First, the conclusion
There is no reason to view the possibility of relisting as zero. The company became profitable in the fiscal year ending March 2026, with net assets of 2.131 billion yen and equity ratio improving to 83.94%. In terms of formality, the first condition asked is that ``consolidated net assets are positive'' has been met.
However, here's where it gets difficult. Asian Development Capital is not a company that was delisted solely because of poor performance or excessive debt. The TSE took issue with the foundations of company management, including insubstantial transactions, concentration of authority, board approval procedures, subsidiary management, compliance, and internal audits.
Therefore, the central issue for relisting is not `Did the company turn a profit for just one year?'' but `Can the organization establish a system that prevents the same problems from occurring, and can this be proven through several years of audits and disclosure?'' Finances have improved. However, there is still insufficient evidence to gauge the distance to relisting.
Why was it delisted?
On March 29, 2023, the TSE decided to delist the company's shares as of April 30, 2023. The basis was that it was recognized that no improvements had been made to the internal management system even after resubmitting the internal management system confirmation report.
The TSE statement cited non-substantive transactions and fund circulation surrounding battery transactions, inadequate screening of new transactions, concentration of authority in specific individuals, and deficiencies in board approval and subsidiary management. Even after that, it was determined that deficiencies remained in compliance, internal regulations, internal audits, overseas and subsidiary management, and board operations.
This is important when considering relisting. This is because even if sales and profits improve in the next fiscal year, it takes time to prove that internal controls are operating effectively. It is not enough to simply create measures to prevent recurrence; it is necessary to build up a track record of how responses to exceptional transactions, investment screening, subsidiary monitoring, and checks on the board of directors have functioned in normal times.
Financial results for the most recent three terms
The consolidated indicators listed in the company's securities report for the fiscal year ending March 2026 are arranged as follows for the most recent three fiscal years.
| Fiscal year end | Operating revenue | Operating income | Ordinary income | Net income attributable to owners of parent company | Operating CF | Net assets | Equity ratio |
|---|---|---|---|---|---|---|---|
| Fiscal year ending March 2024 | 258 million yen | -375 million yen | -392 million yen | -539 million yen | -0.88 billion yen | 1.109 billion yen | 23.20% |
| Fiscal year ending March 2025 | 470 million yen | -141 million yen | -138 million yen | -150 million yen | -360 million yen | 967 million yen | 17.52% |
| Fiscal year ending March 2026 | 1.174 billion yen | 535 million yen | 1.061 billion yen | 1.081 billion yen | 151 million yen | 2.131 billion yen | 83.94% |
There is a clear improvement in the numerical direction. Operating revenue increased approximately 4.6 times over two years, and operating income/loss, ordinary income/loss, final income/loss, and operating cash flow were all in the black. Cash and cash equivalents also increased from 428 million yen at the end of the previous fiscal year to 998 million yen.
On the other hand, total assets at the end of the fiscal year ending March 2026 were 2.539 billion yen, a significant decrease from 5.509 billion yen at the end of the previous fiscal year. This was largely due to the transfer of Digital Asset Securities from a consolidated subsidiary to an equity method affiliate. The equity ratio of 83.94% seems strong, but as the business structure changes, it is too early to judge the stability of the earnings base based on the ratio alone.
Asia Development Capital Stock Analysis continues to summarize the company's business and financial risks.
How do we view the “quality” of surplus in 2026?
Although the company is making progress toward becoming profitable in the fiscal year ending March 2026, there are some points that should be taken with a grain of salt regarding its repeatability.
First, operating revenue of 1.174 billion yen includes sales of operating investment securities of 653 million yen. The transaction involved a change in the scope of consolidation due to the proceeds from the sale of a portion of Digital Asset Securities shares. It is difficult to say that this is normal profit that can be repeated on the same scale in the next fiscal year.
Next, the reversal of allowance for loan losses of 650 million yen contributed to ordinary income of 1.061 billion yen. This is also a reversal of reserves accumulated in the past and cannot be treated as core business income for each period. The final profit was 1.081 billion yen, but the operating cash flow was only 151 million yen, and there is a big difference between accounting profit and cash generation ability.
Furthermore, on May 7, 2026, the company sold all of its remaining shares in Digital Asset Securities for 519 million yen. While this will help secure funds, the investments that supported earnings in the fiscal year ending March 2026 will no longer be subject to consolidation or equity method accounting. At the next financial results, the question will be how much the business portfolio will generate recurring profits after the sale.
Profit over sales, cash over profit. If a company is considering relisting, the first test will be whether it can maintain operating surplus and positive operating cash flow after the fiscal year ending March 2027, excluding stock sales and reserve reversals.
TSE Standard Market Format Requirements
For new listings on the TSE Standard Market, there are mainly the following formal requirements.
| Main items | Criteria | Current view |
|---|---|---|
| Number of shareholders | 400 or more | Sufficiency status as of the latest record date has not been confirmed |
| Number of circulating shares | 2,000 units or more | Close examination of shareholder composition and circulating shares |
| Market capitalization of outstanding shares | 1 billion yen or more | Depends on the expected price at the time of listing and the number of outstanding shares |
| Distribution share ratio | 25% or more | Judgment excluding ownership by major shareholders, officers, etc. is required |
| Number of years of business continuity | 3 years or more | Formally satisfied |
| Net assets | Consolidated net assets are positive | 2.131 billion yen at the end of March 2026 |
| Amount of profit | 100 million yen or more in the past year | This can be met numerically for the fiscal year ending March 2026, but it will be re-evaluated at the time of application |
| Audits, etc. | Conditions regarding false statements, inappropriate opinions, etc. | It is necessary to confirm the most recent audit results and auditor qualifications |
Ordinary profit for the fiscal year ending March 2026 is 1.061 billion yen, which exceeds 100 million yen if you look only at the profit standard amount. However, the current base business year will be used when applying for relisting, and the surplus for the fiscal year ending March 2026 will not automatically be available for future applications. The content of profits can also be seen in the revenue base evaluation in the substantive examination.
A large number of outstanding shares does not mean that the number of outstanding shares will be filled immediately. Without confirming the range of outstanding shares excluding those held by major shareholders and executives, the number of shareholders, and the price formation at the time of listing, it is impossible to determine whether the market capitalization of outstanding shares is 1 billion yen and the ratio of 25% is sufficient.
Substantive examination is more important than formal requirements
In addition to numerical standards, the TSE examines a company's sustainability and profitability, soundness of management, effectiveness of corporate governance and internal control systems, appropriateness of disclosure, and investor protection.
In the case of Asian Development Capital, the following four points are particularly important.
Internal control operational performance
This is the same area as the past reasons for delisting. Examinations of investment projects, board approval, related party transactions, management of subsidiaries and overseas bases, internal audits, and compliance are tested not only on paper but also on whether they are actually functioning.
Continuous revenue base
Investment companies cannot simply deny all temporary profits because the gains from sales are included in their business results. However, it is difficult to explain budget control and continuity if there are large fluctuations from project to project. It is necessary to stabilize investment income, interest and fee income, fixed costs, and operating cash flow over multiple periods.
Reliability of disclosure
Listed companies are required to make timely and accurate disclosures. In light of past revised reports and internal control issues, evidence is needed that prevention of recurrence has become established in practice, such as early settlement of accounts, documentation of accounting judgments, reporting from subsidiaries, and operation of a disclosure committee.
Checks independent of management
Can the board of directors and audit and supervisory committee examine management decisions and stop them when necessary? A record of detecting and correcting problematic transactions is more persuasive than a formal number of outside directors.
GC and audit system
The annual securities report for the fiscal year ending March 2026 includes material uncertainties regarding the going concern assumption. Although the company has returned to profitability, measures such as business restructuring, financing, and fixed cost reduction are still in the process of being implemented, as significant ordinary losses and final losses continued until the previous fiscal year.
The audit opinion itself is an unqualified opinion, and the statement by the GC does not modify the audit opinion. Still, this is a serious issue when it comes to explaining stable business continuity capabilities during relisting examinations. Although it is not a mechanical decision that a company cannot be relisted with a GC remaining, it does at least increase the uncertainty of the screening process.
Audits for the same fiscal year were conducted by Akasaka Certified Public Accountant Office and Hiroaki Umio Certified Public Accountant Office. The formal requirements of the TSE require that financial statements for the past two years be audited by a registered listed company auditor. In the list of registered auditors of listed companies as of February 24, 2026 published by the Japan Institute of Certified Public Accountants, no registration with the same name as these two firms can be confirmed.
However, the reference date for the published list is February 24, 2026, and it is not possible to determine the registration status or individual eligibility after that date. If relisting is to become a reality, the schedule will depend on whether an audit system is in place that complies with the system at the time of application and whether the necessary audit results can be accumulated.
Relisting scenario
Bullish scenario
From the fiscal year ending March 2027 onwards, we will ensure operating income and operating cash flow without relying excessively on the sale of investees or the reversal of reserves. Major uncertainties in the GC will be resolved, and internal control performance and qualified auditing systems will be built up over multiple periods. Furthermore, once the listing preparation system including lead underwriters and auditors, capital policy, and measures for tradable shares are announced, relisting will change from a mere expectation to a concrete project.
Neutral scenario
Although net assets and cash on hand will be maintained, operating cash flow will not be stable due to fluctuations in profits and losses due to the timing of investment sales. Although internal control continues to improve, no progress is seen in the GC, audit system, or lead manager selection. In this case, even if the company's chances of survival increase, the timing of relisting remains difficult to predict.
Bearish scenario
After the sale of digital asset securities, the source of income will not develop, and the company will return to operating deficits and capital outflows. If doubts about control are rekindled due to large-scale investments, related-party transactions, dilutive financing, etc., the company will have to start over from the preparation of the prerequisites for the relisting review. Unlisted stocks cannot be bought and sold continuously on the market, so liquidity risk overlaps with business risk.
KPIs and disclosures to watch in the future
- Operating income excluding stock sales and reversal of allowance for loan losses
- Trends in operating cash flow and year-end cash
- Will important GC uncertainties be resolved?
- Acquisition/sale process of investees and status of board of directors supervision
- Changes in related party transactions, loans and allowances
- Audit system and number of years of continuous audit by registered listed company auditors
- Official announcement regarding lead underwriter securities, listing preparation office, and relisting policy
- Number of shareholders, outstanding share ratio, capital policy at time of listing
Of these, changes are likely to occur most quickly in the description of operating cash flow and GC. Even if the word of relisting does not come up first, the preconditions will improve considerably if the company can maintain cash from normal operations and eliminate the serious uncertainty surrounding its business continuity.
Points to note when viewing unlisted stocks
The company's shares cannot be bought or sold on the TSE. The company provides guidance on the procedure for changing the name of the stock, but unlike listed stocks, there is no market price, board, or daily trading volume, so it is not always possible to buy and sell at the desired time or price.
Furthermore, it will not be known until the specific application plan is announced whether the shares of former shareholders will be available for distribution when the company is relisted, and what will happen to its capital policy, such as reverse stock splits, stock splits, capital increases, and secondary offerings. It is dangerous to evaluate a stock based on the assumptions that `we will relist it because we are profitable'' or `if we relist, the old stock will be at this price.''
[Summary]
Returning to profitability and improving financial performance in the fiscal year ending March 2026 is a clear step forward for Asian Development Capital. Net assets increased to 2.131 billion yen, and operating cash flow also became positive. The foundation for relisting is certainly better than before.
However, the sale of stocks and the reversal of allowance for doubtful accounts will make a large contribution to 2026 profits, and significant uncertainties regarding GC remain. The essence of delisting was the internal control system. It is not possible to skip this point and discuss relisting based solely on financial results.
The current assessment is, ``Relisting remains a possibility, but there is no official information to support short-term realization, and multiple period proof is required.'' What we should watch next is not rumors of a relisting. These include cash from normal operations, dissolution of GC, operation of internal controls, qualified auditing system, and announcement of specific preparations for listing by the company.
Source
- [Asian Development Capital "Securities Report" list] (https://www.asiadevelop.com/irinfo/report/) (Consolidated financial results for the 104th to 106th period, GC for the fiscal year ending March 2026, audit report, important subsequent events)
- Asian Development Capital “IR Information” (confirmed on July 25, 2026)
- Asian Development Capital “About stock procedures” (Procedures for changing the name of unlisted stocks)
- Japan Exchange Group "Delisting Decision: Asian Development Capital Co., Ltd." (March 29, 2023)
- Japan Exchange Group “Summary of Listing Examination Criteria (Standard Market)”
- [Japan Exchange Group "Initial Listing Guidebook (Standard Market Edition)"] (https://www.jpx.co.jp/equities/listing-on-tse/new/guide-new/01.html) (including information revised on July 21, 2026)
- [Japan Institute of Certified Public Accountants "Listed Company Auditor Registration System"] (https://jicpa.or.jp/about/activity/self-regulatory/lcaf/) (Includes guidance to list of registered listed company auditors)