MIRAIT ONE Corporation (1417.T): BCG Matrix [Dec-2025 Updated]

MIRAIT ONE's portfolio balances strong cash generators in legacy NTT and regional engineering with dynamic "Stars" - green energy, ICT/data centers, urban development and a scaling global arm - while selective bets in software, hydrogen and infrastructure sharing are high-upside question marks and commodity mobile/hardware units and failed overseas ventures are being cut as dogs; this clear tilt toward reallocating cash-cow proceeds into decarbonization, data infrastructure and overseas scale tells a story of disciplined capital shifts aimed at long-term growth and higher ROE.

MIRAIT ONE Corporation (1417.T) - BCG Matrix Analysis: Stars

Stars

The Green energy business drives decarbonization growth and is a primary growth engine within the MIRAI Domains, targeting net sales of ¥30,000 million by FY2026 to capture the accelerating green transformation market. As of March 31, 2025, MIRAIT ONE has deployed approximately 5,680 EV charging stations nationwide and achieved cumulative renewable energy generation capacity of 471,411 kW from construction facilities. The segment's contribution supported the group's consolidated revenue increase of 11.6% year-on-year reported in May 2025. National carbon neutrality targets and government incentives produce high market growth rates, justifying continued capital allocation toward grid interconnection projects and hydrogen-related investments.

The ICT Solutions Business has emerged as a high-growth star, driven by expansion in data centers and corporate digital transformation across Japan. MIRAIT ONE SYSTEMS recorded net sales of ¥29,990 million for FY ended March 2025, an increase of 11.2% year-on-year, while operating profit rose 7.3% to ¥2,030 million. Demand for system infrastructure, software development, and specialized ICT engineering remains strong. The company is investing heavily in large-scale data center construction and expanding proprietary data center operations in the Kansai region to secure recurring revenue streams.

Following the integration of Seibu Construction, the Urban Development unit has become a star targeting ¥30,000 million in net sales by FY2026. Seibu Construction contributed ¥71,580 million to the group's total revenue in FY2025, representing 12.37% of the consolidated portfolio. The segment targets resilient urban infrastructure, smart city projects, and large-scale regional redevelopments. Synergies from the Trinity Approach-combining civil engineering and telecommunications-help win complex, high-value contracts. Orders received for the Environmental and Social Innovation segment increased 52.9% year-on-year as of early 2025, underpinning near-term revenue momentum.

The Global Business segment, led by Singapore-based Lantrovision, operates across 14 overseas countries and regions and reported ¥34,320 million in revenue for FY2025, accounting for ~5.93% of consolidated sales. This unit focuses on communications towers and data center infrastructure in high-growth Southeast Asian markets. Despite liquidation of some underperforming global-related subsidiaries in 2025, the core ICT infrastructure sharing business remains a high-potential star. The group is reallocating resources to accelerate growth in markets where double-digit regional growth supports scale and long-term contribution; approximately 10% of group revenue now comes from outside Japan.

Key cross-segment characteristics and strategic priorities for Stars:

• High market growth driven by national decarbonization and digitalization targets.
• Significant capital investment in EV infrastructure, renewable interconnection, hydrogen, and data center build-outs.
• Revenue targets: multiple segments aiming for ¥30,000 million by FY2026 (Green energy and Urban Development).
• Profitability trajectories: ICT Solutions showing operating profit growth (¥2,030 million, +7.3% YoY).
• International scaling via Lantrovision to capture double-digit APAC growth while pruning non-core global exposures.

MIRAIT ONE Corporation (1417.T) - BCG Matrix Analysis: Cash Cows

NTT business provides stable revenue foundation. The NTT Business remains the company's most significant cash cow, providing a steady revenue base through the maintenance and operation of fixed and mobile communication facilities. In the fiscal year ended March 2025, this segment supported a large portion of the 305.11 billion yen in revenue generated by the core MIRAIT ONE entity. Although NTT Group's capital investment is on a downward trend, MIRAIT ONE maintains a dominant and stable market share in carrier-grade engineering. The business generates high cash flows with relatively low CAPEX requirements compared to newer growth domains, funding the company's diversification strategy. For FY 2026, the company expects continued solid sales in this domain, maintaining its role as the primary financial anchor for the group.

Telecommunications infrastructure supports consolidated margins. This mature segment encompasses the construction of traditional mobile and fixed-line networks, characterized by high market share and stable profitability. While market growth in domestic telecommunications engineering has leveled off, the segment's stability allowed the group to achieve record net sales of 578.60 billion yen in FY 2025. The company is focusing on enhancing productivity in this domain to improve the consolidated operating margin, which is forecast to reach 5.5% in FY 2026. Cash generated from these operations supported a dividend increase to 85 yen per share for the upcoming fiscal year. High ROI in this segment is maintained through optimized onsite capabilities and long-standing relationships with major Japanese carriers.

Regional engineering subsidiaries maintain local dominance. Subsidiaries such as TTK, Solcom, and Shikokutsuken operate as localized cash cows, contributing a combined revenue of over 96.00 billion yen in FY 2025. TTK Co., Ltd. specifically accounted for 37.93 billion yen, or 6.56% of group revenue, while Solcom and Shikokutsuken contributed 5.77% and 4.34% respectively. These entities possess deep-rooted market shares in their respective Japanese regions, providing reliable cash flow from local infrastructure maintenance. The maturity of these regional markets means they require minimal growth investment, allowing profits to be redistributed to the MIRAI Domains. Their consistent performance helped drive the 57.0% year-on-year increase in consolidated operating profit reported in May 2025.

• High cash generation with low incremental CAPEX relative to growth domains.
• Dominant market share in carrier-grade engineering for NTT-related projects.
• Stable, mature demand for mobile and fixed-line network construction and maintenance.
• Regional subsidiaries provide predictable local cash flows requiring minimal investment.
• Cash flows from these units fund MIRAI Domains and corporate dividends.

MIRAIT ONE Corporation (1417.T) - BCG Matrix Analysis: Question Marks

Question Marks

The Software Business is a designated MIRAI Domain with high market growth potential but currently holds a relatively small share of the group's total revenue. MIRAIT ONE is transferring approximately 1,000 employees to growth areas like this by FY2026 to build necessary technical expertise. While the segment benefits from the broader DX trend, it faces intense competition from established IT service providers and software houses. The company is investing in call center solutions and specialized software services to differentiate its offering from traditional engineering. Success in this quadrant depends on the company's ability to convert its engineering client base into recurring software service subscribers.

Within the green energy portfolio, nascent ventures in hydrogen fuel cell systems and industrial power storage represent classic question marks. These technologies operate in markets with high projected growth rates but currently contribute a negligible percentage to the company's 578.60 billion yen revenue. Significant R&D and CAPEX are required to establish a competitive foothold as the market for decarbonized social infrastructure evolves. The company is leveraging its planner certification for Net Zero Energy Buildings (ZEB) to gain early-stage project experience. Whether these initiatives can achieve the scale of the established solar business remains uncertain as of December 2025.

The company is exploring new business models in infrastructure sharing, particularly in the communications tower sector across Asia. This model has high growth potential due to the 5G rollout but currently faces regulatory and adoption hurdles in various jurisdictions. Capital intensity is high, as evidenced by the group's focus on accelerating growth through management resource concentration in global domains. While orders in the data center-related business increased in late 2025, the sharing model's long-term profitability is still being tested. MIRAIT ONE's acquisition of an 80% stake in Y2S Corporation in late 2025 highlights its commitment to exploring these high-risk, high-reward opportunities.

Key success factors across these Question Mark initiatives:

• Ability to convert existing engineering clients into recurring software/service customers
• Scaling pilot hydrogen/storage projects to commercial deployments with unit-cost reduction
• Securing regulatory approvals and local partnerships to deploy infrastructure sharing models
• Efficient allocation of the planned ~1,000 transferred employees to revenue-generating roles
• Targeted CAPEX deployment while maintaining group-level ROI thresholds (internal hurdle rates)

Principal risks and mitigation priorities:

• Market share capture - mitigate by differentiating through integrated engineering + software offerings
• High upfront CAPEX - mitigate via staged investment, JV financing, and government incentives
• Technology execution risk in hydrogen/storage - mitigate via partnerships with technology licensors and pilot projects leveraging ZEB expertise
• Regulatory/adoption delay for infrastructure sharing - mitigate by prioritizing jurisdictions with favorable frameworks and leveraging Y2S local capabilities
• Human capital gap - mitigate through accelerated training, targeted hiring, and retention incentives for transferred staff

MIRAIT ONE Corporation (1417.T) - BCG Matrix Analysis: Dogs

The following chapter addresses the 'Dogs' category within MIRAIT ONE's portfolio - low-growth, low-share businesses that consume resources and depress consolidated returns.

Multi-carrier mobile construction faces market contraction. The Multi-carrier Business reported a year-on-year decline in orders of 18% in Q2 FY2026 and a sales decrease of 15% for that quarter versus Q2 FY2025 due to reduced capital expenditure by major carriers. The FY2025 annual report noted ongoing capital constraints in this domain, with segment revenue down 12% for the fiscal year ended March 31, 2025. Competitive intensity and pricing pressure have compressed gross margins to mid-single digits for standard mobile facility construction, prompting management to reallocate engineering and sales resources toward higher-margin MIRAI Domain services.

Legacy sales of physical goods and LAN hardware. Sales of commodity LAN and Wi‑Fi hardware declined by approximately 22% in the late 2025 reporting period versus the previous year, reflecting customers' preference for integrated cloud and software-managed solutions. These product lines operate in a low-differentiation market with average net margins below 5% and fragmented market share, consistent with the Dog quadrant. MIRAIT ONE is deprioritizing standalone hardware transactions in favor of its Full‑Value Model (consulting + managed services + maintenance), where blended margins reach 18-25%.

Underperforming global-related entities undergoing liquidation. In FY2025 MIRAIT ONE recorded extraordinary losses related to the liquidation of certain overseas affiliates that failed to achieve profitability targets; these units exhibited low market share in non-core regions and produced negative ROI. The consolidated ROE was 6.7% as of March 31, 2025. Management's business structure reform removed these Dogs to free capital and management attention for high-performing assets (notably Lantrovision in the global segment).

Key operational and financial implications:

• Resource reallocation: engineers and salesforce redeployed from Multi-carrier and hardware sales to MIRAI Domains and Full‑Value offerings.
• Margin improvement target: aim to lift consolidated operating margin by 2-3 percentage points via elimination of low-margin Dogs.
• Balance sheet impact: one-time extraordinary losses (~¥2.1B) in FY2025 reduce short-term net income but clarify future cash flow profile.
• ROE improvement objective: by exiting non-core loss-making units, management intends to increase consolidated ROE above the March 2025 level of 6.7% toward mid-teens over the medium term.