COMPANY RESEARCH AND ANALYSIS REPORTCOPRO-HOLDINGS. Co., Ltd.
7059
Tokyo Stock Exchange First Section, Nagoya Stock Exchange First Section

14-Jul.-2021
FISCO Ltd. Analyst

Masanobu Mizuta

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

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

COPRO-HOLDINGS. Co., Ltd.
7059 Tokyo Stock Exchange First Section, Nagoya Stock Exchange First Section

14-Jul.-2021
https://copro-h.co.jp/en/ir/■ Index■Summary---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 01
1. Strengths include the high engineer retention rate. ......................................................................................

01

2. In FY3/21, net sales increased by double digits but profits declined due to one-time costs and other factors. ...

01

3. For FY3/22, forecasting a double digit increase in both operating and ordinary profit, return to a growth track. ...

01

4. Aiming to transform itself into a comprehensive engineer dispatch company..............................................

02

5. Company stated its intent to meet the Prime Market’s continued listing requirements and SDGs initiatives . ....

02

6. The dividend is forecast to increase again in FY3/22. ..................................................................................

02■Company outline--------------------------------------------------------------------------------------------------------------------------------------------------------- 03
1. Company outline.................................... ......................................................................................................

03

2. History................................................... ......................................................................................................

04■Business description---------------------------------------------------------------------------------------------------------------------------------------------- 04
1. Summary of services.. ..................................................................................................................................

04

2. Features and strengths.......................... ......................................................................................................

05

3. Risk factors, earnings characteristics, and response measures. ..................................................................

07■Business trends----------------------------------------------------------------------------------------------------------------------------------------------------------- 08
1. Summary of the FY3/21 consolidated results..............................................................................................

08

2. Financial condition................................. ......................................................................................................

10■Outlook-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 12
1. Outline of FY3/22 consolidated results forecasts. ........................................................................................

12

2. Key Initiatives......................................... ......................................................................................................

13■Growth strategy----------------------------------------------------------------------------------------------------------------------------------------------------------- 14
1. The long-term targets are net sales of ¥100bn and operating profit of ¥10bn in FY3/30..............................

14

2. Expand business in the existing construction field targeting large, blue-chip companies. ...........................

14

3. Strengthen the development in the plant field..............................................................................................

14

4. Global development............................... ......................................................................................................

15

5. Aims to transform itself into a comprehensive engineer dispatch company.................................................

15

6. Earnings will grow in the medium- to long-term...........................................................................................

16■Shareholder return policy---------------------------------------------------------------------------------------------------------------------------------- 17■SDGs initiatives and statement of intent to meet the Prime Market requirements--------- 18

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

COPRO-HOLDINGS. Co., Ltd.
7059 Tokyo Stock Exchange First Section, Nagoya Stock Exchange First Section

14-Jul.-2021
https://copro-h.co.jp/en/ir/█ Summary
Conducts a construction engineer dispatch business and aims to
be a comprehensive engineer dispatch company by entering themachine design field
COPRO-HOLDINGS Co. Ltd. <7059> (hereafter, also “the Company”) conducts a construction engineers dispatch
business. Furthermore, the Company has utilized M&A to enter the dispatch business for machine design anddevelopment. By transforming itself into a comprehensive engineer dispatch business, the Company will work toachieve sustainable growth and improve medium- to long-term corporate value, and is aiming to satisfy the continued
listing requirements for the Prime Market, which will be newly established through the Tokyo Stock Exchange’s
market reorganization.
1. Strengths include the high engineer retention rate
The Company pursues the four pillars of the human resources dispatch business (recruitment, training, matching,
and retention), and its features and strengths include its ability to increase clients and ability to recruit through its
nationwide network of branches, its high engineer retention rate through the thorough implementation of education,
training, and mental healthcare support, and its ability to maintain a high utilization rate based on its high-quality
engineers and relationships of trust with client companies. The Company increases the engineer retention rate byenhancing its support system and raising its matching rate, and the dispatch of high-quality engineers creates a
positive cycle which leads to an increase in business with existing clients as well as the acquisition of new clients.
2. In FY3/21, net sales increased by double digits but profits declined due to one-time costs and other factors
In the FY3/21 consolidated results, net sales increased 13.1% compared to the same period in the previous fiscal
year (year-on-year (YoY)) to ¥14,836mn, operating profit decreased 9.7% to ¥1,437mn, ordinary profit declined 9.2%
to ¥1,439mn, and profit attributable to owners of parent fell 6.9% to ¥1,009mn. Sales increased by double digits
due to the high level of demand, and because the Company continued to recruit new engineers even during the
COVID-19 pandemic, leading to an increase in the number of engineers. Net sales increased for the 15th consecutive
period. Profits declined due to the increase in the cost of sales ratio (71.0% in FY3/21, +4.3pp YoY) due to raising
the salary base for engineers following the April 2020 launch of the Equal Pay for Equal Work of Dispatch Workers
system, and the increase in one-time costs (¥123mn) accompanying growth investment.
3. For FY3/22, forecasting a double digit increase in both operating and ordinary profit, return to a growth track
The FY3/22 full year consolidated results are for net sales to increase 10.2% YoY to ¥16,343mn, operating profit torise 12.3% to ¥1,614mn, ordinary profit to grow 12.1% to ¥1,614mn, and profit attributable to owners of parent toincrease 3.8% to ¥1,048mn. The Company is expecting a double-digit increase in net sales due to the high level ofdemand and an increase in the number of engineers, while it also forecasts double-digit increases in both operating
and ordinary profit due to the effect of higher net sales and an increase in gross margin resulting from progress on
charge-up negotiations with clients. With this, the Company expects to return to a growth track. The Company
expects to make ATMOS CO., LTD., which the Company made a subsidiary, a consolidated subsidiary from FY3/22
1Q. However, the amount of goodwill amortization and other factors have not been determined, so the impact of
this has not been included in the consolidated results forecasts. Profits are expected to decline in FY3/22 1H due
to M&A-related expenses associated with the acquisition of ATMOS CO., LTD.

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01 19

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

COPRO-HOLDINGS. Co., Ltd.
7059 Tokyo Stock Exchange First Section, Nagoya Stock Exchange First Section

14-Jul.-2021
https://copro-h.co.jp/en/ir/

Summary

4. Aiming to transform itself into a comprehensive engineer dispatch company
In its long-term management vision, the Company has set management targets of ¥100bn in net sales and operating
profit of ¥10bn in FY3/30. With a base of growth in the existing construction engineer dispatch field, it will strengthen
its business in the plant industry, develop its business overseas, and advance its M&A strategy. With respect tocultivating new fields through M&A, in April 2021, the Company acquired all the shares of ATMOS, which is engaged
in the machine design and development engineer dispatch business, thereby making ATMOS a subsidiary. The
Company’s strategy is to transform itself into a comprehensive engineer dispatch company by entering the machine
design and development field in addition to its existing business in the construction field.
5. Company stated its intent to meet the Prime Market’s continued listing requirements and SDGs initiatives
On May 6, 2021, the Company released a “Notice of Statement to Meet the Continued Listing Requirements for
the Prime Market.” In advance of the Tokyo Stock Exchange’s market reorganization scheduled for April 2022,
the Company will strive to achieve sustainable growth and increase its corporate value over the medium to longterm through constructive dialogue with investors and aim to meet the continued listing requirements stipulated in
the newly established Prime Market. In addition to pursuing further growth in the existing construction and plantengineer dispatch business, the Company will advance its global business and its M&A strategy, including making
ATMOS a subsidiary in April 2021, as it aims to transform into a comprehensive engineer dispatch company. Also,
the Company will strengthen its initiatives on the SDGs and on ESG-conscious management.
6. The dividend is forecast to increase again in FY3/22
After retroactively calculating the dividend taking into account the 1:2 share split conducted on April 1, 2021, theFY3/21 annual dividend was ¥37.50, a ¥7.50 YoY increase (interim dividend of ¥10, fiscal year-end dividend of¥27.50 = ordinary dividend of ¥25 + dividend to commemorate change to First Section of TSE and NSE of ¥2.50).
The forecast for the FY3/22 dividend is a ¥2.50 YoY increase to ¥40.00 (interim dividend of ¥10.00, fiscal year-end
dividend of ¥30.00).
Key Points
Conducts a construction engineer dispatch business and aims to be a comprehensive engineer dispatch
company by entering the machine design and development field• For FY3/22, forecasting a double digit increase in both operating and ordinary profit, and a return to a growth
track• Released a notice of statement to meet the requirements of the Prime Market to be created through the TSE’s
reorganization•

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02 19

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

COPRO-HOLDINGS. Co., Ltd.
7059 Tokyo Stock Exchange First Section, Nagoya Stock Exchange First Section

14-Jul.-2021
https://copro-h.co.jp/en/ir/

Summary

Results trends
Net sales (left)（¥mn）

Operating profit (right)（¥mn）

20,000

2,000
1,614

1,592
1,437

15,00010,000909

894

16,343
13,122

5,000

1,500

1,344

7,701

8,962

1,000

14,836

10,819500

00FY3/17

FY3/18

FY3/19FY3/20FY3/21

FY3/22 E

Source: Prepared by FISCO from the Company’s financial results█ Company outline
Company name is derived from the “responsive pros”
1. Company outline
The Company conducts a human resources (construction engineers) dispatches and temporary staffing businessmainly for the construction industry. Furthermore, the Company has used M&A to enter the machine design anddevelopment field. By transforming itself into a comprehensive engineer dispatch company, the Company will work toachieve sustainable growth and improve medium- to long-term corporate value, and is aiming to satisfy the continued
listing requirements for the Prime Market, which will be newly established through the Tokyo Stock Market’s market
reorganization (scheduled for April 2022).
The company name “COPRO” is derived from the Japanese for the “responsive pros.” It was founded with the idea
of valuing each and every engineer with the goal of “becoming a human resources development company that ignites
people’s hearts,” and it is building strong relations of trust with its client companies and engineers.
As of March 31, 2021, the Company was headquartered in Nakamura-ku, Nagoya, and had total assets of ¥8,514mn,
share capital of ¥30mn, the equity ratio was 73.7%, the number of issued shares was 10,000,000 shares (including
446,334 treasury shares), and there were 2,280 Group employees (regular employees and dispatch employees).

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03 19

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

COPRO-HOLDINGS. Co., Ltd.
7059 Tokyo Stock Exchange First Section, Nagoya Stock Exchange First Section

14-Jul.-2021
https://copro-h.co.jp/en/ir/

Company outline

The Group companies are the Company (holding company) and two consolidated subsidiaries (business company
COPRO-ENGINEERD. Co., Ltd., and COPRO GLOBALS PTE. LTD., an intermediary holding company responsible
for the ASEAN region). In April 2021, the Company established COPRO VIETNAM CO., LTD., a sub-subsidiary, as abusiness company in Vietnam. In addition, the Company acquired all the shares of machine design and development
engineer dispatch company ATMOS (Nakamura-ku, Nagoya) and made it a subsidiary.
2. History
The Company was established in Nagoya City as Trustee Crew Co. Ltd., in October 2006 and changed its company
name to COPRO-ENGINEERD. Co., Ltd., in March 2008. It transitioned to being a holding company in May 2015
and changed its company name to COPRO-HOLDINGS Co., Ltd. In March 2019, it was newly listed on the TSE
Mothers Market and NSE Centrex Market, and then in September 2020, its listings were upgraded to the TSE First
Section and the NSE First Section.
History
Date
October 2006
March 2008

Event
Established as Trustee Crew Co., Ltd., in Naka-ku, Nagoya City (human resources dispatches and temporary staffing business)
Changed company name to COPRO-ENGINEERD. Co., Ltd.

May 2015

Transitioned to being a holding company and changed the company name to COPRO-HOLDINGS Co., Ltd.

May 2016

Head office of COPRO-HOLDINGS. Co., Ltd. is relocated (Nakamura-ku, Nagoya)March 2019
April 2020
September 2020

The Company’s stock is listed for public trading on the Mothers Section of the Tokyo Stock Exchange and the Centrex Section of
the Nagoya Stock Exchange
Established COPRO GLOBALS PTE.LTD. in Singapore
Listings were upgraded to the Tokyo Stock Exchange First Section and the Nagoya Stock Exchange First Section

April 2021

Established COPRO VIETNAM CO., LTD. as a sub-subsidiary in Vietnam

April 2021

Made machine design engineer dispatch company ATMOS CO., LTD. a subsidiary

Source: Prepared by FISCO from the Company materials█ Business description
Strengths include a high engineer retention rate through anenhanced support system
1. Summary of services
The Company’s construction engineer dispatch and temporary staffing business dispatches engineers to clientcompanies, centered on major general contractors. The engineers’ principal work tasks include construction work
management (process management, safety management, quality control, and cost management at construction,
civil engineering, facilities, and plant work sites) and CAD operators. The engineers, based on the instructions of theclient companies, enter worksites between the supervisors and workers and perform construction management.

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04 19

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

COPRO-HOLDINGS. Co., Ltd.
7059 Tokyo Stock Exchange First Section, Nagoya Stock Exchange First Section

14-Jul.-2021
https://copro-h.co.jp/en/ir/

Business description

Business model

Source: The Company’s financial results briefing materials

In the percentages of total net sales by industry in FY3/21, the construction industry provided 30.3%, civil engineering
18.5%, facilities 24.9%, the plant industry 14.8%, CAD 8.1%, and others 3.3%. There were no major changes versus
the previous fiscal year, but going forward the Company is focusing on expanding its business in the plant sector
as a field of emphasis. In the percentages of net sales by clients, approximately 20% were to the super generalcontractors (five companies), while in net sales by area, around 70% were from the three major metropolitan areas(Kanto, Tokai, and Kansai).
2. Features and strengths
The Company pursues the four pillars of the human resources dispatch business (recruitment, training, matching,retention), and its features and strengths include its ability to increase clients and ability to recruit through its
nationwide network of branches, its high engineer retention rate through the thorough implementation of education,
training, and mental healthcare support, and its ability to maintain a high utilization rate based on its high-quality
engineers and relationships of trust with client companies.
Through recruiting activities utilizing its nationwide branch office network, the Company is able to respond to thewide-ranging human resources needs of companies throughout Japan and also grow transactions with clientcompanies nationwide. The Company increases its engineer retention rate by enhancing its support system andraising its matching rate, and the dispatch of high-quality engineers creates a positive cycle which leads to anincrease in business with existing clients as well as the acquisition of new clients.
(1) Nationwide branch network
The Company changed the organization on March 31, 2021, to establish a nationwide network of 18 branches.
Also, in April 2021 the Company made an organizational change placing each branch under one of five divisions(Northern Japan Division, Eastern Japan Division, Central Japan Division, Western Japan Division and the Plant
Sales Division). In addition to separating the construction and plant sales functions in order to flexibly respondto the market, sales employees now handle the entire chain in a one-stop approach, from engineer matching tofollow-up after engineers are assigned.
(2) The number of engineers is increasing
The Company recruits using Gen-Kyari, the Company’s own construction and plant industry recruitment website.
The Company hired 865 engineers in FY3/21 (198 less than in FY3/20) even during the COVID-19 pandemic, andat the end of FY3/21 it had a total of 2,020 engineers, which is 36 more than at the end of FY3/20. It is a recurring
revenue business in which sales increase in proportion to the number of engineers dispatched.

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05 19

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

COPRO-HOLDINGS. Co., Ltd.
7059 Tokyo Stock Exchange First Section, Nagoya Stock Exchange First Section

14-Jul.-2021
https://copro-h.co.jp/en/ir/

Business description

Net sales and number of engineers since the Company’s founding

Source: The Company’s financial results briefing materials(3) Enhanced education and training and support structure
For the education and training of engineers, all recruited engineers must be able to respond to various problems
in the workplaces they are dispatched to, so on joining the Company, they all undergo education and training (onattendance management, work rules, information security, engineers’ support supervisor role, work excluded fromthe scope of temporary staffing, harassment, occupational health and safety, responses at the workplace in theevent of an accident or natural disaster, risk predictions, etc.) Toward improving client satisfaction and growing
transactions with clients, the Company prioritizes whether engineers are able to contribute at worksites, and inparticular, it thoroughly instills in them an awareness of being and readiness as COPRO Group engineers. The
period of education and training for new graduates was previously two weeks, but from FY3/21, this period of
education and training at the time of joining the Company was lengthened to one month.
Together with the education and training at the time of joining the Company, the Company allocates dedicatedlecturers to the Seed of Supervisor training facilities it manages, where it provides practical training according to
the learning levels of applicants, with the aims of supporting engineers’ skills improvements and career advancement. It has built a network of four Seed of Supervisor facilities nationwide (Tokyo, Chiba, Nagoya, and Osaka).
As a support system, the Company provides engineers with support, including follow-up support after they aredispatched, health management, mental health management, support for improving skills, and holding regularsafety conferences. These initiatives help the Company realize a high retention rate. In addition, through hearing
interviews with client companies and engineers, it works to build better workplace environments and improveclient satisfaction. Furthermore, as a rare initiative for a human resources temporary staffing company, it lends
smartphones to all engineers and thoroughly conducts accurate attendance management for workstyle reforms,
while it is also advancing the digitalization of communication with engineers.

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06 19

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

COPRO-HOLDINGS. Co., Ltd.
7059 Tokyo Stock Exchange First Section, Nagoya Stock Exchange First Section

14-Jul.-2021
https://copro-h.co.jp/en/ir/

Business description(4) The engineer retention rate and occupancy rate are trending at high levels
The Company’s engineer retention rate is 73.9% (most recent three-year average from FY3/19 to FY3/21). In
FY3/21, the engineer retention rate declined 3.9pp YoY to 70.9%. The main reason for this was the increase in
the number of term expiration retirements, especially for engineers with relatively little experienced who joined
the Company within the last one to two years, caused by the review or postponement of private works due to the
COVID-19 pandemic and the resulting temporary decline in dispatch projects. In addition, the engineer occupancy
rate is 96.4% (1Q-4Q average for FY3/21). At the end of the FY3/21 4Q the occupancy rate decreased by 2.3pp
to 95.8%, but it is 100% in actual terms if vacation leave and other related factors are excluded. Due to the factthat there is a structural shortage of workers in the construction industry, the total number of dispatch projects
acquired by the Company in FY3/21 increased by about 30% YoY. Demand for dispatch workers is strong,
especially for those with industry experience.

Retention Rate

Occupancy Rate
100.0%

100.0%

98.1%
80.0%

75.9%

74.8%

97.7%

98.0%

70.9%

97.8%

95.8%
60.0%

96.0%

40.0%

94.0%

20.0%

92.0%

94.4%

90.0%

0.0%

FY3/194Q

FY3/20
4Q

End
End
End
End
End
FY3/20 FY3/21 FY3/21 FY3/21 FY3/21
4Q
1Q
2Q
3Q
4Q

FY3/21
4Q

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

3. Risk factors, earnings characteristics, and response measures
The general risk factors and earning characteristics in a construction engineer dispatches and temporary staffing
business include work laws and regulations (the Worker Dispatching Law, the Labor Standards Law, etc.), securing
human resources, and seasonal factors.
Regarding laws and regulations, the Equal Pay for Equal Work for Dispatch Workers system accompanying the April
2020 amendment to the Worker Dispatching Law is a factor which has pushed up the cost of sales, and responding
to this is an issue. The Company is working to increase charges to its clients (increasing the contract amount per
engineer), and the Company expects to see an improvement in the cost of sales ratio in stages in FY3/22.
In terms of seasonal factors, job offers in the construction industry, particularly for civil engineering projects, tend
to be concentrated at the end of the fiscal year (January through March), but the Company works to keep orders
level and retain fluidity among human resources so as to not create periods in which engineers are temporarily on
standby. Also, as engineer numbers are increasing every fiscal quarter due to the active recruitment, it seems that
there are no particularly large seasonal variations in sales.

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07 19

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

COPRO-HOLDINGS. Co., Ltd.
7059 Tokyo Stock Exchange First Section, Nagoya Stock Exchange First Section

14-Jul.-2021
https://copro-h.co.jp/en/ir/█ Business trends
In FY3/21, net sales increased by double digits, but profits declined
due to one-time costs and other factors
1. Summary of the FY3/21 consolidated results
In the FY3/21 consolidated results, net sales increased 13.1% YoY to ¥14,836mn, operating profit decreased 9.7%
to ¥1,437mn, ordinary profit declined 9.2% to ¥1,439mn, and profit attributable to owners of parent fell 6.9% to¥1,009mn.
Summary of the FY3/21 consolidated results(¥mn)
FY3/20FY3/21YoY

Net sales

13,122

14,836

13.1%

Operating profit

1,592

1,437

-9.7%

Ordinary profit

1,585

1,439

-9.2%

Profit attributable to owners of parent

1,084

1,009

-6.9%

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

Net sales increased by double digits due to the increase in the number of engineers resulting from the high level ofdemand as well as active recruiting even amid the COVID-19 pandemic. This marked the 15th straight fiscal yearof an increase in net sales. The Company hired 865 people, which was 198 less than in the previous fiscal year. Of
these, 433 were engineers with industry experience, while 432 had no experience (89 new graduates, 343 mid-career). At the end of FY3/21, there was a total of 2,020 engineers, which was 36 more than at the end of FY3/20.



Breakdown by occupational
experience

Recruitment results(People)300(People)287

279 281240

Others
12

257
231

200

181

172

100

0
1Q

2Q

3Q

FY3/20

4Q

1Q

2Q

Plant
41

3Q

4Q

New graduate
hires
89

CAD
82

Facilities
89
Civil
engineering
68
Construction
141

No industry
experience343

FY3/21

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

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08 19

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

COPRO-HOLDINGS. Co., Ltd.
7059 Tokyo Stock Exchange First Section, Nagoya Stock Exchange First Section

14-Jul.-2021
https://copro-h.co.jp/en/ir/

Business trends

Number of engineers

Source: The Company’s financial results briefing materials

In net sales by industry, sales grew in every industry. Sales grew 7.4% YoY in construction, 20.0% in civil engineering,
13.3% in facilities, 16.9% in plant, 6.4% in CAD, and 33.2% in others. By client, net sales increased 2.4% for super
general contractors, and 16.0% for others. By area, net sales increased 9.6% in the three major metropolitan areas(Kanto, Tokai, Kansai), while net sales in rural areas increased 21.8%. In FY3/21, the expansion of the businessarea (Takamatsu Branch opened in October 2019, while the Chiba Branch, Shizuoka Branch, and Kitakyushu Plant
Branch opened in April 2020, and the Niigata Branch opened in November 2020) helped lift net sales, with sales
increasing significantly, especially to construction companies in non-urban areas. Also, progress was made on
cultivating new clients in the plant-related business.
By quarter, net sales in 1Q were up 19.3% YoY to ¥3,606mn, 2Q sales rose 16.4% to ¥3,664mn, 3Q sales rose
12.5% to ¥3,796mn, while 4Q sales jumped 5.4% to ¥3,768mn, as sales steadily increased. In 1Q, there weresome temporary closures of work sites and some work leaves by engineers due to the COVID-19 pandemic, but
the Company received compensation based on monthly contracts from client companies for all engineers who took
a leave from work.

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09 19

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

COPRO-HOLDINGS. Co., Ltd.
7059 Tokyo Stock Exchange First Section, Nagoya Stock Exchange First Section

14-Jul.-2021
https://copro-h.co.jp/en/ir/

Business trends

Net sales and number of engineers by quarter（¥mn）

Net sales (left)(People)Number of engineers (right)

5,000

2,500

4,000
3,000

1,378

1,483

1,552 1,591

1,686

1,763

2,000
1,500

2,000
1,000

1,879

1,984 2,044 2,002 2,054 2,020

2,457 2,616

3,149
2,824 2,920 3,023

3,376 3,573 3,606 3,664

3,796 3,768

1,000
500

0

0
1Q

2Q

3Q

FY3/19

4Q

1Q

2Q

3Q

FY3/20

4Q

1Q

2Q

3Q

4Q

FY3/21

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

Profits declined due to the increase in one-time costs (¥123mn) associated with growth investment and otherfactors. The main reason for this was the deterioration in the cost of sales ratio due to the Equal Pay for Equal Workfor Dispatch Workers system. The gross profit margin declined 4.3pp YoY to 29.0%. The cost of sales increased
due to a number of reasons, including the raising of the engineer salaries table accompanying the Equal Pay for
Equal Work for Dispatch Workers system, the increase in training expenses due to the increased hiring of new
graduate engineers, the rise in standby labor expenses during the COVID-19 pandemic, and special vacation taken
in conjunction with at-home standby by engineers who were suspected of being infected with COVID-19. Also, onetime costs associated with growth investment (business consulting expenses, core system reconstruction-related
expenses, branch opening/consolidation expenses, global business survey expenses, COVID-19 countermeasuresexpenses, costs to change to the First Section of the Tokyo Stock Exchange and Nagoya Stock Exchange) caused
SG&A expenses to increase 2.7%. However, the SG&A expenses ratio declined 1.9pp to 19.3%.
Because the Company strategically curbed recruitment expenses, recruitment efficiency improved significantly.
Recruiting costs per engineer were ¥156,000 in FY3/21, compared to ¥193,000 in FY3/20. The contract amountper engineer (monthly amount) increased ¥4,000 YoY to ¥546,000 as a Company-wide average. This was due
to support from charge-up negotiations with client companies, as well as the result of the decline in the ratio offirst-year engineers.
2. Financial condition
Looking at the financial condition, at the end of FY3/21, total assets were up ¥483mn on the end of FY3/20 to¥8,514mn, mainly due to an increase in cash and deposits. Total liabilities were down ¥300mn to ¥2,241mn, primarily
due to a decline in income taxes payable. Total net assets were up ¥784mn to ¥6,272mn, mainly due to an increase
in retained earnings, and the equity ratio increased 5.4pp to 73.7%. The Company’s financial condition is very sound.

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10 19

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

COPRO-HOLDINGS. Co., Ltd.
7059 Tokyo Stock Exchange First Section, Nagoya Stock Exchange First Section

14-Jul.-2021
https://copro-h.co.jp/en/ir/

Business trends

The main management indicators
(¥mn)
Item

FY3/19FY3/20FY3/21

Net sales

10,81913,122

14,836

Cost of sales

7,194

8,746

10,539Gross profit

3,624

4,376

4,297

Ratio to sales

33.5%

33.3%

29.0%

SG&A expenses

2,280

2,783

2,859

Ratio to sales

21.1%

21.2%

19.3%

Operating profit

1,344

1,592

1,437

Ratio to sales

12.4%

12.1%

9.7%

Non-operating income

2

1

5

Non-operating expenses

10

9

3

Ordinary profit

1,336

1,585

1,439

Ratio to sales

12.4%

12.1%

9.7%

Extraordinary income

-

17

90

Extraordinary losses

1

35

91

1,335

1,567

1,438

Profit before income taxes
Total income taxes

396

483

429

Profit attributable to owners of parent

938

1,084

1,009

Ratio to sales

8.7%

8.3%

6.8%

Comprehensive income

938

1,084

1,009

7,474

8,030

8,514

6,486

6,897

7,407

988

1,132

1,106

2,781

2,542

2,241

2,104

2,379

2,162

676

162

78

4,692

5,487

6,272

4,692

5,487

6,272

30

30

30

9,420,000

9,428,000

9,553,666

Earnings per share (¥)

113.76115.08106.74

Net assets per share (¥)

498.17582.09656.54

Dividend per share (¥)

21.00

30.00

37.50

Equity ratio

62.8%

68.3%

73.7%

Return on Earnings

25.4%

21.3%

17.2%

Cash flows from operating activities

1,165

1,125

988

Cash flows from investing activities

-122

-144

-83

Cash flows from financing activities

761

-885

-417

4,699

4,795

5,283

Total assets
Current assets
Non-current assets
Total liabilities
Current liabilities
Non-current liabilities
Total net assets
Shareholders’ equity
Share capital
No. of shares issued at period end, excluding treasury shares (shares)

Cash and cash equivalents at end of period

Note: After retroactively calculating the dividend taking into account the 1:2 share split conducted on April 1, 2021
Source: Prepared by FISCO from the Company’s financial results and results briefing materials

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

11 19

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

COPRO-HOLDINGS. Co., Ltd.

14-Jul.-2021

7059 Tokyo Stock Exchange First Section, Nagoya Stock Exchange First Section

https://copro-h.co.jp/en/ir/█ Outlook
For FY3/22, forecasting a double digit increase in both operating andordinary profit, and a return to a growth track
1. Outline of FY3/22 consolidated results forecasts
The FY3/22 full year consolidated results forecasts are for net sales to increase 10.2% YoY to ¥16,343mn, operating
profit to rise 12.3% to ¥1,614mn, ordinary profit to grow 12.1% to ¥1,614mn, and profit attributable to owners ofparent to increase 3.8% to ¥1,048mn. Profits declined in FY3/21, but the Company expects profits to return to a
growth track in FY3/22.
Outline of FY3/22 consolidated results forecasts(¥mn)
FY3/21

FY3/22

1H results

Full-year
results

1H forecast

YoY growth
rate

Full-year
forecast

YoY growth
rate

7,271

14,836

7,446

2.4%

16,343

10.2%

Gross profit

2,015

4,297

2,226

10.4%

5,016

16.7%

SG&A expenses

1,483

2,859

1,739

17.2%

3,402

19.0%

Operating profit

531

1,437

487

-8.4%

1,614

12.3%

Ordinary profit

534

1,439

486

-8.9%

1,614

12.1%

Profit attributable to owners of parent

404

1,009

315

-22.2%

1,048

3.8%

New engineer hires (people)

-

865

-

-

1,200

38.7%

Engineers (people)

-

2,020

-

-

2,440

20.8%

Net sales

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

The Company is expecting a double-digit increase in net sales due to the high level of demand and an increase in
the number of engineers, and also forecasts double-digit growth in both operating profit and ordinary profit due
to a higher gross margin resulting from the increase in sales as well as progress on charge-up negotiations. The
gross profit margin is expected to increase 1.7pp to 30.7%, while the SG&A expenses ratio is forecast to increase
1.5pp to 20.8%.
The Company expects to newly consolidate ATMOS CO., LTD. (which the Company acquired the shares of on
April 30, 2021) from FY3/22 1Q. However, the amount of goodwill amortization and other factors have not been
determined, so ATMOS has not been included in the consolidated results forecasts. Also, profits are expected to
decline in 1H due to M&A-related expenses associated with the acquisition of ATMOS. In terms of the consolidated
forecasts for 1H, the Company expects net sales to increase 2.4% YoY to ¥7,446mn, operating profit to decrease
8.4% to ¥487mn, ordinary profit to decline 8.9% to ¥486mn, and profit attributable to owners of the parent to
decline 22.2% to ¥315mn.

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12 19

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

COPRO-HOLDINGS. Co., Ltd.
7059 Tokyo Stock Exchange First Section, Nagoya Stock Exchange First Section

14-Jul.-2021
https://copro-h.co.jp/en/ir/

Outlook

2. Key Initiatives
In recruitment, the Company plans to increase recruitment expenses 70% YoY as it bolsters hiring efforts, mainly
targeting people with industry experience, and the Company is expecting to hire 1,200 engineers during FY3/22,
an increase of 335 engineers (+38.7%) compared to the previous year. In April 2021, the Company completely
renewed its recruitment website Gen-Kyari, and utilizing the new core system which began operating in April, theCompany plans to boost the accuracy of matching engineers with client companies, thereby increasing the numberof engineers hired and improve the retention rate. The Company expects to have 2,440 engineers at the end of
FY3/22, a 420 person YoY increase (+20.8%)
Concerning the gross profit margin, from February 2021 the Company started to bolster its charge-up negotiations,and it believes that this will lead to a gradual improvement in the gross profit margin. Also, the Company will utilize
the new core system, which began operation in April 2021, to boost the engineer retention rate through optimal
matching, and also improve productivity in branches (expected to achieve a roughly 40% reduction in the numberof administrative man-hours, including for making estimates, concluding contracts, attendance management, andinvoicing). With respect to the improvement in the retention rate, the Company got rid of the position of Trust
representative, which provided follow-up for engineers after dispatch, and changed to a system in which sales
representatives, who know the clients well, are responsible for handling both sales and follow-up. This is expected
to boost the retention rate.
New core system

Source: The Company’s financial results briefing materials

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13 19

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

COPRO-HOLDINGS. Co., Ltd.
7059 Tokyo Stock Exchange First Section, Nagoya Stock Exchange First Section

14-Jul.-2021
https://copro-h.co.jp/en/ir/█ Growth strategy
Aiming to utilize M&A to transform into a comprehensive engineer
dispatch company
1. The long-term targets are net sales of ¥100bn and operating profit of ¥10bn in FY3/30
In its long-term management vision, the Company has set management targets of ¥100bn in net sales and operating
profit of ¥10bn in FY3/30. Based on growth in the existing construction engineer dispatch field, it will develop its
business in the plant industry, expand globally, and advance its M&A strategy.
Image of long-term growth

Source: The Company’s financial results briefing materials

2. Expand business in the existing construction field targeting large, blue-chip companies
In the existing construction engineer dispatch field, with the aim of strengthening sales the Company is changing
from an individual sales style to an organizational sales style. Going forward, taking sales efficiency and otherfactors into consideration, the Company will shift its emphasis from acquiring new clients to increasing the numberof engineers it dispatches to existing clients, particularly targeting large, blue-chip client companies such as super
general contractors. By doing so, the Company aims to increase the volume of business with companies ranked
highly in terms of net sales.
3. Strengthen the development in the plant field
The Company is strengthening its dispatch of engineers to the plant industry, positioning this as the second earnings
pillar behind construction engineer dispatch. The plant industry is a field in which it can utilize its experience andexpertise in the construction industry, such as in plant construction, and in which it is comparatively easy tohorizontally deploy engineers (utilize construction experience for dispatches to plants). It is a promising market as
there is little competition and the orders unit price is high.

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14 19

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

COPRO-HOLDINGS. Co., Ltd.
7059 Tokyo Stock Exchange First Section, Nagoya Stock Exchange First Section

14-Jul.-2021
https://copro-h.co.jp/en/ir/

Growth strategy

4. Global development
In terms of initiatives targeting global development, in April 2021 the Company established COPRO GLOBALS PTE.
LTD., a local subsidiary in Singapore as the hub (intermediary holding company) for entering the ASEAN region.
Also, in April 2021, COPRO GLOBALS PTE. LTD. established subsidiary COPRO VIETNAM CO., LTD. as a businesscompany in Vietnam. Partnering with local educational institutions, this company will recruit high-quality humanresources who want to work in Japan.
Global business

Source: The Company’s financial results briefing materials

It is considering developing its businesses into other ASEAN countries in the future, including the Philippines,
Thailand, and Malaysia. It is promoting the acceptance into Japan of high-level, overseas human resources, andalso for the future, it is considering creating businesses, such as local and overseas U-turn training for humanresources who studied technologies in Japan, intended for local and overseas Japanese general contractors andplant companies that are entering-into the ASEAN region.
5. Aims to transform itself into a comprehensive engineer dispatch company
With respect to its M&A strategy, in April 2021 the Company acquired all the shares of ATMOS, a machine designand development engineer dispatch company, thereby making it a subsidiary. This business engages in the dispatchof development and design engineers mainly to major manufacturers in Japan. In addition to the synergy effects ofsharing management resources such as the Company’s recruitment website Gen-Kyari and the nationwide branch
network, by entering the machine design and development field, the career plan options for construction and plantengineers will expand, and engineers wishing to change jobs will likely be able to move to other jobs within theGroup. The Company’s strategy is to transform itself into a comprehensive engineer dispatch company by entering
the machine design and development field in addition to its existing business in the construction field.

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15 19

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

COPRO-HOLDINGS. Co., Ltd.
7059 Tokyo Stock Exchange First Section, Nagoya Stock Exchange First Section

14-Jul.-2021
https://copro-h.co.jp/en/ir/

Growth strategy

Acquisition of ATMOS shares

Source: The Company’s financial results briefing materials

6. Earnings will grow in the medium- to long-term
The construction investment amount in Japan recovered after the Great East Japan Earthquake of 2011, and while
the number of employees in the construction industry peaked in 1997 and then began falling, it has been trending
basically unchanged YoY since 2011. Also, a tendency has strengthened among major general contractors andothers to keep down recruitment to reduce fixed costs, while the ages of employees are becoming older. With thesefactors in the background, demand for dispatches of construction engineers, mainly young engineers, is growing
even more. The business environment in the construction industry is good, and it can be said that by having added
the machine design and development field, earnings are on the way up over the medium term as a comprehensive
engineer dispatch company.
Business environment supporting growth

Source: The Company’s financial results briefing materials

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

16 19

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

COPRO-HOLDINGS. Co., Ltd.
7059 Tokyo Stock Exchange First Section, Nagoya Stock Exchange First Section

14-Jul.-2021
https://copro-h.co.jp/en/ir/█ Shareholder return policy
The dividend is forecast to increase again in FY3/22
The Company’s basic shareholder return policy is to maintain stable dividends with a target consolidated dividend
payout ratio of 30% or more, while paying attention to the balance with investments that will contribute to futurebusiness expansion. On April 1, 2021 (date of effect), the Company carried out a 1:2 share split of its commonshares.
After retroactively calculating the dividend taking into account the 1:2 share split conducted on April 1, 2021, theFY3/21 annual dividend was ¥37.50, a ¥7.50 YoY increase (interim dividend of ¥10, fiscal year-end dividend of¥27.50 = ordinary dividend of ¥25.00 + dividend to commemorate change to First Section of TSE and NSE of ¥2.50).
The forecast for the FY3/22 dividend is a ¥2.50 YoY increase to ¥40.00 (interim dividend of ¥10.00, fiscal year-end
dividend of ¥30.00). The Company is proactive with shareholder returns, and we can expect the Company to further
enhance returns to shareholders alongside its earnings growth.

Trends in the dividend per share and the dividend payout ratio（¥）

Dividend per share（left）

Dividend payout ratio（right）
40.0
37.5

40.0

30.0

30.0
21.0

35.1%

40.0%
36.5%

30.0%

26.1%

20.0

20.0%
20.2%

10.0

18.5%

15.0

10.0%

0.0

0.0%
FY3/18

FY3/19FY3/20FY3/21

FY3/22 E

Note: Dividends per share have been retroactively adjusted to reflect the 1-to-2 share split which was conducted on April 1,
2021.
Source: Prepared by FISCO from the Company’s financial results

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

17 19

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

COPRO-HOLDINGS. Co., Ltd.
7059 Tokyo Stock Exchange First Section, Nagoya Stock Exchange First Section

14-Jul.-2021
https://copro-h.co.jp/en/ir/█ SDGs initiatives and statement of intent

to meet the Prime Market requirements
Notice of Statement to Meet the Prime
MarketIn terms of SDGs initiatives, the four human resources creation flow elements (recruitment, training and development,
matching, retention) are very closely related to SDGs targets (No. 4, 8, 9, 10, 12), and are priority issues that theGroup should work on. The Company has also set medium- to long-term targets in areas such as increasing thenumber of inexperienced employees who receive training, expanding the recruitment of inexperienced employees,
increasing the ratio of female employees, increasing the number of non-Japanese employees, increasing the retention rate, and reducing the amount of paper used. In March 2021, the Company was recognized by the Ministry of
Economy, Trade and Industry (METI) and the Nippon Kenko Kaigi as a “Certified Health & Productivity Management
Organization (large enterprise category).”
Initiatives to achieve SDGs

Source: The Company’s results briefing materials

Also, on May 6, 2021, the Company released a “Notice of Statement to Meet the Continued Listing Requirements
for the Prime Market.” In advance of the Tokyo Stock Exchange’s market reorganization scheduled for April 2022,
the Company will strengthen its SDGs initiatives and bolster its ESG-conscious management, as well as transform
itself into a comprehensive engineer dispatch company, as it strives to achieve sustainable growth and increase its
corporate value over the medium to long term through constructive dialogue with investors and aim to meet thecontinued listing requirements stipulated by the newly established Prime Market.
The Company is also formulating a medium-term management plan. The long-term growth image targeting FY3/30
has been presented, but the plan is expected to offer more detailed medium-term growth scenarios and targets.

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18 19

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

COPRO-HOLDINGS. Co., Ltd.
7059 Tokyo Stock Exchange First Section, Nagoya Stock Exchange First Section

14-Jul.-2021
https://copro-h.co.jp/en/ir/

SDGs initiatives and statement of intent to meet the Prime Market requirements Notice of Statement to Meet the Prime Market

Notice of statement on TSE market reorganization

Source: The Company’s financial results briefing materials

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

19 19

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

◾ For inquiry, please contact: ◾

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