COMPANY RESEARCH AND ANALYSIS REPORTRIZAP Group, Inc.
2928
Sapporo Securities Exchange Ambitious

30-Mar.-2018
FISCO Ltd. Analyst

Hiroyuki Asakawa

FISCO Ltd.
http://www.fisco.co.jp

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

RIZAP Group, Inc.
2928 Sapporo Securities Exchange Ambitious

30-Mar.-2018https://ir-english.rizapgroup.com/■ Index■Summary---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 01
1. Made strong progress in FY3/18 Q3............................................................................................................

01

2. Announced its intention to fully enter into the two major markets of “sports” and “food”............................

01

3. Expected to achieve FY3/18 results forecasts. Revenue and profits are forecast to continue
to increase greatly in the next fiscal year also from the contribution of M&A. ..............................................

01■Results trends--------------------------------------------------------------------------------------------------------------------------------------------------------------- 02
1. Overview of the FY3/18 Q3 results. . ....... ......................................................................................................

02

2. Trend in the RIZAP body shaper business. ..................................................................................................

05

3. Trend in the RIZAP-related business............................................................................................................

06

4. Earnings at Group companies. . .............. ......................................................................................................

07■Progress made in medium to long-term growth strategy--------------------------------------------------- 08
1. The progress and developments in Q3........................................................................................................

08

2. Developments for “SPORTS”.......................................................................................................................

09

3. Developments for “FOOD”..................... ......................................................................................................

10

4. New M&A: strategic capital and business alliance with Wonder Corporation...............................................

11■Business outlook-------------------------------------------------------------------------------------------------------------------------------------------------------- 12
1. FY3/18 forecast...........................................................................................................................................

12

2. Towards FY3/19...........................................................................................................................................

13■Shareholder returns------------------------------------------------------------------------------------------------------------------------------------------------- 15■Information security------------------------------------------------------------------------------------------------------------------------------------------------ 16

We encourage readers to review our complete legal statement on “Disclaimer” page.

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

RIZAP Group, Inc.
2928 Sapporo Securities Exchange Ambitious

30-Mar.-2018https://ir-english.rizapgroup.com/██Summary
Fully-fledged business developmentin the two major growth markets of “sports” and “food”
Making major progress in M&A also
RIZAP Group, Inc. <2928> (hereafter, also “the Company,” formerly named Kenkou Corporation) started with amail-order business and subsequently expanded its business fields and scope while actively utilizing M&As with anemphasis on “health.” The Group covers the “self-investment industry” as its business domain and operates beautyand health, apparel, housing and lifestyle, and entertainment businesses.
1. Made strong progress in FY3/18 Q3
In FY3/18 Q3, the Company achieved higher revenue and profits, with revenue of ¥99,129mn (up 50.8% year-on
year (YoY)) and operating income of ¥8,114mn (up 1.4%). At first glance, the progress rates toward the full fiscal
year forecasts seem low, but at FISCO, we think that the progress is in line with the forecasts for both revenue andprofits. By segment, in the beauty and health business segment, which includes the mainstay body shaper business,both revenue and operating income steadily increased and drove the results for the Company as a whole. It also
conducted upfront investment in the current Q3, and the nine-months cumulative upfront investment total reached¥7bn. Looking at this in another way, it signifies that the current cumulative Q3 gross operating income exceeded¥15bn, which is a result that confirms that the Company’s profitability is steadily growing.
2. Announced its intention to fully enter into the two major markets of “sports” and “food”
Toward accelerating the growth of the RIZAP-related businesses, the Company has announced that it will newly fully
enter into the sports and food markets. Up to the present time, it has achieved growth for sports through businesses
such as body shaper, golf, and sports apparel. But it is aiming to seize the opportunity provided by the rapid
expansion of the sports industry market, initiated by the government, to achieve further growth. For food also, it has
a track record of managing the diets of its close to 100,000 members, and in addition, it has been accumulating theresults of joint research with universities and research into a low-carbohydrate diet. It can be said to have embarked
on the full-scale monetization of the expertise and findings that it has acquired through these efforts.
3. Expected to achieve FY3/18 results forecasts. Revenue and profits are forecast to continue
to increase greatly in the next fiscal year also from the contribution of M&A
The Company is expected to achieve its results forecasts for FY3/18, of revenue of ¥150,202mn and operating
income of ¥13,010mn, without any problems. When back-calculating from the rates of progress up to Q3, in Q4 it willneed to accumulate operating income of approximately ¥5bn. Considering the results in Q3 on a single period basis
and also the seasonal profit factors at the Group subsidiaries, their levels are not necessarily that high of a hurdle
and we expect the Company to achieve the forecasts. As for FY3/19, the Company has in sight revenue of ¥250bn
with the effects of the recent M&A also appearing. In profits, at FISCO we think one target is an operating margin of
10%. If it were to realize these figures in FY3/19, it would achieve the targets in its medium-term management plan,
COMMIT 2020, ahead of schedule so another task will be considering the results targets for the period after that.

We encourage readers to review our complete legal statement on “Disclaimer” page.

01 16

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

RIZAP Group, Inc.
2928 Sapporo Securities Exchange Ambitious

30-Mar.-2018https://ir-english.rizapgroup.com/

Summary

Key Points
The high rate of growth is continuing in the body shaper business from the rise in LTV on the introduction of
BMP and the improved productivity of trainers• The RIZAP-related businesses of GOLF and ENGLISH have entered phases of fully-fledged expansion• Announced that it will make Wonder Corporation a subsidiary. Has the potential to instantly accelerate businessdevelopment through various synergies.
•㻾㼑㼟㼡㼘㼠㼟㻌㼠㼞㼑㼚㼐㼟㻔¥㼙㼚㻕㻾㼑㼢㼑㼚㼡㼑㻌㻔㼘㼑㼒㼠㻕㻻㼜㼑㼞㼍㼠㼕㼚㼓㻌㼕㼚㼏㼛㼙㼑㻌㻔㼞㼕㼓㼔㼠㻕㻝㻢㻜㻘㻜㻜㻜

㻔¥㼙㼚㻕㻝㻢㻘㻜㻜㻜

㻝㻟㻘㻜㻝㻜
㻝㻞㻜㻘㻜㻜㻜

㻝㻞㻘㻜㻜㻜

㻝㻜㻘㻞㻝㻞

㻤㻜㻘㻜㻜㻜

㻝㻡㻜㻘㻞㻜㻞

㻤㻘㻜㻜㻜

㻡㻘㻜㻢㻢
㻥㻡㻘㻞㻥㻥

㻠㻜㻘㻜㻜㻜

㻞㻘㻝㻜㻤
㻝㻘㻝㻞㻣

㻜

㻞㻟㻘㻥㻝㻜

㻲㼅㻟㻛㻝㻠

㻠㻘㻜㻜㻜㻡㻡㻘㻠㻠㻤

㻟㻥㻘㻝㻜㻝
㻜㻲㼅㻟㻛㻝㻡

㻲㼅㻟㻛㻝㻢

㻲㼅㻟㻛㻝㻣

㻲㼅㻟㻛㻝㻤㻱

Note: Transitioned to IFRS from FY3/17
Source: Prepared by FISCO from the Company’s financial results██Results trends
Absorbed the upfront investment of ¥7bn andachieved higher revenue and profits
1. Overview of the FY3/18 Q3 results
In FY3/18 Q3 results, the Company posted higher revenue and profits, with revenue of ¥99,129mn (up 50.8% YoY),
operating income of ¥8,114mn (up 1.4%), income before income taxes of ¥7,113mn (down 5.9%), and net income
attributable to owners of the parent company of ¥5,233mn (up 3.0%), posting all-time highs both in revenue andoperating income.
There were no prior forecasts for Q3, so it is not possible to evaluate the results compared to the forecasts. But at
FISCO, we evaluate that the Company made strong progress for both revenue and profits.

We encourage readers to review our complete legal statement on “Disclaimer” page.

02 16

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

RIZAP Group, Inc.
2928 Sapporo Securities Exchange Ambitious

30-Mar.-2018https://ir-english.rizapgroup.com/

Results trends

Overview of FY3/18 Q3 results(¥mn)
FY3/17

FY3/18Q3 cumulative
total

Full year

Q3 cumulative
total

Growth rate

Progress rate
vs. full-year
forecast

Full-year
forecast E

Revenue

65,726

95,29999,129

50.8%

66.0%

150,202

Operating income

8,001

10,212

8,114

1.4%

62.4%

13,010

12.2%

10.7%

8.2%

-

-

8.7%

Income before income taxes

7,557

9,604

7,113

-5.9%

59.4%

11,983

Net income attributable to owners of
the parent company

5,081

7,678

5,233

3.0%

65.4%

8,007

Operating margin

Source: Prepared by FISCO from the Company’s financial results

The fact that the increase rate of operating income was small and that income before income taxes declined might
give the impression that the Company’s growth is slowing. But at FISCO, we think that this would not be a correctunderstanding.
As described in the previous report (at the time of the 1H results), in the current fiscal year the Company has been
actively conducting upfront investment to achieve growth. The scale of this investment had reached a cumulative
total of approximately ¥4.7bn by the end of 1H, and on entering Q3 also, it conducted upfront investment of around¥2.3bn. As a result, the cumulative upfront investment total at the end of Q3 exceeded ¥7bn. The important point
here is that this upfront investment was completely under the Company’s control. We have explained in past reportsthat the Company manages its business while maintaining a balance between the aspects of profit levels at the time
and what should be done now to lay the foundations for future growth. It continued to adhere to this approach inthe current Q3 also.
Since the operating income amount on the financial statements is the net value after the deduction of upfront
investment and other such amounts, it is difficult to understand the Company’s actual profitability. To make iteasier to understand, the graph (next page) shows the quarterly trend in the Company’s gross operating income
and upfront investment amount. We see that in the current Q3 cumulative period, total gross operating income
increased to approximately ¥15.1bn; approximately ¥12.1bn from its existing businesses and ¥3bn from a gain on abargain purchase (negative goodwill) following M&As. On the other hand, the Company actively conducted upfront
investments for future growth which totaled approximately ¥7bn. These resulted in, as previously stated, operating
income of approximately ¥8.1bn.

We encourage readers to review our complete legal statement on “Disclaimer” page.

03 16

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

RIZAP Group, Inc.
2928 Sapporo Securities Exchange Ambitious

30-Mar.-2018https://ir-english.rizapgroup.com/

Results trends㻽㼡㼍㼞㼠㼑㼞㼘㼥㻌㼠㼞㼑㼚㼐㼟㻌㼕㼚㻌㼛㼜㼑㼞㼍㼠㼕㼚㼓㻌㼕㼚㼏㼛㼙㼑㻌㼍㼚㼐㻌㼡㼜㼒㼞㼛㼚㼠㻌㼕㼚㼢㼑㼟㼠㼙㼑㼚㼠㻔㼏㼡㼙㼡㼘㼍㼠㼕㼢㼑㻌㼢㼍㼘㼡㼑㼟㻕
㻔¥㼎㼚㻕
㻞㻜㻚㻜

㻻㼜㼑㼞㼍㼠㼕㼚㼓㻌㼕㼚㼏㼛㼙㼑㻌㼒㼞㼛㼙㻌㼑㼤㼕㼟㼠㼕㼚㼓㻌㼎㼡㼟㼕㼚㼑㼟㼟㼑㼟㼁㼜㼒㼞㼛㼚㼠㻌㼕㼚㼢㼑㼟㼠㼙㼑㼚㼠㻘㻌㼑㼠㼏㻚㻳㼍㼕㼚㻌㼛㼚㻌㼎㼍㼞㼓㼍㼕㼚㻌㼜㼡㼞㼏㼔㼍㼟㼑㻌㼠㼔㼞㼛㼡㼓㼔㻌㻹㻒㻭㼟

㻜㻚㻥㻌

㻝㻡㻚㻜

㻞㻚㻝㻌
㻝㻜㻚㻜

㻠㻚㻠㻌

㻞㻚㻝㻌

㻡㻚㻜

㻠㻚㻜㻌

㻞㻚㻝㻌

㻜㻚㻜

㻠㻚㻜㻌

㻟㻚㻣

㻟㻚㻣

㻟㻚㻣

㻙㻟㻚㻜㻌

㻙㻟㻚㻜㻌
㻙㻝㻚㻣㻌

㻙㻟㻚㻜㻌
㻙㻝㻚㻣㻌
㻙㻞㻚㻟㻌

㻝㻴

㻽㻟

㻙㻡㻚㻜
㻙㻝㻜㻚㻜
㻽㻝㻌㼏㼡㼙㼡㼘㼍㼠㼕㼢㼑㻌㼠㼛㼠㼍㼘㻲㼅㻟㻛㻝㻤
Source: Prepared by FISCO from the Company’s results briefing materials

By segment, in the Q3 cumulative period in the beauty and health business segment, revenue increased 83.4%
YoY and operating income grew significantly, by 24.4%, and this segment drove the Company’s overall revenue
and profits. It is noteworthy that in Q3 as a single period, operating income increased rapidly, by around 3.6 times
to ¥4,002mn. Breaking it down, as explained below, revenue in the body shaper business continued to grow,while the results at the subsidiary Maruko Corporation <9980> improved greatly. The profit-loss conditions in the
RIZAP-related businesses, including golf, also improved significantly in Q3 and contributed to the higher profits.
FY3/18 Q3 business breakdown by segment(¥mn)
FY3/17

Revenue

Q3
cumulative
total

Q3

Full year

Q3
cumulative
total

Beauty and health27,164

9,772

38,225

Apparel

8,941

3,497

13,042

Housing and lifestyle

21,306

8,139

Entertainment

8,929

3,156

Subtotal

66,341

24,564YoY
Q3

YoY
growthrate

Growthrate

Change49,823

83.4%

22,65918,46489.0%

20,732131.9%

11,7908,421

140.8%

33,253

21,266

-0.2%

-39

7,152

-12.1%

12,044

9,022

1.0%

92

3,112

-1.4%

96,566

100,84452.0%

34,50337,151

51.2%

-615

-346

-1,266-1,715--1,099

-603

-

Total

65,72624,21895,29999,12950.8%

33,40336,54850.9%

Beauty and health261.0%

Adjustment

OperatingincomeFY3/18

5,808

1,108

6,920

7,225

24.4%

1,416

4,002

Apparel

220

170

1,743

2,084

844.9%

1,863

-152

-

Housing and lifestyle

979

336

1,150

890

-9.1%

-88

117

-65.2%

Entertainment

1,853

240

1,783

41

-97.8%-1,812

124-48.3%

Subtotal

8,862

1,855

11,598

10,241

15.6%

1,379

4,091

120.5%

Adjustment

-861

-247

-1,385-2,127--1,266

-979

-

Total

8,001

1,607

10,212

8,114

1.4%

113

3,111

93.5%

Note: Segment revenue includes internal transactions.
Source: Prepared by FISCO from the Company’s financial results

We encourage readers to review our complete legal statement on “Disclaimer” page.

04 16

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

RIZAP Group, Inc.
2928 Sapporo Securities Exchange Ambitious

30-Mar.-2018https://ir-english.rizapgroup.com/

Results trends

The body shaper business is continuing to grow from the rise in LTV
on the introduction of BMP and the improved productivity of trainers
2. Trend in the RIZAP body shaper business
The body shaper business is not simply performing well, it is continuing to grow. As described in the previous
report of January 9, 2018, the Company is aiming to convert the profit structure of the body shaper business to arecurring-revenue business model and toward this, it has introduced the Body Management Program (BMP).
The point for BMP is that for members who have completed the standard program (normally for two months), for afee of ¥29,800 a month they can receive benefits such as the free use of facilities, diet guidance, and the provisionof rebound insurance and other services. It can be said to be a service for which lifetime value (LTV) is expected
to increase in the future, which is something the Company has been aiming for since the past. In trial calculationsfor 1,000 new members under certain assumptions, revenue on the introduction of BMP is about 3.4 times thaton the completion of the normal program (please refer to the previous report or to the Company’s financial results
briefing materials.)This BMP registration rate has trended steadily upward every month since its launch in July 2017, and by December
2017, it had reached 84.8%.

㼀㼞㼑㼚㼐㻌㼕㼚㻌㼠㼔㼑㻌㻮㼛㼐㼥㻌㻹㼍㼚㼍㼓㼑㼙㼑㼚㼠㻌㻼㼞㼛㼓㼞㼍㼙㻌㻔㻮㻹㻼㻕㻌㼞㼑㼓㼕㼟㼠㼞㼍㼠㼕㼛㼚㻌㼞㼍㼠㼑
㻥㻜㻚㻜㻑
㻤㻜㻚㻜㻑

㻣㻜㻚㻜㻑

㻢㻢㻚㻤㻑

㻣㻜㻚㻤㻑

㻣㻞㻚㻢㻑

㻭㼡㼓㻚㻌㻞㻜㻝㻣㻿㼑㼜㼠㻚㻌㻞㻜㻝㻣

㻤㻞㻚㻟㻑

㻤㻞㻚㻢㻑

㻤㻠㻚㻤㻑

㻻㼏㼠㻚㻌㻞㻜㻝㻣㻺㼛㼢㻚㻌㻞㻜㻝㻣㻰㼑㼏㻚㻌㻞㻜㻝㻣

㻢㻜㻚㻜㻑
㻡㻜㻚㻜㻑

㻠㻜㻚㻜㻑
㻟㻜㻚㻜㻑
㻞㻜㻚㻜㻑

㻝㻜㻚㻜㻑
㻜㻚㻜㻑
㻶㼡㼘㻙㻝㻣

Source: Prepared by FISCO from the Company’s results briefing materials

One more key point for the source of growth of the body shaper business is the improved productivity. Improving
productivity has also been an issue that the Company has continuously been addressing since the past, and thesustained pace in improving this figure is leading to the growth in profits in this business. The representative key
performance indicator (KPI) for productivity improvement is revenue per trainer. In December 2017, it had risen to
1.3 times the figure in the same month in the previous fiscal year. This is also reflected in the revenue per gym, forwhich the value in December 2017 was 1.2 times the same month in the previous year.

We encourage readers to review our complete legal statement on “Disclaimer” page.

05 16

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

RIZAP Group, Inc.
2928 Sapporo Securities Exchange Ambitious

30-Mar.-2018https://ir-english.rizapgroup.com/

Results trends

On the other hand, the Company is actively working to increase the number of RIZAP stores (includes schools andgyms), and the number of stores in the RIZAP-related businesses increased by 40, from 108 at the end of December
2016 to 148 in December 2017. This includes the rise in the number of schools for golf and English, but it was
mainly from the increase in gyms in the body shaper business. For gyms that initially opened in a satellite (smallgym) business format, the Company responded to the growth in demand and increased the number of booths andexpanded to larger-size gyms. So the current situation in the body shaper business is that the increase in the revenue
per gym (vertical axis) and in the number of gyms (horizontal axis) is leading to the growth of revenue (the area).
In the previous report, we introduced the development of the “1-to-n (numerous)” business model based on the“RIZAP Declaration to Bring Health and Fitness to Ten Million People” as one of the measures that we should bepaying attention to in the body shaper business. Specifically, the Company is working on services for corporations
and collaborations with local governments, and these efforts seem to be resulting in the steady increase in thenumber of customers. Revenue to corporations in the October to December 2017 period increased by 1.6 times
compared to the April to June 2017 period. It is also expected to grow further in the future, and at FISCO we thinkthat there will be an announcement on the details of the progress made once a certain scale is reached.

Full-scale expansion of the networks ofmultiple GOLF and ENGLISH schools.
Profitability is also in sight from the growth in revenue.
3. Trend in the RIZAP-related business
The Company is developing businesses such as RIZAP GOLF and RIZAP ENGLISH as the RIZAP-related businesses,
and entered fully fledged growth periods in FY3/18.
As of November 2017, there were 13 RIZAP GOLF schools, but by January 2018, the network had further expanded
to 15 schools. The number of trainers, which in actuality determines the capacity, was 160 as of January 2018,
which was an increase of 20 from 3 months before. The increase in the number of trainers resulted in the revenue
per gym also increasing and combined with the rise in the number of schools, revenue in the RIZAP GOLF businessis rapidly growing. Also, profitability can be seen to be sharply improving alongside the increase in revenue, andprofitability is in sight during FY3/19. Whether the Company actually achieves profitability will be determined by its
plan for expanding its school network, but if it stops or keeps down new investment and upfront investment, at
FISCO we think it is fully capable of achieving profitability.

We encourage readers to review our complete legal statement on “Disclaimer” page.

06 16

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

RIZAP Group, Inc.
2928 Sapporo Securities Exchange Ambitious

30-Mar.-2018https://ir-english.rizapgroup.com/

Results trends

Trends in RIZAP GOLF sales / operating income

Source: Company’s results briefing materials

The conditions in RIZAP ENGLISH are similar to those in RIZAP GOLF. At the end of FY3/18 Q3, it had four
RIZAP ENGLISH schools with the opening of the Ginza and Shinjuku Gyoen schools at the end of September
and December, 2017, respectively. Productivity improved from enhancing trainers’ education and introducing new
programs, and in the current Q3 (October to December 2017), revenue per trainer had doubled compared to thesame period in the previous fiscal year. The improved productivity combined with the increase in the number ofsessions resulted in an increase of 3.7 times in revenue per school YoY. In terms of profitability (operating income),
the same as RIZAP GOLF, it is currently at the upfront investment stage (operating loss). But as a result of the steady
growth in revenue, it fully has in sight achieving operating income in the next fiscal year.

Profits continue to improve at the listed subsidiaries.
They achieved an improvement in excess of¥2.6bn in the Q3 cumulative period
4. Earnings at Group companies
The Company’s Group includes more than 20 listed and unlisted subsidiaries. Looking at the 8 listed subsidiaries
that disclose their results, in the current Q3, they made strong progress in terms of improving profits.
In the Q3 cumulative period, total operating income was ¥997mn, which is an improvement of ¥2,662mn from theoperating loss of ¥1,665mn in the same period in the previous fiscal year. On the same basis, the total improvement
amount for the 8 companies in the current 1H was ¥2,116mn. So as a single fiscal year, the total improvement by
the 8 companies in the current Q3 (October to December 2017) was ¥546mn.

We encourage readers to review our complete legal statement on “Disclaimer” page.

07 16

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

RIZAP Group, Inc.
2928 Sapporo Securities Exchange Ambitious

30-Mar.-2018https://ir-english.rizapgroup.com/

Results trends

Looking at the individual companies, the FY3/18 full year forecasts for Jeans Mate Corporation and SD Entertainment,
Inc. were downwardly revised. The extents of their improvement up to the current Q3 were also below the initial
forecasts, but this was covered by the results of the other 6 companies. For these 2 companies whose forecasts
were recently downwardly revised, the plan is for them to recover profitability from the next period of FY3/19 (Jeans
Mate to achieve operating income).
Results at the listed subsidiaries
Company name

Code

FY3/16 Q3 cumulative
total

FY3/16 Q3 cumulative total

Revenue

OperatingincomeRevenue

OperatingincomeFY3/17 full year E

Operatingincome YoY

Revenue

Operatingincome500

IDEA INTERNATIONAL CO., LTD.

3140

3,315

88

4,077

222

134

9,000

SD ENTERTAINMENT, Inc.

4650

5,646

35

5,834

-122

-157

8,050

70

DREAM VISION CO., LTD.

3185

2,262

-123

3,918

641

765

5,283

780

PASSPORT Co., Ltd.

7577

7,286

-453

6,766

243

696

10,000300

Maruko Corporation

9980

9,277

-617

10,528393

1,010

15,0001,200

Jeans Mate Corporation

7448

6,711

-441

6,388

-447

-6

9,500

-550

Pado Corporation

4833

5,099

-322

5,098

-23

299

7,400

230

Marusho hotta Co., Ltd.

8105

5,570

91

5,878

90

-0

7,500

111

45,166-1,66548,487997

2,739

71,823

2,641

Total for the 8 companies

Note: A s Idea International’s fiscal year ends in June, for FY17, the figures for 1H are listed in the Q3 cumulative column, as FY6/18.
Jeans Mate will change its fiscal year, so for both years the values shown are for February 21 to November 20.
Source: Prepared by FISCO from each company’s financial results and results briefing materials██Progress made in medium

to long-term growth strategy

Announced its fully fledged entry into the two major markets of“sports” and “food”
1. The progress and developments in Q3
In its medium-term management plan COMMIT 2020, the Company is targeting revenue of ¥300bn and operating
income of ¥3.5bn in FY3/21. In the reports up to this time, we have repeatedly introduced the various measuresthat are to realize these targets. For the current Q3 also, it has announced new developments.
The Company announced that in the current Q3 it will make fully fledged entries into the two major growth fields ofthe sports and food markets. Both sports and foods are fields that are closely related to its business domain, andit feels like it is moving in the direction of “What more shall we do now?” At FISCO, our understanding is that the
keyword for the new measures is “monetization.” Up to the present time also, the Company has been involved in
the sports and foods domains and been constantly aware of their “contributions to profits.” At FISCO, we think thatthe fact that the Company is currently once again focusing on these two markets shows its willingness to participate
in them with a desire to earn profits and a sense of scale that is much larger than in the past.
At FISCO, we think that at the present time only the broad framework has been decided and that the specificdevelopments will gradually be clarified from now on. We shall be waiting with anticipation for specific measures tobe announced by the Company, which has a track record of numerous M&A and collaborations.

We encourage readers to review our complete legal statement on “Disclaimer” page.

08 16

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

RIZAP Group, Inc.
2928 Sapporo Securities Exchange Ambitious

30-Mar.-2018https://ir-english.rizapgroup.com/

Progress made in medium to long-term growth strategy

Toward the integration of sports and technologies,
it has announced a collaboration with Sony in the field of golf lessons.
It is also conducting M&A, such as for Pro Shops.
2. Developments for “SPORTS”
The Japanese government has indicated its goal of expanding the scale of the sports industry market, which
was worth ¥5.5 trillion in 2015, through government-led initiatives to ¥10 trillion in 2020 and ¥15 trillion in 2025
(the “Japan Revitalization Strategy” announced on June 2, 2016). Regardless of whether the market expands inaccordance with the government’s targets, it is a fact that the “government-led initiatives” will provide a boost to
the sports market, and the Company intends not to miss this opportunity and to rapidly expand its sports-related
businesses.
The Company has already developed related businesses, such as the RIZAP body shaper, RIZAP GOLF, and sports
apparel businesses, and it is closely related to the sports industry market. In the current Q3 also, it is progressing
several new initiatives, including M&As.
(1) Collaboration with SonyOn February 8, 2018, the Company announced that it was introducing into RIZAP GOLF the “Smart Golf Lesson
TM” provided by Sony Corporation <6758>, and from April 1, it will launch the RIZAP GOLF LESSON System.
This system installs Sony’s “Smart Golf Sensor” into the golf club, and then the data obtained from it is used in
combination with RIZAP GOLF toward realizing higher scores among its customers.
This collaboration with Sony is one specific example of the “Sports × Technology” (the integration of sports andtechnology) that the Company is aiming for.
(2) Making a subsidiary of a sports-related company
On December 28, 2017, the Company made a subsidiary of B&D Co., Ltd, which operates the Sports Pro Shopsin the Tokyo metropolitan area. The Pro Shops cover customers from beginners through to athletes and experts,
mainly for soccer and running, from 27 stores in the Tokyo metropolitan area and also e-commerce. In its mostrecent results in FY8/17, it recorded net sales of ¥7,262mn and an operating loss of ¥292mn.
On the same day, the Company also made a subsidiary of D&M Co., Ltd. D&M is a company engaged in the
manufacture and sale of bandage supports for sports, and it provides supports, taping, icing, fitness supplies,
and other goods under the D&M brand.

We encourage readers to review our complete legal statement on “Disclaimer” page.

09 16

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

RIZAP Group, Inc.
2928 Sapporo Securities Exchange Ambitious

30-Mar.-2018https://ir-english.rizapgroup.com/

Progress made in medium to long-term growth strategy

Steadily taking steps to capture demand in the enormous food market
3. Developments for “FOOD”
Food can also be said to be a field in which the Company is deeply involved. This is because the basis of its core
body shaper business consists of two parts, gym work and diet management. Up to the present time, it has
managed its members’ diets as an important element of the body shaper business. In addition, it is conducting joint
research with universities on food and exercise, developing and selling low-carbohydrate foods, publishing recipe
books, and deploying the RIZAP COOK business.
Currently, the Company has announced several measures to take more direct steps into the food domain. These
measures can be said to be an important move toward capturing demand in the enormous food market.
(1) Entering-into the boxed meal delivery market
On January 30, 2018, the Company made a subsidiary of Fanders Japan, Inc., which conducts a boxed mealdelivery business. It would seem that the decisive factors behind this decision were that Fanders has distribution
channels, food factories, and home-delivery expertise, and it is able to build complementary relations, such aswith the Company’s findings on low-carbohydrate foods.
The so-called ready-meal market, which includes boxed meal deliveries, constitutes ¥9.5tn of the total food market(¥67.2tn). In terms of market scale, it is small compared to the eating-at-home market (¥32.5 trillion), and theeating-out market (¥25.1 trillion), but its growth rate is the highest among these 3 markets (with 2006 as 100%,in 2015 it was 122.6%. The source of all of the figures is the Fiscal 2017 Ready-made Meal White Paper by the
Ready-made Meal Association). As with the market scale, at FISCO we think it is possible that in the future, social
needs will further increase for services involving “boxed meals” and “delivery.”(2) Business collaboration with Tiger Corporation
On February 14, 2018, the Company announced an agreement with the Tiger Corporation for sales of “Torahime,”
which is a rice grain processed food developed by Tiger Corporation, and also for a dedicated cooker for it,
through the Company’s "The RIZAP Low Carbohydrate Rice Program (provisional name)". This is the first phaseof the business collaboration between the two companies.
“Torahime” is a rice grain processed food made from ingredients including tapioca and konnyaku whose characteristics include that it has a 47% reduction in carbohydrate content compared to white rice. A dedicated cooker
is required in order to cook it, but from the end of March, the plan is to release a Torahime and dedicated cooker
set via the RIZAP stores and the RIZAP Group’s sales channels (the only other sales channel is the official online
store of Tiger Corporation).
At FISCO, we think that the Company’s business model and the food domain are highly related and have great
affinity, and we shall be watching with great interest in its fully fledged entry into the food market. Within the current
measures, we are focusing on the acquisition of the boxed meal delivery company. Fanders, which it recently
acquired, is a small-scale company, but it has a complete infrastructure for and expertise in the boxed mealdelivery business, and we think that the Company will obtain major benefits from it. It is planning to launch the“Healthy lunch reform for business people” project from the spring of 2018, and for this also, expertise in boxed
meal is required. In addition, food is an important issue even in the seniors market, in which the Company has
been working since the past, and it has enormous potential. The current acquisition and business collaboration
are still at that introductory stage, so we shall be watching to see to in what form the two companies deepen anddevelop the collaboration in the future.

We encourage readers to review our complete legal statement on “Disclaimer” page.

10 16

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

RIZAP Group, Inc.
2928 Sapporo Securities Exchange Ambitious

30-Mar.-2018https://ir-english.rizapgroup.com/

Progress made in medium to long-term growth strategy

Announced that it will make Wonder Corporation a subsidiary.,and various synergies are expected
4. New M&A: strategic capital and business alliance with Wonder Corporation
On February 19, 2018, the Company announced that it had entered-into a strategic capital and business alliancewith Wonder Corporation <3344> (hereafter, Wonder), which is listed on the Tokyo Stock Exchange (TSE) JASDAQ,
and that it will acquire the shares of Wonder through a public offering (TOB) and underwrite a capital increase froma thirty-party allocation. Through a series of share acquisitions, Wonder is scheduled to become the Company’s
consolidated subsidiary on March 29, 2018.
In the TOB, the Company has already concluded a subscription agreement with Wonder’s leading shareholder,
KASUMI CO., LTD., to acquire the shares it holds (approximately 2.4 million shares, ownership ratio, 43.11%) at¥980 per share. While no upper limit has been set on the number of shares scheduled to be acquired, based on the
results up to the present time, it is estimated that there are many shareholders who expect the results of Wonder
to be improved on it joining the RIZAP Group, so at FISCO, we think the subscriptions from general shareholders
will be limited. The cost of acquiring the approximately 2.4 million shares (43.11%) relating to the subscription
agreement will be ¥2,356mn.
The capital increase from a third-party allocation will be implemented as a condition of the establishment of the
TOB, so the Company will underwrite 1.98 million of Wonder’s shares at ¥835 per share. When combined with theapproximately 2.4 million shares relating to the TOB subscription agreement, the Company will acquire around 4.38
million shares and is expected to have a share ownership ratio of 58.02%. It will pay ¥1,653mn for the capital increase
from a third-party allocation, so the total amount together with the TOB acquisition amount will be around ¥4bn.
At FISCO, we anticipate various synergy scenarios from the capital and business alliance with Wonder, and weevaluate that it is a deal with extremely large potential. Some examples of this have been introduced in the releasematerials, and one typical example is the business strategy in which the Company will utilize the network of 300
stores that Wonder owns (as of the end of January 2018) to instantaneously accelerate the speed of the developmentof the RIZAP-related businesses, which are its core businesses. Specifically, the Company has expressed its intention
to open 20 RIZAP-related business stores in the next fiscal year within Wonder’s WonderGOO stores. In the current
fiscal year, revenue in the RIZAP-related businesses is set to be around ¥32bn and the Company plans to increase
this by 50% in the next fiscal year. Wonder is also developing the WonderREX business (reuse business), and it
seems that the Company may pursue synergies with this business also, including through its body shaper businessand apparel business.
Looking from the Wonder side, it can be expected to realize profit growth through the strengthening of its productcapabilities (including the introduction of PB products), a new store strategy (such as the opening of hybrid stores),and other benefits. Also, by utilizing the Global SPA framework, which the RIZAP Group is working on below thesurface to strengthen its business foundations, it could reduce costs, such as for inventory management anddistribution, and to improve profitability.
In terms of business results, the outlook is for the Company to continue growing significantly in FY3/19. Revenue inFY17, as the simple total for both companies, is expected to greatly exceed ¥220bn. In profits, Wonder’s FY2/18
operating income forecast is ¥300mn, and although its impact appears small, as previously described, there are
multiple measures to pursue synergies that will be effective immediately. Therefore, it is possible that when combining
its direct and indirect impacts, the extent of the contribution to profits will expand above expectations. Wonder’sresults are expected to be incorporated into the housing and lifestyle business segment.

We encourage readers to review our complete legal statement on “Disclaimer” page.

11 16

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

RIZAP Group, Inc.
2928 Sapporo Securities Exchange Ambitious

30-Mar.-2018https://ir-english.rizapgroup.com/██Business outlook
Outlook is for FY3/18 forecasts to be steadily achieved
1. FY3/18 forecast
For FY3/18, the Company is forecasting that revenue and profits will increase with revenue of ¥150,202mn (up57.6% YoY), operating income of ¥13,010mn (up 27.4%), income before income taxes of ¥11,983mn (up 24.8%),
and net income attributable to owners of the parent company of ¥8,007mn (up 4.3%). There has been no change
to the initial forecast.
Overview of FY3/18 forecast(¥mn)
FY3/17

FY3/18Q4Full year

Q4 E

Growth rate

Full year E

Revenue

29,573

95,29951,072

72.7%

Operating income

2,211

10,212

4,895

Operating margin

7.5%

10.7%

9.6%

Income before income taxes

2,046

9,604

Net income attributable toowners of the parent company

2,596

7,678

YoY
Growth rate

Value

150,202

57.6%

54,903121.4%

13,010

27.4%

2,798

-

8.7%

-

-

4,870

138.0%

11,983

24.8%

2,379

2,773

6.8%

8,007

4.3%

329

Source: Prepared by FISCO from the Company’s financial results

In order to achieve the operating income target for the FY3/18 full year, the Company will need profits of around¥5bn in Q4 as a single period. On this point, at FISCO we think that on considering the results up to Q3, the current
business conditions, and also the seasonality of profits, it is highly likely to achieve this forecast.
A level of operating income of ¥5bn for a quarter (3 months) may seem a high hurdle when looking at the results of
the recent quarters. However, among the Company’s subsidiaries, there are several companies whose results growgreatly in Q4 due to the seasonality of profits. Representative of these companies are Maruko and Pado Corporation<4833>. Also, the profits of RIZAP GOLF and RIZAP ENGLISH are rapidly improving, and their operating losses
are expected to improve greatly in Q4. From the effects of these factors, we think it is fully possible it will achieve
operating income of ¥5bn in Q4.
At FISCO, we are not concerned about the possibility that upfront investment will place downward pressure on profits
in Q4. As previously explained, when the Company conducts upfront investment, in many cases it decides on its
scale within a framework with some room to spare, while paying attention to results at that time. In other words, it
carries out upfront investment that is completely under its control. In Q4, we think that gross operating income will
exceed ¥5bn, but we expect that the Company will determine the scale of the upfront investment while considering
the various important elements, including the extent to which it exceeds it and the expected return on the upfront
investment, while placing the greatest importance on achieving the results targets.

We encourage readers to review our complete legal statement on “Disclaimer” page.

12 16

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

RIZAP Group, Inc.
2928 Sapporo Securities Exchange Ambitious

30-Mar.-2018https://ir-english.rizapgroup.com/

Business outlook

Following Wonder becoming a subsidiary, the major increases
in revenue and profits are likely to continue in the next fiscal year
2. Towards FY3/19
The outlook for FY3/19 is for revenue to continue to increase significantly due to Wonder being made a subsidiary.
The total revenue amount for both companies for FY17 is expected to greatly exceed ¥220bn. In the next fiscal year,
the organic growth part will be added to this, so at FISCO we think the target will be ¥250bn.
In profits, in addition to the effects of the M&A, the level of the forecast profit changes depending on how the upfront
investment amount is viewed. Fundamentally, the same as in FY3/18, it would seem that the Company will shapeprofits in a situation in which it controls upfront investment and other costs. One approach toward obtaining animage of the profit level is looking at the operating margin. The FY3/18 forecast operating margin is 8.7%, while thetarget operating margin in the final fiscal year of COMMIT 2020 is 11.7%. So in terms of the process to arrive at thisfigure, at FISCO we consider that one target for the operating margin in FY3/19 is 10%.
Supposing that in the next fiscal year, revenue is ¥250bn and operating income is ¥25bn (operating margin of 10%),then it would seem possible that the targets in COMMIT 2020 will be upwardly revised or will be achieved ahead ofschedule, and that there will be an awareness for considering the results targets for the period after COMMIT 2020.
Statements of income(¥mn)
FY3/18
FY3/16 full year FY3/17 full year

Q3 cumulative
total

Q4 E

Full year E

53,937

95,29999,12951,072150,202

-

76.7%

50.8%

72.7%

57.6%

32,51346,034

48,986

-

-

-

41.6%

46.7%

-

-

Gross margin

60.3%

48.3%

49.4%

-

-

SG&A expenses

28,63541,73844,348

-

-

-

45.8%

48.7%

-

-

53.1%

43.8%

44.7%

-

-

Other income

227

6,687

4,167

-

-

Other expenses

947

770

691

-

-

Operating income

3,159

10,212

8,114

4,895

13,010
27.4%

Revenue
YoY
Gross profit
YoY

YoY
SG&A expenses ratio (to sales)-

223.3%

1.4%

121.4%

Operating income margin

5.8%

10.7%

8.2%

9.6%

8.7%

Income before income taxes

2,806

9,604

7,113

4,870

11,983

YoY

YoY
Net income attributable to owners of
the parent company
YoY
EPS after the stock split (¥)
Dividend after the stock split (¥)-

242.2%-5.9%

138.0%

24.8%

1,587

7,678

5,233

2,773

8,007

-

383.7%

3.0%

6.8%

4.3%

6.26

30.13

20.53

10.89

31.42

-

6.05

-

-

6.29

Source: Prepared by FISCO from the Company’s financial results

We encourage readers to review our complete legal statement on “Disclaimer” page.

13 16

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

RIZAP Group, Inc.
2928 Sapporo Securities Exchange Ambitious

30-Mar.-2018https://ir-english.rizapgroup.com/

Business outlook

Balance sheet(¥mn)
Transition date
(Apr. 1, 2015)

End-FY3/16

End-FY3/17

End-FY3/18 Q3

22,72432,52262,08684,787

Cash, deposits and equivalents

8,366

10,48324,64330,705Trade and other receivables

8,974

12,062

20,54428,184

Other

5,383

9,976

16,89725,897

16,40021,25533,562

42,248Property, plant and equipment

9,647

11,331

17,61622,141

Goodwill

2,473

4,675

6,291

7,655

Intangible assets

846

689

1,013

1,489

Investment, other

3,432

4,559

8,640

10,962

Total assets

39,12553,777

95,648127,036

Current liabilities

19,89827,296

43,63652,057

Trade payables

10,766

13,75624,32628,251

Interest-bearing debt

7,820

10,914

15,996

19,767

Other

1,311

2,625

3,314

4,038

12,286

15,34430,55739,610Interest-bearing debt

10,371

12,85325,20433,877

Other

1,914

2,490

5,352

5,732

6,077

10,226

17,01824,344

Capital stock

132

1,400

1,400

1,400

Capital surplus

200

1,799

1,692

5,320

5,720

7,001

13,696

17,383Current assets

Non-current assets

Non-current liabilities

Total equity attributable to owners of
the parent company

Retained earnings

23

25

228

240

863

910

4,436

11,023

Total equity

6,940

11,13721,45435,368

Total liabilities and capital

39,12553,777

95,648127,036

End-FY3/17

End-FY3/18 Q3

Other capital composition items
Non-controlling interests

Source: Prepared by FISCO from the Company’s financial results

Cash flow statement(¥mn)
End-FY3/16
Cash flow from operating activities

868

175

Cash flow from investing activities-3,973

2,914-2,658-6,720Cash flow from financing activities

5,137

11,08815,732

-27

-18

3

2,004

14,1606,356

Cash, deposits and equivalents at the start of the period

8,478

10,48324,643

Cash, deposits and equivalents at the end of the period

10,48324,64330,705

Cash, deposits and equivalents conversion difference
Change in cash, deposits and equivalents

Source: Prepared by FISCO from the Company’s financial results

We encourage readers to review our complete legal statement on “Disclaimer” page.

14 16

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

RIZAP Group, Inc.

30-Mar.-2018

2928 Sapporo Securities Exchange Ambitious

https://ir-english.rizapgroup.com/██Shareholder returns
There has been no change to its approach of prioritizing shareholders.
The basic policy is to pay dividends targeting a dividend
payout ratio of 20%. In FY3/18, it implemented a share split andenhanced the shareholders’ benefits program.
The Company positions returning profits to shareholders as an important management issue. While having a basic
stance of returning profits to shareholders and having a shareholder gift program, it strives to strengthen returns,
mainly to individual investors. There has been no change to this stance and policy. In terms of the dividend amount,since FY3/17 the Company has revised the standard for the dividend to a consolidated dividend payout ratio of 20%.
The Company conducted a 2 for 1 stock split on October 1, 2017. Based on the situation after the stock split, theFY3/18 forecast for dividend earnings per share is ¥31.42, and corresponding to 20% of this, it has announced adividend forecast of ¥6.29. There still have been no substantive changes to the values of the initial forecasts after
the announcement of FY3/18 Q3 results.

㻱㼍㼞㼚㼕㼚㼓㼟㻌㼜㼑㼞㻌㼟㼔㼍㼞㼑㻘㻌㼐㼕㼢㼕㼐㼑㼚㼐㻘㻌㼍㼚㼐㻌㼐㼕㼢㼕㼐㼑㼚㼐㻌㼜㼍㼥㼛㼡㼠㻌㼞㼍㼠㼕㼛㻔¥㻕㻱㼍㼞㼚㼕㼚㼓㼟㻌㼜㼑㼞㻌㼟㼔㼍㼞㼑㻌㻔㼘㼑㼒㼠㻕㻰㼕㼢㼕㼐㼑㼚㼐㻌㻔㼘㼑㼒㼠㻕㻰㼕㼢㼕㼐㼑㼚㼐㻌㼜㼍㼥㼛㼡㼠㻌㼞㼍㼠㼕㼛㻌㻔㼞㼕㼓㼔㼠㻕

㻟㻥㻚㻞㻑

㻠㻜㻚㻜㻜
㻟㻡㻚㻜㻜

㻠㻜㻚㻜㻑
㻟㻡㻚㻜㻑

㻟㻝㻚㻠㻞

㻟㻜㻚㻝㻟

㻟㻜㻚㻜㻜

㻟㻜㻚㻜㻑

㻞㻡㻚㻜㻜

㻞㻜㻚㻜㻜
㻝㻡㻚㻜㻜
㻝㻜㻚㻜㻜

㻡㻚㻜㻜

㻞㻜㻚㻝㻑

㻝㻤㻚㻥㻑

㻞㻡㻚㻜㻑

㻞㻜㻚㻜㻑

㻞㻜㻚㻜㻑
㻝㻡㻚㻜㻑

㻝㻜㻚㻥㻟
㻤㻚㻜㻑

㻢㻚㻢㻟

㻢㻚㻞㻢
㻟㻚㻤㻜

㻜㻚㻤㻣

㻝㻚㻞㻡

㻲㼅㻟㻛㻝㻠

㻲㼅㻟㻛㻝㻡

㻢㻚㻜㻡

㻢㻚㻞㻥

㻝㻜㻚㻜㻑

㻡㻚㻜㻑

㻜㻚㻜㻜

㻜㻚㻜㻑

㻲㼅㻟㻛㻝㻢

㻲㼅㻟㻛㻝㻣

㻲㼅㻟㻛㻝㻤㻌㻱

Source: Prepared by FISCO from the Company’s financial results

In the shareholder benefits program, shareholders listed in the register of shareholders at the end of the fiscal year
(March 31) can choose a RIZAP Group product according to the number of shares that they hold. The Company also
made changes during FY3/18 that further enhance the appeal of is shareholder benefit program. The first change
is that it has increased the number of products from which shareholders may choose. The number of companies
in the Group has risen through M&A. Reflecting this, it announced its plans to increase the number of productsin the shareholder benefits program from 157 at the end of FY3/17 to more than 300 by the end of FY3/18. The
second change is the increase in the value of the benefit for large shareholders. Previously, shareholders holding
2,000 or more shares was the highest classification. But now, it has newly established a “premium class,” in whichshareholders who hold 4,000 or more shares or 8,000 or more shares (both after the share split) can receive a Group
product with values of ¥72,000 or ¥144,000, respectively.

We encourage readers to review our complete legal statement on “Disclaimer” page.

15 16

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

RIZAP Group, Inc.
2928 Sapporo Securities Exchange Ambitious

30-Mar.-2018https://ir-english.rizapgroup.com/██Information security
Responds to information security risks
by establishing dedicated department and investing in systems.
Also actively utilizes evaluation and advice
from external organizations
As a B-to-C enterprise, the Company has many members of the general public as its customers, while the number
of RIZAP members has increased to around 100,000. Based on this situation, the Company is highly aware of theimportance of information security. As its specific responses, the Company has already established a dedicateddepartment for information security and investing in systems in order to improve security as required. It also
incorporates the evaluations and opinions of external experts and third-party organizations, and in such ways, it iscontinually striving to improve information security.

We encourage readers to review our complete legal statement on “Disclaimer” page.

16 16

Disclaimer
FISCO Ltd. (the terms “FISCO”, “we”, mean FISCO Ltd.) has legal agreements with theTokyo Stock Exchange, the Osaka Exchange,and Nikkei Inc. as to the usage of stock priceand index information. The trademark and value of the “JASDAQ INDEX” are the intellectual
properties of the Tokyo Stock Exchange, and therefore all rights to them belong to the Tokyo
Stock Exchange.
This report is based on information that we believe to be reliable, but we do not confirm or
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