Star Asia Investment (3468) Q2 2026 earnings summary

Executive summary

• H1 FY2026 revenue was ¥9,988mn, up 3.1% YoY; operating income was ¥5,758mn and ordinary and net income were ¥4,834mn, both up 6.9%.

• FP19 DPU was ¥1,803; the Urban Park Imazato sale contributed ¥442mn, or ¥164 per unit. A ¥88.9mn reserve-for-temporary-difference reversal also affected the distribution.

• New 2030 targets are DPU of at least ¥1,913, based on FP21’s ¥1,650 stabilized forecast, and asset size of ¥500bn versus ¥275.7bn at FP19 end.

• September 2025 asset replacement shifts the portfolio toward regional hotels and mezzanine debt while divesting suburban retail and a sectional-ownership residence.

• Portfolio occupancy was 97.1% at July 31, 2025, versus 98.2% at January 31; hotel occupancy was 100.0%.

Financial highlights

• H1 FY2026 rental revenue was ¥9,056mn, gain on real estate sales ¥442mn, leasing NOI ¥7,229mn and net income ¥4,834mn.

• FP19 NOI exceeded the April revised forecast by ¥75mn, mainly on lower repair costs; net income was ¥110mn above forecast and DPU ¥13 higher.

• FP19 FFO per unit was ¥2,067, up ¥41 from forecast; AFFO per unit was ¥1,710, up ¥46. Internal reserves ended at ¥8,565mn.

• H1 operating cash flow was ¥8,047mn; investing and financing outflows were ¥1,011mn and ¥5,370mn, respectively, and ending cash was ¥15,332mn.

• Total assets were ¥293,925mn, net assets ¥144,842mn and equity ratio 49.3% at July 31, 2025.

Outlook and guidance

• FP20 DPU is forecast at ¥1,745, including ¥33 per unit from reserves and ¥272mn of asset-sale gains; FP21 DPU is ¥1,650, including ¥33 per unit from reserves.

• Forecast revenue is ¥9,942mn for the year ending January 2026 and ¥9,277mn for the year ending July 2026; respective ordinary and net income forecasts are ¥4,601mn and ¥4,345mn.

• Forecast NOI is ¥7,368mn for January 2026 and ¥7,333mn for July 2026; no distributions in excess of earnings are planned.

• Hotel RevPAR at comparable Polaris-operated hotels is forecast to rise 2.6% annually across FP20 and FP21; office and residence rent increases are expected to support internal growth.

• Forecast assumptions include two KOKO hotel acquisitions and a mezzanine loan in 2025, with La Park Kishiwada and Shiroi Logiman transfers scheduled for January 16, 2026.