Nihon Jyoho Create : Non-consolidated Financial Results for the Second Quarter of the Fiscal Year Ending June 30, 2022

Non-consolidated Financial Results for the Second Quarter

of the Fiscal Year Ending June 30, 2022

(Six Months Ended December 31, 2021)

		[Japanese GAAP]
		February 14, 2022
Company name: Nihon Jyoho Create Co., Ltd.	Listing: Tokyo Stock Exchange (Mothers)
Stock code:	4054	URL: https://www.n-create.co.jp/
Representative:	Yonetsu Kenichi, Representative Director, President
Contact:	Senokuchi Naohiro, Director, Head of Administration Department
	Tel: [phone]
Scheduled date of filing of Quarterly Report:	February 14, 2022
Scheduled date of payment of dividend:	-
Preparation of supplementary materials for financial results: Yes
Holding of financial results meeting:	Yes

(All amounts are rounded down to the nearest million yen.)

1. Financial Results for the Second Quarter of the Fiscal Year Ending June 30, 2022 (July 1, 2021 to December 31, 2021)

(1) Results of operations						(Percentages represent year-on-year changes.)
	Net sales		Operating profit	Ordinary profit	Profit
	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%
Six months ended Dec. 31, 2021	1,509		15.9	368	8.5	405	9.9	281	9.8
Six months ended Dec. 31, 2020	1,302		-	339	-	368	-	256	-
	Net income per share	Diluted net income per
				share
			Yen		Yen
Six months ended Dec. 31, 2021			19.78		19.43
Six months ended Dec. 31, 2020			19.14		18.23

Notes: 1. Nihon Jyoho Create conducted a 2-for-1 common stock split on December 1, 2020. The amounts of net income per share and diluted net income per share were calculated as if the stock split had taken place at the beginning of the fiscal year ended June 30, 2021.

1. 2. The shares of Nihon Jyoho Create were listed on the Tokyo Stock Exchange Mothers market on July 31, 2020. As a result, diluted net income per share for the six months ended December 31, 2020 is calculated by using the average stock price from the date of listing to the end of the second quarter of the previous fiscal year as the average stock price during the period.

2. Financial position

	Total assets		Net assets		Equity ratio
	Millions of yen		Millions of yen		%
As of Dec. 31, 2021	4,543		3,199		70.4
As of Jun. 30, 2021	4,323		2,983		69.0
Reference: Shareholders' equity (millions of yen)	As of Dec. 31, 2021: 3,199	As of Jun. 30, 2021: 2,983

2. Dividends

			Dividend per share
	1Q-end	2Q-end		3Q-end		Year-end	Total
	Yen	Yen		Yen		Yen	Yen
Fiscal year ended Jun. 30, 2021	-	0.00		-		5.00	5.00
Fiscal year ending Jun. 30, 2022	-	0.00
Fiscal year ending Jun. 30, 2022 (forecast)				-		5.00	5.00

Note: Revisions to the most recently announced dividend forecast: None

3. Earnings Forecast for the Fiscal Year Ending June 30, 2022 (July 1, 2021 to June 30, 2022)

(Percentages represent year-on-year changes.)

	Net sales		Operating profit	Ordinary profit	Profit		Net income per share
	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Full year	3,084		17.8	450	(23.2)	495	(22.8)	325	(21.5)	22.91

Note: Revisions to the most recently announced earnings forecast: None

* Notes

1. Application of special accounting methods for preparing quarterly non-consolidated financial statements: Yes
2. Changes in accounting policies and accounting estimates, and restatements
3. 1. Changes in accounting policies due to revisions in accounting standards, others: Yes
   2. Changes in accounting policies other than 1) above: None
   3. Changes in accounting estimates: None
   4. Restatements: None
4. Number of shares outstanding (common shares)
5. 1. Number of outstanding shares as of the end of the period (including treasury shares)

As of Dec. 31, 2021:

14,260,440 shares

As of Jun. 30, 2021:

14,226,440 shares

1. Number of treasury shares as of the end of the period

As of Dec. 31, 2021:	30 shares	As of Jun. 30, 2021:	30 shares
3) Average number of outstanding shares during the period
Six months ended Dec. 31, 2021:	14,241,837 shares	Six months ended Dec. 31, 2020:	13,396,526 shares

Note: Nihon Jyoho Create conducted a 2-for-1 common stock split on December 1, 2020. The number of outstanding shares as of the end of the period and the average number of outstanding shares during the period were calculated as if the stock split had taken place at the beginning of the fiscal year ended June 30, 2021.

* This quarterly financial report is not subject to quarterly review by certified public accountants or a uditing firms.

• Explanation of appropriate use of earnings forecasts, and other special items
  Forecasts of future performance in these materials are based on estimates and assumptions judged to be valid and information available at the time these materials were prepared, but are not guarantees by Nihon Jyoho Create regarding future performance. Actual results may differ from these forecasts for various reasons.

	Nihon Jyoho Create Co., Ltd. (4054) Financial Results for the Second Quarter of FY6/22
Contents of Attachments
1. Qualitative Information on Quarterly Financial Performance	2
(1)	Explanation of Results of Operations	2
(2)	Explanation of Financial Position	3
(3)	Explanation of Earnings Forecast and Other Forward -looking Statements	4
2. Quarterly Non-consolidated Financial Statements and Notes	5
(1)	Quarterly Non-consolidated Balance Sheet	5
(2)	Quarterly Non-consolidated Statement of Income	6
(3)	Quarterly Non-consolidated Statement of Cash Flows	7
(4)	Notes to Quarterly Non-consolidated Financial Statements	8
	Going Concern Assumption	8
	Significant Changes in Shareholders' Equity	8
	Application of Special Accounting Methods for Preparing
	Quarterly Non-consolidated Financial Statements	8
	Changes in Accounting Policies	8
	Subsequent Events	8

1

Nihon Jyoho Create Co., Ltd. (4054) Financial Results for the Second Quarter of FY6/22

1. Qualitative Information on Quarterly Financial Performance

(1) Explanation of Results of Operations

Forward-looking statements stated herein are based on the estimates and assumptions of Nihon Jyoho Create as of December 31, 2021.

During the six-month period ended December 31, 2021, the Japanese economy was in a challenging environment because of the impact of the COVID-19 pandemic but there are expectations for a recovery because of various preventive measures and the upturn in overseas economies. Nonetheless, the impact of the Corona virus, including mutant strains, on the domestic and international economy, and the effect of fluctuations in the financial and capital markets, will need to be monitored closely. On the other hand, in the real estate support business, where we provide SaaS-type cloud services, etc., the passage of the Digital Reform Bill means that digital transformation (DX) (elimination of seal impressions) of real estate transactions is just around the corner and will accelerate. In addition, there is a growing movement to promote IT-related investment in the industry, such as in the "real estate tech" that combines real estate transactions and technology. There is a growing number of companies that are enhancing operational efficiency through digital transformation.

Under the circumstances we are implementing various strategies to build optimum platforms for the real estate industry and achieve the goals of our Three-Year Plan Growth Strategy that lays down the plan for the next three years.

• Details of the Three-Year Growth Strategy can be found in the "Results of Operations for the Fiscal Year Ended June 30, 2021" posted on our IR website.

Our basic strategy is to propose the introduction of free of charge services such as "Fudosan BB," a B-to-B property listing platform, and "Electronic Rent Application" to increase contact with real estate agents throughout Japan, and then to sell value-added paid solutions. The significant feature of our service is that it offers integrated lineup of services that cover all operations of the real estate companies. Selection of optimum combin ations of services offers additional benefits. In addition, we have been proactively proposing solutions to new customers and upsells and cross-sells to existing customers since many services have a billing system that matches the growth of customers.

We plan to release on November 19, 2021 the "Chintai Kakumei E-Contract Option" developed inhouse for complete digitalization of the real estate industry. The new user -friendly product offers enhanced operability and advanced screen design. We have received positive responses from existing customers. In addition, as the "Electronic Rent Application" function can presently be used for parking lease contracts and lease renewal contracts, we have started a campaign to raise awareness and promote the use of elect ronic contracts among our existing customers.

The expansion of our sales office network and the increase in the number of sales consultants, which are critically important elements of the Three-Year Plan, are progressing well. The number of sales offices have increased to 29 nationwide as the sales office network expansion plan was completed on schedule. We will continue to actively recruit salesforce (consultants) to achieve our target of increasing the number of sales consultants by 60 this year.

As for the alliances with partner companies to build the platform, negotiations are underway in two areas. The first is forging alliances with insurance companies. In this respect, we have started collaboration (data linkage) with SBI Japan SSI Co., Ltd, and Nippon Kyosai Co., Ltd. The second is collaboration in the field of electronic payments. In this area, we have formed a business alliance (data linkage) with Metaps Payment Inc. These alliances will expand the scope of our platform, and, together with our pa rtners, we will continue to contribute to the transition to DX in the real estate industry.

The impact of the COVID-19 pandemic on our financial results was not significant as in the previous fiscal year.

2

Nihon Jyoho Create Co., Ltd. (4054) Financial Results for the Second Quarter of FY6/22

Our results of operations for the first six-month period from July 1, 2021 to December 31, 2021 were as follows:

Net sales: 1,509 million yen, increase of 206 million yen (15.9%) over the same period last year

Operating profit: 368 million yen, an increase of 28 million yen (8.5%) over the same period last year

Ordinary profit: 405 million yen, an increase of 36 million yen (9.9%) over the same period last year

Profit: 281 million yen, an increase of 25 million yen (9.8%) over the same period last year

The performance by service category is as follows.

Solutions for Brokers

In the Solutions for Brokers segment, we have actively made proposals of our tools and services such as promotion with own website, operation of web advertisement, and solutions related to real estate portal sites to solve issues. We have also taken actions as a freemium strategy (see note) to increase values of our product by adding links of services with rent guarantee companies, insurance companies and electronic payment service companies to our "Electronic Rent Application" function of inter-agent platform that we currently provide free of charge. This has led to significant upselling, making the sales of this category to 450 million yen.

Note: Business model in which basic services or products are provided free of charge, and a f ee is charged for the use of more advanced functions or services.

Solutions for Property Management

Both the sales to new customers and sales of version upgrades to existing customers were strong. Earnings from monthly fees continued to increase as the result of promotions involving IT investment subsidies and of the demand for upgrading "Chintai Kakumei" to its cloud -based version. The sales of this category was 1,040 million yen.

• In addition to above sales of 1,491 million yen from the Solutions for Brokers and the Solutions for Property Management, sales of 17 million yen were recorded from other activities.

(2) Explanation of Financial Position

1) Assets

Total assets at the end of the second quarter of the current fiscal year increased by 219 million yen from the end of the previous fiscal year to 4,543 million yen. The balance of current assets increased by 58 million yen from the end of the previous fiscal year to 3,472 million yen. The balance of non-current assets increased by 160 million yen from the end of the previous fiscal year to 1,070 million yen.

The increase in current assets is primarily attributable to an increase in cloud-related prepaid expenses. The increase in non-current assets is primarily attributable to an increase in pre-release software developed in-house.

2) Liabilities

Total liabilities at the end of the second quarter increased by 3 million yen from the end of the previous fiscal year to 1,343 million yen. The balance of current liabilities increased by 4 million yen from the end of the previous fiscal year to 1,338 million yen, about the same as at the end of the previous fiscal year.

3) Net assets

Net assets at the end of the second quarter increased by 215 million yen from the end of the previous fiscal year to 3,199 million yen.

This is primarily attributable to an increase in retained earnings due to the booking of profit.

4) Cash flows

Cash and cash equivalents (hereinafter, "cash") at the end of the second quarter were 2,760 million yen, an increase of 141 million yen, or 5.4%, compared with the end of the same period of the previous fiscal year. The

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