Business overview

• No.1 sells office automation equipment such as multifunction printers and business phones to companies, sourcing from suppliers including NTT East, NTT West, Sharp Marketing Japan and Canon Marketing Japan Inc. It also sells PCs, office furniture and mobile devices, builds websites, and installs and maintains equipment through its own service staff.
• Its subsidiary Alexon, acquired in July 2020, plans, designs and manufactures UTM appliances, security switches, servers and NAS products, so the group both makes and sells its security hardware. The annual securities report describes the original office-equipment market as slowing because of longer replacement cycles, paperless working and hybrid work, and describes information security as the growth area.
• Most office equipment is sold through lease companies: the customer signs a lease with the lessor and No.1 sells the product to the lessor, with the lessor's credit check run in parallel. Multifunction printers also generate usage-based counter-service fees, and the No.1 Business Support consulting service, launched in September 2020, bills customers monthly.
• The group reports a single segment and has a February fiscal year-end. It had 957 consolidated employees at February 28, 2026, up 277 from a year earlier, which the company attributes to business expansion.

Investment case

1. In January 2026 the company raised its dividend payout-ratio target, introduced a minimum dividend-on-equity floor, and adopted a progressive dividend policy under which it states it will in principle not cut the dividend, with interim and year-end payments. It abolished its shareholder-perk program after the August 2025 record date in favor of dividends and buybacks, and it repurchased shares during the year to February 2026 (see Performance & Balance).
2. The annual securities report states that sales of information-security devices, the main product, continued to grow, and that products co-developed by the parent and Alexon are sold through the parent's sales network. Alexon is designated a specified subsidiary, and its sales are large enough to require separate disclosure.
3. No.1 Business Support contracts rose from 5,070 to 5,188 during the year to February 2026, and a price revision raised the average fee per customer. The company is cross-selling corporate mobile phones and electricity contracts through the acquired subsidiary i-Station.
4. The first-half earnings release for the year to February 2027 leaves unchanged the full-year forecast first published on April 13, 2026, which calls for higher sales and profits (see Performance & Balance).

Bear case

1. In the first half of the year to February 2027, sales rose but operating, ordinary and net profit attributable to owners all fell year on year. Selling and administrative expenses, interest expense, goodwill amortization and amortization of newly recognized customer-related assets all increased (see Performance & Balance).
2. Four acquisitions in the year to February 2026 were funded largely with new short- and long-term borrowing. Free cash flow was negative for that year and for the following first half, and the equity ratio fell (see Performance & Balance).
3. The company states that operating profit for the year to February 2027, the final year of the Evolution2027 medium-term plan, will fall short of the plan's original target. It attributes the shortfall to the downsizing and reorganization of a subsidiary originally meant to be a core business, to up-front spending on staff and AI, and to post-merger integration work.
4. Credit Saison Co.,Ltd. is the only customer named as a major customer in the segment notes and is also the second-largest shareholder (see Shareholders), so a significant share of sales depends on a single counterparty that is also an owner.

Catalysts

• Full-year results for the year to February 2027, the final year of Evolution2027, will show whether the unchanged full-year forecast and the stated annual dividend forecast, which is slightly above the prior year's total, are met.
• The company refers to a Vision2030 growth target beyond the current plan. Watch for the next medium-term plan and how it sets out leverage, acquisitions and returns.
• The board discussed a move to a company-with-audit-and-supervisory-committee structure, and the nomination and compensation committee deliberated a succession plan for the president during the year to February 2026. Any resulting proposals would go to a shareholders' meeting.

Key risks

• The company warns that goodwill recorded on acquisitions may need to be impaired if acquired businesses underperform. Goodwill and customer-related assets now form a large part of fixed assets (see Performance & Balance).
• The company states that the rapid increase in subsidiaries makes it difficult to build and run group internal controls, and that weak controls could disrupt operations. It sends directors and statutory auditors from the parent to each subsidiary.
• Disclosed business risks include changes in lease companies' policies or credit standards, a shrinking multifunction-printer market, low entry barriers in office-equipment dealing, and component shortages and price increases linked to AI demand that affect Alexon's products.
• The president is the largest shareholder, and three other directors appear among the top ten shareholders (see Shareholders). The board has seven directors, two of them outside directors, and a statutory audit board of three outside members.

Trading liquidity

2025-10-09 to 2026-11-06 (250 trading days). Trading value is daily closing price × daily volume on the Tokyo Stock Exchange.

Assumptions

• Financial figures on this page come from beluuga.ai's daily data set; trading liquidity is measured over the period shown. We do not use consensus estimates.
• Provisional purchase accounting for i-Station, LGIC and Shinshindo Shoko was finalized in the first half of the year to February 2027. Part of the goodwill was reclassified as customer-related assets with separate amortization periods, so the prior year-end balance sheet in the interim release differs from the one in the annual securities report.
• Subsidiaries S.I.T and LGIC have December and January fiscal year-ends and are consolidated with a lag. Mid-year acquisitions in the year to February 2026, the mergers of Office Alpha in March 2025 and No.1 Digital Solution in March 2026, and the first consolidation of Gloria all affect year-on-year comparisons.
• Qualitative statements are taken from the annual securities report for the year to February 2026 and the first-half (interim) earnings release for the year to February 2027.