These are mechanically computed values based on a residual income model. They are not a forecast of market prices or a recommendation of any investment action, and do not predict or guarantee future share prices. Historical values are computed retrospectively using current guidance-achievement statistics.
| Metric | Current Period | Same Period of Previous Year | YoY |
|---|---|---|---|
| Revenue | ¥1944.2B | ¥2087.9B | -6.9% |
| Operating Income | ¥398.5B | ¥340.3B | +17.1% |
| Ordinary Income | ¥314.1B | ¥279.1B | +12.5% |
| Net Income | ¥237.2B | ¥209.7B | +13.1% |
| ROE | 3.8% | 3.5% | - |
Tokyo Tatemono’s Q2 for the fiscal year ending December 2026 secured higher profit despite lower revenue resulting from a decrease in deliveries in the Housing Business, primarily due to the expansion and higher margins of the Building Business, as well as the recording of extraordinary income. Revenue was ¥1,944.2B (-6.9% YoY), Operating Income was ¥398.5B (+17.1%), Ordinary Income was ¥314.1B (+12.5%), and Net Income attributable to owners of the parent was ¥233.6B (+13.7%). While the Building Business drove growth in revenue and profit, the decline in the Housing Business and increased interest expenses partially offset the upside.
【Revenue】The primary cause of the revenue decline was a decrease in deliveries in the Housing Business, with revenue from that business amounting to ¥384.4B, down -62.5% YoY. Meanwhile, the Building Business recorded a significant increase in revenue to ¥1,182.5B (+61.7%), accounting for 60.8% of company-wide revenue. The Asset Services Business also grew to ¥268.6B (+22.9%), indicating that the revenue mix is shifting from housing toward the leasing and asset management areas.
【Profit and Loss】The Operating Income margin was 20.5%, improving by 4.2pt from 16.3% in the previous year. The primary driver of the improvement was the substantial increase in Operating Income from the Building Business to ¥401.3B (+122.7%, margin of 33.9%), which more than offset the decline in Operating Income from the Housing Business to ¥29.7B (-83.2%). Ordinary Income did not grow as much as Operating Income, as interest expenses increased to ¥91.3B (+55.9% from ¥58.6B in the previous year), pushing up non-operating expenses. Extraordinary income of ¥57.0B (gain on sale of investment securities of ¥32.0B and gain on sale of fixed assets of ¥24.5B) exceeded extraordinary losses of ¥11.0B, thereby increasing profit before tax. Overall, the company recorded lower revenue but higher profit, with the increase in profit supported by both structural margin improvement in the Building Business and temporary gains on asset sales.
The Building Business was the core contributor to company-wide profit, recording revenue of ¥1,182.5B (60.8% of total, +61.7% YoY) and Operating Income of ¥401.3B (+122.7% YoY, margin of 33.9%). The Housing Business contracted substantially, with revenue of ¥384.4B (-62.5% YoY) and Operating Income of ¥29.7B (-83.2% YoY, margin of 7.7%), and quarterly fluctuations are significant due to the timing of delivery recognition. The Asset Services Business maintained stable growth, with revenue of ¥268.6B (+22.9% YoY) and Operating Income of ¥38.6B (+9.7% YoY, margin of 14.4%). Other Businesses contracted, with revenue of ¥108.7B (-3.4% YoY) and Operating Income of ¥2.6B (-67.4% YoY). The segment mix is becoming increasingly concentrated in the Building Business, which is the primary driver of company-wide margin improvement, while also implying relatively greater sensitivity to office and commercial real estate market conditions.
【Profitability】The Operating Income margin was 20.5%, improving by 4.2pt from 16.3% in the previous year. The Net Income margin, based on Net Income attributable to owners of the parent, was 12.0%, improving by 2.2pt from 9.8% in the previous year. The improvement in both metrics reflects a change in the earnings mix resulting from higher margins in the Building Business.【Cash Quality】Cash and deposits were ¥942.8B, a decrease of ¥580.1B from the end of the previous fiscal year. Inventory, comprising real estate for sale and real estate under development for sale, totaled ¥7,206.6B, an increase of 17.7% from the end of the previous fiscal year, indicating that cash and deposits provide relatively weaker support for reported profit.【Investment Efficiency】ROE, based on Net Income attributable to owners of the parent, was 3.8%, improving by 0.3pt from 3.5% in the previous fiscal year. BPS was ¥2,929.73, an increase of 2.9% from ¥2,846.85 in the previous fiscal year. Total asset turnover remained low at 7.9% on a semiannual basis, with the expansion of the asset base weighing on the turnover ratio.【Financial Soundness】The Equity Ratio was 25.0%, down 1.0pt from 26.0% in the previous fiscal year. Interest-bearing debt was ¥15,350.8B, an increase of 14.2% from the end of the previous fiscal year, with its ratio to total assets rising to 62.0% (up 2.9pt from 59.1% in the previous fiscal year). The interest coverage ratio, measured as Operating Income divided by interest expenses, was 4.36x, down from 5.81x in the previous fiscal year. The fact that the pace of increase in interest expenses exceeded the growth in Operating Income requires monitoring.
Although the cash flow statement was not disclosed, changes in the balance sheet indicate that increased investment and inventory accumulation were the primary sources of cash outflow. Land increased by ¥925.1B, while buildings and structures increased by ¥608.9B, reflecting the expansion of development and held assets. At the same time, real estate for sale increased by ¥661.9B and real estate under development for sale increased by ¥423.5B, indicating that the accumulation of the development pipeline has materialized as inventory. In response to these asset acquisitions and inventory increases, cash and deposits decreased by ¥580.1B, while short-term borrowings increased by ¥171.1B, creating a structure in which external financing supplemented funding needs. This movement indicates that profit growth for the period was accompanied by upfront investment and inventory deployment, making progress in converting inventory into revenue and cash from the second half onward a key funding focus.
Recurring earnings improvement was primarily driven by higher margins in the Building Business. Non-operating income remained at ¥33.4B, centered on dividend income of ¥24.0B, while non-operating expenses reached ¥117.8B, primarily due to interest expenses of ¥91.3B, resulting in a net non-operating loss of ¥84.4B. Extraordinary income of ¥57.0B (gain on sale of investment securities of ¥32.0B and gain on sale of fixed assets of ¥24.5B) substantially exceeded extraordinary losses of ¥11.0B. Of profit before tax of ¥360.2B, the net extraordinary gain contributed ¥46.0B, which should be distinguished as a temporary factor. Comprehensive income was ¥295.4B (¥292.2B attributable to owners of the parent), exceeding Net Income attributable to owners of the parent of ¥233.6B by ¥58.6B due to a ¥47.1B contribution from foreign currency translation adjustments. This difference does not represent the company’s recurring earning power and should be noted. The combination of inventory accumulation and declining cash indicates relatively weaker cash support for reported profit.
Progress against the full-year plan was 37.1% for Revenue, 37.8% for Operating Income, 37.6% for Ordinary Income, and 35.9% for Net Income on an attributable-to-owners-of-the-parent basis, all more than 10 percentage points below the mid-period standard of 50%. This may reflect a plan in which deliveries in the Housing Business are concentrated in the second half and sales conversion of inventory and assets accumulated in the first half is expected from the second half onward. During the quarter, the company revised its earnings and dividend forecasts. The full-year plan calls for increases of +10.2% in Operating Income and +6.8% in Ordinary Income. Execution of Housing Business deliveries in the second half and maintenance of high profitability in the Building Business are positioned as prerequisites for achieving the full-year plan.
The interim dividend was ¥61 per share, an increase of ¥13 from ¥48 in the same period of the previous year. The full-year dividend forecast is ¥126, resulting in a Payout Ratio of 40.2% based on the company’s forecast EPS of ¥313.54. The dividend forecast was revised during the quarter, implying an expected final dividend of ¥65 after deduction. Treasury shares increased by ¥1.53B from the end of the previous fiscal year, suggesting continued shareholder returns in addition to dividends. With an Equity Ratio of 25.0%, current assets of ¥8,901.2B, and current liabilities of ¥2,444.0B, short-term payment capacity is ample, and no significant constraints on dividend payments are currently evident.
Segment concentration risk: The Building Business accounts for 60.8% of Revenue and the majority of Operating Income, resulting in relatively high earnings sensitivity to fluctuations in office and commercial real estate market conditions.
Financial leverage and interest burden: Interest-bearing debt was ¥15,350.8B (62.0% of total assets), an increase of 14.2% from the end of the previous fiscal year. The interest coverage ratio declined to 4.36x from 5.81x in the previous fiscal year, creating potential for earnings pressure in a rising interest-rate environment.
Inventory accumulation and Housing Business volatility: The combined balance of real estate for sale and real estate under development for sale was ¥7,206.6B, an increase of 17.7% from the end of the previous fiscal year, while Housing Business revenue declined substantially by -62.5%. If the conversion of inventory into revenue is deferred to the second half, there is a risk that funds will remain tied up for a longer period.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Income Margin | 20.5% | – | – |
| Net Income Margin | 12.2% | – | – |
The company’s Operating Income margin of 20.5% reflects higher margins in the Building Business. Relative assessment within the industry requires further examination after the median data has been expanded.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | -6.9% | – | – |
Revenue declined YoY, but this was significantly affected by the timing of delivery recognition in the Housing Business and should be evaluated together with the improvement in profit margins.
Source: Compiled by the Company
The Operating Income margin of the Building Business increased to 33.9%, and the improvement in the earnings mix lifted the company-wide Operating Income margin by 4.2pt. Determining whether this structural change is temporary or represents sustained margin improvement will require monitoring the operating conditions and rental revision trends of the Building Business from the next period onward.
Of profit before tax of ¥360.2B, net extraordinary income contributed ¥46.0B, indicating that part of the increase in profit for the period depended on temporary factors, namely the sale of investment securities and fixed assets.
Progress against the full-year plan was 37.1% for Revenue and 35.9% for Net Income, indicating a back-loaded second half. The conversion into revenue of real estate for sale and real estate under development for sale accumulated as inventory, totaling ¥7,206.6B, and the execution of Housing Business deliveries will be key points for confirming achievement of the full-year plan.
This is a mechanically calculated reference range based solely on publicly available data using a residual income model (Ohlson-type model with an explicit 5-year fade). It is not a forecast of the market share price or a recommendation of any specific investment action.
| Scenario | Theoretical Share Price |
|---|---|
| bear | ¥3,049 |
| base | ¥3,106 |
| bull | ¥3,153 |
| Calculation Assumption | Value |
|---|---|
| Book Value per Share (BPS) | ¥2,930 |
| Adjusted Forecast EPS | ¥333.1 |
| Cost of Equity r | 9.27% (10-year government bond 2.77% + equity risk premium 6.00% + size premium 0.50%) |
| Residual Income Persistence Coefficient ω / Explicit Forecast Period | 0.62 / 5 years |
| Assumed Payout Ratio | 40.2% |
| Forecast EPS Confidence Adjustment | ×1.062 (based on the track record of industry peers in achieving guidance) |
| Implied PBR / PER |
Sensitivity: ¥3,020–¥3,197 at ±1% for the cost of equity, and ¥3,102–¥3,113 at ±0.1 for ω.
Notes:
(Calculation model: Residual income model / Interest rate reference month: 2026-07 / This value does not forecast or guarantee the future share price)
This report is an earnings analysis document automatically generated by AI based on XBRL earnings summary data. It does not recommend investment in any specific security. Industry benchmarks are reference information compiled by the company based on publicly available earnings data. Investment decisions should be made at your own responsibility, after consulting a professional as necessary.
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| 1.06x / 9.3x |