GLOBAL LINK MANAGEMENT INC.

Business Details

Consists of three businesses: development and sale to corporations of newly built ESG residences (Development Business), planning and sale of land to corporations (Land Planning Business), and acquisition, regeneration, and sale to corporations of office buildings and used residences (Regeneration Business). Main customers are institutional investors and business corporations. This is the Company's sole reporting segment and is consistent with consolidated results. In the first quarter of FY2026 (ending December 2026), despite a decrease in revenue, profit increased due to improved profit margins.

Recent Overview

Q1 FY2026 (ending December 2026) saw a decrease in revenue but an increase in profit. Revenue declined 7.2%, while operating profit rose 13.0% and net profit rose 22.5%

In the first quarter of FY2026 (ending December 2026) (January to March 2026), revenue decreased to ¥15,287 million (down 7.2% year on year), but gross profit improved to ¥3,202 million (compared to ¥2,880 million in the same period of the prior year) due to efficiency improvements in cost of sales. Operating profit increased to ¥2,050 million (up 13.0% year on year), ordinary profit increased to ¥1,790 million (up 10.1% year on year), and net profit attributable to owners of parent increased to ¥1,220 million (up 22.5% year on year), achieving overall profit growth. The Development Business completed delivery of 265 units (approximately 35% of the full-year plan of 758 units), the Land Planning Business completed 3 sales, and the Regeneration Business acquired 5 buildings. Meanwhile, real estate for sale in progress surged to ¥43,768 million (up ¥19,746 million from the end of the prior fiscal year), and long-term borrowings also expanded to ¥29,774 million (up ¥11,199 million). The equity ratio declined from 31.3% to 23.1%. There is no change to the full-year earnings forecast (revenue of ¥75,000 million, operating profit of ¥8,500 million). While the impact of instability in the Middle East situation on cost increases and delivery delays remains unclear from the second half of FY2026 onward, the Company stated there is no impact at present. In the breakdown of revenue recognition, other revenue (including transfer of real estate trust beneficiary interests, etc.) increased substantially to ¥14,165 million (compared to ¥3,904 million in the same period of the prior year), forming a structure in which it accounts for the majority of revenue.

Key Products

Growth Drivers

• Expansion of whole-building bulk sales to institutional investors (a supply-demand gap exists, with institutional investor needs of approximately ¥3.3 trillion for 2025-2027 against the Company's supply plan of approximately ¥250 billion)
• Revenue expansion through the Land Planning Business's high-turnover, high-capital-efficiency model (22 sales in FY2025 ending December 2025, 25 planned for FY2026 ending December 2026)
• Margin improvement in the Regeneration Business driven by recovering demand for office buildings amid post-pandemic return-to-office trends and standardization of hybrid work
• Higher value-add through ESG residence development and rising rent levels amid inflation
• Creation of new revenue sources through expansion of asset types (launch of urban hotel development and sales)
• Contribution to indirect and direct revenue through AtPeak's use of AP-AI for operational efficiency and DX (from FY2027 ending December 2027 onward)
• Steady advancement of growth strategy based on the medium-term management plan 'GLM100' (2025-2027) and the long-term policy 'GLM1000'

Risks

• Deterioration of real estate market conditions (risk of institutional investors' reduced investment appetite due to rising interest rates and economic downturn)
• Risk of cost increases due to soaring construction costs (pressure on profit margins in the Land Planning Business and Development Business)
• Inventory risk from the sharp increase in real estate for sale in progress (¥43,768 million, up ¥19,746 million from the end of the prior fiscal year) and rising financial leverage due to increased borrowings (equity ratio declined to 23.1%)
• Risk of cost increases and delivery delays due to instability in the Middle East situation (impact from the second half of FY2026 onward remains unclear)
• Risk of revenue concentration on specific customers (sales to TAPP Co., Ltd. account for 10.3% of total)
• Short-term downward pressure on profit from continued upfront investment by AtPeak Inc.
• Changes in the business environment due to legal and regulatory changes (amendments to real estate-related laws and tax systems)
• Risk of delayed sale timing in the Regeneration Business (sale of one building planned for Q1 slipping into Q2)