■Summary of financial results of Japan Asia Investment＜8518＞

1. Overview of financial results for the first half of the fiscal year ending March 31, 2025

As for the first half of the fiscal year ending 2025/3 (fund consolidation basis), operating income was 1432 million yen, up 12.9% from the same period last year, and operating profit was 68 million yen (loss of 239 million yen in the same period last year).

According to conventional consolidated standards, operating income increased 55.8% from the same period last year to 664 million yen, and operating loss was 61 million yen (loss of 535 million yen in the same period last year), ordinary loss was 64 million yen (loss of 558 million yen), and intermediate net loss attributable to parent company shareholders was 67 million yen (loss of 560 million yen), which reduced and improved.

As for operating income, sales of unlisted stocks with relatively large investment amounts are scheduled for the second half or later, so in the first half, sales proceeds of other unlisted stocks proceeded, and sales gains from the project (1 logistics facility) contributed greatly to the increase in sales.

In terms of profit and loss, in addition to an increase in sales profit, the loss range was reduced due to a reduction in valuation losses and provisions, and there was a significant improvement.

Meanwhile, there was a change in financial status (conventional consolidated basis) due to the third-party allotment of shares (approximately 1 billion yen) * implemented in 2024/6. Total assets expanded 4.7% from the end of the previous fiscal year to 10929 million yen due to an increase in cash and deposits and investment in investment development businesses (acquisition of group homes for people with disabilities, etc.). Equity capital was also increased to 6535 million yen, an increase of 16.0% from the same period due to a third-party allotment of shares, and the equity ratio improved to 59.8% (54.0% at the end of the previous fiscal year). Interest-bearing debt decreased 11.5% from the end of the previous fiscal year to 3819 million yen, and we were able to proceed with financial consolidation.

* As of 2024/6/28, the issuance of new shares was carried out through a third party allotment with the Governance Partners ASIA Investment Limited Partnership as the allotment. The amount of funds raised is approximately 1 billion yen (4,400 thousand shares issued).

The results by business are as follows. Furthermore, the business area was redefined based on the new business policy from the 2025/3 fiscal year. From conventional “project investment” and “PE investment,” it was divided into three categories: “investment development business (real asset investment)” (almost compatible with old project investment), “investment management business (marketable securities investment)” (almost compatible with old PE investment), and “fund platform business (fund administration contract)” (details will be described later).

(1) Investment development business

Operating revenue was 398 million yen (18 million yen for the same period last year), and total operating profit was 346 million yen (loss of 79 million yen for the same period last year). Accumulated sales gains of logistics facilities (1) * sold in 2024/3 contributed to an increase in sales and profit (profit conversion). Also, although it is taking time for plant factories to become profitable, it seems that loss improvements are progressing steadily.

※ Logistics facility in Atsugi City, Kanagawa Prefecture.

(2) Investment management business

Operating revenue decreased to 189 million yen (336 million yen for the same period last year), and gross operating profit decreased to 81 million yen (14 million yen for the same period last year). Sales proceeded mainly with unlisted stocks, but sales declined because sales of listed stocks decreased compared to the same period last year. Meanwhile, in terms of profit and loss, an increase in profit was secured due to valuation losses and reduction in allowances*.

* In the same period last year, valuation losses and provisions were recorded ahead of schedule for stocks whose expected recovery amounts declined due to fund liquidation in the Greater China region.

(3) Fund platform business

The fund platform business is an administrative contract service for funds. Until now, it has been classified as “project investment” and “PE investment,” but it became independent. Operating revenue has remained stable at 76 million yen (71 million yen for the same period last year) and total operating profit of 76 million yen (71 million yen for the same period last year).

2. Summary of the first half of the fiscal year ending 2025/3

It transitioned to a new system in 2024/6, and a new medium-term management plan (details described later) were announced in August of the same year, but it was a quiet start up in terms of performance. Most likely, the expected earnings for the fiscal year ending 2025/3 presupposes securing a baseline (lower limit) through the sale of projects (group homes for people with disabilities, etc.) and an upside (upper limit) due to the sale of unlisted shares with relatively large investment amounts, and the background is that neither has yet been realized in the first half stage. However, in 2024/10, it was decided to transfer 16 group homes for people with disabilities by utilizing social project bonds (providing highly social investment opportunities to institutional investors), and they can be evaluated as results of new initiatives. Also, the conclusion of strategic business alliances aimed at strengthening networks and know-how, and the establishment of a financial base through third-party allotment of shares is also a major step forward toward expanding the fund business, which is the axis of the future, and it can be said that part of the form the company is trying to do has come into view.

■Main activity results

Significant results in utilizing social project bonds and concluding strategic business alliances

1. Investment results, etc.

(1) Investment development business

While new group homes for people with disabilities (7 buildings) and solar power generation equipment with roof-mounted storage batteries (1) were acquired, facilities for the elderly (1) were sold (profit recorded in the second half). As a result, AUM increased to 16.8 billion yen (16 billion yen at the end of the previous fiscal year). The number of projects at the end of 2024/9 is 12 mega solar power generation (28.4 MW in total), 4 solar power generation facilities with roof mounted storage batteries, 2 biomass power generation, 3 biogas power generation (including operators), 1 wind power generation, 30 group homes for people with disabilities, 1 plant factory, 4 logistics facilities, and 6 others.

(2) Investment management business

AUM, a fund managed and operated by the company group, etc., was completed with 2 funds and the amount was reduced with 1 fund, while 1 fund ※ was newly established, and the balance at the end of 2024/9 decreased to 12596 million yen for 7 cases (15497 million yen for 8 cases at the end of the previous fiscal year).

※ JAIC Wealth Fund 35 million yen.

2. Utilizing social project bonds

It was decided to transfer 16 group homes for people with disabilities in 2024/10 (results contributed to the second half). The transfer destination is a joint company that raised funds from institutional investors through the issuance of social project bonds* using the group homes, etc. as supporting assets, and received anonymous union investment from major leasing companies and major real estate companies. As momentum for the SDGs increases, there is value in connecting funds from institutional investors seeking highly social investment opportunities with funding needs in the disability support field, and it can be evaluated as an initiative rich in novelty, and it also provided a major impetus for future business expansion.

* A second opinion on credit rating (BBB) and social bond framework compliance was obtained from the Rating and Investment Information Center.

3. Concluding a strategic business alliance

On 2024/8/28, business alliances were concluded with GNI Group ＜2160＞ (hereafter, GNI) and Growth Partners Co., Ltd., respectively. While utilizing external resources through these business alliances, the company plans to attract funds not only from domestic but also from overseas investors, form new funds, and lead to the realization of growth strategies.

(1) GNI Group

GNI has a track record of successfully developing drugs and growing as a pharmaceutical company, and has its own sales network in China and other regions. Through the GNI network, funds from domestic and foreign investors are mainly invested in domestic companies through the company's funds, and the aim is to increase the value of investee companies by expanding the products of investee companies to overseas markets through GNI and its group companies.

(Written by FISCO Visiting Analyst Ikuo Shibata)