8789.T

Reporting Segment Changes

• Newly established the "Investment Banking - Aircraft Division" after 2 years of aircraft leasing operations, which has grown in quantitative and qualitative importance. The split was driven by significantly different cost structures: PE investment income has no cost of goods sold, while aircraft leasing records full aircraft acquisition costs as cost of goods sold, creating material reporting differences from other investment banking businesses. All relevant financials were retrospectively restated from prior periods to align with the new segment structure.
• Consolidated and reorganized the former public consulting business and renewable energy facility development/operations (from a newly consolidated subsidiary) into the new "Public Support Service" segment, aligned with the shift from consulting-focused to operational contract-focused work for local governments, and the planned future support for local government-involved power projects.
• The new segment structure consists of 4 divisions: Investment Banking, Investment Banking - Aircraft Division, Public Support Service, and Entertainment Service.

Strategic Corporate Actions

• Acquired 100% of shares of an operating trust company on January 20, 2026, renamed it FinTech Global Trust Inc. The acquisition aims to expand the scope of financial product structuring via trust's diverse functions, and enable the offering of higher value-added products.
• Planned to open the renovated all-weather "Emma's Theater" at Moomin Valley Park on March 14, 2026. The 600-square-meter immersive theater features a 4m×7m LED display, new sound and lighting systems, and approximately 300 benches made from local Hanno City Nishikawa lumber. It is designed to drive visitor growth regardless of weather or season, reducing seasonal visitor dips during rain, extreme heat, and winter.

Investment Banking Business Updates

• PE business succession investment: A large case formed in the prior period reached investment recovery in the quarter. While revenue was down year-over-year due to multiple investment recoveries in the prior year same quarter, new investments are being actively accumulated. Demand for business succession investment remains solid, with multiple new cases in negotiation for fund formation.
• The current quarter recorded 2.0 billion yen in revenue from business succession cases, with an additional 0.6 billion yen in revenue already confirmed for the second quarter and beyond. Current full-year projected revenue from business succession is 2.7 billion yen (compared to 5.2 billion yen in full-year 2025 actual results), and management believes additional near-term investments can still achieve in-fiscal-year investment recovery, as most cases take around 6 months from investment to recovery.
• Trusted assets under custody totaled 156.492 billion yen, down 3.2% from the end of September 2025, driven by lower investment from overseas investors in residential assets. A new wind farm development asset management contract was secured in the quarter, and growth in AUM is expected as development progresses.
• Truck operating leasing: Capital contribution sales to investors totaled 1.49 billion yen in the quarter. Demand for sale-leaseback of used large commercial vehicles continues to grow driven by transport companies' needs for fleet expansion and financial improvement. Vehicle sourcing is progressing smoothly, the number of business partner contracts for introducing investor products is growing steadily, expanding the investor base, and the business is expected to continue on an expansion trajectory.
• Asset investment: The No.3 small-lot real estate product sold out in October 2025, but revenue will not be recognized until after fund principal distribution, so no revenue was recorded this quarter. The No.4 product recorded a negative sales contribution this quarter due to the recognition of initial formation costs. Going forward, FinTech Global will carefully review future small-lot real estate product offerings in response to the Reiwa 8 Tax Reform Outline, but will continue to manage existing products, with minimal expected impact on earnings.
• Mezza Village (held within Investment Banking): Increased parking and other revenue from higher visitor numbers, and the 200 million yen removal loss from the prior year same quarter (linked to Hyper Museum Hanno opening renovations) did not recur, leading to a 210 million yen improvement in profit year-over-year.
• Standalone investment and loan balance totaled 10.385 billion yen, up 33.6% from the prior period end. Principal investment balance rose 60.1% year-over-period to 2.931 billion yen: both operating investment securities and investment securities increased from the prior period end, despite offsetting decreases from distribution receipts and initial cost recognition. Corporate lending increased due to additional loans to the subsidiary SPC developing solar power projects.

Investment Banking - Aircraft Division Updates

• Technical service revenue decreased, as ongoing aircraft shortages in the industry have reduced the volume of inspection revenue when leased aircraft are returned. No new aircraft sale and leaseback transactions were executed in the quarter, but lease revenue from previously accumulated leasing assets increased, driving overall revenue growth. The book value of leasing assets at quarter end was 3.204 billion yen.

Public Support Service Updates

• Revenue growth came from increased demand for public facility management, childcare support, and health promotion, leading to higher sales of administrative planning formulation and revision projects. Outsourcing proposals for public facility management are under negotiation with multiple local governments facing shortages of architectural expertise.
• Renewable energy development: 10 solar power projects are under development, with 5 already securing power purchase agreements with electricity retailers, and the remaining 5 in active negotiation. Commercial operation is scheduled to start sequentially from June 2026, so all costs are currently upfront pre-operation investments that are driving the segment net loss.

Entertainment Service Updates

• Aggressive promotional activities and seasonal events (Christmas events, ice rink, snow play experiences) drove a 10.5% year-over-year increase in visitor numbers to 247,000. Combined with higher average spending per guest, revenue grew 22.3% year-over-year. Higher costs from free bus service for access improvement and increased promotion spending pushed selling, general and administrative expenses up 31.7% year-over-year, resulting in a broadly flat segment profit (down 1.1% year-over-year).

Balance Sheet Updates

• Total assets increased by 2.444 billion yen from the prior period end to 29.438 billion yen, driven by a 2.736 billion yen increase in operating investment securities from business succession investment and trust beneficial interest acquisition by consolidated SPCs, and a 0.506 billion yen increase in construction in progress from solar power project development.
• Total liabilities increased by 1.992 billion yen from the prior period end to 16.944 billion yen, driven by a 0.538 billion yen increase in short-term borrowing for working capital and solar development, and a 1.473 billion yen increase in long-term borrowing from newly consolidated real estate holding SPCs and new borrowing.
• Total net assets increased by 0.451 billion yen from the prior period end to 12.493 billion yen.

• Management confirmed that first quarter performance is progressing in line with the full-year earnings forecast, and no changes to the full-year forecast are required at this time.
• Full-year projected revenue from business succession PE investment is currently 2.7 billion yen, down from the 5.2 billion yen actual in the 2025 September fiscal year, but management notes that most investments take around 6 months to reach recovery, and additional investments executed in the near term can still be monetized via in-fiscal-year recovery, so upside to the current projection is possible.
• Truck operating leasing is expected to continue on an expansion trajectory supported by growing industry demand and expanding investor base.
• Custodial asset balance is expected to increase as the newly secured wind farm asset management contract progresses through development.

1. Investment Banking: Revenue was 2.476 billion yen, up 7.8% year-over-year; gross profit was 2.273 billion yen, up 29.1% year-over-year; segment profit was 1.714 billion yen, up 27.4% year-over-year. This segment contributed 58.4% of total consolidated revenue. 2. Investment Banking - Aircraft Division (newly established segment): Revenue was 0.729 billion yen, up 4.7% year-over-year; gross profit was 0.340 billion yen, up 8.0% year-over-year; segment profit was 47 million yen, down 12.1% year-over-year. This segment contributed 17.2% of total consolidated revenue. 3. Public Support Service: Revenue was 0.156 billion yen, up 24.6% year-over-year; segment net loss was 84 million yen, expanding the loss by 76 million yen year-over-year. This segment contributed 3.7% of total consolidated revenue. 4. Entertainment Service: Revenue was 1.055 billion yen, up 22.3% year-over-year; segment profit was 0.158 billion yen, down 1.1% year-over-year. This segment contributed 24.9% of total consolidated revenue. Total consolidated revenue for the first quarter was 4.237 billion yen, up 9.3% year-over-year.

• The ongoing aircraft shortage in the global aviation industry has reduced technical service revenue for the aircraft division, from inspection work on returned leased aircraft.
• Upfront pre-operation investment in solar power development projects is currently creating negative pressure on the Public Support Service segment's profit, until commercial operation begins sequentially from June 2026.
• The Reiwa 8 Tax Reform Outline will require FinTech Global to carefully evaluate future offerings of small-lot real estate products, though existing operations will continue and the impact on earnings is expected to be minimal.
• Seasonal and weather-related volatility in visitor numbers at Moomin Valley Park is being addressed via the new all-weather theater, but unseasonable weather could still impact entertainment segment performance in vulnerable periods.

No questions and answers were included in the provided earning call transcript.