Meiho : Consolidated Financial Summary for the Second Quarter of the Fiscal Year Ending July 2022 (Japanese GAAP)

Financial Summary for the Second Quarter of the Fiscal Year Ending July 2022

Meiho Enterprise Co., Ltd.

Consolidated Financial Summary for the Second Quarter of the Fiscal Year Ending July 2022 (Japanese GAAP)

March 17, 2022

Name of listed company:Meiho Enterprise Co., Ltd.

Code Representative:

8,927

(Position) Chairman & Representative Director

Contact for inquiries:(Position)General

Management Dept.

Manager,(Name) Ayako IwasakiScheduled date for submission ofMarch 17, 2022 quarterly report:

Creation of supplementary explanatory materials: None Holding of accounts briefing meeting: None

Listing exchange:Tokyo Stock ExchangeURLhttps://www.meiho-est.com(Name) Mitsuru Yabuki

Scheduled date for start of- dividend payment:

(TEL)03(5434)7653

(Amounts are rounded down to the nearest million yen)

1. Consolidated results for the second quarter of fiscal year ending July 2022 (from August 1, 2021 to January 31, 2022)

(1) Consolidated operating results (cumulative)

(% figures show the rate of increase (decrease) compared with the same period of the previous fiscal year)

Net sales	Operating profit	Ordinary profit	Profit attributable to owners of parent Profit attributable to owners of parent
Second quarter of fiscal year ending July 2022 Second quarter of fiscal year ending July 2021	Million yen 2,897 3,131	% (7.5) (46.0)	Million yen 73 172	% (57.7) (46.8)	Million yen 6 177	% (96.2) (36.9)	Million yen (39) 150	% - 48.2

Second quarter of fiscal year ending July 2021 154 Million yen

(Note) Comprehensive incomeSecond quarter of fiscal year ending July 2022

(39) Million yen (-%)

Basic profit per share	Basic profit per share (diluted)
Second quarter of fiscal year ending July 2022 Second quarter of fiscal year ending July 2021	yen sen (1.69) 6.37	yen sen - -

(2) Consolidated financial position

Total assets	Net assets	Equity-to-asset ratio
Second quarter of fiscal year ending July 2022 Fiscal year ended July 2021	Million yen 12,885 11,607	Million yen 4,854 5,085	% 37.6 43.7

Second quarter of fiscal year ending July 2022

(Reference) Equity capital

2. Dividends

4,841Million yenFiscal year ended July 2021 5,071 Million yen

Annual dividend
End of first quarter	End of second quarter	End of third quarter	Year-end	Total

yen sen -

Fiscal year ended

July 2021

(53.6%)

yen sen 0.00

yen sen -yen sen 8.00

yen sen 8.00

Fiscal year ended

July 2022

-0.00

Fiscal year ending July 2022 (Forecast)

-8.00

8.00

(Note) Revisions to the most recent dividend forecast: None

3. Consolidated earnings forecast for fiscal year ending July 2022 (from August 1, 2021 to July 31, 2022)

(% figures show the rate of increase (decrease) compared with the same period of the previous fiscal year)

Net sales	Operating profit	Ordinary profit	Profit attributable to owners of parent	Basic profit per share
Full year	Million yen 12,300	% 20.8	Million yen 820	% (16.6)	Million yen 620	% (35.5)	Million yen 380	% (54.0)	yen sen 16.09

(Note) Revisions to the most recent earnings forecast: None

* Explanatory notes

(1) Changes in significant subsidiaries during the period : None

(Changes in specified subsidiaries resulting in change in scope of consolidation)

Newly included: ― companies (Company name), Excluded: ― companies (Company name)

(2) Application of accounting method specific to preparation of quarterly consolidated financial statements

:None

(3) Changes in accounting policies, changes in accounting estimates, and restatement

1) Changes in accounting policies with revision of accounting standards

• : : Yes

• 2) Changes in accounting policies other than 1)

  :

• 3) Changes in accounting estimates

  :

• 4) Restatement

:None None None

(4) Number of shares issued and outstanding (ordinary shares)

1) Number of shares issued and outstanding (including treasury shares) at end of the period

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

• 3) Average number of shares during the period

(quarterly cumulative)

2Q of FY ending July 2022	24,661,000 shares	Fiscal year ended July 2021	24,661,000 shares
2Q of FY ending July 2022	1,047,160 shares	Fiscal year ended July 2021	1,047,160 shares
2Q of FY ending July 2022	23,613,840 shares	2Q of FY ending July 2021	23,613,840 shares

* Quarterly Financial Summary is outside the scope of the quarterly review by a certified public accountant or audit firm.

* Explanation regarding appropriate use of earnings forecasts, and other notes

The earnings outlook and other forward-looking statements contained herein are based on information currently available and certain assumptions that are thought to be reasonable by the Company. Accordingly, actual business performance and other results may differ materially due to various factors. For the conditions forming the assumptions on which earnings forecasts are based and explanatory notes for use of earnings forecasts, etc., please see "Attachment 1. Qualitative Information on Quarterly Financial Results (3) Explanation of Consolidated Earnings Forecasts and Other Forward-Looking Information" on page 2.

• ○ Contents of Attachments

1. Qualitative Information on Quarterly Financial Results ............................................................................. 1

(1) Explanation of Operating Results ................................................................................................................................ 1

(2) Explanation of Financial Position ................................................................................................................................ 2

(3) Explanation of Consolidated Earnings Forecasts and Other Forward-Looking Information ...................................... 2

2. Quarterly Consolidated Financial Statements and Main Notes .................................................................. 4

(1) Quarterly Consolidated Balance Sheet ........................................................................................................................ 4

(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive Income ..... 6

(3) Consolidated Statement of Cash Flows for the Quarter ................................................................................................ 8

(4) Notes to Quarterly Consolidated Financial Statements ................................................................................................ 9

(Notes Related to Going Concern Assumption) ........................................................................................................... 9

(Notes on Substantial Changes in Amount of Shareholders' Equity) ........................................................................... 9

(Changes in Accounting Policies) ................................................................................................................................. 9

(Additional Information) ............................................................................................................................................. 10

(Segment Information, etc.) ......................................................................................................................................... 11

(Significant Events After Reporting Period) ................................................................................................................ 12

1. Qualitative Information on Quarterly Financial Results

(1) Explanation of Operating Results

During the current consolidated cumulative second quarter, economic and social activities in Japan have repeated stagnancy and resumption due to the impact of the COVID-19 infection. Since the second half of last year, there have been signs that the Japanese economy has been on a gradual recovery path due to various support measures implemented by the government and various administrative agencies, as well as the promotion of vaccination against infectious diseases. However, the future remains uncertain due to the current global outbreak of a new mutant strain of this disease.

In the real estate industry, the environment for home acquisition has been supported by the continuation of the low interest rate environment and various government measures, including the re-extension of mortgage tax breaks. Although there has been continued strong housing demand, the situation remains unpredictable, as concerns about the economic recession and delayed recovery caused by the prolonged infection and the resulting decline in home acquisition. In addition, the procurement environment for building materials remains unstable due to a global shortage of lumber, soaring distribution prices, a shortage of semiconductors, and rising energy prices.

Under these business circumstances, the Group made the following efforts in each business segment.

In the real estate sales business, we handed over two properties in the second quarter, the "MIJAS Nishi Yokohama" (Nishi-ku, Yokohama City, Kanagawa Prefecture) and "MIJAS Sangenjaya III" (Setagaya-ku, Tokyo). In the current situation where the market for rental housing real estate is showing a growing appetite for purchasing, we plan to set up a seminar room facility in our head office to further strengthen our sales activities by holding real estate investment seminars for individual investors.

In the real estate leasing business, in order to maximize profits for existing owners, in addition to area marketing, we aim to eliminate vacancies by setting the optimal rent based on the AI assessment system and contract execution examples and by proposing leasing strategies utilizing our network of brokerage firms in the Tokyo metropolitan area, thereby achieving high occupancy rates in the properties managed by the Group. We have also introduced an application for information exchange with owners and continue to share and exchange information through CS surveys and other measures. For its main brands, the MIJAS and EL FARO series, the Group offers a one-stop service, from the creation of products to their management, thereby endeavoring to maintain high quality and high occupancy rates. Consequently, the series is creating synergies within the Group, with their good recognition as highly profitable real estate investment products, triggering repeated purchases of real estate investment product series.

In the real estate brokerage business, the Group is working to increase revenues by introducing properties in line with customer needs through the use of its unique information network comprising real estate sales business and other businesses.

In the contracting business, the Group worked to increase earnings through the design and construction of five properties in the MIJAS and EL FARO series and remodeling and renovations suiting the characteristics of other properties under management. In addition, we have introduced a customer proposal application for large-scale repairs to uncover potential customers and further expand earnings.

As a result of the above, in the first two quarters of the fiscal year, consolidated net sales stood at 2,897 million yen (down 7.5% year on year), operating income stood at 73 million yen (down 57.7% year on year, ordinary profit stood at 6 million yen (down 96.2% year on year), and loss attributable to owners of parent amounted to 39 million yen (compared to net income attributable to owners of the parent of 150 million yen year on year).

The Company has applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020) from the beginning of the first quarter of the current fiscal year. For details, please refer to 2. Quarterly Consolidated Financial Statements and Main Notes and (3) Notes to Quarterly Consolidated Financial Statements (Changes in Accounting Policies).

The performance of each segment is as follows.

[Real estate sales business]

In the real estate sales business, we handed over two properties in the MIJAS series (apartment development project) in the second quarter. As a result, net sales totaled 1,690 million yen (down 13.6% year on year) and segment income totaled 20 million yen (down 74.9% year on year).

[Real estate leasing business]

In the real estate leasing business, due to property management fees and other factors, net sales totaled 997 million yen

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