Ichigo Inc.

Ichigo reported business profit up 25% year-to-date, EPS up 24%, and cash EPS up 19%. Stock earnings were up 9% and flow earnings up 31%. By segment, the hotel business was up 103%, Ichigo Owners up 87%, sustainable real estate down 19%, and clean energy roughly flat. Management said it expects record earnings this fiscal year, with growth in net income and EPS, and noted upside to EPS and ROE from buybacks. It also said it expanded its buyback to JPY 10 billion and will cancel about 7% of shares outstanding.

Scott Callon emphasized that rising construction costs are making traditional development less attractive and strengthening Ichigo’s core strategy of acquiring existing assets and improving them. He framed this as a structural opportunity in Japan that should benefit the company’s value-add, capital-light approach. His tone was confident and expansionary, repeatedly describing the environment as highly favorable for Ichigo’s model.

The company highlighted that 61% of borrowing costs are fixed through hedges, and said the increase in average interest rate to 1.43% from around 1% over two years is only a 43 bps move and not materially harmful. Management also said Ichigo is highly cash generative, which supports reinvestment, asset purchases, non-asset activity, and share repurchases. It noted the buyback was doubled to JPY 10 billion and that about 7% of outstanding shares will be canceled, which management characterized as a permanent EPS boost.

An analyst asked about the impact of weaker Chinese tourism around Chinese New Year, and Callon said Chinese demand fell immediately after the Japan-China tension emerged and has stayed there, with no further deterioration but also no improvement. He said the impact is not material because Chinese inbound is not a major part of the hotel business. On capital allocation, he said Ichigo prefers organic growth over M&A, but would consider partnerships with asset-rich Japanese companies if the fit is right; he also said the company’s credit access with major banks is strong, so any acquisition could be funded with cash or debt rather than cheap shares.