Ichigo Office REIT Investment (TSE:8975) - Share price, News & Analysis

Q: What is the Fair Price of 8975 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

8975 (¥85600) is trading below our estimate of [[fair value]] (¥188927.04)

8975 fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	0/6
Past Performance	5/6
Financial Health	2/6
Dividends	4/6

8975 Stock Overview

Ichigo Office (8975) is a specialized office REIT that focuses on mid-size offices, an asset class that offers both return stability and upside potential.

Rewards

Trading at 54.7% below our estimate of its fair value

Earnings grew by 18.2% over the past year

Risk Analysis

Debt is not well covered by operating cash flow

Unstable dividend track record

Ichigo Office REIT Investment Competitors

Global One Real Estate Investment

TSE:8958

JP¥105.0b

Japan Excellent

TSE:8987

JP¥166.9b

MIRAI

TSE:3476

JP¥89.1b

MORI TRUST Sogo Reit

TSE:8961

JP¥190.6b

Price History & Performance

Summary of all time highs, changes and price drops for Ichigo Office REIT Investment
Historical stock prices
Current Share Price	JP¥85,600.00
52 Week High	JP¥99,400.00
52 Week Low	JP¥75,500.00
Beta	0.62
1 Month Change	3.13%
3 Month Change	0.23%
1 Year Change	-10.27%
3 Year Change	-18.48%
5 Year Change	14.90%
Change since IPO	37.75%

Shareholder Returns

	8975	JP REITs	JP Market
7D	1.3%	0.6%	2.3%
1Y	-10.3%	-4.9%	2.5%

Return vs Industry: 8975 underperformed the JP REITs industry which returned -4.9% over the past year.

Return vs Market: 8975 underperformed the JP Market which returned 2.5% over the past year.

Price Volatility

Is 8975's price volatile compared to industry and market?
8975 volatility
8975 Average Weekly Movement	2.1%
REITs Industry Average Movement	2.4%
Market Average Movement	3.8%
10% most volatile stocks in JP Market	7.8%
10% least volatile stocks in JP Market	2.0%

Stable Share Price: 8975 is less volatile than 75% of JP stocks over the past 3 months, typically moving +/- 2% a week.

Volatility Over Time: 8975's weekly volatility (2%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2005	n/a	Yoshihiro Takatsuka	https://www.ichigo-office.co.jp

Ichigo Office (8975) is a specialized office REIT that focuses on mid-size offices, an asset class that offers both return stability and upside potential. Ichigo Office seeks to drive higher earnings and sustainable growth for its shareholders by increasing the value of its assets through a broad array of value-add activities, including tailored tenant services, structural building improvements, and targeted tenant leasing. Ichigo Office is managed by Ichigo Investment Advisors, the asset management subsidiary of Ichigo, a major Japanese real estate owner/operator.

Ichigo Office REIT Investment Fundamentals Summary

How do Ichigo Office REIT Investment's earnings and revenue compare to its market cap?
8975 fundamental statistics
Market Cap	JP¥129.54b
Earnings (TTM)	JP¥7.38b
Revenue (TTM)	JP¥17.35b

17.6x

P/E Ratio

7.5x

P/S Ratio

Is 8975 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
8975 income statement (TTM)
Revenue	JP¥17.35b
Cost of Revenue	JP¥8.19b
Gross Profit	JP¥9.16b
Other Expenses	JP¥1.78b
Earnings	JP¥7.38b

Last Reported Earnings

Apr 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	4.88k
Gross Margin	52.82%
Net Profit Margin	42.54%
Debt/Equity Ratio	108.2%

How did 8975 perform over the long term?

See historical performance and comparison

Dividends

5.5%

Current Dividend Yield

62%

Payout Ratio

Does 8975 pay a reliable dividends?

See 8975 dividend history and benchmarks

When do you need to buy 8975 by to receive an upcoming dividend?
Ichigo Office REIT Investment dividend dates
Ex Dividend Date	Oct 28 2022
Dividend Pay Date	Jan 23 2023
Days until Ex dividend	72 days
Days until Dividend pay date	159 days

Does 8975 pay a reliable dividends?

See 8975 dividend history and benchmarks

We’ve recently updated our valuation analysis.

Valuation

Is 8975 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 8975?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 8975. This is calculated by dividing 8975's market cap by their current preferred multiple.
What is 8975's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	JP¥129.54b

8975 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	13.3x
Enterprise Value/EBITDA	21.6x
PEG Ratio	n/a

Price to Earnings Ratio vs Peers

How does 8975's PE Ratio compare to its peers?

8975 PE Ratio vs Peers

The above table shows the PE ratio for 8975 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	21.1x
8958 Global One Real Estate Investment	22.8x	n/a	JP¥105.0b
8987 Japan Excellent	21.7x	n/a	JP¥166.9b
3476 MIRAI	19.9x	n/a	JP¥89.1b
8961 MORI TRUST Sogo Reit	20x	n/a	JP¥190.6b
8975 Ichigo Office REIT Investment	17.6x	n/a	JP¥129.5b

Price-To-Earnings vs Peers: 8975 is good value based on its Price-To-Earnings Ratio (17.6x) compared to the peer average (21.1x).

Price to Earnings Ratio vs Industry

How does 8975's PE Ratio compare vs other companies in the JP REITs Industry?

Price-To-Earnings vs Industry: 8975 is good value based on its Price-To-Earnings Ratio (17.6x) compared to the JP REITs industry average (26.6x)

Price to Earnings Ratio vs Fair Ratio

What is 8975's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

8975 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	17.6x
Fair PE Ratio	n/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate 8975's Price-To-Earnings Fair Ratio for valuation analysis.

Share Price vs Fair Value

What is the Fair Price of 8975 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 8975 (¥85600) is trading below our estimate of fair value (¥188927.04)

Significantly Below Fair Value: 8975 is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.

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Future Growth

How is Ichigo Office REIT Investment forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

6.4%

Forecasted Real Estate industry annual growth in earnings

In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Ichigo Office REIT Investment has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.

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Examine whether Ichigo Office REIT Investment is trading at an attractive price based on how much it is expected to earn in the future, and relative to its industry peers and the wider market.

Past Performance

How has Ichigo Office REIT Investment performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

1.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 8975 has high quality earnings.

Growing Profit Margin: 8975's current net profit margins (42.5%) are higher than last year (40.4%).

Past Earnings Growth Analysis

Earnings Trend: 8975's earnings have grown by 1.5% per year over the past 5 years.

Accelerating Growth: 8975's earnings growth over the past year (18.2%) exceeds its 5-year average (1.5% per year).

Earnings vs Industry: 8975 earnings growth over the past year (18.2%) exceeded the REITs industry 5.4%.

Return on Equity

High ROE: 8975's Return on Equity (7.2%) is considered low.

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Financial Health

How is Ichigo Office REIT Investment's financial position?

Financial Health Score

2/6

Financial Health Score 2/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: 8975's short term assets (¥25.0B) exceed its short term liabilities (¥22.8B).

Long Term Liabilities: 8975's short term assets (¥25.0B) do not cover its long term liabilities (¥102.4B).

Debt to Equity History and Analysis

Debt Level: 8975's net debt to equity ratio (98%) is considered high.

Reducing Debt: 8975's debt to equity ratio has increased from 94.6% to 108.2% over the past 5 years.

Debt Coverage: 8975's debt is not well covered by operating cash flow (9.5%).

Interest Coverage: 8975's interest payments on its debt are well covered by EBIT (6x coverage).

Balance Sheet

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Dividend

What is Ichigo Office REIT Investment current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

5.47%

Current Dividend Yield

Upcoming Dividend Payment

Dividend Yield vs Market

Notable Dividend: 8975's dividend (5.47%) is higher than the bottom 25% of dividend payers in the JP market (1.63%).

High Dividend: 8975's dividend (5.47%) is in the top 25% of dividend payers in the JP market (3.61%)

Stability and Growth of Payments

Stable Dividend: 8975's dividend payments have been volatile in the past 10 years.

Growing Dividend: 8975's dividend payments have fallen over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (62.3%), 8975's dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: At its current cash payout ratio (76.9%), 8975's dividend payments are covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

8.4yrs

Average board tenure

CEO

Yoshihiro Takatsuka (67 yo)

no data

Tenure

JP¥2,160,000

Compensation

Mr. Yoshihiro Takatsuka served as the President at Ichigo Office REIT Investment Corporation (formerly known as Ichigo Real Estate Investment Corporation). Mr. Takatsuka serves as Executive Director at Ich...

Board Members

Experienced Board: 8975's board of directors are considered experienced (8.4 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/16 00:00
End of Day Share Price	2022/08/16 00:00
Earnings	2022/04/30
Annual Earnings	2022/04/30