Nihon Jyoho Create : Non-consolidated Financial Results for the Second Quarter of the Fiscal Year Ending June 30, 2021(Six Months Ended December 31, 2020)

Non-consolidated Financial Results for the Second Quarter of the Fiscal Year Ending June 30, 2021

(Six Months Ended December 31, 2020)

[Japanese GAAP]

February 10, 2021

Company name: Nihon Jyoho Create Co., Ltd.

Stock code:
Representative:	Kenichi Yonetsu, President and Representative Director
Contact:	Naohiro Senokuchi, Director and General Manager, Administration Department
Tel: [phone]

4054

Listing: Tokyo Stock Exchange (Mothers) URL:https://www.n-create.co.jp/Scheduled date of filing of Quarterly Report: February 10, 2021 Scheduled date of payment of dividend: -

Preparation of supplementary materials for financial results: None

Holding of financial results meeting: Yes (for institutional investors and analysts)

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

1. Financial Results for the Second Quarter of the Fiscal Year Ending June 30, 2021

(July 1, 2020 to December 31, 2020)

(1) Results of operations

(Percentages represent year-on-year changes.)Net sales

Millions of yen

Operating profit % Millions of yen

Six months ended Dec. 31, 2020

1,302

Six months ended Dec. 31, 2019

-

%
-	339	-	368	-	256	-
-	-	-	-	-	-	-

Ordinary profit % Millions of yen

Profit % Millions of yen

Net income per share	Diluted net income per share
Six months ended Dec. 31, 2020 Six months ended Dec. 31, 2019	Yen 19.14 -	Yen 18.23 -

Diluted net income per

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

2. Figures for the six months ended December 31, 2019 and year-on-year changes for the six months ended December 31, 2020 are not presented because the quarterly financial statements were not prepared in the six months ended December 31, 2019.

(2) Financial position

Total assets	Net assets	Equity ratio
As of Dec. 31, 2020 As of Jun. 30, 2020	Millions of yen 3,967 2,483	Millions of yen 2,758 1,278	% 69.5 51.5

Reference: Shareholders' equity (millions of yen)

As of Dec. 31, 2020: 2,758

As of Jun. 30, 2020: 1,278

2. Dividends

Dividend per share
1Q-end	2Q-end	3Q-end	Year-end	Total
Fiscal year ended Jun. 30, 2020 Fiscal year ending Jun. 30, 2021	Yen - -	Yen 0.00 0.00	Yen	Yen 0.00	Yen 0.00
-
Fiscal year ending Jun. 30, 2021 (forecast)	-	-	-

Notes: 1.Revisions to the most recently announced dividend forecast: None 2.The dividend for the fiscal year ending June 30, 2021 is not yet determined. The amount will be determined by taking into account the financial position and results of operations.

3.Nihon Jyoho Create conducted a 2-for-1 common stock split on the effective date of December 1, 2020.

3. Earnings Forecast for the Fiscal Year Ending June 30, 2021 (July 1, 2020 to June 30, 2021)

(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	2,566	12.1	29.82

8.0 552 5.4 626 10.8

411

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

  • 1) Changes in accounting policies due to revisions in accounting standards, others: None

  • 2) Changes in accounting policies other than 1) above: None

  • 3) Changes in accounting estimates: None

  • 4) Restatements: None

• (3) Number of shares outstanding (common shares)

  1) Number of outstanding shares as of the end of the period (including treasury shares)

As of Dec. 31, 2020: 13,814,440 shares As of Jun. 30, 2020:

5,883,720 shares

• 2) Number of treasury shares as of the end of the period

  As of Dec. 31, 2020:

  - shares As of Jun. 30, 2020:

  - shares

• 3) Average number of outstanding shares during the period

  Six months ended Dec. 31, 2020: 13,396,526 sharesSix months ended Dec. 31, 2019:

- sharesNotes: 1. Nihon Jyoho Create conducted a 10-for-1 common stock split on the effective date of May 31, 2020. The number of outstanding shares as of the end of the period was calculated as if this stock split had taken place at the beginning of the previous fiscal year.

• 2. Nihon Jyoho Create conducted a 2-for-1 common stock split on the effective date of December 1, 2020. The number of outstanding shares as of the end of the period was calculated as if this stock split had taken place at the beginning of the previous fiscal year.

• 3. The average number of outstanding shares for the six months ended December 31, 2019 is not presented because the quarterly financial statements were not prepared in the six months ended December 31, 2019.

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

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 3

2. Quarterly Non-consolidated Financial Statements and Notes 4

(1) Quarterly Non-consolidated Balance Sheet 4

(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

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, 2020. Since no financial statement was prepared for the first half of the fiscal year ended June 30, 2020, Nihon Jyoho Create does not present year-on-year comparative analyses for the first half of the fiscal year ending June 30, 2021.

The economy of Japan continued to be stagnant because of COVID-19 during the first half of the current fiscal year. There are expectations for an economic recovery due to worldwide measures to prevent infections as well as the effects of various policies. However, we need to closely watch fluctuations in financial and capital markets and be vigilant about downside risk in the Japanese and global economy depending on upcoming events involving the pandemic. In the real estate industry, there is increasing demand for IT-related capital investments, such as for teleworking due to the pandemic and for the digital transformation (DX) of real estate transactions. Nihon Jyoho Create provides IT solutions like SaaS cloud services to respond precisely to these market needs.

Many activities are under way for more progress with the real estate industry DX and for the creation of platforms, which is our medium-term vision. For the DX, we continued to provide customers with one-stop solutions covering brokerage, property management and many other real estate operations. We also created proposals involving teleworking, as well as non-face-to-face consultations and transactions. For the platform to centralize real estate transactions, we have strengthened the functions of electronic rent applications with the core system of Fudosan BB (inter-agent platform for listings of rental properties) in order to increase the use of this service. The upgrade of this service includes IT links with a number of rent guarantee companies and digitalization of the applicant examination process. These activities will speed up the completion of the platform. We will continue to focus on activities that contribute to the business operations of our customers by creating new forms of value.

Due to the COVID-19 pandemic, there has been steady growth in the number of cloud service projects along with the rising need for telework. In addition, our Start Value Plan for new businesses and/or small businesses has been certified for a program eligible for IT investment subsidies. This makes it possible for agents with only a few operators to start using our teleworking and other services.

We have overcome the restrictions on our sales activities by utilizing tools such as video- and teleconferences. As a result, these restrictions had only a small negative impact on our business operations.

In the first half (from July 1, 2020 to December 31, 2020), net sales were 1,302 million yen, operating profit was 339 million yen, ordinary profit was 368 million yen, and profit was 256 million yen.

Service category performance is as follows.

Brokerage Solutions

We are using many activities to promote the services of this category by using our own website, web advertisements and solutions related to real estate portal sites. We are also using a freemium strategy (see note) to increase the value of our products by adding links to rent guarantee companies in our electronic rent application function of the inter-agent platform that we currently provide free of charge. This has led to significant upselling, resulting in an increase in the sales of this category to 416 million yen.

Note: A freemium is a business model in which basic services or products are provided free of charge and a fee is charged for the use of more advanced functions and services.

Property Management Solutions

Both sales to new and existing customers were strong. Earnings from monthly fees continued to increase because of promotions involving IT investment subsidies and demand for upgrading Chintai Kakumei to its cloud-based version. The sales of this category were 874 million yen.

* In addition to sales of 1,290 million yen in the Brokerage Solutions and Property Management Solutions categories, there were sales of 12 million yen 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 1,484 million yen from the end of the previous fiscal year to 3,967 million yen. The balance of current assets increased by 1,432 million yen from the end of the previous fiscal year to 3,244 million yen.

This is primarily attributable to an increase of 1,384 million yen in cash and deposits mainly due to the issuance of new shares.

2) Liabilities

Total liabilities at the end of the second quarter were 1,209 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 1,480 million yen from the end of the previous fiscal year to 2,758 million yen.

This is primarily attributable to an increase of 1,224 million yen in share capital and capital surplus due to the issuance of new shares.

4) Cash flows

Cash and cash equivalents (hereinafter, "cash") at the end of the second quarter were 2,618 million yen. The cash flow components and the main reasons for changes are as described below.

Cash flows from operating activities

Net cash provided by operating activities was 208 million yen. Main factors include profit before income taxes of 368 million yen, an increase of 137 million yen in advances received and a decrease of 197 million yen in other, net.

Cash flows from investing activities

Net cash used in investing activities was 32 million yen. Main factors include proceeds from maturity of insurance funds of 77 million yen, purchase of investment securities of 10 million yen and purchase of intangible assets of 86 million yen.

Cash flows from financing activities

Net cash provided by financing activities was 1,208 million yen. Main factors include proceeds from issuance of shares of 1,224 million yen.

(3) Explanation of Earnings Forecast and Other Forward-looking Statements

There are no revisions to the forecast for the fiscal year ending June 30, 2021 that was announced on November 13, 2020 with "Non-consolidated Financial Results for the Three Months Ended September 30, 2020 [Japanese GAAP]" because the effects of COVID-19 on results of operations is not material at this time.

An announcement will be made promptly if the forecast is revised.

2. Quarterly Non-consolidated Financial Statements and Notes

(1) Quarterly Non-consolidated Balance Sheet

FY6/20	Second quarter of FY6/21
(As of Jun. 30, 2020)	(As of Dec. 31, 2020)
Assets
Current assets
Cash and deposits	1,408,164	2,792,556
Accounts receivable-trade	280,999	246,552
Merchandise	1,226	1,009
Work in process	4,992	3,988
Supplies	2,025	1,657
Other	123,626	206,742
Allowance for doubtful accounts	(8,845)	(7,758)
Total current assets	1,812,190	3,244,748
Non-current assets
Property, plant and equipment
Land	220,745	220,745
Other, net	192,172	190,507
Total property, plant and equipment	412,918	411,252
Intangible assets	66,783	144,134
Investments and other assets
Other	233,128	208,186
Allowance for doubtful accounts	(41,155)	(40,404)
Total investments and other assets	191,972	167,781
Total non-current assets	671,673	723,168
Total assets	2,483,864	3,967,917

(Thousands of yen)

(Thousands of yen)Liabilities

Current liabilities

Accounts payable-trade Income taxes payable Advances received

FY6/20

(As of Jun. 30, 2020)Second quarter of FY6/21

(As of Dec. 31, 2020)

5,550 7,627

147,045 112,388

693,841 830,970

Provision for bonuses - 18,300

Provision for loss on order received Other

Total current liabilities Non-current liabilities

Asset retirement obligations Other

Total non-current liabilities Total liabilities

Net assets

Shareholders' equity

Share capital Capital surplus Retained earnings

Total shareholders' equity Valuation and translation adjustments

Valuation difference on available-for-sale securities

Total valuation and translation adjustments Total net assets

Total liabilities and net assets

- 351,867 1,198,305

849 231,914 1,202,050

4,321 4,804

3,084 2,313

7,405 1,205,711

7,118 1,209,168

74,395 686,448

44,395 656,448

1,159,371 1,278,161

1,415,818 2,758,715

(8)

33

(8)

1,278,153 2,483,864

33 2,758,748 3,967,917

(2) Quarterly Non-consolidated Statement of Income

(For the Six-month Period)

Net sales Cost of sales Gross profit

Selling, general and administrative expenses Operating profit

Non-operating income

(Thousands of yen)

First six months of FY6/21

(Jul. 1, 2020 - Dec. 31, 2020)

1,302,839

340,384

962,455

623,287

339,167

Interest income 9

Dividend income 12

Commission income 4,057

Insurance return 39,094

Other 1,553

Total non-operating income Non-operating expenses

44,728

Going public expenses 14,519

Foreign exchange losses 625

Other 0

Total non-operating expenses Ordinary profit

Extraordinary losses

Loss on retirement of property, plant and equipment

Total extraordinary losses

Profit before income taxes Income taxes

15,145 368,751

32

32

368,718

112,270

Profit

256,447

(3) Quarterly Non-consolidated Statement of Cash Flows

(Thousands of yen)

First six months of FY6/21

(Jul. 1, 2020 - Dec. 31, 2020)

Cash flows from operating activities

Profit before income taxes 368,718

Depreciation 19,892

Increase (decrease) in allowance for doubtful accounts (1,837)

Increase (decrease) in provision for bonuses 18,300

Interest and dividend income (22)

Gain on maturity of insurance contract (39,094)

Going public expenses 14,519

Decrease (increase) in trade receivables 34,446

Increase (decrease) in advances received Other, net

Subtotal

Interest and dividends received Income taxes paid

Net cash provided by (used in) operating activities Cash flows from investing activities

137,128

(197,085)

354,964

22

(146,927)

208,060

Purchase of investment securities (10,000)

Purchase of property, plant and equipment (9,007)

Purchase of intangible assets (86,648)

Purchase of insurance funds (6,167)

Proceeds from maturity of insurance funds 77,750

Other, net 1,589

Net cash provided by (used in) investing activities Cash flows from financing activities

Proceeds from issuance of shares Payments for going public expenses Other, net

Net cash provided by (used in) financing activities

Effect of exchange rate change on cash and cash equivalents

Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period

(32,484)

1,224,106

(14,519)

(771) 1,208,815

-1,384,390 1,234,608 2,618,998

(4) Notes to Quarterly Non-consolidated Financial Statements

Going Concern Assumption

Not applicable.

Significant Changes in Shareholders' Equity

The shares of Nihon Jyoho Create were listed on the Tokyo Stock Exchange Mothers market on July 31, 2020. This listing was accompanied by a public offering of newly issued stock with a payment date of July 30. After the listing, newly issued stock was sold through a third-party allotment on August 31. As a result, share capital and capital surplus increased 612 million yen each during the first three months of the current fiscal year. As of the end of the second quarter, share capital was 686 million yen and capital surplus was 656 million yen.

Application of Special Accounting Methods for Preparing Quarterly Non-consolidated Financial Statements

Calculation of tax expense

Tax expense was calculated by first reasonably estimating the effective tax rate after the application of tax effect accounting with respect to profit before income taxes for the fiscal year, and then multiplying such rate by the quarterly profit before income taxes.

This financial report is solely a translation of "Kessan Tanshin" (in Japanese, including attachments) that has been prepared in accordance with accounting principles and practices generally accepted in Japan, for the convenience of readers who prefer an English translation.