Thelilyinvestor Posted May 14, 2021 Share Posted May 14, 2021 Q1 2021 Shinoken Results are out guys. Real Estate Sales are significantly down... rest of business is improving. Q1 2021 Shinoken.pdf Link to comment Share on other sites More sharing options...
RetroRanger Posted May 14, 2021 Share Posted May 14, 2021 I find q1 Results good. Land purchasements has been stopped due covid but sales we're not largely affected. Service Business increased --> thats the important Part. Company Luminous "spawned" A new Apartment Type "Mini residence" New Shinoken REIT will be listed after DEC 21 Occupancy over 99% Link to comment Share on other sites More sharing options...
Mikekryan Posted May 14, 2021 Share Posted May 14, 2021 With regard to the REIT... What difference will it make to us as shareholders? What are your thoughts on investing in that REIT? Thinking that would be fully dependent on the development and renting side of the business only? Link to comment Share on other sites More sharing options...
RetroRanger Posted May 14, 2021 Share Posted May 14, 2021 Yes, shinoken will Profit from a service perspective. Personally i dont see a reason to Invest in the Reit. I want to be holding the Spawner, not the subsidary. Link to comment Share on other sites More sharing options...
Thelilyinvestor Posted May 14, 2021 Share Posted May 14, 2021 4 minutes ago, RetroRanger said: Yes, shinoken will Profit from a service perspective. Personally i dont see a reason to Invest in the Reit. I want to be holding the Spawner, not the subsidary. Any idea of how they will profit? Will they earn a % of the assets of the REIT? They plan to scale the REIT up to 100B JPY over a couple of years so it could be a very strong recurring income for Shinoken I believe Link to comment Share on other sites More sharing options...
RetroRanger Posted May 14, 2021 Share Posted May 14, 2021 Yeah i wondered the Same. I guess they will a) hold a certain percentage of shares and b) will get all service contracts. The purpose of the REIT ist managing / getting service contracts for Shinoken. Link to comment Share on other sites More sharing options...
Value_Added Posted May 15, 2021 Share Posted May 15, 2021 The REIT confuses me a bit and maybe I'm missing some information that was put out in a publication. Take a peek at their business model below: Based on the graphic, how are they able to sell a property they don't own, to the REIT? It's very confusing and it may be a poor translation but I don't understand this in any way, shape, or form. This makes it seem like selling it to a REIT is the end of that asset in regards to revenue generation for Shinoken as a whole. It would make more sense if their structure was: Marketing/Purchase--->Design--->Build--->Sell To REIT--->Rental Management--->Services For Tenants--->Energy--->Life Care Services I am assuming their REIT's both in Japan and soon to be in Indonesia will be structured the same and hold only assets that fit into Shinoken's business model (assets they can generate recurring management revenue from). I've seen mention several times that the purpose of the REIT's are to target construction of larger buildings that reach far beyond what a typical office worker could afford. BUT, this graphic and other mentions of the REIT's throughout their various publications are conflicting and it is very hard for me to get a clear understanding of exactly what Shinoken is trying to do with these REITs and if they add any value whatsoever to the company. Is the purpose of the REIT to provide long term growth to Shinoken through sales, construction, and management revenue of the properties held within the REIT? Can anyone provide some clarification on this? Link to comment Share on other sites More sharing options...
RetroRanger Posted May 15, 2021 Share Posted May 15, 2021 Is the purpose of the REIT to provide long term growth to Shinoken through sales, construction, and management revenue of the properties held within the REIT? Thats how i understood it. Like the structure you described. Please note WE are talking about two reits. The one in Indonesia and the new one in Japan ( Tokyo) for their new Mini residence Link to comment Share on other sites More sharing options...
Value_Added Posted May 15, 2021 Share Posted May 15, 2021 22 minutes ago, RetroRanger said: Is the purpose of the REIT to provide long term growth to Shinoken through sales, construction, and management revenue of the properties held within the REIT? Thats how i understood it. Like the structure you described. Please note WE are talking about two reits. The one in Indonesia and the new one in Japan ( Tokyo) for their new Mini residence Yes, understood and potentially many more REIT's to come in various countries. I just can't wrap my head around how they depicted the REIT's in the infographic. Saying they Exit (Sell to the REIT) really makes it seem like once the properties are under ownership of the REIT, no further revenue can be recognized by Shinoken. This seems like a big deal to me as it will greatly limit their long term revenue to their current model which is finding interested individual owners, building, and managing for them. This business model obviously works, don't get me wrong, it clearly works well, but is it scalable for years into the future? I think the REIT's are a huge catalyst that makes their spawner frame work scale efficiently IF the plan is to continue managing properties within the REIT. Without them, this seems to be a value play based on a sum of the parts valuation. With them, a growth story with a very identifiable moat that will continually deepen and widen with every property built and transferred to the REIT. I guess time will tell. Link to comment Share on other sites More sharing options...
RetroRanger Posted May 15, 2021 Share Posted May 15, 2021 Lets say when they sell they dont profit anymore "directly". The Reits are still subsidaries of shinoken, so Shinoken would be holding a percentage of shares ---> so they would still profit in that scenario. I have to check their latest report again to find out more details. Link to comment Share on other sites More sharing options...
TheThinkingInvestor Posted May 16, 2021 Share Posted May 16, 2021 I agree that it would be nice to get some clarification on their exit model. From what it looks like on the appendix of their last quarterly, they are clearly focused on expanding recurring revenue. Since they’re very good at property management and all their services I can’t understand why they would build the properties to sell to the REIT then exit the recurring business part of the newly constructed buildings. I hope the REIT’s are simply another source for them to accumulate managed units and expand their recurring businesses. Link to comment Share on other sites More sharing options...
RetroRanger Posted May 16, 2021 Share Posted May 16, 2021 "I hope the REIT’s are simply another source for them to accumulate managed units and expand their recurring businesses. " That is the whole reason ! The slide is saying that. The slide even says the Reits are there to accelerate reaccuring revenues. Link to comment Share on other sites More sharing options...
Value_Added Posted May 16, 2021 Share Posted May 16, 2021 7 hours ago, RetroRanger said: "I hope the REIT’s are simply another source for them to accumulate managed units and expand their recurring businesses. " That is the whole reason ! The slide is saying that. The slide even says the Reits are there to accelerate reaccuring revenues. I see it now. I missed that slide because it wasn’t super clear to me at first (not sure why....doh!) but yes I agree, this appears to be their model going forward. Great to see as it should provide a nice catalyst! Link to comment Share on other sites More sharing options...
jemn Posted May 20, 2021 Share Posted May 20, 2021 Can someone explain why this apartment management company has 35B yen of cash on it's balance sheet? Link to comment Share on other sites More sharing options...
misterkrusty Posted May 20, 2021 Share Posted May 20, 2021 when their competitors blew up in 2018 and banks tightened mortgage lending, they paid down all their net debt and have built up cash since. They're now doing a decent sized buyback, and we should all encourage the company to do even more. Link to comment Share on other sites More sharing options...
jemn Posted May 20, 2021 Share Posted May 20, 2021 Do they actually need all that cash though? Link to comment Share on other sites More sharing options...
RetroRanger Posted May 20, 2021 Share Posted May 20, 2021 AS a spawner / merger type of business , this enables them to buy companies / build infrastructure (Like the IT company in february) easily. But WE can argue about the amount of cash;) . I guess with the increase of foreign shareholder they will see more pressure on such things. Link to comment Share on other sites More sharing options...
jemn Posted May 20, 2021 Share Posted May 20, 2021 no matter how 'good' the business is, hoarding cash is really going to dampen returns. Link to comment Share on other sites More sharing options...
jemn Posted May 20, 2021 Share Posted May 20, 2021 Unless they know something we do not. The only reason why they wouldn't buy back 25% of the shares outstanding is because their primary focus is not getting rich(er). Initially I against the disposal of treasury shares to the scholarship foundation but after stepping back and thinking about it, I think it might be beneficial to shareholders for them to do it. Maybe it incentives management, specifically Shinohara to make some dough for shareholders. Link to comment Share on other sites More sharing options...
misterkrusty Posted May 20, 2021 Share Posted May 20, 2021 there is no reason they can't spend all the cash on buybacks. Link to comment Share on other sites More sharing options...
jemn Posted May 20, 2021 Share Posted May 20, 2021 (edited) probably.. I thought that was a little too ambitious haha Edited May 20, 2021 by jemn Link to comment Share on other sites More sharing options...
MattR Posted May 21, 2021 Share Posted May 21, 2021 13 hours ago, jemn said: no matter how 'good' the business is, hoarding cash is really going to dampen returns. Japan doesn't have inflation and I would argue that it is probably quite difficult at the moment to deploy cash for good returns due to the pandemic. So as long as they continue with their share buybacks I think it is ok. For me it is better they are conservative with their cash than being reckless. Link to comment Share on other sites More sharing options...
ContrarianValue44 Posted June 18, 2021 Share Posted June 18, 2021 I have a challenge for everyone and I'm going to try and figure it out as well. If the company does raise and buy 30B Japanese Yen, what approximately will be their annual recurring services revenues? In other words, what will be the approximate increase in annual recurring revenues like insurance, mortgage financing, energy, etc.? Link to comment Share on other sites More sharing options...
dabuff Posted March 15, 2022 Share Posted March 15, 2022 Pabrai seems to have sold a good portion of his stake. Thoughts? Link to comment Share on other sites More sharing options...
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