Striders Corporation Q2 FY2026 earnings call

• Overall Financial Position

  • Consolidated results: 2Q total revenue is 3.909 billion yen (up 2.5% YoY), consolidated operating profit is 98 million yen, turning to profit from a prior year deficit. This improvement was driven by the Real Estate and Hotel segments, with total profit improvement of 152 million yen across both segments.
  • Balance sheet: Cash and deposits increased from capital raising, lifting equity ratio from 44.8% to 46.5%, strengthening the financial base for future strategic investment.
  • Cost structure improvement: Group-wide in-sourcing of previously outsourced work and AI-driven efficiency gains reduced selling, general and administrative costs across segments, creating a sustainable, repeatable profit structure that balances revenue growth and cost reduction.

• Real Estate Segment Operations & Strategy

  • The segment is the core profit center of the company, focused on rental management primarily in the Tokyo 1-to-3 prefecture area, with the bulk-lease sublet model that eliminates vacancy risk for property owners and provides end-to-end property management services. Management expects steady long-term growth for this segment.
  • Mid-term growth strategy focuses on expanding the renovation and restoration business: the 1-to-3 prefecture restoration market is 200 billion yen, and the total renovation market is 1.5 trillion yen, providing large growth opportunities. Long-term, the company will partner with other firms to expand into adjacent real estate-related fields.

• Hotel Segment Operations & Strategy

  • Operational improvements: Flattened organizational structure to eliminate departmental silos, enabled cross-departmental collaboration and faster on-site decision making. Cost control targeted food waste reduction to hold food cost to low-30%, and implemented DX/AI to improve operational efficiency. The CEO also serves as general manager of Narita Gateway Hotel to strengthen on-site operational alignment.
  • Medium-long term strategy: The "Regional Trading Company Concept" centered on Narita Gateway Hotel, which positions the hotel as an economic gateway and hub for the region, connecting international inbound guests to local tourism, food, and specialty products to create a regional economic cycle. Short-term, the company plans to invest in purchasing buses to build regional tourism mobility and develop in-house tour products.

• Investment Segment Operations & Strategy

  • The Omusubi Venture Fund (based in Singapore) is currently fundraising, targeting a first close by January 2026. The fund focuses on Asia-based deep-tech startups in healthcare, agriculture, and smart city sectors, with approximately 10 portfolio companies already invested.
  • The segment is also developing the wellness villa business, targeting the growing inbound travel and pet tourism sectors, focusing on whole-building vacation rental properties with strong natural surroundings, and due diligence for initial sites is ongoing.

• Financial Policy

  • Targets maintaining 3x liquidity ratio, 40% equity ratio, and uses moderate leverage to fund growth investment. The company targets a full-firm average ROIC of 7% over the medium-long term.
  • Cash allocation for FY2026-FY2027: uses 220 million yen in operating cash flow to balance stable 5 yen per share annual dividend, maintain financial stability, and prioritize high-growth areas for growth investment to maximize enterprise value.

1. Real Estate Segment: Revenue of 3.23 billion yen, operating profit of 143 million yen, accounting for 82.8% of total consolidated revenue. Current operating profit margin is approximately 4.5%. The segment's revenue breakdown: 2.196 billion yen from residence leasing, 546 million yen from other residence business, 487 million yen from real estate sales. Key KPIs: occupancy rate maintains 99%+ levels, and update rate has increased driving higher profit margins.
2. Hotel Segment: Revenue of 657 million yen, operating profit of 56 million yen (reversed from a 25 million yen loss in the prior year period), accounting for 16.8% of total consolidated revenue. Current operating profit margin is approximately 8.5%. For Narita Gateway Hotel: ADR 6,842 yen, occupancy 84%, RevPAR 5,752 yen (up 6.3% YoY). For Kurashiki Royal Art Hotel: ADR 15,172 yen, occupancy 67.8%, RevPAR 10,343 yen (up 21.3% YoY).
3. Investment Segment: Revenue of 31 million yen, operating profit of 17 million yen, accounting for 0.8% of total consolidated revenue. Profit was primarily driven by revaluation of existing investment securities.

• The company upward revised full-year FY2026 guidance: raised total revenue from 8.0 billion yen to 8.2 billion yen, and raised operating profit from 100 million yen to 170 million yen.
• The upward revision is driven by the faster-than-expected establishment of stable profit structures in the Real Estate and Hotel segments, as well as better-than-expected progress in cost optimization and efficient operations.
• Management expects the Real Estate segment to remain the core profit center, with the Hotel segment growing to become a second core profit pillar over time.

• For overseas investment and hotel expansion in Asia: Political and institutional risk is managed via close partnership with local partners and ongoing monitoring, with business continuity as the top priority.
• For tourism demand volatility: Risk is mitigated by geographic diversification across countries and regions, and balancing the portfolio with both domestic and international tourism demand.
• The company faces ongoing industry-wide headwinds including labor shortages, rising commodity and utility prices, and rising outsourcing costs, which the company addresses through internal efficiency improvement and cost control.

Q: What is Striders' view on the current share price, and what is the strategy going forward if the current level is not satisfactory?

A: Management believes that the current share price does not fully reflect the company's medium-long term growth potential, so the current valuation is insufficient. The top priority going forward is to steadily expand the profit base and maintain repeatable profit growth, with the core goal of continuously improving corporate value to reflect this in the share price.

Q: What is the concept behind the planned wellness villa business?

A: The business plans to develop whole-building rented vacation villas, similar to the "NOT A HOTEL" model, with a focus on the wellness element. The company plans to select locations with rich natural Japanese scenery, which is popular with both domestic and international guests, and provide an environment for guests to relax and enjoy high-quality local food.

Q: What regions and sectors does Striders focus on for its investment activity?

A: Asia remains the company's main investment battlefield, with Singapore as the regional hub. The company is currently most focused on Southeast Asian markets including Vietnam and the Philippines, building on 10 years of investment experience across other Asian island markets such as Sri Lanka, Indonesia, and Taiwan. The company also supports existing portfolio companies to expand into adjacent larger markets, such as supporting a Sri Lankan portfolio company to expand into Bangladesh and India.

Q: What areas will Striders prioritize for growth in the real estate business beyond core leasing?

A: The company will keep rental management as the core pillar of the real estate business, and will make the renovation business the second growth pillar. Management does not plan to prioritize expanding the real estate sales business, and will focus instead on growing the existing rental management business and adjacent renovation business.