Company Overview

1. Company Overview

IchiGo <2337> utilizes real estate value enhancement know-how to invest and operate a wide range of real estate types such as offices, commercial facilities, hotels, and residences. The company specializes in heart-building, aiming for social contributions in all businesses, including reducing environmental impact and creating clean energy in the heart-building business, as well as participating in regional revitalization as a top partner of the J-League and engaging in various activities such as joining 'RE100' and the 'United Nations Global Compact,' focusing on achieving a sustainable society.

2. Business content

The company's business segments consist of asset management business, heart-building business, and clean energy business.

The asset management business involves discovering and supplying projects for IchiGo Office Reit, IchiGo Hotel Reit, IchiGo Green Infrastructure Investment Trust, and real estate private funds operated by the group, enhancing property values through heart-building, and maximizing investor value. From the fiscal year ending in February 2023, it also operates the 'IchiGo Residence Token,' a real estate investment product utilizing security tokens. The expansion of the asset management business is a pillar of the company's strategy to generate cash flow independently of the balance sheet, contributing 3.5% of the total sales and 9.3% of the operating profit for the interim period ending in February 2025.

The heart-building business aims to increase rental income based on the enjoyment of rental income from owned real estate over time, ensure legal compliance, seismic reinforcement, and basic value enhancement. It also aims to improve occupancy rates and tenant satisfaction through enhancement of common area functions, community formation with the neighborhood, and event planning for disaster preparedness, ultimately enhancing real estate values and obtaining high profits from sales. Sales and operating profits for the interim period ending in February 2025 accounted for 87.2% and 72.8% of the total company, respectively.

The clean energy business, started in 2012, has grown to operate solar and wind power generation projects in 64 locations nationwide. The breakdown includes 48 solar power plants owned by the company with a capacity of 151.4MW, 1 wind power plant owned by the company with a capacity of 7.3MW, and 15 solar power plants with a capacity of 29.4MW owned by IchiGo Green Infrastructure Investment Trust and operated by the company. The company is steadily contributing to profits, with sales accounting for 9.4% and operating profits for 17.9% of the total company for the interim period ending in February 2025.

The company's revenue structure includes stock revenue and flow revenue, and has been growing in a balanced manner. Stock revenue reached 11,194 million yen in the interim period of February 2025, marking the highest in the first half. The breakdown of stock revenue includes income from rental of owned assets, revenue from power station electricity sales, as well as income from non-asset revenue such as asset management (AM) base operating fees, hotel operator revenue, and PROPERA usage fees, steadily diversifying revenue sources. Flow revenue mainly consists of real estate transfer gains in the construction business, with a performance of 4,886 million yen. The goal is to achieve a ratio of stock revenue to total revenue of over 60%, and progress has been made to just under 60% in the previous period. Stock revenue is equivalent to more than twice the company's fixed costs (fixed selling and administrative expenses + interest payments), providing sufficient cover and surplus, making it a strength of the company where there is no need to rush to sell properties even in situations where real estate prices decline due to recessions.

(Written by FISCO Guest Analyst, Hideo Kakuta)