INTELLIGENT WAVE INC. INTELLIGENT WAVE INC. | 4847
Sponsored Research August 3, 2023
Sessa Investment Research
Cloud Services orders +27.7%, backlogs +61.6%
Raising target dividend payout ratio 40% → 50%
SUMMARY
- IWI announced 4Q results at 15:30 on August 2, and plans to hold a results briefing at 10:00 on August 4. Headline numbers for FY23/6 were: net sales +16.4% YoY, OP +2.4% YoY, OPM 13.2% → 11.6% and NP +10.4% YoY. The annual dividend was hiked for the 5th consecutive term from ¥17.0 → ¥20.0. Cloud Services: net sales ¥1,867mn (+59.2%), orders ¥4,421mn (+27.7%) and backlogs ¥6,695mn (+61.6%).
- Initial guidance for FY24/6 is: net sales +12.2% YoY, OP +44.5% YoY, OPM 11.6% → 15.0% and NP +36.5% YoY. Initial OP guidance for FY24/6 of ¥2,250mn will renew record profits for the first time in 22 years since FY02/6 of ¥1,855mn. Since the Company posted a profit shortfall in FY23/6, mainly due to temporary cost overruns for growth driver Cloud Services, this term it is not issuing new rolling targets, instead maintaining the targets of "15ALL," and will announce a new MTP next August starting in FY25/6. In addition, IWI announced it is raising its target payout ratio 40% → 50% from FY24/6, introducing an interim dividend of ¥15.0, for an annual regular dividend of ¥30.0. The Company also plans to issue a commemorative dividend of ¥10.0, this term marking the 40th anniversary since founding, for a total dividend of ¥40.0, effectively doubling YoY. Based on the August 2 closing price of 816, the dividend yield is 4.90%.
IWI FY23/6 and 4Q-onlyNon-consolidated Financial Results Summary
JPY mn, % | FY22/6 | FY23/6 | CHG | PCT | FY22/6 | FY23/6 | CHG | PCT |
[J-GAAP] | act | act | AMT | YOY | 4Q act | 4Q act | AMT | YOY |
Net sales | 11,493 | 13,375 | 1,881 | 16.4 | 3,659 | 3,478 | (181) | (4.9) |
• Software development | 4,288 | 4,847 | 558 | 13.0 | 1,242 | 1,339 | 97 | 7.8 |
• In-house products | 393 | 305 | (87) | (22.3) | 54 | 152 | 98 | 180.9 |
• System service | 41 | 20 | (21) | (50.9) | 10 | 0 | (10) | ― |
• Third-party products | 1,567 | 1,645 | 79 | 5.0 | 910 | 191 | (719) | (79.0) |
FLOW total | 6,289 | 6,817 | 529 | 8.4 | 2,216 | 1,682 | (534) | (24.1) |
• Maintence | 2,640 | 3,173 | 533 | 20.2 | 688 | 869 | 180 | 26.2 |
• Maintence of 3P products | 614 | 726 | 111 | 18.1 | 157 | 184 | 27 | 17.4 |
• Own services (incl. Cloud) | 1,435 | 2,112 | 678 | 47.2 | 445 | 586 | 141 | 31.6 |
• Other services | 516 | 547 | 30 | 5.9 | 153 | 158 | 5 | 3.6 |
STOCK total | 5,205 | 6,558 | 1,353 | 26.0 | 1,443 | 1,797 | 354 | 24.5 |
Gross Profit | 3,699 | 4,270 | 571 | 15.4 | 1,186 | 1,149 | (37) | (3.1) |
GPM (%) | 32.2% | 31.9% | 32.4% | 33.0% | ||||
Operating profit | 1,520 | 1,557 | 37 | 2.4 | 576 | 420 | (156) | (27.0) |
OPM (%) | 13.2% | 11.6% | 15.7% | 12.1% | ||||
Ordinary profit | 1,556 | 1,603 | 47 | 3.0 | 591 | 446 | (145) | (24.6) |
Profit | 1,056 | 1,165 | 110 | 10.4 | 397 | 385 | (13) | (3.2) |
Source: compiled by SIR from TANSHIN financial statements.
IWI Rolling Medium-Term Business Plan
Rolling Plan announced Aug-2022 | Initial Guidance | ||||||
JPY mn, % | FY22/6 | FY23/6 | FY24/6 | FY25/6 | FY23/6 | FY24/6 | FY25/6 |
act | init CE | MTP | MTP | act | init CE | MTP | |
Net sales | 11,493 | 13,500 | 15,000 | 16,500 | 13,375 | 15,000 | 16,500 |
YoY (pct) | 2.7 | 17.5 | 11.1 | 10.0 | 16.4 | 12.2 | 10.0 |
OP | 1,520 | 1,800 | 2,250 | 2,500 | 1,557 | 2,250 | 2,500 |
OPM (%) | 13.2% | 13.3% | 15.0% | 15.2% | 11.6% | 15.0% | 15.2% |
Source: compiled by SIR from IR materials.
4Q Flash
Net sales | YoY |
4,000 | 64 |
3,500 | 56 |
3,000 | 48 |
2,500 | 40 |
2,000 | 32 |
1,500 | 24 |
1,000 | 16 |
500 | 8 |
0 | 0 |
(8) | |
(16) |
OP | OPM |
600 | 18 |
500 | 15 |
400 | 12 |
300 | 9 |
200 | 6 |
100 | 3 |
0 | 0 |
Source: compiled by SIR from TANSHIN
financial statements. Units: JPY million, %
Chris Schreiber CFA
Company Specialist research@sessapartners.co.jp
This report was prepared by Sessa Partners on behalf of INTELLIGENT WAVE INC. Please refer to the legal disclaimer at the end for details.
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IWI - Intelligent Wave Inc. published this content on 03 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 August 2023 05:02:03 UTC.
