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Omega Investment Co., Ltd.

Sansei Landic (2Q Earnings review)

Coverage
Share price (8/11)871 yenM Cap15.0 bn yen
PER (e）6.4 XDvd yld（e）4.3 X
OP progress70 %Equity ratio34.4 %
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A substantial upward revision lifts earnings. In addition to improved sales capabilities, expanded purchases are building a stronger base for growth from 2027 onward.

Meanwhile, the Company has already achieved approximately 70% of its full-year operating income forecast in the first half, making the validity of the assumptions for the second half the next potential share-price catalyst.

Investment View

1. Earnings Results and Assessment

For 1H, net sales were 16.59 billion yen (YoY +14.3%), operating income was 2.57 billion yen (+14.9%), and net income was 1.58 billion yen (+12.3%). Operating income reached 114.4% and net income 113.1% of the Company’s plan, clearly exceeding forecasts, driven by increased sales of leasehold land and old unutilized properties.

The Company revised its full-year forecast upward to net sales of 31.0 billion yen, operating income of 3.68 billion yen, and net income of 2.19 billion yen. The revisions are substantial, with operating income raised by 53.3% and net income by 64.7%, and we view this as an upward shift in the earnings level rather than simply strong first-half performance.

2. Impact on Investment View

The EPS forecast increased from 81.76 yen to 134.62 yen. Based on the reference share price of 871 yen, the forecast PER is approximately 6.4x, while the forecast dividend yield based on the annual dividend of 37.5 yen is approximately 4.3%. Given the magnitude of the earnings forecast revision, the share-price valuation remains low, leaving room for a valuation re-rating.

First-half purchases of 11.6 billion yen and 312 lots were at record-high levels. The Company has secured 32.7 billion yen in real estate for sale and raised its full-year purchase plan to 22.0 billion yen. We positively evaluate the fact that the inventory available for sale from 2027 onward is becoming more substantial.

3. Near-term Share-price Outlook and Points to Note

Following the upward earnings revision and dividend increase, we expect the shares to remain firm in the near term. However, against first-half operating income of 2.57 billion yen, the full-year forecast is 3.68 billion yen, implying operating income of only approximately 1.11 billion yen in the second half. The most important point to confirm is whether this reflects a conservative plan, incorporates changes in the project mix, or reflects a decline in the gross profit margin.

Attention should also be paid to the funding burden associated with inventory expansion. Interest-bearing debt increased to 26.0 billion yen, while the equity ratio improved to 34.4%, and operating cash flow remained positive at 1.798 billion yen in the first half.

4. Key Points at the August 24 Earnings Briefing

  • The conservatism of the assumption of approximately 1.1 billion yen in second-half operating income and the outlook for the gross profit margin
  • Sales plans for leasehold land and old unutilized properties, and the profit margins and turnover periods of large-scale projects
  • The 22.0 billion yen purchase plan and the timing of its contribution to earnings in 2027
  • Shareholder return policy following the dividend increase, and appropriate levels of inventory and interest-bearing debt

Next update: Following the August 24 earnings briefing, we will reassess the investment view, earnings outlook, and fair share price based on additional explanations from management and report again.

Earnings forecast revision

1H Progress

Fair value

Lower end Median Upper end
800yen 900yen 1,000yen

Comprehensively assessed based on EPS of 134.62 yen, using PER of 6-7x, a dividend yield of 4-5%, and PBR of 0.9-1.1x as benchmarks. At present, we use 900 yen as the midpoint.

Financial data (Quarterly basis)

Unit: million yen 2024/12 2025/12 2026/12
  1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
[Income Statement]                    
Net Sales 7,207 5,785 8,358 4,270 8,848 5,664 5,202 3,634 9,607 6,983
YoY 11.1% 5.3% 11.7% 12.3% 22.8% -2.1% -37.8% -14.9% 8.6% 23.3%
Gross Profit 1,686 1,558 1,910 1,149 3,006 1,602 1,518 868 3,342 1,928
Gross Profit Margin 23.4% 26.9% 22.9% 26.9% 34.0% 28.3% 29.2% 23.9% 34.8% 27.6%
EBIT (Operating Income) 571 455 785 72 1,806 434 410 -403 2,041 532
YoY -49.0% -15.5% 16.2% -140.5% 216.6% -4.6% -47.7% -662.5% 13.0% 22.6%
EBIT Margin 7.9% 7.9% 9.4% 1.7% 20.4% 7.7% 7.9% -11.1% 21.2% 7.6%
Net Income Attributable
to Owners of Parent		 328 245 485 -7 1,175 236 213 -329 1,317 267
YoY -52.0% -4.0% 25.2% -94.9% 258.2% -4.0% -56.1% 4432.4% 12.1% 13.1%
Net Income Margin 4.6% 4.2% 5.8% -0.2% 13.3% 4.2% 4.1% -9.1% 13.7% 3.8%
[Balance Sheet]                    
Cash & Deposits 4,479 4,988 4,728 5,013 5,788 5,730 5,319 4,717 6,960 6,650
Total Assets 30,487 30,561 29,940 33,107 31,353 32,250 35,709 40,680 44,466 43,412
Interest-bearing Debt 16,787 16,211 15,595 18,506 15,747 16,379 20,002 25,145 27,752 26,000
Net Debt 12,308 11,223 10,867 13,493 9,959 10,649 14,683 20,428 20,792 19,350
Shareholders’ Equity 12,133 12,398 12,768 12,759 13,641 13,779 13,877 13,551 14,645 14,943

Source: Calculated by Omega Investment based on FactSet’s standard criteria, rounded to the nearest whole number.

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