1. Investment Snapshot
2. Thesis
3. Valuation & Price Target
4. Business & Product Moat
5. People & Governance
6. Market & Macro
7. Financial Quality
8. Risk Register
9. Prediction Market
10. 𝕏 Posts
Discussion
1. Investment Snapshot
2. Thesis
3. Valuation & Price Target
4. Business & Product Moat
5. People & Governance
6. Market & Macro
7. Financial Quality
8. Risk Register
9. Prediction Market
10. 𝕏 Posts
Discussion
1. Investment Snapshot
2. Valuation
Discussion
Symbol
LRE
Event Date
2023-09-27
IPO Date (Actual)
2022-09-27
Sector
Industrials
Subsector
Construction & Engineering
Offer Range
$7.00
Shares Offered
1.14M
$95.5M
Implied Upside vs Midpoint
Description
• Our Mission: Our mission is to serve our customers by offering stylish, safe, and luxurious living and to adopt the Kaizen (continuous improvement) approach to improve our operations. • Our Vision: We seek to leverage our nationally-recognized, award-winning luxury homes and our strong market position in the luxury residential property market in Tokyo and Kanagawa prefecture to create a global transaction platform allowing access to prime Japanese condominiums as well as overseas condominiums, including in the U.S. and Hong Kong. We are a growing developer of luxury residential properties, including single-family homes and condominiums, across Tokyo and Kanagawa prefecture. In addition, we operate hotels in Tokyo and lease apartment building units to individual customers in Japan and Dallas, Texas. We primarily generate revenue from developing and selling single-family homes and condominiums. Since our inception in 2001, we have delivered more than 1,000 single-family homes and 25 condominiums. The target customers of our single-family homes are wealthy family buyers who are looking for luxury single-family homes as their primary residence, while the target customers of our condominiums are institutional customers who look to purchase entire condominiums for investment purposes. We rely on real estate agencies to help identify land and development sites for acquisition and customers for our luxury residential properties and generally acquire land parcels from private landowners. We outsource the design work and construction for our luxury residential property projects to third-party design firms and construction companies, while coordinating and closely supervising the projects through our internal teams to maximize quality of the projects. In addition, we launched our interactive media platform, Glocaly, in October 2021, as a listing and marketing platform seeking to facilitate matching of sellers and buyers of condominiums. We utilize a homebuilding model designed to minimize risks, in which we typically identify customers for our single-family homes before acquiring the land and commencing construction and build our condominiums in highly-marketable locations, resulting in an aggregate of only four cancelations during the six months ended December 31, 2022 and the fiscal years ended June 30, 2022 and 2021. When developing a single-family home or condominium, we typically deliver the land to the customer before starting the construction of the building and deliver the completed building to the customer 6 to 12 months after the land delivery, in order to quickly recover our payment for the land. The tables below summarize the units of land and building we delivered during the six months ended December 31, 2022 and the fiscal years ended June 30, 2022 and 2021. Six Months Ended December 31, 2022 Land Building Deliveries Deliveries (Units) (Units) Single-family homes 36 43 Condominiums 5 3 Fiscal Year Ended Fiscal Year Ended June 30, 2022 June 30, 2021 Land Building Land Building Deliveries Deliveries Deliveries Deliveries Type (Units) (Units) (Units) (Units) Single-family homes 94 81 102 50 Condominiums 12 9 4 4 To diversify our revenue streams and supplement our real estate sales, we have expanded into other businesses related to real estate since 2018. During the six months ended December 31, 2022 and the fiscal years ended June 30, 2022 and 2021, we operated five, four, and four hotels in Tokyo, respectively. In February 2023, we started to operate a sixth hotel in Tokyo. During the six months ended December 31, 2022 and the fiscal years ended June 30, 2022 and 2021, we leased apartment units in eight, eight, and 17 apartment buildings to 29, 13, and 118 individual customers, respectively. For the six months ended December 31, 2022 and the fiscal years ended June 30, 2022 and 2021, we had total revenue of JPY7,359,750 thousand (approximately $55,836 thousand), JPY14,321,186 thousand (approximately $108,650 thousand), and JPY11,255,277 thousand (approximately $85,390 thousand), respectively, and profit of JPY164,117 thousand (approximately $1,245 thousand), JPY547,809 thousand (approximately $4,156 thousand), and JPY278,428 thousand (approximately $2,112 thousand), respectively. Revenue generated from real estate development and sales accounted for approximately 98.7%, 98.5%, and 98.5% of our total revenue for those periods, respectively. Revenue derived from other businesses accounted for approximately 1.3%, 1.5%, and 1.5% of our total revenue for those periods, respectively. --- Our headquarters are located at 6F, MFPR Shibuya Nanpeidai Building 16-11, Nampeidai-cho, Shibuya-ku, Tokyo, 150-0036, Japan, and our phone number is +81 03-5784-5127. Our website address is www.lead-real.co.jp/en/. Our agent for service of process in the United States is Lead Real Estate Global Co., Ltd., located at 6860 North Dallas Pkwy, Suite 200, Plano, TX 75024.
LEAD REAL ESTATE CO., LTD annual income statement and balance sheet, FY 2022 to FY 2025, as reported in SEC filings (JPY).
| Metric | FY 2022 | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|---|
| Revenue | JPY 14.3B | JPY 17.4B | JPY 19.0B | JPY 18.8B |
| Operating income | JPY 649M | JPY 870M | JPY 899M | JPY 1.5B |
| Net income | JPY 529M | JPY 537M | JPY 627M | JPY 847M |
| Metric | FY 2022 | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|---|
| Total assets | JPY 12.4B | JPY 15.8B | JPY 17.2B | JPY 20.5B |
| Total liabilities | JPY 10.2B | JPY 13.1B | JPY 13.0B | JPY 15.4B |
| Total equity | JPY 2.2B | JPY 2.7B | JPY 4.2B | JPY 5.0B |
| Cash & equivalents | JPY 403M | JPY 786M | JPY 1.3B | JPY 2.7B |