FFRI Security

3692.TMEDIUM

Tactical · Weight: 10%· Data as of 2026-04-15

¥6,040+2.37%

6-month daily

Investment Thesis

Pure domestic cybersecurity — only Japanese company with proprietary endpoint security engine (FFRI yarai). Defense Ministry and government agency contracts (national security services). H1 FY2026 revenue +74.9% YoY, OP swung to ¥548M profit (from ¥13M loss). Full-year guidance: ¥4.26B revenue (+40.2%). Economic Security Technology Development Program contracts. Positioned as sovereign cybersecurity provider — critical for Active Cyber Defense Law implementation.

Risk

1) PE 38.7x — expensive for a ¥48B market cap company. 2) Revenue still small (¥4.26B forecast) — scale risk. 3) Government contract timing is lumpy. 4) Competition from global endpoint players (CrowdStrike, SentinelOne). 5) Growth Market listing — governance concerns.

Monitoring Trigger

FY2026 full-year results (May 2026). If revenue growth slows below 25%, TRIM. If defense ministry contracts expand significantly, ADD to 15%. Watch for Active Cyber Defense Law implementation contracts. If PE expands above 50x without revenue acceleration, EXIT.

Key Dates

2026-05earningsFY2026 full-year results

2026-10-01catalystActive Cyber Defense Law enforcement — sovereign security demand surge

Update History

2026-04-15new_narrativeHOLD

View report →

Initial DD — pure domestic security, defense contracts, revenue +74.9% H1, PE 38.7x

Key Metrics

38.7

67.1

Fwd PE

14.1

P/B

28.4%

ROE

31.3%

Op Margin

56%

D/E

0.2%

Div Yield

N/A

FCF

¥48B

Mkt Cap

Business Segments

Segment	Revenue	Share	Description
Security Products (yarai)	¥2.5B	59%	FFRI yarai endpoint security — predictive defense technology
National Security Services	¥1.2B	28%	Defense Ministry, government agency security consulting/research
Other	¥0.6B	13%	NICT research projects, economic security programs

Supply Chain Evidence

Evidence	Customer	Product	Detail
confirmed	Japan Ministry of Defense	Security consulting, research, analysis	National security services for defense and government agencies
confirmed	Japanese government agencies	FFRI yarai endpoint security	Deployed across government networks, economic security program participant
confirmed	NICT (National Institute of ICT)	Cybersecurity research projects	Supporting NICT demonstration projects and research

Sources & References

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Peer Comparison

Company	PE	Fwd PE	ROE	Op Margin	FCF
Trend Micro	22.5	21.5	26.3%	21.1%	+¥42.7B
Digital Arts	21.7	21.7	17.8%	42.7%	N/A
HENNGE	22.9	19.5	46.0%	17.6%	N/A
Cyber Security Cloud	20.4	N/A	18.6%	21.7%	+¥578M
FFRI Security	38.7	67.1	28.4%	31.3%	N/A
Macnica Holdings	14.7	N/A	10.18%	~3.5% (overall distributor; cyber segment >9%)	N/A
Internet Initiative Japan (IIJ)	19.08	N/A	14.96%	10.7%	N/A
Soliton Systems	14.55	N/A	~20%	14.1%	N/A