(339A) Stock Price

Progress Technologies Group is a company group specializing in supporting digital transformation in the design and development domain of manufacturing. The company handles design process improvement as its core focus, offering one-stop services including consulting, design tool implementation and adoption support, contract projects and engineer dispatch, as well as simulation services including virtual testing. By focusing on upstream processes, the company aims to improve quality, cost, and delivery times while creating new value.

The company's primary customers are manufacturers, centered on automotive makers and their suppliers, where demand is strong for advanced product requirements and solutions to engineer shortages. The company generates revenue primarily through consulting, tool implementation, and project contracting, while also maintaining a stable revenue base from engineer dispatch services. Although the digital twin business currently represents a small portion of consolidated results, the company is pursuing expansion as a growth pillar.

The business is divided into three main segments: Solutions Business, Digital Twin Business, and Engineering Business. The Solutions Business encompasses design methodology development, tool implementation, operational adoption, and contract project delivery. The Digital Twin Business conducts early-stage verification through virtual testing using high-performance simulators and advanced models. The Engineering Business deploys mechanical, electrical, and software engineers to customer projects, supporting development resources and technical problem-solving.

The company's core growth strategy is to specialize in upstream design and development processes, thereby increasing the proportion of high-value solutions. Specifically, it uses "solution ratio" as a key performance indicator, raising it from 50.0% in the February 2024 period to 52.9% in the February 2025 period, and increasing the ratio including digital twin business from 51.7% to 55.8%. Japan's manufacturing DX market is projected to expand to approximately 906 billion yen by fiscal 2030. By capturing digitalization demand from Japanese manufacturing (market size 121 trillion yen, 20.6% of GDP), the company aims for stable revenue and profit growth.

Priority investment areas are five domains the company defines as "near-core technologies": digital twin, xILS (loop verification using models, software, and hardware), AI, UX, and RPA. These technologies directly support design-stage verification and automation of design work. The company is investing in technical advancement and specialist development. As a differentiation strategy, the company builds a cross-functional team of consultants and engineers with design floor expertise to provide one-stop solutions, deploying solution architects and project managers to ensure on-site adoption beyond one-time tool implementation.

For new market development and business expansion, the company plans to broaden its customer base by horizontally deploying expertise accumulated in automotive to semiconductors, precision equipment, medical devices, and heavy industry. On the human resources front, it continues recruiting approximately 80–100 new graduates annually and conducts 50–70 internal transfers per year from engineering to solutions business to secure project execution capability. On the sales front, the company pursues both deepening existing customer relationships and acquiring new clients, with growth areas like digital twin as pillars for advancing revenue structure sophistication.

Technology innovation efforts focus on accumulating field knowledge and building mechanisms to share it across the organization. Specifically, the company develops specialists through reviewing education and evaluation systems by expertise area, career development over an expected six-year tenure, and retention support via improved compensation and benefits. By using virtual testing and simulation to reduce defects at the design stage and shorten lead times, the company achieves improvements in quality, cost, and delivery. Progress is verified through metrics including consolidated revenue growth rate, operating profit margin, and solution ratio.