Tosei Corporation
FY2024 2Q Financial Results Presentation
July 5, 2024

Event Summary[Company Name]

Tosei Corporation[Company ID]

8923-QCODE[Event Language]

JPN[Event Type]Earnings Announcement[Event Name]FY2024 2Q Financial Results Presentation[Fiscal Period]

FY2024 Q2[Date]

July 5, 2024

[Number of Pages]

32[Time]

16:00 – 16:51(Total: 51 minutes, Presentation: 44 minutes, Q&A: 7 minutes)[Venue]Webcast[Venue Size][Participants][Number of Speakers]

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Seiichiro Yamaguchi
Nobuto Fujiwara

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President and CEO
Managing Executive Officer, In charge ofCorporate Management Department

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Presentation
Moderator: Ladies and gentlemen, thank you very much for attending today's financial results briefing for Q2of the fiscal year ending November 30, 2024 of Tosei Corporation.
First, we would like to inform you about today's proceedings. Today, we will begin with a presentation in linewith the documentation, and then move on to a Q&A session. Please refer to our website for the documents.
Today's financial results briefing is scheduled to end around 5:00 PM.
Next, we would like to introduce the attendees from the company who are at today's meeting: President andCEO, Seiichiro Yamaguchi; and Managing Executive Officer, Nobuto Fujiwara. These two people arerepresenting Tosei Corporation. Managing Executive Officer Fujiwara will now provide an overview of thefinancial results for H1 of the fiscal year ending November 30, 2024, beginning on page three of the financial
results presentation materials.
Fujiwara: My name is Fujiwara, as just introduced. I would like to present an overview of the financial resultsfor Q2 of the fiscal year ending November 30, 2024.

Please see page four. This shows the financial highlights for Q2 of the fiscal year ending November 30, 2024.
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The bar graph on the left side of the page shows revenue, operating profit, profit before tax, and profit forthe period for the past three years.
Revenue increased 9% YoY to JPY57.6 billion, and the dotted-line box shows the forecast for the full year,
which is JPY92.1 billion, of which 62.5% has already been achieved. Similarly, operating profit increased 19.1%
to JPY14.9 billion, with a progress rate of 84.2%, and profit before tax increased 19% to JPY14.3 billion, witha progress rate of 87.1%, showing extremely steady progress.
Operating profit by segment and stable business ratio are shown on the right side of the page. We have six
segments. The segments that are boxed off here—the real estate rental business, the real estate property
management business, the real estate fund and consulting business, and the hotel business—are designatedas stable businesses.
For H1 of the fiscal year ending November 30, 2024, the stable business ratio was 35%, as profits from thetrading business led the way, but the ratio is expected to increase toward the full-year plan of 47.2%, as stablebusinesses will generate stable profits over time.

I would like to explain each of the six businesses that we are engaged in. Please see page six. This is the realestate revitalization business.
We acquire existing assets that have lost value due to their age, etc., renovate and add the value, and sellthem to investors and others.

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H1 revenue totaled JPY29.3 billion, down 13.6% YoY, and operating profit was JPY5.5 billion, down 21.9% YoY.
Although the YoY comparison makes it look like a slump, we believe that in reality the market was very
favorable, and that trading remained strong.
As described on pages 15 and 16, we keep roughly two to three years' worth of inventory in our revitalization
business and development business, and from that inventory we formulate sales plans for a mix of properties
for sale in the revitalization business and development business so that earnings in the trading business will
steadily increase.
In the current fiscal year, we had planned to sell large projects in the development business, so we hadplanned for slightly lower sales in the revitalization business. The forecast for the full year is JPY45.8 billion inrevenue and JPY6.1 billion in operating profit, and we have achieved 90% of our operating profit in H1.
We sold 28 whole-buildings, like those shown in the photos on the right. In addition, revenue of pre-owned
condo units, as shown in the lower, dark-yellow bar graph, totaled JPY8.2 billion as 65 units were sold in Q1
and Q2. Both revenue and profits were very strong as we focused on the three central wards of Tokyo,
including Minato ward.

Please see page seven. This is the real estate development business.
Revenue was JPY14.3 billion, up 124.1% YoY, and operating profit was JPY5.1 billion, up 295.3% YoY.
Revenue of whole buildings, shown in the dark yellow portion of the bar graph, for Q1 of the fiscal year ending
November 30, 2024, totaled JPY12.7 billion, showing extremely steady progress. Specifically, we sold alogistics facility T's Logi Ome and a commercial facility in Jiyugaoka, which we developed, pictured on the right.
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4The gross profit margin on whole-building sales in H1 of this fiscal year was 38.7%, with whole-building sales
driving a significant portion of revenue and profits.
In Q2, we sold five detached houses to high-end customers, resulting in revenue of JPY1.3 billion.
The gross profit margin of the development business in H1 of the year was 28.7%, just outside the green graphline. The 49.4% gross profit margin shown above is the gross profit margin after taking into account thereversal of past valuation loss under LCM. Although the gross profit margin is higher in accounting terms than
28.7% of the actual margin, we believe that we were able to sell at a relatively higher profit margin thanordinary detached houses.

Please see page eight. This shows the progress in acquisitions in the revitalization and development
businesses that I just explained.
In the portion that has already been delivered, acquisition is in progress for an estimated disposition value
worth of JPY44.6 billion. Lower down you will find the amount for each individual asset type. We havepurchased 41 whole buildings, 61 condo units, and 70 units worth land lots for detached houses.
In addition, the dotted line in the bar graph near the middle of the page shows progress to JPY64.3 billion,
including JPY19.6 billion that has been contracted but has not yet been delivered. We are 64% of the way
toward our full-year acquisition target of JPY100 billion, and we believe we will be able to achieve this target
as well.

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In Q2, we acquired 23 income-generating offices and commercial facilities, estimated at JPY9.5 billion in
disposition value, through business succession support. The top photo on the right shows an incomegenerating office in Chiba City. We have been able to efficiently acquire properties like this in bulk.

Please see page nine. This is the third segment, the real estate rental business.
This is positioned as one of our stable businesses. The bar graph also shows stable profits. In H1, revenue was
JPY3.7 billion, up 15.4% YoY, and operating profit was JPY1.7 billion, up 17.5% YoY.
On the right is a breakdown of the number of rental properties, with dark blue being investment propertiesof fixed assets and light blue being inventories. There was no movement in investment real estate from theend of the previous period. Inventories increased by 9 buildings from the end of the previous period due to
new acquisitions and acquisitions through M&A, although 22 buildings were sold, as noted in the bottom line.
We are also making good progress in this area.

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Please see page 10. This is the real estate fund and consulting business.
Revenue in H1 totaled JPY3.6 billion, down 12.3% YoY, and operating profit was JPY2.3 billion, down 22.6%
YoY.
As you can see in the bar graph on the lower left, the reason for the decrease in revenue here is that a large
amount of spot income, such as brokerage fees, acquisition fees, disposition fees, etc., was recorded in Q1
and Q2 of last year. In the previous fiscal year, we were able to obtain large projects, such as Otemachi Place,and many spot incomes, but this fiscal year, we do not expect the same spot projects as in the previous fiscal
year, so we are planning a decrease in revenues and profit.
As operating income for H1 of the fiscal year is 58% of the initial plan, we believe that we are on track.
As for assets under management (AUM), the bar graph on the right shows that as of the end of Q2 of thisfiscal year, AUM was JPY2,377.8 billion, up JPY25.3 billion from the end of the previous fiscal year. The fullyear plan for the current fiscal year calls for an annual increase of JPY350 billion in new accumulation and adecrease of JPY150 billion due to sales and other factors, for a net increase of JPY200 billion. While an increaseof about JPY100 billion at the end of H1 would be ideal, the actual results were slightly behind.
The bar graph on the upper right shows the increase/decrease in AUM in H1, with an increase of JPY147.6
billion and a decrease of JPY122.3 billion. Although the increase was generally steady, AUM increased by only
JPY25.3 billion as sales preceded.

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Please see page 11. This is the property management business.
Revenue was JPY4.2 billion, up 10.5% YoY, and operating profit was JPY637 million, up 23% YoY.
As you can see in the bar graph lower down, in addition to the usual management contracts, we also gained
a lot of spot works and commissions this fiscal year, especially through proposal-based sales activities such as
renovation works.
The number of properties managed by the company increased by 105 from the end of the previous fiscal year
to 963, mainly due to the takeover of the management business of an operating company in March throughbusiness succession support.

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Please see page 12. This is the hotel business.
Revenue was JPY3 billion, up 65.3% YoY; GOP was JPY1.5 billion, up 83.7% YoY; and operating profit was JPY1
billion, up 120% YoY, all very strong.
The occupancy rate for the Q2 period was 93.3% for the office area and 86.8% for the tourist area. The Tsukiji
Ginza Premier (No. 8) opened in September of last year, and this hotel contributed significantly to the increasein profit this time. The list of hotels held by Tosei is shown on the right.
Also, looking at the occupancy rate, you may have the impression that the rate in this year has not increasedmuch from last year. ADR is not shown here, but we have been able to increase ADR by approximately 20%,
although there is some variation from hotel to hotel. The hotel business is performing well due to strong
demand from within Japan and overseas.
That concludes my explanation of our business segments.

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Starting on page 13, I will briefly explain the assets section of the balance sheet.
Total assets amounted to JPY254.4 billion, up about JPY9.1 billion from the end of the previous period.
The breakdown on the right side shows a JPY0.5 billion increase in cash, a JPY5.7 billion increase in inventories,
and a JPY0.6 billion decrease in investment properties/PPE due to depreciation and other factors. Other assets
increased by about JPY3.4 billion, mainly due to additional acquisition of investment units of Tosei Reit
Investment Corporation.
As for the increase in inventories, as noted on the lower left, there was an increase of JPY37.1 billion due toproperty acquisitions, construction costs, etc., and a decrease of JPY31.4 billion due to sales of properties.
Although sales were strong, we were able to purchase more properties than we sold.

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10Please see page 14. This is the liabilities and equity section of the balance sheet.
Overall, total liabilities and equity increased JPY9.1 billion to JPY254.4 billion. Interest-bearing debt increasedslightly to JPY675 million. The major increase was in total capital, which increased by JPY7.1 billion to JPY89.4
billion.
The breakdown of changes in total equity is shown in the lower right-hand corner. The increase in total equity
was JPY10 billion due to the accumulation of retained earnings, with a decrease of JPY3.1 billion due todividends, resulting in a net increase of JPY7.1 billion.
While liabilities have barely increased, equity capital has increased, resulting in a 1.5-point increase in theequity ratio to 35% and a net debt-to-equity ratio of 1.21 times, which means that the company has been able
to firmly maintain its financial soundness.

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Please turn to page 15. This is the status of inventories.
As of the end of May, we currently hold inventories with a book value of JPY124 billion, 195 properties, and
583 units, including condo units and detached houses. The middle section here shows the breakdown by asset
type for each of the revitalization and development businesses. Adding construction and value-add costs tothis book value, we are forecasting a book value at the time of completion of JPY149.9 billion and an estimateddisposition value of JPY188.1 billion.
The expected gross profit margin on inventory held is 20.3%, and since the average gross profit margin for the
past three years is 24.2%, we believe this is a relatively conservative estimate.

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Please see page 16. This shows past trends in inventory based on expected disposition value.
The figure on the far right is an estimated disposition value of JPY188.1 billion for inventories held as of theend of May 2024. Inventory in the development business decreased by JPY2 billion from the end of theprevious period to JPY76 billion worth, while inventory in the revitalization business increased by JPY6.9 billion
from the end of the previous period to JPY112 billion. In recent years, construction costs have skyrocketed,
and we have been purchasing properties in order to focus on revitalization rather than development, and thisstrategy is reflected in changes in inventories.
In addition, the balance between inventories and sales is shown in the bottom row. The middle section shows
the inventory at the beginning of the period was JPY183.1 billion, compared with planned revenue of JPY64.5
billion in the revitalization and development businesses for the current fiscal year, so we will have roughly
two to three years’ worth of inventory with which to increase profits in a stable manner.

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Please see page 17. This shows the status of fixed assets.
There is no change in the figures and the number of properties from the end of the previous fiscal year, but
we estimate the book value to be JPY67.5 billion and the fair value to be JPY129.1 billion. The blue column inthe table on the right shows JPY61.6 billion in unrealized gains, and if we were to sell the properties, we would
have to deduct corporate tax, so we estimate that there would be JPY41.3 billion in unrealized gains after tax.
We calculated the figures per share as shown again on the bottom left, total equity per share is JPY1,837, andthe unrealized gains of JPY41.3 billion per share is JPY852, for a total NAV of JPY2,689.

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Finally, please see page 18. This shows the status of borrowings from financial institutions.
The average borrowing rate at the end of Q2 was 1.156%, up 0.083 points from the end of the previous period.
Although there is a sense of high interest rates, we recognize that financial institutions' lending attitudes are
generally favorable.
Considering the length of time we hold inventories, the majority of our borrowing is based on TIBOR, so weare affected by the current rise in market interest rates. The Bank of Japan is expected to raise interest rates
once or twice this year, and we must incorporate such concerns about rising interest rates into our future
management plan.
However, since a sharp rise in interest rates is not expected at this time, we believe that we can adequately
control the situation by raising rental income and securing gross profit in the revitalization and development
businesses.
That concludes my presentation. Thank you very much.
Moderator: Continuing from page 22, President Yamaguchi will now explain business developments during
H2 of the fiscal year ending November 30, 2024.

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Yamaguchi: My name is Yamaguchi, as I was introduced earlier. I would like to review H1 of the fiscal year,
which Fujiwara explained, and talk about business developments in H2.
Please turn to page 23. First, let’s look at the H1 performance trends shown in the top section.
First, profit before tax was JPY14.3 billion, more than 87% of the full-year plan of JPY16.5 billion, as therevitalization and development businesses led profit.
The reason for this is that we had a conservative business plan that assumed a slight adjustment in profit
margins due to rising interest rates in the market, but this did not end up having much influence. And, as I will
explain later, investors have been quite impressed with our development capabilities and our Eco Friendly
revitalization capabilities.
Second, we have just concluded a capital and business alliance with Nagoya Railroad Co., Ltd. We will explain
the details of this later.
Third, the hotel business has been very strong, with ADR up 15%-20%.
The fourth is related to support for business succession to real estate holding companies. We have been able
to acquire prime real estate through real estate M&A, which has very few rivals, and acquisition have beenfavorable in H1 of the year. We have built up a track record of 21 deals, including business succession, andare now able to receive considerable amount of M&A information.
The middle area of the slide shows our understanding of the external environment.

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First is about the macro environment, with domestic and foreign investors continuing to invest in Japanesereal estate due to the favorable financing environment. As we have previously mentioned, there was someconcern that there might be an adjustment due to the high interest rates, and last year, due to the decline in
the US office market and the fall in Chinese real estate, there were signs of restrained investment in offices,
especially by US investors, but the market is now recovering quite well.
Second, the yen is very weak, so this is positive for the hotel environment and hotel revenue.
Let's skip ahead a little and talk about the concerns. The first concern is that the yield spread is shrinking,which is discouraging the investment appetite of investors. Since the COVID-19 pandemic, cap rates have been
gradually declining, in other words, real estate prices have been rising, and if interest rates rises, the yieldspread will shrink, so we have to watch the market closely.
The second is the decline in end-users' willingness to purchase due to higher mortgage rates. For example, inthe condominium and detached house markets, we have already seen a slight shrinkage in some areas aroundTokyo due to rising asset prices. We believe that any future increase in mortgage rates will require us to watch
for the possibility of a further decline in demand.
And the third is the rising cost of construction materials. Price hikes, especially for RC construction, have notstopped. We are shifting our investments from RC development to revitalization of existing buildings, and towooden structures such as detached houses and apartments, which price rise is relatively moderate.

I would like to proceed to page 24. The weather forecast for the real estate market is shown here.
I would like to mention two points that have changed.
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First, regarding offices in the top row, the forecast has been changed from a cloudy mark in the previous
forecast to sunny with partial cloud.
As I have explained a number of times, office vacancy rates rose sharply in the year before last due to the
spread of remote work after the COVID-19 pandemic, but occupancy rates have been rising steadily since lastyear. Vacancy rates have bottomed out and, moreover, rents in the Tokyo area are rising.
The investment environment for small- to mid-sized offices, which is our specialty, has high liquidity and very
popular with investors. Thus, we have changed our mark from cloudy to sunny with partial cloud.
The second change is the private placement fund market in the third row from the bottom, which has changed
from a sunny mark to a mark of sunny with partial cloud.
Last year, the balance of privately placed funds increased by JPY5 trillion to JPY35 trillion, so we had marked
it as sunny. Although currently there are many active investors, we have heard some opinions that core
investors are becoming more cautious about the future rise in interest rates and the shrink of yield spreads.
Therefore, we have set the mark as sunny with partial cloud. In addition, the balance of assets undermanagement by J-REITs is JPY23 trillion and that by private funds is JPY35 trillion, and taking into account thefact that the supply of prime properties is decreasing considerably, we have added some cloudy marks.

We will proceed to page 25. This details the capital and business alliance with Nagoya Railroad, which we havealready announced.

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Please see the bottom row on the right. These four points are about trying to promote joint projects in the
future.
First, on the left, is to begin initiatives for large-scale properties. In the past, investment in assets or bulk
investment ranging from JPY10 billion to JPY20 billion was a major undertaking for Tosei. In the future, wewould like to work with Nagoya Railroad to invest in large-scale assets because we can invest with them when
there are development investment opportunities of JPY30 billion or JPY40 billion or JPY50 billion.
Next, second from the left, is real estate investment in Nagoya area. Nagoya Railroad has excellent
infrastructure and information in Nagoya area, and we would like to work with Nagoya Railroad to seek
investment opportunities, especially in the revitalization of small- to mid-sized buildings, which is Tosei's
specialty.
The third point is the expansion of real estate private placement funds. Since last year, our group has been
number one in Japan in terms of assets under management, and we are aiming to create a private fund withassets in the Nagoya area together with Nagoya Railroad, by utilizing our asset management capabilities andknow-how of the private placement funds. We would then like to promote the acquisition of AM fees with
Nagoya Railroad.
And finally, is the tech business. The group has been ahead of the curve in issuing ST, security tokens, the firstof which was listed on the ADDX in Singapore.
As I will discuss later, we have issued a fourth security token backed by assets in the Tokyo area. In addition,
we have established a 10th fund for crowdfunding. We are considering promoting projects with the aim of
issuing STs backed by assets in Nagoya area, as well as offering and issuing STs to people in the Nagoya area,
including fans of Nagoya Railroad.

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Please refer to page 26 for the progress made in H1 of the fiscal year ending November 30, 2024, and segment
information compared to full-year targets.

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I would like to go over each segment again.
First, we have the real estate revitalization business on page 27.
In H1 of the fiscal year, Tosei's efforts were well received, with revenue of JPY29.3 billion compared with afull-year target of JPY45.8 billion and operating profit at more than 90% of the full-year forecast. For H2 of theyear, we will accelerate acquisitions.
On the right side of the page, you will see our policy for Sustainable Added Value. The three codes for value
improvement, as shown in the boxed area, are Eco Friendly, Well-being, and Resilience. Our real estate
revitalization efforts, which make full use of these three codes, have been well received by both individual
and institutional investors, and we intend to continue to promote value enhancement.
Below that you can see our work in pre-owned condo units. We believe that our investment activities fromlast year to this year, in which we focused on high-end condominiums and tower condominiums in the central
wards of Tokyo, have returned a positive result.
We are engaged in sales of renovated high-end residential properties ranging from JPY100 million-JPY200
million to about JPY500 million, and we intend to promote sales of high-end products to wealthy people whileclosely monitoring market conditions.

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Page 28 is about the real estate development business.
Revenue reached JPY14.3 billion, progressed to 76.9% of the full-year target of JPY18.6 billion. Gross profit isalready JPY5.6 billion, more than 90% of the full-year target of JPY6.2 billion, so we do not see any problem inachieving the full-year target.
In H2 of the fiscal year, we intend to focus on sales of the remaining high-priced detached houses, etc. In
addition, as shown in the middle of the right-hand side of the page, we will create wood-frame rental
apartments of JPY200 million to JPY300 million as investment properties for the wealthy individuals. We
currently have about 20 buildings in inventory and development plans, and we have already sold threecompleted buildings, and we feel that the market is responding very well. We would like to expand this areasignificantly over the medium to long term.
While it is difficult to pass on the increased construction costs of RC construction to projects, the construction
costs of wooden construction are rising moderately, and I believe we can adequately respond to the market
if we create quality apartments.
We would like to make full use of Tosei's originality in these apartments as well, such as by adding lofts or bysoundproofing the apartments so that people can enjoy music, rather than building ordinary apartments.

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Continuing on, page 29 shows our development plan.
As you can see at the bottom of the right-hand column, we already have a pipeline of more than JPY76 billion
in the development business, which, when combined with the revitalization business, is equivalent to
JPY188.1 billion.
Since our announced revenue plan for the fiscal year ending November 2024 is approximately JPY64 billion,
we have just under three years' worth of inventories, and we are in a situation where we have a sufficientpipeline for medium- to long-term growth. Furthermore, I would like to reiterate that acquisitions are on track
for the current fiscal year as well, making full use of M&A.

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Next is page 30.
The upper section shows progress of JPY64.3 billion toward the target of JPY100 billion in acquisition, and thelower section shows our use of M&A in acquisitions.
Just for potential M&A alone, we have already received information equivalent to JPY60 billion. Due to thecircumstances of the other party, we do not know whether our initiatives will blossom in H2 of this year or in
the next fiscal year, but we would like to work hard on acquisitions through M&A.

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Page 31 is about the real estate fund and consulting business.
We are on track with revenue of JPY3.6 billion in H1 of the year, which is 52.9% of our full-year sales forecastof JPY6.9 billion for the fiscal year ending November 30, 2024.
The reason for the drop in the full-year revenue forecast for the fiscal year ending November 2024 comparedto the revenue of JPY7.3 billion in the year that ended November 30, 2023, is due to spot fees received lastyear, such as for the Otemachi Place project, which was commissioned for more than JPY400 billion. This year,
we plan to achieve new AUM of JPY350 billion with net AUM of JPY200 billion without any big-hitting deals,
and we are generally on track to do that.
We have shown Pie charts at the bottom right of the page.
The pie chart on the left shows the current allocation of investors in each country. We have good balance,with 34% of investors in the US, 13% in Europe, 20% in Asia, and 30% in Japan. During the growth period, theratio of US investors was very high, but we believe that we have been able to achieve balanced allocation
through our efforts over the years.
Regarding the fund investment style in the middle, the ratio of the core type is 64%. In the early days, theproportion of opportunistic types was high and they would often sell within one or two years, resulting in adecrease in AUM, but with the increasing proportion of core types, which generally have an investment period
of about five years, the style has changed to one that can maintain AUM for a long time.
Regarding asset types, as shown in the pie chart on the far right, I would like to explain the diverse asset
composition, including residential, office, and logistics.
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Page 32 gives additional explanation of the fund business.
In particular, the right side of the page shows the utilization of prop tech.
In the security token business, we are managing 4 funds with total AUM of JPY11.1 billion, and we are
increasing our track record step by step. We are currently considering listing (handling) the security token
issued for the Ichigaya property in H1 of the year, on to the Osaka Digital Exchange (ODX).
As for the real estate crowdfunding business shown on the lower right-hand side of the page, we have built
up a considerable track record with a total of 10 funds, and we are looking to increase the number of users
each fiscal year.

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Please go to page 33. This is the hotel business.
The revenue in H1 was JPY3 billion compared with the full-year target of JPY5.5 billion. The GOP, in particular,
was JPY1,587 million compared with the target of JPY2.6 billion, progressing more than 59%. This is due tothe fact that ADR is higher than when the forecast was established due to the effect of inbound tourism.
We believe that H2 of the year will also be favorable, barring any particular negative events. In addition, thecompany has resumed considerations on new hotel investments. Within our portfolio of assets, we are
currently considering one new development and two properties for conversion from offices to hotels. If
possible, we would like to supply about two hotels each fiscal year to promote Tosei's hotel brand.

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Lastly, on page 35, we have our shareholder return policy.
This fiscal year is the first year of the new medium-term plan Further Evolution 2026, and we have announced
a plan to raise the dividend payout ratio to 35% during the period of this plan. We would like to generate
stable profits and stable dividends.
This concludes my explanation. Thank you for your attention.
Moderator: Thank you very much.

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Question & Answer

Moderator [M]: We will now answer your questions in turn.
Participant [Q]: The hotel business showed good profit progress in H1 of the year. Do you expect to record
larger renovation and other expenses in H2 of the year, or were you conservative and left your forecast
unchanged? Also, please tell us about any specific future hotel investment plans you are considering, such as
location, timing, etc.
Yamaguchi [A]: The reason we are leaving the full-year forecast unchanged is precisely because we took aconservative view and did not revise it upward, and we do not have any major renovation plans. We will
monitor Q3 and Q4 results and work to achieve an upward revision.
As for future hotel plans, as I mentioned earlier, there are three projects under consideration. One involves
considering development at a location in front of a station in Chigasaki City, Kanagawa Prefecture. We also
have office properties in Kamata, in Ota ward, and Shintomicho, in Chuo ward, and are considering convertingthem from offices to hotels.
Participant [Q]: Regarding the fund business, AUM growth in Q2 was somewhat sluggish. Is the situation thatinvestors in Europe and the US are returning slower than expected? Please tell us about the current
contracting environment and the outlook for the future.
Yamaguchi [A]: The new additions to AUM are about JPY145 billion, which compared to the JPY175 billion
target for H1 and is about 85% of the target. Although you have pointed out that the progress is sluggish,fundamentally we are steadily increasing the balance.
Regarding the return of investors from Europe and the US, we have been told to do pricing or to do due
diligence, but our initiatives did not blossom in H1 of the year. Among European and US investors, we havehigh expectations for H2 of the year and beyond, as the momentum for resumption of investment is growing
among the clients we have entrusted with AUM.
Participant [Q]: You are making good progress toward achieving your full-year plan, but how do you see thepossibility of exceeding the plan? Also, the acquisition progress seems to be a little weak, so what are yourthoughts on the probability of achieving full year target? I would also like to know about any M&A deals thatyou are considering or can see.
Yamaguchi [A]: Particularly with regard to profit before tax, we reached 87% in H1, so we naturally believethat there is a possibility of an upward revision. We will carefully consider how the financial results will lookafter observing the future acquisition situation and sales activities up to Q3, and we will make anannouncement at the appropriate time.
Although there was some talk of a slight weakening in acquisition, we believe that acquisition is basically on
track, since it is just over JPY64 billion compared to the full-year target of JPY100 billion. We also have apipeline of M&A deals totaling more than JPY60 billion. Due to the circumstances of the other parties, we do
not know whether all of these will blossom in H2 of the year or next term, but we would like to carefully
nurture them.
Participant [Q]: You have indicated various possibilities for the capital and business alliance with Nagoya
Railroad. Are there any projects that are already underway at the moment, or are there any areas where you
expect to contribute to your company's performance early in the future?
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Yamaguchi [A]: We just concluded a capital and business alliance at the end of May, and I just had a kick-off
meeting with members of Nagoya Railroad last week. We have begun our own due diligence and pricing of
Nagoya Railroad's assets, and are currently exploring joint projects and other opportunities.
In addition, since June, after the announcement of this business alliance, while we are in Tokyo, we have been
receiving quite a bit of information on real estate in Nagoya. We would like to gather information, including
confirmation that Nagoya Railroad is aware of this information and the possibility of joint projects or joint
investments, and link this to future investments. It is this month that we are finally beginning to discuss suchjoint projects.
Moderator [M]: That concludes the question-and-answer session.
This concludes the Tosei Corporation financial results briefing for Q2 of the fiscal year ending November 30,
2024. Thank you very much for joining us today.
[END]______________
Document Notes
1.
2.
3.
4.

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TollfreePortions of the document where the audio is unclear are marked with [inaudible].
Portions of the document where the audio is obscured by technical difficulty are marked with [TD].
Speaker speech is classified based on whether it [Q] asks a question to the Company, [A] provides ananswer from the Company, or [M] neither asks nor answers a question.
This document has been translated by SCRIPTS Asia.

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