COMPANY RESEARCH AND ANALYSIS REPORTBEENOS Inc.
3328
Tokyo Stock Exchange First Section

22-May-2017
FISCO Ltd. Analyst

Yuzuru SatoFISCO Ltd.
http://www.fisco.co.jp

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

BEENOS Inc.
3328 Tokyo Stock Exchange First Section

22-May-2017https://beenos.com/en/■ Index■Summary---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 01
1. Gross merchandising value (GMV) in the E-Commerce Business growing again after a bottom in 4Q FY9/16.....

01

2. Aims to set all-time highs in net sales, operating income, and ordinary income in FY9/17. .........................

01

3. Aggressively pursuing E-Commerce with a goal of ¥100bn in GMV.............................................................

01■Business overview---------------------------------------------------------------------------------------------------------------------------------------------------- 02
1. Cross Border Business................................................................................................................................

03

2. Value Cycle Business...................................................................................................................................

04

3. Retailing and Licensing Business. . ......... ......................................................................................................

05

4. Incubation Business. . ...................................................................................................................................

05■Results trends--------------------------------------------------------------------------------------------------------------------------------------------------------------- 06
1. 1H FY9/17 results summary ........................................................................................................................

06

2. Segment results...........................................................................................................................................

07

3. Financial position and management indicators. ...........................................................................................

13■Business outlook-------------------------------------------------------------------------------------------------------------------------------------------------------- 14
1. FY9/17 results outlook.................................................................................................................................

14

2. Segment outlooks.................................. ......................................................................................................

15■Medium-to-long-term growth strategy------------------------------------------------------------------------------------------------- 17■Shareholder return policy---------------------------------------------------------------------------------------------------------------------------------- 19

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

BEENOS Inc.
3328 Tokyo Stock Exchange First Section

22-May-2017https://beenos.com/en/██Summary
E-Commerce Business growing again after they bottomed out in 4Q
FY9/16
BEENOS Inc. <3328> (hereafter, also “the Company”) operates the E-Commerce Business and Incubation Business.
The E-Commerce Business consists of the Cross Border Business (Overseas Forwarding and Proxy Purchasing
Business, Global Shopping Business), Value Cycle Business (purchase and sale of used brand products through theInternet), and Retailing and Licensing Business (Producing and Licensing Business, Internet Shopping Business).
Subsidiary Defactostandard, Ltd. <3545>, which runs the Value Cycle Business, listed on the TSE Mothers market
in August 2016.
1. Gross merchandising value (GMV) in the E-Commerce Business growing again after they bottomed out in
4Q FY9/16
Consolidated results in 1H FY9/17 (October 2016 to March 2017) were ¥10,019mn in net sales (up 9.0% year-onyear (YoY)) and ¥398mn in operating income (down 16.8%). While profit declined in the Incubation Business becauseof the absence of gains on sales of operational investment securities, mainstay E-Commerce Business expanded
to all-time highs for a half year at ¥10,016mn in sales (up 11.1% YoY) and ¥681mn in operating income (up 37.5%).
Key drivers were the Cross Border Business and Value Cycle Business. GMV slightly declined to ¥20,574mn (down
1.4%) due to the impact of yen appreciation with the average forex rate dropping from ¥118/$ a year ago to ¥110/$.
At the quarterly level, however, GMV switched to increases QoQ from the bottom in 4Q FY9/16 and climbed 1.5%
YoY to ¥10,498mn in 2Q, recovering to almost the all-time high (¥10,526mn from 1Q FY9/16).
2. Aims to set all-time highs in net sales, operating income, and ordinary income in FY9/17
The Company maintained FY9/17 period-start guidance of ¥20,000mn in net sales (up 4.0% YoY), ¥1,400mn inoperating income (up 16.6%), and ¥1,400mn in ordinary income (up 15.6%). In 2H, it expects to post about ¥800mn
in gains on sales of operational investment securities in the Incubation Business and achieve steady growth in
E-Commerce Business. Continuation of the current forex rate offers an upside factor for Cross Border Businessbecause the Company’s 2H forex rate assumption is ¥95/$. While Internet Shopping Business in Japan continues
to struggle, we think the Company is capable of reaching its forecast as a whole.
3. Aggressively pursuing E-Commerce with a goal of ¥100bn in GMV
The Company is targeting double-digit annual growth in the E-Commerce Business as a medium-term strategy andhas set ¥100bn in GMV as its goal for the time being. We see opportunities for sustaining strong growth in the Cross
Border Business with support from the expansion of the cross-border EC market. In the Overseas Forwarding andProxy Purchasing Business, the Company intends to realize further growth by expanding domestic partner sites
and bolstering promotions that target overseas users. In the Incubation Business, meanwhile, it plans to continue
making investments in Internet ventures mainly in Asian emerging countries outside of China and utilizing some of
the capital gains to invest in creation of its own new businesses as well.
Key Points
Operates the E-Commerce Business and Incubation Business
Aims to set all-time highs in net sales, operating income, and ordinary income in FY9/17• Pursuing ¥100bn in GMV with support from expansion of the cross-border EC market••

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

BEENOS Inc.
3328 Tokyo Stock Exchange First Section

22-May-2017https://beenos.com/en/

Summary㻾㼑㼟㼡㼘㼠㼟㻌㼠㼞㼑㼚㼐㼟㻔¥㼙㼚㻕㻺㼑㼠㻌㼟㼍㼘㼑㼟㻌㻔㼘㼑㼒㼠㻕㻔¥㼙㼚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㻟㻜㻘㻜㻜㻜

㻞㻘㻜㻜㻜㻝㻘㻠㻜㻜㻌

㻞㻡㻘㻜㻜㻜
㻝㻘㻝㻤㻠㻌
㻞㻜㻘㻜㻜㻜

㻞㻜㻘㻜㻜㻜

㻝㻥㻘㻞㻞㻢
㻝㻡㻘㻜㻜㻜

㻝㻞㻘㻡㻥㻥

㻥㻘㻥㻠㻥㻝㻜㻘㻟㻜㻤

㻝㻘㻢㻜㻜㻝㻘㻞㻜㻜㻌
㻝㻘㻞㻜㻜㻤㻜㻜㻝㻢㻘㻥㻟㻢

㻝㻜㻘㻜㻜㻜

㻠㻜㻜

㻡㻘㻜㻜㻜

㻜

㻙㻞㻞㻡㻌

㻙㻟㻝㻜㻌

㻙㻟㻡㻤㻌

㻜

㻙㻠㻜㻜
㻲㼅㻥㻛㻝㻞

㻲㼅㻥㻛㻝㻟

㻲㼅㻥㻛㻝㻠

㻲㼅㻥㻛㻝㻡

㻲㼅㻥㻛㻝㻢

㻲㼅㻥㻛㻝㻣㻌㻱

Source: Prepared by FISCO from the Company’s financial results██Business overview
Operates the E-Commerce Business and Incubation Business
The Company operates the E-Commerce Business and Incubation Business. The E-Commerce Business consistsof the Cross Border Business (Overseas Forwarding and Proxy Purchasing Business, Global Shopping Business),
Value Cycle Business (purchase and sale of used brand products through the Internet), and Retailing and Licensing
Business (Producing and Licensing Business, Internet Shopping Business), which are handled by subsidiaries.
Subsidiary Defactostandard, Ltd. <3545>, which runs the Value Cycle Business, listed on the TSE Mothers market
in August 2016. The Incubation Business, meanwhile, covers new businesses launched internally and investment
cultivation business for Internet ventures in Japan and other countries. Below we review the content of each of thebusinesses.
Major group companies
Investment
ratio

Business

tenso, inc.

100.0%

Overseas Forwarding and Proxy Purchasing Business (has subsidiaries in the UK and Taiwan)

Shop Airlines, Ltd.

100.0%

Global Shopping Business (has subsidiaries in Japan, the US, and the Netherlands)

Defactostandard, Ltd.

57.8%

Apparel Reuse Businessmonosense, Ltd.

100.0%

Producing and Licensing Businessnetprice, Ltd.

100.0%

Online Shopping Business

BEENOS Partners, Inc.

100.0%Startup Studio, Venture Capital and Incubation Business

BEENOS Asia Pte. Ltd.

100.0%

Investment and Incubation Business Specialized in emerging countries

BEENOS Plaza Pte. Ltd.

33.3%

Investment and Incubation Business Specialized in Indonesia

Open Network Lab, Inc.

30.0%

Entrepreneurship Support/Investment BusinessCompany
E-Commerce Business

Incubation Business

Equity method affiliate

Source: Prepared by FISCO from Company website

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

BEENOS Inc.
3328 Tokyo Stock Exchange First Section

22-May-2017https://beenos.com/en/

Business overview

1. Cross Border BusinessThis business is comprised of two consolidated subsidiaries; tenso, Inc., and Shop Airlines, Ltd. tenso, Inc. operates
tenso.com, an overseas forwarding operation (proxy shipping of goods) and Buyee.jp, a proxy purchasing operation
for consumers residing overseas. Shop Airlines, Ltd. operates the “sekaimon” global online shopping site. The salesof both subsidiaries are from handling fees based on transaction values.
(1) Overseas Forwarding and Proxy Purchasing Businesstenso.com overseas forwarding operations by tenso offer a service for foreign and Japanese consumers residing
overseas whereby when they purchase an item on an e-commerce (EC) site in Japan but the operator of that sitedoes not ship goods overseas, tenso will, for a fee, ship (forward) the goods to the users on their behalf. Users areable to select the shipment method from among Japan Post’s Express Mail Service (EMS), regular airmail, Japan
Post’s Surface Air Lifted (SAL) economy airmail service, and surface mail, with forwarding fees for the service
provided starting from as low as ¥50 (depending on total shipment weight).
It also operates the Buyee site for proxy purchasing and proxy auctioning for online-sales products and Internet
auctions in Japan. GMV through Buyee has been growing recently because Buyee utilizes PayPal and Alipay as
payment methods, provides multi-language support of buying procedures, and automatically translates productdetails into multiple languages. It has a broad range of partner sites from large marketplaces, such as Amazon,
Rakuten Ichiba, Yahoo! Shopping, and ZOZOTOWN, to small EC sites and also partners with Yahoo! Auction
and other auction sites. Buyee receives a purchase fee of 0-5% (¥150 flat fee for product purchases worth lessthan ¥3,000 and a ¥200 payment fee per auction purchase on Yahoo! Auction). It also obtains transfer fees anddelivery fees.
The service currently handles shipping to 84 countries and regions and has customer support operations thatcover four languages. It is steadily growing with overseas user members at over 1.16mn people and domestic
partner EC sites at over 1,550 sites as of the end of March 2017 and holds an industry No.1 position in overseas
shipping handling volume.
Two services provided by tenso

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

BEENOS Inc.
3328 Tokyo Stock Exchange First Section

22-May-2017https://beenos.com/en/

Business overview(2) Global Shopping Business
The sekaimon site operated by subsidiary Shop Airlines, Ltd. is an overseas shopping site with Japanese language
support that is certified by eBay, which is one of the world’s largest online marketplaces. sekaimon currently
handles products submitted in four countries – the United States, the United Kingdom, Germany, and Austria. It
charges a fee of 15% of the auction price (it adjusted the minimum fee from ¥500 to ¥800 in February 2016). The
site has about 590,000 members as of March 2017 with a high ratio of male members. Top-selling items are hobby
products, car and motorcycle goods, vintage watches, and other products with low transaction volume in Japan.
Flow in the Global Shopping Business

Source:2. Value Cycle BusinessThis business covers purchasing and selling used brand products over the Internet by subsidiary Defactostandard.
It is the industry leader in purchase and sale transactions over the Internet (with cumulative users at about 1.5mn
people*). Business flow consists of buying products utilizing home delivery firms through Brandear, an Internet-based
operational site, as the first point of contact and selling products on Internet auction sites in Japan and othercountries.
*	As of May 2016

Defactostandard seeks to expand purchasing volume by using multiple channels for purchases with its own site aswell as partner sites, including Yamada Denki’s <9831> Yamada Kaitori and related sites of various CO-OP entities.
The business handles brand products for over 7,000 items, such as clothing, bags, precision metals, and watches,with emphasis on fashion areas. Defactostandard has developed a unique system for purchasing a wide range of
products quickly and at suitable appraisal prices. Its strengths are its purchasing and appraising capabilities.
Conversely, from a sales perspective, its strength is that it has developed its own proprietary system that facilitatesefficient sales by simultaneously offering goods through multiple channels, including most major domestic auction
sites such as Yahoo! Auctions and Rakuten Auction, its own proprietary auction site, and through overseas auction
sites such as eBay. Moreover, on the largest domestic auction site, Yahoo! Auctions, Defactostandard was awarded
its “Annual Best Store Overall Grand Prix” for the eighth straight year in fiscal year 2016.

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

BEENOS Inc.
3328 Tokyo Stock Exchange First Section

22-May-2017https://beenos.com/en/

Business overview

Flow in the Value Cycle Business

Source:3. Retailing and Licensing Business
The Retailing and Licensing Business consists of the Producing and Licensing Business at monosense, Ltd. andthe Internet Shopping Business at netprice, Inc.
The Producing and Licensing Business plans and develops products based on licensing contracts with various
celebrities and well-known people and provides one-stop support for selling and promotions on EC sites, licensing
activities, and other services. It also handles item sales at event venues for popular idol groups through licensing
contracts and manages and operates official EC sites. This business receives selling fees that reflect a certain
percentage of item sales as revenue.
The Internet Shopping Business operates the netprice EC site that employs a gathering (joint buying) system whereby
the selling price declines as the number of buyers increases. It was the first service to adopt this format in Japan.
The business promotes unique product line-ups and selling methods, such as 24-hour limited-sale products, original
products developed jointly with manufacturers, and jointly planned and developed products with well-known people
and celebrities. Cumulative membership has risen to over 2.2mn people of which about 78% are women and morethan 70% are in the 30s-40s age range.
4. Incubation Business
The Incubation Businesses are comprised of investing in and nurturing Internet venture businesses in Japan andoverseas, and developing new businesses in-house prior to the stage they become profitable.
In its investing and nurturing operations, subsidiary BEENOS ASIA PTE. LTD., headquartered in Singapore, invests
in Internet venture businesses in countries that show the potential to develop as rapidly as China has, taking stakesof up to 20%. It targets companies offering, for example, online settlement services and online marketplaces
and has made investments in India, Indonesia, Turkey, the Philippines, Vietnam, Malaysia, and Africa. To nurturethese businesses, BEENOS ASIA PTE. encourages the exchange of personnel and technologies among investee
companies.
BEENOS Partners, Ltd., based in Japan, invests mainly in US start-up companies engaged in Internet businesses,
taking stakes of less than 1%. Through these investments, BEENOS gains information about the latest Internet
services and technologies. It applies this information to establish new businesses in Japan and overseas, and it
eventually realizes capital gains on its investments. This company also invests in start-up companies engaged inInternet businesses in Japan.

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

BEENOS Inc.
3328 Tokyo Stock Exchange First Section

22-May-2017https://beenos.com/en/██Results trends
Posted all-time high half-year results in the E-Commerce Business
1. 1H FY9/17 results summary
Consolidated 1H FY9/17 results were ¥10,019mn in net sales (up 9.0% YoY), ¥398mn in operating income (down
16.8%), ¥453mn in ordinary income (down 10.9%), and ¥104mn in profit attributable to owners of parent (down
65.3%). Profit fell in the Incubation Business because of an absence of gains on sales of operational investment securities in 1H. The E-Commerce Business, meanwhile, improved to all-time highs on a half-year basis at ¥10,016mn
in sales (up 11.1%) and ¥681mn in operating income (up 37.5%). While the Company does not disclose half-yearplans, progress by the E-Commerce Business toward FY9/17 targets was 53.6% in net sales and 71.7% in operating
income, modestly outpacing guidance.
SG&A expenses increased 11.9% YoY to ¥4,802mn. Primary sources were an extra ¥134mn in personnel costs
mainly in the Value Cycle Business and an additional ¥318mn in development costs and other fixed expenses. The
steep decline in profit attributable to owners of parent stemmed from a reduction in deferred tax assets and anincrease in net income attributable to non-controlling shareholders from ¥37mn a year earlier to ¥89mn due to thelisting of Defactostandard shares.
1H FY9/17 Consolidated Results(¥mn)
FY9/16 1H

FY9/17 1H

Results% of sales

Results% of sales

Gross merchandise value

20,874-

20,574-

Net sales

9,195

-

10,019

-

9.0%

9,015

98.0%

10,016100.0%

11.1%-98.2%

E-commerce Business

YoY
-1.4%

179

2.0%

3

0.0%

Cost of sales

4,424

48.1%

4,818

48.1%

8.9%

SG&A expenses

4,292

46.7%

4,802

47.9%

11.9%

Operating income

Incubation Business

479

5.2%

398

4.0%

-16.8%

E-Commerce Business

495

5.5%

681

6.8%

37.5%

Incubation Business

141

78.8%

-79

-

-

Adjustments

-158

-

-202

-

-

Ordinary income

508

5.5%

453

4.5%

-10.9%

Profit attributable to owners of parent

300

3.3%

104

1.0%

-65.3%

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

E-Commerce Business GMV, which the Company focuses on as a KPI, was down 1.4% YoY to ¥20,574mn. The
main setback was an 8.0% YoY decline in Cross Border Business GMV because of the impact from yen appreciation(as the average forex rate in the period moved from ¥118/$ a year ago to ¥110/$). Nevertheless, this was a healthy
pace with GMV reaching 55.6% of FY9/17 target. Looking at the quarterly trend in GMV, the result improved in two
straight quarters from a bottom at ¥9,165mn in 4Q FY9/16 and the YoY growth rate turned positive for the first timein three quarters in 2Q at a 1.5% increase. We think GMV has returned to a growth trajectory.

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COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
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BEENOS Inc.
3328 Tokyo Stock Exchange First Section

22-May-2017https://beenos.com/en/

Results trends㻳㼞㼛㼟㼟㻌㼙㼑㼞㼏㼔㼍㼚㼐㼕㼟㼑㻌㼢㼍㼘㼡㼑㻌㼎㼥㻌㼎㼡㼟㼕㼚㼑㼟㼟㻔¥㼙㼚㻕㻯㼞㼛㼟㼟㻌㻮㼛㼞㼐㼑㼞㻌㻮㼡㼟㼕㼚㼑㼟㼟㼂㼍㼘㼡㼑㻌㻯㼥㼏㼘㼑㻌㻮㼡㼟㼕㼚㼑㼟㼟㻝㻞㻘㻜㻜㻜
㻝㻜㻘㻜㻜㻜
㻤㻘㻜㻜㻜
㻢㻘㻜㻜㻜

㻤㻘㻣㻡㻝
㻝㻘㻡㻡㻞

㻤㻘㻤㻡㻣

㻝㻘㻡㻥㻣

㻥㻘㻡㻟㻟
㻞㻘㻜㻟㻢

㻝㻜㻘㻡㻞㻢

㻝㻜㻘㻟㻠㻣

㻞㻘㻠㻞㻥

㻞㻘㻜㻜㻝

㻞㻘㻟㻣㻟

㻞㻘㻡㻜㻝

㻥㻘㻠㻡㻡

㻾㼑㼠㼍㼕㼘㼕㼚㼓㻌㼍㼚㼐㻌㻸㼕㼏㼑㼚㼟㼕㼚㼓㻌㻮㼡㼟㼕㼚㼑㼟㼟㻝㻜㻘㻜㻣㻢

㻝㻜㻘㻜㻝㻝

㻝㻜㻘㻠㻥㻤

㻥㻘㻝㻢㻡

㻝㻘㻥㻝㻥

㻞㻘㻟㻜㻤

㻞㻘㻞㻢㻟

㻞㻘㻞㻞㻝

㻞㻘㻝㻢㻢
㻞㻘㻠㻟㻡

㻞㻘㻢㻢㻠

㻞㻘㻣㻠㻟

㻝㻘㻥㻣㻡

㻞㻘㻝㻡㻠

㻞㻘㻝㻡㻡

㻞㻘㻟㻟㻣

㻡㻘㻞㻞㻟

㻡㻘㻝㻜㻡

㻡㻘㻟㻠㻝

㻡㻘㻝㻥㻤

㻡㻘㻣㻞㻟

㻡㻘㻤㻠㻠

㻡㻘㻟㻝㻝

㻠㻘㻢㻤㻝

㻡㻘㻝㻜㻟

㻡㻘㻡㻟㻟

㻝㻡㻛㻝㻽

㻝㻡㻛㻞㻽

㻝㻡㻛㻟㻽

㻝㻡㻛㻠㻽

㻝㻢㻛㻝㻽

㻝㻢㻛㻞㻽

㻝㻢㻛㻟㻽

㻝㻢㻛㻠㻽

㻝㻣㻛㻝㻽

㻝㻣㻛㻞㻽

㻞㻘㻟㻝㻢

㻠㻘㻜㻜㻜
㻞㻘㻜㻜㻜
㻜
㻖㼀㼞㼍㼚㼟㼍㼏㼠㼕㼛㼚㻌㼢㼍㼘㼡㼑㼟㻌㼛㼒㻌㼜㼞㼛㼐㼡㼏㼠㼟㻘㻌㼑㼠㼏㻚㻘㻌㼟㼛㼘㼐㻌㼢㼕㼍㻌㼠㼔㼑㻌㻵㼚㼠㼑㼞㼚㼑㼠㻚
Source: Prepared by FISCO from the Company’s results briefing materials

Cross Border Business andValue Cycle Business driving income growth
2. Segment results(1) Cross Border Business
Cross Border Business booked ¥10,637mn in GMV (down 8.0% YoY), ¥2,063mn in net sales (up 7.7%), and¥314mn in operating income (up 199.0%) in 1H FY9/17. Sales and profit improved, despite lower GMV, thanks to ahigher take rate on GMV supported by fee revisions and related service additions, higher forex spread profit owing
to adoption of multi-currency settlements and reduction in logistics costs per item from opening a warehouse site
in the Kansai area in the Overseas Forwarding and Proxy Purchasing Business, and improved productivity due toa switch to internal warehousing in the US in the Global Shopping Business.

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COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
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BEENOS Inc.

22-May-20173328 Tokyo Stock Exchange First Section

https://beenos.com/en/

Results trends㻯㼞㼛㼟㼟㻌㻮㼛㼞㼐㼑㼞㻌㻮㼡㼟㼕㼚㼑㼟㼟㻌㼞㼑㼟㼡㼘㼠㼟㻌㼠㼞㼑㼚㼐㼟㻺㼑㼠㻌㼟㼍㼘㼑㼟㻌㻔㼘㼑㼒㼠㻕

㻔¥㼙㼚㻕

㻔¥㼙㼚㻕

㻻㼜㼑㼞㼍㼠㼕㼚㼓㻌㼕㼚㼏㼛㼙㼑㻌㻔㼞㼕㼓㼔㼠㻕
㻟㻝㻠

㻞㻘㻤㻜㻜

㻟㻞㻜

㻞㻘㻝㻜㻜

㻞㻠㻜
㻝㻥㻞

㻝㻘㻠㻜㻜

㻝㻢㻜
㻝㻜㻡
㻝㻘㻠㻞㻥

㻣㻜㻜

㻞㻘㻜㻢㻟

㻝㻘㻥㻝㻢

㻤㻜

㻜

㻜
㻲㼅㻥㻛㻝㻡㻌㻝㻴㻲㼅㻥㻛㻝㻢㻌㻝㻴㻲㼅㻥㻛㻝㻣㻌㻝㻴

Source: Prepared by FISCO from the Company’s financial resultsForex fluctuations strong affect this segment because it handles cross-border EC business. Looking at quarterly
GMV trends, Overseas Forwarding and Proxy Purchasing GMV moved lower due to yen appreciation while Global
Shopping GMV recovered from 2Q FY9/16 and then Overseas Forwarding and Proxy Purchasing GMV started
rising QoQ as well after a bottom in 4Q FY9/16 thanks to a return to yen depreciation.

㻳㻹㼂㻌㼀㼞㼑㼚㼐㻌㼕㼚㻌㼠㼔㼑㻌㻯㼞㼛㼟㼟㻌㻮㼛㼞㼐㼑㼞㻌㻮㼡㼟㼕㼚㼑㼟㼟㻲㼞㼛㼙㻌㻶㼍㼜㼍㼚㻌㻔㼘㼑㼒㼠㻕㻲㼛㼞㼑㼤㻌㼞㼍㼠㼑㻌㻔㼝㼡㼍㼞㼠㼑㼞㼘㼥㻌㼍㼢㼑㼞㼍㼓㼑㻕㻌㻔㼞㼕㼓㼔㼠㻕

㻔¥㼙㼚㻕
㻢㻘㻜㻜㻜

㻝㻞㻞㻚㻝

㻝㻞㻝㻚㻟

㼀㼛㻌㻶㼍㼜㼍㼚㻌㻔㼘㼑㼒㼠㻕

㻔¥㻛㻐㻕
㻝㻞㻡㻚㻜

㻝㻞㻝㻚㻠

㻝㻝㻥㻚㻝

㻡㻘㻜㻜㻜

㻝㻞㻜㻚㻜
㻝㻝㻡㻚㻞

㻝㻝㻠㻚㻡
㻠㻘㻜㻜㻜

㻝㻝㻝㻚㻢
㻝㻜㻣㻚㻥

㻟㻘㻜㻜㻜

㻞㻘㻜㻜㻜 㻠㻘㻝㻝㻢

㻠㻘㻜㻡㻟

㻠㻘㻟㻞㻥

㻠㻘㻤㻜㻢

㻠㻘㻟㻝㻟

㻠㻘㻢㻤㻣

㻝㻝㻜㻚㻜

㻠㻘㻞㻞㻜

㻝㻜㻞㻚㻟 㻟㻘㻥㻡㻡

㻠㻘㻠㻡㻥

㻟㻘㻡㻢㻞

㻝㻘㻜㻜㻜
㻝㻘㻝㻜㻢

㻝㻘㻜㻡㻞

㻝㻘㻜㻝㻝

㻤㻤㻡

㻥㻝㻢

㻝㻘㻝㻡㻣

㻝㻝㻡㻚㻜

㻝㻜㻥㻚㻢

㻝㻘㻜㻥㻝

㻝㻘㻝㻝㻤

㻝㻜㻡㻚㻜
㻝㻜㻜㻚㻜

㻝㻘㻝㻠㻤

㻝㻘㻜㻣㻟

㻜

㻥㻡㻚㻜
㻝㻡㻛㻝㻽 㻝㻡㻛㻞㻽 㻝㻡㻛㻟㻽 㻝㻡㻛㻠㻽 㻝㻢㻛㻝㻽 㻝㻢㻛㻞㻽 㻝㻢㻛㻟㻽 㻝㻢㻛㻠㻽 㻝㻣㻛㻝㻽 㻝㻣㻛㻞㻽㻖㼀㼞㼍㼚㼟㼍㼏㼠㼕㼛㼚㻌㼢㼍㼘㼡㼑㼟㻌㼛㼒㻌㼜㼞㼛㼐㼡㼏㼠㼟㻘㻌㼑㼠㼏㻚㻘㻌㼟㼛㼘㼐㻌㼢㼕㼍㻌㼠㼔㼑㻌㻵㼚㼠㼑㼞㼚㼑㼠㻚
Source: Prepared by FISCO from the Company’s results briefing materials

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

08 19

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

BEENOS Inc.
3328 Tokyo Stock Exchange First Section

22-May-2017https://beenos.com/en/

Results trendsa) Overseas Forwarding and Proxy Purchasing Business
The Overseas Forwarding and Proxy Purchasing Business posted ¥8,415mn in GMV (down 11.4% YoY) and¥1,465mn in net sales (up 3.8%) in 1H FY9/17. While GMV declined in 1H as the strong-yen impact reduced
handling of high-priced products, sales strengthened due to a rise in the take rate (sales ÷ GMV) from about 15%
a year earlier to the 17% range owing to the launch of delivery option services (such as delivery guarantee andinspection services) from 4Q FY9/16 and decline in the high-priced product ratio. Key factors lifting profit werea boost from higher sales, increase in forex spread profit due to adoption of multi-currency settlements, costsavings from moving the customer support center to an offshore location, and a 13.7% YoY decline in costs peritem from opening a warehouse site in Kansai in 2Q.
Looking at quarterly trends, GMV climbed 12.7% QoQ in 2Q for the second straight quarterly gain and sales
reached an all-time high for the first time in five quarters. Business strengthened on the shift to yen depreciation,
aggressive promotional measures (such as a campaign with shipping fee discounts), and broadening of alliancepartners in Japan. To enhance Buyee (proxy purchasing service) convenience, the Company began provision of
the “Add to Buyee” browsing feature that enables simple handling of orders placement and settlement processing
within the Buyee cart on partner EC sites and expanded supporting EC sites from 35 sites at end-December 2016
to 60 sites at end-March 2017.

㻯㼞㼛㼟㼟㻌㼎㼛㼞㼐㼑㼞㻌㼚㼑㼠㻌㼟㼍㼘㼑㼟㻌㼍㼚㼐㻌㼀㼍㼗㼑㻌㻾㼍㼠㼑㻌㻔㻲㼞㼛㼙㻌㻶㼍㼜㼍㼚㻕㻔¥㼙㼚㻕㻺㼑㼠㻌㼟㼍㼘㼑㼟㻌㻔㼘㼑㼒㼠㻕㼀㼍㼗㼑㻌㼞㼍㼠㼑㻌㻔㼞㼕㼓㼔㼠㻕

㻝㻘㻜㻜㻜

㻝㻣㻚㻢㻑
㻝㻡㻚㻣㻑

㻤㻜㻜

㻢㻜㻜

㻝㻟㻚㻥㻑

㻝㻠㻚㻝㻑

㻝㻣㻚㻟㻑

㻞㻜㻚㻜㻑

㻝㻡㻚㻤㻑
㻝㻠㻚㻢㻑

㻝㻢㻚㻜㻑

㻝㻜㻚㻣㻑

㻝㻞㻚㻜㻑

㻠㻜㻜
㻡㻢㻡
㻞㻜㻜

㻝㻡㻚㻞㻑

㻝㻣㻚㻢㻑

㻢㻝㻜

㻣㻞㻤

㻢㻣㻤

㻢㻤㻠

㻢㻢㻤

㻢㻞㻤

㻢㻥㻢

㻣㻢㻥

㻠㻟㻤

㻤㻚㻜㻑

㻠㻚㻜㻑

㻜

㻜㻚㻜㻑
㻝㻡㻛㻝㻽 㻝㻡㻛㻞㻽 㻝㻡㻛㻟㻽 㻝㻡㻛㻠㻽 㻝㻢㻛㻝㻽 㻝㻢㻛㻞㻽 㻝㻢㻛㻟㻽 㻝㻢㻛㻠㻽 㻝㻣㻛㻝㻽 㻝㻣㻛㻞㻽

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

The Overseas Forwarding and Proxy Purchasing Business continued to expand with partner sites at over 1,550
sites and overseas members exceeding 1.16mn people as of the end of March 2017. While China is still the main
destination, its ratio is trending lower and GMV has been rising for other countries, such as Taiwan, Hong Kong,
the US, and Australia.

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

09 19

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

BEENOS Inc.
3328 Tokyo Stock Exchange First Section

22-May-2017https://beenos.com/en/

Results trends㻿㼡㼎㼟㼏㼞㼕㼎㼑㼞㻌㼚㼡㼙㼎㼑㼞㼟㻌㼒㼛㼞㻌㼠㼑㼚㼟㼛㻚㼏㼛㼙㻌㼍㼚㼐㻌㻮㼡㼥㼑㼑㻌㼍㼚㼐㻌㼍㼒㼒㼕㼘㼕㼍㼠㼑㼐㻌㼟㼕㼠㼑㼟㻔㻿㼕㼠㼑㼟㻕

㻭㼒㼒㼕㼘㼕㼍㼠㼑㼐㻌㼟㼕㼠㼑㼟㻌㻔㼘㼑㼒㼠㻕㻿㼡㼎㼟㼏㼞㼕㼎㼑㼞㼟㻌㻔㼞㼕㼓㼔㼠㻕㻞㻘㻝㻜㻜㻔㻝㻜㻘㻜㻜㻜㻌
㼟㼡㼎㼟㼏㼞㼕㼎㼑㼞㼟㻕
㻝㻠㻜
㻝㻝㻢

㻝㻘㻤㻜㻜

㻝㻜㻤
㻥㻠

㻝㻘㻡㻜㻜

㻝㻞㻜

㻝㻜㻜
㻝㻜㻜

㻤㻢
㻣㻤
㻣㻜

㻝㻘㻞㻜㻜
㻥㻜㻜

㻡㻡

㻤㻜

㻢㻝

㻢㻜

㻠㻣

㻢㻜㻜
㻟㻜㻜

㻝㻘㻝㻜㻜㻌
㻡㻜㻜㻌

㻡㻡㻜㻌

㻣㻜㻜㻌

㻝㻘㻞㻜㻜㻌

㻝㻘㻟㻡㻜㻌

㻝㻘㻠㻞㻜㻌

㻝㻘㻠㻤㻜㻌

㻝㻘㻡㻡㻜㻌

㻤㻜㻜㻌

㻠㻜
㻞㻜

㻜

㻜
㻝㻡㻛㻝㻽 㻝㻡㻛㻞㻽 㻝㻡㻛㻟㻽 㻝㻡㻛㻠㻽 㻝㻢㻛㻝㻽 㻝㻢㻛㻞㻽 㻝㻢㻛㻟㻽 㻝㻢㻛㻠㻽 㻝㻣㻛㻝㻽 㻝㻣㻛㻞㻽

Source: Prepared by FISCO from the Company’s results briefing materialsb) Global Shopping Business
The Global Shopping Business reported ¥2,222mn in GMV (up 7.2% YoY) and ¥597mn in sales (up 18.7%) in
1H. GMV expanded on support from a stronger yen than in the previous year and initiatives to bolster promotions
and broaden sales channels. Additionally, sales realized a double-digit increase with assistance from a higher
take rate (up from the 24% range in the previous year to about 27%), including the positive effect of updating
minimum fee prices in February 2016.
This business restored profitability from 3Q FY9/16 and continued to generate profit in 1H FY9/17 thanks to theboost from higher sales and cost reduction through conversion of US warehouse and customer center functions
to internal operations and revisions to forwarders. The ability to handle products that require oil cleaning (such as
motorcycle parts) supported the switch to internal warehousing contributed to larger GMV as well.
At the quarterly level, however, sales slipped to QoQ declines after a peak in 4Q FY9/16 because of reversal toyen depreciation. The Company needs to find ways to expand GMV, including acquisition of female members.

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

10 19

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

BEENOS Inc.

22-May-20173328 Tokyo Stock Exchange First Section

https://beenos.com/en/

Results trends㻯㼞㼛㼟㼟㻌㼎㼛㼞㼐㼑㼞㻌㼚㼑㼠㻌㼟㼍㼘㼑㼟㻌㼍㼚㼐㻌㼀㼍㼗㼑㻌㻾㼍㼠㼑㻔㼀㼛㻌㻶㼍㼜㼍㼚㻕㻔¥㼙㼚㻕㻺㼑㼠㻌㼟㼍㼘㼑㼟㻌㻔㼘㼑㼒㼠㻕㼀㼍㼗㼑㻌㼞㼍㼠㼑㻌㻔㼞㼕㼓㼔㼠㻕

㻡㻜㻜

㻠㻜㻜

㻟㻜㻜

㻟㻡㻚㻜㻑

㻟㻜㻚㻞㻑
㻞㻟㻚㻡㻑
㻝㻥㻚㻣㻑

㻝㻥㻚㻣㻑

㻝㻥㻚㻤㻑

㻞㻠㻚㻥㻑

㻞㻣㻚㻜㻑

㻞㻢㻚㻠㻑

㻞㻢㻚㻤㻑

㻞㻜㻚㻡㻑

㻞㻝㻚㻜㻑

㻞㻜㻜

㻝㻠㻚㻜㻑
㻞㻤㻤

㻝㻜㻜

㻞㻤㻚㻜㻑

㻞㻝㻣

㻞㻜㻣

㻝㻥㻥

㻞㻤㻤

㻟㻟㻣

㻟㻝㻜

㻞㻤㻣

㻞㻝㻡

㻝㻤㻝

㻣㻚㻜㻑

㻜

㻜㻚㻜㻑

㻝㻡㻛㻝㻽 㻝㻡㻛㻞㻽 㻝㻡㻛㻟㻽 㻝㻡㻛㻠㻽 㻝㻢㻛㻝㻽 㻝㻢㻛㻞㻽 㻝㻢㻛㻟㻽 㻝㻢㻛㻠㻽 㻝㻣㻛㻝㻽 㻝㻣㻛㻞㻽
Source: Prepared by FISCO from the Company’s results briefing materials(2) Value Cycle Business
The Value Cycle Business recorded ¥5,407mn in sales (up 10.9% YoY; GMV equals sales for this segment) and¥301mn in operating income (up 7.9%) in 1H. These were the Company’s highest results ever on a half-yearbasis. Profitability modestly declined because of continued airing of television commercials and higher personnel
costs related to reinforcement of system development capabilities. However, purchase volume climbed sharply
with a 31.8% YoY increase due to aggressive buying efforts, mainly for second-tier brands, including the launchof a buying service through alliances with fashion EC sites, amid vibrant demand for used brand products overthe Internet. The Company also launched a store on Wowma!, which is operated by KDDI Commerce Forward
Co., Ltd., in March 2017, broadening its sales channel.

㼂㼍㼘㼡㼑㻌㻯㼥㼏㼘㼑㻌㻮㼡㼟㼕㼚㼑㼟㼟㻌㼞㼑㼟㼡㼘㼠㼟㻌㼠㼞㼑㼚㼐㼟㻔¥㼙㼚㻕㻺㼑㼠㻌㼟㼍㼘㼑㼟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
㻟㻜㻝

㻤㻘㻜㻜㻜

㻞㻣㻥

㻢㻘㻜㻜㻜

㻔¥㼙㼚㻕
㻟㻞㻜

㻞㻠㻜
㻝㻣㻠

㻠㻘㻜㻜㻜

㻞㻘㻜㻜㻜

㻝㻢㻜
㻠㻘㻤㻣㻠

㻠㻘㻝㻞㻥

㻡㻘㻠㻜㻣
㻤㻜

㻜

㻜
㻲㼅㻥㻛㻝㻡㻌㻝㻴㻲㼅㻥㻛㻝㻢㻌㻝㻴㻲㼅㻥㻛㻝㻣㻌㻝㻴

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

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

11 19

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

BEENOS Inc.

22-May-20173328 Tokyo Stock Exchange First Section

https://beenos.com/en/

Results trends(3) Retailing and Licensing Business
The Retailing and Licensing Business posted ¥4,529mn in GMV (up 2.2% YoY), ¥2,546mn in sales (up 14.5%),and ¥65mn in operating income (down 40.9%) in 1H. Sales and profits climbed in the Producing and Licensing
Business run by subsidiary monosense on healthy sales of goods via EC sites of popular idol groups thanks tobroadening item scope and upbeat activity for the popular ECONECO brand, which is managed through a masterlicense, including the start of trial sales at a Japanese department store in Taiwan. Furthermore, the Company
acquired SWATi Inc. as a wholly owned subsidiary at the end of December 2016. SWATi designs and sells original
goods that target women in their 20s and 30s and possesses robust product planning capabilities. While sales
are low at this point and this business should only have a minor impact on segment income, the Company intends
to establish positioning as a “stylish gift item brand” and expand this business by capitalizing on sales knowhow
from monosense.
In the Internet Shopping Business, meanwhile, GMV declined YoY, despite development of original fashion andbeauty goods and efforts to improve sales, and operating income slipped to a loss due to decline in gross margin
related to inventory disposal. This business hence contributed negatively to segment profit.

㻾㼑㼠㼍㼕㼘㼕㼚㼓㻌㼍㼚㼐㻌㻸㼕㼏㼑㼚㼟㼕㼚㼓㻌㻮㼡㼟㼕㼚㼑㼟㼟㻌㼞㼑㼟㼡㼘㼠㼟㻌㼠㼞㼑㼚㼐㼟
㻔¥㼙㼚㻕
㻟㻘㻜㻜㻜

㻺㼑㼠㻌㼟㼍㼘㼑㼟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

㻝㻝㻜

㻝㻜㻠

㻝㻞㻜

㻞㻘㻡㻜㻜

㻝㻜㻜

㻞㻘㻜㻜㻜

㻢㻡

㻝㻘㻡㻜㻜
㻝㻘㻜㻜㻜

㻔¥㼙㼚㻕

㻤㻜
㻢㻜

㻞㻘㻞㻞㻠

㻞㻘㻝㻟㻝

㻞㻘㻡㻠㻢
㻠㻜

㻡㻜㻜

㻞㻜

㻜

㻜
㻲㼅㻥㻛㻝㻡㻌㻝㻴㻲㼅㻥㻛㻝㻢㻌㻝㻴㻲㼅㻥㻛㻝㻣㻌㻝㻴

Source: Prepared by FISCO from the Company’s financial results(4) Incubation Business
The Incubation Business reported just ¥3mn in sales (down 98.2% YoY) and a ¥79mn operating loss (vs. a ¥141mn
profit in the previous year) in 1H because of the absence of gains on sales of operational investment securities.
The main investment in 1H FY9/17 was Metro Engines Inc. (established in October 2016), which supplies acentralized management tool for private home rentals in Japan. The Company acquired a stake of just over 10%
in December 2016 and is the second largest shareholder after the founder. It sees opportunity in future expansionof the private home rentals market in Japan.

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

12 19

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

BEENOS Inc.
3328 Tokyo Stock Exchange First Section

22-May-2017https://beenos.com/en/

Results trends

Key investee companies are Internet venture firms in India and Southeast Asia with rapidly growing Internet
markets and start-ups in Japan and the US. In this group, Indonesia-based Tokopedia reportedly has a market
cap of ¥100bn and Clues Network, which operates Shop Clues in India, has grown to a market cap of over
¥100bn. Droom, which handles online automobile sales in India, is also rapidly expanding and currently might
have a valuation of a few ten billion yen. While the Company owns less than 1% of Instacart, which operates afood shopping assistance service in the US, this business is currently valued at $3.4bn and expects to conduct
an IPO during 2017. The Company intends to sell shares in investee companies and utilize proceeds as funding
for new investees or creation of its own new businesses.
Main companies invested in and their investment ratios
Investment
ratio
10% ormore

5 to 10%

1 to 5%Less than
1%

Company

Headquarter
location

Business description

akakce.com

TurkeyPrice comparison service

Paynamics Technologies

The Philippines

Online payment service

Metro EnginesJapan

Big data analysis and consulting for private home rentals and accommodations

Droom

India

Operates Droom, an online marketplace for secondhand cars

Buyhatke

India

Price comparison service

Sendo Technology

VietnamOperates Sendo, an online marketplace

NearexMultiple Africancountries

Mobile money

CaSy

Japan

Cloud-based agency service for handling household chores

Quan

Japan

Plans and develops web and app services for mobile equipment

Clues Network

India

Operates ShopClues, a B2C online marketplace

VoonikIndia

Operates voonik.com, a mobile fashion marketplace

Nobroker

India

Operates NoBroker, an online C2C real estate marketplace

Healthians

India

In-home physical examination marketplace

Midtrans

Indonesia

Online payment service

RalaliIndonesia

B2C marketplace for indirect materials

Tokopedia

Indonesia

Operates tokopedia, a C2C online marketplaceiyzi Payments

TurkeyOnline payment service

Ayannah

The Philippines

Online remittance service

Increments

Japan

Operates Qiita, a service for software programmers to exchange technical information

Big Foot Retail Solutinos

India

Operates KARTROCKET, a service for opening an online store

Maplebear

US

Operates instacart, an online delivery service for food and daily necessities

KamcordUS

Operates a video sharing platform for mobile games

Other
Source: Prepared by FISCO from the Company’s results briefing materials and website

Operational investment securities held by the Incubation Businessheaded for the ¥2bn range
3. Financial position and management indicators
Total assets at end of 1H FY9/17 rose by ¥368mn from the previous fiscal year-end to ¥13,481mn. Main changes
were an increase of ¥585mn to ¥2,190mn in operational investment securities and declines of ¥176mn in notes andaccount receivable - trade, ¥134mn in products, ¥108mn in deferred tax assets, and ¥51mn in cash and deposit
under current assets and increases of ¥99mn in investment account securities, ¥40mn in tangible fixed assets,¥50mn in goodwill, and ¥25mn in software under fixed assets.

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

13 19

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

BEENOS Inc.

22-May-20173328 Tokyo Stock Exchange First Section

https://beenos.com/en/

Results trends

Total liabilities dropped by ¥4mn from the previous fiscal year-end to ¥5,065mn. Main changes were increases of¥249mn in deposits received, ¥128mn in accounts payable, and ¥35mn in short-term loans and declines of ¥372mn
in accounts payable - other and ¥75mn in income taxes payable under current liabilities and an increase of ¥22mn
in long-term loans under fixed liabilities.
Net asset value climbed by ¥390mn from the previous fiscal year-end to ¥8,416mn. Main additions were ¥162mn
in the exchange conversion adjustment account, ¥115mn in minority stockholder equity interest, and ¥106mn inearned surplus.
Looking at key management indicators, the capital ratio increased by 0.7pp from 51.1% to 51.8% and the interest-bearing debt ratio rose by 0.3pp from 15.1% to 15.4%. We think the Company remains in sufficiently healthyfinancial shape.
Consolidated balance sheet and business indicators(¥mn)
FY9/14

FY9/15

FY9/16

FY9/17 1H

ChangeCurrent assets

6,692

8,745

11,787

11,906

119

Cash and deposit

2,433

3,276

6,307

6,255

-51

Operational investment
securities

1,563

1,663

1,605

2,190

585

Fixed assets

1,014

1,273

1,308

1,575

267

Total assets

7,706

10,01913,095

13,481

368

Current liabilities

3,078

4,183

4,830

4,793

-36

Fixed liabilities

69

155

238

271

32

Interest-bearing debt

1,034

919

1,009

1,075

66

Total liabilities

3,148

4,339

5,069

5,065

-4

Net assets

4,557

5,679

8,025

8,416

390

Equity ratio

57.5%

54.5%

51.1%

51.8%

Interest-bearing debt ratio

23.3%

16.8%

15.1%

15.4%

Management indicators
Stability

Source: Prepared by FISCO from the Company’s financial results██Business outlook
Aims to set all-time highs in net sales, operating income, andordinary income in FY9/17
1. FY9/17 results outlook
The Company maintained period-start forecast for FY9/17 consolidated results at ¥20,000mn in net sales (up 4.0%
YoY), ¥1,400mn in operating income (up 16.6%), ¥1,400mn in ordinary income (up 15.6%), and ¥750mn in Profit
attributable to owners of parent (down 20.3%). Cross Border Business is likely to exceed its sales and profit targets
if the forex rate stays at the current level of about ¥110/$ because the 2H forex assumption is ¥95/$. The decline inprofit attributable to owners of parent reflects reduction in deferred tax assets and an increase in profit attributable
to non-controlling interests because of a decline in the Company’s stake due to listing of Defactostandard shares.
The Company expects to eliminate all loss brought forward for tax accounting in FY9/17.

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

14 19

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

BEENOS Inc.

22-May-20173328 Tokyo Stock Exchange First Section

https://beenos.com/en/

Business outlook

Segment targets are E-Commerce Business at ¥18,700mn in sales (up 3.8% YoY) and ¥950mn in operating income(up 27.9%) and Incubation Business at ¥1,300mn in sales (up 8.1%) and ¥800mn in operating income (up 3.4%).
We expect the E-Commerce Business to exceed forecast if the yen does not appreciate significantly because ofhealthy progress through 1H and the ¥95/$ 2H forex assumption. The Incubation Business, meanwhile, depends
on selling trends for operational investment securities. We think forecast is attainable considering expansion of
unrealized profit as investees grow.
FY9/17 Consolidated Outlook(¥mn)
FY9/16

FY9/17
YoY

Progress rate
up 2Q

-

-7.6%

55.6%

-

4.0%

50.1%

18,700

93.5%

3.8%

53.6%

6.3%

1,300

6.5%

8.1%

0.3%

6.2%

1,400

7.0%

16.6%

28.4%

Results% of sales

Gross merchandise value

40,050-37,000Net sales

19,226-20,000E-Commerce Business

18,023

93.7%

Incubation Business

1,203
1,200

Operating income

Plan% of sales

E-Commerce Business

742

4.1%

950

5.1%

27.9%

71.7%

Incubation Business

773

64.3%

800

61.5%

3.4%

-

Adjustments

-315

-

-350

-

-

-

Ordinary income

1,211

6.3%

1,400

7.0%

15.6%

32.4%

940

4.9%

750

3.8%

-20.3%

13.9%

Profit attributable to owners of parent

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

E-Commerce Business likely to continue growing the Cross Border
Business as the main driver
2. Segment outlooks(1) Cross Border Business
The outlook targets ¥17,500mn in GMV (down 18.8% YoY) and ¥3,450mn in sales (down 10.1%) for Cross
Border Business. Progress toward full-year targets through 2Q was 60.8% in GMV and 59.8% in sales. While theCompany has not disclosed operating income, we think income generated through 2Q was slightly above theFY9/17 target. Sales and profits are likely to exceed plan targets if the forex rate stays at about ¥110/$ in 2H.
The Overseas Forwarding and Proxy Purchasing Business is likely to perform well again in 2H considering therecovery trend in GMV. Efforts to expand GMV include broadening partner sites in Japan and strengthening
promotional capabilities in other countries.
The Company announced a business alliance with Minimal Technologies, inc., which operates the WOVN.io toolfor development of multi-lingual Web sites, in February 2017. Provision of WOVN.io to EC businesses considering
overseas initiatives enables them to realize multi-lingual Web sites in a short amount of time and at low cost. It
also offers product delivery to overseas users and multi-lingual customer support at no charge (handled by tenso)
by setting the “overseas transfer service” shown on the management screen to ON. This alliance should help infurther expansion of partner sites.

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

15 19

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

BEENOS Inc.
3328 Tokyo Stock Exchange First Section

22-May-2017https://beenos.com/en/

Business outlook

The Company is also striving to broaden EC sites that support “Add to Buyee” and has a goal of supplying this tool
to the top 400 companies in terms of transaction value. Addition of this tool improves convenience and contributes
to larger transaction value. Efforts to bolster promotions to overseas users, meanwhile, include continued bannercollaboration with Japanese EC sites and SEO measures as well as collaboration with retailers, including real-world
stores, and media sources.
The Company projects higher sales and profits for the full year in the Global Shopping Business too. Thisbusiness raises sales efficiency by providing individual members with suitable product information by deploying apersonalizing function based on a proprietary recommendation engine and by building a mechanism that detects
the latest trends and other developments for use in effective promotional activities. Additionally, the Company
started product data collaboration with a major domestic auction site in August 2016 and submits some eBay
product to this site via sekaimon. It intends to expand GMV by broadening submitted item volume and increasing
partner sites.
(2) Value Cycle Business
The outlook targets ¥10,850mn in sales (up 12.7% YoY) and ¥430mn in operating profit (up 29.9%) for Value
Cycle Business. Progress toward full-year targets through 2Q was 49.8% in sales and 71.7% in operating
income, on track with the plan. This business aims to expand the number of purchased items further from 2H
by continuing advertising and promotions (mainly television commercials), expanding purchasing partners, andimproving service functions using smartphones. On the selling side, it utilizes a strategy of maximizing income
through the addition of sales channels in Japan and other countries to increase selling opportunities. The main
cost initiative is reduction of business personnel costs. The Company hopes to lower the total personnel cost
ratio by shifting from higher-priced dispatched personnel to part-time workers.
The C2C market, which includes mercari and other flea-market apps, has been growing over the past 1-2 years
in the Internet-based used goods purchasing and selling market and is increasing transaction scale for branditems too. However, we do not expect an impact on the Company’s business for the time being. This is because
flea-market apps mainly handle casual brands with an average selling price of less than ¥1,000 for reuse items
versus Brandear’s emphasis on second-tier brands with an average selling price in the ¥1,000-10,000 range forreuse items. The business also caters to the demand of people who want to dispose of numerous used goods
at a single time. Competition might intensify over the medium term, and the Company hence intends to continue
developing added-value services, expanding sales channels, and implementing measures that raise awarenessin order to maintain its competitive advantage.
(3) Retailing and Licensing Business
The outlook targets ¥8,650mn in GMV (down 2.4% YoY), ¥4,400mn in sales (down 3.5%), and a slight rise inoperating income for Retail and Licensing Business. Progress toward full-year targets through 2Q was healthy
at 52.4% in GMV and 57.9% in sales. Operating income, however, appears to have been less than 30%, partly
due to weakness in the Internet Shopping Business. Profit might miss targets depending on the income trend in
this business from 2H.
In the Producing and Licensing Business, the Company aims for higher sales and profits by promoting acquisitionof attractive contents that fuel expansion of GMV and pursuing reinforcement of distribution network operations(adding people, etc.) in Japan and improvement in business efficiency.

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

16 19

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

BEENOS Inc.
3328 Tokyo Stock Exchange First Section

22-May-2017https://beenos.com/en/

Business outlook

In the Internet Shopping Business, the Company hopes to increase sales by expanding unique product line-ups
and developing original products and revive earnings through measures that leverage e-commerce knowhow
accumulated in the 17 years since beginning the business. Specific efforts include ramping up promotions to new
customers, strengthening periodic purchase items (mainly in the beauty field), and expanding premium service
benefits.
(4) Incubation Business
The outlook targets ¥1,300mn in sales (up 8.1% YoY) and ¥800mn in operating profit (up 3.5%) for Incubation
Business. The Company expects to book gains on the sales of shares of some investee companies during 2H.
Key events in making decisions to sell investee shares are the next round of investee financing, discovery of anew partner to accelerate growth, and an IPO.

██Medium-to-long-term growth strategy
Pursuing ¥100bn in GMV with support from expansion of the crossborder EC market
As its medium-to-long-term vision, the Company is aiming to be the “Neo-General Trading Company” that opens-up
new markets and creates new industries based on IT technologies and the Internet. In addition to distributing
Japanese products and content to marketplaces throughout the world, it intends to increase its enterprise value bybuilding a global commerce platform to distribute products and contents from throughout the world in Japan andother Asian countries.
The global cross-border EC market is likely to continuing growing at a 20-30% annual rate from an estimated$400bn in 2016 to $994bn in 2020 according to the “Market Survey on E-Commerce Transactions” report released
by METI in April 2017. The survey forecasts annual growth rates in cross-border EC GMV from Japan through 2020of 16.4% to China and 14.6% to the US. These trends should expand the respective markets by 1.8 times and 1.7
times compared to 2016 levels. We see significant business opportunities for the Company, which is involved incross-border EC as a core business.

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

17 19

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

BEENOS Inc.

22-May-20173328 Tokyo Stock Exchange First Section

https://beenos.com/en/

Medium-to-long-term growth strategy㻳㼘㼛㼎㼍㼘㻌㻯㼞㼛㼟㼟㻙㻮㼛㼞㼐㼑㼞㻌㻱㻯㻌㻹㼍㼞㼗㼑㼠㻌㻳㼞㼛㼟㼟㻌㼙㼑㼞㼏㼔㼍㼚㼐㼕㼟㼕㼚㼓㻌㼢㼍㼘㼡㼑㻌㻔㼘㼑㼒㼠㻕㻔㻐㻝㻜㻜㼙㼚㻕㻌㻝㻠㻘㻜㻜㻜
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㻟㻡㻚㻜㻑
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㻞㻡㻚㻜㻑
㻞㻜㻚㻜㻑

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㻞㻘㻜㻜㻜

㻞㻘㻟㻟㻜

㻟㻘㻜㻠㻜

㻞㻜㻝㻠

㻞㻜㻝㻡

㻡㻘㻟㻜㻜

㻠㻘㻜㻜㻜

㻤㻘㻞㻢㻜

㻢㻘㻣㻢㻜

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㻡㻚㻜㻑

㻜

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Source: METI “Market Survey on E㻙Commerce Transactions” report (April 24, 2017)㻯㼞㼛㼟㼟㻙㻮㼛㼞㼐㼑㼞㻌㻱㻯㻌㻳㻹㼂㻌㼒㼞㼛㼙㻌㻶㼍㼜㼍㼚㻌㼠㼛㻌㻯㼔㼕㼚㼍㻌㼍㼚㼐㻌㼠㼔㼑㻌㼁㻿(¥100mn)㻶㼍㼜㼍㼚㻌㼠㼛㻌㻯㼔㼕㼚㼍㻶㼍㼜㼍㼚㻌㼠㼛㻌㼠㼔㼑㻌㼁㻿㻞㻡㻘㻜㻜㻜
㻝㻥㻘㻜㻡㻟

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Source: METI “Market Survey on E㻙Commerce Transactions” report (April 24, 2017)

The Company believes it is necessary to create a market worth a few hundred billion yen in GMV in order to realize
the medium-to-long-term vision and has set a near-term target of ¥100bn in GMV with cross-border EC (Cross
Border Business) driving this growth as the first step. It also aims to expand scale in the Retailing and Licensing
Business by widening the domestic distribution network, developing attractive products and content, and expanding
business to overseas markets. The Company will similarly promote growth in the Value Cycle Business throughexpansion of purchasing and selling channels. In overseas business, the Company will utilize the existing networkwith partners and investees that it has already built, pursue further expansion of the network, and increase businessscale and create new businesses that utilize big data obtained from these activities.

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

18 19

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

BEENOS Inc.
3328 Tokyo Stock Exchange First Section

22-May-2017https://beenos.com/en/██Shareholder return policy
Plans to pay an ¥18 dividend in FY7/19 that includes a ¥5commemorative dividend for the TSE-1 listing
The Company started paying a dividend from FY9/15 as a shareholder return measure. It plans to pay an ¥18.0
dividend in FY9/17 with a ¥5.0 commemorative dividend for the TSE-1 listing at the interim timing and a ¥13.0
ordinary dividend at period-end. The Company retains its existing dividend policy of paying a dividend that reflects
earnings growth while taking into account financial standing, investment funding needs, and business results.

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

19 19

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
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This report is based on information that we believe to be reliable, but we do not confirm or
guarantee its accuracy, timeliness,or completeness, or the value of the securities issued bycompanies cited in this report. Regardless of purpose,investors should decide how to use
this report and take full responsibility for such use. We shall not be liable for any result of its
use. We provide this report solely for the purpose of information, not to induce investment or
any other action.
This report was prepared at the request of its subject company using information provided
by the company in interviews, but the entire content of the report, including suppositions andconclusions, is the result of our analysis. The content of this report is based on informationthat was current at the time the report was produced, but this information and the content of
this report are subject to change without prior notice.
All intellectual property rights to this report, including copyrights to its text and data, areheld exclusively by FISCO. Any alteration or processing of the report or duplications of thereport, without the express written consent of FISCO, is strictly prohibited. Any transmission,
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The final selection of investments and determination of appropriate prices for investment
transactions are decisions for the recipients of this report.
FISCO Ltd.