Company Research and Analysis Report
FISCO Ltd.
http://www.fisco.co.jp

BEENOS Inc.
3328 Tokyo Stock ExchangeFirst Section

7-Dec.-16

Important disclosuresand disclaimers appear
at the end of this document.
FISCO Ltd. Analyst
Yuzuru Sato伪伪Achieved record-high sales and operating profit in
FY9/16
BEENOS Inc. (3328) engages in various electronic commerce (e-commerce) and incubation
businesses. The e-commerce businesses are comprised of the cross border business (overseas
forwarding and proxy purchasing operations and global Internet shopping operations), the value
cycle business (trading pre-owned brand goods via the Internet), and the retailing and licensing
business (product production and licensing operations and Internet shopping operations). In October
2016, its listing was transferred from the Tokyo Stock Exchange (TSE) Mothers to the TSE First
Section. Also, its subsidiary Defactostandard, Ltd. (3545), which operates its value cycle business,
was listed on the TSE Mothers in August 2016.
In the FY9/16 consolidated results, sales increased 13.5% y-o-y to ¥19,228mn and operating profit
rose 1.4% to ¥1,201mn, both of which were record highs. In the mainstay e-commerce businesses,
from Q3 onwards overseas forwarding and proxy purchasing operations slumped due to thestrengthening of the yen, but in the other operations, sales steadily increased 13.4% y-o-y, anddouble-digit growth was once again achieved. However, operating profit decreased 2.6% becauseof higher expenses to build the foundations for growth, including personnel expenses and systemdevelopment expenses. On the other hand, in the incubation businesses, operating profit rose 3.9%
y-o-y following the recording of a gain on the sale of operational investment securities.
The forecasts for FY9/17 are for increases in both sales and profits, with sales to rise 4.0% y-o-y to¥20,000mn and operating profit to climb 16.6% to ¥1,400mn. Within the e-commerce businesses, it
is expected that results will be sluggish in the cross border business due to the effects of the strong
yen, but that this slump will be covered by the strong performances of the value cycle business andthe retailing and licensing business. Sales and profits are also forecast to increase in the incubation
businesses.
Going forward, the Company is aiming to achieve annual double-digit growth in the e-commercebusinesses. Specifically, for the mainstay cross border business, it is adding to its lineup of newservices, in addition to expanding the scale of transactions for cross border e-commerce. For its
incubation businesses, while securing capital gains, the Company is aiming to create new businesses
in-house in addition continuing to invest in Internet venture companies in developing countries,
focusing on India.

伪伪Check Point• Despite being affected by the strong yen, sales and profits achieved record highs• The cross border business achieved record highs for transaction values and sales, but
operating profit declined due to upfront costs• Sales and profits (operating profit and recurring profit) are forecast to increase in FY9/17
also

We encourage readers to review our complete legal statement on “Disclaimer” page.
1

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BEENOS Inc.

㻝㻥㻘㻞㻞㻤

㻞㻜㻘㻜㻜㻜

3328 Tokyo Stock ExchangeFirst Section㻤㻜㻜㻝㻢㻘㻥㻟㻢

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7-Dec.-16
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Important disclosuresand disclaimers appear
at the end of this document.

㻙㻠㻜㻜㻲㼅㻥㻛㻝㻞

㻲㼅㻥㻛㻝㻟FISCO Ltd. Analyst
Yuzuru Sato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

伪伪Description of BusinessComprised of the twin pillars of the e-commerce & incubation
businesses
The Company’s operations can be broadly divided into e-commerce and incubation businesses. Its
e-commerce businesses may be further divided into the cross border business (overseas forwarding
and proxy purchasing operations and global Internet shopping operations), the value cycle business(trading of pre-owned brand goods over the Internet), and the retailing and licensing business(product production and licensing operations and Internet shopping operations). The incubation
businesses include new businesses developed in-house and a business that invests in and nurtures
Internet ventures in Japan and abroad. These businesses are described in greater detail below.
(1) Cross border businessThis business is comprised of two consolidated subsidiaries; tenso, Inc., which operates two sites
including tenso.com, an overseas forwarding operation (proxy shipping of goods) and Buyee.jp, aproxy purchasing operation for consumers residing overseas, and Shop Airlines, Ltd., which operates
the “sekaimon” global online shopping site. The sales of both subsidiaries are from handling fees
based on transaction values.
tenso.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 inJapan but the operator of that site does not ship goods overseas, tenso will, for a fee, ship (forward)
the goods to the users on their behalf. Users are able 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 fromas low as ¥50 (depending on total shipment weight).
tenso also operates Buyee.jp, which serves as a proxy for purchasing and bidding for mail order
goods and goods auctioned over the Internet in Japan. As PayPal and Alipay can be used for thepayment method, the purchase procedure is multilingual, product descriptions are automaticallytranslated into foreign languages, and transaction values from the Buyee.jp site are expanding. Feeson the Buyee.jp site were revised in December 2015 (reduced from 10% of the purchase or auction
price to 5%), and to be free on Amazon Japan K.K., Rakuten Ichiba (Rakuten, Inc., 4755) and Yahoo!
Shopping (Yahoo Japan Corporation, 4689) (with, however, a flat fee of ¥150 for products priced
under ¥3,000 and a ¥200 fee per successful auction at Yahoo! Auctions).
Currently, with 84 countries and regions to which goods may be shipped, customer support services
in 4 languages, and tie-ups with 1,420 domestic e-commerce sites, the Company is establishing a
position as the number one in the industry in terms of the number of items shipped overseas.

We encourage readers to review our complete legal statement on “Disclaimer” page.
2

■■Description of Business

The two services provided by tenso

BEENOS Inc.
3328 Tokyo Stock ExchangeFirst Section

7-Dec.-16

Important disclosuresand disclaimers appear
at the end of this document.
Source: BEENOS Inc.

FISCO Ltd. Analyst
Yuzuru Sato

Comparison of the tenso.com and Buyee.jp Sites

Source: BEENOS Inc.

On the other hand, “sekaimon,” operated by Shop Airline, is a Japanese language compatible
auction site authorized by eBay Inc., one of the largest online marketplaces in the world. Currently“sekaimon” handles products listed on overseas EC sites in four countries – namely the US, the UK,
Germany, and Austria – and charges a fee of 15% of the auction price (or for lower auction prices, afixed fee that was revised from ¥500 to ¥800 in February 2016).
(2) Value Cycle BusinessThis is a business for buying and selling pre-owned brand goods via the Internet. It is operated
by consolidated subsidiary Defactostandard (the Company’s investment ratio, 57.8%) and it is theindustry leader in terms of its track record of purchases and sales over the Internet. With its Brandear
auction site as the first point of contact, it purchases goods using commercial home delivery services
and sells these goods through Japanese and overseas Internet auction sites. The Company’s
strategy is to expand purchase numbers by securing multiple purchasing channels through tie-ups
with other companies, including Yamada Denki Co., Ltd. (9831) and each of the co-op store-relatedsites, in addition to its own proprietary site.

We encourage readers to review our complete legal statement on “Disclaimer” page.
3

■■Description of Business

Defactostandard handles over 7,000 categories of goods focusing on the fashion sector, ranging
from designer clothing to designer handbags, precious metals, and watches. One of the Company’s
strengths is its purchasing and appraisal capabilities, having developed its own system to quickly
appraise and purchase a diverse range of goods at a fair price.

BEENOS Inc.
3328 Tokyo Stock ExchangeFirst Section

Conversely, from a sales perspective, its strength is that it has developed its own proprietary systemthat facilitates efficient 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, in FY9/16 Defactostandard was awarded its “Annual Best StoreOverall Grand Prix” for the seventh straight year.
(3) Retailing and Licensing Business

7-Dec.-16

Important disclosuresand disclaimers appear
at the end of this document.
FISCO Ltd. Analyst
Yuzuru Sato

This business is comprised of operations for the production and licensing of goods, and Internet
shopping operations.
Its subsidiary monosense, Ltd. provides a one-stop service for the licensing of rights to produce
goods endorsed by celebrities and other well-known public figures, the planning and development ofsuch goods, the sales of those goods through e-commerce sites, the promotion of their sales, andthe management of their licensing. It sells official goods at events where licensed pop groups appear
and manages and operates their official e-commerce sites, recording sales from commissions, which
are set at a fixed percentage of goods sold.
At the same time, at its netprice Internet shopping site, operated by consolidated subsidiary netprice,Ltd., the Company develops product lineups and retailing methods for distinctive goods, such as
24-hour sale goods, original goods developed with manufacturers, and goods jointly planned anddeveloped with celebrities and other well-known public figures. The netprice Internet shopping site
has more than 2.2 million cumulative registered users. Women make up about 78% of the netpriceonline shopping site membership, with, by age group, people in their thirties and forties comprising
just over 70% of the membership.
(4) Incubation businesses
The incubation businesses are comprised of investing in and nurturing Internet venture businesses
in Japan and overseas, 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 stakes of 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 nurture these 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 inInternet 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 in Internet businesses in Japan.

We encourage readers to review our complete legal statement on “Disclaimer” page.
4伪伪Business Trends
Despite being affected by the strong yen, sales and profits
achieved record highs

BEENOS Inc.
3328 Tokyo Stock ExchangeFirst Section

7-Dec.-16(1) FY9/16 Results Summary
In the FY9/16 consolidated results, sales increased 13.5% y-o-y to ¥19,228mn, operating profit rose
1.4% to ¥1,201mn, recurring profit climbed 5.5% to ¥1,212mn, and net profit attributable to ownersof the parent increased 6.0% to ¥951mn, for record highs for both sales and profits. Compared to
the Company targets, sales were slightly below target due to the slump in the cross border businessfrom the effects of the strengthened yen, but in the incubation businesses, the recording of a gainon the sale of operational investment securities surpassed the initial forecast, and as a result, total
operating profit exceeded the initial target.
Consolidated FY9/16 Results

Important disclosuresand disclaimers appear
at the end of this document.
FISCO Ltd. Analyst
Yuzuru Sato

FY9/15Results

vs. Sales

36,597
16,936
15,895
1,040
8,068
7,683
1,184
770
744
-329
1,148

93.9%
6.1%
47.6%
45.4%
7.0%
4.5%
4.4%
6.8%

Company
target43,00019,60018,800
800
1,000
870
500
-370
950

898

5.3%

650

Transaction values
Sales
E-commerce
Incubation
Cost of sales
SG&A expenses
Operating profit
E-commerce
Incubation
Adjustment
Recurring profit
Net profit attributable toowners of the parent(Unit: ¥mn)

FY9/16
Results

vs. Sales

y-o-yvs. Target

40,052
19,22818,025
1,203
9,179
8,847
1,201
750
773
-322
1,212

93.7%
6.3%
47.7%
46.0%
6.3%
3.9%
4.0%
6.3%

+9.4%
+13.5%+13.4%+15.6%+13.8%+15.1%
+1.4%
-2.6%
+3.9%
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-6.9%
-1.9%
-4.1%
+50.4%+20.1%-13.7%+54.7%+27.6%

951

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+46.4%In the mainstay e-commerce businesses, transaction values increased 9.4% y-o-y to ¥40,052mn
and sales rose 13.4% to ¥18,025mn, but operating profit declined 2.6% to ¥750mn, for an increasein sales but a decrease in profits. Transaction values and sales rose in all of the business segments,
but overseas forwarding and proxy purchasing operations slumped from Q3 onwards due to the rapid
strengthening of the yen. In addition, profits declined because of the higher expenses in order to build
the foundations for growth, including personnel expenses, systems development expenses, andpromotional expenses. SG&A expenses for the Company as a whole increased ¥1,164mn. Breaking
this down, personnel expenses rose ¥447mn, advertising and sales promotions expenses increased¥177mn, development expenses and other fixed expenses climbed ¥437mn, and variable expenses
rose ¥104mn, with the majority of these increases taking place in the e-commerce businesses.
Conversely, a gain on the sale of operational investment securities was recorded in the incubation
businesses, and as a result of the above factors, sales increased 15.6% to ¥1,203mn and operating
profit rose 3.9% to ¥773mn.

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We encourage readers to review
our complete legal

5

■■Business Trends㼀㼞㼑㼚㼐㼟㻌㼕㼚㻌㼎㼞㼑㼍㼗㼐㼛㼣㼚㻌㼛㼒㻌㻿㻳㻒㻭㻌㼑㼤㼜㼑㼚㼟㼑㼟㼂㼍㼞㼕㼍㼎㼘㼑㻌㼑㼤㼜㼑㼚㼟㼑㼟㻻㼠㼔㼑㼞㻌㼒㼕㼤㼑㼐㻌㼑㼤㼜㼑㼚㼟㼑㼟㻼㼑㼞㼟㼛㼚㼚㼑㼘㻌㼑㼤㼜㼑㼚㼟㼑㼟㻭㼐㼢㼑㼞㼠㼕㼟㼕㼚㼓㻌㼑㼤㼜㼑㼚㼟㼑㼟＋㼟㼍㼘㼑㼟㻌㼜㼞㼛㼙㼛㼠㼕㼛㼚㼟㻌㼑㼤㼜㼑㼚㼟㼑㼟(¥mn)
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BEENOS Inc.

㻤㻘㻜㻜㻜

3328 Tokyo Stock ExchangeFirst Section

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7-Dec.-16

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Important disclosuresand disclaimers appear
at the end of this document.

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㻲㼅㻥㻛㻝㻢FISCO Ltd. Analyst
Yuzuru Sato

㻝㻘㻠㻤㻢



The cross border business achieved record highs fortransaction values and sales, but operating profit declined
due to upfront costs(2) Trends by Business Segmenta) Cross border businessIn this business, transaction values increased 3.3% y-o-y to ¥21,561mn (Company target, ¥26,000mn)
and sales rose 23.9% to ¥3,839mn (¥3,800mn), but operating profit declined 37.4% to ¥265mn.
Due to changes in the market environment, including the rapid strengthening of the yen from Q3
onwards, both transaction values and sales slumped in overseas forwarding and proxy purchasing
operations, but over the full fiscal year, each achieved record highs. Conversely in terms of profits, inorder to build an overwhelmingly position as the number one company in the industry, the Company
conducted upfront investment, including in personnel expenses, promotional expenses, and systems
development expenses, and as a result, profits declined. The reason why the growth rate for sales
exceeded that for transaction values was that while the number of items handled increased, thestrengthening of the yen caused a decline in unit prices, and also due to the effects of reviewing theminimum fee unit price during the period in the global shopping business. The full fiscal year results
were an increase in sales and a decrease in profits for the overseas forwarding and proxy purchasing
operations, and an increase in sales and a return to profitability in the global shopping business.

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We encourage readers to review our complete legal statement on “Disclaimer” page.
6

■■Business Trends

BEENOS Inc.
3328 Tokyo Stock ExchangeFirst Section

Looking at the results trends on a quarterly basis, in Q4 transaction values decreased 9.9% comparedto the same quarter in the previous fiscal year and 12.2% compared to the previous quarter, forthe second consecutive quarter of negative growth. In overseas forwarding and proxy purchasing
operations, the main factors behind the decline in transaction values were the effects of the stronger
yen, in addition to the fall in demand, particularly for high-priced products, following the rise in EMS
shipping costs (¥300 to ¥500) from June 2016. In particular, the Chinese market, which is the main
selling destination, was sluggish from Q3 onwards. Looking at the exchange rates, the yen trended in
the range of ¥15 to the Chinese yuan in July to September 2016, meaning the yen was around 20%
stronger than in the same period in the previous fiscal year.

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7-Dec.-16

㻣㻘㻜㻜㻜

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Important disclosuresand disclaimers appear
at the end of this document.

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㻿㼍㼘㼑㼟㻌㻔㼞㼕㼓㼔㼠㻌㼍㼤㼕㼟㻕

㻥㻜㻜
㻣㻡㻜

㻢㻡㻢

㻠㻘㻜㻜㻜
㻟㻘㻜㻜㻜

FISCO Ltd. Analyst
Yuzuru Sato

㻝㻘㻜㻡㻜

㻢㻜㻜
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
㻡㻘㻟㻟㻝

㻞㻘㻜㻜㻜

㻠㻡㻜
㻠㻘㻢㻤㻝

㻝㻘㻜㻜㻜

㻟㻜㻜
㻝㻡㻜

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



As the initial measures in overseas forwarding and proxy purchasing operations, the Company revised
its fees from December 2015 in order to increase the number of users, reducing the usage feesfor Buyee.jp, in addition to establishing a system of paid-for options. From the previous settlement
system that was based on the Japanese yen, it is now possible to pay for purchases in 28 major
currencies. In addition, the Company has been working to improve services in Taiwan by making
shipped packages available for pick up at convenience stores, following on from FamilyMart and
7-Eleven stores where the service has been available since September 2016. Through this initiative,
the number of subscribers to tenso.com and Buyee.jp increased by approximately 40%, from 700,000
people at the end of the previous fiscal year to 1 million people at the end of September. Althoughtransaction values for China are struggling, they are expanding steadily for Taiwan, Southeast Asia,and the US.
The number of companies using the Company’s services are also trending upward. The cumulative
number of affiliated sites at the end of September was 1,420 sites, a significant increase from the
800 sites at the end of the previous fiscal year. In this way, the Company is steadily establishing its
position as the number one platform company for cross border e-commerce in the industry.

We encourage readers to review our complete legal statement on “Disclaimer” page.
7

■■Business Trends㻿㼡㼎㼟㼏㼞㼕㼎㼑㼞㻌㻺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㻚㼖㼜㻌㼍㼚㼐㻌㻭㼒㼒㼕㼘㼕㼍㼠㼑㼐㻌㻿㼕㼠㼑㼟㻔㼟㼕㼠㼑㼟㻕

㻭㼒㼒㼕㼘㼕㼍㼠㼑㼐㻌㼟㼕㼠㼑㼟㻌㻔㼘㼑㼒㼠㻌㼍㼤㼕㼟㻕㻿㼡㼎㼟㼏㼞㼕㼎㼑㼞㼟㻌㻔㼞㼕㼓㼔㼠㻌㼍㼤㼕㼟㻕
㻥㻠
㻤㻢

㻝㻘㻡㻜㻜

㻔㻝㻜㻘㻜㻜㻜㻌㼟㼡㼎㼟㼏㼞㼕㼎㼑㼞㼟㻕
㻝㻜㻜
㻝㻜㻜

㻣㻤
㻝㻘㻞㻜㻜

BEENOS Inc.

㻢㻝

3328 Tokyo Stock ExchangeFirst Section

㻥㻜㻜

㻡㻡

㻢㻜

㻠㻣

㻢㻜㻜

7-Dec.-16

㻟㻜㻜

㻝㻘㻝㻜㻜
㻡㻡㻜

㻝㻡㻛㻝㻽

㻝㻡㻛㻞㻽

㻝㻘㻟㻡㻜

㻝㻘㻠㻞㻜
㻠㻜

㻤㻜㻜

㻣㻜㻜

㻡㻜㻜

㻝㻘㻞㻜㻜

㻞㻜

㻜

Important disclosuresand disclaimers appear
at the end of this document.

㻜
FISCO Ltd. Analyst
Yuzuru Sato

㻤㻜

㻣㻜

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



On the other hand, the number of users in the global shopping business steadily increased,
supported by the strengthened yen. This increase was also as a result of the major improvements
to user convenience, including that the “sekaimon” site was renewed in Q2 and the user interface
improved. In addition, the Company installed on the site its proprietary recommendation engine.
In the new user interface, the costs other than the price of the product, such as an estimate of theinternational shipping costs, are now displayed in an easy-to-understand manner at the time theproduct is purchased. Previously, the purchaser was notified of the shipping costs after the weight
was measured when the product arrived at the warehouse, but in the new interface, the shipping
estimate is displayed based on past results data, which enables more safe and secure shopping.
In profits, the operating loss continued up to Q2, but achieved profitability from Q3 onwards andoperating profit was recorded for the full fiscal year. In terms of the measures to improve profitability,
the Company reduced costs, including by moving in-house the US warehouse and the customer
center, and changing the forwarder (the international shipping company), at the same time as
improving service quality. Raising the lowest-bid fee from ¥500 to ¥800 from February 2016 also
contributed to the improved profits.

In the value cycle business, sales and operating profit wereboth record highsb) Value cycle businessIn this business, sales increased 11.7% y-o-y to ¥9,627mn (Company target, ¥10,000mn) andoperating profit rose 81.9% to ¥322mn, which were record highs and also basically in line with theCompany targets. Demand was strong for purchases of pre-owned brand goods via the Internet, anddouble-digit growth continued as the Company strengthened its handling of a wide range of brandproducts. Profits also increased, as while on the one hand promotional expenses rose, including for
TV commercials, on the other hand, in addition to the effect of the higher sales, progress was madein improving the costs structure through enhancing in-house operations and utilizing outsourcing.
At the end of August 2016, Defactostandard, which operates this business, was listed on the TSE
Mothers. This listing will improve its credibility and recognition, in addition to enabling it to raiseworking capital and strengthen its financial base, as it aims to achieve further growth in profits andimprove its corporate value. The Company’s investment ratio was lowered from 80.3% to 57.8%
following the issue of new shares, but going forward the plan is to maintain the capital relationshipas a consolidated subsidiary.

We encourage readers to review our complete legal statement on “Disclaimer” page.
8

■■Business Trends㼂㼍㼘㼡㼑㻌㻯㼥㼏㼘㼑㻌㻮㼡㼟㼕㼚㼑㼟㼟㻌㻾㼑㼟㼡㼘㼠㼟㻌㼀㼞㼑㼚㼐㼟(¥mn)

㻿㼍㼘㼑㼟㻌㻔㼘㼑㼒㼠㻌㼍㼤㼕㼟㻕(¥mn)

㻻㼜㼑㼞㼍㼠㼕㼚㼓㻌㼜㼞㼛㼒㼕㼠㻌㻔㼞㼕㼓㼔㼠㻌㼍㼤㼕㼟㻕㻝㻞㻘㻜㻜㻜

㻟㻞㻞㻝㻜㻘㻜㻜㻜

BEENOS Inc.

㻟㻜㻜

㻤㻘㻜㻜㻜

3328 Tokyo Stock ExchangeFirst Section

㻢㻘㻜㻜㻜

㻞㻠㻜
㻝㻠㻥

㻝㻤㻜

㻤㻘㻢㻞㻞

㻥㻘㻢㻞㻣

㻝㻞㻜

㻢㻘㻟㻤㻣
㻞㻘㻜㻜㻜

㻠㻘㻟㻢㻝

㻢㻜

㻜

Important disclosuresand disclaimers appear
at the end of this document.

㻜㻲㼅㻥㻛㻝㻟

㻲㼅㻥㻛㻝㻠FISCO Ltd. Analyst
Yuzuru Sato

㻝㻣㻣

㻝㻟㻝

㻠㻘㻜㻜㻜

7-Dec.-16㻟㻢㻜㻲㼅㻥㻛㻝㻡

㻲㼅㻥㻛㻝㻢c) Retailing and licensing businessIn this business, transaction values increased 24.7% y-o-y to ¥8,863mn (Company target, ¥7,000mn)
and sales rose 9.2% to ¥4,558mn (¥5,000mn), but operating profit fell 3.6% to ¥161mn. The increased
consignment sales from sites such as official artist e-commerce sites was the reason why the sales
growth rate was comparatively lower than that of transaction values.
In the Internet shopping business, sales declined y-o-y, and while an operating profit was maintained
up to Q3, for the full fiscal year once again an operating loss was recorded. This was due to the active
investment in promotional expenses in Q4 in order to find new customers and stimulate purchasesfrom non-active subscribers.
On the other hand, the product production and licensing business achieved year-on-year growth insales and profits, with increased sales of popular celebrity goods as the main factor. From August
2016, the Company starting handling online CD sales for some pop groups, which also contributed
to the higher sales. In addition, ECONECO, for which monosense holds the master licenses, opened
its first long-term store in February 2016 in Lumine Est Shinjuku.

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㻾㼑㼟㼡㼘㼠㼟㻌㼀㼞㼑㼚㼐㼟㻿㼍㼘㼑㼟㻌㻔㼘㼑㼒㼠㻌㼍㼤㼕㼟㻕

(¥mn)
㻢㻘㻜㻜㻜

㻻㼜㼑㼞㼍㼠㼕㼚㼓㻌㼜㼞㼛㼒㼕㼠㻌㻔㼞㼕㼓㼔㼠㻌㼍㼤㼕㼟㻕
㻝㻢㻣

㻝㻢㻝

(¥mn)
㻞㻜㻜

㻡㻘㻜㻜㻜

㻝㻡㻜

㻠㻘㻜㻜㻜

㻝㻜㻜

㻟㻘㻜㻜㻜

㻡㻜
㻠㻘㻣㻥㻡

㻠㻘㻞㻞㻠

㻞㻘㻜㻜㻜
㻝㻘㻜㻜㻜

㻠㻘㻝㻣㻠

㻠㻘㻡㻡㻤

㻜
㻙㻡㻜

㻙㻠㻟
㻙㻣㻝

㻜
㻲㼅㻥㻛㻝㻟

㻲㼅㻥㻛㻝㻠

㻙㻝㻜㻜㻲㼅㻥㻛㻝㻡

㻲㼅㻥㻛㻝㻢

We encourage readers to review our complete legal statement on “Disclaimer” page.
9

■■Business Trends

BEENOS Inc.
3328 Tokyo Stock ExchangeFirst Section

7-Dec.-16

Important disclosuresand disclaimers appear
at the end of this document.
FISCO Ltd. Analyst
Yuzuru Satod) Incubation businesses
In these businesses, sales increased 15.7% y-o-y to ¥1,203mn (Company target, ¥800mn) andoperating profit rose 3.9% to ¥773mn (¥500mn). In the investing and nurturing operations, therecording of gains on the sales of shares in domestic and overseas investee companies was afactor behind the higher sales and profits. The Company also conducted new investment on
multiple occasions. Conversely, as a result of the revaluation of the enterprise values of the investee
companies, in Q4 a valuation loss of ¥227mn in operational investment securities was recorded incost of sales.
The Company has been investing aggressively in India recently. In this Q2 in India, it invested in
NoBroker Technologies Solutions Pvt Ltd. which operates NoBroker, India’s first online C2C realestate marketplace, and in August, it invested in Expedient Healthcare Marketing Pvt. Ltd., which
operates Healthians, which is India’s largest home health checkup marketplace. In other emerging
countries also, it is investing in Internet venture companies considered to have potential for the future.
Among the companies it is investing in, the market capitalization of Tokopedia in Indonesia is said tobe on a scale of ¥100bn, while the Clues Network Pvt. Ltd., which operates Shop Clues in India, also
has a market capitalization in excess of ¥100bn. In addition, Droom, an online marketplace for buying
and selling vehicles, is achieving rapid growth, and in this situation its current value would seem tobe on a scale of tens of billions of yen, and it is estimated that the profits attributable to the Company
will increase in the future alongside these companies’ growth.
Main Companies Invested in and their Investment Ratios
Investment
Company
ratio
akakce.com
10% ormore
Paynamics Technologies

Headquarter
Business description
location
TurkeyPrice comparison service
Philippines
Online settlement service
Operates Droom, an online marketplace for buying and
Droom
India
selling vehicles
Buyhatke
India
Price comparison service
Sendo Technology
VietnamOperates Sendo, an online marketplace
African
5 to 10%
NearexMobile money
nations
Cloud-based agency service for handling household
CaSy
Japan
choresPlans and develops web and app services for mobile
Quan
Japan
equipment
Tokopedia
Indonesia
Operates tokopedia, a C2C online marketplace
Clues Network
India
Operates ShopClues, a B2C online marketplace
Operates NoBroker, an online C2C real estate
NoBrokerIndiamarketplace
Midtrans
Indonesia
Online settlement service
iyzi Payments
TurkeyOnline settlement service
1 to 5%
AyannahPhilippines
Online settlement service
Operates Qiita, a service for software programmers to
IncrementsJapanexchange technical information
GifteeJapan
Operates giftee, a social gift service
Healthians
India
A home health checkup marketplace
VoonikIndia
Operates voonik.com, a mobile fashion marketplace
Operates KARTROCKET, a service for opening an online
Big Foot Retail Solutions India
store
Less than
Operates instacart, an online delivery service for food
1%
MaplebearUSand daily necessities
KamcordUS
Operates a video sharing platform for mobile games
Note: Investments highlighted were made since October 2015

We encourage readers to review our complete legal statement on “Disclaimer” page.
10

伪伪Future outlook
Sales and profits (operating profit and recurring profit) are
forecast to increase in FY9/17 also

BEENOS Inc.
3328 Tokyo Stock ExchangeFirst Section

7-Dec.-16

Important disclosuresand disclaimers appear
at the end of this document.
FISCO Ltd. Analyst
Yuzuru Sato

(1) Forecasts for FY9/17
The FY9/17 consolidated results forecasts are for sales to increase 4.0% y-o-y to ¥20,000mn,
operating profit to rise 16.6% to ¥1,400mn, recurring profit to increase 15.5% to ¥1,400mn, andnet profit attributable to owners of the parent to decrease 21.2% to ¥750mn. The Company’s policy
is to expand transaction values by continuing to strategically allocate resources to cross border
e-commerce, but due to the fall in product unit prices from the effects of the stronger yen, transaction
values are forecast to decline. The reason for the expected decline in net profit attributable to ownersof the parent is that within the Group’s loss brought forward from the previous fiscal term, deferred
tax assets were recorded in the previous fiscal year for that part that was expected to be dissolvedin the following term. In addition, at the time that consolidated subsidiary Defactostandard was listedon the TSE Mothers, the Company’s investment ratio was reduced following the public offering,and therefore net profits attributable to non-controlling interests increased. In FY9/17, all of the loss
brought forward from the previous fiscal term for tax purposes is expected to be dissolved.
In the e-commerce businesses, transaction values are forecast to decline 7.6% y-o-y to ¥37,000mn.
By business segment, the forecasts are for sales from e-commerce businesses to increase 3.7% to¥18,700mn and operating profit to rise 26.6% to ¥950mn, and sales from incubation businesses toclimb 8.1% to ¥1,300mn and operating profit to increase 3.4% to ¥800mn. The forecasts by businesssegment are as follows.
FY9/17 Consolidated Results Forecasts
FY9/1640,052
19,22818,025
1,203
1,201
750
773
-322
1,212

93.7%
6.3%
6.3%
3.9%
4.0%
6.3%

Company
target37,00020,00018,700
1,300
1,400
950
800
-350
1,400

951

5.0%

750

Results
Transaction value
Sales
E-commerce
Incubation
Operating profit
E-commerce
Incubation
Adjustment
Recurring profit
Net profit attributable toowners of the parent

vs. Sales

FY9/17
vs. Sales(Unit: ¥mn)
y-o-y

93.5%
6.5%
7.0%
4.8%
4.0%
7.0%

-7.6%
+4.0%
+3.7%
+8.1%
+16.6%+26.6%+3.5%+15.5%

3.8%-21.2%a) Cross border businessIn this business, the forecasts are for transaction values to decline 18.8% y-o-y to ¥17,500mn andsales to fall 10.1% to ¥3,450mn. Within these amounts, the outlook is for both transaction values
and sales to fall in the overseas forwarding and proxy purchasing operations due to the effects ofthe stronger yen. It is calculated that the exchange rate will further strengthen from the rate of ¥111
to the dollar in the previous fiscal year to ¥103 to the dollar in 1H (October to March) and ¥95 tothe dollar in 2H (April to September), which will lower the purchase unit prices, thereby causing
sales to decrease. Operating profit is also expected to fall as the Company continues to invest in
development to strengthen its services and in promotions. If the rates settle for the time being on thecurrent exchange rates of ¥103 to the dollar and around ¥15 to the Chinese yuan and if these levels
are maintained going forward, exchange rates may become a factor causing transaction values toaccumulate. User numbers are also starting to increase in Asian countries other than China, North
America, and Australia, and there has been no change to the expectation that this business will growin the medium to long term. Recently, an increasing number of Japanese companies have been
opening stores on China’s leading marketplace, and the Company, which has the strength of a trackrecord of exporting a wide range of products from various companies from over 1,400 sites to 84
countries, is expected to continue to lead the industry in the future as an Internet platform company
supporting the cross border EC market.

We encourage readers to review our complete legal statement on “Disclaimer” page.
11

■■Future outlook

BEENOS Inc.
3328 Tokyo Stock ExchangeFirst Section

7-Dec.-16

Important disclosuresand disclaimers appear
at the end of this document.
FISCO Ltd. Analyst
Yuzuru Sato

It has also launched a new cross border EC-related service. Specifically, the “okurun” service,
which matches online domestic EC businesses and retailers that want to increase their exports withforwarders (international shipping companies), was fully launched in September 2016. Through the“okurun” service, exporting companies can request batch estimates from a number of forwarders,and select the optimum forwarder from among them. In addition, on the “okurun” website there isa mechanism for communicating with forwarders in a chat format on matters such as operational
progress, shipment tracking, and schedule adjustments. The service is attracting attention as it
contributes to improving the efficiency of complex export operations and to reducing costs. In thebusiness model, the Company collects fees from the exporting companies as the main shippers, and
it is targeting medium- to small-scale corporations as customers.
On the other hand, increases in both sales and profits are forecast in the global shopping business. In
FY9/17 also, the same as in the previous fiscal year, the Company will invest in systems development
in order to improve user convenience on the website. In addition, from August 2016 it started linking
product data with a major domestic auction site, and began exhibiting eBay products on this site via“sekaimon” Initially there have been only few items as they are limited to the hobby field, but going
forward it intends to increase the number of items while keeping a watch on conditions. As the abilityof “sekaimon” to attract customers is still weak, the sales collaboration with a major domestic auction
site is expected to contribute to the increase in transaction values in the future.
For the cross border business, the Company plans to develop new services in peripheral areas in
the future.
b) Value cycle businessIn this business, sales are forecast to increase 12.7% to ¥10,850mn (transaction values are thesame as sales) and operating profit is also expected to rise. In addition to expanding the number ofpurchases of pre-owned brand goods, for sales the Company will simultaneously exhibit items on the
major auction sites domestically and overseas, and open-up new sales channels, and in such ways
it intends to strengthen sales capabilities and improve sales efficiency. Also, in the medium term itplans to develop new services through utilizing the customer base it possesses.
In the last one or two years, the C2C pre-owned goods markets that use a flea market app, suchas Mercari, have been growing, and for brand goods also, the distribution scale has been seen to
be expanding. But at the current time this is not considered to affect the Company’s results. This isbecause in the main flea-market-app markets, the pre-owned items tend to be casual brands with anaverage selling price of less than ¥1,000, but in contrast, the main pre-owned items on the Brandear
site tend to be second-tier brands with an average selling price in the range of ¥1,000 to ¥10,000.
That said, it is possible that competition will intensify in the medium term and that the Company will
be required to take measures in response.
c) Retailing and licensing businessIn this business, the forecasts are for transaction values to decrease 2.4% y-o-y to ¥8,650mn andsales to fall 3.5% to ¥4,400mn, but for operating profit to increase slightly. Within these forecasts,
the Company is aiming for the Internet shopping business to once again achieve profitability throughcontinuing with its previous measure of strengthening sales of original products and repeat-type
products.
Conversely, in the product production and licensing business, the Company is aiming to increase
sales of related products through initiatives including working to expand the ECONECO sales
channel and entering into new agreements with celebrities.
d) Incubation businesses
In the incubation businesses, the results forecasts are for sales to increase 8.1% y-o-y to ¥1,300mn
and operating profit to rise 3.5% to ¥800mn. In FY9/17 also, the Company plans to record gains on
the sales of shares of some investee companies. The information the Company is thought to use
when deciding on the sales of shares in investee companies are when it is time for the next roundof financing of an investee company, when it discovers a new partner whose growth can be further
accelerated, or alternatively when there is an IPO.

We encourage readers to review our complete legal statement on “Disclaimer” page.
12

■■Future outlook(2) Medium-term Targets

BEENOS Inc.
3328 Tokyo Stock ExchangeFirst Section

7-Dec.-16

Important disclosuresand disclaimers appear
at the end of this document.
FISCO Ltd. Analyst
Yuzuru SatoAs its medium-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 by building a global commerce platform to distribute products
and contents from throughout the world in Japan and other Asian countries.
In order to realize this vision, the Company considers that it is necessary to create a market with atransaction value on the scale of hundreds of billions of yen. As the first step toward this, it would
seem to be aiming to achieve a transaction value of ¥100bn. Domestically, it is further expanding
its distribution network, opening up channels for leading products and contents, and strengthening
product development. For overseas, it is considered that it will create new businesses by expanding
the network through adding to the network of business partners and investee companies it has built
so far, and that it will expand distribution and utilize the big data on the products that it distributes.

伪伪Financial Position and Shareholder Return Policy
Enhancing the financial base and putting in place aninvestment system for further growth(1) Financial Position and Management Indicators
At the end of September 2016, total assets had increased ¥3,094mn from the end of the previous
fiscal year to ¥13,113mn. Looking at the main factors behind the change, in current assets, cash
and deposits increased ¥3,030mn. In addition in fixed assets, software rose ¥82mn, while goodwill
decreased ¥28mn.
Total liabilities increased ¥736mn from the end of the previous fiscal year to ¥5,076mn. Looking at
the main factors behind this, in current liabilities, accounts payable increased ¥853mn and deposits
decreased ¥250mn. In addition, in non-current liabilities, long-term borrowing rose ¥74mn.
Net assets increased ¥2,357mn from the end of the previous fiscal year to ¥8,036mn. The main
factors behind this change were an increase of ¥1,896mn in proceeds from non-controlling interests
following the sale of shares in conjunction with the listing of the subsidiary Defactostandard, in
addition to an increase in retained earnings of ¥951mn on the recording of net profit attributable toowners of the parent. However, the foreign currency translation adjustment declined ¥310mn due tothe strengthening of the yen by the period end.
Looking at the management indicators, the shareholders’ equity ratio declined from 54.5% at theend of the previous fiscal year to 51.1%. This was mainly because although shareholders’ equity
increased, non-controlling interests’ equity rose ¥1,116mn compared to the end of the previous fiscal
year following the listing of Defactostandard. However, the interest-bearing debt ratio fell from 16.8%
to 15.1%, and net cash (cash and deposits – interest-bearing debt) increased ¥2,940mn comparedto the end of the previous fiscal year, so the Company is enhancing its financial base and can be said
to have put in place a system to conduct investment for further growth in the future.

We encourage readers to review our complete legal statement on “Disclaimer” page.
13

■■Financial Position and Shareholder Return Policy

Consolidated Balance Sheet and Management Indicators

BEENOS Inc.
3328 Tokyo Stock ExchangeFirst Section

7-Dec.-16

Important disclosuresand disclaimers appear
at the end of this document.
FISCO Ltd. Analyst
Yuzuru Sato

Current assets(cash and deposits)(operational investment securities)
Fixed assets
Total assets
Current liabilities
Non-current liabilities(interest-bearing debt)
Total liabilities
Net assets
Main management indicators(stability)
Shareholders’ equity ratio
Interest-bearing debt ratio(profitability)
ROA (return on assets)
ROE (return on equity)
Operating profit margin

FY9/13
4,294
2,552
2,141
6,435
2,116
206
953
2,323
4,112

FY9/14
6,692
2,433
1,563
1,014
7,706
3,078
69
1,034
3,148
4,557

FY9/15
8,745
3,276
1,663
1,273
10,019
4,183
155
919
4,339
5,679

FY9/16
11,806
6,307
1,605
1,307
13,113
4,837
238
1,009
5,076
8,036

62.5%
23.7%

57.5%
23.3%

54.5%
16.8%

51.1%
15.1%

2.1%
0.9%
-2.2%

-5.2%
-10.7%
-2.9%

13.0%
18.2%
7.0%

10.5%
15.6%
6.3%

(Unit: ¥ mn)
Change
3,060
3,030
-58
33
3,094
653
83
90
736
2,357

(2) Shareholder Return Policy
For its shareholder returns, the Company commenced payment of dividends from FY9/15, given that,along with having enhanced its financial base, it had entered a growth phase in line with increased
profits from its e-commerce businesses. As the FY9/16 results exceeded the initial targets, it raised
the dividend per share by ¥3.0 from the initial forecast to ¥13.0. Also, in FY9/17, to commemorate
its change of listing to the TSE First Section, it will pay a commemorative dividend of ¥5.0 at the endof Q2. So in addition to the full year ordinary dividend of ¥13.0, it plans to pay a dividend per shareof ¥18.0.
Going forward, the Company’s dividend policy is to pay dividends in line with profit growth while
taking into consideration factors including its financial situation, demand for investment funds, andbusiness performance.

We encourage readers to review our complete legal statement on “Disclaimer” page.
14

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
price and index information. The trademark and value of the “JASDAQ INDEX” are theintellectual 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
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
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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 duplicationsof the report, without the express written consent of FISCO, is strictly prohibited. Anytransmission, reproduction, distribution or transfer of the report or its duplications is also
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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.