Densan

Basic Information

Stock Code
3640
Industry
Information and Communications Industry
Category Detail
Systems & Software
Prefecture
Nagano Prefecture
Establishment Year
March 1966
Listing Year
June 2010
Official Website
https://www.ndensan.co.jp/
TSE Information
TSE Information
Yahoo! Finance
Yahoo! Finance
Other Companies
ZOA, Fixstars, Nankai Chemical, Japan System Techniques, Base, Cresco, TDC Soft, Alpha Systems, Tokei Densan, Human T, CEC, NSW, NSD

Overview

Densan is a system integrator in the information and communications industry based in Nagano Prefecture, founded in 1966, specializing in core business software for government with a strong regional presence.

Current Situation

Densan recorded consolidated sales of approximately 16.1 billion yen, operating profit of about 1.1 billion yen, and net profit of about 600 million yen in the fiscal year ended March 2021. Its flagship government-oriented systems, including regionally attached tax collection and other core business software, provide stable revenue sources. Supported by a unique customer base centered in the Shinetsu region, it has achieved stable growth. In addition to IT solutions, it offers provider services for diversified business operations. Certified as a Superior Health Management Corporation consecutively from 2022 to 2024, it emphasizes employee health management. In recent years, it has expanded its own subsidiaries, improved system development efficiency, reviewed business partnerships, and strengthened its management foundation. Moving forward, it will focus on specialized technology and solutions for local governments, maintaining stable revenue structures while exploring new businesses. Its financial position is solid with net assets of about 6.7 billion yen and total assets of about 19.7 billion yen. It maintains regionally focused service delivery through branches and support centers nationwide.

Trivia

Interesting Facts

  • Originally founded as Nagano Electronic Computing Center.
  • High regional attachment as a provider of systems for local governments.
  • Certified as Superior Health Management Corporation for three consecutive years.
  • Strong capital relationship with Shinetsu Broadcasting.
  • Entered partnership with Nissho Electronics in 2007, later dissolved.
  • Made T.M.R. Systems a wholly-owned subsidiary in 2017.
  • Multiple sales bases and support centers in Nagano Prefecture.
  • Transitioned to Tokyo Stock Exchange First Section in 2013.
  • Specializes in government system development with numerous transactions with major local governments.
  • Actively promotes health management and focuses on improving the work environment.
  • Diversifies information and communication services to complement regional communication infrastructure.
  • High management stability due to primarily local investor composition.
  • Headquarters in Nanase Nakamachi, Nagano City, also houses a data center.
  • Also operates an internet service provider business.
  • Establishes strong governance as a company with a board of auditors.

Hidden Connections

  • Shinetsu Broadcasting Co., Ltd. is the largest shareholder, indirectly linked to broadcasting-related businesses.
  • Regional banks such as Hachijuni Bank and Nagano Bank are among major shareholders.
  • As an independent system integrator, has capital ties with Toshiba Digital Solutions.
  • Nagano Shinkin Bank and Kyoei Fire & Marine Insurance form part of the major shareholders.
  • Contributes to regional economic revitalization through collaboration with local companies.
  • Subsidiary T.M.R. Systems contributes to strengthening system development capabilities.
  • Multiple branches in Nagano Prefecture are closely connected to local communities.
  • Certified system integrator by the Ministry of Economy, Trade and Industry, with high reliability.

Future Outlook

Growth Drivers

  • Demand for DX (digital transformation) promotion by local governments
  • Spread of cloud-based government systems
  • Increasing demand for welfare-related systems in aging society
  • Expansion of communication services due to 5G and network high-speedization
  • Increased investments for cyber security enhancement
  • Strengthened talent acquisition through health management promotion
  • Participation in regional economic recovery support projects
  • Multifunctionalization of business efficiency software for local governments
  • New business creation through collaboration with local companies
  • Service diversification accompanying advancements in information and communication technology

Strategic Goals

  • Complete cloud shift for local government core business systems
  • Promote market expansion for nationwide rollout
  • Build industry-leading talent environment through health management
  • Establish sustainable growth foundation in collaboration with regional society
  • Strengthen revenue base by achieving annual sales over 20 billion yen
  • Improve customer trust through security optimization
  • Enhance technological capabilities by maximizing synergies with subsidiaries
  • Expand DX support services for new market development
  • Aim to be the IT solution leader contributing to local revitalization
  • Thoroughly implement business operations considering reduced environmental impact

Business Segments

Local Government System Development

Overview
Provides planning, development, and operation of business support systems for government, centered on local governments.
Competitiveness
Shinetsu region-rooted administrative specialized technology and detailed support system.
Customers
  • Local Governments
  • Government Agencies
  • Public Organizations
  • Educational Institutions
  • Regional Welfare Organizations
  • Medical Institutions
Products
  • Tax Collection Core System
  • Resident Information Management System
  • Welfare Operation Support System
  • Disaster Information Sharing System
  • Electronic Application System

Information and Communication Services

Overview
Comprehensive information and communication services including network construction, data storage, and operation monitoring for corporations.
Competitiveness
Regionally attached communication network centered in Nagano with robust operation monitoring.
Customers
  • Corporate Entities
  • Educational Institutions
  • Medical Institutions
  • Regional Providers
  • SME Federations
  • Public Institutions
Products
  • Internet Connection Service
  • Network Construction and Maintenance
  • Data Center Operation Monitoring
  • Communication Infrastructure Provision
  • Cloud Services

System Contract Development

Overview
Contract development and maintenance of custom systems tailored to needs across various industries.
Competitiveness
Strong customer base in the Shinetsu region with flexible responsiveness.
Customers
  • Private Companies
  • Public Institutions
  • Non-Profit Organizations
  • IT Vendors
  • Startups
Products
  • Custom Software Development
  • Business System Development
  • Data Analysis Solutions
  • Mobile App Development
  • System Maintenance and Operation

Competitive Advantage

Strengths

  • Strength in regionally focused government system development
  • High expertise in core business software
  • Strong relationships with long-term customers
  • Diverse information and communication services
  • Solid financial foundation
  • Talent development through Superior Health Management Corporation certification
  • Comprehensive support system
  • Flexible response to small and medium-sized customers
  • Efficiency gains from subsidiary business integration
  • High governance through board of auditors

Competitive Advantages

  • Strong customer base built primarily in the Shinetsu region
  • Leading position in tax collection systems for local governments
  • Rapid responsiveness through regionally focused services
  • Ability to provide comprehensive information and communication services
  • Attractive workplace environment via Superior Health Management Corporation certification
  • Long-term investment capability due to stable capital
  • Technology enhancement and synergy creation through subsidiaries
  • High flexibility as an independent system integrator
  • Nationwide network of branches and support centers
  • High-quality system operation monitoring services

Threats

  • Expansion of major IT companies into local government markets
  • Risk of reduced orders due to local government budget cuts
  • Decline in trust from information security incidents
  • Need to keep pace with rapid technological innovation
  • Intensified competition from cloud service proliferation
  • Concerns over market contraction due to declining regional population
  • Challenges in employee aging and talent acquisition
  • Business continuity risks from natural disasters
  • Cost increases from ongoing health management initiatives
  • Changes in business environment due to legal revisions

Innovations

2024: Enhancing Cloud Compatibility for Government Systems

Overview
Began sequential migration of systems from on-premises to cloud environments.
Impact
Achieved reduction in operation costs and improved scalability.

2023: Development of Advanced Disaster Information Sharing System

Overview
Developed a new system enabling real-time disaster information sharing among local governments.
Impact
Significantly improved disaster response capabilities.

2022: Information Security Enhancement Project

Overview
Implemented latest security technologies and employee training to reduce information leakage risks.
Impact
Improved customer trust.

2021: Internet Service Infrastructure Renewal

Overview
Updated infrastructure to support high-speed communications and enhance network stability.
Impact
Improved service quality and increased customer satisfaction.

Sustainability

  • Continuous acquisition of Superior Health Management Corporation certification
  • Implementation of programs to improve employee work-life balance
  • Promotion of paperless operations within the company
  • Introduction of energy-saving systems
  • Participation in local events and environmental protection activities