

Time
Second year

First year

Investment phase
Expenses for customer
acquisition precede

Third year

Return phase

After investment payback, profit steadily accumulates over thelong term(Ref) Past financial results briefing materials

In the month that a new contract is made, all costs become recorded, so thatan overall loss is recorded for that particular month. However, since theCompany can then earn an almost fixed amount of revenue from sales every
month starting in the first month of contract, the cumulative break-even point(zero) is reached after eight months. From the ninth month, the cumulative
profit/loss (LTV) turns into a surplus and profit accumulates until the 36thmonth when cancellation is expected (right side of the graph shows theamount of cumulative profit or loss). In other words, it is a model with a timelag; during the phase that the number of contracts is increasing at anaccelerating speed, there will be little contribution to profit in the first year,
but profit will then accumulate on a continual and stable basis from thesecond year until the end of contract.
17/47
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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

3． Shareholder Composition◆
w Individuals hold anextremely high proportion ofshares at about 92%.

Change in Composition by Shareholder TypeAs of the end of September 2022, there is no significant change regarding theshareholder composition by shareholder type as of the end of September 2022
(Figure 15). Compared to one year ago, the proportion of “individuals, etc.”
has increased slightly from about 91% to about 92% of the total. On the other
hand, “financial institutions, etc.” has decreased from about 4% to about 2%
and “overseas corporate entities, etc.” has stayed about the same at about 1%.

[Figure 15] Change in Shareholder Composition by Shareholder Type (unit = %)
(%)

100
95
Individuals, etc.

90
85
80

~

2014/9期末2015/9期末

2016/9期末2017/9期末2018/9期末

2019/9期末

2020/9期末

2021/9期末

10
9
8
7
6
5
4
3
2
1
0

2022/9期末Financial instruments b usiness
operators
Other corporate entities
Financial institutions, etc.
Overseas corporate entities, etc.

期末2014/9FY 2014期末2015/9FY 2015期末
2016/9FY 2016期末2017/9FY 2017期末2018/9FY 2018期末2019/9FY 2019期末2020/9FY 2020

期末2021/9FY 2021期末
2022/9FY 2022(at year-end)(Ref) Prepared by Alpha-Win Research Dept. based on the Company’s notice of annual meeting of shareholders and securities report.

◆ Major Shareholder Composition
w No significant change to themajor shareholders. Parties
affiliated with the Company(former and present directors
and executive officers plus
the employee stock
ownership plan) possess
about 60% of all shares intotal.

The major shareholders as of the end of September 2022 are shown in Figure
16 on page 19. Below is supplementary information. Compared with past
periods, there has essentially been no significant change in the major
shareholders.

w Shares held by the Custody
Bank of Japan (trust accountas well as the securities
investment trust account)have decreased.

・The fourth largest shareholder is the Custody Bank of Japan (trust account).
Its number of shares owned has decreased by about 26 thousand shares, but
it still owns about 103 thousand shares (1.6%). Its final investors are
unknown since it is a custodian (as a financial institution that manages
securities on behalf of investors, it is the largest bank specialized in asset
management in Japan). This bank’s securities investment trust account had
also been a major shareholder, but it seems to have sold its shares since it
is no longer listed among the top ten major shareholders.

・The largest shareholder owning a little greater than 40% of the shares is
Susumu Iwata, the current president, founder, and owner.
・The second and third largest shareholders are both former directors of theCompany (their shareholding ratios have been declining since they havebeen gradually selling their shares). The shares of former and present
directors and executive officers of the Company, plus the employee stock
ownership plan at fifth place, amount to greater than 60% of the total shares.

18/47
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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18
w Invested by several
investment trusts

w Individual investors are also
among the major
shareholders.

w The Company has conductedshare buybacks multiple
times. As of September 30,
2022, it held approximately
1.75% of its outstanding
shares. The Company iseffectively the fourth largest
shareholder.

The Company’s stock is also incorporated in the “Japan Emerging Equity
Open” managed by Nikko Asset Management (as of December 20, 2021, theCompany’s shares accounted for 0.69% of the portfolio), “The 2020 Vision”
managed by Commons Asset Management (similarly, 1.10%), and “Rakuten
Japan New Economy Index Fund (JANE Index)” managed by Rakuten
Investment Management (0.04%). These investments may be partiallyconducted under the names of custodians that are among the major
shareholders, although this cannot be confirmed.
・The sixth largest shareholder is Hakuhodo DY Media Partners Inc., theCompany’s sales agency.
・ The final investors and purpose of the tenth largest shareholder
J.P.MORGAN SECURITES PLC is unknown.
・The seventh to ninth shareholders are individual investors who are also
investing as major shareholders in several other Japanese listed companies.
・Currently, there seems to be no activist among the investors.
At the end of September 2018, the number of treasury shares owned by theCompany was 983 shares. Then, the Company bought back some of its sharesin February and March of 2019 (a total of about Y100 million at an averagepurchase price of Y1,363), increasing its treasury shares to about 81 thousand
shares by the end of September 2019. In addition, from November toDecember 2021, the Company purchased a total of 80 thousand shares (total
value of Y100 million at an average purchase price of Y1,253). Subsequently,
a portion of the shares were issued to its directors, executive officers, andemployees as restricted stock compensation, and as of September 30, 2022,
the Company owned approximately 115.6 thousand shares of its own stock(approximately 1.75% of outstanding shares, effectively making it the fourthlargest shareholder). The Company may also potentially use the treasury
shares for M&As and alliance strategies as well as stock-based compensation
for its directors, executive officers, and employees.

[Figure 16] Current Major Shareholders (units: thousand shares, %)Susumu Iwata (president and CEO)Hiroichi Fukuda (former executive vice president)
Kanako Mataza (former director and senior executive officer)
Custody Bank of Japan (trust account)
YRGLM Employee Stock Ownership Plan
Hakuhodo DY Media Partners Inc.
Yoshihisa Yamashita (indiv.)
Satoshi Hasegawa (indiv.)
Tomonori Yamada (indiv.)
J.P. MORGAN SECURITIES PLC
Custody Bank of Japan (securities investment trust account)
Rakuten Securities, Inc.
Yukio Tanaka (indiv.)
SBI SECURITIES Co., Ltd.
UEDA YAGI TANSHI Co., Ltd.
au Kabucom Securities
Mitsubishi UFJ Morgan Stanley Securities
Japan Trustee Services Bank (former name)
BNY GCM CLIENT ACCOUNT JPRD AC ISG (FE-AC)
Trust & Custody Services Bank (former name)
GOLDMAN SACHS INTERNATIONALUEDA YAGI TANSHI Co., Ltd.
Katsuyuki Ito (indiv.)
Akiko Takashima (indiv.)
Kenichiro Wade (former outside director)
Yoshio Takayama (indiv.)
Kayoko Nagano (indiv.)
SEPTENI CO., LTD
Matsui Securities Co., Ltd.
Japan Securities Finance Co., LTD
Yoichi Nishikawa (indiv.)
Akio Shiojiri (former director: audit committee member)(Treasury shares: thousand shares)(Percentage of treasury shares: %)End of Sept.
2015

End of Sept.
2016

End of Sept.
2017

2,851
1,071
415
―
76
60
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
39
―
―
62
―
30
34
26
0

2,817
1,021
415
―
39
60
―
―
―
―
―
―
―
―
―
―
―
59
―
―
―
―
―
―
29
―
―
62
36
35
―
―
0

2,817
1,021
352
―
48
60
―
―
28
―
―
―
―
―
―
―
―
―
60
60
―
―
―
―
29
28
24
―
―
―
―
―
0.045
0.00%

End of Sept.
2018

2,819
961
354
―
69
60
―
―
―
―
―
72
―
―
―
―
―
60
―
29
―
―
52
29
―
―
―
―
―
―
―
―
0.983
0.02%

End of Sept.
2019

2,822
801
353
―
68
60
―
―
―
―
―
64
―
―
―
―
―
333
―
123
284
113
―
―
―
―
―
―
―
―
―
―
81.423
1.28%

End of Sept.
2020

2,825
781
352
221
71
60
―
―
―
―
169
―
―
―
86
62
58
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
64.493
1.01%

End of Sept.
2021

2,827
817
329
128
66
60
54
―
33
35
82
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
57.8250.91%

End of Sept.
2022

2,809
779
329
103
69
60
54
37
36
34
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
111.580
1.75%←Shareholding Ratio

44.86
12.44
5.25
1.63
1.09
0.95
0.86
0.58
0.57
0.53

←Ranking

1
2
3
4
5
6
7
8
9
10

(Ref) Prepared by Alpha-Win Research Dept. based on materials including the notice of shareholder meeting and securities report. Words in
red indicate groups and individuals affiliated with the Company.
(Note) Shareholding ratio (proportion of shares owned) has been calculated excluding treasury shares. The shareholder ranking is also theranking that excludes the Company.

19/47
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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

4．ESG and SDGs
The Company has been continuing to work on ESG as usual, and there has
been no notable change in the most recent year.

w Continuing to work on its
ESG as usual.

◆ Environment
Company’s business is not the kind that harms the environment. It works onconserving energy by saving electricity and other means.

◆ Society
The Company’s business contributes to its users’ operation efficiency
improvement and business expansion through Internet marketing tools.

◆ Governance
The Company has adopted a company system with an audit and supervisorycommittee and delegates board decisions on executions of important businessmatters to directors to enable quick decision-making. Also, by incorporating
an executive officer system and separating business execution fromsupervision, the Company aims to improve management efficiency and speed.
There are a total of six directors including the CEO Susumu Iwata. Of these
directors, three are outside directors who are also audit and supervisorycommittee members (director from Kobe Steel, Ltd., director from MUFJ Bank,
Ltd., and certified public accountant). There is currently no woman or personfrom outside of Japan among the directors or the three executive officers (CTO,
COO, and CSO).

w Half of the directors areoutside directors.

◆ SDGs (Sustainable Development Goals)(11) SDGs (Sustainable
Development Goals) are
international development goals
adopted at the UN Summit toachieve a sustainable and betterworld by 2030.

Regarding the SDGs11 (Sustainable Development Goals), the Company isworking toward “providing marketing DX support to contribute to job
satisfaction and business growth for our company as well as our customers,”
which is the common goal that applies to achieving the SDGs both in terms of
employment and through its services (Figure 17).

【Figure 17】SDGs and Their Initiatives
Our SDGs for Employment

Achieving SDGs through Our Services

Common Goal
NO
POVERTY

GOOD HEALTH
AND W ELL-BEINGQUALITYEDUCATIONDECENT WORK AND
ECONOMIC GROWTHGENDEREQUALITY

REDUCEDINEQUALITIESINDUSTRY,INNOVATION AND
INFRASTRUCTURE

PEACE, JUSTICEAND STRONG
INSTITUTIONSCreating an environment andsystems that support diverse
workstyles as our company grows
and creating sustainable
employment through enhanced
training for people development

Providing marketing DX
support to contribute to job
satisfaction and businessgrowth for our company aswell as our customers

PARTNERSHIPSFOR THEGOALSSupporting marketing DX
through data andtechnology to help
companies create their
growth platforms

Accelerating impact
creation through active
partnerships(Ref) Financial results briefing materials

20/47
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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

5． History of Growth◆ Past Transition in Financial Results
Sales
From FY 2009 to FY 2022, sales have been hitting record highs every year,
at least for the 13 fiscal years for which information is disclosed. During thisperiod, sales had increased by about 5.8x from Y570 million to Y3,330
million (annual compound rate of +14.5%). The Company has grown rapidly
by developing and releasing unique products that can be differentiated fromother companies, predicting and meeting the needs of society ahead of others,
as well as through M&As. Its growth has been achieved thanks to the releaseand expansion of its cloud services, especially the rapid growth of its
originally developed service AD EBiS of the Marketing PF, and the steady
growth of the EC PF’s EC-CUBE as the e-commerce market grew.

w Developed and released
unique products thatdifferentiate the Company
from other companies. Hasgrown rapidly by predicting
and meeting the needs ofsociety ahead of others.

w Posting record-high sales for
13 fiscal years in a row

Profitw In FY 2015, record-high profits

Regarding profit, the Company had stayed profitable both on a standalone
and consolidated basis up through FY 2017. In FY 2015, a record-highoperating profit of Y350 million and a record-high net profit of Y231 million
were achieved. However, starting in FY 2016, the Company’s active businessrestructuring and upfront investments had increased the expenses, leading toa consecutive decline in profit despite increasing sales. In FY 2018, theCompany recorded a net loss (of Y88 million) for the first time since
becoming listed on the market, due to upfront investments mainly to hire
more employees for development and sales (Figures 18 and 19). In FY 2019,
the Marketing PF’s sales grew by 20% thanks to its main product AD EBiS,and the Company was able to post both an operating profit and a recurring
profit for the full year in a turnaround. However, due to extraordinary losses,
it posted a net loss for the second consecutive fiscal year.

of the time were recorded.

w Starting in FY 2016, theCompany had conductedbusiness restructuring andupfront investments,
prioritizing acceleration of
future business growth overprofit. Net losses wererecorded consecutively in FY
2018 and FY 2019.
w Since then, sales haveincreased and costs have
improved, leading to a Vshaped recovery in businessperformance. In FY 2021,
sales and profits hit record
highs, and in FY 2022,
operating and recurring
profit hit record highs inconsecutive years.

In the following year or FY 2020, consecutive growth of sales andimprovements in cost led to a 3x growth in operating and recurring profit
compared to the previous fiscal year. The Company posted a net profit for the
first time in three fiscal years in a clear, V-shaped recovery. In FY 2021, theCompany posted record profits for the first time in six years, and in FY 2022,
operating and recurring profits both hit record highs for consecutive years.

【Figure 18】Transition in Past Financial Results andForecast for This Fiscal Year (Unit: million yen, %)Sales (left axis: million yen)

(Unit: persons)
250

Operating profit (left axis: million yen)

Operating margin (right axis: %)4,000【Figure 19】Change in the Number of Employees

Development

30.0%

3,500

25.0%

3,000

221

Other

200

184
167

20.0%

2,500

15.0%

2,000

150

122

10.0%

98

1,500
5.0%

1,000

100

68

71

33

33

35

38

FY 2014

FY 2015

0.0%

500

-5.0%

0
-500

50

-10.0%FY 2009

FY 2010

FY 2011

FY 2012FY 2013

FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021

FY 2022 FY 2023 CE(Ref) Prepared by Alpha-Win Research Dept. based on the financial results summary. CE =the Company’s estimate/forecast.
(Note) Consolidated results starting in FY 2014; nonconsolidated prior to this. Information
on operating profit before FY 2010 was not available.

58

141

149

67

83

141
102

120

42

56

64

74

66

65

FY 2016

FY 2017

FY 2018

FY 2019

FY 2020

64

80

0FY 2021 FY 2022

(Ref) Prepared by Alpha-Win Research Dept. based on thefinancial results briefing materials. Includes estimates.

21/47
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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

6． Market Environment◆ Trends of Japan’s Advertising Market
Total Advertising Expenditure
Total advertising expenditure in Japan in 2021 (calendar year; the same
applies to this entire chapter) was about Y6.8 trillion, having increased by
10.4% from the previous year. The advertising market has recovered rapidly
with the relaxation of the COVID-19 situation and in a rebound from theprevious year.

w In 2021, Japan’s total

advertising expenditure
increased at a double-digit
rate compared to the previous
year.

Internet Ad Market
With the growth of overall advertising expenditure, digitalization of thesociety, the e-commerce market boom, and greater demands for video ads,
the Internet advertising market grew by 21.4% YoY in 2021, a much higher
rate than the overall advertising growth. Since 2005 (point of comparison, set
at 100), Internet advertising has grown significantly to about 7.2x by 2021
(annual growth rate of about +13.3%, on a simple average) (Figure 20).

w Internet advertisingexpenditure has been
continuing to grow at a highrate. It surpassed the fourmass media as the largest
medium for advertising.

Internet advertising expenditure (sum of medium cost and production cost),
which is about Y2.7 trillion, accounts for about 39.8% of the total advertisingexpenditure. Its proportion has been steadily increasing by several percent
every year. In 2021, it surpassed the four mass-media advertising (newspaper,magazine, radio, and television) for the first time to become the largest
advertising medium (source: Dentsu Inc.’s “2021 Advertising Expendituresin Japan”).

【Figure 20】Change in Advertising Expenditure by 【Figure 21】Change in Monthly Sales of Internet Ads
Medium (Indexation: the year 2005 is set to 100)（％）

(100 million yen)

1,600

800%

50.0
Internet sales (left axis)
YoY growth (right axis)
YoY decline (right axis)

1,400

750%

40.0

1,200

700%
650%

Internet ads

600%

30.0

1,000
20.0

The four mass media

550%

800

Total advertising expenditure

500%

10.0

Promotional media

600

450%
400%

0.0

400

350%

-10.0

200

300%
250%

-20.0
月
1Jan
3月
Mar
5月
May
月
7Jul
月
9Sep
Nov
月
11
月
1Jan
月
3
Mar
月
5
May
月
7Jul
月
9Sep
Nov
月
11
月
1Jan
3月
Mar
5月
May
月
7Jul
月
9Sep
Nov
月
11
月
1Jan
3月
Mar
5月
May
月
7Jul
月
9Sep
Nov
月
11
月
1Jan
3月
Mar
5月
May
月
7Jul
月
9Sep
Nov
月
11
月
1Jan
3月
Mar
5月
May
月
7Jul
月
9Sep
Nov
月
11
月
1Jan
3月
Mar
5月
May
月
7Jul
月
9Sep
Nov
月
11
月
1Jan
月
3
Mar
5月
May
月
7Jul
月
9Sep
Nov
月
11
月
1Jan
3月
Mar
5月
May
Jul
7月
月
9Sep
Nov
月
11
月
1Jan
Mar
3月
May
5月
月
7Jul
月
9Sep

0

200%
150%

2013年

2013

100%

2014年

2014

2015年

2015

2016年

2016

2017年

2017

2018年

2018

2019年

2019

2020年

2020

2021年

2021

2022年

2022

50%
0%
2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

(Ref) Figure 20: prepared by Alpha-Win Research Dept. based on Dentsu Inc.’s “2021 Advertising Expenditures in Japan” (published in February of each year)
Figure 21: prepared by Alpha-Win Research Dept. based on the “Survey of Selected Service Industries (Advertising)” by the Ministry of Economy, Trade,and Industry.

w Internet advertising hasturned to a positive trend.
However, its momentum(YoY) is declining.

Recent Situation
The COVID-19 crisis had caused the entire Internet advertising market toshrink on a year-on-year comparison (based on the monthly sales of theadvertising industry as announced by the Ministry of Economy, Trade, andIndustry) since the beginning of 2020, but the market came back to growthin October of the same year (Figure 21). The market has been growing sincethen due to the e-commerce boom, but the stay-at-home consumption has
somewhat settled down and the momentum (sales growth rate) has been
declining on a monthly basis. Over the medium to long term, the businessenvironment is predicted to remain advantageous for the Company’s
Interned ad business due to further digitalization.
22/47

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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18◆ Competitors
w No competitor among major
corporations with a similar
service price range. Gained
greater competitive edge
through businessacquisition.

(12) Google Analytics: A website
access analysis tool provided by
Google targeting SME users.
Analysis is only conducted within
Google’s website, and mostly thefree version is popular. The highspec, paid version has a high price(for example, the GA360 as
explained later is priced as
combinations such as “monthly
fixed price of about Y1.3 million+ pay-per-use price”).
(13) Adobe Analytics: An accessanalysis tool used by many large
websites. It can analyze
complicated and large data, ishighly customizable, and has
multiple and high-quality
functions, but the price is rather
high.
(14) Cookies are a mechanism forrecording information such as a
website visitor's browsing history,
input data, and user environment.
By identifying information andhistory, it enables the providing ofadvertisements and information
tailored to each individual.
Cookies include 1st party cookies
issued directly from the domain(host) of the website that a user isvisiting and 3rd party cookies
issued from a different domain.

There seems to be no similar Japanese listed company in the field of Internet
advertising effectiveness measurement that could be directly compared with
the Company. Its biggest rival used to be the product ADPLAN, but theCompany has already acquired this business. Consequently, there is currently
no major competitor with a similar service price range, and the Company has
gained a greater price advantage and stronger appeal toward potential
customers.

◆ Similar Services and Response to Regulations on Privacy
Protection
For advertising effectiveness measurement and analysis tools, competing andsimilar products are Google Analytics12 and Adobe Analytics13 widely usedby small/medium-sized companies in Japan and Web Antenna (used by morethan 600 companies from major companies to ventures) provided by theprivate company beBit, Inc. However, these other companies are notspecialized in the field, and their products’ functions, measurement target,
analysis content, and support system are limited. In comparison, theCompany's products are superior in terms of specifications, development
system, and support system and also have a high price advantage.
The Company’s target customers are in the middle zone, encompassing midtier companies as well as listed companies. Its customers are therefore mostly
different from the high-end zone targeted by the paid versions of Google
Analytics and Adobe Analytics (with price settings that are estimated to beabout ten times greater the Company’s).
Recent Situation
・For the protection of user privacy, Google and Apple are shifting towardeliminating or placing restrictions on the use of third-party cookies14 thatmake measurements and track users across multiple websites. Instead, firstparty cookies14 that cannot measure across multiple websites are generally
becoming mainstream.
・Google has announced to discontinue support for the previous version of
Universal Analytics Properties in July 2023 and consolidate support to its
successor, Google Analytics 4 Properties (“GA4”). GA4 is equipped withcross-device user analysis, integrated management of apps and websites, anduser behavior prediction functions using machine learning. However, in
acquiring data, it uses cookies and google account information.
・There are two versions: the standard version (free version) and the paidversion (Google Analytics 360 or “GA360”). The free version has limited
function, while the paid version has sophisticated functions but are highly
priced. GA360 has many similar functions as the Company's AD EBiS, andalthough they are at different price ranges, competition is expected for someof the customers.
・In late December 2022, the Company will release a new measurement
method for AD EBiS, the 1st Party Cookie Program (developed in-house),which will enable highly accurate measurement of advertising effectiveness.
The previous method had limitations on some of the measurements due tostricter regulations, but by switching to 1st party cookies issued by theadvertiser’s web servers, accurate data measurement will now be possible
within the limits of cookie regulations.

23/47
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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

7． Last Fiscal Year’s Results, the Company’s
Forecast for This Fiscal Year, and MediumTerm Business Plan
◆ Financial Results for FY 2022 (last fiscal year)
w Sales increased byapproximately 13% andoperating profit increased by
7% in the previous fiscal year.

w Sales hit a record high for the
ninth consecutive year (since
becoming listed on themarket).

w Although the rate of increasein sales and profit has slowed
down in recent years,
operating and recurring profit
hit record highs.
w While sales fell slightly shortof the Company's plan,
profits rose above
expectation. Turnaround fromthe forecasted profit decline
to profit growth.

Summary
Consolidated results for FY 2022 (October 2021 to September 2022) were as
follows: sales increased to Y3,334 million (+12.7% YoY) and operating
profit rose to Y392 million (+7.4% YoY). Net profit declined slightly to Y236
million (-1.5% YoY) due to an impairment loss (impairment loss on software
which is no longer provided) recorded under extraordinary losses (see Figure
22 on page 25).
Overall sales remained strong thanks to the M&As and the in-housedeveloped services. Sales reached a record high for the ninth consecutive
fiscal year since becoming listed on the stock exchange. Operating profit
increased for the fourth consecutive fiscal year and reached a record high forthe second consecutive fiscal year. Although the rate of sales growth was at
a double digit, both sales and profit growth rates have been gradually slowing
down over the past four fiscal years. In the previous fiscal year, the operating
margin worsened due to increased costs associated with the M&As andenhanced promotions, leading to a slowdown in the rate of profit growth.

Comparison with the Company’s Forecast
In May, the Company revised down its initial plan, expecting sales growthand profit decline. Although sales fell short of this revised plan by Y66
million (-1.9% compared to the revised plan), operating profit was Y52
million greater (+15.3%), and net profit was Y26 million greater (+12.4%),
exceeding the Company's forecasts in a turnaround to profit growth. Dividend
per share was unchanged from the 7 yen/share after the revision.

w The main reason for sales
falling short of plan was thedecrease in the number ofaccounts of AD EBiS due tolarge cancellations by some of
the customers.

Sales of the core business, AD EBiS, fell short of the forecast due to a decline
in the number of accounts. Sales of AD HOOP also fell short of the plan. As
a result, sales of the Marketing PF segment were about Y85 million below
the forecast. On the other hand, sales of the EC PF segment exceeded theforecast by about Y24 million due to orders for large projects received by
BOKUBLOCK after the acquisition, which helped increase sales.

w The upward revision to profit
was due to the difference
from the cost estimates.

The main reasons for the upward revision to profit were the higher-thanexpected amount of transfer to assets, the postponement of a part of theadvertising measures, and unused personnel expenses due to delays in hiring.

w Both sales and profits slightly
exceeded our forecast.

Comparison with Alpha-Win’s Forecast
Sales, operating profit, and net profit exceeded our previous forecast by Y34
million (+1.0% compared to our forecast), Y43 million (+12.2%), and Y18
million (+8.3%), respectively. While sales were close to our forecast, profit
became greater mainly presumably due to the difference in cost estimates,
especially in the amount of transfer to assets.

24/47
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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18【Figure 22】Last Fiscal Year’s Financial Results (comparison between results and forecast)
FY 2014(Units: million yen, %)FY 2015

FY 2016

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021

Amount (result) Amount (result) Amount (result) Amount (result) Amount (result) Amount (result) Amount (result) Amount (result) Amount (result)

Total Sales
I. Marketing Platform
II. EC Platform
Gross Profit
Gross Margin
SG&A Expenses
SG&A Expenses Ratio
Operating Profit (segment's)
I. Marketing Platform
II. EC Platform
Operating Margin
I. Marketing Platform
II. EC Platform
Recurring Profit
Net profit

1,360
883
477
867
63.8%
618
45.4%
249
142
107
18.3%
16.1%
22.5%
234
138

1,437
911
526
956
66.5%
606
42.1%
350
214
136
24.4%
23.5%
25.8%
352
231

1,613
1,074
539
1,044
64.7%
796
49.3%
248
210
38
15.4%
19.5%
7.1%
250
169

1,719
1,255
465
1,123
65.3%
1,030
59.9%
93
153
-60
5.4%
12.2%
-12.9%
106
73

1,805
1,530
274
1,190
65.9%
1,289
71.4%
-98
-121
22
-5.5%
-7.9%
8.2%
-115
-89

2,204
1,951
253
1,561
70.8%
1,476
66.9%
85
46
39
3.9%
2.4%
15.4%
79
-35

2,619
2,318
301
1,832
70.0%
1,555
59.4%
277
199
78
10.6%
8.6%
26.1%
261
183

2,958
2,599
358
2,039
68.9%
1,674
56.6%
365
247
119
12.4%
9.5%
33.1%
364
240

FY 2022: Company Forecast(Revised)

FY 2022

3,334
2,925
414
2,260
67.8%
1,867
56.0%
392
280
108
11.8%
9.6%
26.1%
399
236

Change inAmount/Rate% Change

376
326
56
220
-1.2%
193
-0.6%
27
33
-11
-0.6%
0.1%
-7.0%
36
-4

12.7%
12.5%
15.6%
10.8%
11.5%
7.4%
13.3%
-9.0%
9.8%
-1.5%

Amount(forecast)

3,400
3,031
393
2,299
67.6%
1,955
57.5%
340
285
56
10.0%
9.4%
14.2%
340
210

Diff. inAmount/Rate

-66
-106
21
-39
-0.2%
-88
1.5%
52
5
52
1.8%
0.2%
11.9%
59
26

FY 2022 Alpha-Win's Forecast(Previous)
Amount(forecast)% Diff.

-1.9%
-3.5%
5.4%
-1.7%
-4.5%
15.3%
1.9%
93.1%
17.4%
12.4%

Diff. inAmount/Rate

3,300
2,960
340
2,250
68.2%
1,900
57.6%
350
290
60
10.6%
9.8%
17.6%
350
218

34
-35
74
10
-0
-33
-0
42
-10
48
0
-0
0
49
18

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

Profit Margin and SG&A Expenses Ratio
The gross margin worsened by 1.1 percentage points from 68.9% in the fiscal
year before the previous to 67.8% in the previous fiscal year, while the SG&A
expenses ratio improved by 0.6 percentage point from 56.6% to 56.0%. The
operating margin had been expected to worsen from 12.4% to 10.4%, but theactual margin only declined by 0.6 percentage point to 11.8% (Figure 23).

w Operating profit increased
and exceeded the forecast due
to higher sales despite thedecline in operating margin.

The SG&A expenses increased by Y193 million or 11.5% from the previous
fiscal year. However, this increase was smaller than the 12.7% sales growthrate, so the increase in sales led to an increase in operating profit.

[Figure 23] Transition in Profit Margins and SG&A Expenses Ratio
Gross margin

（％）

90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
-10.0

63.8

66.5

64.7

O.P. margin

65.3
59.9

45.4
18.3

42.1
24.4

SG&A expenses ratio

70.8

71.4
65.9

66.9

49.3

15.4
5.4

3.9

70.0

68.9

67.8

56.6

56.0

10.6

12.4

11.8

10.1

FY 2020

FY 2021

FY 2022

FY 2023 CE

59.4

61.7

51.7

△5.5
FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

FY 2019(Ref) Alpha-Win Research Dept. based on the financial results summary.
(Note) CE: the Company’s forecast.

25/47
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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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.

% Diff.

1.0%
-1.2%
21.8%
0.4%
-1.7%
12.0%
-3.6%
80.2%
14.0%
8.3%

Alpha-Win Company Research ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18
w Marketing PF posted doubledigit sales and profit growth,absorbing the increase in cost.

Summary of Each Segment
The status of businesses within each segment will be discussed later, but by
segment, sales (to external customers) of its mainstay Marketing PF segment
increased by Y325 million (+12.5% YoY) from Y2,599 million in FY 2021
to Y2,925 million in FY 2022. This represented 86% of the total increase insales.
The segment’s operating profit increased by Y33 million (+13.3%) from
Y247 million to Y280 million, accounting for 122% of the total increase inoperating profit. This was because the increase in costs associated with the
M&As and enhanced promotion was absorbed by the increase in sales andthe increase in transfer to assets associated with the new functions (recorded
as assets, not as profit/loss for the period).
Regarding this segment’s profit, the profit margin improved slightly from
9.5% to 9.6%.

w In the EC PF, despite thedouble-digit sales growthlargely owing to theacquisition of BOKUBLOCK,
profit declined due to anincrease in the related costs.

w Sales of ad effectivenessmeasurement increased, but
the rate of sales growth has
declined. This was mainly
due to the slower rate ofincrease in the average unit
price and the net decrease in
the number of accounts.
w Average unit price increased
QoQ for the 19th consecutive
quarter. It has been
increasing YoY for 38
consecutive quarters.
w Major update to AD EBIS
Sync, strengthening the
product.
(15) Major version upgrade to AD
EBiS Sync: Conducted a total ofthree version upgrades: media
sync function, automatic ad
registration function, and margin
setting function. Automation
improves efficiency of ad
management operations andsharing of information within agroup, contributing to greater
competitive edge.

The EC PF posted sales of Y414 million, increasing by Y56 million YoY(+15.6%), largely thanks to the acquisition of BOKUBLOCK, an ecommerce website building & operation support company.
However, its operating margin declined from 33.1% to 26.4% due to higher
personnel costs associated with the M&As and greater server management
costs caused by the weak yen, resulting in a profit of Y108 million for thesegment in a Y11 million profit decline (-9.0%).
Financial Trend by Segment: Marketing PF (1) AD EBiSSales of the advertising effectiveness measurement business seems to haveincreased slightly YoY (by about +4% YoY according to our estimate).
The increase in the Marketing PF’s sales and profits used to be driven mainlyby the rise in the monthly average unit price of its core business AD EBiS.
However, the rate of increase in the average unit price is slowing down, while
the number of accounts has also continued to decline. As a result, sales of AD
EBiS in the previous year seem to have been about Y30 million lower thanthe expected Y2,400 million.
The average unit price has been increasing for 19 consecutive quarters QoQ(164,745 yen at the end of Q4 FY 2022), as shown in Figure 24 on page 27,
due to the price revision following the improvement of functionality and thechange in customer base toward higher-priced zones.
However, from the end of Q4 FY 2021 to the end of Q4 FY 2022, the average
unit price increased (YoY) from 25,311 yen ⇒ 16,306 yen ⇒ 16,235 yen ⇒13,493 yen ⇒ 12,609 yen, with the rate of its increase slowing down from
+20.0% ⇒ +12.0% ⇒ +11.5% ⇒ +9.2% ⇒ +8.3%. One reason for this is that
although a major upgrade15 from AD EBiS to AD EBiS Sync was released(see Figure 25 on page 27), the price was left unchanged as a standard service.

26/47
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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18【Figure 24】Change in the Average Unit Price of AD EBiS(Y)

164,745
160,000

152,136

159,803
157,321

ADPLANacquired

140,000

152,236
146,310141,086
135,930

120,000

126,825
124,032
120,070

Change inprice system

100,000

111,587

Q4→Q1
seasonal
variability

107,143
102,262

80,00098,042
86,621
84,91879,52560,00040,000Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
FY 2015

FY 2016

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021

FY 2022(Ref) Prepared by Alpha-Win Research Dept. based on the financial results summary and financial results briefing materials.

【Figure 25】Updates of AD EBiS Sync (2022)

April
Release

AugustReleaseQ1 FY 2023

October
Release

1st Round

2nd Round

3rd RoundMedia Sync
Function

Automatic Ad
Registration Function

Margin Setting
Function

Automatically retrieves the data measured foreach advertising media to help improve theefficiency of ad management and the sharing
of information within a group

Automatizes the process from setting
measurement parameters, submitting ads, andretrieving measured data for each advertising
media to help eliminate the dependency on
individual skills and prevent human errors

Calculates the advertising cost that includes thefee paid to the advertising agency (margin) tohelp advertising agencies improve theefficiency in managing ads and measuring theireffectiveness(Ref) Financial results briefing materials

w The number of accounts
continues to show a trend of
net decline.

Meanwhile, the number of accounts has been declining QoQ for 10
consecutive quarters, and the downward trend has not been stopped (Figure
26 on page 28).
Even in the most recent quarter, the number of accounts has shown a net
decline from 1,290 at the end of Q4 FY 2021 ⇒ 1,183 at the end of Q4 FY
2022 (-107 accounts or -8.3% YoY). This was due to lower-than-expectedacquisition of new clients, cancellations by clients in industries with weak
performance, and cancellations by major clients.

27/47
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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18【Figure 26】Change in the Number of Accounts of AD EBiSADPLAN

Change inprice system(# of accounts)

1,600

acquired

1,500
1,400

1,569
1,518

1,300

1,513
1,200

1,543

1,516
1,433

1,438

1,290

1,464
1,451

1,425

1,183

1,413
1,363
1,311

1,100
1,000

1,281
1,244
1,216

900
800
700
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
FY 2015

FY 2016

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021

FY 2022(Ref) Prepared by Alpha-Win Research Dept. based on the financial results summary and financial results briefing materials.

w Churn rate has stayed about
the same.

The quarterly churn rate remained flat from Q4 FY 2021 to Q4 FY 2022, from
2.5% ⇒ 2.4% ⇒ 2.3% ⇒ 2.3% ⇒ 2.4%, falling short of the 2.0%
target set for the end of the previous fiscal year (Figure 27).

w Will focus on improving
customer success

The Company believes that the main reason for churn is that users who start
using the ad effectiveness measurement are not able to fully utilize theanalysis results in their business. Going forward, the Company intends toprevent churn by further strengthening customer success and recover thenumber of accounts through greater sales efficiency.

【Figure 27】Change in the Churn Rate of AD EBiS
3.5%
3.0%

2.8% 2.7% 2.9% 2.7%

2.5%

Definitions
2.5% 2.4%

2.3% 2.3% 2.4%

2.0%

2.0%

1.5%

(Goal for endof fiscal year)

1.0%
0.5%
0.0%

Q4

FY 2020

Q1

Q2

Q3

FY 2021

Q4

Q1

Q2

Q3

Q4

FY 2022・Monthly churn rate =churn amount during themonth ÷ previous
month's sales
・Since there is seasonalvariability in cancellations
due to when fiscal years
end for customers, etc.,
the 12-months moving
average was used tounderstand trends.

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

28/47
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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18
w Advertising agency DX
business has stayed
mostly flat.

w M&As and the newservices contributed tosales.

Financial Trend by Segment: Marketing PF (2) Advertising Agency DX
Sales of AdRepo, which accounted for most of the sales of the advertising
agency DX business, seem to have stayed mostly flat compared to theprevious fiscal year. Regarding Ad-Knowledge, the Company has not been
actively working on sales activities and its sales have been gradually
declining.
Financial Trend by Segment: Marketing PF (3) Incubation
This category’s name has been changed from the previous “new services” to“incubation.” Sales grew by 4.1x compared to the previous fiscal year andcontributed to overall sales growth, thanks to contribution to sales by the threecompanies acquired in the M&As (Spoo, TOPICA, and Far End) and thegrowth of AD HOOP. However, the amount of net loss appears to haveworsened slightly due to starting in-house development.
The proportion of the incubation business in the total consolidated sales has
risen steadily from 3% in FY 2021 ⇒ 12% in FY 2022 (estimated sales of
Y89 million ⇒ Y400 million in the same order).

w Sales of EC PF increased dueto the M&As, but profit
decreased due to the increase
in related costs.

Financial Trend by Segment: EC PF Segment
In the EC PF, sales (to external customers) increased by Y52 million (+15.6%
YoY) from Y358 million in the fiscal year before the previous to Y414
million in the previous fiscal year, largely due to the acquisition of
BOKUBLOCK, an e-commerce website building & operation support
company. This segment’s amount of sales growth accounted for 14% of theoverall increase in sales.
On the other hand, despite the increase in sales, operating margin (of thesegment) declined from 33.1% to 26.4% due to the increase in costs such as
higher personnel costs associated with the M&As and higher server
maintenance costs due to the weaker yen. Consequently, operating profit
declined by Y11 million (-9.0%) from Y119 million to Y108 million.

w Sales of EC-CUBE declined
due to intensifying
competition and thediscontinuation of use bysome customers.

w Major upgrade of EC-CUBE
was also released.

w BOKUBLOCK performed
well and gained major
contracts due to synergies
within the YRGLM Group.

Financial Trend by Segment: II. EC PF (1) EC-CUBE
The intensifying competition of e-commerce platforms has led to thetermination of use by some of the customers. The lasting impact of thistermination seem to have led to the Y27 million decline in sales (-7.5%) from
Y358 million in the fiscal year before the previous to Y331 million in theprevious fiscal year. Since this business is based on a business model with ahigh marginal profit ratio, this sales decline was presumably one of the factors
causing the segment’s profit decline.
Of the two businesses of the EC PF, a major update (strengthening security
and adding new functions) was released in September 2022 for EC-CUBE,
one of the Company’s longtime products, as the latest version EC-CUBE 4.2.
Financial Trend by Segment: II. EC PF (2) E-commerce Website
Building & Operation Support
As a result of the corporate acquisition, the e-commerce building & operation
support business by BOKUBLOCK became included in this segment startingin the current fiscal year. Its sales (four months’), calculated back from theapportionment of sales over the fiscal year, are estimated to have been about
Y80 million, which appears to have exceeded the expected sales. Compared
to its annual sales before the acquisition, it is estimated to be posting sales attwice the rate since the acquisition. Having already gained new, large
contracts, the effect of synergies within the Group is evident.
29/47

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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

Factors that Increased/Decreased Profit
Figure 28 shows the factors that caused profit to increase or decrease in theprevious fiscal year.
The largest factor that increased profit was the sales growth of the Marketing
PF segment (+Y325 million YoY), followed by an increase in the transfer toin-house developed assets (+Y88 million) and an increase in the sales of the
EC PF due to the acquisition of BOKUBLOCK and other factors (+Y55
million).

w Sales growth and increasedtransfer to in-house developed
assets were the main reasonsfor the increase in profit.
Absorbed the increase inpersonnel expenses.

On the other hand, the largest factor that decreased profit was the increase inpersonnel expenses due to the M&As (addition of approx. 20 employees
caused a profit decline of -Y204 million), followed by the increase inpersonnel expenses (-Y88 million) due to increasing employees for the
existing businesses. Advertising expenses also increased (-Y29 million) due
to sales promotions for AD EBiS Sync and other products. However, thesewere all upfront investments as part of the business expansion process.
In addition, since the Company uses overseas servers, profit decline was also
caused by the increase in server management expense due to the weak yen (Y48 million). The increase in goodwill amortization due to the M&As also
caused profit to decrease (-Y24 million). These negative factors were allabsorbed, though, resulting in a net increase in operating profit of Y27 million
YoY (+7.4%).

[Figure 28] Factors that Impacted Operating Profit in FY 2022 (Unit: million yen)(million yen)

900

88

800

55
325

700

-48

-5

-88

600
500
400

-204
365

Increase

Decrease

-24

-29

392
-41

300
200
100
0
FY 2021Marketing PF
operating profit
sales

EC PF
sales

Cancellationofintersegment
sales

Transfer toin-housedeveloped
assetsServermaintenanceexpensePersonnel
expense forexisting
businesses

Goodwill
Personnel
amortization
expenseassociatedwith M&A

AdvertisingexpenseOther
expenses

FY 2022
operatingprofit(Ref) Prepared by Alpha-Win Research Dept. based on the financial results briefing materials.

30/47
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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

Quarterly Transition in Financial Performance
Quarterly sales in the previous fiscal year all showed YoY as well as QoQ
growth, also hitting record-high quarterly sales consecutively. Operating
margins remained at a double digit (11.1%-12.6%) in all quarters, andoperating profit since Q2 also increased YoY.

w Sales increased in all quartersof the previous fiscal year andrecord quarterly sales wereposted consecutively.
Maintained high levels ofquarterly profit.
w Q4 recurring profit reached
the record high for a single
quarter.

In Q4, the Company posted record quarterly sales as well as recurring profit,
thanks to the effects of the M&As (acquisition of Far End in Q2 andBOKUBLOCK in Q3) and the increase in transfer to assets due to thedevelopment of major functions (operating profit was only slightly lower than
the quarterly record high posted in Q4 of FY 2020).
In the Marketing PF, the Company posted record quarterly sales from Q1 to
Q3. Although Q4 sales declined from Q3 due to the one-time sales in Q3 at a
subsidiary, sales have generally continued to increase (Figure 29). Operating
profit has been solid, with around Y70 million posted every quarter.

w Through businessrestructuring and shift to thesubscription business model,
business structure became
stable with little seasonalvariability.
w Both segments have remained
profitable for 10 consecutive
quarters.

In the EC PF, sales had been stagnant for some period, but with theacquisition of BOKUBLOCK in Q3 of last fiscal year, both sales andoperating profit grew in Q4.
Due to the transition to the subscription business model, businessrestructuring, and the entry into related businesses, its business structure isbecoming stable with little seasonal variability. Since Q3 FY2020, both PFs
have been firmly posting a profit.

【Figure 29】Quarterly Transition in Operating Profit(million yen)

Strategic Investment Phase

140
120
100

41

60

20

Acquired
ADPLAN
Changedcompany
name

43
35

80

40

Growth Phase

Stepwise
withdrawal frome-commerce
contract dev.
business

24

22 19

9

33

11

22
67 69

36 41 35 41
28 35

77
45 50

60

(1)

Marketing Platform Business Segment-40

EC Platform Business Segment

17

17
52
25

0
-20

38

39

19

21 17 16 34

46 30

13

4
36

Acquired
AdRepo3515(8) (11)
(38)

30

14 12
(44) (37)(23)(15) (21)
(1)

9

3

33

8

80

79
51 51

47 53

74
65 70 72 62

15(4)Profit increased due to transfer toassets associated with major function
development

(5)

(3)

-60

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

FY 2019

FY 2020

FY 2021

FY 2022(Ref) Prepared by Alpha-Win Research Dept. based on the financial results summary and financial results briefing materials, with partial edits.

31/47
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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18◆ The Company’s Financial Forecast for FY 2023 (thisfiscal year)
Overview

w For the current fiscal year, theCompany forecasts doubledigit sales growth, slight
profit growth, and dividend
hike.

For the current fiscal year (FY 2023), the Company forecasts sales of Y3,900
million (+17.0% YoY), operating profit of Y400 million (+1.9% YoY), net
profit of Y240 million (+1.7% YoY), dividend of 7.8 yen (+0.8 yen/share),operating margin of 10%, and dividend on equity of 2.5% (Figures 30 and
31).

w Revised down its forecast forthis fiscal year in its mid-term
plan

The goals of the medium-term business plan for the current fiscal year (thefinal year of the plan), had been sales of Y5,000 million, operating profit ofY750 million (operating margin of at least 15%), and dividend on equity ofat least 3%. However, it has revised down each of these to its current forecast.
This was presumably to reflect the lower-than-expected sales of AD EBiS in
the previous fiscal year and to exclude undetermined factors, such as new
M&As and new services to be launched in the future (which are notincorporated in this fiscal year's forecast at all), from the plan.

w The reasons for the
downward revision are thelower-than-expected sales of
AD EBiS in the previous
fiscal year, continued upfront
investment, and the exclusionof undetermined factors fromthe plan.

However, in the new forecast for this fiscal year, the Company still plans toachieve record-high sales for the 10th consecutive fiscal year since becoming
listed on the market, as well as record-high operating profit and net profit for
the third consecutive fiscal year. As with the previous fiscal year, the forecast
for the first half is not disclosed.

w The Company aims to achieve
record-high sales and profits
consecutively in the current
fiscal year.

【Figure 30】Progress with Achievement of the Main Financial
Targets and This Fiscal Year’s Revised Forecast
Consolidated
Sales

Consolidated
Operating Margin

Dividend on
EquityFY 2020 Results

Y2.61 billion

10.6%

2.0%

FY 2021 Results

Y2.95 billion

12.4%

2.3%

FY 2022 Results

Y3.33 billion

11.8%

2.6%

FY 2023
Previous
Medium-Term
Financial Targets

Y5.0 billion

15%3% or more

FY 2023
Revised Financial
Targets

Y3.9 billion

10%2.5% ormore(Ref) Prepared by Alpha-Win Research Dept. basedon the financial results briefing materials.

【Figure 31】The Company’s Financial Forecast for This Fiscal Year
FY 2022(Units: million yen, %)Amount (result)

Total Sales
I. Marketing Platform
II. EC Platform
Gross Profit
Gross Margin
SG&A Expenses
SG&A Expenses Ratio
Operating Profit (segment's)
I. Marketing Platform
II. EC Platform
Operating Margin
I. Marketing Platform
II. EC Platformw アドエビスのメジャーアップデー
Recurring Profit
トに期待。単価の上昇とアカウン
Net profit

ト数の微増により、アドエビスは15％の増収を予想。

3,334
2,924
414
2,260
67.8%
1,867
56.0%
393
280
108
11.8%
9.6%
26.1%
400
236

FY 2023: Company Forecast
Amount (forecast)

3,900
3,260
640
2,410
61.8%
2,010
51.5%
400
340
60
10.3%
10.4%
9.4%
390
240

Change in Amount/Rate

566
336
226
150
-6.0%
143
-4.5%
7
60
-48
-1.5%
0.9%
-16.7%-104% Change

17.0%
11.5%
54.5%
6.7%
-8.8%
7.7%
-8.0%
1.9%
21.6%
-44.5%-12.9%
9.1%-64.1%-2.5%
1.7%(Ref) Prepared by Alpha-Win Research Dept.
based on the financial results summary.
(Note) For this fiscal year's forecast, the grossprofit, SG&A expenses, and segment’s profit
are estimates by Alpha-Win Research Dept.
Since some of the sales within each PF weredisclosed as a percentage of total sales or as apercentage of increase or decrease, estimatesby Alpha-Win have been shown in the tables
and the text.

32/47

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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

Sales
w For the current fiscal year,
double-digit sales growth isexpected in both segments.

Sales by Platform (PF)By platform, the Company seems to be estimating the sales of the Marketing
PF to increase by Y336 million from Y2,924 million to Y3,260 million(approximates for all figures in this paragraph; +11.5% YoY) and sales of the
EC PF to increase by Y266 million from Y414 million to Y640 million(+54.5% YoY).

w EC PF is expected to increase
its proportion of total sales by
5 percentage points due torelatively high growth.

Proportion of Sales by Platform
The Company expects that approximately 83% of consolidated sales will
come from the Marketing PF (-5 percentage points YoY) and the remaining
17% will come from the EC PF (+5 percentage points YoY). Profit forecasts
for each platform segment are not disclosed.

w AD EBiS’s sales are expected
to increase slightly, as ahigher unit price will offset
the decline in the number ofaccounts.

Forecasted Sales of Businesses of the Marketing PF
Within the Marketing PF, the Company forecasts sales of Y2,460 million(+3.8% YoY) for the ad effectiveness measurement business. Although it has
not disclosed the estimates for the unit price per customer and the number ofaccounts of AD EBiS on which the forecast is based on, it presumably expects
the unit price to increase slightly and the number of accounts to decreaseslightly.
The Company seems to be estimating that sales of advertising agency DX
will increase slightly from Y175 million to approximately Y180 million due
to the increase in the sales of AdRepo.

w The incubation business is
expected to see a significant
increase in sales.

For the incubation business, the Company expects a significant increase insales by Y226 million (+54.6% YoY), from Y414 million to Y640 million,
due to the expansion of AD HOOP’s business domain and full contribution
by the companies acquired during the fiscal year.
Forecasted Sales of Businesses of the EC PF
While sales of EC-CUBE have been on a downward trend, the Company
expects its sales to increase by Y21 million from Y331 million to Y352
million this fiscal year.

w In EC PF, BOKUBLOCK willbe the growth driver.

w The medium-term target forthe proportion of newservices is 30%, but this is
expected to be achieved in thenext fiscal year or later.
w The proportion of newservices jumped from 3% in
FY 2021 to 12% in FY 2022
(excluding e-commerce
website building & operation
support). Based on the newstandard of (incubation + ecommerce website building& operation support) / total
sales, the target ratio of 14%
was achieved in the previous
fiscal year.

BOKUBLOCK contributed to four months of sales (estimated at Y84 million)in the previous fiscal year’s consolidated sales. The Company seems to expect
its sales to increase to approximately Y290 million in the current fiscal year.
Proportion of the New Services
The proportion of new services in the consolidated sales, which is one of thecompanywide KPIs, had been planned to increase from 3% in FY 2021
(estimated actual sales of about Y89 million) to 14% in FY 2022 (Y500
million), and then to 30% in FY 2023 or this fiscal year (Y1,500 million) (the
30% target has been extended to next fiscal year and beyond).
However, due to the sales of eZCX falling short of the initial plan and otherfactors, the proportion was 12% in the previous fiscal year (approximately
Y400 million based on the previous standard that calculates the proportion
excluding the e-commerce building & operation support; approximately
Y470 million based on the new standard which includes sales from the ecommerce website building & operation support, which reaches the 14%
target). For this fiscal year, the target has been revised down to 23% (basedon the new standard) (Figure 32).
33/47

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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022
2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18
Consequently, this fiscal year’s sales forecast for the new services has also
w Plans to double sales of the
new services this fiscal year.
been revised downward to Y900 million (estimate). Despite the downward

revision, however, the Company plans to almost double its sales for thecurrent fiscal year compared to the previous fiscal year. It expects theacquisition of Far End in the Marketing PF and BOKUBLOCK (e-commerce
website building & operation support) in the EC PF to contribute fully to theCompany's performance and lead to significant growth through synergies.

【Figure 32】Change in Financial Performance by Business and Change in the Proportion of New
Services in the Consolidated Sales
I. MPF （1） Adverting effectiveness measurement
I. MFP （2）Advertising agency DX
I. MPF （3） Incubation
II. ECPF （1） EC-CUBE
II. EC PF （2） E-commerce website building & operation support

Proporion of the newservices (%)

23％
MPF = Marketing Platform

Proporion of the
new services (%)

10％
8%

3％
FY 2021(result)
Y2.95 billion

MPF: Y2.59 billion
EC PF: Y350 million

FY 2022(Q1 result)
Y780 million

MPF: Y700 million
EC PF: Y80 million

FY 2022(result)

Y3.3

FY 2022(first-halfresult)Y1.58 billion

FY 2023(forecast)

Y3.9
billionbillion

MPF: Y1.42 billion
EC PF: Y160 million

w Operating margin is expected
to decline due to upfront
investments.

14％

MPF: Y2.92 billion
EC PF: Y410 million

MPF: Y3.26 billion
EC PF: Y640 million(Ref) Prepared by Alpha-Win
Research Dept. based on thefinancial results briefing materials.
(Note) Proportion of new services in
FY 2022 (result) as well as FY 2023
(forecast) were calculated
including the sales of the ecommerce website building &operation support.

Companywide Profit
The Company intends to continue to make upfront investments for further
business expansion, while avoiding a decline in profit as much as possible.
Due to investments in the development of new tools and services, M&As,
and change in the business model, the overall operating margin is expected
to decline from 11.8% in the previous fiscal year to about 10% in the current
fiscal year.
EBITDAEBITDA is expected to increase slightly by Y3 million YoY (+0.3%) from
Y677 million in the previous year to Y680 million. The EBITDA margin is
expected to decline by 2.9 percentage points from 20.3% to 17.4%.

34/47
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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18
w Announced strategy update,early achievement of Y10
billion in sales, and revisionof financial targets for thecurrent fiscal year.

◆ Medium-Term Business Plan and Strategy
The Company has announced the medium-term business plan VISION2023
for the three fiscal years from FY 2021 to FY 2023. The basic policy andpriority strategies have not been changed, but it has announced a strategy
update, a goal to achieve Y10 billion in sales at an early stage, and revisionof financial targets (for the current fiscal year; see Figure 30 on page 32).

Priority Strategy
Under a strategy to evolve into a platform business that supports themarketing DX of Japanese companies through the development of its existing
services as well as multiple new services, the Company has been focusing its
business resources on areas of growth to develop its business. Seeing theaccelerating progress of DX as a business chance, it plans to expand its
business domain by utilizing data and technology.

Groupwide Synergy
Through M&As and its in-house developed services that leverage thestrengths gained through its years of business with AD EBiS, the Company
plans to expand its current areas of business (accelerated growth) as well as
creating and cultivating new areas of business. It plans to increase its assets
as a corporate group and pursue synergy within its group.
It plans to not just provide single services to corporate customers, but alsotransform into a corporate group of comprehensive marketing DX support
that provides the optimal combination of multiple services. Through this, itaims to maximize the LTV (lifetime value).

Updates to the Strategy
Although the timing has not been specified, the Company has set a new goalto achieve sales of Y10 billion at an early stage, and has updated a part of its
current strategy to achieve this goal.

【Figure 33】Updates to the Strategy➊ Accelerated growth ofthe existing services

Partial change

MPF
Existing

UpdatedEC PF
New➋ Development ofmultiple new businesses

UpdatedMPF
New

Generate stable revenue through solid growth of theexisting services, particularly AD EBiS, as therevenue base for the entire YRGLM Group・Strengthen the e-commerce website building &operation support business・Increase resources through M&As to strengthen
project execution capability
・Explore the development of new services foraccelerated growth over the medium to long term・Invest in development based on transfers from theexisting businessPriority
Strategy

1

Maximally
utilize theexisting
resources

Priority
Strategy

2

Evolve into a Corporate Group of Comprehensive Marketing Support
and Maximize Lifetime Value (LTV)(Ref) Financial results briefing materials.

Regarding the acceleration of growth of the existing services in ❶ (of Figure33), rather than concentrating business resources on AD EBiS as the core
growth driver, the strategy has been changed to maximize the use of resources
for the new businesses by generating stable revenue from steady growth of
35/47
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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

its existing services, centered on AD EBiS, which will serve as the revenue
base for the entire group.
w In the EC PF, resources will
be augmented for the ecommerce website building& operation support toaccelerate growth.

w In the Marketing PF, aiming
to create new services.

As for the development of multiple new businesses in ❷ (of Figure 33 on
page 35), the 1st priority strategy is to leverage the YRGLM Group’s
strengths and EC-CUBE’s competitive edge to strengthen the EC PF’s
business in the area of website building & operation support (accelerate
growth under a vertically integrated business model) based on
BOKUBLOCK. The Company plans to increase its resources throughrecruitment and M&As, gain large projects, and establish the business as acontinuous business by providing operation support after the website building.
Its 2nd priority strategy is to strengthen investment in the Marketing PF toaccelerate growth over the medium to long term. It plans to create newservices for marketing process support (planning for release during this fiscal
year).

w The Company aims to achievesales of Y10 billion at an earlystage through stable growth ofexisting businesses anddevelopment of new services.

Early Achievement of Y10 Billion in Sales
In aiming to achieve the Y10 billion goal for sales as recently announced, theCompany envisions stable growth of its existing businesses (advertising
effectiveness measurement, advertising agency DX, and EC-CUBE) anddevelopment of new services in three areas (incubation, e-commerce website
building & operation support, and marketing process support) (Figure 34).

w Marketing process support
business is underdevelopment, aiming forrelease during this fiscal year.

The marketing process support business, which is expected to become asignificant portion of the Company's entire business in the future, is currently
under development. The details of the service content, including the businessmodel, have not been disclosed. Its concept is “service that helps facilitate theentire marketing process.”【Figure 34】Image of Sales Growth over the Medium to Long Term
Sales

10
billionyen

MPF

Marketing Process Support
EC

E-commerce Website Building &Operation Support
MPF

Now

Incubation

Advertising
EffectivenessMeasurement

Advertising
Agency DX

EC-CUBE

Existing
businesses(Ref) Financial results briefing materials.

36/47
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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18
w Sales of Y10 billion is a highgoal, but within an
achievable range considering
the past growth rates andM&As that may be conductedin the future.

Sales of Y10 billion would be 2.56x the Y3.9 billion in sales planned for thecurrent fiscal year. Assuming that the Company will achieve this goal in thesix years starting next fiscal year, a sales growth rate of 17.0% per year(compound rate) would be necessary (a sales growth rate of 20.7% per year
would be necessary to achieve this goal in five years). However, the Company
has achieved a comparable rate of sales growth in the past (sales growth of+17% YoY is expected this fiscal year too).
Presumably, the goal includes the expected sales growth from future M&As.
Therefore, it is not unrealistic as a medium- to long-term goal and may indeed
become achieved.

37/47This 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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

8．Alpha-Win Research Dept.’s Forecast for This
Fiscal Year and the Medium Term
◆ Alpha-Win Research Dept.’s Forecast for This Fiscal
Year

w We have updated our

medium-term forecast (for thecurrent and next fiscal year)
and added a new forecast for
FY 2025 (fiscal year after thenext).

We have revised our forecasts for the current and the next fiscal year to reflect
the current situation. We have also added a new forecast for FY 2025 (thefiscal year after the next) (Figure 36 on page 39).

Current Situation

w Overall sales in both Octoberand November continue toshow double-digit YoY
growth, but less than theannual growth rate expectedby the Company.

Monthly companywide sales in October and November, the first two monthsof the current fiscal year, grew by 12.6% and 14.3% YoY, respectively, bothat double-digit growths. The sales growth rate of the EC PF was high thanks
to the positive effects of the acquisition of BOKUBLOCK, while the sales
growth rate of the Marketing PF is slowing down due to the decrease in thenumber of AD EBiS accounts, despite the positive effect of the acquisition of
Far End. The cumulative, companywide sales growth rate for the first twomonths was 13.4%, slightly below the Company's expected sales growth rateof 17.0% for the current fiscal year (Figure 35).
New M&As and new services planned to be developed have not been factored
into the Company's forecast for this fiscal year. If the current sales growthrate continues and there is no M&A during the period, sales may not reachthe forecasted value.

【Figure 35】Change in Recent Monthly Sales (preliminary values) (Upper row: sales in thousand yen) (Lower row: YoY change in %)Calendar Year
Fiscal Year
Monthly Sales(thousand yen)

2021

2022

2022
FY 2023

FY 2022

MarketingPlatform
EC Platform
Entire Company

Nov

This Fiscal YearYTD (Oct 2022 Nov 2022)

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

June

July

Aug

Sept

Oct

233,052

231,281

232,702231,333

244,921

246,739

259,809247,336

250,882

247,675

248,093

250,142

248,293248,744

114.3

112.7

109.6

112.1

113.1

109.0

121.1

116.6

117.1

113.8

108.0

104.2

106.5

107.6

107.0

31,47323,73924,57534,69524,222

22,49432,16824,57935,05747,321

56,20753,63649,52542,73692,261

497,037

88.2

65.2

86.7

87.8

82.8

85.5

93.0

102.6

146.8

140.6

236.7

232.3

157.4

180.0

167.1

264,526

255,021257,278

266,028

269,143

269,233

291,977

271,915

285,940

294,997

304,300

303,779

297,819

291,480

589,299

110.4

105.5

106.9

108.2

109.5

106.5

117.2

115.2

120.1

117.3

120.1

115.4

112.6

114.3

113.4

(Ref) Prepared by Alpha-Win Research Dept. based on the Company’s news release on its website.
(Note) Values shown are preliminary values that have not been audited by an auditor and may be revised in the future. Note that sales of Far End Technologies,
which became a consolidated subsidiary, are included in the Marketing Platform starting in February 2022, and sales of BOKUBLOCK, which became aconsolidated subsidiary, are included in the EC Platform starting in in June 2022.

New Forecast for This Fiscal Year (FY 2023)
w We lowered our sales andprofit forecasts from ourprevious forecasts. While
sales may fall short, we expect
profits and dividend to be inline with the Company's plan.
For the current fiscal year,
too, we expect sales, profit,and dividend to increase.
w The Company has tended to
conduct a certain degree ofcost control, as seen from pastfinancial performance.

We lowered our previously prepared forecasts for the current fiscal year,
which were sales of Y4,320 million, operating profit of Y500 million, net
profit of Y320 million, and dividend of 9.3 yen/share. Our new forecasts are
as follows: sales of Y3,800 million, operating profit of Y400 million, net
profit of Y240 million, and dividend of 7.8 yen/share. We have lowered ourforecasts by Y520 million, Y100 million, Y80 million, and 1.5 yen/share,respectively.
We have forecasted that sales will be Y100 million less than the Company's
plan. However, since there seems to be some buffer to the costs, we predictedthat profits and dividends will be in line with the Company's forecast (Figure
36 on page 39).
38/47

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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022
2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18
w The size of business
However, it should be noted that financial performance may be impacted byinvestment and whether there
whether there will be M&As during the period and their sizes, the size ofwill be large contracts arebusiness investments, the success or failure of new businesses or in gaining
factors that may impact
large orders, situation with recruitment, and changes in the macrofinancial performance.

environment.

【Figure 36】Financial Forecast for This Fiscal Year and the Medium Term (the Company and Alpha-Win’s forecasts)(Million yen)

FY 2021 A

Sales
I. Marketing PF
II. EC PF
Gross Profit
Gross Margin
SG&A Expenses
Ratio to sales
Operating Profit
Ratio to sales
Recurring Profit
Ratio to sales
Net Profit
Ratio to sales
Sales (YoY growth rate)
I. Marketing PF
II. EC PF
Gross Margin (diff. from last FY)
SG&A Expense (growth rate)
Operating Profit (growth rate)
Recurring Profit (growth rate)
Net Profit (growth rate)
EBITDAKPIAD EBiS: # of active accounts% change for the above
AD EBiS: average unit price (yen)% change for the above

FY 2022 A

FY 2023 New CE

FY 2023 New E

FY 2024 New E

FY 2025 New E

2,957
3,334
3,900
3,800
4,320
5,000
2,599
2,925
3,260
3,137
3,507
4,036
358
414
640
670
810
965
2,039
2,260
2,410
2,320
2,610
2,880
69.0%
67.8%
61.8%
61.1%
60.4%
57.6%
1,673
1,867
2,010
1,920
2,150
2,350
56.6%
56.0%
51.5%
50.5%
49.8%
47.0%
365
392
400
400
460
530
12.3%
11.8%
10.3%
10.5%
10.6%
10.6%
364
399
390
390
450
520
12.3%
12.0%
10.0%
10.3%
10.4%
10.4%
239
236
240
240
300
340
8.1%
7.1%
6.2%
6.3%
6.9%
6.8%
12.9%
12.7%
17.0%
12.9%
13.7%
15.7%
12.1%
12.5%
11.5%
4.6%
11.8%
15.1%
19.2%
15.6%
54.5%
83.6%
20.9%
19.1%
-1.0%
-1.2%
-6.0%
-7.6%
-0.6%
-2.8%
7.6%
11.6%
7.7%
-2.0%
12.0%
9.3%
32.0%
7.4%
1.9%
14.3%
15.0%
15.2%
39.5%
9.6%
-2.5%
11.4%
15.4%
15.6%
30.7%
-1.5%
1.7%
10.1%
25.0%
13.3%
638
677
680
680
760
850
Annual Average Annual Average Annual Average Annual Average Annual Average Annual Average
(A)
(A)
(E)
(E)
(E)
(E)
1,344
1,231
Slight decline
1,160
1,170
1,185
-8.9%
-8.4%
-5.8%
0.9%
1.3%
143,866
158,527
Slight growth
165,000
175,000
185,000
19.3%
10.2%
4.1%
6.1%
5.7%

FY 2022
Revised CE
3,400
3,010
390

FY 2023
Previous CE
5,000
4,590
410

340
10.0%
340
10.0%
210
6.2%
15.0%
-14.2%-51.9%

750
15.0%

-7.0%
-6.7%
-12.4%
640
Annual Average(E)

Annual Average(E)

FY 2022
Previous E
3,300
2,950
350
2,310
70.0%
1,960
59.4%
350
10.6%
350
10.6%
218
6.6%
11.6%
13.5%
-2.3%
13.3%
17.2%
-4.1%
5.0%
-4.1%
650
Annual Average
(E)
1,280
-4.8%
156,300
8.6%

FY 2023
Previous E
4,320
3,870
450
2,950
68.3%
2,450
56.7%
500
11.6%
500
11.6%
320
7.4%
29.6%
32.3%
8.7%
0.5%
31.2%
27.6%
25.3%
35.6%
820
Annual Average
(E)
1,310
6.4%
157,000-1.0%

FY 2024
Previous E
4,740
4,260
480
3,280
69.2%
2,700
57.0%
580
12.2%
580
12.2%
380
8.0%
9.7%
10.1%
6.7%
0.9%
10.2%
16.0%
16.0%
18.8%
910
Annual Average
(E)
1,350
3.1%
158,000
0.6%
2,560

I. (1) Ad Measurement (AD EBiS):
Actual/Forecasted Sales

2,313

2,369

2,460

2,297

2,457

2,631

2,400

2,470

I. (2) Advertising Agency DX: Sales

182

175

180

190

200

205

170

210

240

104
2,599
358
358

380
2,925
414
330

620
3,260
640
350

650
3,137
670
350

850
3,507
810
360

1,200
4,036
965
370

430
3,000
365
365

1,190
3,870
450
450

1,460
4,260
480
480

84

290

320

450

595

I. (3) Incubation: Sales
I. Marketing PF （1）+（2）+（3）II. EC PF （1）+（2）(1) EC-CUBE(2) E-commerce website building & operation
support; BOKUBLOCK

476
3,010
390
390

1,500
4,590
410
410

(Ref) Prepared by Alpha-Win Research Dept. based on the financial results summary, financial results briefing materials, and interview.
(Note) CE is the Company’s forecast, E is Alpha-Win’s forecast, and A is actual result. “Previous” is the previous forecast and “New” is the current forecast. A part ofthe company-estimated (CE) gross profit (margin), SG&A expenses (ratio), and sales of ad effectiveness measurement, advertising agency, and new services for thisfiscal year, as well as the past segment sales, are estimates calculated by Alpha-Win (in italics). In Alpha-Win’s forecasts and the results, the average unit price andnumber of active accounts of AD EBiS are based on annual averages (= average of the values at the end of each quarter).

w Lowered our previous
forecast. Not reflecting future
M&As, we changed ourestimates for AD EBiS andreflected the current situation
including monthly sales.

Estimates Used to Predict This Fiscal Year’s Sales
・We have lowered our previous sales forecast. In the previous forecast,though, we had assumed that new M&As would partially contribute to theincrease in sales. However, the Company’s new forecast for this fiscal yearthat it has announced did not include the effects of M&As and new services,
so we also revised our forecast accordingly.
・In addition, we also reflected the current situation, including the downward
trend in the number of accounts of AD EBiS, the slowdown in the rate ofincrease in its unit price, and the recent level of monthly sales since October.

w Updated our sales forecast,raising the expected unit
price of AD EBiS while
lowering its expected numberof accounts.

Our predicted number of accounts of AD EBiS (annual average of end-ofthe-quarter numbers) was lowered from 1,310 to 1,160 from our previous
forecast to our current forecast. On the other hand, we raised our predicted
average monthly unit price (similarly, the annual average) from 157,000 yen
to 165,000 yen. As a result, we lowered our sales forecast for the advertising
effectiveness measurement business from Y2,468 million to Y2,300 million.

w Three major updates to AD
EBiS have been released.

・However, although the Company has yet to see a net increase in the numberof accounts, it has been enhancing the product strength of AD EBiS throughthree major updates and will begin to focus on further preventing churns
through enhanced onboarding. Therefore, we predict that the rate of decline
39/47

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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18
w The decline rate in the
average annual number ofaccounts is expected to
improve.
w Average annual unit price forthe current fiscal year is
expected to increase by 4%
from the previous fiscal year.
w We forecast a slight decreasein the sales of AD EBiS forthe current fiscal year.
w Key points are the pricing
policy of AD EBiS and thereversal in its number ofaccounts.
w We forecast a slight increasein the sales of advertising
agency DX and a significant
increase in the sales of
incubation.
w Sales of Marketing PF will
increase but are expected tofall short of the Company's
sales forecast by greater than
Y100 million.
w On the other hand, in the EC
PF, sales of EC-CUBE are
expected to remain flat, but
we predict the expected fullcontribution and earnings
growth of the acquired
BOKUBLOCK to lead tohigher sales than the
Company's forecast.

w Although sales may not reach
the Company's forecast, wepredict that it can achieve its
profit target through cost
control.

in the average number of accounts will improve from about 8% YoY in FY
2021 and FY 2022 to 5% to 6% in the current fiscal year.
・On the other hand, we predict that its unit price will increase by about 4%
in annual average compared to the average of the previous fiscal year, due toa change in customer base from low-priced to high-priced zones, as well as
up-selling and cross-selling including the enhancement and addition offunctions. As reference, our analysis shows that since October 2022, theaverage unit price of AD EBiS has most likely remained almost flat comparedto the end of September, while the number of accounts has slightly decreased.
・ Consequently, we estimate that the sales of AD EBiS (advertising
effectiveness measurement) will decline by about 3% YoY to Y2,300 million(about -Y160 million compared to the Company's plan). The pricing policyof AD EBiS and the reversal in the numbers of its accounts will be the key
points in the future. We predict the sales of advertising agency DX to increaseslightly to Y190 million (similar to the Company’s plan). For incubation, we
expect its sales to be Y650 million, slightly exceeding the Company’s
forecast (+Y30 million compared to the Company’s plan; +Y270 million or+71% YoY), due to the expansion of the business domain of AD HOOP, fullcontribution by Far End acquired in the previous fiscal year, increase incapacity through recruitment, and an expected increase in the number of new
projects.
In sum, we expect the overall sales of the Marketing PF to increase by 7.4%
YoY to Y3,140 million (-Y130 million compared to the Company’s plan).
・In the EC PF, we expect sales of EC-CUBE to increase slightly YoY toY350 million like the Company's plan. Sales of the new, e-commerce website
building & operation support business will be impacted by whether there will
be orders for large, generally one-time projects, but its sales are beginning tosteadily expand thanks to the synergy with EC-CUBE that is also starting to
be seen. We expect its sales to be Y320 million, which is Y30 million above
the Company's forecast.
・As a result of the above, we predict that the EC PF’s sales will be Y670
million (+Y30 million compared to the Company plan; +61.8% YoY).

Estimates Used to Predict This Fiscal Year’s Profit
・We expect the gross margin to decline due to increased costs, such as higher
development and personnel expenses, as the Company continues to makeupfront investments for future growth. However, there seems to be room forcontrol regarding SG&A expenses and other costs. Therefore, we predict thatthe costs will be offset by the sales growth and improved profit margins of
the new services, so that the Company will ultimately be able to secure profit
at the level that it predicts.
Although there are concerns that sales may fall short as described above, we
predict that the operating margin will be 10.5%, which is slightly higher thanthe Company's forecast of 10.3% (the Company expects the margin to worsen
by 1.5 percentage points YoY), and operating profit will be Y400 million (thesame as the Company’s forecast). We do not anticipate any significant nonoperating or extraordinary gains or losses.

40/47
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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18◆ Alpha-Win Research Dept’s Forecast for the MediumTermw Our forecast for the next
fiscal year reflects somepredicted contributions fromnew M&As and businesses.

Forecast for Next Fiscal Year (FY 2024)
The Company has not announced specific sales and profit targets for eachfiscal year of its next medium-term business plan, which will start in FY 2024.
We will have to wait for future announcements (we expect them to beannounced next spring or later).
Unlike our forecast for the current fiscal year, we have reflected a certain
amount of impact from new M&As and businesses in our forecast for next
fiscal year and beyond.

w Although we have revised
down our previous forecast,in FY 2024 (revised forecast),
we expect sales and profit
growth again as well as
consecutive record highs forsales and profit.

w Consecutive dividend hike is
expected due to the increasein profit, but considering thedividend payout ratio andother factors, there is stillmuch room for moredividend hikes in the future.
w Estimated the sales growthrate of AD EBiS as 8%
w With sales growth, theadvertising agency DX andincubation businesses may
become profitable in aturnaround.

From our previous forecast to our current forecast, we have made thefollowing revisions: sales of Y4,740 million ⇒ Y4,320 million (+13.7% YoYcompared to our forecast for FY 2023), operating profit of Y580 million ⇒Y460 million (similarly, +13.7% YoY), and net profit of Y380 million ⇒Y300 million (+25.0% YoY). We expect the consecutive posting of recordhigh sales to continue due to M&As and growth of the new services (Figure
36 on page 39). Also, as operating margin is predicted to be maintained whilesales grow, we expect profits to hit consecutive record-highs too.
We forecast a dividend of 9.2 yen/share (+1.5 yen/share YoY), based on theassumption that DOE will continue to be maintained at 2.5%. Considering
the dividend payout ratio and other factors, there is still much room for moredividend hikes in the future.
For the next fiscal year and beyond, we forecasted the sales of advertising
effectiveness measurement based on the following estimates for AD EBiS:an annual increase in the unit price by 6-8%, annual increase in the numberof accounts by about 1%, and a sales growth rate of about 8%.
In addition, since the advertising agency DX and incubation businesses may
potentially post profits in a turnaround depending on the increase in sales, andsince the marketing process support business currently under development
may also begin to contribute to sales, we included these factors in our forecast
as well.
However, while sales growth is expected for both platform segments, the rateof increase in profit is unlikely to significantly exceed the rate of increase insales, since the Company will most likely continue to make upfront
investments while controlling the costs.

w M&A is an important growthstrategy, but it is also a major
variable factor impacting
earnings.

Although not included in the forecast for this fiscal year, M&A is an
important growth strategy for the Company. It would be realistic to predictthat the Company will conduct M&As from time to time, which may
significantly impact business performance. While M&As may cause sales to
exceed our forecast, single-year profits may fall below our forecast dependingon the acquisition cost, amortization of goodwill, performance of the acquiredcompany, and the timing of acquisition.
Given the uncertainties at this stage, we have made a somewhat conservative
forecast in consideration of the risks involved.

41/47
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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18
w Due to the completion of an
upfront investment phase anda relative reduction in the
expenses-to-sales ratio, we
expect the Company to post
higher sales and profits andpay higher dividend in thefiscal year after the next, too.

Forecasts for the Fiscal Year After the Next (FY 2025)
For the fiscal year after the next, we forecast sales of Y5,000 million,
operating profit of Y530 million, net profit of Y340 million, and dividend of
10.3 yen/share. We expect the Company to achieve higher sales and profits,
pay higher dividends, and post record-high sales and profits in consecutive
years, as it will have completed its upfront investment phase and will start tosee the positive effects of the investment, as well as seeing relative declines
in the expenses-to-sales ratio due to sales growth (Figure 36 on page 39).

Forecast of Growth Rate over the Medium to Long Term
As DX progresses and the Internet ad market continues to expand, theCompany plans to newly incorporate related areas of business through M&As
and in-house development. Therefore, the growth potential of the Marketing
PF based on AdTech tools and expertise is large.
w Expecting annual sales
growth rate of 10-20% overthe medium term

Similarly, growth can also be expected for the EC PF due to the expansion of
the e-commerce market, as the Company enters the e-commerce website
building & operation support business and plans to further expand its businessdomain through M&As. Consequently, over the medium to long term, wepredict that the Company’s overall sales will grow by about 10-20% per year.

w The Company is in the stageof making upfront
investments for the next stage
and is ambitiously working
on M&As and expanding into
new and related businesses.

Although the business restructuring has reached the end of a phase, theCompany is now in the upfront investment phase for the next stage of growth.
It has an ambitious mindset of increasing synergy and expanding businessthrough M&As and business alliances or acquisitions. It has also been
actively pursuing greater competitive edge, expansion of existing areas ofbusiness through new services and new customer acquisition, and expansion
into new and related areas of business. Therefore, the Company’s sales andprofit over the medium to long term will most likely be impacted by whether
it will execute M&As and succeed in the new businesses.
Some aspects are also difficult to predict since the Company’s business issmall and specialized in a niche field, and since its financial performance will
be impacted by its cost control, the effort put into achieving the bottom lineof its target, and the management topics that it will prioritize.

w Due to the upfront
investment for future growth,
over the medium to longterm, the profit growth rate
(on a normalized basis) is
expected to be about the sameas the sales growth rate atabout 10-20% per year.

In developing its business, the Company is expected to continue upfront
investments. It may also expand into businesses other than those with highmarginal profit ratios (estimated at 70%). These are expected to cause its
profit structure to change. Therefore, we expect its profit growth to be around10-20% per year (on a normalized basis), which is equivalent to its sales
growth. We expect the operating margin to remain almost constant (gradually
increasing from around 10%) and profits to increase along with the sales
growth.

42/47This 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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

9． Analyst’s View
◆ SWOT Analysis
The Company's SWOT analysis result is shown on Figure 37 (below is
supplementally information). There has basically been no major change since
the last report.

w The Company's strengths are
the data and technologies
accumulated over many
years, DX talents, external
network, the president's
management skill, productstrength, support system,
business model, andbusiness strategy of actively
conducting M&As.

Strengths
The Company’s main strengths are the following: data and technologies thatit has accumulated over many years through AD EBiS; talents with highexpertise in DX; network with numerous business partners; its president’s
management skill and expertise in leading technologies of Internet
marketing; its main products with proven and strong functions and theirsupport systems (technological expertise, development speed, andresponsiveness to changes that only specialized major players like theCompany can achieve); position in the market (No. 1 in the Internet ad
effectiveness measurement market with an extremely high share); stable,
subscription-based business model; and growth strategy to actively conduct
M&As and business acquisitions.

Risk Factors
w On the other hand, risks
include stricter regulations
on the protection of personal
information, technologicalinnovations, intensifying
competition, and staff
shortage.

On the other hand, the main risks include further stricter regulations
pertaining to the collection and use of personal information due tostrengthened privacy protection (with regards to conducting Internet
advertising effectiveness measurement), the emergence of alternative
products due to the development of sophisticated AI technologies, the impact
of COVID-19, staff shortage, and intensifying competition.

w Clarified the areas ofPreviously, the management’s heavy dependence on its president Iwata had
been a problem. However, the Company has shifted to a system in which
supervision and execution of duties are divided among the CFO (Chief
Financial Officer & director) and the executive officers CTO (Chief
Technology Officer), COO (Chief Operating Officer), and CSO (Chief
Strategy Officer). This system should increase management speed andreduce the risks. As CEO, Susumu Iwata oversees the advertising agency DX
business, the incubation business, and areas of new development, shifting
toward creating growth drivers.

responsibility of eachdirector and executive officer
and shifted to a moreorganized management
structure.

[Figure 37] SWOT Analysis (Words in red have been added/revised)
Strength

Weakness

Opportunity

・Data and know-how (potential usage as big data), as well as technologies, that it has accumulated since foundation
・Recognition, strong customer base, proven track record, and product strength (No. 1 in the Internet ad effectiveness system tools market with an extremely highshare)
・The main marketing platform business is subscription-based; stable revenue can be expected (subscription business)
・Network with numerous business partners (leverage resources of external partners and collaborate with them)・ Potential to raise unit price through upselling and cross-selling and expand customer base
・CEO's management skills and expertise in leading-edge technologies of the industry
・Enhanced working environment; engineers with expertise in leading-edge technologies; accumulation of know-how (competitive edge as a major, specializedcompany with high capability in development and in responding to needs)
・Specialized in a niche market; small in scale
・Business management is largely dependent on the CEO (however, authority and responsibility have now become divided and delegated to other executive officers)
・AD EBiS's number of accounts is on a declining trend (working on finding effective solutions to improve churn rate)
・Employee shortage (engineers and sales reps)・Funding power (upfront investment costs and risks related to amount of capital and equity financing in large-scale M&As)
・Internet ad marketing market's growth potential and potential for accelerated growth of current products
・Business opportunities associated with the expansion of the e-commerce business (development into the e-commerce website building & operation support businessthrough M&A)

Threat・Business expansion and groupwide synergy through M&As and business acquisitions
・Development of new products and new services
・Impact of COVID-19 outbreak (cancellation by users with deteriorated financial performance, stopped services, etc.)
・Intensification of competition (esp. EC-CUBE-related businesses), launch of competing or alternative products/services, emergence of rivals, weakened competitiveedge of existing products
・Tighter regulations related to stronger privacy protection in the use of personal information
・Defects in products/services and delays in development or in providing services with new function
・Large system troubles such as computer system stoppage(Ref) Prepared by Alpha-Win Research Dept.

43/47
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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18◆

Return of Profit to Shareholders

Past Dividend and Stock Splits
w Paid dividend for threefiscal years after becoming
listed on the market. Then,it stopped paying dividend
for a while due to worsened
financial performance.

In the second fiscal year after becoming listed on the market (FY 2015), theCompany paid dividends of 4.5 yen (annual dividend per share; the same
applies to the rest). Dividend was then increased by 0.5 yen in FY 2016 to 5.0
yen. In FY 2017, dividend was paid for the third year in a row, again at 5.0
yen (Figure 38).

w Held down the outflow ofcapital and instead used
capital for growthinvestment.

However, in FY 2018 and FY 2019, no dividend was paid since net losses
had been posted consecutively during those years. It also abolished theshareholder benefit program. The Company’s decision was to increase
shareholder value by recovering its financial performance through focus on
investments for the next stage of growth, rather than letting its cash flow out
through dividend and benefit programs.

w Dividend was resumed in
FY 2020 with the success ofthe structural reform. Since
then, dividend has beenconsecutively increased.

Thanks to its structural reform, the Company achieved a net profit in aturnaround and eliminated its carried-forward loss in FY 2020. It was able toresume dividend for the first time in three fiscal years. Since then, theCompany has continuously increased its dividend each fiscal year to 5.2
yen/share, and then to 7.0 yen/share. As for stock splits, it had conducted a
two-for-one stock split in June 2015, but has not conducted one since then.

[Figure 38] Change in Dividend and Dividend Payout Ratio
Dividend (left axis)(Y)

Dividend payout ratio (right axis)

DOE (right axis)

12.00

50.0
43.2

10.30

10.00

9.20

5.00

4.00

25.0

4.00
18.6

18.7
13.8

12.2

2.1

2.8

2.6

30.0

5.20

5.00

4.50

0.00

35.0

7.00

6.00

0.00

0.00

0.0

0.0

0.0

0…

2.0

20.3

19.2

19.0

20.0
15.0

13.7

2.3

45.0
40.0

7.80

8.00

2.00

（％）

10.0
2.6

5.0
2.5

2.5

2.5
0.0

FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025
E
E
E

(Ref) Prepared by Alpha-Win Research Dept. based on the financial resultssummary. E: Alpha-Win’s forecast/estimate.

Dividend Policy and Goals
w Although the Company
lowered its DOE target from
3.0% to 2.5% in its mid-term
plan, it plans to increase
dividends for the third
consecutive year this fiscal
year due to an increase in net
assets resulting from higher
profit.

In the medium-term business plan VISION2023, the goal for dividend on
equity (DOE) is set for each fiscal year. Its policy is to determine the amountof dividend based on this DOE and raise the DOE in stages. However, theCompany has now revised its medium-term plan’s financial targets and has
lowered its DOE target of 3% or higher for the current fiscal year, or the final
year of the plan, to 2.5%. Although this is even lower than the previous fiscal
year’s 2.6%, the Company plans to increase dividend by 0.8 yen to 7.8 yen
for the current fiscal year, since it expects an increase in net assets due tohigher profit.
The dividend payout ratio for the current fiscal year is expected to be 20.3%.
Since the Company is in a growth stage, its dividend payout ratio does notreach the typical payout ratio of 30% but is still increasing. We expect thistrend of increase in dividend to continue, since there is room to raise thedividend payout ratio and the DOE, and since the Company is expected toincrease profits and consequently increase its net assets as well.
44/47

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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18◆ Stock Price, Characteristics, and Factors that May
Affect Stock Price
Characteristics

w Listed on the TSE GrowthMarket. Small growth stockwith high volatility.

The Company’s stock is a small-cap, AdTech16-related stock listed previously
on TSE Mothers and now on TSE Growth (GRT). Since becoming listed, thevolatility of stock price has been high (max of 5,260 yen in May 2016 andmin of 675 yen in June 2022).

(16) AdTech (ad technology): A
generic term for information
technology used in advertisingbusiness, it refers to the digitaltechnology used in Internet ads,
etc.

Stock Price
Figure C on page 4 of this report shows the stock price and relative stock
price against the TOPIX for the past approximately six years since August
2016. Stock price was weak during the period that the Company’s financial
performance had been worsening. Then, with the recovery in profit, itbottomed out and has been fluctuating within a boxed range of 700 to 2,000
yen. It is currently near the lower end of this previous boxed range.

w The stock price is close to thelowest price since becoming
listed and has been aroundthe lower end of a boxed
range.

Performance
Since the beginning of the year, the Company's stock has been
underperforming major indices such as the TOPIX, TSE Mothers, and TSE
Growth (comparison of the closing prices on December 9, 2022; Figure 39).
This is most likely due to the downward revision of the previous fiscal year's
financial forecast in May and the downward revision of this fiscal year's
financial targets in the medium-term plan. However, since the stock price has
already been corrected after the Company’s announcement of financial
results on November 4 (underperforming the TOPIX by 13.2%), the above
factors seem to be already largely factored in.

w Stock price has been
underperforming the major
indices since the beginning of
the year.

Valuation Comparison with Major Indices of the TSE
w Valuation is above the TSE
Prime’s average but well
below the Growth’s average.
Does not seem overvalued.

Compared to the average of the TSE Prime, the Company's key valuation
measures are all high. In contrast, when compared to the average of the TSE
Growth, all of the Company's major valuation measures are low. Although
the Company's valuation is mixed in its comparison with the market average,
the absolute level of valuation suggests that its stock price is not particularly
overvalued (Figure 39).

[Figure 39] Comparison of Valuation and Return between the Company and the Market Average
Closing price on December 9, 2022
YRGLM (3690): GRT

Stock price or
index

This fiscal year's
forecasted P/E

Actual P/B (atend of quarter)

Simple average ofdividend yield

Return since
Return since the end
beginning of yearof April 2022

699

18.24

2.47

1.12

-27.5

-10.8

TSE Prime Stock Average: PRM

1,009.38

13.51

1.16

2.36

-

3.3

2.4

TSE Standard Stock Average: STD

1,010.46

14.27

0.91

2.22

-

4.7

2.1

TSE Growth Stock Average: GRT

998.00

97.10

4.29

0.32

-

13.5

7.2

TOPIX

1,961.56

-1.54

3.3

2.4

TSE Mothers

787.03-22.54

13.3

7.6

Nikkei Stock Average

27,901.01

-3.1

3.9

2.6

12.66

1.14

2.27

-41.94Return sinceNov. 4, 2022

(Ref) Prepared by Alpha-Win Research Dept. based on market data. Month-end figures of TSE PRM (TSE Prime), STD (TSE Standard), and
GRT (TSE Growth) have been disclosed since April 2022. November 4, 2022, is the Company's financial results announcement date.

45/47
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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

Valuation Comparison with Similar Companies
In Japan, there are no listed companies that provide similar AdTech tools andare based on a subscription model like the Company. Instead, we compared
the size, business, and valuations of listed Japanese AdTech companies withbusiness partly similar to the Company and listed companies that competewith the Company in the e-commerce platform business (packaged software
for building websites for e-commerce stores, etc.) (Figure 40).
w Comparison with similar
Japanese companies showsthat the Company’svaluation is somewhat
underpriced.

As reference, comparison was also made with two companies listed in the US
market: HubSpot Inc. (ticker code HUBS; based in the U.S.; global
development of its original marketing PF based on a subscription model;
continuing to post a net loss; P/S of 10.9; P/B of 15.9) and Shopify Inc. (ticker
code SHOP; based in Canada; providing cloud-based commerce PF
developed for small/medium-sized businesses; expanding into Japan andcompeting with EC-CUBE; rapid growth; P/S of 10.5; P/B of 4.0).

(17) P/S (Price to Sales Ratio):
Ratio of stock price to sales. A
valuation indicator in whichmarket capitalization is divided
by annual sales. P/S is often used
as an indicator for the stock valueof emerging companies with ahigh growth potential or a netloss.

Of the compared companies, the average values of the 23 Japanese companies
with net profit forecasted for the current fiscal year based on company
forecasts (19 AdTech companies and four e-commerce companies) are notvery meaningful due to the large disparity between the companies. However,at least based on this fiscal year’s expected P/E, P/B, P/S17, and dividend yield,
the Company's valuation is relatively generally low and somewhat
underpriced.

[Figure 40] Comparison with Similar Companies (AdTech-related companies + e-commerce-platform-relatedcompanies + 2 overseas companies)
AdTech-Related Companies
Code
2389
2461
2491
3134
3655
3688
3690
3853
3923
4293
4395
4751
4784
6038
6045
6081
6094
6533
6562

Markets: PRM=TSE Prime, STD=TSE Standard, GRT=TSE Growth

Company NameBusiness Area

DIGITAL HD

Internet ad agency / ad measurement tool

F@N Communications

Affiliate (pay-per-performance) ad

ValueCommerce

Affiliate (pay-per-performance) ad

Hamee

Mobile accessories / E-commerce cloud support

BrainPad

Internet marketing / data analysis

CARTA HD

Ad platformYRGLM Inc.

Internet ad measurement tool

Asteria

Packaged software

RAKUS

Cloud service / Email delivery / IT engineer dispatching

SEPTENI HD

Internet ad agency / smartphone marketing support

AccreteSMS delivery service

CyberAgentInternet ad agency / smartphone / games

GMO AD Partners

Internet ad agency and related platform

iiD

Contents marketing platform

Rentracks

Pay-per-performance Internet ad service

Allied Architects

SNS-related marketing support

FreakOut HD

Internet ad delivery (DSP)

Orchestra HD

Digital marketing for companies

GenieeAutomatic trading of media ad space / AdTech biz

Market
PRM
PRM
PRM
PRM
PRM
PRM
GRT
PRM
PRM
STD
GRT
PRM
STD
STD
GRT
GRT
GRT
PRM
GRT

Simple average of 19 AdTech-related companies (which have not forecasted a net loss)
6026
6550

GMO TECH (net loss)

App-installation-type charging ad / SEO

Unipos (net loss)

Internet ad service; media monetization support

NYSE: HUBS

HubSpot Inc.

Cloud-based customer management platform

E-Commerce-Platform-Related Companies
Code
3371
4304
4057
4496
4477
NYSE: SHOP

GRT
GRT
NYSE

Markets: PRM=TSE Prime, STD=TSE Standard, GRT=TSE Growth

Company Name
SOFT CREATE HD

Business Area
E-commerce website building package / selling merchandise B2B

EstoreE-commerce website building / online shopping support

Cloud commerce platform
Interfactory
Support services for e-commerce website mgmt SMEs / mid-tier companies
Commerce One Holdings
Simple average of 4 e-commerce-platform-related companies (which have not forecasted a net loss)
E-commerce platform / online settlements
BASE (net loss)
Cloud-based commerce platform
Shopify Inc.

Market
PRM
STD
GRT
GRT
GRT
NYSE

Unit: million yen(million USD for overseas companies)
Market Cap.
28,391
33,46568,52814,136
18,82242,0094,454
14,308316,947
74,722
21,259615,204
7,591
4,769
7,705
20,406
24,511
20,24324,00471,6561,816
2,010
14,154

Sales
16,4007,680
37,00014,00010,30028,3003,900
3,700
27,30242,5006,121
720,000
15,000
6,000
3,156
4,600
35,00010,0002,389
52,281
5,000
838
1,300

Ratio

%

O.P.

O.P. Margin
0
0.0
2,410
31.4
8,700
23.5
2,250
16.1
1,100
10.7
3,500
12.4
400
10.3
3,250
87.8
1,424
5.2
7,500
17.6
1,220
19.9
45,000
6.3
600
4.0
730
0.1
1,114
35.3
1,020
22.2
1,600
4.6
1,670
16.7
1,100
46.0
4,452
19.5
100
2.0
-1,138-135.8
-54
-4.2

P/S
1.73
4.36
1.85
1.01
1.83
1.48
1.14
3.9
11.61
1.8
3.47
0.9
0.51
0.8
2.44
4.44
0.70
2.02
10.05
2.94
0.36
2.40
10.9

Unit: million yen (million USD for%overseas companies)
Market Cap.
Sales
O.P.
O.P. Margin
45,871
23,460
4,140
17.6
7,981
9,600
1,250
13.0
5,076
2,843
229
8.1
5,778
3,206
711
22.2
16,177
9,777
1,583
15.2
32,924
9,310-2,215-23.8
48,320
4,611
268
5.8

P/S
1.96
0.83
1.79
1.80
1.59
3.54
10.48

P/E
3.59
18.47
10.71
8.56
23.14
10.45
18.24
6.9
339.61
12.46
27.33
35.16
18.55
9.28
11.52
24.48
21.29
33.51
35.18
Ratio
P/E
17.11
9.98
32.55
11.45
17.77
-

%
P/B
Dividend Yield
0.67
0.00
1.61
4.37
3.30
2.82
1.93
2.36
3.90
0.00
1.56
3.23
2.47
1.12
1.00
36.34
0.11
1.18
11.87
0.28
4.26
0.01
1.40
2.43
1.20
0.00
2.55
1.14
6.65
2.85
0.00
3.69
0.44
7.41
5.05
1.22
2.86
0.00
1.43
0.00
15.9
0.00
%
P/B
Dividend Yield
3.06
1.50
2.33
3.53
4.94
0.00
2.35
0.00
3.17
1.26
2.35
0.00
3.94
0.00

Closing Price（ 12/9 ）Stock Price
1,192
435
1,988
869
844
1,670
699
818
1,749
354
3,605
1,216
453
942
966
1,437
1,360
2,065
1,330
1,650
155
USD 291.38
Closing Price（12/9 ）
Stock Price
3,330
1,416
1,267
768
294
USD 38.38(Ref) Prepared by Alpha-Win Research Dept. based on the companies’ websites, securities reports, financial results summaries, and financial results briefing materials.
(Note) Generally, each company’s forecasted values from the latest financial results disclosure (latest quarterly financial results) or the most recent actual results (BPS,etc.) were used (based on disclosed data available as of December 9). For forecasts disclosed as ranges, as a general rule, the median was used for calculations. For theCompany, Alpha-Win Research Dept.’s forecast was used. Values not disclosed are marked by “ND” (not determined) or “-”. The average was calculated using only
valid figures. For the financial data on the two overseas companies, actual values from the most recent full fiscal year, forecasted P/E, and actual P/S and P/B were used.

46/47
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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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 ReportYRGLM Inc. (3690 TSE Growth)

Issued: 12/15/2022

2018/12/1820182018/12/1820152018/12/182018/12/182018/12/18

The Company’s Valuation
w Our forecast for P/E is 18 forthis FY and 15 in the next FY.

w The PEG ratio is around alittle less than 1 to about 1.8(18) PEG Ratio (Price Earnings
Growth Ratio): A valuation
indicator for stock value thattakes into consideration acompany's medium-term profit
growth rate. It is calculated by
dividing the expected priceearnings ratio (P/E) by the
expected medium-term profit
growth rate (%) per share.
Generally, a PEG ratio of lessthan 1 means the stock isundervalued, and overvalued if it
is more than 2.
w Should closely watch thetightening of personal
information protection
regulations, financial
performance, changes in
KPIs, and M&As as factorsthat may impact stock pricew The timing at which thenumber of accounts of AD
EBiS turn to a net increase isa key point.

The Company's stock price has already been corrected, and the P/E based on
our profit forecast (EPS) is expected to decline sharply from 18 in this fiscal
year, 15 in the next fiscal year, and 13 in the fiscal year after the next. If theCompany's normalized EPS growth rate over the medium term is assumed tobe 10-20%, its PEG Ratio18 comes out to be 0.9-1.8 for this fiscal year (2.0 if
the annual average profit growth rate is assumed to be about 9%). If a PEG
ratio of up to about 2 can be seen as acceptable for growing companies, thenthe Company’s stock price seems to be at a somewhat underpriced level
regarding its balance against the anticipated profit growth rate.
IT companies, and especially AdTech companies, tend to be valued at apremium in anticipation of high growth, but the Company’s stock currently
does not seem to be priced at a significant premium. If the likelihood of
upward revisions of financial performance and dividend hike increases, thenits stock may possibly rise to a higher level.

Key Points that May Impact Future Stock Price
As factors that may affect stock price, we should continue to closely watch
the situation concerning tightened regulation on the protection of personal
information, the trends in monthly sales (YoY), the quarterly changes in theamount and rate of profit growth, the level of dividend, financial trend of the
e-commerce website building & operation support and incubation business inwhich growth is expected, new M&As and business acquisitions or alliances,
future announcements of new products and services, and the trends of theentire Internet ad market.
Also, in judging the Company’s growth potential in profit, we should
continue to follow the change in AD EBiS’s unit price (pricing strategies) andthe number of active accounts (quantity strategy; the turning point to a netincrease would be especially key), on which its sales are based, in addition to
the churn rate of AD EBiS and the proportion of the new services in the
consolidated sales.

Medium- to Long-Term Outlook of Stock Price
Over the medium to long term, the Company's marketing platform businesshas a large growth potential in the Internet advertising market, and theCompany also seems to be in a good position with regards to reaping benefits
from this growth potential. It plans to accelerate growth in existing areas
through active engagement in M&As and in-house development, as well as
developing multiple new businesses. Consequently, sales are expected to firstincrease, followed by profit growth after a time lag.
We believe that the stock price will basically change along with theCompany's profit level, profit growth rate, and level of dividend, since thecurrent valuation does not seem overvalued. The Company should continue
to be followed as an AdTech-related, domestic-demand-oriented, and smallcap growth stock.
w アドテク関連の内需・小型成長株として、今後の展開に
期待。

47/47
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 inthis Report for the purpose of providing a description of the company. This Report is not to be construed as a recommendation or solicitation of investment. Contents of this Report are basedon 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 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 theirinvestment. 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.