Star Asia Investment (3468) Q4 2024 earnings summary

Executive summary

• Six-month revenue was ¥7,964mn, up 14.7% YoY; operating income rose 19.5% to ¥4,309mn and net income rose 14.8% to ¥3,527mn, 7.0% above forecast.

• Portfolio expansion lifted total assets to ¥259,155mn; period-end occupancy was 97.5%. DPU was ¥1,524.

Financial highlights

• FP16 lease business revenue was ¥7,524mn, ¥56mn above forecast; NOI was ¥5,542mn, ¥199mn above forecast, and operating income was ¥4,309mn, ¥198mn above forecast.

• Ordinary income was ¥3,528mn and net income ¥3,527mn, each 7.0% above forecast; FFO/unit was ¥1,735 and AFFO/unit ¥1,268.

• Rental revenue rose to ¥7,077mn from ¥6,048mn; other lease business revenue was ¥447mn and real estate sale gains were ¥375mn.

Outlook and guidance

• DPU forecasts are ¥1,520 for FP17 and ¥1,538 for FP18, including reserve use of ¥55 and ¥37, respectively; FP18 is the stated lower-limit distribution target.

• Forecast net income is ¥3,476mn for Jul. 2024 and ¥3,561mn for Jan. 2025; forecast NOI is ¥5,842mn and ¥6,019mn, respectively.

• Mid-term FY2026 targets are ¥300bn in asset size and DPU of ¥1,600 or more; FP18's ¥1,538 DPU forecast represents 81% achievement.

• Hotel revenue is forecast at ¥1,877mn/¥1,997mn for FP17/FP18 as the 11 FP16 acquisitions contribute for full periods.