Core Insights - Lead Real Estate Co., Ltd reported a net income attributable to common shareholders of JPY 846.8 million ($5.9 million), marking a 35.1% increase year-over-year [1][8] - Total revenue for the fiscal year ended June 30, 2025, was JPY 18.8 billion ($130.7 million), a slight decrease of 0.6% from JPY 19.0 billion in the previous fiscal year [2] - The company is focusing on expanding its hotel operations and targeting high-value real estate opportunities, with plans for international expansion [11] Financial Performance - Real estate sales accounted for JPY 18.3 billion ($127 million), down 1.0% from JPY 18.5 billion in the prior fiscal year, attributed to fewer unit deliveries and higher average selling prices [3][4] - Other revenue increased by 15.5% to JPY 535.3 million ($3.7 million), driven by the ramp-up of hotel operations and higher average daily rates [4] - The cost of revenue for real estate sales decreased by 6.1% to JPY 14.8 billion ($102.4 million), leading to a gross margin increase to 19.8% from 15.6% [5] Operating Expenses and Income - Selling, general, and administrative expenses rose by 9.9% to JPY 2.3 billion ($15.6 million), increasing as a percentage of revenue to 12.0% from 10.8% [6] - Operating income surged by 64.1% year-over-year to JPY 1,475 million ($10.2 million), with an operating profit margin of 7.8% compared to 4.7% in the previous year [6] Other Financial Metrics - Interest expenses increased to JPY 44.5 million ($309 thousand) from JPY 18.3 million, reflecting higher market interest rates [7] - Total other income (expense) was a net expense of JPY 80.4 million ($558 thousand), compared to net income of JPY 55.5 million in the prior year [8] - Cash and cash equivalents rose to JPY 2.7 billion ($18.4 million) as of June 30, 2025, up from JPY 1.3 billion a year earlier [9] Business Outlook - The company anticipates favorable market conditions with record levels of inbound tourism and strengthening housing demand in Tokyo [11] - Plans include expanding hotel operations nationwide and acquiring condominium units in the Philippines and Malta as part of a risk-hedging strategy [11] - The company aims to enhance profitability and deliver renewed revenue growth in fiscal 2026 while maintaining a commitment to long-term shareholder value [11]

Revenue and Sales Performance - Revenue from condominium sales for the fiscal year ended June 30, 2025, was JPY 6,677,016 thousand (approximately $46,313 thousand), accounting for 35% of total revenue[20] - For the fiscal year ended June 30, 2024, revenue from condominium sales was JPY 11,788,238 thousand (approximately $73,273 thousand), representing 62% of total revenue[20] - For the fiscal year ended June 30, 2025, total revenue was JPY 18,842,663 thousand (approximately $130,698 thousand), a slight decrease from JPY 18,950,683 thousand in 2024[129] - Revenue from real estate sales accounted for approximately 97.2% of total revenue in 2025, with JPY 18,307,409 thousand generated from this segment[148] - The company delivered 70 single-family homes and 20 condominiums in the fiscal year ended June 30, 2025, compared to 71 single-family homes and 33 condominiums in the fiscal year ended June 30, 2024[128] - The company delivered a total of 94 single-family homes and 25 condominiums in the fiscal year ended June 30, 2025[153][156] - The average sale price for delivered single-family homes in 2025 was JPY 122,682 thousand, while for condominiums it was JPY 373,196 thousand[153][156] - The company experienced only six cancellations in total during the fiscal years ended June 30, 2025, 2024, and 2023, indicating a strong demand for its properties[127] Borrowings and Financial Risks - As of June 30, 2025, the company had approximately JPY 5,000,212 thousand (approximately $34,683 thousand) in short-term borrowings outstanding[21] - The company repaid JPY 10,738,084 thousand (approximately $74,482 thousand) and renewed JPY 10,814,500 thousand (approximately $75,012 thousand) of short-term borrowings during the fiscal year ended June 30, 2025[21] - The company’s long-term borrowings as of June 30, 2025, amounted to JPY 7,157,249 thousand (approximately $49,645 thousand)[23] - The company’s reliance on short-term borrowings poses a risk to its operations if it fails to renew these borrowings on favorable terms[21] Competition and Market Conditions - The company faces significant competition in the luxury residential property markets in Tokyo, Kanagawa prefecture, and Sapporo, which may impact its ability to secure development sites[18] - The company faces competition from local hospitality providers, which may impact revenue[38] - Economic contraction or low growth levels could adversely affect the company's revenue and profitability as a hotel operator[39] - Rent control laws may limit the company's ability to increase rental rates, negatively impacting rental income and profitability[41] - The geographic concentration of the company's operations in Tokyo, Kanagawa, and Sapporo increases exposure to local economic conditions[55] - The Japanese economy's mixed indicators and potential future deterioration may negatively impact demand for real properties[59] Operational Risks - The company’s construction operations are heavily dependent on the availability and performance of contractors, which could affect project timelines and costs[29] - Shortages in labor and raw materials, particularly lumber, could lead to increased construction costs and delays, adversely impacting the company’s financial condition[31] - The company is subject to various risks in the residential leasing business, including demand fluctuations and competition[40] - The company is subject to risks related to environmental contamination, which could adversely affect operations and property values[64] - Natural disasters, including earthquakes and typhoons, pose significant risks to the company's operations and property values, particularly in Japan[66] - Fixed costs associated with the business may adversely affect financial performance during periods of decreased demand[39] - The company may incur unforeseen losses due to defects in properties, which could adversely affect financial results and operations[70] International Expansion and Compliance - The company plans to expand operations internationally, particularly in the U.S., Hong Kong, and Southeast Asia, which involves various risks[60] - Legal and regulatory compliance in foreign markets may pose challenges and increase operational costs[62] - The company may face significant liabilities or losses from legal disputes related to property development and sales[63] Corporate Governance and Shareholder Matters - The concentration of share ownership among management (approximately 90.1%) may influence corporate decisions and shareholder interests[74] - The sale of substantial amounts of American Depositary Shares (ADSs) could negatively impact their market price and the company's ability to raise capital[75] - Ineffective internal controls could lead to material misstatements in financial statements, harming investor confidence and market price[80] - The company follows home country governance practices, which may provide less protection for public shareholders compared to U.S. standards[82] - Shareholders holding 3% or more of total voting rights can examine accounting books and records under Japanese law[83] - Direct acquisition of Ordinary Shares by Foreign Investors requires prior filing and clearance, which may take up to 30 days[87] - The depositary received clearance for the acquisition of Ordinary Shares underlying the ADSs in May 2023, easing trading for ADSs[88] - Cash dividends for Ordinary Shares are paid in Japanese yen and converted to U.S. dollars, affecting the value received by ADS holders due to exchange rate fluctuations[97] - As a foreign private issuer, the company is exempt from certain Nasdaq corporate governance standards, resulting in less protection for investors[99] - The company does not have a standalone compensation committee or nomination and corporate governance committee, following home country practices[99] - Holders of ADSs may not receive distributions if it is illegal or impractical to make them available[93] - The deposit agreement allows amendments without consent from ADS holders, limiting their options if they disagree[95] - ADS holders may face limitations on the transfer of their ADSs due to the depositary's discretion[94] - The company may incur significant additional expenses if it ceases to qualify as a foreign private issuer, impacting operations[98] - The company regained compliance with Nasdaq's minimum market value of publicly held shares (MVPHS) requirement after previously being non-compliant[100] Development and Project Management - The company has developed approximately 1,300 luxury residential properties since its inception in 2001, enhancing brand recognition and trust[134] - The management team has an average of over 20 years of experience in the Japanese real estate development industry, contributing to effective project oversight and execution[137] - The company has developed approximately 1,300 luxury residential properties since its inception in 2001, primarily in Tokyo, Kanagawa prefecture, and Sapporo[158] - During the fiscal years ended June 30, 2025, 2024, and 2023, the company received introductions of approximately 170 land parcels and customers from 60 real estate agencies each year[158] - The company operates eight hotels under the brand ENT TERRACE as of June 30, 2025, up from six hotels in the previous two fiscal years[178] - The company launched an interactive media platform, Glocaly, in October 2021 to facilitate matching sellers and buyers of condominiums[126] - The company launched the Glocaly platform in October 2021, designed to facilitate matching of sellers and buyers of condominiums, with features including AI-powered translation in over 100 languages[182] - The company emphasizes quality control with a 10-year warranty on properties developed, ensuring compliance with Japanese laws and standards[175] - The company has a corporate structure that includes various subsidiaries established for property management and overseas business expansion[111] Employee and Operational Stability - As of June 30, 2025, the company had 76 full-time employees, an increase from 62 in 2023, representing a 22.6% growth[190] - The company has not experienced material labor disputes and maintains a good working relationship with employees and independent contractors[191] - The company’s business is not subject to seasonal fluctuations, indicating stable operational performance throughout the year[198] - The company has adopted an environmentally friendly approach in property development, primarily using lumber as raw material[189] - The company’s leasing, development, and reconstruction operations are subject to the Soil Contamination Countermeasures Act, which mandates remediation if soil pollution exceeds prescribed standards[211] - The company has not paid any penalties associated with breaches of environmental laws and regulations in the past[188] Real Estate and Property Management - The company has registered 19 trademarks in Japan related to real estate services and 10 domain names as of the date of the annual report[186] - The company outsources construction work to independent contractors, with payments to the largest contractor accounting for 15% of total payments under construction contracts for the fiscal years ended June 30, 2025, 2024, and 2023[172] - The company’s construction contracts typically provide for fixed payments, with adjustments for excess costs due to design changes or government price changes[171] - The company leases office space in Tokyo with a monthly rent of JPY2,623,720 (approximately $14,826) for an area of 4,243 square feet, with a lease term from December 2024 to November 2026[192] - The company owns 4,101 square feet of buildings and land in Tokyo, excluding inventories for real estate development and sales[193] - The company’s office leases automatically renew unless either party provides written notice of intent not to renew[192][195][196] - The company has a statutory liability for defects in property sales for one year from the date the purchaser becomes aware of the defect[213]

Core Viewpoint - Lead Real Estate Co., Ltd (LRE) is set to release its financial results for the fiscal year ended June 30, 2025, on November 3, 2025, before the U.S. market opens, followed by a conference call to discuss the results and outlook [1]. Company Overview - Lead Real Estate Co., Ltd is a Japanese developer specializing in luxury residential properties, including single-family homes and condominiums in Tokyo, Kanagawa Prefecture, and Sapporo [3]. - The company also operates the ENT TERRACE brand of extended-stay hotels and leases apartment units in Japan and Dallas, Texas [3]. Mission and Strategy - The company's mission is to provide stylish, safe, and luxurious living, guided by the philosophy of Kaizen (continuous improvement) to enhance operational efficiency [4]. - LRE aims to expand its award-winning luxury housing and hotel portfolio while building a global real-estate transaction platform that offers access to prime properties in Japan and internationally, including the U.S. and Hong Kong [4]. Conference Call Details - The conference call to discuss the fiscal year 2025 earnings will take place on November 3, 2025, at 8:30 AM Eastern Time (10:30 PM Japan Standard Time) [2]. - Participants can join the call via a toll-free number in the U.S. or an international dial-in number, with a conference ID provided for access [2].

Core Insights - Dutch Bros has signed a lease for a new build-to-suit location in Folsom, California, expected to open in Q2 2026 [1] - The new facility will feature dual drive-thru lanes and walk-up service windows to accommodate high traffic [2] - The expansion in Folsom is part of Dutch Bros' growth strategy in the Sacramento area, building on its existing presence in Northern California [4] Company Overview - Dutch Bros is recognized as one of the fastest-growing quick-service beverage brands in the U.S., recently surpassing 1,000 stores across 18 states [5] - The company is known for its energetic culture, community involvement, high-quality drinks, personalized service, and a secret menu [5] Development Details - The new Folsom location will be 986 square feet and is designed to handle up to 20 vehicles in the drive-thru lanes [2] - LRE & Co will manage all construction aspects, with architecture and engineering contracts currently being finalized [3]

Core Viewpoint - Lead Real Estate Co., Ltd has announced a dividend distribution of 10 JPY (approximately $0.07) per American Depository Receipt (ADR), subject to shareholder approval on September 29, 2025, with distribution planned for September 30, 2025 [1][2]. Company Overview - Lead Real Estate Co., Ltd is a Japanese developer specializing in luxury residential properties, including single-family homes and condominiums, primarily located in Tokyo, Kanagawa Prefecture, and Sapporo [3][4]. - The company also operates hotels in Tokyo and leases apartment units in Japan and Dallas, Texas [3]. Financial Information - The total dividend distribution amounts to approximately $923,810 (around 139,419,000 JPY) [2]. - The previous cash dividend was $0.02 per share, distributed on September 30, 2024 [2]. Management Statement - Chief Executive Eiji Nagahara expressed satisfaction in rewarding shareholders for their support and indicated anticipation for further positive developments in the future [3]. Company Mission and Vision - The company's mission focuses on providing stylish, safe, and luxurious living environments [4]. - The vision includes adopting a Kaizen (continuous improvement) approach to enhance operations and leverage its strong market position in the luxury residential sector [4].

Financial Data and Key Metrics Changes - The company reported an annualized Return on Equity (ROE) of approximately 15% for the first half of 2025, with expectations upgraded to high teens for the full year [4][5] - Insurance revenue increased by 8.9% year-over-year to $930 million, driven by growth in gross premiums written [21] - The undiscounted combined ratio was 97.8%, with a discounted ratio of 87.4%, indicating strong underwriting performance despite significant industry losses [22][24] Business Line Data and Key Metrics Changes - The reinsurance segment saw stable market conditions, with growth in property reinsurance through core clients, while casualty business is largely at scale [14][15] - The specialty reinsurance book is expanding, particularly in marine energy and terror reinsurance, while property insurance faces headwinds requiring portfolio adjustments [15][16] - Premiums grew nearly 6% in the first half of 2025, reflecting a disciplined growth strategy [13] Market Data and Key Metrics Changes - The global insured natural catastrophe losses for the first half of 2025 were about $80 billion, the second highest recorded for that period [10] - The insurance market remains favorable, with most lines well-priced, although a softening market is beginning to emerge [12][5] Company Strategy and Development Direction - The company emphasizes disciplined growth and active capital management to deliver sustainable returns [6][7] - The focus remains on expanding in areas with strong margins while maintaining a diversified portfolio [18] - The company is not looking to expand its catastrophe footprint but is managing existing exposures carefully [67] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver strong returns through the remainder of 2025 and beyond, despite the softening market [32] - The company is well-capitalized and prepared for the wind season, with a BSCR ratio over 257% [30][31] - The management highlighted the importance of underwriting results and returns in shaping market conditions moving forward [39][92] Other Important Information - The investment portfolio generated a return of 3.7% in the first half of the year, benefiting from higher yields and favorable currency movements [28][29] - The company has a five-year exemption from Bermuda corporate income tax, which will not significantly impact the overall tax charge until 2030 [23] Q&A Session Summary Question: Development of combined ratios into 2026 - Management indicated that it is premature to predict combined ratios for 2026, as the market will be influenced by loss activity during the peak hurricane season [38] Question: Reserve releases and Hurricane Ian - Management clarified that Hurricane Ian was not included in the highlighted reserve releases, and the timing of reserve releases can vary based on new information [41][42] Question: Drivers for updated ROE target - The updated ROE target is a reflection of the strong Q2 performance, not indicative of changes in expectations for the second half of the year [47] Question: Growth strategy and areas of focus - The company is focusing on expanding its U.S. platform, particularly in energy liability, while remaining selective in other areas [49] Question: Timing of aviation contracts and growth expectations - The timing of aviation contracts is not expected to negatively impact growth, with opportunities anticipated in Q3 and Q4 [54] Question: Capital generation outlook for the second half - Management plans to assess capital returns post-wind season, maintaining a BSCR above 200% [78][112] Question: Onerous loss components in insurance liabilities - Onerous losses are considered immaterial and reflect conservative assumptions rather than expected loss-making contracts [81]

Financial Data and Key Metrics Changes - The company reported an annualized Return on Equity (ROE) of approximately 15% for the first half of 2025, with expectations upgraded to high teens for the year [3][4]. - Insurance revenue increased by 8.9% year-over-year to $930 million, driven by growth in gross premiums written [19][20]. - The undiscounted combined ratio was 97.8%, reflecting disciplined underwriting despite significant industry losses [21]. Business Line Data and Key Metrics Changes - The reinsurance business saw stable market conditions, with growth in property reinsurance and a largely scaled casualty book [13][14]. - The insurance segment faced headwinds in property insurance, prompting adjustments in the portfolio, while marine and energy classes showed good momentum [15][16]. - Premiums grew nearly 6% in the first half of 2025, indicating a focus on disciplined growth ahead of rate [12]. Market Data and Key Metrics Changes - The global insured natural catastrophe losses reached about $80 billion in the first half of 2025, the second highest recorded for that period [9]. - The insurance market remains favorable, with most lines well-priced, although early signs of a softening market are emerging [11][12]. - The company noted that terms and conditions in the market are broadly holding steady, which bodes well for future underwriting results [11]. Company Strategy and Development Direction - The company continues to focus on disciplined growth and active capital management to deliver sustainable returns [5][6]. - There is an emphasis on maintaining a healthy balance sheet to pursue selective growth opportunities [6]. - The strategy includes expanding capabilities in specialty reinsurance and building out the U.S. platform, particularly in energy liability [17][48]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver strong returns through the remainder of 2025 and beyond, despite the competitive market conditions [32]. - The company remains cautious about the impact of potential losses during the peak hurricane season on future market conditions [38]. - Management highlighted that losses do not move markets; rather, margins do, indicating a stable outlook despite significant losses in the first half [98]. Other Important Information - The investment portfolio generated a return of 3.7% in the first half of 2025, benefiting from higher yields and falling treasury rates [27][29]. - The company remains well-capitalized, with a BSCR ratio of over 257%, allowing for flexibility in underwriting and capital returns [29][30]. Q&A Session Summary Question: How do you expect the combined ratios to develop into 2026? - Management indicated that it is premature to predict the combined ratios for 2026, as the market will be influenced by loss activity during the peak hurricane season [38]. Question: Can you clarify the reserve releases related to Hurricane Ian? - Management confirmed that Hurricane Ian has not been specifically called out in reserve releases, and the timing of reserve releases can vary based on new information [40][41]. Question: What are the underlying drivers for the updated ROE target? - The updated ROE target is a reflection of the strong Q2 performance, not related to expectations for the second half of the year [47]. Question: What areas are you looking to grow in? - The company is focusing on expanding its specialty reinsurance and U.S. platform, particularly in energy liability, while remaining selective in other areas [48][49]. Question: How do large loss events impact pricing? - Management stated that large loss events do not necessarily move markets; rather, it is the margins that are more significant [98][99].

Investor Presentation: Half-year 2025 Safe harbour statements NOTE REGARDING FORWARD-LOOKING STATEMENTS: CERTAIN STATEMENTS AND INDICATIVE PROJECTIONS (WHICH MAY INCLUDE MODELLED LOSS SCENARIOS) MADE IN THIS PRESENTATION OR OTHERWISE THAT ARE NOT BASED ON CURRENT OR HISTORICAL FACTS ARE FORWARD-LOOKING IN NATURE INCLUDING, WITHOUT LIMITATION, STATEMENTS CONTAINING THE WORDS "BELIEVES", "AIMS", "ANTICIPATES", "PLANS", "PROJECTS", "FORECASTS", "GUIDANCE", "INTENDS", "EXPECTS", "ESTIMATES", "PREDICTS", "MAY", ...

Core Viewpoint - Lead Real Estate Co., Ltd has engaged in significant transactions with Samurai Capital, selling long-term stay hotels and condominiums, indicating a strategic move to enhance its portfolio and operational capabilities in the luxury residential market in Japan [1][2][3]. Group 1: Transaction Details - The company has sold two long-term stay hotels, "Ent Terrace Akihabara" and "Ent Terrace Asakusa," and entered into trust beneficiary right purchase agreements for two condominiums, "Excelsior Shakujii-Koen" and "Excelsior Yokohama Enokicho," totaling approximately 5.3 billion yen in this round of transactions [2][3]. - The initial engagement with Samurai Capital began with a business alliance agreement on May 30, 2024, which included the first round of transactions worth over 4 billion yen [2]. Group 2: Future Prospects - On June 30, 2025, the company signed a memorandum of understanding for preferential negotiations regarding three long-term stay hotels currently scheduled for construction, indicating plans for future growth and development in the hospitality sector [4]. - The company aims to provide integrated services from planning to operation, enhancing customer satisfaction through a one-stop service model [4]. Group 3: Property Overviews - "Ent Terrace Akihabara" is an eight-room hotel in Chiyoda, Tokyo, featuring a building area of 4,870 square feet and designed for groups or families [6]. - "Ent Terrace Asakusa" is a nine-room hotel in Taito, Tokyo, with a building area of 8,719 square feet, offering both Japanese-style and Western-style rooms [9]. - "Excelsior Shakujii-Koen" is a 22-unit property in Nerima, Tokyo, with a building area of 13,021 square feet, located near Shakujii-Koen Station [11]. - "Excelsior Yokohama Enokicho" is a 30-unit property in Yokohama, Kanagawa, with a building area of 18,955 square feet, ideal for families due to its proximity to schools and parks [14]. Group 4: Company Overview - Lead Real Estate Co., Ltd specializes in luxury residential properties, including single-family homes and condominiums, across Tokyo, Kanagawa Prefecture, and Sapporo, and also operates hotels in Tokyo [15]. - The company's mission focuses on providing stylish, safe, and luxurious living, while its vision emphasizes continuous improvement and leveraging its strong market position in luxury residential properties [16].

Core Insights - Lead Real Estate Co., Ltd (LRE) has signed a sales contract for its planned hotel, ENT TERRACE Tsukiji 6 Chome, located in Tsukiji, Tokyo [2][10] - The hotel will feature eight extended-stay rooms and will be constructed with reinforced concrete, comprising nine floors above ground [3][9] - The Tsukiji District Community Development Project, initiated in March 2022, aims to revitalize the area into a "waterfront city" and enhance its cultural and historical significance [8][9] Company Overview - Lead Real Estate Co., Ltd specializes in luxury residential properties, including single-family homes and condominiums, across Tokyo, Kanagawa, and Sapporo [10][11] - The company operates hotels in Tokyo and leases apartment units in Japan and Dallas, Texas [10] - LRE's mission focuses on providing stylish, safe, and luxurious living, while its vision emphasizes continuous improvement and leveraging its strong market position [11] Project Details - ENT TERRACE Tsukiji 6 Chome will have a building area of 6,698 square feet and a land area of 1,016 square feet [3][9] - The total construction cost for the Tsukiji District Community Development Project is approximately 6 billion dollars [9] - The project site covers an area of 19 hectares and involves multiple participating companies, including Mitsui Real Estate and Toyota Automobile [9]