SHINWA WISE HOLDINGS CO.,LTD. (2437) Stock Price

Shinwa Wise Holdings operates primarily in art-related businesses centered on fine art. The company's core business is conducting auctions, while also offering private sales services outside of auctions, including diamond sales for asset protection purposes and direct transactions in paintings and NFTs.

The company's customers are primarily art collectors, dealers, and investors. Its main revenue sources are auction-related fees, including consignment fees and buyer's premiums. Additional revenue comes from sales profits on private sales and electricity sales from solar power generation facilities that the company owns.

The business is divided into two segments: art-related and other operations. The art-related segment is further divided into auction operations and private sales and other services. The company regularly and periodically holds auctions across diverse categories including modern art, modern ceramics, Part II auctions for lower-priced works, contemporary art, Western art, wine, branded goods, watches, and jewelry. Lower-priced works are handled through dealer exchange meetings. The company previously operated a biomass business overseas but has exited this business through divestment, and certain related subsidiaries have completed liquidation.

The company aims to maximize corporate value through efficient management, with a medium to long-term target of consolidated return on equity (ROE) of 15% or higher. Growth will be driven by increasing both revenue and profit. The strategy includes raising the proportion of high-value items handled at auctions, establishing a stable revenue base through expanded diamond sales emphasizing asset protection and private sales. In response to accounting irregularities in prior-year private sales, the company is implementing trust-recovery measures including past financial restatements and establishing a third-party committee, while prioritizing the normalization of financial reporting and restoration of investor confidence.

Priority investment areas are tangible assets including high-value art, jewelry, watches, and wine. The company differentiates itself through specialized appraisal capabilities and public auction platforms as core strengths. To capture inheritance-related demand from Japan's aging population and growing demand for tangible assets amid inflation, the company is expanding services for affluent clients and creating value through artist discovery and contemporary art initiatives. It is also streamlining non-core operations to concentrate management resources and stabilize revenue structure.

For new market development, the company is clearly targeting overseas demand, particularly in Asia, beyond the domestic market. It is strengthening recruitment of international marketing talent and enhancing the convenience of live bidding accessible via the internet from both domestic and international participants. This approach aims to increase customer touchpoints beyond traditional auction formats, develop new customer segments, and attract high-value items. Additionally, to prevent recurrence of past issues, the company has established a Governance Committee and Risk Compliance Committee, implementing concrete organizational and operational improvements including internal audit restructuring, regulatory reviews, and external whistleblower channels.

On the technology front, the company is prioritizing live bidding system enhancements and improved online participation convenience, advancing multi-layered sales and distribution channels through digital utilization. It is also expanding digital transaction capabilities for paintings and NFTs while strengthening transaction transparency and provenance management to enhance appraisal capabilities. By advancing these technology investments in parallel with governance strengthening, the company aims to sustain revenue growth in a changing market environment.