Hikari Tsushin（9435.T）Improvements in productivity， growth in new contracts

Investment Rating - The report assigns a 12-month investment rating of Neutral for the industry [1]. Core Insights - The company reported a core operating profit of ¥25.6 billion for Q1, reflecting a year-on-year increase of 7% and surpassing forecasts by 4% [1]. - The quarterly operating profit rose to ¥27.2 billion, exceeding consensus estimates of ¥23.6 billion, driven by higher stock profits and a business divestment gain of ¥1.3 billion [1]. - The company announced a share buy-back program worth up to ¥10 billion, representing 1.13% of shares in issue, and increased its quarterly dividend from ¥612 to ¥624 per share [1]. - The firm’s investment securities had a book value of ¥636.4 billion and a market value of ¥1.1 trillion at the end of June, indicating an 8% increase in book value compared to the end of March [1]. - The company has improved its financial visibility by increasing segmental disclosures and providing data on its securities holdings [1]. Financial Performance Summary - Revenue for FY3/23 was ¥643.98 billion, showing an 11.4% year-on-year increase, while FY3/24 revenue is projected to decline by 6.5% to ¥601.95 billion [2]. - Operating profit for FY3/23 was ¥86.62 billion, a 4.3% increase, with FY3/24 expected to rise by 9.2% to ¥94.55 billion [2]. - The net profit for FY3/23 was reported at ¥91.35 billion, with a projected increase to ¥122.23 billion for FY3/24 [2]. - The basic EPS for FY3/23 was ¥2,037.6, with an expected increase to ¥2,753.5 for FY3/24 [2]. Quarterly Performance - In Q1 FY24, the company reported revenue of ¥146.15 billion, a 4.3% increase year-on-year, and an operating profit of ¥27.22 billion, reflecting a 13.6% increase [3]. - The operating profit margin for Q1 FY24 was 18.6%, indicating a positive trend in profitability [3]. - The net profit for Q1 FY24 was ¥45.90 billion, showing a significant year-on-year increase [3].