F3/27 1Q Results: Strong Profit Progress, but Higher Cost Budget Ahead

研报英文原文证据摘录

F3/27 1Q Results: Strong Profit Progress, but Higher Cost Budget Ahead

Update

July 29, 2026 10:13 AM GMT

Morgan Stanley MUFG Securities Co., Ltd.+MSMS (2175) | Japan Katsumi Arai

Equity Analyst

F3/27 1Q Results: Strong Profit Katsumi.Arai@morganstanleymufg.comAkiho Toyama +81 3 6836-8918

Akiho.Toyama@morganstanleymufg.com +81 3 6836-8405

Progress, but Higher Cost

Budget Ahead

AlphaSignals Earnings Reaction

SMS (2175.T, 2175 JP)

Unchanged Modest upside Largely unchanged Mid Small Cap/Non-Manufacturer | Japan

Impact to our thesis Financial results versus consensus Direction of next 12-month

consensus EPS Stock Rating Equal-weight

Industry View In-Line

Source: Company data, Morgan Stanley Research Price target ¥1,600

Shr price, close (Jul 29, 2026) ¥2,372

Mkt cap, curr, basic (bn) ¥194.7

Key Takeaways Avg daily trading value (bn) ¥0.7

1Q OP of ¥4.3bn beat ¥3.7bn consensus and met our ¥4.2bn forecast. Progress

vs. F3/27 guidance was strong, but SMS indicated hiring/costs should rise from

2Q.

SMS's overseas stance is unchanged from 4Q results: it continues to review

operations, including potential exits. SMS says it may also enter spot-work field.

SMS newly disclosing key KPIs for the Career Business and other segments was a

positive development. 1Q productivity (revenue per Career Partner (CP)) increased

2% YoY, and we view the improvement in productivity despite large-scale CP hiring

positively. In Medical Career, the competitive environment also appears to have

eased somewhat. Meanwhile, management during the briefing outlined the

initiatives of the Corporate Value Enhancement Committee established in July.

Regarding overseas businesses, management indicated that the highest priority is

evaluating whether to withdraw from or downsize the Medical Platform business,