Miyakoshi Holdings, Inc.

Business Details

Miyakoshi Holdings, as a pure holding company, conducts a Real Estate Leasing Management Business in Shenzhen, China, through its consolidated subsidiaries Shenzhen Crown (China) Electronics Co., Ltd. and Kelang (Shenzhen) Business Co., Ltd. All revenue derives from real estate leasing management income from China, and operating revenue for FY2026 (ending March 2026) was ¥391 million. In parallel, the company is promoting as its core strategy the development of the large-scale urban renewal project "World Innovation Center (WIC)" in Shenzhen, aiming for construction to begin in 2026 and grand opening in 2030.

Recent Overview

Recorded a net loss of ¥1,937 million due to impairment and provisions associated with WIC development; demolition work is in progress

In FY2026 (ending March 2026), due to the progress of building demolition work accompanying the advancement of the WIC project, the company recorded an impairment loss of ¥848 million and demolition costs of ¥95 million as extraordinary losses related to fixed assets (mainly land use rights) held by Crown Electronics. In addition, as a result of recording a provision for doubtful accounts of ¥944 million as a non-operating loss due to conservative valuation of long-term loans receivable, the company recorded a net loss attributable to owners of parent of ¥1,937 million. Meanwhile, cash flow from investing activities was positive at ¥2,821 million due to the cancellation of time deposits, and cash and cash equivalents increased to ¥5,485 million. In FY2027 (ending March 2026 [sic]), the company will newly enter the business of importing and selling semiconductors, electronic components, etc., from Chinese companies, and expects operating revenue of ¥2,000 million.

Key Products

Growth Drivers

• With the effective securing of development permission for Plot 01-01 of the WIC project, the project has moved into the development phase toward construction commencement in 2026 and grand opening in 2030. The estimated real estate value upon completion is approximately ¥338.5 billion (converted at the exchange rate as of March 31, 2026)
• An increasing number of companies, primarily Japanese listed companies and Western Fortune Global 500 companies, have expressed intent to move into WIC, and a further increase in tenant companies is expected as development progresses
• Shenzhen's GDP achieved 5.5% year-on-year growth in 2025, and the economic revitalization of the Greater Bay Area is supporting the business environment through concentrated investment in high-tech industries such as AI, IT, EVs, and robotics
• After the WIC opening, in addition to rental income, the company plans to cultivate an innovation business (such as a Japan agent business) in partnership with Chinese companies in AI, robotics, semiconductors, etc., as a second pillar of revenue
• From FY2027 (ending March 2026 [sic]), the company will newly enter the business of importing and selling semiconductors, electronic components, etc., from Chinese companies, securing a new revenue source to fill the revenue gap until the WIC grand opening

Risks

• The WIC development requires the temporary return and new acquisition of land use rights, leaving uncertainty regarding the cost and schedule of acquiring new land use rights (the 251,000 sq. m of floor area for R&D buildings is exempt from fees, while the 90,700 sq. m of floor area for commercial facilities and dormitories is expected to incur fees)
• No rental income is expected until the WIC grand opening, while selling, general and administrative expenses (¥526 million in FY2026, ending March 2026) continue to be incurred, and operating losses are expected to continue
• The import and sale business for semiconductors, electronic components, etc., to be newly launched in FY2027 (ending March 2026 [sic]) has no track record, and there is high uncertainty as to whether the projected operating revenue of ¥2,000 million will be achieved
• Total project costs of approximately RMB 4.5 billion need to be raised, presenting a financial risk premised on large-scale fundraising from capital markets and financial institutions
• Due to the impact of US-China trade friction, leading companies in Japan, the US, and Europe tend to hold back on investment in China, posing a risk to tenant attraction
• Risk that fluctuations in the RMB/yen exchange rate could significantly affect the asset value and earnings of overseas subsidiaries (China-related assets such as long-term loans receivable of ¥13,531 million are subject to exchange rate effects)
• Business operations are heavily concentrated in Shenzhen, China, posing a risk that geopolitical risk or regulatory changes in China could directly affect performance
• Although a provision for doubtful accounts of ¥940 million has been recorded against long-term loans receivable of ¥13,531 million, additional credit risk could materialize