We suspect the Company is misleading retail investors into believing its low profit margins as high. The following slides only in Japanese were prepared and used only in the information session for retail investors. In these slides, the Company explains that it has realized a higher profit margin than other companies in the same industry by specializing in the leasing business. The names of other companies above are not disclosed, but it is assumed that there are four companies: Unizo HD, Heiwa Real Estate, Daibiru Corp, and TOC Co (Hereafter collectively referred to as “4 Main Competitors”).

（Source：Keihanshin Presentation to Retail Investors – Japanese only（29th Nov 2019））

However, sales in the property leasing business accounts for more than 99% of the total sales of the Company, whereas the 4 Main Competitors also engage in other businesses that make a lower profit margin（■） than the leasing business（■&■）. To compare profit margins correctly, it is needed to compare the figure of the profit gained from leasing business alone（■&■）, and through such correct comparison, it is clear that the profit margin of the Company is lower than that of the 4 Main Competitors.

（Source：QUICK Astra Manager）
（Supplement：the margin ■ is calculated deducting the corporate cost and the margin ■ is calculated not deducting such cost）

Such misrepresentation that leads to misunderstanding of high profit margin is inappropriate as IR. Also, there is no such comparison of profit margins in the materials prepared for the information session for analyst. Why the Company uses such a misleading description only in the materials for retail investors? Under these circumstances, it is increasingly suspicious that such misrepresentation is an attempt to mislead retail investors into believing the profit margin for the leasing business of the Company is higher than that of competitors.
Instead of such misleading IR, we would like the Company to fulfill the responsibility of managements to increase shareholder value by facing the problems of the Company sincerely and improving profitability.

In the mid-term business plan announced October 25, 2019, the recurring profit margin is expected to be almost the same (36.2% → 36.4%). While the Company does not disclose the target of EBITDA margin, it is expected to greatly improve by calculating back as follows.

（Supplement：EBITDA margin is the ratio of operating profit plus cost amortization divided by sales. The number with a marginal note “x” is disclosed by the Company, without “x” is our estimate.）

However, if the same comparison with the correct profit margin we explain above is made with the EBITDA margin, the mid-term business plan shows that the Company’s profit ratio is just catching up with other companies in the same industry (Figures below).

（Source：QUICK Astra Manager）