The valuation of Keihanshin Building is extremely low. In general, unrealized gains on the leasing properties are not being reflected on the balance sheet. Share price can be evaluated using the disclosed net assets per share (hereinafter referred to as “BV-BPS”) plus unrealized gains per share after tax※ (hereinafter referred to as “MV-BPS”). For Keihanshin Building the MV-BPS is calculated※※ as per below.

※ Unrealized gain after tax per share is calculated using the following formula.
{(Leasing property market value – its book value) x (1-tax rate)} ÷ (Number of issued shares-Number of treasury shares)

※※For Keihanshin Building, MV-BPS after adjusting for unrealized gains is calculated as following.
BV-BPS + Unrealized gain after tax※ = ¥1,287 + {(¥166.0 billion – ¥94.3 billion) x (1-30%)} ÷ (52.18 million – 0.20 million shares)
Note that the leasing property market value of ¥166.0 billion and its book value of ¥ 94.3 billion are from the numbers in notes to YUHO (FY2019), deducting the transfer value of Toyahama Warehouse released in April 2020, and other figures are from the latest quarterly result report.

Based on the latest company disclosures, the MV-BPS of Keihanshin Building is ¥2,253 (¥2,235 written in our shareholder proposal was based on previous year number). Moreover, we believe the market value may be calculated conservatively.
If there is an unrealized gain (i.e. MV-BPS is larger than the BV-BPS), the PBR obtained by dividing the stock price by the MV-BPS (hereinafter referred to as the “MV-PBR”) is less than the book value PBR obtained by using BV-BPS. The MV-PBR of Keihanshin Building is 0.60 times which is far lower than its book value PBR of 1.05 times (as of 14th August 2020).