Loadstar Capital Kk · TSE:3482
Loadstar Capital Kk — FY2020 Earnings Presentation
61 slides from Loadstar Capital Kk's earnings presentation, February 2021
Slide 1: Fiscal year ended December 31, 2020 Earnings Briefing
Fiscal year ended December 31, 2020 Earnings Briefing Loadstar Capital K.K. Securities code: 3482 February 2021 © Loadstar Capital ALL RIGHTS RESERVED
Slide 2: Index
Index １．Our Business P. 2 ２．Overview of Financial Results for the Fiscal year Ended December 31, 2020 P. 4 ３．Business Overview P. 11 Corporate Funding Business P. 13 Asset Management Business P. 17 Crowdfunding Business P. 19 ４．Forecast for the FY2021 and Future Growth Strategy P. 23 Appendix 1. Our
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-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 FY ended December 31, 2020
2. Overview of Financial Results for the Fiscal year Ended December 31, 2020 © Loadstar Capital ALL RIGHTS RESERVED 4
Slide 6: Highlights
Highlights Consolidated Net sales +12% y-o-y Financial Profit before income taxes +30% y-o-y Results Profit +30% y-o-y • Limited COVID-19, property sales progressed as Corporate planned and net sales increased year on year Funding +16% y-o-y • Completed our largest-ever property acquisition • Net sa
Slide 7: Consolidated Financial Results
Consolidated Financial Results Further details provided on following pages. FY2019 FY2020 % of Net % of Net Progress vs. Amount Initial Budget Amount % Y-o-Y sales sales initial target Net sales 15,116 100.0% 16,862 16,979 100.0% 112.3% 100.7% Cost of sales 10,378 68.7% 11,348 11,346 66.8% 109.3% 10
Slide 8: Consolidated Net Sales
Consolidated Net Sales • As planed sales of properties have been under way since the beginning of the fiscal year, consolidated net sales were almost as planned. • Net Sales in the Crowdfunding Business & Asset Management Business were unable to meet the annual plan, due to impact of Covid-19. 16,97
Slide 9: Consolidated Profit Before Tax and Cost Controls
Consolidated Profit Before Tax and Cost Controls • Due to higher-than-expected property sales prices and SG&A expenses also remained low, Consolidated Profit before income taxes increased 30% y-o-y. • We implemented a cost-conscious style of management in an effort to secure profit margins Consolida
Slide 10: Consolidated Financial Position
Consolidated Financial Position （¥ millions） 12/31/2020 % of % vs. Amount total 12/31/2019 • This shows the amount of loans Current assets 50,898 99.5% 115.6% outstanding in the Crowdfunding Cash and deposits 7,331 14.3% 94.4% business Operating loans 5,642 11.0% 92.1% Real estate as inventory 37,37
Slide 11: Consolidated Statements of Cash Flows
Consolidated Statements of Cash Flows （¥ millions） Amount • Cash flow from operating activities FY2019 FY2020 will remain negative until we Changed achieve our aim of building up real CF from operating activities △3,986 △4,118 △131 estate as inventory enough to ensure that leasing income is Profit b
Slide 12: 3. Business Overview
3． Business Overview © Loadstar Capital ALL RIGHTS RESERVED 11
Slide 13: Mission: Real Estate Investments
Real Estate Investments Mission Real Estate X Tech to Open Up a New Market CROWDFUNDING （Equity-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 12
Slide 14: Corporate Funding Business Results: Real estate investment
Corporate Funding Business Results 【Real estate investment sales】 • While real estate transactions have been somewhat sluggish, property sales progressed according to plan and net sales increased 13% year on year. The abilities of management have been well demonstrated. • Profit margins have also be
Slide 15: Corporate Funding Business Results: Real estate leasing
Corporate Funding Business Results 【 Real estate leasing sales 】 • Amid the COVID-19 crisis, there was a good opportunity for acquiring properties at attractive prices in the 2 nd quarter. We consequently acquired 8 properties, the most since the Company’s foundation. This contributed significantly
Slide 16: Corporate Funding Business Results
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 Overview of some of the Buildings acquired in 2nd Quarter of 2020 Prime Myogadani Bldg. Prime Suehirocho Bldg. Prime Suidobashi Bldg. Prime Takadanobaba name 4-chome Bldg. 5-5-5, Koishikawa, Bunkyo-ku, 1-1-12, Ueno, Taito-ku, Tokyo 2-21-2, Kanda-misakich
Slide 18: Asset Management Business
Asset Management Business • We were entrusted with no new transactions this fiscal year mainly because COVID-19-related immigration restrictions have prevented foreign investors from entering Japan. Nevertheless, inquiries from overseas investors are on the rise, therefore we will focus our efforts
Slide 19: Mission: Real Estate Tech
Real Estate Tech Mission Real Estate X Tech to Open Up a New Market CROWDFUNDING （Equity-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 18
Slide 20: Crowdfunding Business Results
Crowdfunding Business Results • Demand for loan-type transactions waned in the first half because real estate transactions were sluggish in response to the COVID -19 situation, as well as the impact of the government’s COVID -19 emergency lending scheme. Nevertheless, demand for capital rebounded in
Slide 21: Investor Members / Cumulative Investment Amount
Investor Members / Cumulative Investment Amount • The recruitment of new investor members was subject to a correction because of the limited number of new deal originations. • Our priority is to avoid excessive risk burdens being placed on investor members. We aim to expand our business while carefu
Slide 22: 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-type Several times products. (more than 3,000investors) Remarkable growth in fundi
Slide 23: Crowdfunding: Profit structure
Crowdfunding ～ Profit structure ～ ⚫ Profit structure Asset Up-front fee Disposition fee Management fee Loan-type Loan amount × 2% － － Equity Amount Real Estate Sales Price Equity-type AUM × 0.3-1％ × 1-2％ × 1％ * The above fee condition is a typical sample. ⚫ Risk and Return High Futures Equity-type C
Slide 24: 4. Forecast for FY2021 and Future Growth Strategy
4. Forecast for the FY2021 and Future Growth Strategy © Loadstar Capital ALL RIGHTS RESERVED 23
Slide 25: Forecast
Forecast Corporate funding business ： Accumulate properties to strengthen earnings base Crowdfunding business ： Offer diverse products and expand scale Asset management business : Increase AUM （単位：百万円） FY2020 FY2021(Forecasts) % of Net % of Net Amount Amount % Y-o-Y Sales Sales Net sales 16,979 100.
Slide 26: 2021: Our Real Estate Market Outlook
2021: Our Real Estate Market Outlook ⚫ Outlook for Tokyo Real Estate Market Given that economic activity will gradually recover after the COVID-19 crisis eases and the Bank of Japan will maintain its monetary easing policy, we expect the domestic real estate market to also normalize. That said, beca
Slide 27: Real Estate Investments
Real Estate Investments Sustainable growth of Corporate Funding business • We aim to build up property holdings, mainly focusing on offices but also looking closely at logistics facilities and hotels, by harnessing our strengths in property appraisal and speedy decision-making. • Rent levels for B-c
Slide 28: Expanding the Asset Management Business
Real Estate Investments Expanding the Asset Management Business The impact of COVID-19 on Tokyo’s office market has been relatively limited from a global perspective, and investment appetite among overseas investors remains strong thanks to market and forex stability. Also, in the low-interest-rate
Slide 29: Fintech: Development of Crowdfunding Business
Fintech Development of Crowdfunding Business The inclination of individual investors to invest in our Crowdfunding Business (OwnersBook) remains strong and we have put together multiple deals with each ¥500 million or more and completed investor recruitment. For loan-type transactions, corporate dem
Slide 30: 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 Acquisition of Dividends to Shareholders Treasury Share
Slide 31: Major Shareholders and Acquisition of Treasury Stock
Major Shareholders and Acquisition of Treasury Stock ⚫ Primary major shareholders Shareholder Shareholding (1,000 shares) % of total shares Tatsushi Iwano 3,360 20.5 RENREN LIANHE HOLDINGS 2,540 15.5 Yasuhiro Morita 1,502 9.1 藤岡 義久 1,456 8.8 キャピタルジェネレーション㈱ 1,100 6.7 Note 1: Percentage of total share
Slide 32: Key Risk Information
Key Risk Information Recognized risk Likelihood Countermeasures As a matter of course, we will strengthen our recruiting, but to The risk of being unable to secure prevent the outflow of talent from the organization, we will talented personnel to support the Low endeavor to foster an open corporate
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 • Real estate prices have a tendency to fluctuate on a 10-year cycle. • By earning a high level of creditworthiness from financial institutions owing to unrealized gains on our property holdings, and by taking out long-term loans, we have been able to reduce refinancing concern
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 • Groundbreaking scheme for both investors and people seeking capital. • Market scale is expected to expand up ahead because the number of lending-type crowdfunding business operators is increasing year after year. Reasons Supported Japan
Slide 41: OwnersBook (Loan-Type / Equity-type)
OwnersBook（Loan-Type / Equity-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 Interest / Pri
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-type: The world we aim for
Equity-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 Institutional inves
Slide 44: Growth Potential in Japan
Growth Potential in Japan Other Real Estate Investment Product Domains Investment Domains • Aim to have professional investors also Private-Placement participate in the future by expanding the Publicly Offered Listed REITS Private-Placement REITs/Funds ¥19.6 trillion ¥21.1 trillion Cash and platform
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-type) Fundrise Project (Lending type) THE SEIBU SHINKIN BANK ORIX Bank Corporation SAISON FUNDEX CORPORATION Shinsei Investment & Fin
Slide 46: Appendix 3. Company Profile
Appendix 3. Company Profile © Loadstar Capital ALL RIGHTS RESERVED 45
Slide 47: Company Profile (as of December 31, 2020)
Company Profile（as of December 31, 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 Directors 6 (including two outside directors) N
Slide 48: Our Team
Our Team Hiroyasu Kaizuka Naoyuki Kubo Yo Narita Hiroyasu Kaizuka was named Executive Naoyuki Kubo was named Executive Yo Narita was named Executive Director, Investment Management in Director in March 2019. Director in March 2019. March 2018. Since Joining Loadstar Capital in 2014, Since Joining Lo
Slide 49: History
History Mar 2012 Established Loadstar Capital K.K. in Ebisu, Shibuya-ku, Tokyo May 2014 Established Loadstar Funding K.K. (wholly owned subsidiary) Sep 2014 Launched crowdfunding service on the internet under the brand name “OwnersBook” Apr 2015 Relocated head office to Ginza, Chuo-ku, Tokyo Sep 201
Slide 50: Appendix 4. Real Estate Market Analysis
Appendix 4. Real Estate Market Analysis Impact of COVID-19 on the real estate market and advantages in our area of focus (Tokyo) © Loadstar Capital ALL RIGHTS RESERVED 49
Slide 51: COVID-19: Changes in the Office Market
COVID-19: Changes in the Office Market ⚫ The number of office workers have started to decline. ⚫ The impact on office floor space is minimal. Change in number of office workers Change in office floor space 100 1.3 1.7 1.9 1.2 100 13.6 13 14.2 19.7 80 80 60 46.8 48.8 52 60 57.5 85.7 86.6 87.9 88.9 40
Slide 52: COVID-19: Population Inflow (23 wards of Tokyo)
COVID-19: Population Inflow (23 wards of Tokyo) ⚫ Change in population inflow that has remained consistent for 20+ years. ⚫ In 2020, excess inflow of Japanese people and likely outflow of non-Japanese people due to immigration restrictions. ⚫ Inflow of non-Japanese will probably return once the COVI
Slide 53: COVID-19: Job-Offers-to-Seekers Ratio and Bankruptcies
COVID-19: Job-Offers-to-Seekers Ratio and Bankruptcies Job-Offers-to-Seekers Ratio and ⚫ Hiring is currently subdued Bankruptcies owing to the clouded economic （%） outlook. 200 4 ⚫ The number of bankruptcies have been limited compared to when Japan’s bubble economy 150 3 burst and the 2007/2008 fina
Slide 54: COVID-19: Vacancy Rates
COVID-19: Vacancy Rates ⚫ Vacancy rates for Tokyo’s business districts are rising (had been trending at low levels until recently). ⚫ However, compared to the UK and the US, vacancy rates and the rate of increase are quite low. （%） Overall vacancy rate for Tokyo’s 5 major wards （%） Vacancy rates in
Slide 55: COVID-19: Real Estate Investment from Overseas
COVID-19: Real Estate Investment from Overseas ⚫ In the period Jan-Sep 2020, Tokyo received the biggest amount of investment from overseas property investors, 40% to 50% greater than New York and London. ⚫ There were some particularly noteworthy transactions for large office buildings. Investment am
Slide 56: 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 2,606 （¥ trillions） Still very small. A lot of room to grow. 1,034 1,034 693 91 JGB Stock Market 株式時価総額 不動産総額 Tokyo Real Estate Investment 投資用不動産 Real 家計現預金総額 Total Cash and Capitalization V
Slide 57: 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. Composition of Japan’s Household Financial Assets Composition of U.S. Household Financial Assets Other, 2.9% Other, 3.0% Insurance/annu Cash and depsits, ity reserves, 13.7
Slide 58: 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) other, 11.40% 14,000 Hiroshi
Slide 59: 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 30,000 Shanghai 25,000 人口（千人）2025 Beijing 20,000 New York 15,000 Paris 10,000 London 5,000 0 $0 $500 $1,000 $1,500 $2,000 $2,500 GDP (USD BN
Slide 60: 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 61: 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