Happinet FY2024 slides: Profit jumps 34.6%, exceeds mid-term targets

Introduction & Market Context

Happinet Corp (TSE:7552), a Japanese entertainment products distributor, presented its fiscal year 2024 results and new mid-term management plan on May 16, 2025. The company reported substantial profit growth, significantly exceeding targets set in its 9th Mid-term Management Plan. Happinet’s stock closed at ¥6,700 on October 3, 2025, up 0.75% for the day, and has traded between ¥3,790 and ¥7,260 over the past 52 weeks.

Executive Summary

Happinet delivered impressive financial results for FY2024, with operating profit surging 34.6% year-over-year to ¥11.68 billion and ordinary profit increasing 33.3% to ¥11.96 billion. Net sales grew 4.0% to ¥364.42 billion, while profit attributable to owners of the parent rose 2.8% to ¥6.76 billion. These results substantially exceeded the company’s 9th Mid-term Management Plan target of ¥6.5 billion in ordinary profit.

As shown in the following financial summary chart, the company achieved growth across all major profit metrics:

Detailed Financial Analysis

Happinet’s performance varied significantly across its four business segments, with the Toy and Amusement businesses driving growth while the Video-Game segment faced challenges.

The Toy Business, representing 46.5% of total sales, grew 13.0% year-over-year to ¥169.47 billion, with segment income increasing 32.9% to ¥9.12 billion. This growth was attributed to strong sales of character toys for younger age groups and continued demand for adult-oriented products including the Pokémon Trading Card Game, ONE PIECE CARD GAME, and Gundam series plastic model kits.

The Visual and Music Business, accounting for 17.7% of sales, saw a slight 0.6% decrease in net sales to ¥64.52 billion. However, segment income improved dramatically, turning from a loss in previous years to a profit of ¥976 million, driven by improved profitability in video production and contributions from visual packages with licensing rights.

The following chart breaks down performance by business segment:

The Video-Game Business experienced the most significant challenges, with net sales declining 16.9% to ¥78.07 billion and segment income plummeting 83.3% to ¥252 million. The company attributed this decline to sluggish game hardware sales and software amortization expenses from a game app.

In contrast, the Amusement Business showed remarkable growth, with sales increasing 25.7% to ¥52.36 billion and segment income rising 35.2% to ¥3.02 billion. This growth was driven by strong performance in the capsule-toy market and the expansion of company-run "gashacoco" stores, which reached 137 locations by March 31, 2025.

Financial Position and Cash Flow

Happinet maintained a strong financial position, with total assets increasing to ¥121.45 billion from ¥113.42 billion the previous year. Cash and deposits grew significantly to ¥41.01 billion, up from ¥29.68 billion. Net assets increased to ¥55.67 billion, resulting in a net asset per share of ¥2,518.49, up from ¥2,281.90 in FY2023.

The company’s cash flow improved substantially, with net cash provided by operating activities reaching ¥18.12 billion, up from ¥8.36 billion in FY2023. This strong cash position supports the company’s dividend increase to ¥130.00 per share for FY2024, up from ¥125.00 in the previous year.

Looking at the long-term performance trend, Happinet has demonstrated consistent growth in both sales and profits over more than two decades:

Strategic Initiatives

With the successful completion of its 9th Mid-term Management Plan, Happinet has launched its 10th Mid-term Management Plan with the theme "Ambitious Growth through Global Expansion and Value Chain Transformation." The company significantly outperformed its targets under the previous plan, as shown in the following chart:

The new plan focuses on leveraging Happinet’s intermediary distribution strengths while expanding globally and transforming its value chain. Key initiatives include:

1. Further development of the capsule-toy business, which has already begun expansion into the US market

2. Continued focus on downstream sectors, building on the success of the "gashacoco" store concept

3. Introduction of new human resources systems to support sustainable management

The company identified several market challenges, including projected long-term shrinkage in the toy market, increased competition from retail business operators strengthening their toy and game offerings, and growing saturation in the capsule-toy vending machine space.

Forward-Looking Statements

Happinet’s management expressed confidence in the company’s ability to achieve "ambitious growth" through its dual strategy of global expansion and value chain transformation. The company plans to leverage its strong performance in the Toy and Amusement businesses while addressing challenges in the Video-Game segment.

The successful expansion of the "gashacoco" store concept, which reached its 100th location during the 9th Mid-term Management Plan period, provides a foundation for continued growth in the Amusement Business. Meanwhile, the company’s initiatives in the capsule-toy business in the US market represent its first significant step toward international expansion.

With a strong cash position and consistent dividend growth, Happinet appears well-positioned to execute its strategic initiatives while continuing to deliver value to shareholders. However, the company will need to navigate challenges in certain business segments and an increasingly competitive market environment to maintain its growth trajectory.

Full presentation:

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.