Loadstar Capital Kk · TSE:3482
Loadstar Capital Kk — H1 2020 Earnings Presentation
57 slides from Loadstar Capital Kk's earnings presentation, August 2020
Slide 1: Six months ended June 30, 2020 Earnings Briefing
Six months ended June 30, 2020 Earnings Briefing Loadstar Capital K.K. Securities code: 3482 August 2020 © Loadstar Capital ALL RIGHTS RESERVED
Slide 2: 目次
目次 １．Our Business P. 2 ２．Overview of Financial Results for the Six months Ended June 30, 2020 P. 4 ３．Business Overview P. 11 Corporate Funding Business P. 12 Asset Management Business P. 20 Crowdfunding Business P. 21 ４．Forecast for the FY2020 and Future Growth Strategy P. 26 Appendix 1. Our strengt
Slide 3: 1. Our Business
１．Our Business © Loadstar Capital ALL RIGHTS RESERVED 2
Slide 4: Mission
Our Business Mission Real Estate X Tech to Open Up a New Market CROWDFUNDING （Equity Investment-type / Loan-Type） Real Estate Tech Real Estate BROKERAGE CORPORATE FUNDING ASSET MANAGEMENT Investments (Real Estate Principal Investment) / ADVISORY SERVICES © Loadstar Capital ALL RIGHTS RESERVED 3
Slide 5: 2. Overview of Financial Results for the Six months Ended June 30, 2020
2. Overview of Financial Results for the Six months Ended June 30, 2020 © Loadstar Capital ALL RIGHTS RESERVED 4
Slide 6: High Light
High Light Consolidated Net sales +38% y-o-y Financial Ordinary profit +59% y-o-y Results Profit +63% y-o-y • Net sales increased due to the sale of a large Corporate property. +40% y-o-y Funding • Completed our largest-ever property acquire despite the COVID-19 crisis (See P.16) • As a result of ou
Slide 7: Consolidated Statements of Income
Consolidated Statements of Income Further details provided on following pages. （¥ millions) FY2020 1Q-2Q Results FY2020 (Forecasts) % of % of Net After Before Amt. Amount % Y-o-Y FY2018 Sales Revision Revision Changed Forecast Net sales 10,107 100.0% 137.5% 59.9% 16,862 100.0% 111.6% Cost of sales 6
Slide 8: Consolidated Sales
Consolidated Sales • As strategic sales of properties have been under way since the beginning of the fiscal year, consolidated sales grew mostly in line with annual plan. Achieved high year-on-year growth rate of 38%. Sales in the Crowdfunding Business & Asset Management Business lagged behind the a
Slide 9: Consolidated Ordinary Profit/Profit
Consolidated Ordinary Profit/Profit • Annual plan achievement rate: Ordinary Profit 75%; Profit 79% • Remarkably steady performance, due to higher-than-expected property sales prices, while SG&A expenses also remained low. Consolidated Ordinary Profit （¥ millions） Consolidated Profit（¥ millions） 4Q
Slide 10: Consolidated Financial Position
Consolidated Financial Position （¥ millions） 6/30/2020 • A considerable amount of % of % vs. unrealized gains have accrued, as Amount we hold properties with high total 12/31/2019 appraisal values. Current assets 51,228 99.4% 116.3% • High liquidity since we have no Cash and deposits 6,245 12.1% 80.
Slide 11: Consolidated Statements of Cash Flows
Consolidated Statements of Cash Flows （¥ millions） FY2019 FY2020 Amount 1Q-2Q 1Q-2Q Changed • Cash flow from operating activities will remain negative until we CF from operating activities △407 △5,993 △5,585 achieve our aim of building up real estate as inventory enough to Profit before income taxes
Slide 12: 3. Business Overview
3. Business Overview © Loadstar Capital ALL RIGHTS RESERVED 11
Slide 13: Real Estate Investments: Mission
Real Estate Investments Mission Real Estate X Tech to Open Up a New Market CROWDFUNDING （Equity Investment-type / Loan-Type） Real Estate Tech Real Estate BROKERAGE CORPORATE FUNDING ASSET MANAGEMENT Investments (Real Estate Principal Investment) / ADVISORY SERVICES © Loadstar Capital ALL RIGHTS RESE
Slide 14: Corporate Funding Business Results: Real estate investment sales
Corporate Funding Business Results 【Real estate investment sales】 • Net sales grew 43% year-on-year due to sale of large properties (with fairly high profit margins). • Initial plan has been exceeded since some payments for property sales scheduled for the 3 rd quarter have already been settled at a
Slide 15: Corporate Funding Business Results: Real estate leasing sales
Corporate Funding Business Results 【Real estate leasing sales】 • We reduced the number of property acquisitions in the 1st quarter due to the COVID-19 pandemic and the somewhat overheated real estate market conditions at the beginning of the year. Leasing income therefore increased only slightly yea
Slide 16: Corporate Funding Business Results: Shareholder Value Enhancement
Corporate Funding Business Results 【Shareholder Value Enhancement through Property Acquisition】 • Property number and asset balance increased significantly through property acquisitions in the 2nd quarter. • Unrealized gains have also increased considerably due to thorough scrutiny and selection of
Slide 17: Property Acquisition During COVID-19 Pandemic
Property Acquisition During COVID-19 Pandemic Acquisition of 8 Office Buildings in Central Tokyo • While real estate transactions stagnated across the board due to the COVID-19 pandemic, we acquired 8 office buildings in central Tokyo. As the seller desired the transaction in a relatively short peri
Slide 18: Overview of the 8 Buildings acquired in 2nd Quarter of 2020
Property Acquisition During COVID-19 Pandemic Overview of the 8 Buildings acquired in 2nd Quarter of 2020 (TBD)Myogadani Bldg. (TBD)Suehirocho Bldg. (TBD)Suidobashi Bldg. (TBD)Takadanobaba name 4-chome Bldg. 5-5-5, Koishikawa, Bunkyo-ku, 1-1-12, Ueno, Taito-ku, Tokyo 2-21-2, Kanda-misakicho, 4-39-7,
Slide 19: Overview of the 8 Buildings acquired in 2nd Quarter of 2020
Property Acquisition During COVID-19 Pandemic Overview of the 8 Buildings acquired in 2nd Quarter of 2020 (TBD)Iwamotocho 1- (TBD)Koishikawa Bldg. (TBD)Higashi- (TBD)Nihonbashi name chome Bldg. nihonbashi 1-chome Hisamatsucho Bldg. 1-6-3, Iwamotocho, Chiyoda- 4-2-6, Kohinata, Bunkyo-ku, 1-1-4, Higas
Slide 20: Corporate Funding Business - topics
Corporate Funding Business - topics ⚫ COVID-19 Pandemic and Real Estate Market Conditions We expect the impact of the COVID-19 pandemic on the Tokyo office market to be limited. Although the vacancy rate, having remained low and stable till the beginning of the 2020, is expected to get deteriorate s
Slide 21: Asset Management Business
Asset Management Business • Due to the COVID-19 pandemic, no new asset management orders were received in the 1st half of the current fiscal year. Based on the expectation that these restrictions will be lifted gradually in the 2 nd half, we will focus on winning new asset management orders. • We ha
Slide 22: Real Estate Tech: Mission
Real Estate Tech Mission Real Estate X Tech to Open Up a New Market CROWDFUNDING （Equity Investment-type / Loan-Type） Real Estate Tech Real Estate BROKERAGE CORPORATE FUNDING ASSET MANAGEMENT Investments (Real Estate Principal Investment) / ADVISORY SERVICES © Loadstar Capital ALL RIGHTS RESERVED 21
Slide 23: Crowdfunding Business Results
Crowdfunding Business Results • Real estate transactions are stagnating due to the COVID-19 pandemic. As a result of our cautious credit decisions about target borrowers, the forming of new deals has also stagnated. • On the other hand, a steady flow of applications has been received, and investor d
Slide 24: Investor Members / Cumulative Investment Amount
Investor Members / Cumulative Investment Amount • As we are taking a cautious approach to forming new deals, we are not actively recruiting new investor members. • Our priority is to avoid excessive risk burdens being placed on investor members. We aim to expand our business while carefully monitori
Slide 25: OwnersBook Growth
OwnersBook Growth Projects are becoming larger due to an Implementation of Overseas Deal Formation increase in number of investor members. lottery projects ¥1.1bn in offering Lottery ratio: Seeking new kinds of equity Several times investment-type products. (more than 3,000investors) Remarkable grow
Slide 26: Crowdfunding: Profit structure
Crowdfunding ～ Profit structure ～ ⚫ Profit structure Asset Up-front fee Disposition fee Management fee Loan-type Loan amount × 2% － － Equity Equity Amount Real Estate Sales Price AUM × 0.3-1％ Investment-type × 1-2％ × 1％ * The above fee condition is a typical sample. ⚫ Risk and Return High Futures Eq
Slide 27: 4. Forecast for the FY2020 and Future Growth Strategy
4. Forecast for the FY2020 and Future Growth Strategy © Loadstar Capital ALL RIGHTS RESERVED 26
Slide 28: Forecast
Forecast As we expect that the impact of the COVID-19 pandemic on performance has been limited, we do not plan to revise our earnings forecast. (¥ million) FY2019 FY2020(Forecasts) % of Net % of Net Amount Amount % Y-o-Y Sales Sales Net sales 15,116 100.0% 16,862 100.0% 111.6% Cost of sales 10,378 6
Slide 29: Real Estate Investments: Sustainable growth of Corporate Funding business
Real Estate Investments Sustainable growth of Corporate Funding business • We aim to build up property holdings by harnessing our strengths in real estate appraisal and speedy decision-making. • We believe the considerable uncertainty of the market environment presents a good opportunity for us to l
Slide 30: Real Estate Investments: Expanding the Asset Management Business
Real Estate Investments Expanding the Asset Management Business ⚫ We aim to ramp up operations in the Asset Management Business and accumulate properties in order to expand our stable revenue base. ⚫ Since transactions were stagnant due to the COVID-19 pandemic in the 1st half of FY2020, we focused
Slide 31: Real Estate Tech: Development of Crowdfunding Business
Real Estate Tech Development of Crowdfunding Business While our OwnersBook services are unnecessary for those companies with adequate cash reserves due to the special COVID- 19 loan program (with interest-free and unsecured loans), we need to remain cautious about extending new loans to companies wi
Slide 32: Return to shareholders
Return to shareholders 《Basic dividend policy》 ⚫ We strive to improve corporate value and shareholder profit by expanding business performance ⚫ Perform stable and continuous profit reduction with a payout ratio of 15% as a guide Surplus Growth Dividends to Acquisition of investment Shareholders Tre
Slide 33: Appendix 1. Our strengths and characteristics
Appendix 1. Our strengths and characteristics © Loadstar Capital ALL RIGHTS RESERVED 32
Slide 34: Loadstar Capital's Strength
Loadstar Capital’s Strength Barrier to entry due to Ability to respond to government approval market changes, and licenses Supported by a Innovation First-mover advantage stable financial base as we entered the Financial and crowdfunding market stability at an early stage Entry barriers High Experti
Slide 35: Competitive advantage of Corporate Funding Business
Competitive advantage of Corporate Funding Business While harnessing our speedy real estate appraisal and decision-making, we will acquire mainly medium-sized office buildings with high liquidity within Tokyo’s 23 wards, and work to enhance their value. Sell Information Appropriately judge acquisiti
Slide 36: Stable Financial Base
Stable Financial Base • We are working to further increase the unrealized gains of the property holdings by leveraging the advanced scrutiny and selection capabilities of the Corporate Funding Business. • Long-term borrowings secured based on high level of creditworthiness accredited by financial in
Slide 37: Competitive advantage of Crowdfunding Business
Competitive advantage of Crowdfunding Business Realizing access to personal money not established in the real estate investment market Demand Supply Established credibility as an asset High High hurdles to overcome in manager owing to track record of acquiring approvals and more than five years and
Slide 38: High Expertise
High Expertise With a high level of expertise in both real estate and IT, we are able to accurately grasp the market’s needs and quickly provide services. Real Estate Pros IT Pros ■Many of our members have more than 20 years of experience in the real estate business (experienced the 2007-2008 ■Exper
Slide 39: Appendix 2. Social lending market and OwnersBook
Appendix 2. Social lending market and OwnersBook © Loadstar Capital ALL RIGHTS RESERVED 38
Slide 40: Background to Expansion of Social Lending and Scale of Market
Background to Expansion of Social Lending and Scale of Market ⚫ Social lending = Loan-type crowdfunding ⚫ Revolutionary for investors and persons seeking funds, market is expanding rapidly Reasons Supported Japan’s crowdfunding market （¥100 millions） High return on investment 2,100 2,044 (Banks: 0.0
Slide 41: OwnersBook (Loan-Type / Equity Investment-type)
OwnersBook（Loan-Type / Equity Investment-type） Loan-type : Lending for real estate-backed/loans Senior Loan Real ¥600~900 Lending estate million * In some cases, we provide senior loans. ¥1,000 Mezzanine Loan ~1,500 ¥200~300 OwnersBook Investors million million Investment Equity ¥200~300 million Int
Slide 42: OwnersBook Features
OwnersBook Features Small investment amounts Investor base for a wide range of ages Makes it easy to invest in real estate through small Wide range of investors in their investments 20s to 70s (Mostly in the 30s to 40s). Investors all over Japan, mainly in the Greater Tokyo Area Online platform allo
Slide 43: Equity Investment-type: The world we aim for
Equity Investment-type ～ The world we aim for ～ Historically The Aim of OwnersBook Larger Investment Small Size Small Size Products Real Estate J-REIT mainly for Real Estate J-REIT investment investment professional investors Individual investors Individual investors Institutional investors Institut
Slide 44: Factors of Growth Potential in Japan
Factors of Growth Potential in Japan Going forward, there is a chance that professional investors will start to get involved due to the growth of the platform. Real Estate Investment Product Domains Other Investment Publicly Offered Private-Placement Domains Listed REITs Private-Placement REITs/Fund
Slide 45: Crowdfunding Business Alliance
Crowdfunding Business Alliance We will continue to strengthen cooperation with financial institutions, etc. Acquire investor members Matsui Securities Project (Equity-investment type) Fundrise Project (Lending type) THE SEIBU SHINKIN BANK ORIX Bank Corporation SAISON FUNDEX CORPORATION Shinsei Inves
Slide 46: Appendix 3. Company Profile
Appendix 3. Company Profile © Loadstar Capital ALL RIGHTS RESERVED 45
Slide 47: Company Profile (as of June 30, 2020)
Company Profile（as of June 30, 2020） Company Name Loadstar Capital K.K. Address Ginza First Building 2F, 1-10-6 Ginza, Chuo-ku, Tokyo, Japan Founded March 14, 2012 Representative President & CEO Tatsushi Iwano Share Capital ¥1,402 million Number of Officers 69 and Employees Tatsushi Iwano President
Slide 48: History
History Mar 2012 Established Loadstar Capital K.K. in Ebisu, Shibuya-ku, Tokyo Mar 2014 Accepted capital increase through third-party allocation by Renren Lianhe Holdings May 2014 Established Loadstar Funding K.K. (wholly owned subsidiary) Sep 2014 Launched crowdfunding service on the internet under
Slide 49: Other topics
Other topics ⚫ New share acquisition rights granted to executives and employees • For executives: These share acquisition rights are incentives to expand our business performance and maximize our corporate value. Also, these rights requires the executives to exercise the rights when the Company shar
Slide 50: Appendix 4. Real Estate Market Analysis
Appendix 4. Real Estate Market Analysis Japan's position in the real estate market and Our Advantages in our Core Domains © Loadstar Capital ALL RIGHTS RESERVED 49
Slide 51: Japan's Investment Real Estate Market
Japan’s Investment Real Estate Market Japan’s investment real estate market has a lot of room to grow further （¥ trillions） 2,606 Still very small. A lot of room to grow. 1,032 1,000 611 94 JGB Stock Market Total Real Estate Investment Real Total Cash and Capitalization Value Estate Deposits JGB（bal
Slide 52: Japanese People's Wealth
Japanese People’s Wealth More than half of Japan’s household financial assets are waiting on the sidelines, not being invested. Cash and deposits total ¥978 trillion. Composition of Japan’s Household Financial Assets Composition of U.S. Household Financial Assets Other, 3.0% Other, 2.7% Insureance/a
Slide 53: Population Growth in Tokyo
Population Growth in Tokyo Tokyo with sufficient infrastructure to compete with major overseas cities. About 61% of investable assets stay in the greater Tokyo area. Tokyo’s Population will Increase Going Forward Ratio of office floor space in Japanese cities (Thousands) Sendai, 1.74% Hiroshima, Fuk
Slide 54: The World in 2025 (Urban Population & GDP)
The World in 2025（Urban Population ＆ GDP） The greater Tokyo area continues to have the largest urban population and GDP in the world. 40,000 Tokyo 35,000 Delhi 2025 Population (thousands) 30,000 Shanghai 25,000 Beijing 20,000 New York 15,000 Paris 10,000 London 5,000 0 $0 $500 $1,000 $1,500 $2,000 $
Slide 55: Concentration of Large Companies in Tokyo
Concentration of Large Companies in Tokyo Fortune Global 500 2019 FT 500 2015 Number of Global Corporate HQ’s by City Number of Global Corporate HQ’s by City (Corporate ranking by market capitalization) Beijing 53 California 31 Tokyo 38 New York 28 Paris 20 Tokyo 26 New York 17 Beijing 19 London 12
Slide 56: Global Comparison of Investment Real Estate Performance
Global Comparison of Investment Real Estate Performance Tokyo has a favorable environment. Prime Office Yield to Gov’t Bond Historical Yield Spread by Major Cities (unit: bps) Yield Spread 350 6.00% 300 5.00% 250 4.00% 200 3.00% 150 2.00% 100 1.00% 50 0 0.00% 2014 2015 2016 2017 2018 Hong London New
Slide 57: Disclaimers
Disclaimers ⚫ The contents of this document are being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published in whole or in part, for any purpose without our prior permission. This document is being
Loadstar Capital K.K. — H1 2020 Earnings Presentation on 6ix