SD Entertainment

Basic Information

Stock Code: 4650
Industry: Service Industry
Category Detail: Leisure & Recreation Facilities
Prefecture: Hokkaido
Establishment Year: May 1954
Listing Year: September 1996
Official Website: https://sdentertainment.jp/
TSE Information: TSE Information
Yahoo! Finance: Yahoo! Finance
Other Companies: Banners, ZOA, AEON Fantasy, Round One, Kyowa Corporation, TB Group, GENDA

Overview

SD Entertainment is a regionally focused company founded in 1954 and based in Hokkaido, diversifying across various service industries including fitness, cafes, internet cafes, and online crane games.

Current Situation

SD Entertainment recorded consolidated sales of approximately 3.7 billion yen in the fiscal year ended March 2021, focusing on its mainstay fitness and internet cafe businesses. It withdrew from game centers, bowling alleys, and movie theaters in 2018 through spin-offs and transfers. Amid special losses from the Hokkaido Eastern Iburi Earthquake and the parent company RIZAP Group's business reconstruction plan, it is advancing wellness-related services and nursery business expansion. After selling and relocating from the Dinos Sapporo Central Building, it is also working on effective utilization of regional assets. Through diversified service operations, it aims to deepen ties with local communities and maintain a stable business foundation. It is also leveraging profits from asset sales to improve its financial structure and strengthen its management base for future growth strategies.

Trivia

Interesting Facts

Once operated nationally rare composite amusement facilities in Hokkaido.
Has revised its points card service multiple times, changing brand names.
Has experience as an official sponsor of the Hokkaido Nippon-Ham Fighters.
Withdrew from game centers, bowling alleys, and movie theaters all at once in 2018.
Established company tracing back to 1918.
Dinos Sapporo Central Building was demolished in 2020, and the site became hourly parking.
Under RIZAP Group, advancing business reconstruction.
Commercialized small-scale nursery 'Dinos Kids' in 2019.
Early entry into online crane game business.
Operates multiple fitness clubs in Sapporo City.
Focusing on composite service deployment utilizing regional assets.
Engaged in collaboration projects across multiple industries.
Strengthening regional integration by providing services to diverse customer layers.
Incorporating measures for aging society into its business within the industry.
Independently established management structure after separating from former Geo Group.

Hidden Connections

As a RIZAP Group subsidiary, contributes to the group's overall health and wellness strategy.
As a longstanding Sapporo amusement operator, deeply involved in local culture and economy.
Acquired part of former Geo-related business, strengthening internet cafes and fitness.
Adopts proactive asset management policy through sales and transfers of composite facilities.
Advancing service development fusing online and physical stores.
Promptly undertaking business reconstruction despite impacts from Hokkaido Eastern Iburi Earthquake.
Dinos Kids childcare business contributes to local child-rearing support.
Receiving business strategy support from major shareholder RIZAP Group.

Future Outlook

Growth Drivers

Rising health consciousness in Hokkaido and local communities
Expansion of online + offline composite services
Increased childcare demand due to government child-rearing support policies
New business development utilizing digital technology
Synergies from strengthened collaboration with RIZAP Group
Development of new health and welfare services for declining birthrate and aging
Reinforcement and expansion of community-based business model
Improved flexibility to diverse customer needs
Financial strengthening through efficient asset operations
Accelerated growth via new formats and external capital introduction
Increased social credibility through environmentally considerate business
Enhanced customer loyalty initiatives

Strategic Goals

Establishment as regional top-class in fitness and childcare businesses
Positioning online crane game business as a major domestic player
Completion of sustainable growth structure with sales over 5 billion yen
Realization of business operations incorporating environmental and social considerations
Deepening of diversified service deployment in collaboration with local communities
Expansion of corporate health management support services
Stabilization of revenue base through advanced asset management
Service quality improvement aiming for 90%+ customer satisfaction
Efficiency operations and new value creation through DX promotion
Organizational strengthening via diverse talent utilization

Business Segments

Corporate Fitness Services

Overview

Provides fitness services for corporations aimed at health promotion and employee welfare.

Competitiveness

Community-based services leveraging regional foundation

Customers

Corporate health promotion departments
Welfare benefit providers
Sports event organizers
Hospitals and nursing facilities
Educational institutions

Products

Corporate fitness plans
Health management support
Training programs
Health event planning
Facility usage licenses

Internet Cafe and Composite Cafe Operation Support

Overview

Provides services and systems to support the operation of internet cafes and composite cafes.

Competitiveness

Operational support based on long years of industry experience

Customers

Franchise stores
Cafe operators
IT service providers
Advertising agencies
Event planning companies

Products

Store design consulting
IT system provision
Marketing support
Points management system
Event hosting support

Online Game Services Provision

Overview

Provides online and smartphone-based crane game services.

Competitiveness

Superior user interface design for operability

Customers

Online game users
Smartphone app operators
Advertising agencies
EC platform operators
Partner companies

Products

Online crane game platform
Smartphone apps
User acquisition campaigns
Game prize management
Billing systems

Real Estate Leasing Business

Overview

Manages and leases owned real estate to secure stable revenue.

Competitiveness

Asset management capabilities considering regional characteristics

Customers

Retail stores
Office tenants
Food and beverage operators
Local companies
Event operators

Products

Commercial building leasing
Event space rental
Parking lot operations
Asset management
Tenant management

Competitive Advantage

Strengths

Regionally integrated diversified service operations
Management support structure under RIZAP Group
Reach to diverse customer segments
Reliability as an established company
Strengthened integration of online and physical stores
New market development through childcare facility collaboration
Ownership of real estate assets rooted in the local area
Customer attraction through diverse brand deployments
Customer retention through composite services
Proactive investment in new businesses

Competitive Advantages

Strong brand recognition and customer base in the Hokkaido market
Streamlined business structure by transferring traditional amusement operations
24-hour services via SD Fitness brand
Community-based childcare business expansion including Dinos Kids
Competitive edge in IT utilization for online crane games
Synergies with RIZAP Group for funding and management support
Multi-channel sales and cross-marketing across multiple formats
Service composition adaptable to diverse customer needs
Asset management and facility operation expertise rooted in specific regions
Ability to develop new businesses in collaboration with local communities

Threats

Risk of regional market contraction due to declining birthrate and aging population
Spillover risk from RIZAP Group's business struggles
Decrease in store usage due to COVID-19 and other infectious diseases
Intensification of online competitive services
Fluctuations in consumer spending due to economic changes
Decline in asset value from aging existing facilities
Labor shortages and rising personnel costs
Impacts from strengthened regulations and environmental rules
Risk of delayed revenue from new businesses
Service expansion by competitors inside and outside the region

Innovations

2022: Dinos Sapporo Shirashi Building Sale Completed

Overview: Transferred large facility to Japan Esco for effective regional asset utilization.
Impact: Promotes financial base strengthening and asset efficiency.

2021: SD Fitness 24 Sapporo Shirashi Store Renovation

Overview: Renewed 24-hour store equipment to improve convenience.
Impact: Achieved membership growth and improved utilization rates.

2020: Online Crane Game Business Strengthening

Overview: Implemented UI/UX improvements for smartphone apps and expanded prize lineup.
Impact: Contributed to improved user satisfaction and revenue.

2023: Dinos Kids Business Expansion

Overview: Newly established and began operating multiple small-scale nurseries in Sapporo City.
Impact: Strengthened local childcare support and established new revenue sources.

2024: Launch of Corporate Health Management Fitness Services

Overview: Provides corporate health support programs and facility usage plans.
Impact: Contributes to corporate customer expansion and stable revenue.

Sustainability

Promotion of energy-saving equipment installation in stores
Participation in local cleanup and beautification activities
Employee health management and improved work environment
Reduction of plastics and promotion of recycling
Active use of local products and contribution to regional economy