ZENKOKU HOSHO Co.,Ltd (7164) Stock Price

Zenkoku Hosho Co., Ltd. is a company primarily engaged in the "credit guarantee business." This business is centered on mortgage loan guarantees and consists of Zenkoku Hosho and its affiliated companies. Zenkoku Hosho provides joint and several guarantees to borrowers seeking mortgage loans, enabling them to secure financing smoothly from financial institutions.

Zenkoku Hosho's business model works as follows: borrowers apply for guarantee services through financial institutions, and Zenkoku Hosho underwrites joint and several guarantees after reviewing the applicant's creditworthiness and the collateral property. Guarantee fees are collected either as a lump sum or based on the monthly outstanding guarantee balance, and are managed through low-risk investments.

When borrowers become unable to repay, Zenkoku Hosho makes substitute payments to financial institutions and acquires subrogation rights to pursue repayment. In collecting subrogation claims, the company aims for swift and maximum recovery through property sales. Additionally, the company has established a system using group term life insurance to make substitute payments from insurance proceeds in cases of borrower death or severe disability.

As an independent guarantee company not dependent on specific financial institutions or industries, Zenkoku Hosho operates nationwide. This enables risk diversification and allows the company to build a community-focused sales structure. Principal guarantee products include mortgage loan guarantees, card loan guarantees, and education loan guarantees.

Mortgage loan guarantees address diverse needs including home purchase funds and renovation financing, with guarantee fee structures based on collateral valuation and borrower attributes. Card loan guarantees offer simplified procedures and repeated usability for mortgage loan customers. Education loan guarantees cover expenses beyond tuition and exam fees, available in both term loan and overdraft formats.

Zenshoku Guarantee Corporation is advancing its growth strategy under the medium-term management plan "Next Phase ~ Growth and Value Creation ~" for fiscal years 2023 through 2025. The plan aims to establish the company's position as a housing loan platform and enhance corporate value. Specifically, the company prioritizes building a solid business foundation by expanding its core business of housing loan credit guarantee services.

Zenshoku Guarantee is pursuing market share expansion in Japan's large housing loan market while strengthening its sales capabilities and proposal competitiveness. The company also seeks to uncover new demand through product development and service offerings, while deepening relationships with partner financial institutions. Additionally, the company is considering market share expansion in existing lending markets through M&A of competitors and ABL lending.

Expansion into adjacent businesses is part of the growth strategy. The company is developing new revenue sources in real estate-related sectors and advancing receivables management and collection services through group companies. The company is also promoting M&A and venture capital investments in synergistic industries. These efforts accelerate the development of a housing loan platform.

Efficient capital allocation is also a key initiative. The company prioritizes growth investments while pursuing enhanced shareholder returns. Specifically, it implements continuous dividends and opportunistic share buybacks to improve capital efficiency and enhance corporate value.

Zenshoku Guarantee is also committed to addressing ESG issues. Based on its SDGs declaration, the company aims to contribute to solving social challenges. Through improved employee engagement, workplace environment enhancements, and strengthened corporate governance, the company seeks to achieve sustainable growth.