Tosei : Results for the Fiscal Year Ended November 30, 2022

This English document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translation and the Japanese original, the Japanese original shall prevail. Tosei Corporation assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation.

Consolidated Financial Results

for the Fiscal Year Ended November 30, 2022

	January 12, 2023
Company name: Tosei Corporation	Stock listing: TSE / SGX
Securities code number: 8923/S2D	URL: https://www.toseicorp.co.jp/english/
Representative: Seiichiro Yamaguchi, President and CEO
Contact: Noboru Hirano, Director and CFO	Phone: [phone]

Ordinary general shareholders' meeting: February 24, 2023 (scheduled)

Commencement of dividend payments: February 27, 2023 (scheduled)

Submission of Securities Report (Yuka Shoken Hokokusho): February 27, 2023 (scheduled)

Preparation of supplementary materials for financial results: Yes

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

Note: All amounts are rounded down to the nearest million yen.

1. Consolidated Financial Results for the Fiscal Year Ended November 30, 2022 (December 1, 2021 - November 30, 2022)

(1) Consolidated Operating Results									(Percentages indicate year-on-year changes.)
			Revenue			Operating profit		Profit before tax		Profit for the year
			(¥ million)	(%)			(¥ million)	(%)			(¥ million)	(%)		(¥ million)	(%)
	Year ended Nov. 30, 2022	70,953	14.9			13,514	23.2			12,753	23.8		8,607	28.0
	Year ended Nov. 30, 2021	61,726	(3.5)			10,965	70.6			10,302	74.6		6,723	86.6
			Profit attributable to		Total comprehensive		Basic earnings		Diluted earnings
			owners of the parent		income for the year		per share			per share
			(¥ million)	(%)			(¥ million)	(%)				(¥)			(¥)
	Year ended Nov. 30, 2022	8,607	28.1			8,784	23.1			181.66			181.33
	Year ended Nov. 30, 2021	6,721	86.6			7,136	132.9			142.56			142.37
			Ratio of profit to equity		Ratio of profit before tax	Ratio of operating profit
			attributable to owners of	to total assets			to revenue
			the parent
					(%)					(%)				(%)
	Year ended Nov. 30, 2022			12.5					6.3				19.0
	Year ended Nov. 30, 2021			10.8					5.8				17.8
(Reference) Equity method investment gain or loss		Year ended Nov. 30, 2022: ¥－million Year ended Nov.30, 2021: ¥－million
(2) Consolidated Financial Position
													Ratio of equity	Equity per share
									Equity attributable to	attributable to owners
		Total assets		Total equity		attributable to
				owners of the parent	of the parent to total
									owners of the parent
													assets
			(¥ million)		(¥ million)			(¥ million)		(%)		(¥)
	As of Nov. 30, 2022		210,955			72,290			72,290		34.3	1,529.65
	As of Nov. 30, 2021		195,010			65,958			65,958		33.8	1,380.36

(Percentages indicate year-on-yearchanges.)

(3) Consolidated Cash Flows

	Cash flows from	Cash flows from	Cash flows from	Cash and cash
	equivalents at end of
	operating activities	investing activities	financing activities
	year
	(¥ million)	(¥ million)	(¥ million)	(¥ million)
Year ended Nov. 30, 2022	(197)	(9,081)	7,477	31,767
Year ended Nov. 30, 2021	974	(15,448)	10,994	33,560

2. Dividends

		Annual dividends per share				Ratio of dividend
						Total dividends	Devident	to equity
						attributable to
						per share	payout ratio
	1Q-end	2Q-end	3Q-end	Year-end	Total	owners of the
	(Total)	(Consolidated)
						parent
								(Consolidated)
	(¥)	(¥)	(¥)	(¥)	(¥)	(¥ million)	(%)	(%)
Year ended Nov. 30,	－	0.00	－	38.00	38.00	1,815	26.7	2.9
2021
Year ended Nov. 30,	－	0.00	－	51.00	51.00	2,410	28.1	3.5
2022
Year ending Nov. 30,	－	0.00	－	60.00	60.00		30.2
2023(Forecast)

3. Consolidated Earnings Forecasts for the Fiscal Year Ending November 30, 2023 (December 1, 2022 - November 30, 2023)

							Profit attributable to	Basic earnings
	Revenue	Operating profit	Profit before tax	owners of the
	per share
							parent
	(¥ million)	(%)	(¥ million)	(%)	(¥ million)	(%)	(¥ million)		(%)	(¥)
Year ending Nov. 30,	85,000	19.8	14,824	9.7	14,000	9.8	9,388		9.1	198.66
2023

• Notes
• 1. Changes in significant subsidiaries during the year (changes in specified subsidiaries resulting in changes in the scope of consolidation): No

Newly added: －Excluded: －

(2) Changes in accounting policies and changes in accounting estimates

(a) Changes in accounting policies required by IFRS:

No

1. Changes in accounting policies other than (a) above: No

(c) Changes in accounting estimates:No

(3) Number of issued shares (ordinary shares)

(a) Number of issued shares at the end of the year (including treasury shares)

	As of Nov. 30, 2022	48,683,800 shares
	As of Nov. 30, 2021	48,683,800 shares
(b) Number of treasury shares at the end of the year
	As of Nov. 30, 2022	1,424,122 shares
	As of Nov. 30, 2021	900,022 shares
(c) Average number of outstanding shares during the year
	Year ended Nov. 30, 2022	47,381,024 shares
	Year ended Nov. 30, 2021	47,145,722 shares

(Percentages indicate year-on-yearchanges.)

(Reference) Summary of Non-Consolidated Results

1. Non-consolidated Financial Results for the Fiscal Year Ended November 30, 2022 (December 1, 2021 - November 30, 2022)

(1) Non-consolidated Operating Results

	Revenue	Operating income	Ordinary income	Net income
	(¥ million)	(%)		(¥ million)	(%)	(¥ million)	(%)	(¥ million)	(%)
Year ended Nov. 30, 2022	43,063	(9.2)			7,175	(5.3)		10,678	10.2	8,687	16.6
Year ended Nov. 30, 2021	47,452	(8.7)			7,574	165.5		9,690	186.5	7,452	187.2
	Net income per share		Net income per share
		(diluted)
		(¥)				(¥)
Year ended Nov. 30, 2022		183.35				183.02
Year ended Nov. 30, 2021		158.08				157.86
(2) Non-consolidated Financial Position
	Total assets	Net assets	Equity ratio	Net assets per share
	(¥ million)		(¥ million)		(%)		(¥)
As of Nov. 30, 2022		189,896				65,863			34.7		1,393.00
As of Nov. 30, 2021		171,076				59,467			34.7		1,243.27
(Reference) Equity As of November 30, 2022: ¥65,832million	As of November 30, 2021: ¥59,408million
2. Non-consolidated Earnings Forecasts for the Fiscal Year Ending November 30, 2023
(December 1, 2022 - November 30, 2023)					(Percentages indicate year-on-year changes.)
	Revenue	Ordinary income	Net income	Net income per share
	(¥ million)	(%)		(¥ million)	(%)	(¥ million)	(%)		(¥)
Year ending Nov. 30, 2023	53,429	24.1		11,430	7.0		9,011	3.7		190.68

• These Financial Results are not subject to audit procedures by a certified public accountant or an audit corporation.
• Proper use of earnings forecasts and other notes
• 1. The forward-looking statements, including outlook of future performance, contained in these materials are based on information currently available to the Company and on certain assumptions deemed to be reasonable by the Company. Actual performance and other results may differ substantially from these statements due to various factors. For the assumptions on which the earnings forecasts are based and cautions concerning the use thereof, please refer to "1.Operating results and Financial Position (5) Future outlook" on page 6 of the attached materials.
  2. A financial results meeting will be held on January 12, 2023 for institutional investors and analysts. The presentation materials distributed at the meeting will be available on our website immediately after the financial results disclosure.

Contents of Attached Material

1. Operating Results and Financial Position ………………………………………………………...………2
2. 1. Operating Results..………………………………………….………………….……………....……2
   2. Analysis and Discussion of Operating Results……………….……………......………………………4
   3. Financial Positions.………………………………………………….…………………….……………. 5
   4. Cash Flows ……………………………………………………….……………………………............ 5
   5. Future Outlook….…………………………….........…..……..……..……..………..……..…….... 6
   6. Fundamental Earnings Distribution Policy and Dividends for 2022 and 2023…………..….........8
3. Basic Concept Regarding Selection of Accounting Standards……………………………………………..8
4. Consolidated Financial Statements and notes…………………………………………………….……........ 9
5. 1. Consolidated Statement of Financial Position …………………………………………… …………9
   2. Consolidated Statement of Comprehensive Income ………………………………………………10
   3. Consolidated Statement of Changes in Equity ……………………………………………..............11
   4. Consolidated Statement of Cash Flows …………………………………………………….…………12
   5. Notes on Consolidated Financial Statements ……………………………………………….…………13
      (Notes on Going Concern Assumption) ……………………………………………………………... 13 (Additional Information) ……………………………………………………………………... 13 (Segment Information) ………………………………………………………………………………... 13 (Earnings per Share) ………………………………………………………………………………14
      (Significant Subsequent Events) ………………………………………………………………….. 15

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1. Operating Results and Financial Position

1. Operating Results

During the fiscal year ended November 30, 2022, the Japanese economy showed signs of recovery as social and economic activities went back to normal as society transitions to coexisting with COVID-19 in ways such as the lifting of border entry restrictions. Meanwhile, it is necessary to monitor the effects of the downturn of the overseas economies, which is caused by the global credit tightening and the supply shortage and soaring prices of natural resources due to the situation between Russia and Ukraine, as well as the impact of surging prices caused by the excessively depreciating yen.

In the real estate industry where Tosei Group operates, due to the effects of a decrease in the number of projects sold and a decrease in the number of J-REIT properties acquired, domestic real estate investments for the nine months from January to September 2022 amounted to ¥1.9 trillion, decreasing 38% year on year. However, because of the continuing superiority of domestic real estate backed by its excellent stability and liquidity, in addition to the depreciating yen and Japan's continuing monetary easing policies as compared to hikes in interest rates in other countries, the Japanese real estate investment market is becoming even more attractive, and overseas investors' appetite for investment remains high (according to a survey by a private research institute).

In the Tokyo metropolitan area condominium market, the number of newly built units from January to October 2022 decreased 2.7% year on year to 20,946 units. While developers refrain from cutting prices due to rising prices of building materials, leading to a longer period of time to make sales, the number of units sold remains stable. In addition, in the Tokyo metropolitan area pre-owned condominium market, while the number of units contracted from January to October 2022 declined 11.1% year on year to 29,797 units, the market is booming, as evidenced by the continuing trend of rising contract prices. In the build- for-sale detached house market, housing starts for the 10 months from January to October 2022 came to 49,452 units (up 6.0% year on year) (according to a survey by a private research institute).

Regarding construction costs for the ten months from January to October 2022, average costs per tsubo for wooden structure were ¥580 thousand (1 tsubo = 3.30 square meters) (an increase of 1.9% year on year), and average costs per tsubo for steel reinforced concrete structure were ¥1,436 thousand (an increase of 23.8% year on year). Although a shortage in supply of timber that once caused the "wood shock" has eased, the price of timber has not declined due to the recent depreciating yen, and construction costs for wooden structures remain at a high level. Moreover, with the soaring price of steel, construction costs of steel reinforced concrete structures are rising rapidly (according to a survey by the Ministry of Land, Infrastructure, Transport and Tourism).

In the office leasing market of Tokyo's five business wards, the average vacancy rate as of October 2022 was 6.44% (a decrease of 0.03 percentage points year on year), and the average asking rent was ¥20,114 per tsubo (a decrease of 3.3% year on year), demonstrating the slowdown of the downward trend. A massive supply of new office buildings is expected in 2023 and it remains necessary to continue monitoring the trends in supply and demand (according to a survey by a private research institute).

Meanwhile, the condominium leasing market remained generally robust and the average asking rent of apartments in the Tokyo metropolitan area as of October 2022 was ¥10,879 per tsubo (a decrease of 0.5% year on year) and the average occupancy rate at condominiums held by J-REIT in the Tokyo Area as of August 31, 2022 was 97.0% (an increase of 0.5 percentage points year on year). As for the rent of apartments for singles in the 23 wards of Tokyo, the falling trend of the previous year has eased and there are signs of bottoming out (according to a survey by a private research institute).

In the Tokyo metropolitan area's logistics facility leasing market, leasable stock in October 2022 amounted to 8.21 million tsubo (an increase of 13.5% year on year). The vacancy rate was 4.0%. Although this was an increase of 2.3 percentage points from the same period of the previous year, rent continues to gradually increase. While the vacancy rate is expected to rise even higher temporarily due to increased supply resulting from new development, it is predicted to remain solid with the expanding demand in e- commerce in the medium- to long-term (according to a survey by a private research institute).

In the real estate fund market, the market scale continues to expand. J-REIT assets under management in October 2022 totaled ¥21.7 trillion (an increase of ¥0.4 trillion year on year) and assets under management in private placement funds totaled ¥26.5 trillion (as of June 30, 2022, an increase of ¥3.1 trillion year on year). Combining the two, the real estate securitization market scale grew to ¥48.2 trillion (according to a survey by a private research institute).

In the Tokyo business hotel market, in the nine months from January to September 2022, the average guest room occupancy rate was 53.9% (38.1% in the same period of the previous fiscal year), and the total

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