4442 VALTES HDS is 3697 SHIFT’s competitor, which focusing on higher and more independent software test services. Its sales grew 5 times bigger in the last decade. The reason why its sales was not as high as SHIFT is that they didn’t acquire companies much frequently, and both segments are different. VALTES mainly provides highly qualified software service, not like SHIFT also providing software test and development. This company was facing a difficulty of hiring high-end engineers in this year which caused its sales growth slowing down. OP also reduced this year due to M&A expense. But they will solve this problem by offering higher wage, various employee welfare and staff training program. Therefore, our analyst still rates ‘A’ despite fair value is adjusted lower.
Overview
Established in 2004. The company provides testing services for software quality. Widely targets embedded software, PC applications, business systems, Web applications and others. Services cover the verification of accurate functions, accumulation of data, detection of vulnerability, and others. Also develops web and mobile applications and offers security assessment services through a subsidiary. Provides services to Japanese firms in Philippines through a subsidiary as well.
Advantage
· Offer standard test process like ISO/IEC/IEEE and QUINTEE
· 92% engineers have JSTQB certificate (Japan Software Testing Qualifications Board) and also ISTQB’s global partner (International Software Testing Qualifications Board)
· Provide test service to various industry, especially financial service and railway
· Has an independent service dept. for looking after big enterprises due to long contract, big project and high price (50% sales from big enterprises)
Growth
· M&A activities, despite of only 2 companies in 2023 and 1 company per year in the past, VALTES starts to focus on more M&A
· Outlook of future performance, new mid-term business plan will be released in May
· Global business, build offshore service in Philippine to enlarge business scope, reduce labor cost and solve shortage of engineers
· Training program, hold 160~320 hours training course and 70 seminars per year self-growing course for all employees