Group 1 - KDDI and NEC will collaborate in the field of cybersecurity [1]

Financial Data and Key Metrics Changes - The consolidated operating revenue for Q3 FY 2025 was ¥4,364.2 billion, representing a year-on-year increase of 2.3% with a progress ratio of 75.6% against the full year forecast [2][3][4] - The operating income reached ¥864.6 billion, up 2.0% year-on-year, with a progress ratio of 77.9% [2][4][5] - Net income showed a progress ratio of 77.8%, with a year-on-year increase of 0.6% when excluding temporary impacts from subsidiary reorganizations [5][6] Business Line Data and Key Metrics Changes - The communications ARPU revenues increased by ¥3.5 billion year-on-year, while value-added ARPU revenues rose by ¥27.9 billion year-on-year [7][11] - The financial and energy businesses combined contributed an increase of ¥12.6 billion, and Lawson's equity method accounted income was up ¥18.2 billion [6][19] - The Business Services segment reported a year-to-date operating revenue of ¥1,012 billion, driven by a 19.9% year-on-year growth in the growth area, particularly in IoT-related services [21][25] Market Data and Key Metrics Changes - The number of smartphone subscriptions has been steadily increasing, although the multi-brand churn rate has risen due to intensified competition [8][9] - The introduction of competitive pricing plans in UQ mobile and au has led to a recovery in monthly net additions since November [10][11] - The customer base for the financial business remains strong, with au PAY Card exceeding 10 million members and au Jibun Bank's mortgage loans surpassing ¥5 trillion [19] Company Strategy and Development Direction - The company aims to enhance the synergy between communications and financial services, focusing on increasing the ratio of unlimited plans and value-added services [12][13] - Collaborative initiatives with Lawson are progressing, with plans to start eSIM sales at all Lawson stores soon [14][15] - The company is committed to strengthening its AI and communication infrastructure, particularly through the WAKON-CROSS platform, to support digital transformation [22][24] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the rapid changes in the communications industry, emphasizing the transition from 5G to an AI-driven era [42][43] - The company is focused on maintaining high communication quality and expanding its service offerings to meet growing customer demands [17][91] - Future strategies will include leveraging AI to enhance customer experiences and operational efficiencies [54][98] Other Important Information - The company plans to exhibit at MWC Barcelona 2025, showcasing its initiatives in communications and AI [29][30] - The new President, Hiromichi Matsuda, will focus on sustainable growth and enhancing the company's ability to connect various services [50][103] Q&A Session Summary Question: What are Mr. Matsuda's strengths and weaknesses? - Mr. Matsuda described his strength as being tenacious in exploring win-win points with partners, while acknowledging the need to improve as a new member of the top management team [58][60] Question: What technology is Mr. Matsuda most interested in? - Mr. Matsuda expressed a strong passion for telecommunications and emphasized the importance of integrating AI with 5G technology [64][68] Question: How does Mr. Matsuda plan to build relationships with global partners? - Mr. Matsuda highlighted the importance of presenting KDDI's contributions and leveraging new technologies to enhance partnerships [114] Question: What is the company's plan for the consumer business? - Mr. Matsuda indicated that understanding consumer needs will be crucial in the next medium-term plan, with a focus on expanding the economic zone [139] Question: What achievements is Mr. Takahashi proud of during his presidency? - Mr. Takahashi noted the company's success in achieving number one in communication quality and building a foundation for integrating life design with communication [111][112]

Consolidated Financial Results - Operating revenue reached 4,364.2 billion yen, a year-on-year increase of 2.3%[6] - Operating income totaled 864.6 billion yen, up 2.0% year-on-year[6] - Profit for the period was 536.5 billion yen, a 0.6% increase year-on-year, excluding temporary impacts[6] - Progress against full-year forecasts for operating revenue, operating income, and profit for the period were 77.9%, 77.8%, and 75.6% respectively[6] Personal Services Segment - Total ARPU revenues increased to 1,488.2 billion yen, a rise of 27.9 billion yen[15] - Communications ARPU revenue increased steadily, with continued upward trend by brands[15] - Value-added ARPU revenue also increased steadily[15] - Multi-brand IDs saw positive monthly net additions after new pricing plans were introduced[22] - Total ARPU reached 5,210 yen in Q3, with communications ARPU at 3,970 yen and value-added ARPU at 1,380 yen[27] Business Services Segment - Consolidated operating revenue grew to 122.0 billion yen, a year-on-year increase of 20.8%[48] - IoT-related services operating revenue increased to 486.1 billion yen[48] - IoT Connections increased to 48.52 million, a year-on-year increase of 22.2%[48] Financial Business - au PAY Card membership exceeded 10 million[45] - au Jibun Bank exceeded 5 trillion yen in cumulative mortgage loan amount[45] Telecom x Convenience Store - povo Data Oasis led to approximately 20% QOQ increase in new acquisitions[36] - Average daily sales at Lawson stores increased by 3.4% year-on-year due to collaboration with KDDI[36]

Core Insights - Swift Navigation and KDDI Corporation launched the Skylark® Precise Positioning Service in Japan on October 8, 2024, aimed at meeting the demand for high-precision positioning technology [1][4] Company Overview - Swift Navigation specializes in precise positioning solutions that enable centimeter-level mapping, tracking, and navigation, facilitating advancements in vehicle autonomy and industrial automation [5] - KDDI Corporation is a leading telecommunications provider in Japan, offering various services to both individual and corporate customers [6] Product Features - Skylark is a real-time, cloud-based GNSS correction service that enhances positioning accuracy from several meters to a few centimeters, improving precision by up to 100 times [2] - The service is designed to support applications in automotive, robotics, supply chain, logistics, and infrastructure development, ensuring high accuracy for autonomous vehicles and construction projects [2][3] Strategic Importance - The partnership between Swift Navigation and KDDI is significant for advancing digital transformation in Japan, a key market for innovation and manufacturing [4][3] - Skylark is the first real-time, cloud-based service certified for functional safety standards (ISO 26262:2018), essential for full vehicle autonomy [3] Market Availability - Skylark is now available across North America, Europe, and Asia, indicating a broad market reach for Swift Navigation's technology [4]

Core Viewpoint - The research service "Asia Value & Moat Stocks" targets value investors looking for Asia-listed stocks that exhibit significant discrepancies between market price and intrinsic value, focusing on deep value balance sheet bargains and wide moat stocks [1] Group 1: Investment Focus - The service emphasizes deep value balance sheet bargains, which include assets purchased at a discount such as net cash stocks, net-nets, low price-to-book (P/B) stocks, and sum-of-the-parts discounts [1] - It also highlights wide moat stocks, which are characterized by strong earnings power at a discount, including high-quality businesses and hidden champions [1] Group 2: Market Focus - The primary focus of the investment ideas is on the Hong Kong market, providing a range of watch lists with monthly updates for investors [1]

Financial Data and Key Metrics Changes - Consolidated operating revenue for the first half was JPY2,855.7 billion, up 2.8% year-on-year, achieving a progress ratio of 49.5% against the full year forecast [7] - Operating income was JPY573.1 billion, up 2.3% year-on-year, with a progress ratio of 51.6% against the full year forecast [7] - Communications ARPU revenues continued to increase, contributing to steady growth in major businesses [8] Business Line Data and Key Metrics Changes - The Business Services segment reported operating revenue of JPY672.4 billion, a 13.1% year-on-year increase, with operating income of JPY113.7 billion, up 11.1% year-on-year [13] - The DX Business Services segment experienced double-digit growth in operating income [7] - Financial and Energy businesses also saw an increase in income, contributing positively to overall performance [7] Market Data and Key Metrics Changes - The customer base in the value-added area expanded, with au Jibun Bank savings accounts increasing by 940,000 year-on-year and au PAY Gold Card members increasing by 410,000 year-on-year [12] - The number of au Denki subscriptions increased by 30,000 year-on-year, indicating growth in value-added services [12] Company Strategy and Development Direction - The company aims to achieve its EPS target by promoting a satellite growth strategy, focusing on major businesses and new areas such as drones and Starlink [9] - A capital policy was introduced, including a 2-for-1 stock split to attract new individual investors and an additional share repurchase of up to JPY100 billion [14] - The collaboration with Lawson is expected to enhance customer engagement and drive revenue growth [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the competitive advantage of their network quality, particularly in the 5G space, and emphasized the importance of maintaining this lead [42][43] - The company anticipates that the introduction of new pricing plans and services will positively impact customer acquisition and ARPU in the second half of the fiscal year [21][25] Other Important Information - The company is committed to a total return ratio of 100% as an upper limit for shareholder returns, indicating a focus on maintaining stable dividends and share repurchases [33] - The company plans to enhance its brand strategy by differentiating its offerings among its three brands: povo, au, and UQ [29][30] Q&A Session Summary Question: Shareholder return strategy and future buybacks - The company clarified that the JPY100 billion share buyback is separate from cross-shareholding considerations and that they aim to maintain a balance between the two [18] Question: Impact of new plans on customer acquisition - Management indicated that the new Ponta Pass and UQ 30 giga plan are expected to positively impact customer acquisition and ARPU in the second half [20][21] Question: Competitive positioning and network quality - The company highlighted its strong network quality and competitive edge, particularly in the 5G space, and expressed confidence in sustaining this position [42][43] Question: Contribution from Lawson and future synergies - The company expects Lawson to contribute approximately JPY10 billion to operating income, with ongoing efforts to generate synergies between the two companies [47][49]

Financial Data and Key Metrics Changes - Consolidated operating revenue for the first half of the fiscal year ending March 2025 was JPY2,855.7 billion, an increase of 2.8% year-on-year, achieving a progress ratio of 49.5% against the full-year forecast [5] - Operating income rose to JPY573.1 billion, up 2.3% year-on-year, with a progress ratio of 51.6% against the full-year forecast [5] - Communications ARPU revenues continued to increase, contributing to overall revenue growth [6] Business Line Data and Key Metrics Changes - The Personal Services segment saw total ARPU revenues grow, with au brand increasing by approximately 3% year-on-year and UQ Mobile by about 7% year-on-year [10] - The Business Services segment reported operating revenue of JPY672.4 billion, a 13.1% year-on-year increase, with operating income at JPY113.7 billion, up 11.1% year-on-year [27] Market Data and Key Metrics Changes - IoT-related services in the Business Services segment achieved operating revenue of JPY79 billion, up 21.5% year-on-year, with IoT connections growing to 46.33 million [28] - Data center operating revenue was JPY65 billion, reflecting a 12.1% year-on-year increase [28] Company Strategy and Development Direction - The company aims to achieve EPS targets by promoting satellite growth strategies and enhancing efficiency in technology costs [9] - KDDI is focusing on expanding major businesses and new areas such as DX, Drones, Lawson, and Starlink [9] - The collaboration with Lawson aims to enhance customer experience and drive sales through data and AI [22][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting full-year forecasts, citing steady growth in major business areas and the successful implementation of new pricing plans [6][36] - The company is committed to strengthening its network and expanding its 5G capabilities to maintain competitive advantages [15][16] Other Important Information - KDDI has initiated a two-for-one stock split to attract new individual investors and announced an additional share repurchase of up to JPY100 billion [36][38] - The company is preparing for the launch of direct communications between satellites and smartphones using Starlink by the end of the year [17] Q&A Session Summary Question: What are the expectations regarding the NTT Law? - Management agrees with the direction of the draft report from the MIC Council, recognizing the need for updates to the NTT law in response to changing times [39] - The conclusion of discussions indicates no strong arguments for changing or abolishing the current legal system [39]

Financial Performance - Operating revenue increased to 5,770 billion yen, a 2.8% year-over-year increase, achieving 49.5% of the full-year forecast[2] - Operating income increased to 573.1 billion yen, a 2.3% year-over-year increase, achieving 51.6% of the full-year forecast[2] - DX (Business Services segment) experienced double-digit growth in operating income[2] Personal Services Segment - Total ARPU revenues increased, driven by growth in both communications and value-added services, reaching 986 billion yen[9] - Communications ARPU increased by approximately 3% year-over-year[9] - Value-added ARPU increased from 227.1 billion yen to 243.2 billion yen[9] - Smartphone subscriptions increased, contributing to ARPU growth[11] Business Services Segment - Operating revenue grew by 13.1% year-over-year[33] - Operating income grew by 11.1% year-over-year[34] - IoT-related services operating revenue increased from 65 billion yen to 79 billion yen[35] - Data Center operating revenue increased from 58 billion yen to 65 billion yen[35] Capital Policy - The company resolved to repurchase up to 100 billion yen of its own shares through market purchases, with a total repurchase price in FY25-03 of up to 400 billion yen[45, 46]

FY23-03 FY24-03 *1 au Financial Holdings (IFRS basis) excluding the impact of accounting treatment changes in FY23-03 *2 Comparison of 4 MNOs in Japan. The browsable license number by Ministry of Internal Affairs and Communications radiocommunication search as of April 12, 2024. 7 Mid-Term Management Strategy Tomorrow, Together Fiscal Year Ending March 2024 (April 2023-March 2024 ) | --- | --- | --- | --- | |-------------------------|--------------------------------------------|----------------|------------ ...

Financial Data and Key Metrics Changes - For the fiscal year ended March 2024, revenues increased to ¥5.754 trillion, up 1.5% year-on-year, while operating income was ¥961.6 billion, impacted by temporary factors [39][16][17] - The net income attributable to the owners of the parent was ¥637.9 billion, with a target for EPS to increase 1.5 times by FY March 2026 [39][41] Business Line Data and Key Metrics Changes - The financial business reported strong performance with operating income of ¥14.2 billion, while the energy business grew steadily to ¥16 billion [17][12] - ARPU revenues for multi-brand communications rebounded, increasing by ¥5 billion, while DX areas showed growth of ¥20.4 billion [8][18] Market Data and Key Metrics Changes - The company completed the rollout of 5G with 94,000 base stations, the highest in the industry, and expects Sub6 data traffic to increase by about 20% following the relaxation of satellite interference conditions [40][32] - The number of au Denki contracts is increasing, with a target for double-digit growth in operating income [57] Company Strategy and Development Direction - The company aims to integrate AI into its services to create new value and enhance customer experiences, focusing on digital transformation (DX) in finance and energy businesses [20][65] - A new satellite growth strategy has been formulated, emphasizing the combination of telecommunications with data-driven services and generative AI [30][52] Management's Comments on Operating Environment and Future Outlook - Management acknowledged temporary impacts on income but emphasized that the overall progress is on track, with a focus on sustainable growth and shareholder returns [16][41] - The company aims to achieve a consolidated operating income increase through enhanced communications ARPU revenues and double-digit growth in focus areas [13][68] Other Important Information - The company plans to allocate operating cash flow of ¥3 trillion over two years for growth investments and shareholder returns, including a dividend payout ratio of over 40% [7][59] - Aiming for sustainable growth, the company has extended its mid-term management strategy by one year and is focused on optimizing CapEx and OpEx levels [69][29] Q&A Session Summary Question: What are the core initiatives for growth? - The company emphasized the importance of creating value for customers through AI and data-driven services, particularly in the personal segment and convenience store partnerships [64] Question: How does the new satellite growth strategy impact future growth? - The new strategy focuses on DX, finance, and energy businesses, targeting double-digit CAGR growth and enhancing synergies with partners like Lawson [65][67] Question: What are the expectations for ARPU revenue in the coming fiscal year? - Communications ARPU revenue is expected to increase organically by ¥14 billion, despite a projected decrease due to access charge revisions, with limited impact on profits [68]