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Omega Investment Co., Ltd.

Sansei Landic (Company note – 1Q update)

Coverage
Share price (6/30) ￥1,096Dividend Yield (25/12 CE)3.8 %
52weeks high/low￥834/1,180ROE(24/12 act)8.5 %
Avg Vol (3 month) 18.8 thou shrsOperating margin (24/12 act)7.3 %
Market Cap ￥9.41 bnBeta (5Y Monthly)0.18
Enterprise Value ￥22.43 bnShares Outstanding 8.584 mn shrs
PER (25/12 CE)8.5 XListed market TSE Standard
PBR (24/12 act)0.7 X
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Solid start in 1Q FY12/2025 with higher revenue and profit

◇ Highlights of 1Q FY12/2025 results: Smooth start with increased revenue and profits, mainly in terms of profits

Sansei Landic (hereinafter, “the Company”) announced its financial results for 1Q FY12/2025 on May 15, 2025, posting year-on-year increases in both revenue and profit. Specifically, net sales were 8.84 billion yen (+22% YoY), operating income was 1.80 billion yen (+216% YoY), ordinary income was 1.72 billion yen (+250% YoY), and net profit attributable to owners of parent was 1.17 billion yen (+258% YoY).

This set of results is viewed positively as it increases confidence in achieving the Company’s full-year forecast. While the Company’s full-year forecast calls for modest increases in revenue and profit, earnings are expected to be concentrated in the first half (as detailed below). Compared to the 1Q forecast, sales came in approximately 1 billion yen short; however, all profit levels exceeded forecasts, indicating a solid start to the fiscal year.

Breaking down sales by segment: Leasehold land was 5.75 billion yen (+171% YoY), Old unutilized properties were 2.75 billion yen (-43% YoY), and Freehold was 210 million yen (+125% YoY). While total sales fell short of the 1Q plan, this was not due to any change in business conditions, and no revisions have been made to the full-year forecast announced at the start of the period. It is reasonable to assume that the variance was due to timing differences in revenue recognition.

Due to the increased proportion of sales from Leasehold land, the gross profit margin rose to 34%. This indicates the Company’s strength in rights adjustment and sales capabilities for Leasehold land.

Purchases during the quarter totaled 2.82 billion yen (-15% YoY), consisting of 2.12 billion yen for Leasehold land (+111% YoY), 530 million yen for Old unutilized properties (-73% YoY), and 150 million yen for Freehold (-49% YoY). The progress rate toward the full-year purchase plan of 17.6 billion yen was 16%. However, given that the number of deals is steadily increasing, the number of purchase contracts rose to 151 (+155% YoY), Leasehold land purchases are progressing well, and multiple large Old unutilized property acquisitions are expected in 2Q, there is currently little cause for concern.

On the balance sheet, the balance of property for sale decreased by 3 billion yen from the end of the previous fiscal year to 22.3 billion yen due to steady sales. Cash and deposits increased by 700 million yen to 5.7 billion yen, and interest-bearing debt decreased by 2.7 billion yen to 15.7 billion yen. These are all regarded as normal developments.

◇ FY12/2025 earnings forecast: Unchanged; revenue and profit expected to show slight full-year increases with 1H-weighted performance

There are no changes to the Company’s FY12/2025 earnings forecast.

Specifically, the 1H forecast includes sales of 15.46 billion yen (+19% YoY), operating income of 2.05 billion yen (+99% YoY), ordinary income of 1.90 billion yen (+120% YoY), and net profit attributable to owners of parent of 1.25 billion yen (+118% YoY).

 The full-year forecast includes sales of 25.65 billion yen (+0.1% YoY), operating income of 1.91 billion yen (+1.4% YoY), ordinary income of 1.60 billion yen (+0.9% YoY), and net profit attributable to owners of parent of 1.07 billion yen (+1.8% YoY).

◇ Strengthened shareholder returns

The dividend forecast has not been changed. The annual dividend per share is projected at 42 yen (17 yen for the first half and 25 yen for the year-end), representing a 1 yen increase from the previous year’s interim dividend. The dividend payout ratio is forecast at 31.9%, remaining nearly unchanged, and this would mark the twelfth consecutive year of dividend increases.

Regarding the share buyback, the Company completed the repurchase of 194,900 shares at a total cost of 200 million yen between February 17 and May 14, 2025.

◇ Update on regional revitalization business

In conjunction with announcing the financial results, updates were provided on the regional revitalization business. A RIDER’S VILLA targeting female riders will open in Izu Inatori on July 1, 2025. In addition, two facilities related to renovating traditional houses and the effective use of vacant homes will open in Hirado City, Nagasaki Prefecture, in June and July 2025.

Furthermore, to revitalize and utilize lodging facilities and vacation homes, the second facility in Hachimantai City is scheduled for a pre-opening in June 2025 and a grand opening in August. Also, registration for motorcycle storage services began in April 2025.

These initiatives are drawing significant attention as potential long-term drivers of earnings.

◇Share price trend and future highlights

Following the financial results announcement on February 14, 2025, the Company’s share price generally rose, reflecting the FY12/2025 forecast for higher revenue and profit, the twelfth consecutive year of dividend increases, and the execution of a share buyback. The favorable 1Q results announced on May 15 were also well received, and on May 19, the share price reached a year-to-date high of 1,180 yen. As of now, it remains around the 1,090 yen level.

The stock shows no signs of overheating with a valuation of 8 times forecast earnings (PER), 0.7 times book value (PBR), and a projected dividend yield of 3.85%. This suggests that the market recognizes the Company’s steady growth trajectory and proactive shareholder return policy.

From this perspective, key points to watch going forward include: trends in the real estate market; progress in full-year purchases and earnings for FY12/2025 (including any potential upward revisions); updates on the new medium-term management plan – particularly the effectiveness of measures to strengthen the core Leasehold land and Old unutilized properties businesses, results of feasibility studies for derivative businesses such as Co-ownership, ownership period, and Leasehold rights, and the initial progress of the regional revitalization business; and any announcement of an additional share buyback.

The real estate market is concerned about rising interest rates, construction costs, and labor shortages. However, the Company’s core businesses in Leasehold land and Old unutilized properties appear largely unaffected by these issues. If the Company successfully strengthens its existing core businesses and demonstrates the potential of its derivative businesses, there remains significant room for a valuation re-rating. Notably, the Company will celebrate its 50th anniversary in February 2026, and expectations for shareholder returns will likely increase accordingly.

Company profile

Sansei Landic Co., Ltd. operates a real estate rights adjustment business. The Company makes a profit by adjusting the rights to properties it has purchased, mainly leasehold land and old unutilized properties, and then reselling them. It has captured stable profit opportunities in niche markets. In August 2024, the Company announced a new medium-term plan covering the period from August 2024 to fiscal 2027. ROE and PBR are expected to improve due to the growth strategy and improved capital efficiency.

Key financial data

Unit: million yen 2020/12 2021/12 2022/12 2023/12 2024/12 2025/12
CE
Sales 17,775 16,836 15,533 23,269 25,620 25,650
EBIT (Operating Income) 847 1,118 1,469 2,155 1,883 1,910
Pretax Income 712 1,004 1,270 1,756 1,585 1,600
Net Profit Attributable to Owner of Parent 358 609 1,060 1,183 1,051 1,070
Cash & Short-Term Investments 4,330 5,361 3,837 3,770 5,013  
Total assets 20,071 20,051 28,977 30,976 33,107  
Total Debt 16,879 16,879 16,879 16,879 18,506  
Net Debt 13,109 13,109 13,109 13,109 13,493  
Total liabilities 10,004 9,749 17,921 18,899 20,349  
Total Shareholders’ Equity 12,077 12,077 12,077 12,077 12,759  
Net Operating Cash Flow -917 1,705 -9,268 -12 1,143  
Capital Expenditure 21 40 28 304 138  
Net Investing Cash Flow -288 -51 -267 -766 -715  
Net Financing Cash Flow 953 -608 7,971 303 1,223  
Free Cash Flow -291 -291 -291 -291 1,049  
ROA (%) 1.82 3.04 4.32 3.95 3.28  
ROE (%) 3.58 5.98 9.93 10.23 8.46  
EPS (Yen) 42.3 73.6 129.6 143.8 127.2 131.6
BPS (Yen) 1,192.9 1,249.5 1,356.8 1,465.5 1,541.8  
Dividend per Share (Yen) 25.00 26.00 28.00 33.00 41.00 42.00
Shares Outstanding (Million Shares) 8.47 8.47 8.49 8.58 8.58  

Source: Omega Investment from company data, rounded to the nearest whole number.

　

Share price

　

FY12/25 1Q  financial result

Source: Company materials

Source: Company materials

Source: Company materials

Source: Company materials

Source: Company materials

Source: Company materials

Full-year forecast for FY12/2025 (Reposted from FY12/2024 financial results materials)

Source: Company materials

Source: Company materials

Financial data (quarterly basis)

Unit: million yen 2023/12 2024/12 2025/12
  1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
(Income Statement)                  
Sales 6,486 5,494 7,485 3,804 7,207 5,785 8,358 4,270 8,848
Year-on-year 45.9% 47.6% 141.8% -11.0% 11.1% 5.3% 11.7% 12.3% 22.8%
Cost of Goods Sold (COGS) 4,320 3,858 5,681 3,067 5,521 4,228 6,448 3,122 5,842
Gross Income 2,166 1,635 1,803 737 1,686 1,558 1,910 1,149 3,006
Gross Income Margin 33.4% 29.8% 24.1% 19.4% 23.4% 26.9% 22.9% 26.9% 34.0%
SG&A Expense 1,048 1,097 1,128 914 1,115 1,102 1,125 1,077 1,200
EBIT (Operating Income) 1,118 539 676 -177 571 455 785 72 1,806
Year-on-year 150.0% 15.6% 135.5% -165.8% -49.0% -15.5% 16.2% -140.5% 216.6%
Operating Income Margin 17.2% 9.8% 9.0% -4.7% 7.9% 7.9% 9.4% 1.7% 20.4%
EBITDA 1,145 559 692 -161 587 476 806 92 1,827
Pretax Income 1,046 378 587 -254 493 369 728 -4 1,728
Consolidated Net Income 684 256 387 -144 328 245 485 -7 1,175
Minority Interest 0 0 0 0 0 0 0 0 0
Net Income ATOP 684 256 387 -144 328 245 485 -7 1,175
Year-on-year 82.2% -24.4% 97.9% -195.1% -52.0% -4.0% 25.2% -94.9% 258.2%
Net Income Margin 10.5% 4.7% 5.2% -3.8% 4.6% 4.2% 5.8% -0.2% 13.3%
                   
(Balance Sheet)                  
Cash & Short-Term Investments 3,569 4,266 5,388 3,770 4,479 4,988 4,728 5,013 5,788
Total assets 29,627 30,777 30,632 30,976 30,487 30,561 29,940 33,107 31,353
Total Debt 16,061 16,520 16,262 16,879 16,787 16,211 15,595 18,506 15,747
Net Debt 12,493 12,254 10,874 13,109 12,308 11,223 10,867 13,493 9,959
Total liabilities 18,064 18,944 18,412 18,899 18,354 18,163 17,173 20,349 17,712
Total Shareholders’ Equity 11,563 11,833 12,220 12,077 12,133 12,398 12,768 12,759 13,641
                   
(Profitability %)                  
ROA 5.50 4.81 5.08 3.95 2.75 2.66 3.02 3.28 6.14
ROE 12.43 11.42 12.79 10.23 6.98 6.74 7.32 8.46 14.73
(Per-share) Unit: JPY                  
EPS 83.5 31.0 47.0 -17.4 39.8 29.7 58.6 -0.9 142.4
BPS 1,406.1 1,435.9 1,482.9 1,465.5 1,472.3 1,501.2 1,542.9 1,541.8 1,665.9
Dividend per Share 0.00 0.00 0.00 33.00 0.00 16.00 0.00 25.00 0.00
Shares Outstanding(Million shares) 8.58 8.58 8.58 8.58 8.58 8.58 8.58 8.58 8.58

Source: Omega Investment from company materials

Financial data (full-year basis)

Unit: million yen 2014/12 2015/12 2016/12 2017/12 2018/12 2019/12 2020/12 2021/12 2022/12 2023/12 2024/12
(Income Statement)                      
Sales 10,446 11,569 12,300 13,099 16,833 18,020 17,775 16,836 15,533 23,269 25,620
Year-on-year 13.7% 10.8% 6.3% 6.5% 28.5% 7.1% -1.4% -5.3% -7.7% 49.8% 10.1%
Cost of Goods Sold 7,055 7,798 8,344 8,566 12,028 12,902 13,788 12,468 10,486 16,927 19,318
Gross Income 3,391 3,770 3,957 4,532 4,805 5,119 3,986 4,368 5,047 6,342 6,302
Gross Income Margin 32.5% 32.6% 32.2% 34.6% 28.5% 28.4% 22.4% 25.9% 32.5% 27.3% 24.6%
SG&A Expense 2,204 2,216 2,295 2,434 2,702 2,891 2,750 2,877 3,031 3,569 4,420
EBIT (Operating Income) 1,187 1,300 1,446 1,762 1,766 1,861 847 1,118 1,469 2,155 1,883
Year-on-year 31.6% 9.6% 11.2% 21.9% 0.2% 5.4% -54.5% 31.9% 31.5% 46.7% -12.6%
Operating Income Margin 11.4% 11.2% 11.8% 13.5% 10.5% 10.3% 4.8% 6.6% 9.5% 9.3% 7.3%
EBITDA 1,260 1,406 1,532 1,833 1,822 1,912 896 1,161 1,517 2,236 1,962
Pretax Income 1,044 1,196 1,329 1,672 1,539 1,759 712 1,004 1,270 1,756 1,585
Consolidated Net Income 626 724 854 1,111 1,007 1,159 358 609 1,060 1,183 1,051
Minority Interest 0 0 0 0 0 0 0 0 0 0 0
Net Income ATOP 626 724 854 1,111 1,007 1,159 358 609 1,060 1,183 1,051
Year-on-year 37.5% 15.6% 17.9% 30.2% -9.4% 15.1% -69.1% 70.5% 73.9% 11.6% -11.2%
Net Income Margin 6.0% 6.3% 6.9% 8.5% 6.0% 6.4% 2.0% 3.6% 6.8% 5.1% 4.1%
                       
(Balance Sheet)                      
Cash & Short-Term Investments 2,276 2,254 2,435 3,558 3,594 4,134 4,330 5,361 3,837 3,770 5,013
Total assets 8,793 11,398 10,833 16,916 16,777 19,294 20,071 20,051 28,977 30,976 33,107
Total Debt 2,414 3,958 2,712 7,439 6,048 7,203 8,342 8,108 16,399 16,879 18,506
Net Debt 139 1,704 277 3,881 2,454 3,069 4,012 2,747 12,562 13,109 13,493
Total liabilities 3,531 5,363 3,977 8,909 7,869 9,399 10,004 9,749 17,921 18,899 20,349
Total Shareholders’ Equity 5,262 6,034 6,856 8,006 8,908 9,895 10,067 10,302 11,056 12,077 12,759
                       
(Cash Flow)                      
Net Operating Cash Flow 1,761 -1,451 1,611 -3,666 1,617 -420 -917 1,705 -9,268 -12 1,143
Capital Expenditure 91 58 111 57 66 61 21 40 28 304 138
Net Investing Cash Flow -111 -116 -184 107 -64 -71 -288 -51 -267 -766 -715
Net Financing Cash Flow -612 1,588 -1,278 4,667 -1,495 984 953 -608 7,971 303 1,223
Free Cash Flow 1,697 -1,491 1,536 -3,692 1,572 -446 -923 1,682 -9,282 -291 1,049
                       
(Profitability %)                      
ROA 7.07 7.17 7.68 8.01 5.98 6.42 1.82 3.04 4.32 3.95 3.28
ROE 13.72 12.82 13.24 14.96 11.90 12.32 3.58 5.98 9.93 10.23 8.46
(Per-share) Unit: JPY                      
EPS 90.2 90.1 104.9 134.4 119.6 137.1 42.3 73.6 129.6 143.8 127.2
BPS 664.8 744.2 841.3 958.0 1,054.5 1,170.2 1,192.9 1,249.5 1,356.8 1,465.5 1,541.8
Dividend per Share 6.00 10.00 12.00 18.00 21.00 23.00 25.00 26.00 28.00 33.00 41.00
Shares Outstanding (Million shares) 7.91 8.11 8.15 8.35 8.45 8.46 8.47 8.47 8.49 8.58 8.58

Source: Omega Investment from company materials

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