Star Asia Investment (3468) Q2 2027 earnings summary

Executive summary

• FP21 DPU was ¥1,737, 5.3% above forecast; EPU was ¥1,704, supported by hotel and office rent growth, lower expenses and preferred-equity redemption gains.

• H1 FY2027 revenue and net income declined YoY, while portfolio occupancy rose to 98.9% from 98.6%.

• Asset replacement and rent growth are intended to offset higher financing costs; the 2030 DPU target is at least ¥1,913.

Financial highlights

• H1 FY2027 operating revenue was ¥9,659m, operating income ¥5,737m, ordinary income ¥4,579m and net income ¥4,578m; all declined YoY.

• Revenue and net income exceeded forecast by ¥182m and ¥233m, respectively; versus FP20, operating revenue fell ¥610m and net income fell ¥174m.

• Rental revenue was ¥9,110m versus ¥9,465m; H1 FY2027 included no property-sale gain, compared with ¥332m in the prior period.

• Net cash from operating activities was ¥4,847m; investing activities provided ¥1,778m and financing activities used ¥4,752m. Period-end cash was ¥17,320m.

Outlook and guidance

• Forecast DPU is ¥1,755 for January 2027 and ¥1,660 for July 2027; the January forecast includes ¥100 per unit from the Umeda East sale gain.

• Forecast revenue/net income is ¥10,622m/¥5,186m for January 2027 and ¥9,819m/¥4,370m for July 2027; interest expense is forecast at ¥1,286m/¥1,346m.

• Forecast average 3M TIBOR is 164bp for FP22 and 175bp for FP23; rent growth and asset replacement are expected to counter higher financing costs.

• 2030 targets include DPU of at least ¥1,913, asset size of ¥500bn and EPU excluding sale gains of ¥1,700–¥1,800.