CONEXIO Corporation (E05547) Stock Price

Connexio is a company whose primary business is acting as a sales agent for mobile phones. Based on agency agreements with telecommunications carriers (NTT Docomo, KDDI, SoftBank, Rakuten Mobile, and others), the company handles intermediation of mobile communication service contracts and sells handsets. The company also provides after-sales services to subscribers and generates revenue through commissions paid by the telecommunications carriers for these services.

The company serves both individual consumers and corporate clients. Sales activities are conducted through three channels: carrier-authorized shops (Docomo Shop, au Shop, Rakuten Mobile Shop, and others), major camera and electronics retailers, and corporate sales operations. Revenue consists of commissions earned at contract execution or upon achievement of certain conditions, after-sales service fees, and handset sales income.

The business is divided into two segments: Consumer Business and Corporate Business. The Consumer Business handles communication service contract intermediation and handset sales for individuals, and also operates a proprietary smartphone support service called "nexi" and an insurance agency business. The Corporate Business provides communication service contract intermediation for enterprises, along with diverse services including mobile work-related solution development, IoT solution provision, and prepaid card provision for convenience stores.

Connexio is focusing on fundamental reform of its existing business and creation of new revenue streams to respond to the harsh changes in the mobile phone market environment. The company has withdrawn its medium-term management plan with a final fiscal year of March 2024, and is currently working to improve profitability under a single-year plan for the fiscal year ending March 2023. As carrier commission revenues have declined more than expected due to intensifying price competition among telecommunications carriers, a new medium-term management plan is scheduled to be formulated with the fiscal year ending March 2024 as the initial year.

In the Consumer Business, the company is prioritizing the restructuring of its carrier agency business. Connexio is promoting store consolidation, downsizing, and operational reforms, while exploring new sales methods such as mobile sales and external sales to increase unit sales. In its proprietary business segment, the company is focusing on expanding classroom-related operations centered on its "Smartphone Classes for Daily Life" program. It is expanding its customer base through collaboration with the Ministry of Internal Affairs and Communications, local governments' "Digital Utilization Support Promotion Project," and companies with senior customer touchpoints, with plans to expand into digital life support services.

In the Corporate Business, the company is restructuring its sales organization in response to environmental changes including telecommunications carrier consolidation. Connexio is promoting digitalization of sales methods and accelerating DX proposals targeting mid-sized and small-to-medium enterprises. The company is also working to promote practical implementation of IoT solutions for new customer segments in manufacturing, construction, and 5G utilization fields, aiming to expand business by leveraging tailwinds from expanded telework and DX promotion initiatives.

In strengthening its management foundation, the company plans to maintain stable shareholder returns with a dividend payout ratio target of 40% while actively executing strategic investments. Connexio is also focusing on SDGs management, positioning five key issues: bridging the digital divide, promoting DX in business society, disaster response, environmental initiatives, and diversity promotion. The company is pursuing a strategy for sustainable growth through social contribution via its core business.