開示日時：2021/12/29 17:00:00
▼テキスト箇所の抽出
‘For Immediate Release \n\nDecember 24, 2021 \n\nCompany name: First Brothers Co., Ltd. \nTomoki Yoshihara \nPresident: \n (TSE First Section, Stock code: 3454) \nInquiries: \n\nChief Financial Officer \nYoshinobu Hotta \n(Tel: +81-3-5219-5370) \n\n \n\n \n\n \n\nNotice Regarding Application for Selection of Prime Market in TSE New Market Segments \nand Submission of Plan to Meet the Continued Listing Requirements \n\nOn December 24, 2021, First Brothers Co., Ltd. (hereafter “the Company”) resolved to select the Prime \nMarket in connection with the restructuring of the market segments of the Tokyo Stock Exchange, Inc. \n(TSE) scheduled for April 2022, and duly submitted an application. The Company did not meet the \ncontinued listing requirements for this market as of the base date for transition (June 30, 2021), and \ntherefore formulated a plan toward compliance to the continued listing requirements as described below. \n\n1. The Company’s status of compliance to the continued listing requirements and timeframe of the plan \n\nWith regard to our status of compliance to the continued listing requirements as of the base date for \ntransition (shown below), we did not meet the requirements for tradable share market capitalization and \ntradable share ratio. However, the First Brothers Group (hereafter “the Group”) has achieved steady \ncorporate growth since our founding in February 2004 by consistently upholding high aspirations and \nworking in harmony with local communities, and we firmly believe that moving to the Prime Market will \ncontribute to our further corporate growth. \n\nWe are committed to implementing various initiatives in order to meet the listing requirements for \n\ntradable share market capitalization and tradable share ratio by the end of November 2026. \n\n \n\nTradable shares \n(Units) \n\nTradable share \nmarket \ncapitalization \n\nTradable share \nratio \n\nDaily average \ntrading value \n\nStatus of the Company \n(As of the base date \nfor transition) \n\n38,339 \n\n¥3.86 billion \n\n26.5% \n\n¥38 million \n\nListing requirements \n\n20,000 \n\n¥10.0 billion \n\n35.0% \n\n¥20 million \n\nItems described in the \nplan \n\n \n\n✓ \n\n✓ \n\n \n\n* The status of compliance was calculated based on the distribution of the Company’s share certificates, \n etc., ascertained by the TSE as of the base date for transition. \n\n \n2. Basic policy regarding the Company’s initiatives toward compliance to the continued listing requirements, \n\nthe challenges, and details of such initiatives \n\n(1) Basic policy underpinning the Company’s initiatives \n\nThe Group aims to achieve sustainable corporate growth while maintaining harmony with local \ncommunities. To this end, we will actively engage not only in our mainstay businesses of operating \nproperties for lease and managing real estate assets, but also in hospitality services such as hotel \noperation and the renewable energy business. Under this basic policy, we will seek to meet the continued \nlisting requirements by enhancing our corporate value and gaining recognition in the stock market. \n \n\n\x0c(2) Current challenges \n\nAs of the base date for transition, the Company’s shares did not meet the continued listing requirements \nof the Prime Market in terms of tradable share market capitalization and tradable share ratio. \n\nAs such, we will implement the following initiatives to meet the requirements for tradable share market \n\ncapitalization and tradable share ratio. \n \n(3) Details of specific initiatives \n\n1) Measures to improve tradable share market capitalization \n\nTradable share market capitalization is calculated as follows. \n Tradable share market capitalization ＝ Market capitalization × Tradable share ratio \nThis section only refers to our measures to improve tradable share market capitalization. The \nmeasures to improve the tradable share ratio are indicated in the corresponding section “Measures \nto improve tradable share ratio.” \n\nWhen focusing on the net asset value, market capitalization is calculated as follows. \n\n Market capitalization ＝ Net asset value × Price-to-book ratio (PBR) \n\nWe plan to implement the measures outlined below to improve both the net asset value and PBR, \n\nwhich are the two components of market capitalization. \n\n \n\nA. Measures to increase net asset value \n\n(a) Build leasing income from the portfolio of properties for lease \n\nThe Group owns properties for lease worth ¥67.6 billion on a book value basis (as of end of \nAugust 2021) from which it generates stable income. Recurring costs including general and \nadministrative expenses and interest on borrowings can be covered by the income we earn from \nleasing these properties (gross profit from leasing). Our earnings structure is such that income \nfrom leasing alone is enough to ensure profit (pre-tax) and an increase in net asset value (after \ntax), so long as special circumstances (such as a decline in the appraisal value of properties) do \nnot surface. \n\nIn addition, we conduct portfolio rotation as necessary to realize the unrealized gains from \nproperty value enhancement, and use the proceeds from the rotation to acquire new properties \nfor lease, expanding the overall portfolio on an ongoing basis. Our policy is to increase income \nfrom leasing in proportion to portfolio growth. \n\n [Changes in the portfolio of properties for lease] \n\nEnd of August 2019 \n(end of Q3) \n\nEnd of August 2020 \n(end of Q3) \n\nEnd of August 2021 \n(end of Q3) \n\nBook value *1 \n\n¥48.6 billion \n\n¥59.9 billion \n\n¥67.6 billion \n\nNumber of properties \n\n53 \n\n59 \n\n90 \n\n*1 Properties for lease include office buildings, commercial buildings, residential buildings, \n\n¥1.14 billion \n\n¥1.53 billion \n\n¥1.79 billion \n\nGross profit from \nleasing *2 \n\nlodging facilities, etc. \n\n*2 Refers to net income gained from properties for lease over the nine-month period, after \n\ndepreciation (excluding non-recurring expenses such as large-scale repairs, etc.) \n\n \n\n \n\n(b) Profit from sale accompanying portfolio rotation of properties for lease \n\nAs explained in item (a) above, during the process of growing our portfolio, we sell some of the \nproperties for lease to realize unrealized gains and generate income from the sale (gross profit \n\n\x0cfrom sale). Since the recurring costs of the Group are currently covered by income from leasing \n(gross profit from leasing), the income from sale (gross profit from sale) becomes our profit on a \npre-tax basis and increases the net asset value on an after-tax basis. \n\nUnrealized gains (difference between the book value and the appraised value, etc.*1) as of the \nend of August 2021 amounted to ¥12.2bn. If these unrealized gains were to be realized, the net \nasset value would increase by ¥7.3 billion*2. \n*1 Appraisal value or assessment value based on the appraisal value \n*2 Applies effective tax rate of 39.82% in the fiscal year ended November 30, 2020 (effective tax \n\nrate without considering the gain on negative goodwill) \n\n \n\nB. Measures to improve price-to-book ratio (PBR) \n\nAt present, the stock price of First Brothers trends below the book value per share (the price-to-\nbook ratio [PBR] was 0.66x based on the closing price of ¥923 on November 30, 2021). We attribute \nthis to the relatively high share of our income from property sale within the current term profit, and \nto the high volatility of term profit because of the irregularity of the timing of property sale. \n\nSince we plan to expand our income from leasing (gross profit from leasing) going forward, we \nexpect income from property sale (gross profit from sale) to consequently have a smaller share of \nthe term profit and the volatility of term profit to also fall. \n\n[Changes in the breakdown of gross profit] \n\nFiscal year \nended \nNovember 30, \n2018 \n\nFiscal year \nended \nNovember 30, \n2019 \n\nFiscal year \nended \nNovember 30, \n2020 \n\n¥1.05 billion \n(16.2%) \n\n¥5.33 billion \n(82.2%) \n\n¥0.10 billion \n(1.6%) \n\n¥1.41 billion \n(26.5%) \n\n¥2.09 billion \n(48.7%) \n\n¥3.83 billion \n(72.0%) \n\n¥0.08 billion \n(1.5%) \n\n¥2.17 billion \n(50.6%) \n\n¥0.03 billion \n(0.7%) \n\n¥6.48 billion \n\n¥5.32 billion \n\n¥4.29 billion \n\nFuture direction \n\nIn the process of \nincreasing gross profit \nfrom leasing and other \ngross profit, which are \nstable sources of income, \nwe will consequently \nreduce dependence on \ngross profit from sale that \nis liable to wide fluctuation \nand also reduce volatility \nof term profit. \n\nIn addition, we will engage in hospitality services such as hotel operation as well as the renewable \nenergy business with a view to establishing a revenue structure that does not depend solely on \nincome from the real estate business. \n\nThrough these efforts, we will seek to raise PBR, which is currently at a low level. \n\n2) Measures to improve tradable share ratio \n\nA. Cancellation of treasury stock \n\nTreasury stock held by listed companies is classified as nontradable shares. As of the end of \nNovember 2021, the Company held 421,710 treasury shares. Since we currently do not have any \nspecific plans to use these shares, except for those subject to share acquisition rights under our \nstock option program (equivalent to 238,400 shares as of end of November 2021), we intend to \ncancel the remaining treasury shares by the end of November 2026 to improve the tradable share \nratio. \n\n \n\nGross profit \nfrom leasing \n\nGross profit \nfrom sale \n\nOther gross \nprofit \n\nTotal gross \nprofit \n\n \n\n \n\n\x0c \n\nB. Shares being held by GOLDMAN SACHS INTERNATIONAL \n\nAs of the end of November 2020, GOLDMAN SACHS INTERNATIONAL was a major shareholder \nof the Company with a shareholding ratio of 10.72%. However, based on the Large Shareholding \nReport filed by Gordian Capital Singapore Private Limited (hereafter “Gordian”) on June 11, 2018 \n(including the Change Reports filed thereafter), we presume Gordian to be the beneficial \nshareholder, with GOLDMAN SACHS INTERNATIONAL being its agent. Gordian is a Singapore-\nbased institutional investor that engages in pure investment, and the Large Shareholding Report it \nfiled states that Gordian’s purpose of owning First Brothers shares is “to make pure investments on \nbehalf of customers.” The Large Shareholding Report also confirms that Gordian frequently trades \nour shares. \n\nFurther, disclosure documents confirm that in addition to investing in the Company, Gordian \ninvests in multiple listed companies as a major shareholder owning over 5% of their shares, and \nsome cases indicate that Gordian sells its shareholdings after a certain period of time. As such, we \nbelieve Gordian, as an investor engaging in pure investment, will sell all or a portion of its \nshareholding in the Company after a certain period of time, and expect Gordian’s shareholding ratio \nto fall below 10%. \n\nAs a result of items A and B explained above, the Company’s tradable shares ratio will reach 37.42%. \n\nFurther, as noted in item 1) A. (b), unrealized gains as of the end of August 2021 amounted to ¥12.2bn \n(¥7.3bn after tax). If these gains were to be realized, the net asset value would be ¥27.1 billion (as of \nthe end of August 2021). Assuming a PBR of 1.0x, the tradable share market capitalization based on \nthese figures would be as follows. \n\nTradable share \nmarket capitalization \n\n＝ \n\nNet asset \nvalue \n\n× PBR \n\nTradable share \nratio \n\n¥10.1 billion \n\n＝ ¥27.1 billion × 1.0x \n\n37.42% \n\n× \n\n× \n\n \n\n \n \n \n\n \n\n End of document \n\n\x0c’
