Financial Result Summary
For FY Nov 2016
January 13, 2017
Star Mica Co., Ltd.
Contents
１．Executive Summary
２． Business Outline
３．Corporate Strategy
４．Market Analysis and Reference
５．Company Profile
2
-PL- Profit reached new record high. Recurring Profit up by over 40%.
■ Record earning was led by extensive marketing and sales of
renovated pre-owned condominium.
■ Sale of properties by investment business also contributed to profit.
FY Nov 2014
FY Nov 2015
FY Nov 2016
YoY
Change
(JPY million)
(JPY million)
(JPY million)
13,901
19,333
20,973
+8.5%
Gross profit
3,531
4,600
5,519
+20.0%
Operating income
1,903
2,465
3,258
+32.2%
Recurring profit
1,286
1,797
2,581
+43.6%
Net income
772
1,114
1,678
+50.6%
Depreciation/Amortization
451
332
286
-14.0%
2,354
2,798
3,544
+26.7%
Sales
EBITDA （※）
※ EBITDA = Operating profit + Depreciation/Amortization
3
Growth of Pre-owned Condominium Business contributed as our main domain.
■ Rent revenue and profit increased from acquisition of properties.
■ Sales of properties increased by refined marketing strategies to meet
various demand.
YoY
Change
FY Nov 2014
FY Nov 2015
FY Nov 2016
(JPY million)
(JPY million)
(JPY million)
Sales
13,901
19,333
20,973
+8.5%
Pre-owned
Condominium
12,253
15,497
16,982
+9.6%
2,120
2,363
2,530
+7.1%
Sales
10,132
13,134
14,452
+10.0%
Rent
Investment business
Advisory business
1,199
3,419
3,547
+3.7%
448
416
443
+6.7%
Revenue from real estate brokerage, management fee, etc
(JPY million)
Profit
Margin
FY Nov 2015
(JPY million)
Profit
Margin
FY Nov 2016
(JPY million)
Profit
Margin
YoY
Change
Gross profit
3,531
25.4%
4,600
23.8%
5,519
26.3% +20.0%
Pre-owned
Condominium
2,932
23.9%
3,627
23.4%
3,857
22.7%
+6.4%
Rent
1,558
73.5%
1,719
72.8%
1,797
71.0%
+4.5%
Sales
1,385
13.7%
1,947
14.8%
2,204
15.3% +13.2%
-11
-
-40
-
-143
Investment business
Mark-to-market loss
Advisory business
Revenue from pre-owned condominium rent/sales
Revenue excluding pre-owned condominium rent/sales
※including sale of properties
FY Nov 2015 : 2,433 JPY million
FY Nov 2016 : 2,512 JPY million
FY Nov 2014
Mark-to-market loss
Explanation of business units
-
Explanation of business units
Profit from pre-owned condominium rent/sales
-
242
20.2%
668
19.5%
1,334
37.6% +99.7%
-
-
-
-
-0
-
-
356
79.6%
305
73.4%
328
73.9%
+7.5%
Profit from pre-owned condominium rent/sales
※ including revenue of properties
FY Nov 2015 : 276 JPY million
FY Nov 2016 : 896 JPY million
Profit from real estate brokerage, management fee, etc
4
-BS- Total real estate holdings are at JPY47.2 billion, will become future
profit source.
■ We strived to acquire quality assets to add to our real estate holdings.
FY Nov 2015 FY Nov 2016
YoY
Change
(JPY million)
(JPY million)
43,093
+9.6%
1,933
3,260
+68.6%
36,890
39,221
+6.3%
Fixed assets
9,477
8,550
-9.8%
Tangible fixed assets
9,067
8,004
-11.7%
48,802
51,651
+5.8%
6,094
4,941
-18.9%
Long-term liabilities
30,154
32,804
+8.8%
Shareholder's equity
12,486
13,846
+10.9%
Capital-to-asset ratio
25.6%
26.8%
Current assets
Cash and deposits
Inventories
Total assets
Short-term liabilities
Total real estate holdings
（inventories＋Tangible fi xed assets）
39,315
45,957
＋1,267
47,225
+2.8%
※ Most of the inventories are condos from pre-owned condominium business
※ Most of the fixed assets are properties from investment business
5
Highlights
■ 2016.1
Started sales of “Stella Garden Musashikoganei” after renovation
of the whole building.
■ 2016.3
Hosted 2nd Design Contest by College students.
■ 2016.6
Initiated investment in Minpaku related company,
dispatched corporate director.
■ 2016.6
Revised up FY result forecast (1st revision).
Revised up dividend per share forecast (34 yen to 41 yen).
■ 2016.12 Renewed corporate logo and web site.
■ 2016.12 Revised up FY result forecast (2nd revision).
Revised up dividend per share forecast (41 yen to 46 yen).
6
１．Executive Summary
２．Business Outline
３．Corporate Strategy
４．Market Analysis and Reference
５．Company Profile
7
Corporate Philosophy
We strive to realize society
from "build" to "utilize“.
8
We offer better lifestyle through renovation.
■ We consider unique characteristics and renew each condominium
functionally as a new residence.
■ We provide total lifestyle service through our group companies in
purchase/sale, reform, and property management.
■ We have recorded sales of more than 5,000 units to date, or 600 units per year,
mainly in Tokyo Metropolitan area.
before
after
9
Example of product concept: Renovation that supports women.
■ Pursue comfortable living from women‘s perspective.
■ Product planning focused in storage, line of human flow, and ease of
maintenance.
“Shiawase (Happy life) Renovation”
✔ Storage cabinet for
big-size stuff
✔ Straight route from
entrance to kitchen
http://www.shiawase.starmica-r.co.jp/
✔ Easy-care sink
✔ Pantry
（storage space in kitchen）
10
Renovation of the entire building.
■ Renovate condominium unit and also the entire building by large scale.
■ Consider not only building exterior or facility but also softwares
such as security service and living environment.
■ Successful sales as “Stella” brand, 9 buildings in Tokyo and Kanagawa.
Before
After
Stella Residence Hikawadai
Stella Residence Koenji
Stella Garden Mizonokuchi
11
Working with external vendors to revitalize renovation market.
■ Lifestyle proposal with house facility providers, interior designers,
renovation service providers.
■ Diverse offering in renovation plan to meet wide variety of lifestyles.
12
１．Executive Summary
２．Business Outline
３．Corporate Strategy
４．Market Analysis and Reference
５．Company Profile
13
We own largest number of pre-owned condominiums in the industry.
■ Our pre-owned condominium holdings is over 1,800 units.
We will continue to offer variety of condominiums from our stock.
（ Unit : JPY bn ）
Comparison of pre-owed condominium holdings
40
(as of Nov. 30, 2016. in book value)
30
20
10
0
Ａ
Ｂ
※Summarized by Star Mica from corporate fiscal reports
Ｃ
Star Mica
14
Our profit margin remains strong.
■ We aim to expand profit margin by optimizing marketing strategy
and making improvements in product quality.
Comparison of gross profit margin (last 3 years )
（ Unit : % ）
30.0%
・・・last year
・・・2 years ago
・・・3 years ago
20.0%
10.0%
Ａ
Ｂ
Ｃ
Star Mica
※Listed comparable companies, gross profit margin of consolidated financial results for last 3 years.
15
A well diversified condominium portfolio.
Composition by year built
Composition by region
Areas under
Others 3.4%
Osaka branch
～1980 10.8%
Tokyo
（central
9.2%
5 wards）
12.6%
Chiba 3.5%
1998～
1981～1988
33.2%
22.0%
Saitama 4.3%
1989～1997
Kanagawa
Tokyo
17.6%
34.1%
（23 wards,
Tokyo
（ex-23
ex-above）
39.7%
wards）
9.7%
※ Above figures are as of November 2016.
※ Average property figures are based on number of properties. (all unit based)
※ Regional and Age segregation are based on acquisition amount. (all unit based)
Average unit data
Avg size
Avg age
Avg acquisition
64.02 ㎡
25.0 year
20,049 K（JPY）
16
Unrealized gain in pre-owned condominiums are estimated to be
approximately 11 billion yen.
■ Appraisal from third party appraiser indicates inventory market value
(Estimated sales value) of JPY56.2bn.
■ Estimated profit from sales will be JPY11.3bn, increase by JPY1.5bn YoY.
Unrealized gain from recent FY end book value
（Unit: JPY billion）
Estimated sales revenue
Estimated cost before sale
5.7
56.2
39.2
Book1value
Estimated2 sales value
※ Estimated cost before sale is calculated based on past record of transaction fee and renovation cost.
※ Above figures are based on projection under certain accounting method, this does not guarantee future capital gain revenue.
17
Unique strategy
■ We invest in less liquid pre-owned condominiums that are
occupied, rather than more liquid vacant condominiums.
■ Our unique strategy was recognized by Porter Prize in 2011.
Porter Prize
Award named after Professor Michael E. Porter (Harvard Business School) in
Corporate Strategy. This award is given to companies that have innovative product,
process and management, with unique strategy and solid earning results.
Awarded companies
Marui Group
Kirin Brewery
YKK “Fastener Business”
Gourmet Navigator
Kakaku.com, Inc.
Fast Retailing Co., Ltd.
Komatsu
Oisix Inc.
etc.
18
We are reaching the goal of 3-year medium term business plan
(2015-2017) in 2 years.
FY2017 Goals
( 3rd year )
Sales
Recurring Profit
EBITDA
ROE
FY2016 Results
( 2nd year )
20.0bn ＜ 20.9bn
2.2bn ＜
2.5bn
3.3bn ＜
3.5bn
10.0
％
＜ 12.7％
19
We have achieved strong results to meet Strategic Emphasis in
FY2015 and FY2016.
Strategic Emphasis
Pre-owned
condominium
Expand area of acquisition.
Enhance product quality.
Investment
Invest in real estate
restoration projects.
Advisory
Finance/Corporate
management
2-year results
Opened Saitama branch（2016/6）
Expanded product offerings
Invested 1.6billion yen.
Realized sales of 1.0 billion yen.
Reinforce real estate
brokerage, property
management.
Strengthened renovation proposal
ability.
Increase corporate publicity
through change in listed
market, recruiting efforts.
Changed listing to Tokyo Stock
Exchange 2nd Section.
Total number of management and
employees over 100.
Enhanced services to tenants.
20
We are planning medium term, 3-year business plan (2017-2019).
Business Environment
■ Changes are uncertain in Japanese economy
(fragile outlook of the world economy, aging population etc)
■ Rising price in newly built condominiums, potential over supply of them,
higher activities in pre-owned condominium market.
■ Evolution of Sharing economy, Integration of IT and existing businesses
(Development in Fin-tech etc)
Our Direction
★ Focus our resources to pre-owned condominium business
Establish leading position in pre-owned condominium industry in both
volume and quality.
★ Challenge for Innovation
Challenge ourselves to further integrate IT and real estate to
pursue new business opportunities.
21
We renewed our corporate logo to meet new challenges.
■ We hope to share our value through brand communication.
Points of new logo
✔ Strong logo type to express trust, innovation and challenging spirit.
✔ Golden ratio to provide beauty, stability and universality.
22
Challenges toward integration of real estate business and IT.
Examples of business
✔ Home key system
by smartphones.
✔ Match making of demand and
supply through cloud servers.
✔ Virtual property visits utilizing
VR technologies.
✔ Paperless contracts/agreements by tablets.
23
Preparing to enter Minpaku service. Seek to meet inbound short stay
demand.
■ Government is considering launch or Minpaku service, related legislation
is to be discussed in 2017 ordinary diet session.
Recent developments
Number of international visitors to Japan
✔ Negotiation and adjustments to prepare
a bill
✔ Announcement of companies to provide
Minpaku services.
Year 2020 goal
40 million
（Unit：million）
40
Our positioning
35
30
✔ We own large number of condominiums
in Tokyo and suburbs.
25
20
✔ We have alliance with Squeeze, a
minpaku marketing/operation company.
15
10
5
0
2011
2012
2013
2014
2015
2020
✔ We have experience in furnished
condominium, short-term rent
arrangements.
24
We aim to establish leading role in the industry in 3 years (end of FY2019）.
FY
2016/11
Sales
20.9bn
23.5bn
37.7bn
45.0bn
3.2bn
Operating Profit
Inventory
Others
FY
2019/11(E)
・
・
3.5bn
Achieve ROE of 10% for all 3 years.
Listing change from Tokyo Stock Exchange
2nd section to 1st section.
25
We plan to make aggressive acquisition in pre-owned
condominiums.
■ From increased inventory of pre-owned condominiums, we anticipate
improvement in rent revenue and sales revenue.
（Unit : JPY bn）
50.0
40.0
35.3
30.0
20.0
45.0
Transition of Inventories (at end of each year)
21.2
24.1
23.9
2011/11
2012/11
26.9
37.7
31.1
10.0
0.0
2010/11
2013/11
2014/11
2015/11
2016/11
・・・・・・・
2019/11
(Planned)
26
Operating profit is growing along with business expansion.
■ Growth of Pre-owned condominium holdings lead us to future stable gains.
（Unit : JPY bn）
4.0
3.5
3.2
History of Operating Profit
3.0
2.4
2.5
2.0
1.5
3.3
3.5
1.6
1.8
1.5
1.8
1.9
1.0
0.5
0.0
2010/11 2011/11 2012/11 2013/11 2014/11 2015/11 2016/11 2017/11
(Forecast)
2019/11
(Planned)
27
We are looking forward to breaking record high earnings again in
FY 2017.
■ We believe demand of renovated pre-owned condominiums
■
remains high due to expensiveness in newly built condominiums.
We will strive to increase supply of quality pre-owned condominiums
for higher sales and profit.
（※1）
FY Nov 2016
FY Nov 2017
Result
Forecast
YoY
Change
(JPY million)
(JPY million)
Sales
20,973
21,800
+3.9%
Pre-owned
Condominium business
16,982
17,430
+2.6%
Gross profit
5,519
5,669
+2.7%
Pre-owned
Condominium business
3,857
4,032
+4.5%
Operating income
3,258
3,356
+3.0%
Recurring profit
2,581
2,727
+5.7%
Net income
1,678
1,750
+4.3%
28
We plan to increase dividend, eight consecutive years in a row.
■ FY 2016 annual dividend was 46 yen, increase of 17 yen YoY.
FY 2017 annual dividend forecast is 50 yen.
■ Goal of dividend payout ratio is 30%, long-term. We continue to plan
on increase in dividends.
（Unit ： Yen ）
50.0
46.0
60.0
50.0
History of dividend per share （※）
40.0
29.0
30.0
20.0
10.0
0.0
Consolidated
dividend
payout ratio
15.0
18.0
10.0
11.0
11.5
12.0
2009/11
2010/11
2011/11
2012/11
2013/11
2014/11
2015/11
2016/11
22.8％
14.0％
14.4％
20.2％
17.9％
21.0％
23.5％
24.8％
※ Due to stock split of 1-100 in December 2012, past per share dividends are adjusted.
2017/11
25.9％
（Forecast ）
29
Semi-annual shareholder benefit plan.
Sample
: Lifestyle Goods
（2,000 yen）
Record date : Nov end
Stock Holding : over 100shares
Benefit
Sample
: Quo Card
（1,000 yen）
Record date : May end
Stock Holding : over 100shares
Benefit
※ Sample photo subject to change without notice
30
１．Executive Summary
２．Business Outline
３．Corporate Strategy
４．Market Analysis and Reference
５．Company Profile
31
Japanese pre-owned condominium stock now over 6 million units.
■ Supply of newly built condominiums is rising steadily.
⇒ We expect growth and development in Japanese condominium market.
Over 6million units
Number of new condominiums
7,000,000
construction in units
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
Source: Star Mica, based on the statistical data from Ministry of Land, Infrastructure, and Transport data
32
Condominium market is shifting towards pre-owned.
■ Number of pre-owned condominiums for purchase/sale is in increasing trend.
（Unit：One contract））
40,000
Number of pre-owned condominium purchase and sale in Tokyo metropolitan area
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
1997
1999
2001
2003
2005
2007
Source: Star Mica, based on the statistical data from REINS Market Trend
2009
2011
2013
2015
※ 12 months total in each year except for the year 2016.
11 out of 12 months total as for the year 2016.
33
Potential upside in market growth, in a global perspective.
■ 70-90% of housing market in developed countries are
used(pre-owned) properties, whereas 10% in Japan.
■ Along with maturing social infrastructure, we think this as a
growth market.
Ratio of used(pre-owned) properties among all housing market
83.1%
88.0%
68.4%
14.7%
US
UK
（2014）
（2012）
France
（2013）
Japan
（2013）
Source: Star Mica based on the data from and Ministry of Land, Infrastructure and Transport data
34
Future outlook of renovation business.
■ Households can own higher grade “for-sale condominiums” compared to lower
grade “for-rent condominiums”, with better economics.
■ Planning, renovating and providing warranty by experienced company like
us can offer reliable housing to households.
Standard monthly rent
143
（※１）
thousand yen
Monthly mortgage repayment （※２）
85
thousand yen
※1 Based on our corporate results at November 2016, Average sales price of 31.8million yen, average space of 67.53 square meters
※2 Assumed mortgage of 30 million yen, at 1%, for 35 years
35
１．Executive Summary
２．Business Outline
３．Corporate Strategy
４．Market Analysis and Reference
５．Company Profile
36
Company profile（as of 30 Nov. 2016）
Company name
Star Mica Co., Ltd.
Representative
Chairman and CEO Masashi Mizunaga
Date of incorporation
May 1, 2001
Listing date
October 2, 2006
Listed market
Tokyo Stock Exchange 2nd Section （stock code: 3230）
Capital
3,573 million yen
Offices
Tokyo head office （Minato Ward）, Yokohama branch（Yokohama City）,
Osaka branch （Osaka City）, Saitama branch ( Saitama City )
Main Bank
Bank of Tokyo-Mitsubishi UFJ, Sumitomo Mitsui Banking Corporation,
Aozora Bank, Mizuho bank, Ltd, Resona Bank, Ltd.
Auditor
KPMG AZSA LLC
Employees
101
Businesses
Pre-owned Comdominium business, Investment business, Advisory
business
37
Major shareholders (as of 30 Nov. 2016)
Major Shareholders
（Unit : Shares ）
Shareholder
May 2016
Office Ohgi
Masashi Mizunaga
1,497,000
1,497,000
957,799
945,599
1,343,900
Star Mica Co., Ltd
Hiroshi Taguchi
900,000
The Master Trust Bank of Japan, Ltd. (Account in trust）
Other
corporations
0.2%
9.5%
4.7%
5.1%
3,030,301
Office Ohgi,
Masashi
Mizunaga 28.5%
Foreign entities
17.6%
Individual
investors,
others 25.1%
－ Treasury stock
9.9%
466,000
10,000,000
Treasury Stock
9.0%
466,000
240,300
Distribution of share ownership
9.5%
14.9% Chairman / Representative Director
8.1%
140,300
Total
13.5%
708,600
213,480
189,600
2,998,321
10,000,000
7.1%
2.1%
1.9%
30.0%
100.0%
Notes
16.5% Private Company of Masashi Mizunaga
7.3%
Citibank London KIA FUND 136
Others
900,000
15.0%
% Voting
Rights
730,200
897,400
The Nomura Trust and Banking Co., Ltd.
(Account in investment trust）
1,351,200
%
Holdings
527,000
Japan Trustee Services Bank, Ltd. (Account in trust）
Royal Bank of Canada Trust Company (Cayman) Ltd.
Nov 2016
7.8%
2.4%
2.1%
33.1%
100.0%
Transition in number of shareholders
‥‥Individual investors
8,047
7,058
‥‥Non-individual investors 5,016
2,347
Financial
Institutions
19.2%
2013/11 2014/11 2015/11 2016/11
38
Cautionary Statement / Contact Information
■ This presentation contains forward-looking statements, including forecasts of business performance and operation
plans and targets. These statements are based on information available to the company’s management when this
material was prepared and on current assumptions for uncertain factors affecting future earnings. Actual results may
differ from the information presented in this report due to a host of factors that are unforeseeable and/or beyond the
control of the company.
■ The information in this presentation includes data believed by the company to be reliable and has been obtained from
public sources believed to be reliable. However, the company makes no representation as to the accuracy or
completeness of such information.
■ This presentation is not to be construed as a solicitation to invest in the company. Investors must make their own
investment decisions.
For further information please contact:
Star Mica Co., Ltd., Corporate Planning Department
E-mail： [email protected]
39