(1438) Stock Price

Gifu Zouen is a company specializing in the design, construction, and maintenance of landscaping and greening projects. Since its founding in 1927, the company has been dedicated to creating green spaces that enrich communities and daily life, combining traditional landscaping techniques with environmentally conscious methods.

The company's primary customers include residential builders, real estate developers, government agencies, private enterprises such as commercial facilities and hotels, and individual homeowners (through its showroom). In addition to design and construction contract revenue, Gifu Zouen secures stable earnings through post-completion green space maintenance, operational revenue from designated park management, and repeat orders such as re-gardening (renovation) projects.

Although operating as a single business segment, the company divides its operations into "Garden Exterior" and "Landscape" categories by target market. Garden Exterior provides high-value exterior design and construction for detached and multi-unit residences, unified landscape design for residential developments, and customized proposals through the "Pines" showroom. Landscape handles a wide range of projects and maintenance, including public works and private facility greening, rooftop and wall greening, biotope development, designated park management, and regular maintenance services.

The company aims to evolve from a "landscape construction business" to an "environmental creation company" by 2027, marking its 100th anniversary, as part of its growth strategy toward 2030. The company prioritizes three key performance indicators: revenue, gross profit margin, and operating profit margin. Recent results show revenue of ¥6,271,357 thousand, gross profit of ¥1,800,159 thousand (28.7% margin), and operating profit of ¥549,108 thousand (8.8% margin). For the next fiscal period, the company forecasts revenue of ¥6,312,000 thousand, gross profit of ¥1,750,420 thousand (27.7% margin), and operating profit of ¥575,722 thousand (9.1% margin). The company has set a clear objective to improve profitability through business expansion and rigorous performance management.

The company has designated human capital investment and the succession of craftsmanship as priority investment areas. It continues concrete investments in skill transfer through its in-house training institution, "Gifu Landscape Academy," which conducts monthly workshops and produces educational videos. The company emphasizes "craftsman-oriented field capabilities"—the ability to handle design, construction, and post-completion maintenance in-house—as its competitive differentiator. Through initiatives such as sourcing and cultivating 700 to 1,000 deciduous trees annually from northeastern Japan and selecting and utilizing local stone materials, the company aims to secure high-value-added projects that set it apart from competitors.

As its primary expansion strategy, the company prioritizes strengthening its presence in the Kanto region. In addition to reinforcing its Tokyo branch, it is advancing into the Kanto market through a business partnership with Saitama Botanical Garden established in March 2024, developing construction bases and attracting general customers through model garden exhibitions. Through business partnerships with the Sekisui House Group (2020) and capital partnerships (2020 and 2023), the company expects to participate in large-scale landscape and PFI projects. The company also plans to open a Fukuoka office, strengthen personnel and construction capabilities through strategic M&A, and pursue overseas expansion leveraging design project experience in China and Canada. These initiatives aim to expand the company's order base centered on Japan's four major metropolitan areas.

The company is also investing in operational efficiency and technological innovation, including the implementation of an enterprise-wide core system to streamline back-office operations, establishment of information-sharing platforms, paperless documentation, and utilization of generative AI. To strengthen internal management, the company conducts regular inter-office meetings and customer satisfaction surveys to identify and address issues early. By balancing design innovation through "exploration" and "deepening" of landscape technology with sustainability initiatives such as CO2 reduction through effective use of plants and stone materials, the company aims to enhance long-term corporate value.