Loadstar Capital Kk · TSE:3482

Loadstar Capital Kk — FY2018 Earnings Presentation

58 slides from Loadstar Capital Kk's earnings presentation, February 2019

  1. Slide 1: Fiscal year ended December 31, 2018 Earnings Briefing

    Fiscal year ended December 31, 2018 Earnings Briefing Loadstar Capital K.K. Securities code: 3482 February 2019 © Loadstar Capital ALL RIGHTS RESERVED

  2. Slide 2: 目次

    目次 1. Overview of Financial Results for the Fiscal Year Ended December 31, 2018 2. Forecast for the FY2019 3. Future Growth Strategy © Loadstar Capital ALL RIGHTS RESERVED 1

  3. Slide 3: 1. Overview of Financial Results for the Fiscal Year Ended December 31, 2018

    1. Overview of Financial Results for the Fiscal Year Ended December 31, 2018 © Loadstar Capital ALL RIGHTS RESERVED 2

  4. Slide 4: Highlights

    Highlights Consolidated • Net sales +10% y-o-y Financial • Ordinary profit +78% y-o-y Results • Profit +71% y-o-y Corporate Funding • Net sales +8% y-o-y • Solid property build-up and value enhancement • Net sales +239% y-o-y Crowdfunding • investor members and the amount of loans grew rapidly • Lau

  5. Slide 5: Consolidated Sales

    Consolidated Sales We achieved our planned profit for the period, so from the standpoint of medium- to long-term growth, we decided to put off selling properties that we had initially planned to sell until the next fiscal year or beyond. 10,498 10,585 9,670 （¥ millions） % of initial forecast 92% Ini

  6. Slide 6: Consolidated Ordinary Profit

    Consolidated Ordinary Profit Adding value to properties acquired in previous fiscal years was successful in increasing ordinary profit significantly. 2,089 2,117 （¥ millions） 1,591 % of initial forecast 133% Initial 当初計画 forecast Forecast 業績予想修正 revision 2018 results 2018実績 © Loadstar Capital ALL RI

  7. Slide 7: Consolidated Profit

    Consolidated Profit The improvement in profit margin pushed results significantly higher than the initial forecast. As a result, we made the decision to increase the dividend. 9.50 1,600 10.00 8.75 9.00 1,400 1,359 （¥ millions） 8.00 Dividends per share 1,200 6.25 1,261 7.00 1,000 6.00 800 900 5.00 4

  8. Slide 8: Business Overview

    Business Overview © Loadstar Capital ALL RIGHTS RESERVED 7

  9. Slide 9: Real Estate Investments

    Real Estate Investments Corporate Philosophy Real Estate X Tech to Open Up a New Market CROWDFUNDING AI （Equity Investment-type / Loan-Type） × REAL ESTATE INVESTMENTS Real Estate Tech Real Estate CORPORATE FUNDING BROKERAGE Investments ASSET MANAGEMENT (Real Estate Principal Investment) / ADVISORY ©

  10. Slide 10: Corporate Funding Business Results

    Corporate Funding Business Results • Realized earnings by adding value to properties and with speedy decision-making • Stably expanded earnings by steadily accumulating properties Net Sales （¥ millions） Real estate leasing +28% Real estate investment 1,234 965 +6% 7,762 8,214 2017 2018 © Loadstar Ca

  11. Slide 11: Corporate Funding Business Results

    Corporate Funding Business Results ・Cost-effectiveness improved as the size of acquired properties increased ・Secured earnings for next year and beyond by accumulating properties Real estate as inventory (Book value)（¥ millions） Appraisal value Book value 23,194 15,987 12,388 4,682 2,818 2014 2015 2

  12. Slide 12: Corporate Funding Business Topics

    Corporate Funding Business Topics ⚫ Change in Lending Stance Currently, we see no changes in the lending stance with respect to medium-size office real estate which is our main focus, but we must watch financial market trends, including moves by the Bank of Japan and the Financial Services Agency. ⚫

  13. Slide 13: Real Estate Tech

    Real Estate Tech Corporate Philosophy Real Estate X Tech to Open Up a New Market CROWDFUNDING AI （Equity Investment-type / Loan-Type） × REAL ESTATE INVESTMENTS Real Estate Tech Real Estate CORPORATE FUNDING Investments (Real Estate Principal Investment) ASSET MANAGEMENT BROKERAGE / ADVISORY © Loadst

  14. Slide 14: Crowdfunding Business Results

    Crowdfunding Business Results ・The Crowdfunding Business has rapidly expanded along with the increase in awareness ・We started providing an equity investment-type product from Q3 Net Sales （¥ millions） 220 % Y-o-Y 65 +239% 2017 2018 © Loadstar Capital ALL RIGHTS RESERVED 13

  15. Slide 15: Investor Members / Cumulative Investment Amount

    Investor Members／Cumulative Investment Amount The number of investor members and cumulative investment amount are surging due to the growing recognition of the company as well as crowdfunding in general. （¥ millions） （People） 9,000 16,812 18,000 8,000 14,541 16,000 累積投資金額(左軸) Cumulatice Investment A

  16. Slide 16: Launch Equity Investment-type Crowdfunding

    Launch Equity Investment-type Crowdfunding 【Overview】 Project Name Akihabara Office Building Total Amount Raised ¥265 million ¥100,000 per unit (5-100 units) Investment Units Minimum investment amount = ¥500,000 (5 units); Maximum investment amount = ¥10 million (100 units) Subscription Period Augus

  17. Slide 17: Crowdfunding Business Topics

    Crowdfunding Business Topics ⚫ The Use of Anonymity and Multiple Borrowers in Loan-type Crowdfunding Concerning the use of anonymity and multiple borrowers in loan-type crowdfunding, measures to protect investors in line with demands since we began our services are being considered, and we are also

  18. Slide 18: 2. Forecast for the FY2019

    ２. Forecast for the FY2019 © Loadstar Capital ALL RIGHTS RESERVED 17

  19. Slide 19: Forecast

    Forecast ⚫ Once again aim for net sales above ¥10 billion for the first time in the Company’s history ⚫ Aim to maintain ordinary profit margin above 20% Net Sales （¥ millions） Ordinary Profit （¥ millions） 13,487 2,777 9,670 2,118 +39% +31% 2018 2019 2018 2019 © Loadstar Capital ALL RIGHTS RESERVED 1

  20. Slide 20: Forecast

    Forecast （¥ millions） FY2018 FY2019 (Forecasts) % of Net % of Net Amount Amount % Y-o-Y Sales Sales Net sales 9,670 100.0% 13,487 100.0% 139.5% Cost of sales 6,401 66.2% 9,090 67.4% 142.0% Gross profit 3,269 33.8% 4,396 32.6% 134.5% SG&A expenses 876 9.1% 1,258 9.3% 143.6% Operating profit 2,392 24.

  21. Slide 21: 3. Future Growth Strategy

    3. Future Growth Strategy © Loadstar Capital ALL RIGHTS RESERVED 20

  22. Slide 22: Sustainable growth of Corporate Funding business

    Sustainable growth of Corporate Funding business ⚫ In FY2019, we will accumulate more properties, aiming for the level where leasing income can cover the company’s fixed costs. ⚫ We continue to expand our workforce in order to achieve continuous growth. Annual investment amount （¥ millions） 15,955 1

  23. Slide 23: 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 professional investment investors Individual investors Individual investors Institutional investors Institut

  24. Slide 24: 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. Other Investment Real Estate Investment Product Domains Domains Publicly Offered Private-Placement Listed REITs Private-Placement REITs/Fund

  25. Slide 25: Overseas Business Development

    Overseas Business Development ⚫ Leverage the Company’s competitive advantages and expertise to expand business ⚫ Expand the service lineup in line with investors’ needs ⚫ Crowdfunding Business: - Provide overseas investment products to individual investors through OwnersBook - We envisage starting w

  26. Slide 26: 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 Dividends to Growth investment Shareholders 2018 2019 2012年 …

  27. Slide 27: Appendix

    Appendix © Loadstar Capital ALL RIGHTS RESERVED 26

  28. Slide 28: Company Profile (as of December 31, 2018)

    Company Profile（as of December 31, 2018） 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 ¥1,335 million Number of Officers 54 and Employees Consolidated Loadstar

  29. Slide 29: Board Member

    Board Member Tatsushi Iwano President April 1996 Joined Japan Real Estate Institute April 2000 Joined Goldman Sachs Realty Japan Ltd. August 2004 Joined Rockpoint Management Japan LLC March 2012 Founded Loadstar Capital K.K. Assumed office as President (current) May 2014 Assumed office as President

  30. Slide 30: Board Member

    Board Member Board Member Hiroyasu Kaizuka 1989 Joined Royal Bank of Canada 1993 Joined Richard Ellis (currently CBRE) 1999 Joined Goldman Sachs Realty Japan Worked on the establishment of the real estate and hotel asset management unit, became leader of the unit in 2002, later becoming managing dir

  31. Slide 31: History/Financial Results

    History/Financial Results Total number of OwnersBook Total number of OwnersBook registered members surpasses registered members surpasses 12,000 25,000（as of 12/31) Leading company in real estate “AI-Checker” launch 2018 tech Loadstar Funding K.K. founded Launch of crowdfunding service “OwnersBook”

  32. Slide 32: Consolidated Financial Results

    Consolidated Financial Results （¥ millions） FY2017 FY2018 % of Net % of Net Amount Amount % Y-o-Y Sales Sales Net Sales 8,794 100.0% 9,670 100.0% 110.0% Cost of sales 6,837 77.7% 6,401 66.2% 93.6% Gross Profit 1,957 22.3% 3,269 33.8% 167.0% SG&A expenses 592 6.7% 876 9.1% 147.9% Operating Profit 1,3

  33. Slide 33: Consolidated Financial Position

    Consolidated Financial Position （¥ millions） As of 12/31/2017 As of 12/31/2018 % vs. Amount % of total Amount % of total 12/31/2017 Current assets 21,849 99.4% 32,785 99.3% 150.1% Cash and deposits 4,615 21.0% 5,871 17.8% 127.2% Operating loans 1,167 5.3% 3,340 10.1% 286.1% Real estate as inventory

  34. Slide 34: Crowdfunding Business Development

    Crowdfunding Business Development Acquire investor members Matsui Securities Introduce borrowers THE SEIBU SHINKIN BANK ORIX Bank Corporation SAISON FUNDEX CORPORATION Shinsei Investment & Finance Limited © Loadstar Capital ALL RIGHTS RESERVED 33

  35. Slide 35: Real Estate Investment-type for individual investors

    Real Estate Investment-type for individual investors Investment Investment Target Property Characteristics Type Amount Target of loan is unknown Can invest starting （concealed） Compared to equity OwnersBook from one investment At least two or more investment-type, this is a Loan-type unit of ¥10,000

  36. Slide 36: Equity Investment-type: Profit structure

    Equity Investment-type ～ Profit structure ～ Asset Management Model Up-front fee Disposition fee fee Loan amount Loan-type － － × 2％ Equity Equity Amount Real Estate Price Real Estate Sales Price Investment-type × 2％ × 1％ × 1％ * The above fee condition is a typical sample. Real Estate Office Loan Resi

  37. Slide 37: Crowdfunding: Risk and Return

    Crowdfunding ～ Risk and Return ～ ⚫ The average yield for loan-type is approximately 5%, equity investment-type aims for returns of approximately 6-10% of cash on cash yield. High Futures Return (Expected Gains) Equity investment -type CF Investment in Foreign Loan-type CF physical stocks real estate

  38. Slide 38: Change in other affiliates

    Change in other affiliates On June 21, 2018, the 100% parent company of Loadstar Capital affiliate Renren Lianhe Holdings（owns 36.4% of Loadstar Capital’s shares) changed from Renren Inc. to Oak Pacific Investment. The capital relationship chart following the change is shown below. The shareholder c

  39. Slide 39: Our strengths and characteristics

    Our strengths and characteristics © Loadstar Capital ALL RIGHTS RESERVED 38

  40. Slide 40: 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 and crowdfunding market stability at an early stage Entry barriers Professionals Fast inv

  41. Slide 41: Competitive Advantage

    Competitive Advantage ⚫ Supply side We have obtained the approvals and licenses necessary to engage in the equity investment-type crowdfunding business ⚫ Demand side Careful selection of projects by real estate specialists and listing on TSE Mothers, established trust as an company in the cloud fund

  42. Slide 42: 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 ■Experts with more than 15 years in the IT years of experience in the real estate

  43. Slide 43: Growth Potential of Crowdfunding Business

    Growth Potential of Crowdfunding Business Japanese market is expanding, and going forward equity investment-type crowdfunding is expected to grow as overseas market has been. Japan’s crowdfunding market Real estate market size Real estate occupies a large proportion of loan-type cloud funding （¥100

  44. Slide 44: Corporate Funding Business Overview

    Corporate Funding Business Overview Acquire mainly medium-sized office buildings within Tokyo’s 23 wards, and value up Sell Information Appropriately judge acquisition Increase value gathering market conditions ✓ Over 20 years of ✓ Quick decision-making ✓ Construction work to add experience and ✓ In

  45. Slide 45: Stable Financial Base

    Stable Financial Base ⚫ Long-term borrowings based on high level of creditworthiness from financial institutions Our financial base allows us to flexibly respond to changes in the market. ⚫ The increase in value of properties themselves due to the decline in vacancy rates and other factors is viewed

  46. Slide 46: OwnersBook

    OwnersBook © Loadstar Capital ALL RIGHTS RESERVED 45

  47. Slide 47: OwnersBook Features

    OwnersBook Features Small investment amounts Makes it easy to invest in real estate through small investments Online platform allows for Can invest according to risk lower investor costs tolerance level Free-of-charge member registration, Product lineup based on investors’ no investment fees, risk t

  48. Slide 48: Loan-type OwnersBook

    Loan-type OwnersBook Loan-type : Lending for real estate-backed/loans* OwnersBook Investors Senior Loan Lending Investment Real ¥300 million estate ¥500 Mezzanine Loan million ¥50 million Interest / Dividend/ Equity Principal Principal ¥150 million Investors * In some cases, we deal with senior loan

  49. Slide 49: Equity Investment-type OwnersBook

    Equity Investment-type OwnersBook Equity Investment-type : Open up investment areas closed to individual investors OwnersBook Investors Investment Investment Real Loan estate ¥350 million ¥500 million Dividend / Dividend / Equity Principal Principal ¥150 million Investors © Loadstar Capital ALL RIGH

  50. Slide 50: Real Estate Market Analysis

    Real Estate Market Analysis © Loadstar Capital ALL RIGHTS RESERVED 49

  51. Slide 51: Japan's Position in the Real Estate Market and Our Advantages

    Japan’s Position in the Real Estate Market and Our Advantages in our Core Domains • Growth possibilities for Japan’s investment real estate market • Japanese people’s wealth • Areas with population growth in past 20 years • Areas with real estate for investment • The world in 2025（Urban population ＆

  52. Slide 52: 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. Japan’s investment market 2,300 （Units: ¥trillion） Still very small. A lot of rooms to grow. 995 968 583 86 JGB Stock Market Capitalization Total Real Estate Value Investment Real Estate To

  53. Slide 53: 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 ¥968 trillion* 1 Composition of Japan’s Household Financial Assets Cash and deposits Insurance/annuity reserves Composition of U.S. Shares and equit

  54. Slide 54: Areas with Population Growth in Past 20 Years

    Areas with Population Growth in Past 20 Years Only Tokyo has an infrastructure that can compete with major cities overseas. Tokyo’s Population will Tokyo’s Population Increase Going Forward (Thousands) Increase (Thousands) 200 14,000 150 13,800 13,600 100 13,400 50 13,200 0 2015 2020 2025 2030 2013

  55. Slide 55: Investment real estate area

    Investment real estate area About 70% of investable assets stay in the greater Tokyo area. Ratio of office floor space in Japanese cities Sendai 2.3, 2.0% Hiroshima, 1.7, 1.5% Sapporo 2.6, 2.3% Fukuoka 3.6, 3.2% Nagoya 6.4, 5.7% Kyoto 1.1, 0.9% Kobe 1.8, 1.6% Osaka 16.2, 14.3% Tokyo 69.2, 61.2% Sait

  56. Slide 56: The World in 2025 (Urban Population & GDP)

    The World in 2025（Urban Population ＆ GDP） Invest with an eye to the future. The Tokyo economic area continues to have the largest urban population and GDP in the world. 40 000 Tokyo 35 000 Delhi 30 000 Shanghai 2025 POPULATION (thousands) Beijing 25 000 Mumbai Mexico C. Sao Paulo 20 000 New York 15

  57. Slide 57: Concentration of Large Companies in Tokyo

    Concentration of Large Companies in Tokyo Tokyo has the second highest concentration of large companies in the world. Fortune 500 Companies by City (Ranking) 60 50 40 30 20 10 0 Beijing Tokyo Paris New York London Seoul Shanghai Osaka Hong Kong Source: Loadstar Capital K.K., based on data from Fortu

  58. Slide 58: 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

Loadstar Capital K.K. — FY2018 Earnings Presentation on 6ix