Loadstar Capital Kk · TSE:3482

Loadstar Capital Kk — Q2 2023 Earnings Presentation

53 slides from Loadstar Capital Kk's earnings presentation, August 2023

1. Slide 1: Q2 FY2023 Financial Results

   Q2 FY2023 Financial Results (Six months ended June 30, 2023) Loadstar Capital K.K. Securities Code: 3482 August, 2023 © Loadstar Capital ALL RIGHTS RESERVED

2. Slide 2: Real estate and technology opening the future market

   不動産とテクノロジーの融合が 未来のマーケットを切り開く 1

3. Slide 3: Table of Contents

   Table of Contents １．Topics of the Q2 FY2023 P. 3 ２．Overview of the Q2 FY2023 Financial Results P. 6 ３．Business Overview by Segment P. 12 ４．FY2023 Forecast, Real Estate Market Outlook, P. 22 Progress of Medium-Term Management Plan ５．Our Strengths and Characteristics P. 33 ６．Crowdfunding Market and Ow

4. Slide 4: Topics of the Q2 FY2023

   1 Topics of the Q2 FY2023 © Loadstar Capital ALL RIGHTS RESERVED 3

5. Slide 5: Highlight

   Highlight FY2023 Q2 Financial Results • We made steady progress in all of our businesses; Corporate Funding, Asset Management, and Crowdfunding. We achieved almost half of the full-year forecast. • Although sales were up but profits were down year on year, there was no significant change in the full

6. Slide 6: Topics of the Q2 FY2023

   Topics of the Q2 FY2023 ① Acquired the largest property in the Company’s history ①CIRCLES Nibancho We acquired CIRCLES Nibancho, our largest property in terms of acquisition price, from Mitsubishi Estate. The property is in a prime location in Nibancho, Chiyoda-ku and is a relatively new building wi

7. Slide 7: Overview of the Q2 FY2023 Financial Results

   2 Overview of the Q2 FY2023 Financial Results © Loadstar Capital ALL RIGHTS RESERVED 6

8. Slide 8: Consolidated Sales

   Consolidated Sales • Consolidated sales increased 7% year on year to 14.5 billion yen. • The real estate transaction market is becoming more active, and the office leasing market is also slowly recovering. As the number of foreign visitors to Japan jumps after reopening the borders, the demand for h

9. Slide 9: Cost structure

   Consolidated Profit before income taxes and Cost Controls • Consolidated profit before income taxes was 3.5 billion yen, down 31% year on year. • As we made steady progress in acquiring real estates, costs, such as financing charges, have weighed on profits in advance. • We entered into new interest

10. Slide 10: Consolidated Statements of Income

    Consolidated Statements of Income FY2023Q2 Results FY2023 (Forecasts) Progress vs. % of Net % of Net % of the previous Amount % Y-o-Y original Amount sales sales fiscal year (¥ millions) forecast Net sales 14,536 100.0% 107.3% 49.5% 29,342 100.0% 124.1% Gross Profit 5,241 36.1% 85.1% 51.7% 10,129 34

11. Slide 11: Consolidated Financial Position

    Consolidated Financial Position • We significantly accumulated real estate as inventory, our future business foundation, to 63.6 billion yen, a record high. • Operating loans decreased from the previous fiscal year-end due to multiple loan redemptions in the Crowdfunding business, but overall busine

12. Slide 12: Consolidated Statements of Cash Flows

    Consolidated Statements of Cash Flows • As a result of the upfront property acquisition, the balance of real estate as inventory increased, which caused a large cash outflow. We believe this is not a concern as we aggressively invested in our future business foundation. • We have maintained good rel

13. Slide 13: Business Overview by Segment

    3 Business Overview by Segment © Loadstar Capital ALL RIGHTS RESERVED 12

14. Slide 14: Real Estate Investments

    Real Estate Investments Real Estate X Tech to Open Up a New Market Real Estate Investments Real Estate Tech BROKERAGE CORPORATE FUNDING ASSET MANAGEMENT / ADVISORY SERVICES CROWDFUNDING Investment in real Management of Comprehensive Japan’s first real estate using internal investment real estate sup

15. Slide 15: Corporate Funding Business Results: Real estate investment

    Corporate Funding Business Results 【Real Estate Investment Sales】 • Sales in Q2 increased 7% year on year to 12.8 billion yen due to the sales of a large property. • We acquired CIRCLES Nibancho in Chiyoda -ku, the largest acquisition ever by the Company. We made extremely good progress in purchasin

16. Slide 16: Corporate Funding Business Results: Real estate leasing

    Corporate Funding Business Results 【Real Estate Leasing Sales】 • Two hotels performed better than expected, capturing both domestic and inbound demand. • The office leasing market is also recovering, and we expect the leasing business will remain relatively stable. • Real estate leasing costs slight

17. Slide 17: Corporate Funding Business Results

    Corporate Funding Business Results • Profit margins on property sales continue to remain high, reflecting the market's resilience. • The real estate acquisition demand of Japanese corporations is strong, we are currently negotiating to sell several properties for the 2nd half of the year. • We accum

18. Slide 18: Asset Management Business Results

    Asset Management Business Results • We sold a large property to SPC and received a mandate for asset management service from the SPC, thus securing ongoing AM fees. • Due to less new mandates in Q2 vs. the same period of the previous year, sales in Q2 decreased 8% year on year to 264 million yen. •

19. Slide 19: Real Estate Tech

    Real Estate Tech Real Estate X Tech to Open Up a New Market Real Estate Investments Real Estate Tech BROKERAGE CORPORATE FUNDING ASSET MANAGEMENT / ADVISORY SERVICES CROWDFUNDING Investment in real Management of Comprehensive Japan’s first real estate using internal investment real estate support fo

20. Slide 20: Crowdfunding Business Results

    Crowdfunding Business Results • Thanks to the favorable real estate market conditions, the Crowdfunding business performed well, resulting in sales of 238 million yen (up 42% y -o-y). • Operating loans decreased 22.3% to 6.5 billion yen from the previous fiscal year - end, as 5.8 billion yen was red

21. Slide 21: Crowdfunding Business (KPI)

    Crowdfunding Business（KPI） • We launched a new marketing campaign through our official LINE account. Also, to attract new investors, we created special investment allotments for first-time investors to OwnersBook. • The investment amount increased steadily and also with accumulated dividends, we hav

22. Slide 22: Return to Shareholders

    Return to Shareholders Basic Policy • We continue our efforts to improve corporate value and shareholder profit by expanding business performance. Dividend Policy • Aiming for dividend payout ratio of 17%, we shall continue stable and continuous return of profits. Surplus Dividend to For Future Grow

23. Slide 23: FY2023 Forecast, Real Estate Market Outlook, Progress of Medium-Term Management Plan

    4 FY2023 Forecast, Real Estate Market Outlook, Progress of Medium-Term Management Plan © Loadstar Capital ALL RIGHTS RESERVED 22

24. Slide 24: Forecasts for the fiscal year Ending December 31, 2023

    Forecasts for the fiscal year Ending December 31, 2023 • All businesses performed well, and the full-year operating performance is progressing well. • We aim to increase sales and profits for the 11th consecutive fiscal year since our company's foundation. Beyond that, we strategically develop our b

25. Slide 25: Real Estate Market Outlook

    Real Estate Market Outlook ◆ In the office transaction market, Japanese corporations have strong investment appetite, and investors in Asia ex-Japan are also becoming more active. In the office leasing market, tenant liquidity is recovering and there are some signs of improvement in vacancy rates. T

26. Slide 26: Mid-Term Management Plan Basic Policy

    Mid-Term Management Plan Basic Policy With the Corporate Funding Business as our business Basic foundation, we aim to increase our corporate value Policy by expanding the scale of our Asset Management Business and Crowdfunding Business. 1．Increase Assets Held on the Balance Sheet 2．Expand AUM in the

27. Slide 27: Progress of Mid-Term Management Plan

    Progress of Mid-Term Management Plan • So far, we are on a good track to achieve our mid-term management plan. • We have set challenging targets for Real estate investment as inventory / AUM / OwnersBook investment but we strive to achieve the targets through company-wide efforts. FY2022 FY2023 FY20

28. Slide 28: Business Strategy: Increase Assets Held

    Business Strategy: ① Increase Assets Held Strengthen Business Foundation with Continuous Real Estate Investment • Continue to invest approx. ¥20 billion a year in real estate that will form our future revenue base. • Increase assets held on the balance sheet to approx. ¥75 billion by the end of Dece

29. Slide 29: Business Strategy: Asset Management Business

    Business Strategy: ② Asset Management Business Increase AUM and Boost Name Recognition • Accumulate AUM of several tens of billions of yen per year in response to ongoing high demand for Tokyo real estate not only from overseas investors but also domestic investors. • Accumulate AUM worth ¥200 billi

30. Slide 30: Business Strategy: Crowdfunding Business (Loan-Type)

    Business Strategy: ③ Crowdfunding Business (Loan-Type) Increase Scale and Diversity of Investment Products • Provide products to meet investor demand, as individual investors are still highly motivated to invest. ➢ Larger scale transactions ➢ Enhancement and expansion of products with shareholder be

31. Slide 31: Business Strategy: Crowdfunding Business (Equity-Type)

    Business Strategy: ④ Crowdfunding Business (Equity-Type) Aim to Create Funds Targeted at Individuals • Consider selling the Company’s investment properties to funds alongside external acquisitions to generate recurring revenue. • Aim to create open-end funds*. • Proceed with consideration of funds u

32. Slide 32: Business Strategy: Crowdfunding Business (STOs)

    Business Strategy: ⑤ Crowdfunding Business (STOs) A framework based on new technologies for What are providing law/regulation-compliant services that meet demand for new fund procurement methods to STOs replace traditional equity and debt financing, as well (Security Token as demand for new financia

33. Slide 33: Business Strategy: ESG

    Business Strategy: ⑥ ESG Environment Society Governance ✓ Consideration ✓ Increase workforce of donation-type ✓ Switch to electricity diversity Crowdfunding Business generated from renewable ✓ Strengthen compliance Initiatives ✓ Make employee health a energy sources system & increase management prio

34. Slide 34: Our Strengths and Characteristics

    5 Our Strengths and Characteristics © Loadstar Capital ALL RIGHTS RESERVED 33

35. Slide 35: Loadstar Capital's Strength

    Loadstar Capital’s Strength Barrier to entry due Ability to respond to to government market changes, approval and licenses Innovation Creation of a new supported by a Financial market by stable financial base and Entry Crowdfunding Stability Barriers High Expertise Fast investment decision-making by

36. Slide 36: Value Creation in the Corporate Funding Business

    Value Creation in the Corporate Funding Business ■Why are we targeting mid-sized offices in the Tokyo's 23 wards for investment? Office conditions for small and New supply of mid-sized Positioning medium-sized enterprises (SMEs) buildings • Mid-sized buildings are less likely to compete • 99% of the

37. Slide 37: Competitive Advantage of Corporate Funding Business

    Competitive Advantage of Corporate Funding Business Building Establishing future a stable operating financial foundations base Information gathering Acquisition Increase value Solid track record • Track record of property • Over 20 years of real estate acquisitions totaling 100 • Construction work t

38. Slide 38: Asset Management Business

    Asset Management Business • We have many employees from real estate funds. So, we have successfully increased AUM, utilizing their knowledge and experience in the asset management business, as well as their extensive networks with institutional investors both in Japan and overseas. • We have also se

39. Slide 39: Competitive Advantage of Crowdfunding Business

    Competitive Advantage of Crowdfunding Business Realizing access to individual investors, which has not been established in the real estate investment market Demand Supply Established credibility as an asset High High hurdles to overcome in manager based on the track record acquiring approvals and of

40. Slide 40: Stable Financial Base

    Stable Financial Base Creditworthiness backed by ◼ Build a stable financial base through long-term appraisal track record borrowings to prepare for short-term real estate price 150 fluctuations. Tokyo Office Real Estate Price Index 100 200.0 50 150.0 0 購入額 Borrowed 借入額 Purchase amount amount 評価額 App

41. Slide 41: Crowdfunding Market and OwnersBook

    6 Crowdfunding Market and OwnersBook © Loadstar Capital ALL RIGHTS RESERVED 40

42. Slide 42: Crowdfunding Market and Growth Potential

    Crowdfunding Market and Growth Potential • Market is expected to continue to grow as the number of lending-type/FTK* crowdfunding business operators is increasing every year. • The global market is expected to grow to approx. 114 trillion yen by 2032 (based on the rate as of June 30, 2023). *FTK: Pl

43. Slide 43: OwnersBook Features

    OwnersBook Features 1 Loan-Type Loan-Type Loans secured by real estate Loan Real Lending (Mortgage) estate ¥800~1,200 ¥1,000 million ~1,500 OwnersBook million Equity Interest/ Investment Investors ¥200~300 million Principal Equity-Type Dividend/ Non- recource Principal Investment Real loan estate ¥6

44. Slide 44: OwnersBook Features

    OwnersBook Features 2 Borrowers’ Investors’ demand demand OwnersBook Lending Investment Interest/ Dividend/ Principal Principal Quick Financing collateral Small investment Little time & effort is origination capacity amounts required Faster No price changes originations than We can provide loans Eas

45. Slide 45: Company Profile

    7 Company Profile © Loadstar Capital ALL RIGHTS RESERVED 44

46. Slide 46: Company Profile (as of June 30, 2023)

    Company Profile（as of June 30, 2023） Company Name Loadstar Capital K.K. Address Ginza First Building, 1-9-13 Ginza, Chuo-ku, Tokyo, Japan Founded March 14, 2012 Representative President, Tatsushi Iwano Number of Directors 7 (including three outside directors) Number of Officers Approx. 80 and Employ

47. Slide 47: Our Team

    Our Team Naoyuki Kubo Yo Narita Takuya Kawabata Naoyuki Kubo was named Yo Narita was named Executive Takuya Kawabata has been our Executive Director in March 2019. Director in March 2019. Chief Financial Officer since January Since Joining Loadstar Capital in Since Joining Loadstar Capital in 2019,

48. Slide 48: 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

49. Slide 49: Real Estate Market Analysis

    8 Real Estate Market Analysis © Loadstar Capital ALL RIGHTS RESERVED 48

50. Slide 50: Vacancy Rates

    Vacancy Rates • Vacancy rates in the Tokyo business district, which had been very low, increased but have now stabilized. • Tokyo’s office vacancy rates remain lower than in the UK and US. Overall vacancy rate for Tokyo’s 5 major wards Vacancy rates in Japan, UK, and US （%） （%） Q4 2021 20 20 Q2 2022

51. Slide 51: Real Estate Investment from Overseas

    Real Estate Investment from Overseas • In Japan, where interest rates remain low, the average yield spread for office transactions is 280 bps. This is considerably higher than in other regions. • For Q1 2023, investment volume by overseas investors was 268.7 billion yen, a significant increase year-

52. Slide 52: The World in 2025 (Urban Population & GDP)

    The World in 2025（Urban Population ＆ GDP） The greater Tokyo area has higher concentrations of large enterprises, the largest urban population, and GDP in the world. Fortune Global 500 2019 40,000 Number of Global Corporate HQ’s by City Tokyo Beijing 53 35,000 Delhi Tokyo 38 20 Population（thousands）

53. Slide 53: 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

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