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

BEENOS Inc.
3328 TSE Mothers

13-May-16

Important disclosuresand disclaimers appear
at the end of this document.
FISCO Ltd. Analyst
Yuzuru Sato伪伪Aggressively investing in human resource
development and promotional expenses in order toestablish an industry leading structure
BEENOS, Inc. (3328) engages in various electronic commerce (e-commerce) and incubation
businesses. The e-commerce businesses comprises of: a cross-border business (purchasing andforwarding agent operations, global internet shopping operations), a value cycle business (trading
pre-owned brand goods via the internet), and a retailing and licensing business (product production
and licensing operations, internet shopping operations), with cross-border e-commerce overseas
purchasing and forwarding agent operations in particular enjoying rapid growth.
1H FY9/16 consolidated results (Oct 2015-Mar 2016) were basically in line with the Company’s
forecast, with sales up 11.5% YoY to ¥9,195mn, and operating profit down 35.9% YoY to ¥479mn.
Despite profit declines in the incubation business, e-commerce business sales rose 17.2% YoY
to ¥9,015mn, with operating profit from that segment also rising 5.1% YoY to ¥495mn, achievinga record high on a half-yearly basis. The cross-border and value cycle businesses, in which theCompany had aggressively invested in order to establish itself as the undisputed leading player in
the industry, there was a steady, double-digit growth in sales, with the value cycle business being thedriver in terms of operating profit.
FY9/16 full-year forecasts remain unchanged with sales of ¥19,600mn (+15.7% YoY) and operating
profit of ¥1,000mn (-15.6% YoY). Total transaction values are expected to rise 17.5% YoY to¥43,000mn. The rate of progress (with respect to Company forecast) for operating profit to 1H is57.0% in its e-commerce business and 28.3% in its incubation business. Given that e-commerce
operations, centering on its cross-border and value cycle businesses, are also expected to grow fromQ3 onwards, we feel the Company forecast (for 12.9% YoY growth to ¥870mn) is achievable. At thesame time, given that in Q3 US$6 million (approximately ¥685mn at an exchange rate of US$1:¥113)
in gains on sales of investment securities are also scheduled to be booked in the incubation business,the likelihood of it also achieving the Company forecast (for a 32.8% YoY decline to ¥500mn) is high.
Company policy aims for double-digit annual growth rate in its e-commerce business, centered on its
cross-border and value cycle businesses. In FY9/16, as a result of aggressively investing in humanresource development and promotional expenses in order to establish an industry leading structure,
margins will decline slightly, however, from FY9/17, given that it will reach the stage where it canutilize its economies of scale, it is expected that profitability will also improve. With respect to its
incubation business, as it secures capital gains, apart from continuing to invest in internet venturecompanies in developing countries, focusing on India, the Company aims to create new businesses
in-house.

伪伪Check Point• Established record highs for transaction values and sales in its cross-border business• Double-digit sales and profits growth and record results highs expected in e-commercebusinesses• Shareholders’ equity ratio and interest-bearing debt ratio both at healthy levels

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

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BEENOS Inc.

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㻝㻜㻘㻟㻜㻤FISCO Ltd. Analyst
Yuzuru Sato

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Important disclosuresand disclaimers appear
at the end of this document.

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13-May-16㻢㻜㻜㻝㻢㻘㻥㻟㻢

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伪伪Description of BusinessComprising 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 (an overseas
purchasing and forwarding agency business, and a global internet shopping business), 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 inand nurtures internet ventures in Japan and abroad. These businesses are described in greater
detail below.
○Cross-border Business
The cross-border business is comprised of two consolidated subsidiaries; tenso, Inc., which serves
as a purchasing and forwarding agent for goods purchased through an e-commerce site in Japanby buyers living 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.
Overseas forwarding operations by tenso offers a service for foreign and Japanese consumers
residing overseas whereby, when they purchase an item on an e-commerce site in Japan, in cases
where 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. Apart from being able to select the shipment method fromamongst Japan Post’s Express Mail Service (EMS), regular airmail, Japan Post’s Surface Air Lifted(SAL) economy airmail service, and surface mail, forwarding fees for the service provided also startfrom as low as ¥50 (depending on total shipment weight).
Further, the Company also operates Buyee.jp, which serves as a proxy for purchasing and bidding
for mail order goods and goods auctioned in Japan. As payment methods allow for Paypal andAlipay to be used, and products descriptions to be automatically translated into foreign languages,
transaction values over the Buyee.jp site are expanding. Fees on the Buyee.jp site were revised in
December 2015 (to 5% of the purchase or auction price, down from 10%), being free on Amazon
Japan K.K, Rakuten (4755) and Yahoo Shopping! (Yahoo (4689)]) (with, however, a flat fee arisingof ¥150 for products priced under ¥3,000 and a ¥200 fee per successful auction at Yahoo Auction !).
Currently, with 84 countries and regions to which goods may be shipped, customer support services
in four languages, and tie-ups with approximately 1,200 domestic e-commerce sites, the Company
is establishing itself in the leading position 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

Two services tenso.com provides and their service flows

BEENOS Inc.
3328 TSE Mothers

13-May-16

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

Source: BEENOS, Inc.

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., the largest auction site in the world. Currently sekaimon handles
products listed in four countries, namely the US, the UK, Germany, and Austria and charges a feeof 15% of the auction price (or for lower auction prices, a fixed fee which was revised from ¥500 to¥800 in February 2016).
○Value Cycle BusinessThis is a business for buying and selling pre-owned brand goods via the internet operated byconsolidated subsidiary Defactostandard Ltd., and is the industry leader in terms of its track recordof purchases and sales over the internet. With its Brandear auction site as the first point of contact, itpurchases goods using commercial home delivery services and sells these goods through Japaneseand overseas internet auction sites. The Company’s strategy is to expand purchase numbers bysecuring multiple purchasing channels through tie-ups with other companies, including Yamada
Denki (9831) and each of the co-op store-related sites, 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 6,000 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 for quickly
appraising and purchasing at a fair, appraised price this diverse range of goods.

BEENOS Inc.
3328 TSE Mothers

13-May-16

Important disclosuresand disclaimers appear
at the end of this document.
FISCO Ltd. Analyst
Yuzuru SatoOn the flip side, from a sales perspective, its strength is that it has developed its own proprietarysystem that allows it to enable 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 thelargest domestic auction site, Yahoo! Auctions, in FY9/16 Defactostandard was awarded its “Annual
Best Store Overall Grand Prix” for the seventh straight year.
○Retailing and Licensing Business
The retailing and licensing business is comprised of operations for the production and licensing ofgoods, and internet shopping operations.
At its subsidiary monosense, Ltd. It 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, and the
management of their licensing. It sells official goods at events where licensed popular groups appear
and manages and operates their official e-commerce sites, recording sales from commissions, which
are 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 line-ups and retailing methods for distinctive goods, such as 24hour sale goods, original goods developed with producers, and goods jointly planned and developedwith celebrities and other well-known public figures. The netprice internet shopping site has morethan 2.2 million cumulative registered users. Women make up about 78% of the netprice online
shopping site membership, with, by age group, people in their 30’s and 40’s comprising just over
70% of the membership.
○Incubation Business
The incubation business comprises investing in and nurturing internet venture businesses in Japanand overseas, and developing new businesses in-house prior to the stage they become profitable.
In its investing and nurturing operations, subsidiary BEENOS Asia Pte., 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 companies, BEENOS Asia Pte.
encourages the exchange of personnel and technologies among investee companies.
BEENOS Partners Inc., based in Japan, invests mainly in US start-up companies engaged in internet
businesses, taking stakes of less than 1%. Through these investments, BEENOS gains information
about the latest internet services and technologies. It applies this information to establish new
businesses in Japan and overseas, and it eventually realizes capital gains on its investments. This
company also invests in start-up companies engaged in internet businesses in Japan.

We encourage readers to review our complete legal statement on “Disclaimer” page.
4伪伪Business Trends
Sales increased 11.5% YoY to ¥9,195mn, with operating profit
declining 35.9% YoY to ¥479mn

BEENOS Inc.
3328 TSE Mothers

13-May-16

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

(1) 1H FY9/16 Results Summary
Consolidated 1H FY9/16 results, which were announced on April 21, progressed basically in linewith the Company’s forecast, with sales up 11.5% YoY to ¥9,195mn, operating profits down 35.9%
YoY to ¥479mn, recurring profit down 30.9% YoY to ¥508mn, and net profit attributable to parent
shareholders down 50.7% YoY to ¥300mn.
Despite profits declining in the incubation business, in its core e-commerce businesses sales rose
17.2% YoY to ¥9,015mn, and operating profits rose 5.1% to ¥495mn, setting a record high on ahalf-yearly basis. The Company’s cross-border and value cycle businesses, where it aggressively
invested in human resource development and promotional expenses in order to establish its position
as the undisputed industry leader, there was a steady, double-digit expansion in revenues, with thevalue cycle business being the driver in terms of operating profit. SG&A increased ¥668mn YoY,
within which staff cost rises of ¥266mn and advertising and promotional cost rises of ¥188mn werethe main factors contributing to the increase.
Looking at transaction values in the e-commerce business on a quarterly basis, we see that inthis Q2 (Jan-Mar 2016) they rose 16.8% YoY, declining 1.7% QoQ. Year-on-year all businesses
continued to perform well with double-digit growth. The reason for falling QoQ was a decline in theretailing and licensing business, however, this is a temporary factor and due to a reaction to thesignificant increase in Q1 in shipments of pre-ordered goods in the producing and licensing business.
Consolidated 1H FY9/16 Results
1H FY9/15
Results
vs. sales
17,609
8,247
7,690
93.3%
556
6.7%
3,875
47.0%
3,623
43.9%
747
9.1%
471
6.1%
439
79.0%
-163
735
8.9%
104
1.3%
609
7.4%

Transaction valueSales
e-commerce
Incubation
COGs
SG&A
Operating profit
e-commerce
Incubation
Joint costs
Recurring profit
Extraordinary profit (loss)
Profit attributable to owners of parent

Results
20,874
9,195
9,015
179
4,424
4,292
479
495
141
-158
508
300

1H FY9/16
vs. sales
98.0%
2.0%
48.1%
46.7%
5.2%
5.5%
78.8%
5.5%
3.3%

(Unit: ¥ mn)
v
18.5%
11.5%
17.2%
-67.7%
14.2%
18.4%-35.9%
5.1%-67.8%-30.9%-50.7%

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We encourage readers to review our complete legal statement on “Disclaimer” page.
5

■■Business Trends

Cross-border business transaction values and sales set a
record high(2) 1H FY9/16 Segment Results
Quarterly results trends by operating segment are as set out below.

BEENOS Inc.
3328 TSE Mothers

13-May-16

Important disclosuresand disclaimers appear
at the end of this document.

○Cross-border Business
Cross-border transaction values in this Q2 rose 14.5% YoY to ¥5,844mn, while sales rose 25.9%
YoY to ¥972mn; both setting record highs. The reason behind the growth rate for sales exceedingthat for transaction values was that yen appreciation caused a decline in unit pricing while there wasan increase on the basis of number of items handled. On the other hand, operating profit fell 28.9%
YoY to ¥78mn, marking a second consecutive quarterly decline in profits. Increases in promotionalcosts, systems development costs, staff and other costs were the main factors behind this decline.
However, as the Company positioned the period through to Q2 as one for up front investment,
progress is basically in line with the plan.

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Looking at a breakdown of transaction values we see that proxy purchasing and overseas forwarding
operations continued double-digit growth, rising 15.6% YoY, but declined 2.5% from the previous
quarter. Sluggish sales in big-ticket goods suffered an impact from appreciation of the yen, however,looking at it in terms of number of items handled underlying growth continued, even on a quarterlycomparison. A fee revision was put into effect from the middle of December, and apart from a
reduction in Buyee usage fees, with among other things the settlement currency also going froma Japanese yen settlement basis to accommodating 15 major currencies, it is felt that the marked
increase in convenience for users led to increases in the number of items handled. By region, despite
a slight slowdown in China, apart from high growth continuing in Taiwan, Hong Kong and the US,
increases in users from Q2 in the Southeast Asian region, including Thailand and Malaysia, stoodout. In Taiwan the launch of a pick-up service at convenience stores from this period is thought tohave contributed to an increase in items handled, and going forward the Company plans to roll-out asimilar service to other countries also.
From around 700,000 subscribed customers in overseas forwarding and proxy purchasing operations
at the end of the last period, the number had grown to 860,000 by the end of Q2, and the number
of affiliated domestic e-commerce sites has also expanded steadily from around 800 at the end of
the previous period to approximately 1,200 by the end of Q2, arguably being on route to cementing
structures for an undisputed leading position within the industry.

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

■■Business Trends

BEENOS Inc.

From a profit perspective, temporary increases in expenses, in line with fee revisions and strategic
investment in promotional costs, as well as strengthening of equipment and staffing structures in linewith operational expansion led to decreased profits. Moreover, in March the Company established asatellite office in Daisencho, Tottori Prefecture that will become a development base. It is scheduled
to commence operations from April. Not only does it create employment in the IT sector in Tottori
Prefecture, the Company is seeking, in collaboration with Daisencho, measures aimed at tourists
visiting Japan, making full use of its e-commerce know-how, with it planned to create a new system
of PR.

3328 TSE Mothers㻔㻿㼕㼠㼑㼟㻕

13-May-16㼠㼑㼚㼟㼛㻚㼏㼛㼙㻌㼍㼚㼐㻌㻮㼡㼥㼑㼑㻌㻿㼡㼎㼟㼏㼞㼕㼎㼑㼐㻌㻯㼡㼟㼠㼛㼙㼑㼞㼟㻌㻺㼡㼙㼎㼑㼞㼟㻌㼍㼚㼐㻌㻭㼒㼒㼕㼘㼕㼍㼠㼑㼐㻌㻿㼕㼠㼑㻌㻺㼡㼙㼎㼑㼞㼟㻔㻝㻜㻘㻜㻜㻜㻌㼡㼟㼑㼞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㼀㼔㼑㻌㼚㼡㼙㼎㼑㼞㻌㼛㼒㻌㼟㼡㼎㼟㼏㼞㼕㼎㼑㼐㻌㼏㼡㼟㼠㼛㼙㼑㼞㼟㻌㻔㼞㼕㼓㼔㼠㻌㼍㼤㼕㼟㻕
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Important disclosuresand disclaimers appear
at the end of this document.

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FISCO Ltd. Analyst
Yuzuru Sato

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㻽㻟㻲㼅㻥㻛㻝㻡

㻽㻠㻲㼅㻥㻛㻝㻡

㻽㻝㻲㼅㻥㻛㻝㻢

㻽㻞㻲㼅㻥㻛㻝㻢

On the other hand, transaction values in global shopping operations grew 10.0% YoY, having
shifted to growth from the previous quarter, and also being up 26.2% QoQ; and with, among otherfactors, two consecutive quarters of growth the recovery has become clear. In addition to being
aided along by yen appreciation since the beginning of the year, the impact of the sekaimon site
renewal implemented in Q2, which significantly enhanced customer convenience, was significant.
Specifically, costs apart from the purchase price, such as international forwarding charge estimates
are displayed in a readily understandable way at the time of purchase. Previously, the buyer was
notified after the product had arrived at the warehouse and been weighed in relation to international
forwarding charges. However, by displaying a forwarding charge estimate based on past data from
actual cases, it has helped enabled safe and secure shopping. Further, in order to expand female
customer numbers that had remained at only 20% of overall users, apart from creating a specialist
female only site, by introducing its own recommendation engine and other initiatives, it has improved
to become a site customers want to shop at.
From a profit perspective, despite the continuance of a small operating loss a return to profitability
is expected from Q3 onwards. Apart from promoting an enhancement in the quality of service at thesame time as reducing costs by way of measures to raise profitability including, from this period,
bringing US warehousing and customer service centers in-house, as well as promoting changes inforwarders (carriers), it is felt that the increasing of minimum auction fees from February from ¥500
to ¥800 will also contribute to an improvement in profits.
○Value Cycle BusinessQ2 value cycle business sales rose 16.1% YoY to ¥2,501mn, while operating profit rose 108.7% to¥264mn, achieving a record results high on a quarterly basis. Buying demand via the internet for
pre-owned brand goods is robust, and due to the Company’s strength in handling a broad array ofbranded merchandise, double-digit growth continues.
From a profit perspective, in addition to the impact from higher revenues, internal operational
improvements and improvements in cost structures through the use of outsourcing were major factors
behind increased profits. Further, the impact from higher revenue and a reduction in promotional
expenses from the previous quarter were factors behind increased profits.

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

■■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
㻞㻢㻠

㻞㻘㻣㻜㻜
㻞㻘㻠㻜㻜

㻞㻡㻜

㻞㻘㻝㻜㻜

BEENOS Inc.

㻞㻜㻜
㻝㻞㻢

㻝㻘㻤㻜㻜

3328 TSE Mothers

㻝㻘㻡㻜㻜

㻥㻜㻜

㻝㻝㻡

㻝㻘㻥㻣㻡

㻝㻡㻜
㻞㻘㻡㻜㻝

㻠㻤

㻝㻘㻞㻜㻜

13-May-16

㻞㻘㻟㻣㻟
㻞㻘㻝㻡㻠

㻞㻘㻝㻡㻡

FISCO Ltd. Analyst
Yuzuru Sato

㻝㻜㻜
㻡㻜

㻞㻘㻟㻟㻣

㻜

㻝㻡

㻢㻜㻜

㻙㻡㻜

㻟㻜㻜

Important disclosuresand disclaimers appear
at the end of this document.

㻟㻜㻜

㻙㻝㻜㻜

㻙㻝㻝㻞

㻜
㻽㻝㻌㻲㼅㻥㻛㻝㻡㻽㻞㻌㻲㼅㻥㻛㻝㻡㻽㻟㻌㻲㼅㻥㻛㻝㻡㻙㻝㻡㻜㻽㻠㻌㻲㼅㻥㻛㻝㻡㻽㻝㻌㻲㼅㻥㻛㻝㻢㻽㻞㻌㻲㼅㻥㻛㻝㻢

○Retailing and Licensing BusinessIn this Q2 the retailing and licensing business enjoyed 25.3% YoY growth in transaction values
to ¥2,001mn, 0.2% YoY growth in sales to ¥1,070mn and 17.8% YoY growth of operating profit to¥57mn. Increased consignment sales from sites such as official artist e-commerce sites was thereason that the sales growth rate was comparatively lower than that for transaction values.
There was a slight decline in revenue and earnings in respect of internet shopping business, however,underlying profitability is being maintained. The strategy is to strive for higher overall profitability
while investing in promotional and system development expenses aimed at acquiring new customers
and promoting usage by existing customers, by raising the percentage of sales of original products
developed in-house, which carry high gross margins. The percentage of sales represented byproducts produced in-house is around 6% and steadily rising, with gross margins also continuing thetrend towards improvement QoQ.
On the other hand, in respect of the retailing and licensing business, there was year-on-year growth
in revenues and earnings, with increased sales of popular celebrity goods as the main factor.
ECONECO, which monosense holds the master licenses, opened its first long-term store in February
2016 in Lumine Est Shinjuku. It launched sales of pocket monster character goods through a tie-up
with Pokémon (including at its online store) in April, with an expansion in sales expected.

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(¥ mn)
㻝㻘㻤㻜㻜㻿㼍㼘㼑㼟㻌㻔㼘㼑㼒㼠㻌㼍㼤㼕㼟㻕

㻡㻣

㻡㻥

㻡㻡

(¥ 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

㻢㻜

㻡㻞

㻠㻥

㻝㻘㻡㻜㻜

㻡㻜

㻝㻘㻞㻜㻜

㻠㻜

㻥㻜㻜

㻟㻜

㻢㻜㻜

㻝㻘㻜㻢㻞

㻝㻘㻜㻢㻤

㻥㻤㻢

㻟㻜㻜

㻝㻘㻜㻡㻢

㻝㻘㻝㻡㻟

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㻞㻜
㻝㻜

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㻜
㻽㻝㻌㻲㼅㻥㻛㻝㻡㻽㻞㻌㻲㼅㻥㻛㻝㻡㻽㻟㻌㻲㼅㻥㻛㻝㻡㻽㻠㻌㻲㼅㻥㻛㻝㻡㻽㻝㻌㻲㼅㻥㻛㻝㻢㻽㻞㻌㻲㼅㻥㻛㻝㻢

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

■■Business Trends○Incubation BusinessNo sales were recorded in the incubation business in Q2, with an operating loss of ¥25mn (comparedwith a profit of ¥18mn for the same period a year ago).

BEENOS Inc.
3328 TSE Mothers

Also, the balance of investment securities at end-March increased ¥81mn from the end of theprevious fiscal year to ¥1,745mn. The main investee companies and percentages held are as per thetable below, with investments in India being undertaken aggressively recently. In this Q2 in India the
Company invested in Nobroker Technologies Solutions which operates NoBroker, India’s first online
C2C real estate marketplace, and Voonik, which operates fashion marketplace voonik.com. The
Company invests in superior companies that significantly exceed market averages, even amongst
domestic Indian online internet platform companies, and we may assume that its latent gains also will
only increase further in line with the growth of these companies.

13-May-16

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

Main Companies Invested in by the Incubation Business
Investment
ratio

Headquarters
Business
locationakakce.com
TurkeyPrice comparison service
10% orPaynamics Technologies Philippines
Online settlement service
more
Operates the Durania flea market application in Malaysia
Duriana Internet
Malaysia
and the Philippines
Tokopedia
Indonesia
Operates the tokopedia C-to-C online marketplace
Management of droom, an online marketplace for buying
Droom
India
and selling vehicles
Buyhatke
India
Price comparison service
Sendo Technology
VietnamOperates online marketplace Sendo
African
5 to 10%
NearexMobile money
nations
FablicJapan
Operates flea market application Fril
Cloud-based agency service for handling household
CaSy
Japan
choresPlans and develops Web and application services for
Quan
Japan
mobile equipment
Clues Network
India
Operates the ShopClues B-to-C online marketplace
Citrus Payment Solutions India
Online settlement service
Operates the KARTROCKET service for opening online
Big Foot Retail Solutinos India
storesOperates the NoBroker online C-to-C real estate
NobrokerIndiamarketplace
1 to 5%Midtrans
Indonesia
Online settlement service
iyzi Payments
TurkeyOnline settlement service
AyannahPhilippines
Online settlement service
Operates the Qiita service for exchanging technical
IncrementsJapan
information among software programmers
GifteeJapan
Operates the giftee social gift service
VoonikIndia
Operates the voonik.com mobile fashion marketplace
Less than
Operates the instacart online delivery service for
MaplebearUS1%
foodstuffs and daily use goods
KamcordUS
Operates a video sharing platform for mobile games
Note: Investment highlighted were made since October 2015
Company

Double-digit growth in sales and profits and record results
expected for the e-commerce business(3) Company forecast for FY9/16
The FY9/16 full-year consolidated forecast is for sales of ¥19,600mn (+15.7% YoY), operating
profit of ¥1,000mn (-15.6% YoY), recurring profit of ¥950mn (-17.3% YoY) and net profit of ¥650mn(-27.6% YoY); with transaction values of ¥43,000mn (+17.5% YoY), and all unchanged from the planat the beginning of the period. While double-digit growth in sales and profits and record results are
expected for the e-commerce business, there will be an overall decline in profits due to a reduction
in gains on sales of operational investment securities.

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

■■Business Trends

BEENOS Inc.
3328 TSE Mothers

Looking at the rate of progress up to Q2 we see that sales are at 48.0% and operating profit at 57.0%
versus respective targets in e-commerce business, and basically in line with plan. Further, despite therates of progress for sales being only 22.5% and operating profit 28.3% in the incubation business,
it was decided in April to make a partial sale of operational investment securities in one issue, andgiven that that will carry a sales value of US$6.2mn (approximately ¥708mn at an exchange rateof US$1:¥113), and gains on sale of US$6.0mn (approximately ¥685mn), the likelihood of full-year
results exceeding the plan are high. Although by simply adding the gains on sale, operating profit
in the incubation business would exceed the plan by around ¥320mn, given that some expenses
are expected in 2H for establishing a new business, there is also the possibility that the quantum of
increase will remain somewhat lower. The forecast by operating segment is as set out below.
FY9/16 Consolidated Results Outlook

13-May-16

FY9/15Results

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

Transaction valueSales
e-commerce
Incubation
Operating profit
e-commerce
Incubation
Joint costs
Recurring profit
Net profit

36,597
16,936
15,896
1,040
1,184
770
744
-329
1,148
898

(Unit: ¥ mn)

FY9/16

vs. sales

Forecast

vs. sales

93.9%
6.1%
7.0%
4.8%
71.5%
6.8%
5.3%

43,00019,60018,800
800
1,000
870
500
-370
950
650

95.9%
4.1%
5.1%
4.6%
62.5%
4.8%
3.3%

YoY
17.5%
15.7%
18.3%
-23.1%-15.6%
11.5%-32.8%-17.3%-27.6%

Rate ofprogress
48.5%
46.9%
48.0%
22.5%
47.9%
57.0%
28.3%
53.5%
46.2%

㻿㼍㼘㼑㼟㻌㼀㼞㼑㼚㼐㼟㻌㼎㼥㻌㻮㼡㼟㼕㼚㼑㼟㼟(¥ mn)

㻯㼞㼛㼟㼟㻙㼎㼛㼞㼐㼑㼞㼂㼍㼘㼡㼑㻌㼏㼥㼏㼘㼑㻾㼑㼠㼍㼕㼘㼕㼚㼓㻌㼍㼚㼐㻌㼘㼕㼏㼑㼚㼟㼕㼚㼓㻵㼚㼏㼡㼎㼍㼠㼕㼛㼚㻞㻝㻘㻜㻜㻜
㻤㻜㻜㻝㻤㻘㻜㻜㻜
㻝㻘㻜㻠㻜㻝㻡㻘㻜㻜㻜
㻝㻢㻥㻝㻞㻘㻜㻜㻜
㻥㻘㻜㻜㻜

㻡㻘㻜㻜㻜

㻠㻘㻝㻣㻠

㻠㻘㻞㻞㻠

㻝㻢

㻝㻜㻘㻜㻜㻜

㻠㻘㻣㻥㻡

㻤㻘㻢㻞㻞

㻢㻘㻜㻜㻜

㻢㻘㻟㻤㻣

㻟㻘㻜㻜㻜

㻠㻘㻟㻢㻝
㻝㻘㻤㻞㻝

㻟㻘㻤㻜㻜

㻝㻘㻝㻟㻣

㻟㻘㻜㻥㻥

㻜

㻲㼅㻥㻛㻝㻟

㻲㼅㻥㻛㻝㻠

㻲㼅㻥㻛㻝㻡

㻲㼅㻥㻛㻝㻢㻱

○Cross-border Business
Cross-border business transaction values are expected to rise 24.6% YoY to ¥26,000mn, sales tocontinue double-digit growth of 22.6% YoY to ¥3,800mn, with operating profit to be in line with theprevious period as a result of aggressive strategic investment, including in promotional expenses.
Overseas forwarding and proxy purchasing business’ sales are also expected to see double-digit
growth from Q3 onwards. From April a new tax regime in respect of cross-border e-commercecommenced in China, the Company’s largest trading partner country, however, the Company seesno change in underlying expansion in demand.

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

■■Business Trends

BEENOS Inc.
3328 TSE Mothers

13-May-16

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

Under the new regime, postage tariffs levied on personal imports will be abolished, with a value
added tax to be levied on all goods. In line with this the duty free scope recognized under the postage
tariff (under the postage tariff goods of 50 yuan or under were tax exempt) will disappear. However,
it is not the case that all product categories will see increased taxes. As for example, whereas forapparel, fashion, electrical appliances and other products that exceed 250 yuan, previously, a postage
tariff of 20% had been levied (with goods under 250 yuan being tax exempt), under the new regime
there will be a reduction in tax to the 11.9% flat rate in the value added tax. Further, for cosmetics
also, there will be a 3% reduction in tax over previous rates in respect of goods that exceed 100 yuan.
On the other hand, foodstuffs (including health foods), baby goods and sundry items, as they weretax exempt if they were 500 yuan and under, there will now be a flat 11.9% tax rate levied, with theprevious 10% tax rate for goods 500 yuan and over also rising to 11.9% under the new system. Thus
both pluses and minuses will arise for users under these changes in the tax regime.
As a result, it is necessary to ascertain the position in Q3 in respect of China, however, it is thought that
expansion in demand will not change significantly. Further, due to the fee revision in December 2015
and commencement of multi-currency settlement services from mid-February 2016, with significant
growth in volumes handled from March, it is expected that, as long as no rapid appreciation in theyen occurs going forward, double-digit growth will continue.
At the same time, the Company is also aiming for increased full-year sales and profitability in global
shopping operations. It is felt that the benefits of tackling customer base expansion by, in addition
to enhancing "usability", strengthening sekaimon’s shopping functions, and implementing initiatives
such as site creation aimed at acquiring more female members, will now become apparent.
Moreover, in the global domain this period a new business is scheduled to be launched. Details have
not yet been made clear, however, it appears that it will be a service that contributes to reduction inlogistics costs, using existing member assets.
○Value Cycle Business
Sales in the value cycle business are expected to rise 16.0% YoY to ¥10,000mn, with operating profit
also seeing double-digit growth. Given that the Company will again proactively invest in televisioncommercials in Q3, profits will see a one-off decline, however, they are expected to rise in Q4.
As a measure aimed at expanding the number of purchasers, in April the Company implemented site
renewals at its purchasing sites. Given that site usage via smartphones had expanded, it renewedsites (Z format → I format) with designs that make site screens easily viewed on smartphones.
Further, from a sales perspective, by continuing to offer goods simultaneously on major domestic
and overseas auction sites, it promoted strengthening of its sales capabilities. From FY9/17, as
well as expansion in sales volumes, given that the ratio of promotional expenses will also decline,
profitability is expected to improve another notch.
○Retailing and Licensing BusinessTransaction values in the retailing and licensing business are expected to decline 1.5% YoY
to ¥7,000mn, with sales increasing 19.8% YoY to ¥5,000mn and operating profit on par with theprevious period. Within this, at the same time as continuing to deploy promotional expenses aimed
at acquiring new customers and promoting usage by existing customers in internet shopping
operations, the Company is aiming for increased revenue and earnings through increased sales oforiginal and repeat merchandise.
At the same time, apart from tackling expansion of ECONECO’s sales channels, by entering into
new agreements with celebrities and other initiatives, the company will promote sales expansion in
related products.
○Incubation business
Incubation business sales are expected to fall 23.1% YoY to ¥800mn, and operating profit to decline
32.8% YoY to ¥500mn. As mentioned above, through the sale of operational investment securities in
April, it is expected that the full-year plan will be achieved. Also, whether a partner that can raise thevalue of the investee company, or whether it will IPO are among the assessment criteria when sellingshares in investee companies.

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

伪伪Financial Position and Shareholder Return Policy
Both the shareholders’ equity ratio and interest-bearing debt
ratio in a healthy state

BEENOS Inc.
3328 TSE Mothers(1) Financial Position and Management Indicators
Total assets as of end-March 2016 declined ¥262mn from the end of FY9/15 to ¥9,756mn. Looking
at the factors behind changes at the period-end, we see that in current assets cash and deposits andaccounts receivable declined by ¥231mn and ¥240mn respectively, while accounts receivables rose

13-May-16

by ¥366mn and operational investment securities by ¥81mn. In fixed assets investment securities

Important disclosuresand disclaimers appear
at the end of this document.

On the other side of the ledger, liabilities declined ¥319mn from the previous fiscal year-end to

FISCO Ltd. Analyst
Yuzuru Sato

increased by ¥42mn, while goodwill declined ¥18mn.

¥4,019mn. Looking at the major factors behind the change we see that other accounts payable
declined by ¥199mn, notes and accounts payable by ¥46mn and income tax payable by ¥76mn.
Also, net assets rose by ¥56mn compared to the end of FY9/15 to ¥5,736mn. While the Company
recorded ¥300mn in net profit for the half, dividend payments of ¥158mn and a ¥106mn foreign
currency translation adjustment were factors tending to reduce net assets.
Looking at management indicators, we see that apart from the shareholders’ equity ratio rising 1.7%
to 56.2% to remain stable and above the 50% mark, the interest-bearing debt ratio is also trending at
the low level of 18.3%, and thus we may conclude that the financial position continues to be sound.
Consolidated balance sheet

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 financial indicators(financial strength)
Shareholders’ Equity ratio
Interest-bearing debt ratio

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

FY9/14
6,692
2,457
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

1H FY9/16
8,444
3,045
1,745
1,311
9,756
3,813
206
1,003
4,019
5,736

62.5%
25.0%

57.5%
24.8

54.5%
18.0%

56.2%
19.1%

(Unit: ¥ mn)
Change
-301
-231
81
38
-262
-369
50
84
-319
56

(2) Shareholder Return Policy
In respect of 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 withincreased profits from its e-commerce business. As profits are expected to decline in FY9/16 theCompany plans a dividend of ¥10.0, down ¥3.0 YoY, however, in the future, increased dividends may
be expected in line with earnings growth as the Company takes into consideration factors such as
trends in performance and demand for funds.

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

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
this report and take full responsibility for such use. We shall not be liable for any result of its
use. We provide this report solely for the purpose of information, not to induce investment
or any other action.
This report was prepared at the request of its subject company using information provided
by the company in interviews, but the entire content of the report, including suppositions andconclusions, is the result of our analysis. The content of this report is based on informationthat was current at the time the report was produced, but this information and the content
of this report are subject to change without prior notice.
All intellectual property rights to this report, including copyrights to its text and data, areheld exclusively by FISCO. Any alteration or processing of the report or 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
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FISCO Ltd.