COMPANY RESEARCH AND ANALYSIS REPORTUNIRITA Inc.
3800
TSE JASDAQ

3-Jul.-2018
FISCO Ltd. Analyst

Ikuo Shibata

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

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

UNIRITA Inc.
3800 TSE JASDAQ

3-Jul.-2018
http://www.unirita.co.jp/en/ir/index.html■ Index■Summary---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 01
1. Company profile.. ................................... ......................................................................................................

01

2. Summary of the FY3/18 results....................................................................................................................

01

3. New medium-term management plan..........................................................................................................

01

4. FY3/19 results forecasts..............................................................................................................................

02

5. Shareholder returns policy..................... ......................................................................................................

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

03

2. Corporate characteristics. . ..................... ......................................................................................................

07■Business trends----------------------------------------------------------------------------------------------------------------------------------------------------------- 08
1. Summary of the FY3/18 results....................................................................................................................

08

2. Activities......................................................................................................................................................

10■Medium-term management plan----------------------------------------------------------------------------------------------------------------- 11
1. Basic policy and numerical targets..............................................................................................................

11

2. Strategy and targets by business segment. .................................................................................................

12

3. Other basic strategies..................................................................................................................................

13■Business outlook-------------------------------------------------------------------------------------------------------------------------------------------------------- 14
1. FY3/19 outlook...................................... ......................................................................................................

14

2. Activities policy...................................... ......................................................................................................

15■Corporate history and business performance------------------------------------------------------------------------------- 16
1. Corporate history................................... ......................................................................................................

16

2. Past business performance.. .................. ......................................................................................................

17■Industry environment--------------------------------------------------------------------------------------------------------------------------------------------- 18■Shareholder returns------------------------------------------------------------------------------------------------------------------------------------------------- 19

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

UNIRITA Inc.
3800 TSE JASDAQ

3-Jul.-2018
http://www.unirita.co.jp/en/ir/index.html██SummaryAnnounced medium-term management plan, centered on Cloud
Solutions
Aiming to accelerate growth, including by advancing the industry
SaaS business1. Company profile
UNIRITA <3800> (hereafter, also “the Company”) develops, sells, and provides support for package software forthe operation of IT systems for a broad range of industries, primarily finance and manufacturing. It also provides
solutions utilizing data. In April 2015, it merger with its consolidated subsidiary Beacon Information Technology Inc.,(hereafter, “Beacon IT) and changed its name from BSP Incorporated., to UNIRITA Inc. By integrating its management
resources with those of Beacon IT, which was strong in the growth field of data utilization, the Company has been
advancing structural reforms to respond to environmental changes. The role of IT is changing from “defensive”(such as to improve operational efficiency and reduce costs) to “offensive” (a means to realize business competitive
advantages). In this situation, it is utilizing its strengths in the areas of “systems operations” and “data utilization”
and working to strengthen its provision of solutions that directly solve the operational problems that companies aretackling in their digital reforms.
2. Summary of the FY3/18 results
In the FY3/18 results, sales increasingly slightly but profits decreased, with net sales rising 1.7% year-on-year (YoY)
to ¥7,056mn, but operating income falling 7.5% to ¥1,347mn. These results were below the initial forecasts. Sales
grew significantly in the Cloud Business, while higher sales were also secured in the Product Business. But overall,sales increased only slightly due to the contraction of the Solutions Business and the Mainframe Business. The
reason why the results were below the initial forecasts was that the Company was unable to cover for the part thatwas below forecast in 1H in the Product Business, and alongside this, results slumped in the Solutions Businessdue to a lack of orders for technical support services on the introductions of products. In particular, although thesales force and sales engineers worked together to develop activities to propose solutions, they required time until
they achieved results, which became a factor behind results falling below the forecasts in the 1H. However, in the
2H, the results of the activities started to appear, and also the alliances with partner companies proved successful,and results trended upward. On the other hand, in profit and loss, although there were no special cost factors, there
was a decrease as a reaction to the large-scale orders in the previous fiscal period and an increase in upfront costs.
Due to the effects of these and other factors, the operating margin fell to 19.1% (21.0% in the previous fiscal year).
3. New medium-term management plan
The Company has announced its new medium-term management plan, with FY3/21 as its final fiscal year. Within the
rapid changes to the IT environment surrounding companies, it is aiming to expand its business as a “strategic IT
partner” that contributes to its customers’ business growth. The targets for the plans’ final fiscal year are net sales¥11bn (three-year average growth rate, 16.0%), operating income of ¥2bn (operating margin, 18.2%), and ROE of
10.7%. Except for the Mainframe Business, whose market is contracting, the plan is for all of the businesses to grow.
But in particular, the Company has positioned the Cloud Business, for which demand is growing, as a growth field,
and the main elements of its strategy are to provide its proprietary Cloud infrastructure, strengthen Cloud solutions,and conduct new initiatives for the industry SaaS business.

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

UNIRITA Inc.
3800 TSE JASDAQ

3-Jul.-2018
http://www.unirita.co.jp/en/ir/index.html

Summary

4. FY3/19 results forecasts
For the results forecasts for FY3/19, which is the first year of the new medium-term management plan, the Company
is forecasting higher sales and profits, with net sales to increase 31.8% YoY to ¥9,300mn and operating income torise 3.9% to ¥1,400mn. The growth in net sales will be from the new addition of the Systems Integration Business(an addition of ¥1,550mn) following the consolidation of Mugen Corp. However, even on excluding this amount, it
is estimated that it will realize an increase in sales of 9.8% YoY from factors including the growth of the mainstay
Cloud Business and Product Business. On the other hand, in profit and loss, while higher profits will be secured fromthe increase in sales, the forecast is that the operating margin will decline to 15.1% (previous fiscal year, 19.1%),
because in addition to the effects of the consolidation of Mugen (a factor lowering profitability), SG&A expenses will
increase to invest in human resources (including to raise wages) and in existing and new businesses.
5. Shareholder returns policy
The Company has changed its dividend policy, from the previous policy in which the consolidated dividend payout
ratio was the standard, to a policy in which dividend on equity (DOE) is the standard, with the aim of stably andsustainably increasing dividends. The FY3/19 dividend is forecast to increase ¥8 YoY for an annual dividend of¥54 (interim dividend ¥27, year-end dividend, ¥27). Also, according to the new medium-term management plan, it
intends to raise DOE to 4.5% in FY3/21 (FY3/18 result, 3.5%) and to increase the annual dividend per share to ¥71.
At FISCO, we think that it is fully possible that the Company will achieve the FY3/19 results forecasts due to various
factors. These include that it has enhanced its lineup (provision of solutions) in the Cloud Business, in which demandis expanding; that solutions-proposals activities, which were a factor causing results to lag behind forecast in theprevious fiscal period, are back on track; and that through the consolidation of Mugen, it has further strengthened
the Group’s ecosystem that is able to provide one-stop proposals from the upstream. Also, toward realizing thetargets in the medium-term management plan, it will be focusing on developing the industry SaaS business, which
has major potential. We judge that the key to success will be how it will acquire the first-mover advantage for thisbusiness, and we shall be following the speed of its development and the path to it becoming profitable.
Key Points
In FY3/18, was unable to cover for the part of results below forecast in the 1H, and although sales increasedslightly, profits declined (but results improved in the 2H)• Announced a new medium-term management plan centered on the Cloud Business to respond to customers’
digital-reform needs• Policy is to accelerate growth, including through measures for the SaaS business specializing in specificindustries• Changed to a dividend policy based on a DOE standard with the aim of stably and sustainably increasing
dividends•

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

UNIRITA Inc.
3800 TSE JASDAQ

3-Jul.-2018
http://www.unirita.co.jp/en/ir/index.html

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Source: Prepared by FISCO from the Company's financial results██Company profile
Is strong in the areas of “systems operations” and “data utilization”.
An independent developer of proprietary software
1. Business overview
The Company develops, sells, and provides support for package software for the operation of IT systems for a broad
range of industries, primarily finance and manufacturing. It also provides solutions utilizing data.
Products for mainframe computers, chiefly for financial institutions and large corporations, have been a stable, highly
profitable, source of income since the Company’s establishment. The Company achieved steady results growth in
the past by contributing to automation and enhanced efficiency in IT systems operation, including job management
and report management.
However, to prepare for growth in the medium- to long-term in light of rapid changes in its operating environment,such as the shift to open architecture systems, downsizing, the proliferation of cloud computing, and the use of
big data, the Company initiated reforms to its business structure. It plans to accelerate growth by developing its
business domain in areas that directly contribute to raising its customers’ corporate value (e.g. market expansion
and enhanced competitiveness). The Company is also progressing with creating a business structure that addresses
customers’ digital transformation needs, on both the sides of “offense” and “defense.”*	As part of its business structure reforms, in April 2015, BSP merged with its consolidated subsidiary, Beacon IT, andchanged its name to UNIRITA. The goals of this merger were to promote the establishment of an operating structure thatcombined BSP’s forte of systems operation and Beacon IT’s forte of data utilization to realize synergies that would help it
respond to changes in its operating environment.

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

UNIRITA Inc.
3800 TSE JASDAQ

3-Jul.-2018
http://www.unirita.co.jp/en/ir/index.html

Company profile

In April 2017, the Company changed its management structure in conjunction with the changes to its representative
directors as a generational transfer of leadership to accelerate the reforms to its business structure. In addition, in
February 2018, it announced its medium-term management plan, with FY3/21 as its final fiscal year. The plan sets
a direction that prioritizes the provision of more concrete solutions (to directly solve customers’ problems and tocreate new businesses), including by further evolving the measures up to the present time, providing Cloud services
with higher levels of business expertise, and promoting the collaboration model with partner companies.
The Company has five business segments*; the Cloud Business, the Product Business, the Solutions Business,
the Mainframe Business, and the System Integration Business. The percentage of sales provided by the Mainframe
Business, which has been main business since its establishment, has been declining due to the growth of the otherbusinesses. But on the other hand, the percentage provided by the Cloud Business, which is a growth field, hasgrown significantly, although it is still only small scale.
*	Newly added from FY3/19 following the consolidation of Mugen, which it acquired in February 2018.

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

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

UNIRITA Inc.
3800 TSE JASDAQ

3-Jul.-2018
http://www.unirita.co.jp/en/ir/index.html

Company profile

An overview of each business is provided below,(1) Cloud BusinessIn areas such as data utilization, systems operations, work management, and back-office operations, theCompany’s Group provides products and services as Cloud services (usage-fees type). The main products it isdeveloping include the ITSM (IT services management) tool LMIS on cloud*1 and Be. Cloud*2, and also SaaStype attendance management services*3 for the personnel outsourcing industry, and LIVE UNIVERSE* 4, which
is a human resources education tool for the restaurant and other industries. In addition, recently the Company
released the communication specialized-type PaaS Smart Communication Platform*5, and it is the first vendor
of this platform in Japan. It has also begun providing its security solutions on the Cloud-based platform of I-NET
CORP <9600>*6, which manages Cloud-based data centers.
*1	“LMIS on cloud” is a cloud-based service that provides a framework for the appropriate management of IT services asa whole, centered on a service desk function.
*2	“Be.Cloud” is a cloud-based service that provides an extensive menu, including from expanding and the managementof the cloudbased services used by customers.
*3	Provided by the subsidiary, Aspex Inc.
*4	An e-learning and knowledge system for companies launched in March 2016 that the Company jointly planned with
Golden Magic Co., Ltd.* (wholly-owned subsidiary of Diamond Dining Holdings <3073>), which operates around 100
izakaya (Japanese style) restaurants in the Kyushu Netchuya chain. It is an effective tool for training human resources(such as to pass down expertise and improve skills and motivation) by combing video and SNS (two-way communication)on the system infrastructure provided by the Company. The expandability of its services has been highly evaluated, andit was awarded the SaaS Partner of the Year 2017 in the Amazon Web Services APN Awards.
*5	When a company is advancing digital reforms, and when a cloud integrator is developing cloud-based services, it isa platform on which the user can select and quickly deploy the necessary functions from the systems infrastructure
provided by the Company and the micro services (video, SNS, etc.) In addition to becoming the system infrastructure
for the previously mentioned LIVE UNIVERSE, it has also been adopted for the M3 Care Portal, which is an educational
service for nursing-care providers constructed and provided by Takumi Business Place Corporation.
*6	The Company entered into capital and business alliance with I-NET CORP on May 2017. The Company and I-NET arecollaborating-on and have entered into a technical alliance to provide the middleware products for automating systems
operations and for data linkage previously developed by the Company within the corporate cloud-based services provided
by I-NET. The aim of the capital and business alliance is to utilize the strengths of both companies in order to quickly
and strategically respond to the rapidly expanding corporate cloud market, particularly to customers’ needs for digitalreforms in their businesses.

(2) Product Business
The Company sell products focused on the open packaged software it develops in-house. In the data utilizationarea, it provides software products and services to link, analyze, and utilize huge amounts of data that are
generated atypically and in real time. Also, in the systems operations area, it provides the products and services
necessary to operate core operations systems accurately and efficiently. The sources of revenue are the royalties
from product usage rights (license fees) and maintenance service fees, which are a fixed ratio of the productcost. Its main products include the job management tool “A-AUTO” (automation area)*1 and the data coordinationand integration tool “Waha! Transformer” (ETL area)*2. It is also developing products and services in other areas,
including BPM*3, IoT solutions for bus operators by a subsidiary*4, and products to respond to BCP*5.
*1	“A-AUTO” is a batch processing job management tool that manages the jobs on systems that are operating on different
platforms in an integrated manner and that realizes automatic implementation controls.
*2	“Waha! Transformer” is an ETL tool produced in Japan that uses non-programming to convert the data in various formats
used for operations into the necessary format.
*3	An abbreviation of Business Process Management. It involves ascertaining and analyzing the sequence of operations in
a company as a whole, and using an information system to continuously manage, improve, and optimize.
*4	Solutions for bus operators utilizing IoT technologies. In addition to bus location search systems (bus route searches andbus location tracking searches), it is also developing system to count the number of bus passengers in real time.
*5	A business continuity plan (BCP) is a plan to continue key businesses after emergencies, such as natural disasters andscandals, or to minimize losses from the discontinuation of these businesses. This business is conducted by consolidated
subsidiary Bitis, Inc.

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

UNIRITA Inc.
3800 TSE JASDAQ

3-Jul.-2018
http://www.unirita.co.jp/en/ir/index.html

Company profile(3) Solutions BusinessIn order to expand the Cloud Business and Product Business, the Company is taking responsibility for theprocesses before and after these two businesses, and it provides consulting for systems operations and data
management to support customers’ digital reforms. It provides customers with high-value-added solutions throughsupporting their introductions of the Company Group’s products and services and other technical support. In
other words, the markets are approached from the Solutions Business (consulting), which leads to the salesof products and services in both these businesses. Then after that, integrated services are provided from the
Solutions Business (such as technical support and outsourcing). Therefore, it is necessary to be aware of theirrelationship that means these two businesses mutually affect each other.
(4) Mainframe BusinessIn this business, the Company sells and provides supports for its own software products for mainframes for theoperations and management of core operations systems, mainly for financial institutions, life and non-life insurancecompanies, and major manufacturing industry companies. It has been its mainstay business since its foundationand is a stable source of revenue. Although it is positioned as a mature field, the Company is working to develop
new demand, including by starting to provide new functions* that user companies are highly interested in.
*	The Company has started to provide software with added systems operations simulation functions for mainframe usersthat utilize the expertise and skills it has accumulated up to the present time.

(5) The Systems Integration BusinessThis segment was newly added in FY3/19 following the consolidation of Mugen, which the Company acquiredin February 2018. It builds corporate information systems, such as for customer management, e-commerce,
content management, and IT infrastructure, mainly for customers in the information and communications industry,
distribution retailing industry, and manufacturing industry. In terms of its business characteristics, its profit margin
is low compared to the level of the Company as a whole, but it plays an important role in the Group’s ecosystemthat provides one-stop proposals from the upstream of customers’ system lifecycles.
As of March 31, 2018, more than 1,200 companies had installed the Company’s products. Most of these werelarge corporations. The range of customer industries was wide, but the manufacturing, retail and distribution, andfinance and insurance industries accounted for high percentages of total aggregate sales.
In terms of sales channels, previously the Company provides its products and services mainly through direct sales,
but recently it has been working to strengthen its ability to provide solutions through collaborations (promotion of acollaboration model) with its partner companies (sales agencies). The number of partner companies is increasing
and has reached 96 companies (up 8 companies YoY).
The Company had the following eight consolidated subsidiaries. BSP Solutions Incorporated runs an IT service
consulting business. BSP (Shanghai) Inc. is the base for sales in China. Aspex Inc. handles SaaS products forhuman resources outsourcing attendance management. Bitis, Inc. offers BCP development, administration andmaintenance support. Data Research Institute is a data management consulting business. UNITRAND, Inc. offers
solution services for IoT-based mobile equipment. UNIRITA PLUS Inc. offers sales channels to customers inwestern Japan and boost sales of its products while collaborating with partners. Mugen Corp. operates a system
integration business and develops and sells its own package software.

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

UNIRITA Inc.
3800 TSE JASDAQ

3-Jul.-2018
http://www.unirita.co.jp/en/ir/index.html

Company profile

Mainframe Business has been a source of stable profit since
foundation.
Supporting active investment in the new and growth businesses
2. Corporate characteristics
UNIRITA’s corporate philosophy is “Using IT flexibly, we aim to contribute to the development of society and thecreation of a better future.”
UNIRITA has the following three distinguishing traits.
(1) An independent developer of proprietary software
A strength of UNIRITA’s products in its flagship systems operations and mainframe businesses is that they enablesmooth system operation regardless of the scale of a computer, its manufacturer or other such factors. Competing
manufacturer-affiliated products do not allow the replacement of the hardware component with other maker’s
products, which is clearly a hindrance to a customer’s flexible system development. Also, as the Company’s value
proposition in its core businesses is the aggregate of how much the Company can contribute to the automation or
improved efficiency of an IT system’s operation, the track record and know-how the Company has accumulated byfocusing in this area are reflected in the precision and superior performance of its goods and services and in the
precision of its proposals. Amidst a readily observable trend (by other vendors) to rely on agents to install systems,
the fact that UNIRITA provides its products directly, chiefly to financial institutions and large corporations, and thatits products are often adopted as replacements during system updates is arguably proof of this. The Company
has been hired to operate the SysAdmin’s Group, the largest network of system managers in Japan, boasting
more than 15,000 members and 178 endorsing companies. This demonstrates that UNIRITA is the driving force
in this field. Also, the customer base of more than 1,200 companies has great potential in terms of providing themwith solutions in the future to address their various business problems.
(2) Stable income from the Mainframe Business income source being invested in new growth areas
As well as having astoundingly high segment profit margin levels in the order of 52.8% (FY3/18 actual results), theMainframe Business segment provides a stable income source that has supported the Company’s growth. We
believe this profitability is made possible not only by customer confidence in the Company’s products and services,
but also by high customer switching costs (costs arising from systems replacement). Sales in the Mainframe
Business have been shrinking because of external factors, such as the development of open-architecture systems,
but it is expected that it will for the time being play the role of a cash cow, enabling the income from the businessto be diverted into investments in new growth areas, such as cloud business and product business, which we
feel is a significant advantage for the Company.
(3) Achieving a structure that can support both offense and defense aspects of customers’ businesses
The business structure reforms will not only contribute to the automation of and enhanced efficiency of IT systems
operation, but will also allow the Company to expand into the business of assisting customers to reallocate
management resources, such as HR and budgeting, to create more corporate value. By realizing structures thatcan support both the offense and defense aspects of customer businesses, the Company will be able to offer
comprehensive proposals to improve IT investment performance at its customers and solidify its superiority inthe software industry.

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

UNIRITA Inc.
3800 TSE JASDAQ

3-Jul.-2018
http://www.unirita.co.jp/en/ir/index.html██Business trends
In FY3/18, sales increased slightly, but profits decreased (and theresults were below the initial forecasts).
Aimed for a recovery in the 2H, but was unable to recover the partthat was behind forecast in the 1H
1. Summary of the FY3/18 results
In the FY3/18 results, sales increased slightly, but profits decreased, with net sales rising 1.7% YoY to ¥7,056mn,
operating income falling 7.5% to ¥1,347mn, ordinary income declining 6.5% to ¥1,454mn, and profit attributableto owners of parent decreasing 8.6% to ¥965mn. Also, while the results were below the initial forecasts, they werebasically in-line with the downwardly revised forecasts (on November 7, 2017).
Net sales grew significantly in the Cloud Business, in which demand is increasing, while in the Product Businessalso, higher sales were secured from the recovery in the 2H. But the overall increase in sales was only slight due
to the contraction of the Solutions Business and the Mainframe Business. The reasons why the results were below
the initial forecasts were that the Company was unable to cover for the part that was below forecast in the ProductBusiness in the 1H and that, alongside this, sales slumped in the Solutions Business due to the lack of orders fortechnical support services for the introductions of products. In particular, in order to respond to environmental
changes*1, the sales force and sales engineers worked together to develop activities to propose solutions, but theyrequired time until they achieved specific results (such as improving the contract completion rate and shifting tolarge-scale proposals), which became a factor behind results falling below the forecasts in the 1H. However, in the
2H, the results of the activities started to appear, and also the alliances with partner companies were successful,and results trended upward*2.
*1	The role of IT has changed from “defense” to “offense” (such as to realize business competitive advantages), and alongside
this, the department with control over it has changed from the IT department up until recently to business departments,
while the commoditization of products (a situation in which differentiation is difficult) has also been advancing. In thissituation, it seems that more specific solutions sales are required, rather than the former approach of sales of stand-alone
products.
*2	In particular, on looking only at the results in FY3/18 Q4, net sales and operating income set new record highs (on aquarterly basis).

On the other hand, in profit and loss, although there were no special cost factors, there was a decrease as a reaction
to the large-scale orders in the previous fiscal period, and an increase in upfront costs. Due to the effects of theseand other factors, the operating margin fell to 19.1% (21.0% in the previous fiscal year).
Financially, total assets increased greatly, up 13.9% on the end of the previous fiscal year to ¥15,517mn, including
due to the increase in investment securities*1 and the recording of goodwill*2. On the other hand, equity grew only
6.8% to ¥11,432mn, despite the accumulation of internal reserves. As a result, the equity ratio declined to 73.7%(78.5% at the end of the previous fiscal year), but it can be said that as before, it is being maintained at a very highlevel. In addition, ROE, which is an indicator of capital efficiency, declined slightly to 8.7% (10.2% in the previous
fiscal year), mainly due to the effects of the lower profits.
*1	From the capital and business alliance with I-NET Corp (acquired 100,000 I-Net shares equivalent to a voting-rights ratioof 0.6% through trading during off-auction hours).
*2	Following the consolidation of Mugen (within the total acquisition price of ¥632mn, ¥535mn was recorded as goodwill).

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COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
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UNIRITA Inc.

3-Jul.-2018

3800 TSE JASDAQ

http://www.unirita.co.jp/en/ir/index.html

Business trends

Summary of the FY3/18 results(¥mn)
FY3/17
Results

FY3/18% ofsales

Results

6,941

FY3/18Change% ofsales

Initial forecast

Revised forecast

% of
sales

% of
sales

%
change
115

1.7%

7,500

Cloud Business

420

6.1%

513

7.3%

92

22.1%

600

-

520

-

Product Business

2,492

35.9%

2,562

36.3%

69

2.8%

2,832

-

2,630

-

Solutions Business

1,767

25.5%

1,748

24.8%

-18

-1.1%

2,100

-

1,620

-

Mainframe Business

2,260

32.6%

2,231

31.6%

-28

-1.3%

1,968

-

2,230

-

Cost of sales

1,830

26.4%

2,032

28.8%

202

11.0%

-

-

-

-

SG&A expenses

3,654

52.6%

3,676

52.1%

21

0.6%

-

-

-

-

Operating income

1,455

21.0%

1,347

19.1%

-108

-7.5%

1,620

21.6%

1,380

19.7%

Cloud Business

-168

-

-83

-

85

-

-

-

-

-

Product Business

383

15.4%

302

11.8%

-81

-21.1%----

Solutions Business

233

13.2%

219

12.6%

-13

-5.8%

-

-

-

-

Mainframe Business

1,205

53.3%

1,178

52.8%

-27

-2.2%

-

-

-

-

Ordinary income

1,555

22.4%

1,454

20.6%

-101

-6.5%

1,700

22.7%

1,460

20.9%

Profit attributable to owners of parent

1,056

15.2%

965

13.7%

-91

-8.6%

1,170

15.6%

1,000

14.3%

Net sales

7,056

7,000

ChangeFY3/17
Results

FY3/18Results

Total assets

13,624

15,517

1,893

13.9%

Shareholders’ equity

10,70011,432732

6.8%

Shareholders’ equity ratio

78.5%

73.7%

-4.8pt-%changeSource: Prepared by FISCO from the Company’s financial results and results briefing materials

Results by business are as set out below.
(1) Cloud BusinessNet sales increased 22.1% YoY to ¥513mn and the operating loss was ¥83mn (compared to a loss of ¥168mn inthe previous fiscal year), so the extent of the loss was reduced by the higher sales and profits. In addition to thegrowth in sales of Be.Cloud, the main product of the ITSM product LMIS on cloud performed strongly throughcapturing demand by responding to the digital-business needs of customer companies (business departments
and IT departments) through collaborating with systems operations consulting. Sales of SaaS-type attendance
management services also grew from capturing demand from the personnel outsourcing industry. In terms of
profit and loss, while as before an operating loss was recorded, the extent of the loss was greatly reduced dueto the increase in sales.
(2) Product BusinessNet sales increased 2.8% YoY to ¥2,562mn, but operating income decreased 21.1% to ¥302mn, for higher sales
but lower profits. While the results were below forecast in the 1H, toward the 2H, the Company worked to increase
the scale of proposals through providing business solutions centered on existing products (including sales ofreports and BI products) and also achieved successes with the collaboration model with partner companies. In
addition, sales were strong of BPM products and a subsidiary’s BCP products, and each contributed to the higher
sales. On the other hand, the reasons for the fall in profits included a decline in sales of ETL products as a reaction
to the large-scale projects in the previous fiscal year, the delay in creating solutions in automation products, andalso an increase in purchase sales of IoT devices following the expansion of sales in the IoT business for mobile
devices.

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

UNIRITA Inc.
3800 TSE JASDAQ

3-Jul.-2018
http://www.unirita.co.jp/en/ir/index.html

Business trends(3) Solutions BusinessNet sales decreased 1.1% YoY to ¥1,748mn and operating income declined 5.8% to ¥219mn, for lower sales andprofits. In response to the strong need for investment in digital areas, systems operations consulting for businessdepartments and IT departments performed strongly. Also, in outsourcing and technical support services, sales
grew of products including Be.Cloud, BI, and ITSM. However, the reason for the decline in profits was a reaction
to the large-scale projects in the previous fiscal year for BPM and data management consulting.
(4) Mainframe BusinessNet sales decreased 1.3% YoY to ¥2,231mn and operating income declined 2.2% to ¥1,178mn, for lower sales
and profits. In a situation in which the market is contracting, the Company succeeding in collaborative proposals
activities to provide solutions based on its expertise, including providing proposals tailored to the upgrades tohost computers and for risk management, such as for the integration and relocation of data centers. As a result,the extent of the contraction in results was kept to within the expected range.

Achieved a certain level of results for establishing an organizationalsales structure and strengthening the ability to provide solutions
2. Activities
As its activities policy for this fiscal period, the Company is implementing four policies, of (1) integrating andenhancing the sales force to expand the customer base, (2) strengthening the ability to provide solutions throughalliances, (3) providing and developing products and services that create new value, and (4) leveraging Groupsynergies. The achievements for these four policies are described below.
(1) Integrating and enhancing the sales force to expand the customer baseIn addition to the reorganization of the front organization that integrated the existing sales functions and thetechnical department’s customer service functions, the Company has progressed the building of a structure fororganizational sales activities (solutions proposals activities in which the sales force and sales engineers work
together) to respond to the diversifying needs of existing customers and to strengthen its ability to solve problems.
It took some time for specific results to appear, so this was a factor behind results falling below their forecasts in
the 1H. But in the 2H, specific results did start to appear, which led to an improvement in the contract-completion
rate and a shift to large-scale proposals. The Company also established UNIRITA Plus (formerly the West Japan
Business Department) in order to strengthen the sales structure in the West Japan region.
(2) Strengthening the ability to provide solutions through alliances
To strengthen its ability to provide problem solving-type solutions, the Company has been actively working tobuild a collaboration model with partner companies that are strong in specific business areas. As a result, thenumber of partner companies has grown to 96 companies (up eight companies on the end of the previous fiscal
year), while the number of applications of the collaboration model increased by 37. In particular, in May 2017,
on implementing a capital and business alliance with I-NET Corp, which operates a Cloud-based data center
business, the Company began offering its security solutions on I-NET’s Cloud services platform. It has also begun
partnership alliances with T.D.I. Co., Ltd.*1 and Toukei Computer Co., Ltd <4746>*2.
*1	The business alliance between the Company and T.D.I., which has expertise in and an abundant track record for systems
migration, will enable them to provide high-quality migration solutions in a short period of time.
*2	The objective is to link Toukei Computer’s operations package software for restaurant-related companies to the Company’s
software.

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

UNIRITA Inc.
3800 TSE JASDAQ

3-Jul.-2018
http://www.unirita.co.jp/en/ir/index.html

Business trends(3) Developing and providing products and services that create new value
Based on its track record of introducing products and services for more than 1,200 companies, the Company
has started to provide its lineup (provision of 17 solutions) not only from the viewpoint of the functions of existingproducts, but also from the viewpoint of solving business problems, which is leading to orders from new customer
groups. Also, in order to enhance its SaaS services, it has added AI functions on the industry’s first communication-specific application development platform. At the subsidiary UNITRAND, which provides solutions for bus
operators that utilize IoT technologies, in addition to expanding sales of existing services, which include a bus
location information real time search function and destination search function, it has conducted a demonstration
test for a bus passenger attributes analysis that uses a passenger embarking-disembarking sensor, and it also
invested in an AI technology development company. As these are new services never seen before, first it is implementing a strategy of making a start with a sense of speed (to acquire the first-mover advantage). A medium-to
long-term perspective is required to generate profits from data utilization, but in only the second year since its
establishment, results are steadily expanding, including introducing products to 40 bus companies nationwide.
(4) Leveraging Group synergies
In order to solve its customers’ business problems, the Company is participating from IT upstream processes
through to consulting services, and it is conducting proposal activities for collaboration solutions through “consulting by a subsidiary x UNIRITA products,” which is leading to orders for large-scale projects. In particular, it
is succeeding with consulting activities that combines its expertise in systems operations for business and IT
departments with the Company’s Cloud-based products. Also, to establish the Group’s ecosystem, it conducted
an M&A to acquire and make a consolidated subsidiary of Mugen*, which covers system integration (the designand development phases).
*	In addition to the Systems Integration Business, it also provides package software for back offices that contribute toreforming ways of working and improving productivity. It is aiming to develop new services solutions that meet the reform
needs of business support departments by utilizing Mugen’s systems development capabilities and responding more widelyand faster to customers’ introduction needs, and also by combining the technological capabilities and business expertiseof both companies.

██Medium-term management plan
Accelerate growth centered on Cloud Solutions.
In particular, intends to expand the SaaS business specializing inspecific industries.
1. Basic policy and numerical targets
The Company has announced its new medium-term management plan, with FY3/21 as its final fiscal year. Within
the rapid changes to the IT environment surrounding companies, it is aiming to expand its business as a “strategic
IT partner” that contributes to its customers’ business growth. The plan has the following three basic policies.
(1) R efine the expertise in “systems operations” and ”data utilization” and further strengthen the businessfoundation(2) Expand the SaaS business in the business IT field that will revitalize the market(3) Actively invest in the latest digital technologies and construct a business foundation

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

UNIRITA Inc.
3800 TSE JASDAQ

3-Jul.-2018
http://www.unirita.co.jp/en/ir/index.html

Medium-term management planAlso, the targets for FY3/21 are net sales of ¥11bn (three-year average growth rate, up 16.0%), operating incomeof ¥2bn (operating margin, 18.2%), and ROE of 10.7%. Except for the Mainframe Business, whose market iscontracting, the plan is for all the businesses (the Systems Integration Business has been newly added) to grow.
But in particular, it has positioned the Cloud Business, for which demand is growing, as a growth field, and themain elements of its strategy are to provide its proprietary Cloud infrastructure, to strengthen Cloud solutions,and to conduct new initiatives for the industry SaaS business. Also, even though the operating margin will decline
temporarily in FY3/19, including due to the effects of launching the Systems Integration Business and upfront
investment, the policy is for the operating margin to also steadily improve, such as from the effects of the higher
sales and the improvement in added value.
Medium-term management plan(¥mn)
FY3/18 results

FY3/19 results

FY3/20 target

FY3/21 target

Average
growth rate

7,056

9,300

10,00011,000

16.0%

Cloud Business

513

770

-

1,300

36.3%

Product Business

2,562

3,030

-

3,800

14.0%

Solutions Business

1,748

1,850

-

2,500

12.7%

Mainframe Business

2,231

2,100

-

2,000

-3.6%

-

1,550

-

1,500

-

Operating income

1,347

1,400

1,650

2,000

14.1%

Profit margin

19.1%

15.1%

16.5%

18.2%

965

1,000

1,180

1,420

Profit margin

13.7%

10.8%

11.8%

12.9%

ROE

8.7%

8.5%

9.5%

10.7%

Net sales

Systems Integration BusinessProfit attributable to owners of parent

13.7%

Source: Prepared by FISCO from the Company's financial results and new medium-term management plan materials

2. Strategy and targets by business segment(1) Cloud Business
By combing the Company’s “existing products” and “business templates” to provide Cloud services (SaaS services), it is expanding its provision of services to directly solve customers’ operational problems. Also, with the aimof providing its expertise in its existing businesses to industry specific platforms* 1, it is developing and advancing
measures for an industry SaaS business that focuses on three fields; HRM (human resources)-related* 2, mobile
devices IoT-related*3, and agriculture-related*4. The target for the plan’s final fiscal year is net sales of ¥1.3bn(annual average growth rate, up 36.3%).
*1	Aiming for a platform that solves the problems of an industry by the Company itself acquiring the business expertise thatis specific to that industry, and also by aggregating and analyzing data and increasing the accuracy of data analysis.
*2	The development of solutions relating to human assets (such as supporting reforms to ways of working), centered on
products and services, including SaaS-type attendance management services for the personnel outsourcing industry
and expenses-calculation package software for back offices.
*3	Centered on IoT solutions for bus operators, strengthening IoT and AI technologies and developing transportation-related
solutions (such as contributing to regional revitalization), including in relation to the Smart City concept.
*4	By utilizing its strengths in the data utilization area and collaborating with businesses in various fields, improving efficiency
through introducing IT into agriculture and developing a platform and business model that will led to the generation of
profits (including contributing to “revitalizing primary industries”).

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

UNIRITA Inc.
3800 TSE JASDAQ

3-Jul.-2018
http://www.unirita.co.jp/en/ir/index.html

Medium-term management plan(2) Product BusinessTo expand core operations solutions, the Company will advance the installation of AI into groups of existingproducts and services. Also, in order to build a Win-Win relationship with partner companies (sales agencies),
it will work to develop products and services that will expand the businesses of its partner companies, while italso plans to increase investment to strengthen the functions of Group companies’ product and services (mobile
devices IoT business and expenses-calculation package software for administrative departments). The target forthe plan’s final fiscal year is net sales of ¥3.8bn (average growth rate, up 14.0%).
(3) Solutions BusinessIn addition to expanding the consulting business specializing in digital reforms and developing one-stop services(planning, design, construction, operations, and improvements), the Company is working to create stock businesses, including by developing RPA-related services for core operations-related IT and expanding the managed
services (management and administration outsourcing services)-type BPO business. The target for the plan’s final
fiscal year is net sales of ¥2.5bn (annual average growth rate, up 12.7%).
(4) Mainframe BusinessAs a comprehensive mainframe vendor, the Company will establish the survivor position in the market throughutilizing the collaboration model with other mainframe vendors and training and developing engineers. The target
for the plan’s final fiscal year is net sales of ¥2bn (annual average growth rate, down 3.6%).
(5) Systems Integration BusinessIn addition to training and developing digital engineers, such as for AI, IOT, Big Data and block chains thatare necessary for a digital business, the Company is aiming to utilize its application development engineers to
speed-up the development of the Group’s products and services. The target for the plan’s final fiscal year is net
sales of ¥1.5bn.
3. Other basic strategies(1) Strengthening competitiveness through the UNIRITA Group ecosystem
Through collaborations between the Company itself, the Group companies, the companies with which it has
business and capital alliances, and the partner companies, the aim is to strengthen competitiveness by building
a structure that can provide one-stop proposals from the upstream of customers’ system lifecycle (consultation~ design and development ~ construction ~ maintenance and operations ~ BPO), and thereby approach a wider
range of customers.

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

UNIRITA Inc.
3800 TSE JASDAQ

3-Jul.-2018
http://www.unirita.co.jp/en/ir/index.html

Medium-term management plan

Provision of solutions through the Group’s ecosystem

Capital and businessalliance (I-NET Corp.)(Consulting)(SI)(middleware)(DC, IaaS)(outsourcing)96 partner companies(37 applications of the collaboration model)
Consulting

Design anddevelopment

Construction

Maintenance andoperations

BPO

Promoting the partner business model
Source: From the Company's results briefing materials(2) Active investment to lead digital reforms
The Company is aiming to improve its business-creation capabilities through research and development into
new technological areas (in addition to IoT, AI, data analytics, areas such as Robot, RPA, and block chains) andinvesting in the industry SaaS business. It plans to invest a total of ¥3bn over three years, which will be divided into
the investment categories of 1) investment to refine expertise in the existing businesses of “systems operations”
and “data utilization,” which will form the base; 2) additional investment in business areas for which measures havebeen started, and investment to expand scale; and 3) investment to newly develop the industry SaaS business,
which will heighten business expertise. The planned investment amounts are ¥800mn in 1), ¥1.2bn in 2), and ¥1bnin 3). The Company will also work to introduce a new system to invest in human resources (including increasing
basic salaries) and to evaluate specialist human resources.
*	Creation of the Open Incubation Center, a culture-creation project, enhancements to the personnel system, etc.

██Business outlook
The outlook is for net sales to increase significantly, including fromthe effects of the consolidation of Mugen and the growth of the
Cloud business
1. FY3/19 outlook
For the results forecasts for FY3/19, which is the first year of the new medium-term management plan, the Company
is forecasting higher sales and profits, with net sales to increase 31.8% YoY to ¥9,300mn, operating income torise 3.9% to ¥1,400mn, ordinary income increased 1.8% to ¥1,480mn, and profit attributable to owners of parent
increasing 3.6% to ¥1,000mn.

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14 19

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

UNIRITA Inc.

3-Jul.-2018

3800 TSE JASDAQ

http://www.unirita.co.jp/en/ir/index.html

Business outlook

Net sales will increase significantly from the addition of the Systems Integration Business (a new business segment
adding ¥1,550mn) following the consolidation of Mugen. However, even on excluding this amount, it is estimatedthat it will realize an increase in sales of 9.8% YoY from factors including the growth of the mainstay Cloud Businessand Product Business.
On the other hand, in profit and loss, while higher profits will be secured from the increase in sales, the forecast
is that the operating margin will decline to 15.1% (previous fiscal year, 19.1%). This is because in addition to theeffects of the consolidation of Mugen (a factor lowering profitability), SG&A expenses will increase to invest in humanresources (including to raise wages) and in existing and new businesses.
*	In terms of its business characteristics, the profit margin of the Systems Integration Business is low compared to the levelof the Company’s mainstay businesses. Mugen’s most recent operating margin was 3.3% (FY3/17 result).

Within the total investment amount of ¥3bn in the medium-term management plan, the Company intends to invest¥1bn in this fiscal period. It plans to invest in strengthening its existing businesses (make existing products Cloud
compliant) and the businesses it has already launched (HRM-related and mobile devices IoT-related), and in developing a new business (agriculture-related).
Forecast for FY3/19(¥mn)
FY3/18Results

FY3/19% of sales

7,056

Net sales

Initial forecast

Change% of sales

9,300% change
2,243

31.8%

Cloud Business

513

7.3%

770

8.3%

256

49.9%

Product Business

2,562

36.3%

3,030

32.6%

467

18.3%

Solutions Business

1,748

24.8%

1,850

19.9%

101

5.8%

Mainframe Business

2,231

31.6%

2,100

22.6%

-131

-5.9%

-

-

1,550

16.7%

1,550

Cost of sales

2,032

28.8%

-

-

-

SG&A expenses

3,676

52.1%

-

-

-

-

Operating income

1,347

19.1%

1,400

15.1%

52

3.9%

Ordinary income

1,454

20.6%

1,480

15.9%

25

1.8%

965

13.7%

1,000

10.8%

34

3.6%

Systems Integration BusinessProfit attributable to owners of parent-

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

2. Activities policy
In this fiscal period, toward realizing the targets in the medium-term management plan, its policy is to work to refine“operations expertise” and to acquire “business expertise”. The key policies it will implement for this are (1) CloudFirst, (2) Providing Group-ecosystem solutions and developing new businesses, and (3) Building an organization totake on the challenge of reforming itself.
(1) Cloud FirstWith an eye to the progress of Cloud technologies and customer needs, the Company intends to create anorganization to shift existing products to the Cloud and to promote Cloud First, and also to expand Cloud services.
(2) Providing Group-ecosystem solutions and developing new businesses
The Company will develop micro-services on its own communications platform and launch an industry SaaS
business. This will include by thoroughly ascertaining problem solving through customers’ IT, strengthening themanagement of account plans in order to organizationally respond to sales, actively promoting the collaboration
model with partner companies, and establishing a new organization, the Open Incubation Center.
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COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

UNIRITA Inc.
3800 TSE JASDAQ

3-Jul.-2018
http://www.unirita.co.jp/en/ir/index.html

Business outlook(3) Building an organization to take on the challenge of reforming itself
In addition to in the technological areas it has been involved in up to the present time, which include IoT, AI, anddata analytics, the Company will actively invest in the research and development of new technologies, such as
Robot, RPA, and block chains. It also plans to launch businesses through investing in companies and businessthat specialize in the areas of expertise that the Company is targeting. In terms of corporate culture, it is working
on various initiatives, including to develop a personnel system that broadens the career options for employees
and to increase their basic wages to raise their motivation, to create a structure that can take on the challenge of
projects to launch new businesses for business structural reforms, and to promote bottom-up type projects toreform the organizational culture, which will be implemented horizontally across the Group.
At FISCO, we think that it is fully possible that the Company will achieve the FY3/19 results forecasts due tovarious factors. These include that it has enhanced its lineup (provision of solutions) in the Cloud Business, inwhich demand is expanding; that solutions proposals activities, which were a factor causing the results to lag
behind forecasts in the previous fiscal period, are back on track; and that through the consolidation of Mugen, it
has further strengthened the Group’s ecosystem that is able to provide one-stop proposals from the upstream.
Also, toward realizing the targets in the medium-term management plan, it will be focusing on developing theindustry SaaS business, which has major potential. We judge that the key to success will be how it will acquire
the first-mover advantage in this business, and we shall be following the speed of its development and the path
to it becoming profitable.

██Corporate history and business performance
Management integration with Beacon IT in April 2015.
Made a new start as UNIRITA
1. Corporate history
The Company was established as Three B, Inc. in 1982 in Tokyo’s Chuo Ward as a subsidiary of Business Consultant,Inc., a provider of programs for HR and organizational development. Business Consultant was the origin for Software
AG of Far East, which changed its name to Beacon IT in August 1996. Software AG of Far East had been selling
A-Auto software for automating the scheduling of complicated computer systems jobs and enhancing the efficiencyof IT systems administration in Japan, with Three B, Inc. being set up to sell this software in the U.S.
Subsequently, in 1987, Three B, Inc. changed its name to BSP. The turning point for BSP was when it took overthe systems management operations of Software AG of Far East in 1993 and commenced full-scale operations asa specialist in systems administration package software. After that it steadily strengthened its operational platform,
while benefiting from increased investment in IT systems in Japan, and built a track record chiefly in software forcore mainframe systems, mainly for financial institutions and large corporations.
In 2001, the Company established BSP Solutions Inc. and commenced full-scale consulting solutions operations.
In 2006, it listed its shares on the JASDAQ Securities Exchange, currently TSE JASDAQ.
In 2008, the Company expanded into China by establishing BSP Shanghai. In 2013, based on the “operationless”
concept, it commenced the Be.Cloud cloud-based service and administrative BPO Operations Service.

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

UNIRITA Inc.

3-Jul.-2018

3800 TSE JASDAQ

http://www.unirita.co.jp/en/ir/index.html

Corporate history and business performance

By consolidating Beacon IT in January 2014, BSP, as well as incorporating growth areas such as data utilization,
began reforming its business structure.
With the merger of Beacon IT in April 2015, the Company changed its name to UNIRITA Inc. The new company
name embodies the concept of aspiring to contribute to the development of customers and society with “unique
ideas” to create value and an “altruistic” spirit (“rita” being the Japanese word for altruism).
2. Past business performance
Looking at the Company’s results trends, while net sales declined YoY from FY3/09 to FY3/10 due to the impact of
the economic recession resulting from factors such as the collapse of Lehman Brothers, from FY3/12 onward, amidst
a shift to open architecture systems, there has been continued underlying growth in sales, led by sales growth in
the systems operations business, which is now part of the Product Business. Also, as a result of the consolidationof Beacon IT in FY3/15, the Company’s operational scope expanded significantly.
From a profitability perspective, despite there still being a high degree of reliance on the Mainframe Business forincome, the Company’s operating income margin trended upward with improving profitability in the Product Businessand reached 28.1% in FY3/14. However, this margin has declined since FY3/15 due to upfront expenditure in linewith its structural business reforms and other factors. Notwithstanding, the Company has maintained it at levels
around 20%.

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㻢㻘㻜㻜㻜

㻝㻤㻚㻜㻑

㻠㻘㻜㻜㻜

㻞㻘㻜㻜㻜

㻣㻘㻝㻞㻡

㻟㻘㻤㻠㻜

㻟㻘㻥㻟㻝

㻠㻘㻞㻜㻟

㻝㻞㻛㻟期

㻲㼅㻟㻛㻝㻟

㻲㼅㻟㻛㻝㻠

㻣㻘㻝㻥㻤

㻢㻘㻥㻠㻝

㻣㻘㻜㻡㻢

㻝㻞㻚㻜㻑

㻢㻚㻜㻑

㻜

㻜㻚㻜㻑
㻲㼅㻟㻛㻝㻡

㻲㼅㻟㻛㻝㻢

㻲㼅㻟㻛㻝㻣

㻲㼅㻟㻛㻝㻤

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

From a financial perspective, the Company arguably has an extremely conservative financial strategy. While theCompany’s shareholders’ equity ratio, which represents the stability of the fiscal platform, suffered a one-off decline
in FY3/14 as a result of the consolidation of Beacon IT, in FY3/16, in line with its merger with Beacon IT (and parent
equity adjustment), the ratio rose to 80.1%. Further, the current ratio also, which represents its ability to meetshort-term payments, reflecting an ample balance of cash and deposits, is trending at high levels, being 326.2% at
March 31, 2018. However, we may view the strength of its financial platform as underpinning the Company’s growth,
at times when it is necessary to invest in future growth fields. ROE, a measure of capital efficiency, was progressing
at double-digit levels but now falls short of 10% due to the influence of a drop in earnings in close proximity.

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

17 19

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

UNIRITA Inc.

3-Jul.-2018

3800 TSE JASDAQ

http://www.unirita.co.jp/en/ir/index.html

Corporate history and business performance㻱㼝㼡㼕㼠㼥㻌㼞㼍㼠㼕㼛㻌㼍㼚㼐㻌㻾㻻㻱㻌㼠㼞㼑㼚㼐㼟㻱㼝㼡㼕㼠㼥㻌㼞㼍㼠㼕㼛㻌㻔㼘㼑㼒㼠㻕㻝㻜㻜㻚㻜㻑
㻥㻜㻚㻜㻑

㻤㻢㻚㻟㻑

㻤㻢㻚㻠㻑

㻤㻡㻚㻜㻑

㻾㻻㻱㻌㻔㼞㼕㼓㼔㼠㻕
㻡㻜㻚㻜㻑

㻤㻣㻚㻞㻑
㻤㻜㻚㻝㻑

㻣㻤㻚㻡㻑

㻤㻜㻚㻜㻑
㻢㻠㻚㻡㻑

㻣㻜㻚㻜㻑

㻠㻡㻚㻜㻑

㻣㻟㻚㻣㻑

㻢㻡㻚㻤㻑

㻟㻡㻚㻜㻑

㻢㻜㻚㻜㻑

㻟㻜㻚㻜㻑

㻡㻜㻚㻜㻑

㻞㻡㻚㻜㻑

㻠㻜㻚㻜㻑
㻟㻜㻚㻜㻑

㻞㻜㻚㻜㻑
㻝㻜㻚㻜㻑

㻠㻜㻚㻜㻑

㻝㻜㻚㻡㻑
㻢㻚㻢㻑

㻝㻝㻚㻝㻑

㻣㻚㻡㻑

㻝㻟㻚㻢㻑

㻝㻢㻚㻝㻑

㻞㻜㻚㻜㻑
㻝㻜㻚㻞㻑

㻤㻚㻣㻑

㻝㻡㻚㻜㻑

㻝㻜㻚㻜㻑

㻟㻚㻟㻑

㻡㻚㻜㻑

㻜㻚㻜㻑

㻜㻚㻜㻑
㻲㼅㻟㻛㻝㻜 㻲㼅㻟㻛㻝㻝 㻲㼅㻟㻛㻝㻞 㻲㼅㻟㻛㻝㻟 㻲㼅㻟㻛㻝㻠 㻲㼅㻟㻛㻝㻡 㻲㼅㻟㻛㻝㻢 㻲㼅㻟㻛㻝㻣 㻲㼅㻟㻛㻝㻤

Source: Prepared by FISCO from the Company's financial results██Industry environment
High growth in fields relating to big data and workstyle reforms
According to a survey by International Data Corporation Japan, in 2016, the software market in Japan was worth
approximately ¥2.6957 tn (up 2.2% YoY). The market’s growth is being driven by the fact that measures for big data
have become fully fledged and the high growth of the data management software and analytics software markets.
Also, in the applications market, the field relating to workstyle reforms in companies is growing. Elsewhere, thesystems management software market, which is the Company’s core area, performed strongly and was worth
around ¥327.9bn (up 4.6%). It seems that an increasing number of companies are introducing software to monitor
the operations of new systems, such as to monitor IT resources and performance and for log analysis, in orderto respond to the increasing complexity of IT systems resulting from virtualization and the transition to the cloudcomputing.
The main developers of software in Japan are vendors affiliated with large Japanese computer makers, such as
Hitachi, Ltd. <6501>, FUJITSU LIMITED <6702>, and NEC Corporation <6701>, and vendors affiliated with foreign
computer makers, such as IBM Corporation and Hewlett Packard Company. However, UNIRITA holds a large shareof the Japanese market for software for mainframe computers and remains positioned to receive survivor benefits.
Furthermore, there is no other listed software vendor specializing in IT systems operation and data utilization in
Japan. That is, there is no other listed company producing its own package software.
There is an increasing trend for users to invest in IT areas that contribute directly to their business expansion. Thus,
they are acquiring digital technologies, such as big data utilization, artificial intelligence (AI), and IoT. They are alsobuilding business models based on the perspectives of their customers in order to create new corporate value.

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

18 19

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

UNIRITA Inc.

3-Jul.-2018

3800 TSE JASDAQ

http://www.unirita.co.jp/en/ir/index.html██Shareholder returns
The forecast for FY3/19 is for an annual dividend of ¥54, up ¥8 YoY
Changed to a dividend policy with DOE as the standard
The Company decided on an annual dividend for FY3/18 of ¥46 (interim dividend ¥23, year-end dividend ¥23), whichis the same as in the previous fiscal year (dividend payout ratio 40.0%, DOE 3.5%). Also, for FY3/19 it forecastingan annual dividend of ¥54 (interim dividend ¥27, year-end dividend ¥27), which is up ¥8 YoY (forecast dividend
payout ratio, 45.4%).
From FY3/19, the Company has changed its dividend policy, and instead of using the consolidated dividend payout
ratio as the standard as it did previously, it is using dividend on equity (DOE) as the standard. The aim of this is tostably and sustainably pay dividends without being affected by fluctuations in profit and loss during a fiscal period,
such as due to upfront investment. Also, according to the new medium-term management plan, in FY3/21 it plays
to raise the DOE to 4.5% (FY3/18 result, 3.5%) and to increase the annual dividend per share to ¥71.
Given the Company’s profitability and growth potential, at FISCO, we think it is highly possible that the dividend
will steadily and continuously increase in the future. Further, the Company has deployed a shareholder incentive
scheme to increase the number of individual shareholders and enhance liquidity. Under this scheme, all shareholders
as of March 31 each year will be presented with JCB gift cards corresponding to the number of shares they hold.

㻰㼕㼢㼕㼐㼑㼚㼐㻌㼜㼑㼞㻌㼟㼔㼍㼞㼑㻔¥㻕㻯㼛㼙㼙㼑㼙㼛㼞㼍㼠㼕㼢㼑㻌㻝㻜㻙㼥㼑㼍㼞㻌㼘㼕㼟㼠㼕㼚㼓㻌㼐㼕㼢㼕㼐㼑㼚㼐㻌㻔㻣㻚㻜㻜㻕㻯㼛㼙㼙㼑㼙㼛㼞㼍㼠㼕㼢㼑㻌㼙㼑㼞㼓㼑㼞㻌㼐㼕㼢㼕㼐㼑㼚㼐㻌㻔㻡㻚㻜㻜㻕

㻡㻡㻚㻜㻜
㻡㻜㻚㻜㻜
㻠㻡㻚㻜㻜
㻠㻜㻚㻜㻜

㻟㻡㻚㻜㻜
㻟㻜㻚㻜㻜

㻡㻞㻚㻜㻜

㻞㻡㻚㻜㻜
㻞㻜㻚㻜㻜
㻝㻡㻚㻜㻜

㻠㻜㻚㻜㻜

㻡㻠㻚㻜㻜
㻠㻢㻚㻜㻜

㻠㻢㻚㻜㻜

㻲㼅㻟㻛㻝㻣

㻲㼅㻟㻛㻝㻤

㻟㻜㻚㻜㻜

㻝㻜㻚㻜㻜
㻡㻚㻜㻜
㻜㻚㻜㻜

㻲㼅㻟㻛㻝㻠

㻲㼅㻟㻛㻝㻡

㻲㼅㻟㻛㻝㻢

㻲㼅㻟㻛㻝㻥㻌㻱

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

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

19 19

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