Japan Investment Adviser Co.,ltd.TSE: 7172

Financial Results for the Second Quarter of FY2020

Jul 31, 2020 at 7:05 AM UTC · Issued by Japan Investment Adviser Co.,ltd.

Japan Investment Adviser Co., Ltd.

(Stock Code: 7172)

Financial Results

for the Second Quarter of FY2020

July 31, 2020

Kasumigaseki Common Gate West Tower 34F 3-2-1 Kasumigaseki, Chiyoda-ku Tokyo Japan https://www.jia-ltd.com

Contents

1. Company Overview	P.3	- 8
2.	Second Quarter of FY2020 Business Overview	P.9	- 15
3.	Second Quarter of FY2020 Financial Results	P.16 - 20
4.	FY2020 Outlook	P.21 - 26
5.	Shareholder Return	P.27 - 30

1. Company Overview

Corporate Philosophy

	● ● ● Our commitments for accomplishing this goal ● ● ●

For	We will contribute to the prosperity of our shareholders by increasing corporate value with an
shareholders	aim to achieve a steady and rapid growth on a sustainable basis.


For clients	We are dedicated to contributing to the prosperity of our corporate and individual clients by
providing financial products and services that are backed by the support and trust of our clients.



For business	We aim to fulfill our social responsibility and achieve business growth together with our business
partners	partners empowered by their support and trust.

For our

officers and employees

We will build a work environment to help each of our staff to develop professionalism and fully exercise their ability. We will foster an organization and a corporate culture that prioritize openness and creativity to encourage our staff to take on new challenges.

Corporate Information

As of June 30, 2020

Company Name	Japan Investment Adviser Co., Ltd.


Headquarters	Kasumigaseki Common Gate West Tower 34F, 3-2-1 Kasumigaseki, Chiyoda-ku, Tokyo
Representative	Naoto Shiraiwa, President and CEO
Established	September 2006 (Fiscal Year-end: December 31)
Business Activities	Financial solutions business, Media-related business
Paid-in Capital	¥11,661 million
Listed Exchange	Tokyo Stock Exchange - Mothers (Stock Code: 7172)
Employees	Non-consolidated: 144; Consolidated: 190

Financial Institutions	Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, MUFG Bank, Ltd., Resona Bank, Limited., The Chiba Bank,
Ltd., THE DAISHI BANK, LTD., and the other 80 banks

	Top shareholders (55.7% shares, excluding treasury stock) as of June 30, 2020
	Naoto Shiraiwa
Major Shareholders	KODO Holdings Co., Ltd.
Japan Trustee Services Bank, Ltd. (Trust account)

	Japan Investment Adviser Co., Ltd.(Treasury stock)
	Government of Norway

Auditor	Grant Thornton Taiyo LLC

Group Companies

As of June 30, 2020

	Name	Location	Capital	Main line of business	Share of
	(Thousands of yen)	voting rights (%)

Consolidated	JP Lease Products & Services Co., Ltd.		950,000	Operating lease business for aircrafts,	100.0
Chiyoda-ku, Tokyo	maritime container boxes and vessels
subsidiaries		Insurance agency business
	JLPS Holding Ireland Limited	Ireland	20 million euros	Leasing business for aircrafts	100.0
	Finspire Inc.	Chiyoda-ku, Tokyo	50,000	Operating lease business	100.0
	JPO No.0 Co., Ltd.	Chiyoda-ku, Tokyo	300	Aircraft part-out & conversion business	100.0
	JPO No.1 Co., Ltd.	Chiyoda-ku, Tokyo	300	Aircraft part-out & conversion business	100.0
	JIA LUXEMBOURG SARL	Luxembourg	5.3 million euros	Investment business	100.0
	JPE No.1 Co., Ltd.	Chiyoda-ku, Tokyo	300	Investment business	100.0
	Nihon Securities Journal Inc.	Chuo-ku, Tokyo	4,500	Media-related business	100.0
	Arena Aviation Partners B.V.	Netherlands	1,100 euros	Aircraft lease management business	49.0

	Others (6 companies)

Equity method	Vallair Capital SAS	France	101,570 euros	Aircraft part-out & conversion business	40.0
affiliates	Iter Corporation	Chiyoda-ku, Tokyo	50,000	Fintech business	37.0

	Others (2 companies)

Business History

Acquired all shares of Nihon Securities Journal Inc.

Acquired shares of Arena Aviation

Established JP Lease

Partners B.V. and strengthened the

and Nihon Securities Journal Research Inc. and started

Products & Services Co.,

media related & IR supporting business.

capabilities for structuring operating

Ltd. and started an

lease for aircraft

operating lease business

Established Japan

Established JIA LUXEMBOURG SARL and constructed

Established Iter Corporation

for aircraft.

a network of partners in Europe.

Investment Adviser Co., Ltd.

(affiliated company accounted for by

and started an operating

Started aircraft part-out and conversion business

the equity method), a joint venture

lease business for marine

JP Lease Products &

through a capital and business tie-up with Valliere

for financial service business.

transportation containers

Aviation S.A. (currently VallairCapital SAS)

Started insurance agency business

Services Co., Ltd. started

an operating lease

The first IPO in private equity

Started an operating lease business for Vessels

business for marine

investment business (TSE - Mothers

transportation containers.

Bank of Innovation ,Inc. (Stock

Started private equity investment business

Code: 4393))

2007

2014

2016

2019

2006

2011

2013

2015

2017

2018

Started M&A advisory business

Got listed on Tokyo Stock

Started IPO consulting business

JP Lease Products & Services Co., Ltd.

succeeded the insurance agency business of

Exchange Mothers Section.

Finspire Inc.

Established CAIJ Inc. (currently Finspire

Acquired all shares of CAIJ Inc.

Nippon Securities Journal Inc. conducted an

(currently Finspire Inc.) (made

absorption merger with Nippon Securities

Inc.), a joint venture of leasing business

into a wholly owned subsidiary

Journal Research Inc.

of marine transportation containers that

Started structuring and selling

company)

utilized portfolio of America CAI

JLPS Holding Ireland Limited, which was

International, Inc. (company listed on

the No. 1 Fund of solar power

established in 2017, starts full-scale business

NY Stock Exchange)

generation business

operation as a hub in Europe.

Our Businesses

Japan Investment Advisor Co., Ltd.

JP Lease Products & Services Co.,

Ltd.

Second Quarter of FY2020

2. Business Overview

Highlights for the Second Quarter of FY2020

The sales and profit marked a record high for the cumulative second quarter (3-month profit dropped).

◆Marketing activities, which had been stalled under the state of emergency declaration, gradually resumed after the declaration was lifted.

◆The sales of equities underwritten in June were up 46% year on year, achieving the estimate for the second quarter.

(Millions of yen)	Q2		Q2	YoY change	YoY change		Revision forecast (May 1,2020)

FY2019		FY2020	(%)		First half	Progress	Fiscal	Progress


							rate	Year	rate

Net sales	6,046		10,544	74.4%	4,498		10,400	101.4%	19,730	53.4%

Operating profit	3,147		4,436	41.0%	1,289		4,230	104.9%	8,400	52.8%

Ordinary profit	2,694		3,979	47.7%	1,284		3,830	103.9%	7,000	56.8%

Profit attributable to	1,765		2,712	53.7%	947		2,650	102.3%	4,400	61.6%
owners of parent

Total amount of	42,460		53,074	25.0%	10,614		46,859	113.3%	79,680	66.6%
equity sales

•	Note1: Transfer of equity interest in special-purpose companies(SPC) as defined in Article 2, Paragraph 2-5 of the Financial Instruments and Exchange Act
•	Note2: In fiscal 2019, the sales posting standard was changed from "the sold-out one" to "the sales one."	10
	Copyright © Japan Investment Adviser Co., Ltd. All rights reserved.

Business Segment Summary

Amid the harsh business environment, the operating lease business served as the driving force.

◆YoY change in 3-month sales of the operating lease business: +229.3% for Jan. to Mar. and -7.3% for Apr. to Jun.

	Business units	Q2 FY2019	Q2 FY2020	YoY change (%)	YoY change
	(Millions of yen)


Operating Lease Business	5,418	10,184	88.0%	4,766

Renewable Energy Business	213	177	(17.1%)	(36)
Aircraft Part-Out & Conversion Business	17	33	94.8%	16
	Insurance Business
Other	M&A Advisory Business	255	47	(81.6%)	(208)
Businesses	Private Equity Investment Business

	IPO Consulting Business and others
Media-related & IR Support Business	141	102	(27.7%)	(39)
Total		6,046	10,544	74.4%	4,498

Note: In fiscal 2019, the sales posting standard was changed from "the sold-out one" to "the sales one."

Deals Structured (Operating Lease Business, Renewable Energy Business)

Amount and Number of Deals Structured by Type of Asset

(Millions of yen)	Q2 FY2019	Q2 FY2020

Aircraft	187,301	69,134
(22 deals)	(2 deals)

Vessel	0	0

Change in Amount and Number of Deals Structured

Amount of deals structured (millions of yen)

250,000

200,000196,221

	(0 deal)	(0 deal)

Container box	8,259	0
(3 deals)	(0 deal)

Solar photovoltaic	661	0
generation	(1deal)	(0 deal)

150,000

100,000

50,000

114,325

65,11869,134

Total	196,221	69,134
(26 deals)	(2 deals)

Q2 FY2017 Q2 FY2018 Q2 FY2019 Q2 FY2020

Equity Sales (Operating Lease Business, Renewable Energy Business)

Amount of Equity Sales* by Type of Asset

(Millions of yen)	Q2 FY2019	Q2 FY2020

Aircraft	41,512	43,174

Vessel	0	0

Container box	698	9,900

Solar photovoltaic	250	0
generation


Total	42,460	53,074

Change in Amount and Number of Equity Sales*

Amount of equity sales (millions of yen)

60,000
			53,074

50,000
	41,960	42,460

40,000

30,000

20,500
20,000

10,000

0
Q2 FY2017	Q2 FY2018	Q2 FY2019	Q2 FY2020

•	Note1: Transfer of equity interest in special-purpose companies(SPC) as defined in Article 2, Paragraph 2-5 of the Financial Instruments and Exchange Act
•	Note2: In fiscal 2019, the sales posting standard was changed from "the sold-out one" to "the sales one."	13
	Copyright © Japan Investment Adviser Co., Ltd. All rights reserved.

Balance of Equity underwritten* at the End of the Term

Balance and Number of Equity underwritten*

at the end of the term by Type of Asset

(Millions of yen)	Q2 FY2019	Q2 FY2020

Balance of Equity underwritten* at the end of the term

Term-end balance of equity underwritten [million of yen]

100,000

Aircraft	74,546	46,132
(26 deals)	(16 deals)


Vessel	0	0
(0 deal)	(0 deal)）

80,000

60,000

40,000

82,107

47,725 46,132

Container box	7,561	0
(2 deal)	(0 deals)）

20,000

18,417

Total	82,107	46,132
(28 deals)	(16 deals)

Note* : Falls under the item "Merchandise Investments" of Balance Sheet

Q2 FY2017 Q2 FY2018 Q2 FY2019 Q2 FY2020

Growth of the Sales Network (Business Matching Partners)

Note: "the sales Network" (Business Matching Partners) indicates the business matchmaking contractor that introduces investors.

In the Second quarter of 2020 (3 months), business matching contracts were executed with 17 accounting/tax accounting firms,
1 regional bank/shinkin banks.
At the end of June 2020, there were matching agreements with 331 accounting/tax accounting firms, 96 regional bank/ shinkin banks, 10 securities companies, a total of 437 partners.

		Accounting/tax accounting firms, etc.
500		Regional banks and Shinkin Banks			412	437
	Securities companies			10
			306	10
400		(Cumulative numbers)

					10	93	96

300
		169	192	75

200	117	9		331
9		309

	7	53
	40	221

100		22	120	130

	88
0
	End-FY2015	End-FY2016	End-FY2017	End-FY2018	End-FY2019	End-June 2020

Note: From the end of 2016, the total number of business matching contracts of JP Lease Products & Services Co., Ltd. and Finspire Inc. has been added.

Second Quarter of FY2020

3. Financial Results

Q2 FY2020 Consolidated Income Statement Summary

(Millions of yen)		Q2 FY2019	Q2 FY2020	YoY	YoY
	change (%)	change
		*5

Net sales		6,046	10,544	74.4%	4,498

Cost of sales		1,485	4,054	173.0%	2,568

Gross profit	*1	4,561	6,490	42.3%	1,929

SG&A expenses	*2	1,414	2,054	45.3%	639

Operating profit		3,147	4,436	41.0%	1,289

Non-operating	*3	458	596	30.1%	138
income

Non-operating	*4	910	1,053	15.7%	142
expenses

Ordinary profit		2,694	3,979	47.7%	1,284

Profit attributable to		1,765	2,712	53.7%	947
owners of parent

*1. Gross profit

Gross profit margin decreased 13.9% to 61.6%.

*2. SG&A expenses

SG&A expenses ratio decreased 3.9% to 19.5%.

The difference from the previous fiscal year has widened because there were projects with different cost accounting.
2nd quarter (3 months)

Gross profit	74.0％（Y to Y ▲3.5％）
SG&A ratio	30.5％（Y to Y +10.4％）

*3. Non-operating income

An increase of ¥65 million in gain on sales of special-purpose companies(SPC) investments.

*4. Non-operating expenses

An increase of ¥142 million

increases of ¥71 million in interest expenses increases of ¥187 million in fees

foreign exchange losses ¥203 million (foreign exchange losses in previous year

¥354 million.)

Note5: In fiscal 2019, the sales posting standard was changed from "the sold-out one" to "the sales one."

Trends by quarter

Year on Year Comparison (FY2018, FY2019, FY2020)									Q１			Q2		Q3		Q4


																											* Note (*) : In fiscal 2020, Earnings forecast was revised.
		0	2,500	5,000				7,500		10,000	12,500	15,000		17,500
																														15,036
		FY2018	3,271				2,905								4,489							4,370
																														16,647

Net sales	FY2019	2,582				3,464							2,742											7,858
(Millions of yen)																														19,730 (*)
FY2020					7,380												3,164




		0	1,000	2,000		3,000				4,000			5,000		6,000		7,000	8,000
																															8,766
		FY2018	2,169							1,667											2,586					2,342
Operating																													8,188

FY2019	1,161							1,986						832											4,208
profit																														8,400 (*)

FY2020	3,057									1,378
(Millions of yen)


		0	500			1,000				1,500	2,000	2,500	3,000			3,500		4,000	4,500	5,000
																														5,025
		FY2018	1,017										1,145							1,105						1,757
																												4,555
Profit	FY2019	503					1,262			(122)													2,913
(Millions of yen)																														4,400 (*)
FY2020					2,023												689

* Note : In fiscal 2019, the sales posting standard was changed from "the sold-out one" to "the sales one."	18
Copyright © Japan Investment Adviser Co., Ltd. All rights reserved.

Q2 FY2020 Consolidated Balance Sheet Summary (1)

(Millions of yen)	June. 30,	Dec. 31,	June. 30,	YoY change	Vs. Dec. 31,
2019 (1)	2019 (2)	2020 (3)	(3) - (1)	2019
	(3) - (2)

Cash and deposits	26,160	36,239	36,966	10,806	727
Accounts receivable -	4,719	6,661	6,167	1,448	(494)
trade

*1 Merchandise	4,180	2,637	3,751	(428)	1,113
*2 Equity underwritten	82,107	82,372	46,132	(35,974)	(36,239)
Costs on uncompleted	4,672	4,580	1,758	(2,914)	(2,822)
services

*3 Advance payments -	5,202	5,263	7,973	2,770	2,710
trade
*4 Advances paid	7,114	6,898	14,755	7,641	7,857
Other	8,948	6,513	7,507	(1,441)	993
Current assets	143,106	151,167	125,012	(18,093)	(26,154)
Property, plant and	405	109	222	(183)	112
equipment

Intangible assets	54	114	124	70	10
Investments and other	6,720	7,407	6,450	(269)	(957)
assets

Non-current assets	7,180	7,632	6,798	(382)	(834)
Deferred assets	87	80	99	11	18
Total assets	150,373	158,879	131,910	(18,463)	(26,969)

*1. Merchandise

Mainly the inventory for the parts-out & conversion business and for the solar power generation funds after the exercise of purchase.

*2. Equity underwritten

Special-purpose companies(SPC) investments to be sold in the operating lease business.

*3. Advance payments - trade

Advance payments - trade mainly for purchase of Aircraft to develop investment products.

Plans to transfer all the balance to equity underwritten.
The company may sell aircraft.

*4. Advances paid

Mainly temporary advances paid before sale to investors for the operating lease business and for the renewable energy business.

Note: In fiscal 2019, the sales posting standard was changed from "the sold-out one" to "the sales one."

Q2 FY2020 Consolidated Balance Sheet Summary (2)

	(Millions of yen)	June. 30,	Dec. 31,	June. 30,	YoY change	Vs. Dec. 31,
	2019 (1)	2019 (2)	2020 (3)	(3) - (1)	2019
		(3) - (2)

	Accounts payable -	21	39	15	(6)	(24)
	trade

*1	Short-term loans	94,838	99,052	79,516	(15,321)	(19,535)
	payable
*2	Unearned revenue	12,804	13,574	7,417	(5,386)	(6,156)
	Income taxes payable	1,971	2,335	199	(1,772)	(2,136)
	Other	1,679	1,596	786	(892)	(810)
Current liabilities	111,315	116,598	87,935	(23,379)	(28,662)
Non-current liabilities	5,516	6,025	5,462	(54)	(562)
Total liabilities	116,832	122,623	93,398	(23,434)	(29,225)
	Capital stock	11,646	11,658	11,661	15	3
	Capital surplus	11,580	11,593	11,596	15	3
	Retained earnings	11,659	14,154	16,493	4,834	2,338
	Treasury shares	-1,470	-1,470	-1,470	0	0
*3	Shareholders' equity	33,415	35,935	38,280	4,864	2,344
	Other	126	321	232	105	(89)
Total net assets	33,541	36,256	38,512	4,970	2,255

*1. Short-term loans payable

Short-term loans payable are mainly used by the Group to temporarily underwrite special-purpose companies(SPC) investments on the premise that the status will be transferred to investors.

The proceeds from the transfer of the Equity Underwritten to the investors will be used to repay the loans.

*2. Unearned revenue

Of the business consignment fees received from SPC, the amount for the period before the transfer to investors.

*3. Total net assets

Equity ratio rose due to a decline in the balance in Equity Underwritten and progress in repayment of loans.

End of 2nd quarter of FY 2020	29.1 %
End of FY 2019	22.7 %

Note: In fiscal 2019, the sales posting standard was changed from "the sold-out one" to "the sales one."

FY2020

4. Future outlook

Future outlook for the Group

Considering the spread of the COVID-19 infection,

1	Outlook for the Operating Lease Business
2	Outlook for the Renewable Energy Business
3	Earnings forecast

1. Outlook for the Operating Lease Business

Effects of decrease of flights and utilization rate caused by the novel coronavirus

The situational awareness at the time of financial results announcement for FY2019 (February 10, 2020) remains.

We will collect information on the direct effects on the Group's performance in FY2020, based on the present conditions as below.
Any items requiring disclosure will be announced promptly.
We will take a careful look at the deterioration of conditions for deals structured, and the impacts on the future opportunities

to make deals, when the situation gets worse and prolonged.	(Cited from the financial results announcement for FY2019)
"Current status" at the time of financial results announcement for FY2019 (February 10, 2020)	(Cited from the financial results
		announcement for FY2019)

(Current status 1) The conditions of the Group's deals to be sold until around the third quarter of 2020 have been largely fixed, but we will carefully monitor the situation.

(Current status 2) The portfolios to be created in the future will be determined while carefully considering the impacts of the COVID-19 on the lessees.

(Current status 3) We will make efforts to gather further information, including the impacts on deals already created for or sold to airline companies, and take appropriate actions..

(Current status 4) We will prepare a contingency plan with monitoring the future performance and financial position of the lessees.

"Current status" at the time of financial results announcement for Q1 FY2020 (May 1, 2020)	(Cited from the financial results
		announcement for Q1 FY2020)
	(Current status 5) Following the announcement that Virgin Australia Holdings Limited (VAH), a party to the existing transaction, applied for

	voluntary management procedures, we promptly began discussions with related parties on countermeasures.	（still ongoing）
Situation after that

(Current status 1,2) We are carefully negotiating for deals that would satisfy the needs of investors while examining airline companies and the content as investment products. To work on the operating lease other than conventional passenger planes, such as cargo airplane, and the conversion from passenger planes to cargo airplane. To work on developing the project scheme with the structure that is not dependent on the conventional framework.

2. Outlook for the Renewable Energy Business

We will carry out businesses as scheduled against the backdrop of stable power generation/operation performance.
Without revising the initial schedule, we will work on monetization through management of our properties, and development and sales of new funds. ・Operation commission fees or income generated from sales of power from 26 existing power stations are our source of stable income.
・Impact of delay in completion of a new large-scale project (15.0 MW) due to COVID-19 is minimal.
・Exercising purchase options for the products sold in previous years has begun. We are establishing a new profit structure after purchase.

Operational status

of solar power

stations at the end

of June 2020

	At the end of Dec.	At the end of June	26 stations
Region	2019		2020
	Output 45.8MW
	Output	Number	Output	Number

Kanto	11.0MW	7	11.0MW	7
Tohoku	7.2MW	4	7.2MW	4
Chubu	9.6MW	5	9.6MW	5
Kinki	5.9MW	3	7.0MW	4
Chugoku	5.7MW	3	5.7MW	3
Shikoku	3.4MW	2	3.4MW	2
Kyushu	2.0MW	1	2.0MW	1
Total	44.7MW	25	45.8MW	26	24
				Copyright © Japan Investment Adviser Co., Ltd. All rights reserved.

3. Earnings Forecast for FY2020

The earnings forecast for FY2020 is not revised from that announced on May 1.

Earnings forecast was estimated with reference to currently available information, and may be revised, according to the global situation of spread of COVID-19.

FY2020

(Millions of yen)	2nd quarter		2nd quarter		2nd half	Fiscal year
Result	May 1,	Difference from	YoY change	May 1,	YoY change	May 1,	YoY change

	Revision	the revised	(%)	Revision	(%)	Revision	(%)
		forecast
Net sales	3,164	3,019	4.8%	(8.7%)	9,330	(12.0%)	19,730	18.5%

Operating profit	1,378	1,172	17.6%	(30.6%)	4,170	(17.3%)	8,400	2.6%

Ordinary profit	1,112	962	15.6%	(37.5%)	3,170	(29.4%)	7,000	(2.6%)

Profit attributable to	689	626	10.0%	(45.4%)	1,750	(37.3%)	4,400	(3.4%)
owners of parent


Total amount of	20,783	14,568	42.7%	(9.8%)	32,820	(46.8%)	79,680	(23.5%)
equity sales*

Note: Transfer of equity interest in special-purpose companies(SPC) as defined in Article 2, Paragraph 2-5 of the Financial Instruments and Exchange Act

3. Risk factors related to Earnings Forecasts in FY2020

Business risk factors when the pandemic of COVID-19 lingers

Risks on supply-side

 Due to deterioration in performance of lessees, including airline companies	・・・Risks to decrease opportunities to make deals
 Due to the deterioration of financing environment
(changes in financing terms offered by financial institution)

Risks on demand-side

 Due to deterioration in performance of investors (SMEs nationwide)	・・・Risks to lose the willingness to invest
Risks on portfolio assets
 Related to the operating lease business	・・・Risks to degrade the value of assets owned
Risks on business operation	・・・ Risk to hinder smooth business continuity
 Through the spread of the virus inside our company

Our corporate group will take appropriate measures for controlling the above risks, but the business performance of our corporate group may largely differ from the projections due to prolonged spread of COVID-19.

5. Shareholder Return

Dividend Forecast

Our dividend policy is to aim for a consolidated payout ratio of at least 20% in the medium term

Basic Policy for Shareholder Return

The basic policy of JIA for the profit distribution is to pay dividends linked to business performance, taking into consideration the balance with the expansion of financial base and human investment for performance improvement.
The interim dividend for the FY2020 is ¥16 (an increase of ¥6.50 from the previous year), unchanged from the initial forecast.
The annual dividend for the FY2020 is estimated to be ¥32, an increase of ¥10 from the previous year.
- It may be revised, according to the global situation of spread of COVID-19.

Changes in dividend amount	Interim dividend	Year-end dividend	Annual dividend

FY2017	Result	¥ 6.00	¥ 6.00	(*)

FY2018	Result	¥ 5.50	¥ 9.50	¥ 15.00

FY2019	Result	¥ 9.50	¥ 12.50	¥ 22.00


FY2020		¥ 16.00 (Result)	¥ 16.00 (Forecast)	¥ 32.00 (Forecast)

* Note: JIA conducted a 2-for-1 common stock split on September 1, 2017.

Profitability Indicators

Capital efficiency remains high thanks to business operation earning large revenue and achieving significant growth
We aim to achieve a high profit rate and a high growth rate while maintaining the good balance between dividends and internal reserve.

	FY2018	*1	FY2019	FY2020
				（forecast）
Payout ratio	8.5%		14.4%	21.7%

Equity ratio	30.0%		22.7%	－

ROA	8.4%		5.4%	－

Profit to sales	33.4%		27.4%	22.3%

Increase in profit	+84.3%		(9.3%)	(3.4%)

ROE	21.7%		13.4%	－

Note1: In fiscal 2019, the sales posting standard was changed from "the sold-out one" to "the sales one." .
Note2: The forecast of FY 2020 was revised on May 1, 2020.

Shareholder Incentives

Descriptions of shareholder incentives in 2020
We introduced the incentive plan for shareholders to encourage more shareholders to maintain their investment loyalty over the medium- to long-term period.

(1) Eligible shareholders	Perks are provided to all shareholders recorded in the shareholder register as of December 31,2020
(2) Allocation date	End of December,2020 (once each year)
(3) Gift	QUO Card and free subscription of Nihon Securities Journal (Digital Version)
(4) Gift eligibility	The number of shares	(QUO Card + subscription ticket of Nihon Securities Journal (Digital Version) )
	Period of less than one year	 QUO Card worth ¥1,000 + Three-month free subscription ticket of Nihon
	100 or more and less than 2,000 shares
	2,000 shares or more	Securities Journal (Digital Version) worth ¥9,000
	 QUO Card worth ¥3,000 + Six-month free subscription ticket of Nihon
	Period of one year to less than two years	Securities Journal (Digital Version) worth ¥18,000
	 QUO Card worth ¥3,000 + Six-month free subscription ticket of Nihon
	100 or more and less than 2,000 shares
	2,000 shares or more	Securities Journal (Digital Version) worth ¥18,000
	 QUO Card worth ¥5,000 + Twelve-month free subscription ticket of Nihon
	Period of two years or more	Securities Journal (Digital Version) worth ¥36,000
	 QUO Card worth ¥5,000 + Six-month free subscription ticket of Nihon
	100 or more and less than 2,000 shares
	2,000 shares or more	Securities Journal (Digital Version) worth ¥18,000
	 QUO Card worth ¥10,000 + Twelve-month free subscription ticket of Nihon
		Securities Journal (Digital Version) worth ¥36,000

(5) Definition of continuous	A continuous ownership period is the time during which an investor holds JIA stock without any interruption. This is defined as
ownership period	the length of time JIA stock is held continuously starting on the day an investor is recorded in the shareholder register and
	ending on the record date (December 31,2020).

Disclaimer

Industry trends and analysis, business outlooks, strategies, and other forward looking statements in this presentation are based on information available to the management of JIA when this presentation was prepared. The operating environment in the future could differ significantly from the current environment for a variety of reasons. As a result, next-stage strategies, results of operations and other items could differ from the information in this presentation.

IR Contact

Please contact us with any questions or comments about our stock and other subjects involving a JIA investment.

ir@jia-ltd.com

or call the JIA's IR Desk at +81-3-6550-9307.

We may reply to you in writing, and it may take some time to respond to your inquiries. Please note that we will respond on or after the following business day if your inquiries are received on weekends, holidays, or the year-end and New Year holidays.

Personal Information

Personal information (names, addresses, phone numbers and e-mail addresses) about clients that is sent to the IR e-mail address will be used only to respond to questions or other inquiries or to send materials requested. This information will not be used for any other purposes.

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