COMPANY RESEARCH AND ANALYSIS REPORT

Cosmos Initia Co., Ltd.
8844
TSE JASDAQ

30-Jul.-2018
FISCO Ltd. Analyst

Kimiteru Miyata

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

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

Cosmos Initia Co., Ltd.
8844 TSE JASDAQ

30-Jul.-2018https://www.cigr.co.jp/english/message.html■ Index■Summary---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 01■Company profile---------------------------------------------------------------------------------------------------------------------------------------------------------- 03
1. Company profile and history........................................................................................................................

03

2. Synergies from partnership with Daiwa House.............................................................................................

04■Business overview---------------------------------------------------------------------------------------------------------------------------------------------------- 05
1. The Company’s business....................... ......................................................................................................

05

2. Residential business.............................. ......................................................................................................

06

3. Solutions business.......................................................................................................................................

07

4. Construction business and Overseas business.. ..........................................................................................

08■Medium/long-term business strategy---------------------------------------------------------------------------------------------------- 08
1. Business rehabilitation plan and previous medium-term business plan. ......................................................

08

2. Business environment and basic action plan...............................................................................................

10

3. Medium/long-term strategy and image of business scale. ...........................................................................

11■Results trends--------------------------------------------------------------------------------------------------------------------------------------------------------------- 14
1. FY3/18 results..............................................................................................................................................

14

2. FY3/19 forecast..................................... ......................................................................................................

15

3. Progress versus medium-term business plan 2018......................................................................................

17■Shareholder return policy---------------------------------------------------------------------------------------------------------------------------------- 18■Information security------------------------------------------------------------------------------------------------------------------------------------------------ 18

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

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

Cosmos Initia Co., Ltd.
8844 TSE JASDAQ

30-Jul.-2018https://www.cigr.co.jp/english/message.html██Summary
Making full use of its expertise in new condominium development,
pursuing growth through development and sales ofinvestment properties and apartment hotels
Cosmos Initia <8844> is a mid-tier developer of condominiums and detached housing, specializing in family-oriented
condominiums for first-time buyers. Geographically, it operates mainly in the greater Tokyo area and Kinki region.
The Company was found in 1969 as a subsidiary of Japan Recruit Center (now Recruit Holdings Co., Ltd.), but
is now pursuing its growth strategy as a subsidiary of Daiwa House Industry <1925> and member of the Daiwa
House group. The scope of Cosmos Initia’s business has broadened over the years as it has gained expertisein different areas and customer needs have grown more diverse. Its business is split into four segments, with its
mainstay Residential business (for general consumers) and Solutions business (for businesses) supplemented bya Construction business and Overseas business. In FY3/18, the Residential business accounted for 39% of sales,
the Solutions business 47%, the Construction business 10%, and the Overseas business 4%.
Under its Residential business, Cosmos Initia offers various brand lines including its INITIA series of newly built
condominiums, COSMOS AVENUE series of new detached housing, and its &Renovation series of renovatedpre-owned condominiums. The Company has a long reputation for high-quality, customer-oriented service, including
after-sale service. At its Solutions business, the Company offers various corporate agency brokerage services,
including subleasing of condominiums, office buildings, and other types of properties, sales of investment properties
including condominiums and buildings, and consulting services for investment property development. In this area,
the Company is distinguished by its professional solutions that draw on the resources of the entire group. The
Construction business builds condominium galleries, handles sales of interior design options, and does renovation
work in connection with office relocations. The Overseas business has been managing a resort hotel in Australia but,in accordance with the 2018 medium-term business plan, is pulling out of this business in March 2018.
The Company is currently working under its 2018 medium-term business plan to implement initiatives aimed atstrengthening in business base and pursing its growth strategy. The Company has also set forth a medium/longterm business strategy that looks out further ahead of the current medium-term plan, which only runs throughFY3/19. At the Residential business, the Company is looking to do more new condominium development work andmore renovation work; in addition to its traditional target market, it will also be building housing designed for theso-called "active senior" market. At its Solutions business, the Company is looking to offer a one-stop solutions
service for business-use property owners, and is also looking to enter the lodging market for overseas travelers bydeveloping and operating apartment hotels. In terms of sales, the Company envisions total sales of ¥155,000mn
in the near future, with some ¥70,000mn of this coming from the Residential business, ¥70,000mn from Solutions,and ¥15,000mn from the Construction and the Overseas business.

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

01 18

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

Cosmos Initia Co., Ltd.
8844 TSE JASDAQ

30-Jul.-2018https://www.cigr.co.jp/english/message.html

Summary

For FY3/19, the Company is forecasting sales of ¥105,000mn (+4.1% YoY) and an operating profit of ¥5,250mn(+7.8%). The gross profit margin is expected to decline as a result of its exit from the high-margin overseas resort
hotel management business. In this relation, we note that the operating profit target for FY3/19 under the 2018
medium-term business plan had initially been set at ¥5,000mn but was raised to ¥5,250mn. The cause was a strong
performance in the Solutions segment, including real estate for investment among other factors. . The Company
also reported that new businesses are getting off to a good start. The Company completed construction of its first
condominium complex designed for active seniors (the Grand Cosmo Musashiurawa) in 2016, and has already has
tentative plans to build three more properties of this kind through redevelopment projects untaken in large cities inrural regions. On the apartment hotel development and management front, the Company opened its first facility in
February 2018 and as of the April end had a four such properties with a total of 154 guest rooms in operation. Given
the progress thus far, it would appear that the Company is finally ready to start expanding these new businesses
nationwide.
Key Points
Mid-tier developer operating mainly in Tokyo area and Kinki region, especially strong in new condominium andinvestment property development and sales• Targets under medium-term business plan raised on strong performance of investment real estate business;medium/long-term strategy aiming for sales of ¥155.0bn• New businesses in condominiums for active seniors and apartment hotels both off to good start•㻾㼑㼟㼡㼘㼠㼟㻌㼠㼞㼑㼚㼐㼟（¥㼙㼚）㻿㼍㼘㼑㼟㻔㼘㼑㼒㼠㻕（¥㼙㼚）㻻㼜㼑㼞㼍㼠㼕㼚㼓㻌㼜㼞㼛㼒㼕㼠㻔㼞㼕㼓㼔㼠㻕㻝㻞㻜㻘㻜㻜㻜

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

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

02 18

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

Cosmos Initia Co., Ltd.
8844 TSE JASDAQ

30-Jul.-2018https://www.cigr.co.jp/english/message.html██Company profile
Developer of INITIA brand condominiums and the old Cosmo brand1. Company profile and history
Cosmos Initia is a mid-tier developer affiliated with the Daiwa House group, focusing mainly on condominiums anddetached housing in the greater Tokyo area and the Kinki region. Specializing in family-oriented condominiums
for first-time buyers, Cosmos Initia has a very long track record and has brought a cumulative total of more than
100,000 new condominium units to the market. As the needs of customers have grown more diverse and its
partnership with Daiwa House has grown, Cosmos Initia has turned itself into a one-stop shop for a wide variety of
housing products and services for the general consumer, including new condominiums and detached housing, retail
brokerage services, pre-owned condominium purchasing and sales, renovation and remodeling, as well as various
after-sale services after the homeowner or tenant moves in. For owners of business-use properties, the Company
has also expanded its service menu over the years and now offers a one-stop real estate solutions service, including
investment property sales, subleasing of condominiums and office properties, agency services for business-use
properties, and real estate consulting. Going forward, Cosmos Initia is looking to continue diversifying its businessportfolio away from its past focus on condominium development.
The roots of Cosmos Initia go back to its founding as Japan Recruit Motion Pictures Co., Ltd., a subsidiary of Japan
Recruit Center. The Company subsequently switched its business to real estate in 1974. In 1985 the Company
changed its Recruit Cosmos Co., Ltd. and was listed on Japan’s over-the-counter stock market (now JASDAQ) in1986. Following a management buyout in 2005, it became independent and it changed its name to Cosmos Initia
in 2006, the name it still holds today. Not long after that, however, the real estate market crashed as the collapse of
Lehman Brothers shook the financial markets and Cosmos Initia fell victim to its heavy debt load. Having become
insolvent, the Company went into Business Revitalization ADR proceedings in 2009, where an agreement wasreached on business rehabilitation plan. Cosmos Initia got financial support from its creditors but had to sell off
its condominium management company and other assets to Daiwa House. The business rehabilitation plan was
finally completed in 2013 as Cosmos Initia paid off the last of the debt covered by the Business Revitalization ADR
agreement. Shortly thereafter Cosmos Initia entered into a capital and business alliance with Daiwa House that madeit a subsidiary, and it is currently pursuing its growth strategy as a member of the Daiwa House group. Cosmos
Initia’s mainstay condominium line that now goes under the INITIA brand name used to go by the name of Cosmo
when the Company was a member of the Recruit Group.

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

03 18

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

Cosmos Initia Co., Ltd.
8844 TSE JASDAQ

30-Jul.-2018https://www.cigr.co.jp/english/message.html

Company profile

History
History
June 1969
February 1974

Japan Recruit Motion Pictures Co., Ltd. is founded in Chiyoda-ku, Tokyo
Business objective is changed to the real estate business, and the company name changed to Environment Development Co., Ltd.

May 1974

Sales operations for mid- to high-rise housing begin

June 1977

Osaka Branch (now West Japan Branch) is established and begins sales operations for mid- to high-rise housing in the Kinki region

January 1985

Brokerage Department is establishedMarch 1985

Company name is changed to Recruit Cosmos Co., Ltd.
Head office is moved to Chuo-ku, Tokyo

July 1986

Real Estate Rental Business begins in earnest

October 1986

Company stock is listed on the over-the-counter market (now the Tokyo Stock Exchange JASDAQ)

March 1987

All stock for Cosmos Life Co., Ltd. (now DAIWA LIFENEXT Co., Ltd.) is acquired, and entry is made to the real estate management business

January 1990

Cosmos More Co., Ltd., (now a consolidated subsidiary) is established to undertake building and repair work

September 1990

Cosmos Australia Pty. Ltd. is established in Australia
Overseas hotels and resorts operations begin

July 1993

The head office is moved to Minato-ku, Tokyo

April 1996

Sales operations of single-family homes begins in earnest

October 1998
June 2005
September 2006

Cosmos Hotline is established as a point of contact for customers
The Company is spun off from the Recruit Group through a management buyoutCompany name is changed to Cosmos Initia Co., Ltd.
Head office is moved to Chiyoda-ku, Tokyo

April 2009

After becoming insolvent amid real estate market downturn, used Business Revitalization ADR (alternative dispute resolution) proceedings tocreate business rehabilitation plan

July 2009

Three branches in the Tokyo metropolitan area (Chiba Branch/Yokohama Branch/Northern Kanto Branch) are integrated into the head office

September 2009

All stock from Cosmos Life Co., Ltd. is transferred to Daiwa House Industry Co., Ltd.

January 2011

Number of condominiums sold tops 100,000

July 2011

The head office is moved to Minato-ku, Tokyo.

June 2013

Daiwa House Industry Corp. became the largest stockholder of company and joined the Daiwa House Group

October 2014
May 2016

Cosmos Life Support Co., Ltd. (now a consolidated subsidiary) is establishedEstablishment of mid-term business plan

December 2016

Cosmos Australia Holdings Pty Ltd (now a consolidated subsidiary) is established

October 2017

Cosmos Hotel Management Co., Ltd. (now a consolidated subsidiary) is established

December 2017

Entered into capital and business alliance with WOOC Co., Ltd. to develop business to revitalize vacant space in rental office buildings andother properties

March 2018

All stock from KBRV Resort Operations Pty. Ltd. held by Cosmos Australia Pty. is transferred. Withdraw from overseas hotels and resorts
operations

Source: Prepared by FISCO from the Company’s securities report, etc.

Capital and business alliance with Daiwa House Industry
2. Synergies from partnership with Daiwa House
Cosmos Initia has enjoyed the textbook synergies one might expected from its acquisition by Daiwa House in 2013.
As a subsidiary of Daiwa House, Cosmos Initia has been able to more easily secure the financing needed to pursue
its real estate development business, receiving strong backing Daiwa House in the form of credit guarantees aswell as overall support. And, because Daiwa House makes it a practice to respect the management teams of thecompanies it acquires, Cosmos Initia has also enjoyed a great deal of autonomy since being acquired, making its own
decision about personnel, operations, and even maintaining its stock exchange listing. As this has allowed Cosmos
Initia to maintain the continuity in its management team as well as in its branding, which in turn has helped drive
the subsequent recovery in sales and earnings. From the perspective of Daiwa House, the acquisition of Cosmos
Initia has helped it fill a gap, for even though Daiwa House was already operating in many areas—from detachedhousing to rental housing, to commercial buildings and construction—prior to the acquisition of Cosmos Initia it
did not have much of the presence in the Tokyo area condominium market. With knowledge and experience in theTokyo, Japan’s largest condominium market, Cosmos Initia was a welcome addition to the Daiwa House group thatwould help it expand its condominium business.
We encourage readers to review our complete legal statement on “Disclaimer” page.

04 18

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

Cosmos Initia Co., Ltd.
8844 TSE JASDAQ

30-Jul.-2018https://www.cigr.co.jp/english/message.html██Business overview
Majority of sales and earnings come from two businesses,
the Residential business that deals in housing andSolutions business that deals with investment properties
1. The Company’s businessCosmos Initia’s primary business is real estate development and sales, but this is broken down further into a
Residential business that offer housing products and services for the general consumer and a Solutions businessthat provides professional services as well as investment real estate and other products to the corporate market. In
addition to these two large businesses, Cosmos Initia also has a Construction business and an Overseas business.
The Residential business accounted for 39% of sales and 18% of operating profit, the Solutions business 47%
of sales and 75% of operating profit, the Construction business 10% of sales and 1% of operating profit, and theOverseas business 4% of sales and 6% of operating profit. The mainstays of the business are the Residential andSolutions businesses, which are primarily managed by the parent company while the Construction and the Overseas
businesses are operated by subsidiaries.

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㻣㻡㻑

Note: All figures prior to adjustments
Source: Prepared by FISCO from the Company’s financial results and results briefing materials

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

05 18

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

Cosmos Initia Co., Ltd.
8844 TSE JASDAQ

30-Jul.-2018https://www.cigr.co.jp/english/message.html

Business overview

One-stop shop for housing-related products and services
for the general consumer
2. Residential businessCosmos Initia’s Residential business does not follow the traditional split between new homes and pre-owned homes,
but rather holds itself out as a one-stop shop for housing-related products and services for the general consumer.
Its service menu includes its INITIA series of new condominiums and COSMOS AVENUE series of new detachedhousing, its &Rennovation series of renovated, pre-owned condominiums, and retail real estate brokerage services.
In FY3/18, new condominiums accounted for 64% of segment sales ratio, new detached housing 12%, renovatedcondominiums 22%, and retail real estate brokerage services 2%. Cosmos Initia is distinguished by the highproportion of certified first-class registered architects on staff, and its reputation for high-quality, customer-oriented
service, including after-sale service.
The new condominiums that account for most of sales at the Residential business go under the INITIA brand name.
INITIA condos are aimed at families, their target market being discerning, first-time buyers in their early 30s. As asuccessful condominium developer of many years, Cosmos Initia has made a practice of listening to customers andso has been consistently able to envision what customers want ahead of time and bring to market condominiums
that offer the comfortable living space buyers are looking for. Cosmos Initia’s success is evidenced by its long trackrecord that took it over the 100,000 unit mark for new condominiums in 2011 (its 37th year as a developer) and its
receipt of the prestigious Good Design awards for 16 years running. In recent years Cosmos Initia has also applied
the concept of “spatial quality” to create living spaces that are larger, more enjoyable, and easier to use throughinnovative designs such as “scenery kitchen” designs that place the kitchen in the center of an LDK condominium
and widening entryways to create “welcome halls.” In response to the rapidly changing demographics, Cosmos
Initia has also started designing condominiums for the so-called “active senior” market.
Although best known as a condominium developer, Cosmo Initia is also a prolific builder of detached housing,having built more than 4,000 units. Appling the same QIT quality control management system to new detachedhousing that it developed and uses in the construction of new condominiums, Cosmos Initia has been lauded forits service structure that facilitates the formation of communities after people move into new sub-developments
by holding ceremonies and other activities until a new community is finally formed. When it comes to renovating
condominiums, Cosmos Initia applies the design expertise and skills that it has acquired from years in the newcondominium development business and applies it to older condominiums to change ambiance and give it a morewelcome feel. In the area of residential-use real estate brokerage services, Cosmos Initia not only helps people
with selling properties it also offers services make it easier for homeowners to move to a new home by allowing
them to stay in their current and complete the sale only after they buy a new home (katte kara nattoku baikyaku)
or, alternatively, buys the condominium from the owner and allows them to stay there while looking for a new place
to live (suminagara kaitori).

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

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

Cosmos Initia Co., Ltd.
8844 TSE JASDAQ

30-Jul.-2018https://www.cigr.co.jp/english/message.html

Business overview

One-stop solutions service for owners of investment properties
3. Solutions business
The Solutions business is aimed at meeting the needs of owners of investment properties and, with the help of its
own and the many professionals in the Daiwa House group, is a one-stop shop for real estate-related solutions
services. The service menu includes subleasing of condominiums and office buildings, a real estate brokerage service
to handle sales of condominiums, business-use buildings and land, especially the condominiums in the Company’s
COSMO REID series and office buildings in the REID-C series that were designed specifically as investment properties. Real estate subleasing accounts for 30% of sales ratio at the Solutions segment, investment properties 68%,
and real estate brokerage 2%.
Cosmos Initia has been in the property management business for many years, managing the leases of more than
9,500 residential properties has well as a variety of other buildings, including retail store space. Most of its businessis accounted for by the subleasing of residential properties, wherein the condominium owner leases his property
to the Company who in turn subleases it to tenants. This service offers a great deal of convenience to property
owners, as its allows them to avoid the troublesome process of finding tenants, signing rental contracts, renewing
contracts, and responding to tenants problems, and also has the additional advantage of signing a one-time leasing
agreement that guarantees a safe and steady stream of rental income. The subleasing business also works out wellfor Cosmos Initia by limiting the business risk that goes along with property ownership while remaining in a position
to generate a steady stream of revenues and earnings.
In the area investment property, Cosmos Initia develops smartly style condominiums, office buildings, and commercial
properties for sale to investors, and also buys entire old condominium complexes and office buildings that it canrenovate, upgrade, bring up to code, and then resell to investors that are looking to generate steady returns byinvesting in real estate. In this business the Company focuses mainly on properties in central urban districts where
demand is high. On the surface, this type of property development and renovation business may appear to veryrisky. However, thanks to Cosmos Initia’s wide-ranging expertise and its targeting of smaller properties (¥200mn to¥500mn) where there is little competition, it is able to reduce its risk relative to other operators and probably has adistinct advantage over the rest of the industry.
Also included under the Solutions segment is the Company’s investment property brokerage service, real estate
property development consulting service, and architectural design administration and construction management
service. In response to the growing number of foreign tourists visiting Japan in recent years, Cosmos Initia has also
started an apartment hotel development and management business, distinguishing its apartment hotel properties
with spacious rooms that can accommodate families of four or more and include kitchens versus the growing
pipeline of business hotels designed to accommodate one or two occupants per room. With this broad service
menu for investment property investors, Cosmos Initia is prepared to provide solutions regardless of the type of
property or client.

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

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

Cosmos Initia Co., Ltd.
8844 TSE JASDAQ

30-Jul.-2018https://www.cigr.co.jp/english/message.html

Business overview

As Construction business grows,
overseas resort hotel management business is being wound down
4. Construction business and Overseas business
The Construction business is run mainly by Cosmos More Co., Ltd, which builds condominium galleries, handles
sales of interior design options for new condominiums, handles repairs and improvements related to office relocations, and builds steel houses and other buildings. Cosmos More is also moving into office design services aimed atcreating the maximum value for an office property through smart spatial designs and also has a large-scale building
repair business providing service for condominiums operated by Daiwa Cosmos Construction Co., Ltd. The Overseas
business consists of Cosmos Australia Pty Ltd. and seven other subsidiaries. In addition to managing a resort hotel
on scenic Fraser Island (a World Heritage Site as the largest sand island in the world), located off the coast of thestate of Queensland, Australia, the subsidiaries operate other real estate-related businesses in Australia. The resort
hotel management business has been profitable recently, but the lack of synergies with the other business and thelarge impact on results from swings in foreign exchange rates led to a decision to sell off the resort hotel managementbusiness in March 2018. As for plans for the Overseas business going forward, the Company said it will be working
together with the Daiwa House group on condominium development projects in Sydney, Australia, and is also looking
at operating serviced apartments in Australia and New Zealand. In other areas, subsidiary Cosmos Life Support Co.,
Ltd. provides property management services for condominiums for active seniors.

██Medium/long-term business strategy
Business rehabilitation plan –> previous medium-term business plan–> medium-term business plan 2018
1. Business rehabilitation plan and previous medium-term business plan
As mentioned previously when reviewing the Company’s history, Cosmos Initia became insolvent in the wake ofthe financial crisis sparked by the collapse of Lehman Brothers but was eventually turned around under a businessrehabilitation plan. After completing the business rehabilitation process, Cosmos Initia became a subsidiary of
the Daiwa House group and put together its previous medium-term business plan as it set its sights on growing
its business again. Under the medium-term business plan 2018, Cosmos Initia is moving forward with additional
initiatives aimed at reinforcing its business base and pursuing its growth strategy. And with its medium/long-termbusiness strategy, it has also given us the business it would like to be in the years after the medium-term businessplan 2018 runs out.

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

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

Cosmos Initia Co., Ltd.
8844 TSE JASDAQ

30-Jul.-2018https://www.cigr.co.jp/english/message.html

Medium/long-term business strategy

During the lead-up to the final approval of its business rehabilitation plan, Cosmo Initia undertook a broad-based
restructuring, starting with liquidating certain assets. At that time, it sold the condominium management business
operated by subsidiary Cosmo Life Co., Ltd. (now DAIWA LIFENEXT Co., Ltd.) to Daiwa House, and based on
financial support such as getting banks to forgive some ¥37.0bn in loans, doing a debt-equity swap worth ¥30.5bn,
and getting concessionary repayment conditions on another ¥100.8bn in loans, implementing an extensive andrigorous restructuring. The business rehabilitation plans was completed on schedule in FY3/13, but even though the
Cosmos Initia’s financials had improved much more than initially expected, its credit standing had not yet recovered
to the point where it could expect to raise sufficient capital. Making matters worse, earnings came up short of planowing to an extraordinary loss booked in anticipation of losses on the future disposal of overseas businesses. In
order to regain a credit standing that would allow it to raise the capital need to get back on the growth track, in June2013 the Company entered into a capital and business alliance with Daiwa House that made it a subsidiary of the
Daiwa House group. After joining the Daiwa House group, the Company put together a medium-term business planthat would take it through FY3/16. During that plan, sales on a cumulative basis were slightly less than expected but
operating profit, recurring profit, and net profit all finished ahead of plan. With its credit standing greatly improved,
the Company was able to increase borrowings again, pushing the total for loans outstanding on its balance sheet
at the end of FY3/16 to roughly ¥52.2bn versus its initial target of ¥22.0bn. This allowed it to increase its inventoryof properties held for sale (the seeds for future growth) up to ¥67.1bn versus its initial target of only ¥34.0bn. The
Company’s medium-term business plan 2018 and its medium/long-term growth strategy reflect both past experience
as detailed above and its assessment of the current operating environment.
Performance under medium-term business plan versus target(¥mn)
Previous medium-termbusiness plan

Business rehabilitation plan

Medium-term business plan 2018

FY3/09results

FY3/13
initial target

FY3/13
results

FY3/16
initial target

FY3/16
results

FY3/19initial target

FY3/18results

FY3/19forecast

Sales

191,616

79,20085,82488,00087,022

105,000

100,829

105,000

Operating profit-18,207

6,200

2,562

4,000

3,480

5,000

4,869

*1 5,250

Net profit attributable to parent
company shareholders-88,088

5,500-1,073

3,500

3,639

3,695

4,400

Inventories

168,044

34,40020,04434,00067,10173,497

Borrowings

187,766

17,000

5,995

22,00052,160Net assets-45,183

19,80013,10918,00019,47058,04829,00025,824*1 Revised from ¥5,000mn to ¥5,250mn at time of FY3/18 result announcement*2 Fisco estimate
Source: Prepared by FISCO from the Company’s financial results and results briefing materials

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09 18*2 60,000

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

Cosmos Initia Co., Ltd.
8844 TSE JASDAQ

30-Jul.-2018https://www.cigr.co.jp/english/message.html

Medium/long-term business strategy

Business environment and basic action planunder medium-term business plan 2018
2. Business environment and basic action plan
Among the many factors influencing the operating environment in Japan at this time are: 1) demographic changes
including a growing proportion of the population accounted for by seniors and changes in the number of people
per household; 2) a growing need to resolve problems related to vacant properties, reconstruction, and large-scalebuilding repair mansions; 3) a growing secondary market for older homes and buildings that have been renovated;
4) a growing need for property management and inheritance-related planning services; 5) a growing need forenergy-efficient and earthquake-resistance homes in response to heightened concerns about the environment
and natural disasters; 6) growing awareness of safety and protection features as worries grow about the quality ofworkmanship and the potential impact of earthquakes; and 7) further growth in demand for lodging from the ongoingrise in inbound tourist traffic and the opening of Tokyo Olympics in 2020. The Company took all of these factors
influencing the operating environment into consideration when creating its basic action plan aimed at strengthening
its business base and pursuing its growth strategy.
The action plan by segment is as follows. At the Residential business, the action plan calls for 1) more newcondominium development projects, increasing renovation of used properties and promoting renovation work, andpromoting more after-sale services to create a broad service menu and become a one-stop service provider for
housing-related services; 2) stepping up construction of housing aimed at the active senior market and expanding
after-sale services for this market; and 3) working together with companies in the Daiwa House group on reconstruction and redevelopment projects. At the Solutions business, the plan calls for 1) creating a one-stop solutions service
with a professional consulting group to serve the needs of business-use property owners; and 2) developing moreinvestment properties and increasing inventories of older properties for renovation. 1) At the Construction business,the plan calls for growing existing businesses and expanding further into large-scale building repair mansions. 2)
At the Overseas business, the plan calls for continuing to work together with the Daiwa House group on housingdevelopment projects in Australia. 3) In terms of new businesses, the plan calls for developing a new business tomeet the growing demand for lodging by overseas travelers visiting Japan.
Based on the above expectations with respect to the operating environment and its basic action plan, the Company
put together its medium-term business plan 2018 in 2016, targeting sales of ¥105.0bn and an operating profit of¥5.0bn in FY3/19, and a net debt equity ratio of 1.5x at the end of FY3/19 (with a target for net interest-bearing
debt of ¥43.0bn and net assets of ¥29.0bn). The above assessment of operating environment and the action planunder the 2018 medium-term business became the basis for the Company’s medium/long-term strategy that was
unveiled later with the aim of given investors a picture of the expected size of the business another three to five
years in the future.

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

Cosmos Initia Co., Ltd.
8844 TSE JASDAQ

30-Jul.-2018https://www.cigr.co.jp/english/message.html

Medium/long-term business strategy

Medium/long-term strategy incorporates the medium-term businessplan 2018
3. Medium/long-term strategy and image of business scale
The medium/long-term business strategy reflects the Company’s corporate philosophy of "Next Value For The
Customer – Create the next value requested by customer" and, as applied in practice, its CSV* vision statement"Next Good: Give the next answer for God Living” and “Good Society.” The medium/long-term strategy serves asa guide to providing solutions to society problems through the products and services the Company offers and,as such, outlines the steps the Company plans to take to create more ”Next Good” together with customer andsociety. The urban living environment, the Company’s business domain and the seven characteristics of the operating
environment discussed previously are targeted by the medium/long-term strategy, with expansion strategies createdfor each business according to whether it is considered a flow-type business, a stock type business, or a service
business. In accordance with this, the Company was able to project the size of its business in the near future, seeing
sales of ¥70.0bn at the Residential business, ¥70.0bn in sales at the Solutions business, and ¥15.0bn in sales at
the Construction business and Overseas business for total sales of ¥155.0bn.
* CSV (Creating Shared Value): A differentiation strategy aimed at creating sustainable growth by using the strength of a company toaddress society problems; said to be an extension of CSR (Corporate Social Responsibility).

(1) Residential business
At its Residential business, the Company plans to offer a broad service menu split between new condominium
development (a "flow") and renovation services (utilizing "stock"). It will also offer a wide range of supplemental
services to create a one-stop service and increase the profitability. On the new condominium development front,with new developments generally on the decline the Company is looking to capture market share by focusing on
locations for condominium and single-family home developments where convenience is a major selling point andfurther differentiating itself by creating high value-added homes with spatial designs that provide plenty of living
space and are highly functional. On the new business front, the Company is looking offer property management
and other services to meet the varied needs of the active seniors market. With the help of these initiatives, theCompany is aiming to generate ¥50.0bn in annual sales from new condominium development in the near future.
In terms of renovated condominium, the Company will be buying older condominium properties and renovatingthem to give the interiors the same spatial designs used in new condominiums. The Company is also looking to
expand its service that sets up retail agents with renovation construction with the help of its RENONAVI website.
In addition increasing the Company’s database of information on renovated condominiums on the market, its
RENONAVI website provides an analysis of each individual property based on its proprietary housing diagnostic
system. With this kind of recurring income-type business, the Company is looking to generate some ¥20.0bn.
It is also considering building up its after-sale service menu, such as its Sugoshikata Concierge proposal-type
support service.

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

Cosmos Initia Co., Ltd.
8844 TSE JASDAQ

30-Jul.-2018https://www.cigr.co.jp/english/message.html

Medium/long-term business strategy

As Japan’s population ages we can expect to see a sharp increase in the number of healthy and active seniors.
Unfortunately, when most people think about senior-oriented business they wrongly jump to the conclusionthat this refers to nursing care and similar businesses, and very few think of businesses that are aimed healthy
and active seniors. The Company is stepping into this gap and attempting to address the needs of the market
represented by active seniors market by designing condominiums specifically for this market. The Company’s
GRAND COSMO series are new condominiums designed for active seniors, with features aimed specifically at
reducing the burden of housework and physically-demanding tasks. However, unlike serviced units in retirement
homes or assisted living facilities, GRAND COSMO condominiums maintain the value of a property in which theresidents can live as they please. What distinguishes these condominiums from the average condominium are
the various support services (provided by subsidiary Cosmos Life Support) that are readily available to residents
to handle medical emergencies, earthquakes, etc., as well as services aimed at helping residents stay in good
health and rest at ease. Going forward, the Company is looking to develop this type of active senior-oriented
condominiums in government designated cities and cities with at least 400,000 residents, selecting locations
within those cities that are convenient from the perspective of everyday living (shopping, hobbies, medical care,travels, etc.). In this venture the Company plans to work together with Daiwa House and fellow Daiwa House
group member Fujita Corporation in redevelopment and rebuilding.
(2) Solutions business
The Solutions business is a one-stop solutions service provider with services to cover everything from the initialproperty purchase, to operations management, to sales. At the same time, the Company is also striving tostrengthen synergies among the various business units under the Solutions segment and increase operational
efficiency. Investment property development is a flow business, but the Company is not only diversifying its productoffering in this area, it is also looking to increase its inventory of used investment properties that it can renovated,
reinforce its brand in this market, and develop a new business featuring apartment hotels aimed at meeting thelodging needs of the growing number of foreign tourists visiting Japan. In the near future, the Company is looking
for this business to generate annual sales of ¥40.0bn.
In terms of real estate subleasing, the Company is looking to extend its reach from residential properties tobuildings, increase the number of unit properties and the square feet under management, and also increase
operational efficiency. On the service side, at its real estate consulting business, the Company is working to expand
its solutions business that draws on its extensive network, and increase the number of subscribers to its property
diagnostic service. Through these efforts the Company is looking to generate sales of ¥30.0bn.
The Company has also moved into the development and management of apartment hotels, drawing upon its
expertise in condominium development and management to create the new MIMARU chain of comfortableapartment hotels (complete with hotel management services) for investors. This represents the combination ofboth a flow business and a stock (recurring income) business, the flow part being the development and the stockpart being the hotel management contract. The MIMARU hotels are distinguished by 1) their convenient locations
in areas close to major terminal stations in Tokyo, Osaka, and Kyoto; 2) smart designs that evokes Japaneseculture and relatively small size, with roughly 40 guest rooms with each room having an average size of 40 square
meters; 3) space for bedroom and living & dining in all rooms, as well as a mini-kitchen, cooking utensils, anddining ware, and space enough to comfortably accommodate four or more people; and 4) usually inexpensive
rooms charges in Japan of about ¥30,000 per night.

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

Cosmos Initia Co., Ltd.

30-Jul.-20188844 TSE JASDAQ

https://www.cigr.co.jp/english/message.html

Medium/long-term business strategy

With rooms large enough to comfortably accommodate a party of three to five people, the cost of a night’s stay
per person comes down to a level that few hotels can match in Japan, so MIMARU apartment hotels will nothave much competition. The demand for this kind of hotel is expected to be large because most of the overseas
tourists that are expected to come to Japan are coming from other Asian countries and are traveling as a family.
One might say that Airbnb and other Vacation Rental operators represent competition, but not only are the typesof travelers using Vacation Rental and their motivations quite different, Vacation Rental accommodations cannot
come close to the MIMARU apartment hotels when it comes to offering foreign travelers safety, peace of mind,
and convenience. And, because MIMARU apartment hotels are a new style of accommodations that promises toappeal to a growing target market, there is an additional advantage of being one of the early movers in the market.
Revenues and earnings from MIMARU apartment hotels will come first from the sale after development and thenfrom the hotel management contract. The popularity of this type of hotel is expected to relatively high sales prices.
The Company is looking to have 1,500 rooms developed and under management by 2020.
(3) Construction business/Overseas businessAt the Construction business, the Company is looking to expand its service menu for residential properties andoffice buildings, and increase orders for both new construction and repair work on investment properties. At its
Overseas business, the Company plans to actively work together with the Daiwa House group in Australia and
New Zealand, developing condominiums in Sydney and also participating in a serviced apartment managementbusiness. The Company is looking to generate annual sales of ¥15.0bn from the Construction business and theOverseas business in the near future.

㻿㼍㼘㼑㼟㻌㼠㼍㼞㼓㼑㼠㼟㻌㼡㼚㼐㼑㼞㻌㼙㼑㼐㼕㼡㼙㻛㼘㼛㼚㼓㻙㼠㼑㼞㼙㻌㼎㼡㼟㼕㼚㼑㼟㼟㻌㼟㼠㼞㼍㼠㼑㼓㼥㻾㼑㼟㼕㼐㼑㼚㼠㼕㼍㼘㻌㼎㼡㼟㼕㼚㼑㼟㼟㻯㼛㼚㼟㼠㼞㼡㼏㼠㼕㼛㼚㻌㼎㼡㼟㼕㼚㼑㼟㼟（¥㼙㼚）㻿㼛㼘㼡㼠㼕㼛㼚㼟㻌㼎㼡㼟㼕㼚㼑㼟㼟㻻㼢㼑㼞㼟㼑㼍㼟㻌㼎㼡㼟㼕㼚㼑㼟㼟㻝㻣㻡㻘㻜㻜㻜
㻝㻡㻜㻘㻜㻜㻜

㻝㻡㻘㻜㻜㻜

㻝㻞㻡㻘㻜㻜㻜

㻠㻘㻟㻞㻤㻝㻜㻘㻠㻜㻢

㻝㻜㻜㻘㻜㻜㻜

㻣㻜㻘㻜㻜㻜

㻣㻡㻘㻜㻜㻜
㻠㻣㻘㻢㻠㻣
㻡㻜㻘㻜㻜㻜
㻣㻜㻘㻜㻜㻜
㻞㻡㻘㻜㻜㻜

㻟㻥㻘㻝㻞㻥

㻜㻲㼅㻟㻛㻝㻢

㻲㼅㻟㻛㻝㻣

㻲㼅㻟㻛㻝㻤

㻺㼑㼍㼞㻌㼒㼡㼠㼡㼞㼑

Source: Prepared by FISCO from the Company’s website, etc.





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13 18

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

Cosmos Initia Co., Ltd.

30-Jul.-20188844 TSE JASDAQ

https://www.cigr.co.jp/english/message.html██Results trends
Strong growth leaves FY3/18 results ahead of initial forecast
1. FY3/18 results
For FY3/18, the Company reported sales of ¥100,829mn (+9.2% YoY), operating profit of ¥4,869mn (+19.2%),
recurring profit of 4,367mn (+25.4%), and net profit attributable to parent company shareholders of ¥3,695mn(+21.9%). This was the fourth consecutive year that Cosmos Initia reported higher sales and higher earnings and thefirst time in seven fiscal years that sales topped the ¥100.0bn mark. Compared with the Company’s initial forecast,sales came in ¥2,829mn ahead of plan. Thanks to the strong top-line growth and good cost control at the SG&A
expense, operating profit came in ¥469mn ahead of plan.
FY3/18 results(¥mn, %)
FY3/17% of sales

FY3/18% of sales% changeSales

92,366100.0

100,829

100.0

9.2

Gross profit

18,51620.0

19,487

19.3

5.2

SG&A expense

14,432

15.6

14,61814.5

1.3

Operating profit

4,084

4.4

4,869

4.8

19.2

Recurring profit

3,482

3.8

4,367

4.3

25.4

Net profit attributable to parent
company shareholders

3,030

3.3

3,695

3.7

21.9

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

The Residential business reported sales of ¥39,129mn (-21.6% YoY) and an operating profit of ¥1,142mn (-46.3%),
in line with the Company’s initial forecast. The sharp decline in sales and earnings was attributed to the drop in salesof new condominium units (down 186 units to 558), a decline in sales of new detached housing (down 13 to 55),
and a decline in the sale of pre-owned condominiums that had been purchased for resale (down 103 units to 214).
The drop in sales was attributed in part to the Company’s insistence on good locations for development projects;
together with the rising cost of land at those locations, this limited the number of sites meeting the Company’s
standards for development projects.
The Solutions business reported sales of ¥47,671mn (+67.3%) and an operating profit of ¥4,862mn (+73.7%). The
strong growth in sales and earnings is attributable to high occupancy rates at its condominium subleasing business(where the average vacancy rate declined 0.4ppts to 2.5%), and increases in the number of investment properties
sold and the 1.3ppt increase in gross profit margin on those sales. The increase in sales of investment properties
reflects the successful preparations made under its previous medium-term business plan to meet the growing
demand for investment properties.
The Construction business reported sales of ¥10,406mn (-5.0% YoY) and an operating profit of ¥71mn (-80.3%)
as orders for office renovation work declined from elevated levels the previous year and gross profit margin was
squeezed. The Overseas business reported sales of ¥4,328mn (+7.3%) and an operating profit of ¥367mn (+20.0%)
thanks to a good year at the resort hotel management business in Australia.

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

Cosmos Initia Co., Ltd.

30-Jul.-20188844 TSE JASDAQ

https://www.cigr.co.jp/english/message.html

Results trends

In keeping with its growth strategy, the Company increased its holdings of properties in all areas, adding to its
inventory of investment properties, new condominiums, and the apartment hotels under its new business. And,because it did not depend on borrowing, it was still able to improve the ratio of net debt to equity. The strong demandfor investment properties suggests there is not a problem at this time, and the consensus view within the company
sees no reason for concern about the operating environment through 2020. Incidentally, the medium/long-termbusiness strategy envisages both the Residential and Solutions businesses being in the scale of ¥70bn, but there
is a clear division between the two and the hope is that the Residential business can come back.
Segment sales and operating profit(¥mn, %)
Sales (before adjustments)

FY3/17% of sales

FY3/18% of sales% change

Residential business

49,884

53.5

39,129

38.5

-21.6

Solutions business

28,50230.5

47,671

47.0

67.3

Construction business

10,953

11.7

10,40610.2-5.0

Overseas business

4,032

4.3

4,328

4.3

7.3

Operating profit (before adjustments)

FY3/17

Profit margin

FY3/18

Profit margin% change

Residential business

2,128

4.3

1,142

2.9

Solutions business

2,799

9.8

4,862

10.2

-46.3
73.7

Construction business

360

3.3

71

0.7

-80.3

Overseas business

305

7.6

367

8.5

20.0

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

FY3/19 forecast prompts upward revision of targets
under medium-term business plan
2. FY3/19 forecast
For FY3/19, the Company is forecasting in sales of ¥105,000mn (+4.1% YoY), an operating profit of ¥5,250mn(+7.8%), recurring profit of ¥4,800mn (+9.9%), and net profit attributable to parent company shareholders of¥4,400mn (+19.1%). The gross profit margin is expected to come down following the Company’s pullout from theoverseas resort hotel management business, but SG&A expenses are also expected to come down and this together
with the growth in sales at the high-margin Solutions business is expected push up the operating profit margin for
the Company as a whole and bring operating profit in above the target initially set under the 2018 medium-termbusiness plan.
FY3/19 forecast(¥mn, %)
FY3/18% of sales

FY3/19 E% of sales% change

Sales

100,829100.0

105,000

100.0

4.1

Gross profit margin

19,48719.3

18,330

17.5-5.9

SG&A expenses

14,61814.5

13,080

12.5

-10.5

Operating profit

4,869

4.8

5,250

5.0

7.8

Recurring profit

4,367

4.3

4,800

4.6

9.9

Net profit attributable to parent
company shareholders

3,695

3.7

4,400

4.2

19.1

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

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

Cosmos Initia Co., Ltd.
8844 TSE JASDAQ

30-Jul.-2018https://www.cigr.co.jp/english/message.html

Results trends

For the Residential business, the Company is forecasting sales of ¥38,000mn (-2.9% YoY) and operating profit of¥1,250mn (+9.5%). With regard to the operating environment, the Company is looking for new condominium sales
to remain in a downtrend but sees sales of new detached housing doubling and sales of pre-owned condominium
turning up as well. Near term, the Company appears to be content with just maintaining overall sales at the
Residential business at a certain level. For the Solutions business, the Company is forecasting sales of ¥55,100mn(+15.6%) and operating profit of ¥5,560mn (+14.4%) based on its outlook for steady growth in revenues fromcondominium subleasing and an increase in both the number of investment properties sold and the gross profit
margin on those sales. The new apartment hotel development and management business is expected to get intofull swing this year, though hotel opening costs will weigh on earnings initially. For the Construction business, theCompany is forecasting sales of ¥11,600mn (+11.5%) and a 4.2-fold increase in operating profit to ¥300mn, basedon its outlook for improvements in both its order flow and margins. At the Overseas business, following its exit fromthe resort hotel management business, the Company is forecasting sales of ¥1,100mn (-74.6%) and an operating
profit of ¥70mn (-80.9%).
Breakdown of FY3/18 sales and operating profit forecast by segment(¥mn, %)
Sales (before adjustments)

FY3/18% of sales

FY3/19 E% of sales

Residential business

39,12938.5

38,00035.9-2.9

Solutions business

47,67147.0

55,10052.1

15.6

Construction business

10,406

10.2

11,600

11.0

11.5

Overseas business

4,328

4.3

1,100

1.0

-74.6
% change

Operating profit (before adjustments)% change

FY3/18MarginFY3/19 E

MarginResidential business

1,142

2.9

1,250

3.3

9.5

Solutions business

4,862

10.2

5,560

10.1

14.4

Construction business

71

0.7

300

2.6

322.5

Overseas business

367

8.5

70

6.4

-80.9

Note: Does not include the Other business.
Source: Prepared by FISCO from the Company’s financial results and results briefing materials

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

Cosmos Initia Co., Ltd.
8844 TSE JASDAQ

30-Jul.-2018https://www.cigr.co.jp/english/message.html

Results trends

Company keeping pace with medium-term business planas never before
3. Progress versus medium-term business plan 2018
Under its medium-term business plan 2018, the Company initially set a target for FY3/19 sales of ¥105,000mn
and operating profit of ¥5,000mn. It also targeted a net debt-to-equity ratio of 1.5x at the end of FY3/19, with atarget for net interest-bearing debt of ¥43,000mn and net assets of ¥29,000mn. Results in FY3/18, saw sales
hit ¥100,829mn and operating profit ¥4,869mn. Net interest-bearing debt rose to ¥42,706mn and net assets of¥25,824mn, bringing the net debt-to-equity ratio to 1.7x. This put the Company firmly on track to meet the targets
under the medium-term business plan. Indeed, the growth in operating profit was such that the Company raised its
operating profit target for FY3/19 to ¥5,250mn.
Looking now at the interim progress under the medium-term business plan 2018, at the Residential business, wefind the Company following up the 2016 completion of the GRAND COSMO Musashiurawa condominium complex
for active seniors with 2 to 4 additional development plans that represent in cities in regional areas. This is thelong-awaited start of a nationwide rollout. The Company has already completed tentative planning for redevelopment
projects and also working to respond to the three other brand lines for renovated condominiums. Of these, the INITIA
LINE particular has won praise from customers for being easy to picture because renovation gives it a look on parwith newly built INITIA condominiums and the and also created synergies with its new condominium construction
operations, leading to efficiency gains in both construction and design. The Company says it started getting requests
for renovation work from customers last fiscal year.
At the Solutions business, the Company is making rapid progress rolling out its apartment hotel development andmanagement business. Since the February 2018 opening of its first hotel, the 40-room MIMARU Tokyo Ueno NORTH,
it has opened three more for a combined total of four hotels and 154 guest rooms under management as of the endof April 2018. The Company is looking to have a total 1,500 rooms under management in 2020, a figure that looks
achievable given the total of 931 rooms in the 18 hotels that are either already in operation or under development. For
the first three months of operations at its first hotel, the Company reported an occupancy rate of 72% for February,
83% for March, and 89% for April. The average price per room per night during this timeframe was around ¥30,000;
the average stay was 2.5–2.6 nights, with an average of 4.2 people per room. Just under 40% of guests were said
to be from Taiwan and roughly 10% from Hong Kong; the rest came from a range of countries including Thailand,
Japan, the US, and Australia. With these results being closely in line with expectations, the Company is planningto have a total of seven or eight hotels in operation by the end of FY3/19, opening up the possibility that its hotelmanagement business will be in the black as early as FY3/20.

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

Cosmos Initia Co., Ltd.
8844 TSE JASDAQ

30-Jul.-2018https://www.cigr.co.jp/english/message.html██Shareholder return policy
The Company places the highest priority on increasing its enterprise value and distributing profits to shareholders
and, in keeping with this, will strive to maintain a stable dividend that both shares profits with shareholders andassures the internal reserves needed to sustain growth. Although its articles of incorporation allow the board of
directors to approve the payment of an interim dividend, the Company’s dividend policy at this time calls for paying
a dividend once a year at the end of the fiscal year. Based on its earnings forecast for FY3/19, the Company expects
to pay a period-end dividend of ¥11 per share, an increase of ¥2 over FY2/18. The Company does not have a special
benefit program for shareholders.

㻰㼕㼢㼕㼐㼑㼚㼐㻌㼜㼑㼞㻌㼟㼔㼍㼞㼑㻌㼍㼚㼐㻌㼐㼕㼢㼕㼐㼑㼚㼐㻌㼜㼍㼥㼛㼡㼠㻌㼞㼍㼠㼕㼛（¥）

㻰㼕㼢㼕㼐㼑㼚㼐㻌㼜㼑㼞㻌㼟㼔㼍㼞㼑㻌㻔㼘㼑㼒㼠㻕㻰㼕㼢㼕㼐㼑㼚㼐㻌㼜㼍㼥㼛㼡㼠㻌㼞㼍㼠㼕㼛㻌㻔㼞㼕㼓㼔㼠㻕

（㻑）

㻝㻝㻚㻜

㻝㻞㻚㻜

㻝㻞㻚㻜

㻥㻚㻜
㻥㻚㻜

㻣㻚㻤

㻢㻚㻜

㻥㻚㻜

㻣㻚㻜

㻣㻚㻜

㻤㻚㻟

㻤㻚㻡

㻢㻚㻜

㻢㻚㻡

㻟㻚㻜

㻟㻚㻜
㻜㻚㻜

㻜㻚㻜

㻲㼅㻟㻛㻝㻠

㻲㼅㻟㻛㻝㻡

㻜㻚㻜㻜㻚㻜㻲㼅㻟㻛㻝㻢

㻲㼅㻟㻛㻝㻣

㻲㼅㻟㻛㻝㻤

㻲㼅㻟㻛㻝㻥㻌㻱

Source: Prepared by FISCO from the Company’s financial results██Information security
In the course of its business the Company comes into the possession of personal information of buyers andprospective buyers of new condominiums and detached housing and, as a result, is subject to the Protectionof Personal Information Act. In keeping with the Act, the Company has taken all appropriate steps to guard thepersonnel information in its possession, including establishing a privacy policy and procedures and rules for thehandling of personal information. It is also working to fortify its information management structure across thecompany as a whole, including employee training and the installation of secure entry/exit systems for all offices.

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

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Disclaimer
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