Business-Related and Other Risks
Among the items that indicate the Company's business and financial situation, etc., the following may have a significant influence on investors' judgment.
The items regarding the future listed below are based on the judgment of the Corporate Group.
(1)Real-estate market conditions and land price fluctuation
The Company is committed to supply, sell, and profit from its house selling business, including detached houses and condominiums, on a stable basis. However, the house selling business is characteristically heavily affected by demand trends reflecting business cycles and interest rate changes as well as supply trends reflecting the volume and prices of houses supplied by the competition. Office space leasing is also susceptible to changes in the unit lease fee and the vacancy factor, both of which reflect such demand/supply trends. Furthermore, land prices may drop, affecting adversely the profitability of the house selling business and the value of assets on hand.
(2)Dependence on interest-bearing debts and trends of interest
The majority of the group's interest-bearing debts are long-term loans, almost all of which have fixed interest rates and are handled in such a way that there is little impact on them from interest rate fluctuations. However, in the event that interest rates were to rise in the future, although the impact on our operating results would be comparatively limited in the short-term, there is a possibility that it would increase in the medium- to long-term.
(3)Changes in regulations, taxation, etc.
The Group's businesses are subject to a restriction on laws and regulations pertaining to real estate sales, leasing of real estate, property management, construction, facility operations, etc. as well as of ordinances, taxation, etc. established by local governments. The Group provides these services in accordance with Building Lots and Buildings Transaction Business Act and related ordinances.
Moreover, in the future, if such regulations were amended/abolished or new legal restrictions were put in place, or the Company were subject to new legal restrictions due to an expansion in the scope of its business services, there is a possibility that there would be an impact on the development of the group's business.
(4)Information systems
In an effort to improve and better use its information systems, the Company has been taking various security measures, including IT infrastructure enhancement and the securing of data backup. In the event of facing a system risk, however, the business operation and processing would be seriously affected.
(5)Stock market
The Group has marketable stocks; however a substantial drop in the prices of such stocks following declines in the market could negatively impact the Group's operating results.
(6)Occurrence of natural disasters, man-made disasters, etc.
Any earthquake, rainstorm, flood, or other act of providence, as well as war, riot, terrorism, accident, fire, and other man-made disaster could negatively impact the Group's operating results and financial position.