Suspension of operations of a Chinese subsidiary
比智（杭州）商貿有限公司 (PG China, a consolidated subsidiary)
PG China in Hangzhou, Zhejiang Province, China. Business: cross-border e-commerce support
A decline in the number of Japanese companies entering China due to the spread of COVID-19, sluggishness in the Chinese economy resulting from lockdowns and other factors, and difficult conditions for recovering performance
Cumulative net loss of ¥102 million for the most recent 3 years (no amount of expenses associated with the suspension is disclosed)
Current consolidated fiscal year (expenses arising from the suspension of operations)
Expenses arising from the suspension of operations are not expected to have a material impact on consolidated results for the current consolidated fiscal year
Company response
All operations of PG China, including cross-border e-commerce support, are scheduled to be suspended on 30 April 2026
By suspending all operations, the company expects that it will no longer record losses related to its China business of the kind recorded over the most recent 3 years. The entity will not be liquidated, leaving open the possibility of re-entering the Chinese market. The accounting treatment based on the decline in the value of the subsidiary's assets has already been completed.
| Item | Details |
|---|---|
| Event name | Suspension of operations of a Chinese subsidiary |
| Date of occurrence | 23 March 2026 (date of the board resolution; the opening section also states that the board meeting was held on 26 March 2026) |
| Subject Entity | 比智（杭州）商貿有限公司 (PG China, a consolidated subsidiary) |
| Target Locations / Products | PG China in Hangzhou, Zhejiang Province, China. Business: cross-border e-commerce support |
| Cause | A decline in the number of Japanese companies entering China due to the spread of COVID-19, sluggishness in the Chinese economy resulting from lockdowns and other factors, and difficult conditions for recovering performance |
| Amount of Impact on Business Performance | Cumulative net loss of ¥102 million for the most recent 3 years (no amount of expenses associated with the suspension is disclosed) |
| Accounting period in which recognized | Current consolidated fiscal year (expenses arising from the suspension of operations) |
| Impact on Earnings Forecast | Expenses arising from the suspension of operations are not expected to have a material impact on consolidated results for the current consolidated fiscal year |
| Suspended operations | All operations of PG China, including cross-border e-commerce support, are scheduled to be suspended on 30 April 2026 |
| Outlook | By suspending all operations, the company expects that it will no longer record losses related to its China business of the kind recorded over the most recent 3 years. The entity will not be liquidated, leaving open the possibility of re-entering the Chinese market. The accounting treatment based on the decline in the value of the subsidiary's assets has already been completed. |
Items this document does not state (15)
These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.
The reasons the company gives
The company's own explanation, not something inferred from the numbers.PG China's performance deteriorated as the spread of COVID-19 reduced the number of Japanese companies entering the Chinese market, while the Chinese economy remained sluggish due to lockdowns and other factors. As it remained in the red as of the fiscal year ended December 2025, the company determined that suspending operations was the best course of action to prevent further losses, make effective use of management resources across the group, and pursue optimization and greater efficiency. The company will not liquidate the entity because liquidation procedures in China are complex and lengthy, and because it considered the possibility of re-entering the Chinese market in the future.