■Intelix 8940 Business Overview

(2) Solution business field

The solution business field includes development/sale/lease/management/brokerage business of other profitable real estate (1 building, land, etc.), as well as development/sales of newly built condominiums, leaseback business, asset sharing business, hotel business, etc.

a) Lease back business

The leaseback business is a service where the company buys a real estate property (house, home, store, 1 building, etc.) owned by the user, simultaneously signs a new fixed-term building lease agreement (2 years), and leases (leases) it as it is, which began in the 2017/5 fiscal year. When the contract period is reached, the user can re-contract and choose to extend their residence, leave, or buy back the real estate. When consolidated funds such as inheritance tax funds, retirement funds, loan repayment funds, etc. are needed, it is possible to continue living even if owned real estate is sold, so the market has expanded in the past few years.

As for sales, in addition to contract fees at the time of property acquisition and rent income obtained every month, sales revenue when the property is sold is recorded, making it a hybrid business model combining stock revenue and flow profit. In terms of cost, since depreciation and amortization expenses are also recorded in addition to acquisition tax and registration costs at the time of property acquisition, costs precede for a certain period of time from property acquisition, but since depreciation and amortization progresses when the property is sold, it is a business model where profit margins are high. There are also cases where sales are handled door-to-door, but financial efficiency is enhanced by consolidating multiple properties into trust beneficiaries and transferring them to real estate funds.

The leaseback business was started by And Do Holdings (3457) ahead of the industry in 2013, and now the number of participating companies, including finance companies, is increasing. For this reason, the company has a strategy to expand its business by expanding purchase/sales routes while strengthening cooperation with major real estate companies (Century 21 Japan ＜8898＞, etc.).

b) Asset sharing business

The asset sharing business refers to the sales business of real estate miniaturization products by utilizing the “voluntary union type” in the Real Estate Specific Joint Business Law (commonly known as the Unspecified Law). Features of this product include the fact that high-quality real estate properties, regardless of whether they are newly built or used, can be acquired in units of 1 million yen per unit by co-owning with multiple investors, that vacancy/delinquency risks can be distributed through joint ownership and stable profits can be expected, and that asset evaluations can be drastically reduced as inheritance/gift assets.

Real estate property management is mainly carried out by the subsidiary Intelix Property Co., Ltd. As a group, in addition to flow profits from small-lot sales, stock profits from board chairman fees and property management of voluntary associations can be obtained. As an expected return rate for investors, the policy is to create products using 3% or more of the planned distribution yield* as a guide.

* Annual income after deducting expenses (administrative expenses, etc.) actually generated from rent income ÷ investment amount

There are also businesses that are ahead in this business, such as Aoyama Property Networks ＜8929＞ and FPG ＜7148＞, but the company's strength is that it can develop a variety of products from newly built/used properties, residential to commercial use by utilizing the networks and know-how it has built up until now as a real estate agent. As for sales channels, we sell through various channels such as holding seminars, our own website, professional routes starting with tax accountants, and financial institutions.

(Author: FISCO Visiting Analyst Joe Sato)