Star Mica Lifts Nine-Month Operating Profit 67.4% to ¥9,768 Million as Condo Margins Widen, Already Passing Full-Year Net Guidance

A record nine months for a renovated-condominium specialist

Star Mica Holdings Co., Ltd. (TSE: 2975), the Tokyo-based group that buys pre-owned condominiums — mainly units with a tenant in place — leases them, renovates them and resells them, published consolidated results for the first nine months of FY11/2026, the period from December 1, 2025 to August 31, 2026, on September 30, 2026 under Japanese GAAP. Revenue rose 34.4% to ¥65,228 million, operating profit 67.4% to ¥9,768 million, ordinary profit 78.0% to ¥8,893 million and profit attributable to owners of the parent 77.3% to ¥6,079 million, or ¥172.08 per share against ¥102.23. The company says revenue and every profit line are the highest it has recorded for a nine-month period, and that its buying and selling both progressed extremely well.

The profit growth is a margin story. Cost of sales rose 29.5%, five points slower than revenue, so gross profit jumped 55.6% to ¥14,205 million and the gross margin widened from 18.8% to 21.8%. Selling, general and administrative expenses rose 34.7% to ¥4,436 million, roughly in step with revenue, and the operating margin moved from 12.0% to 15.0%. Below the operating line, interest expense rose 35.6% to ¥1,221 million as borrowings grew, but a ¥443 million gain on the valuation of derivatives (¥226 million a year earlier) cushioned it, and ordinary profit grew faster than operating profit. There were no extraordinary items in either year.

Higher prices and margins in the core condo business

The Renovated Condominiums segment produced ¥62,560 million of revenue, up 33.0%, and ¥8,740 million of segment profit, up 61.6%. Sales of units rose 35.5% to ¥58,992 million and rental revenue from the portfolio 1.8% to ¥3,567 million. The company attributes the sales gain to more units sold, helped by a wider range of exit routes for tenanted units — including selling them with the tenant still in place — and to buying concentrated in urban areas, which it says raised both selling prices and margins: the sales profit margin reached 18.8%, up 3.6 points. Valuation losses on real estate held for sale were only ¥12 million.

That came against a softening resale market. The company cites figures from the East Japan Real Estate Information Network showing Tokyo-area resale condominium contracts in August 2026 down 10.5% to 3,180, a fifth straight monthly decline, with the contract price per square metre down 3.8%, the average contract price down 2.8% and listed inventory up 8.2% to 48,235 units.

The two smaller segments grew faster still

The Investment segment, which holds whole income-producing buildings and other investments, lifted revenue 79.5% to ¥1,393 million and segment profit 13.6% to ¥149 million; it sold one building and bought several. The Advisory segment — brokerage, property management and real-estate consulting — grew revenue from external customers 80.1% to ¥1,274 million and segment profit 88.5% to ¥1,521 million, helped by higher brokerage commissions and a large success fee. Its profit exceeds its external revenue because it also earns ¥873 million from other group companies.

Inventory and borrowings rise; Tokyo Tatemono buys in

Total assets rose ¥29,762 million to ¥145,224 million from November 30, 2025, almost all of it real estate for sale, which grew by ¥27,265 million to ¥132,295 million. Long-term borrowings rose by ¥14,656 million to ¥88,206 million. Net assets rose 38.8% to ¥41,212 million and the equity ratio improved from 25.6% to 28.3%. Part of that came from a third-party share allotment: under a capital and business alliance with Tokyo Tatemono Co., Ltd., Star Mica issued 3,823,100 new shares to that company, paid in on June 1, 2026, raising share capital and the capital reserve by ¥3,280 million each.

Nine-month profit already past the full-year forecast

Star Mica left unchanged the full-year forecast it raised on May 13, 2026: revenue of ¥89,168 million (+28.9%), operating profit of ¥10,449 million (+42.9%), ordinary profit of ¥8,771 million (+42.5%) and profit attributable to owners of the parent of ¥6,030 million (+44.1%). Nine-month ordinary profit of ¥8,893 million and net profit of ¥6,079 million already exceed those full-year figures, and operating profit stands at 93% of the target; the filing does not comment on the gap. The dividend forecast is also unchanged at ¥51.00 per share for the year (¥25.50 at the interim and ¥25.50 at year end), against ¥37.00 for FY11/2025.

JapanStockPulse provides informational content only and does not constitute investment advice. Figures are taken from the company's published earnings short report and may be subject to subsequent revision.