Good Com Asset Co.,Ltd. Q2 FY2025 earnings call

• Corporate Development & Strategic Partnerships

• Completed a capital and business alliance with Nissei Advance, a regional Kansai-area developer focused on Osaka with over 108 completed properties and 23 billion yen in annual revenue, to accelerate organic property supply in the high-growth Osaka market, which is benefiting from sustained positive net migration, Expo 2025, and the upcoming integrated resort opening.
• Acquired an 80% stake in Livenup Group, a former TOKYO PRO Market-listed firm focused on single-family home development and used home resale, turning it into a consolidated subsidiary to expand the group's business scope and grow recurring stock-based revenue from increased property management units.
• Listed on the Fukuoka Stock Exchange main market as a dual listing to expand brand recognition, property supply, and financial institution relationships in the Kyushu region.
• A portfolio company consulting client (Elevator Communications) successfully newly listed on the Sapporo Securities Exchange Ambitious market, to build the group's listing support track record and expand this consulting business.

• Product & Brand Development

• Launched development of a new high-end condominium brand above the core GENOVIA line, with a focus on family-friendly amenities (underground parking for large vehicles, child-friendly commercial tenant space for clinics on lower floors) and high-end design features. Four units of the new brand are scheduled to break ground this calendar year.
• Launched a new national marketing campaign featuring celebrity Tomohisa Yamashita, with a dedicated special page on the company website including behind-the-scenes and corporate explanation content.

• Pipeline & Procurement

• As of June 13, 2025, the company has secured 96.64 billion yen equivalent of property pipeline, with 68.98 billion yen in executed procurement contracts. Excluding properties already sold this term, the pipeline holds 73 total buildings and 5,224 units. The company has already completed procurement of 27 buildings (1,599 units) in the first half of the fiscal year, exceeding full-year procurement volume from the prior fiscal year, with a full-year target of approximately 3,000 units. The core GENOVIA brand supplies properties primarily in Tokyo's 23 wards, the Tokyo metropolitan 1-3 prefecture area, and Osaka, with 165 completed buildings in Tokyo 23 wards and 204 total completed buildings across the core supply area.

• Real Estate Fund Business

• Launched the third private real estate fund, which began operations on April 30 with a total asset size of approximately 11.1 billion yen, holding 4 GENOVIA brand properties totaling 332 units. The fourth and fifth funds are planned for this fiscal year, with total target size of approximately 30 billion yen across all three funds to grow assets under management.

• Shareholder Return

• Implemented a special commemorative shareholder benefit program for the Fukuoka listing, offering 20 thousand yen in digital gift cards for holders of 500+ shares and 50 thousand yen for holders of 1,000+ shares to be distributed twice (to May and October record date shareholders). The company maintains a base policy of targeting a 35% payout ratio, has increased dividends for 8 consecutive fiscal years since listing (a 9x increase over 8 years), and forecasts a full-year dividend of 45 yen per share. The company actively purchases treasury shares when permissible, using acquired shares for stock-based compensation and M&A consideration.

Segment-level financial performance is not explicitly broken out in the provided transcript. Consolidated performance for FY2025 2Q is as follows: revenue of 19.22 billion yen (69.4% year-over-year increase), operating profit of 1.64 billion yen (89.2% YoY increase), ordinary profit of 1.56 billion yen (165% YoY increase), net quarter profit of 1.04 billion yen (191.9% YoY increase). Units sold increased significantly to 15 buildings, 579 units. The newly consolidated subsidiary Livenup Group forecasts 7.954 billion yen in revenue and 0.4 billion yen in operating profit for its September 2025 fiscal year; Nissei Advance, the capital alliance partner, posted 23 billion yen in prior-period revenue.

• Full-year FY2025 operating profit is forecast to hit 5.88 billion yen, a 7.9% increase over the prior fiscal year, which would be a new all-time high, with the forecast described as conservative. Full-year revenue guidance is not disclosed to accommodate expected large swings from active M&A activity.

• The company has a long-term target to reach 600 billion yen in revenue and 60 billion yen in operating profit by the October 2030 fiscal year. Under the 5-year plan to reach this target, 200 billion yen in revenue will come from organic growth of the existing new condominium development and real estate fund businesses, while 400 billion yen will come from growth via M&A.
• A full updated medium-term management plan detailing M&A and growth targets is expected to be released alongside full-year FY2025 results in December.

No explicit risk or operational failure discussion is included in the provided transcript excerpt.

Q: Can we expect revenue and profit growth from M&A and business alliance deals with large-scale companies? / A: Livenup Group (the newly acquired consolidated subsidiary) forecasts 7.954 billion yen in revenue and 0.4 billion yen in operating profit for FY2025. Nissei Advance (the capital alliance partner) posted 23 billion yen in prior-year revenue. Since Good Com Asset does not disclose full-year revenue guidance, incorporating these large deals does not trigger mandatory timely disclosure of an upward revenue revision, which the company sought to avoid. Management confirms that the 5-year plan will deliver steady top-line growth; while goodwill amortization will suppress near-term reported profit, positive contributions to profit are expected after 5 years. An updated detailed medium-term plan is targeted for release at the December full-year earnings announcement.

Q: What types of companies does Good Com target for future M&A and business alliances? / A: The company is targeting local condominium developers to support national expansion, used home buy-resale firms, single-family home developers, hotel operators, senior and childcare-focused residential operators, construction firms, and property management companies. Management expects cross-synergies between acquired firms and the existing group to expand business scale and improve corporate value, aligned with the long-term 600 billion yen revenue target.

Q: Why has the PER not improved, and what measures will the company take to increase market capitalization? / A: (Full answer not included in the provided transcript excerpt)

Q: What is the impact of rising interest rates on the business? / A: (Full answer not included in the provided transcript excerpt)