BEENOS 3328

BEENOS

Recent Updates

2022-05-11

1H FY09/22 flash update

2022-04-13

Projection of an increase in consolidated net assets

2022-03-17

The investee company, GoTo, gaining approval for IPO on the Indonesia Stock Exchange

Get in touch

Gotenyama Trust Tower 7F, 4-7-35 Kita-Shinagawa, Shinagawa-ku, Tokyo, 140-0001 JAPAN

http://beenos.com/

03-5739-3350

Summary

BEENOS Inc. (previously named netprice.com, Ltd.) operates cross-border e-commerce websites that target individual users. The company provides services such as website translation, exchange rate settlement, shipping, and customer service. Revenue comprises fees paid by users of these services. BEENOS has two business segments: E-Commerce (95% of revenue and 50% of operating profit in the past three years) and Incubation (5% and 50%).

Internet & Direct Marketing Retail

Key dates

2018-03-27

Coverage initiation

Full Report

2022-05-11

1H FY09/22 flash update

2022-05-11

Q1 FY09/22 flash update

2022-02-09

FY FY09/21 flash update

2021-11-05

Q3 FY09/21 flash update

2021-08-12

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Executive summary

Business overview

BEENOS Inc. (previously netprice.com, Ltd.) operates cross-border e-commerce websites that target individual users. The company provides services such as product information translation, exchange rate settlement, shipping, and customer service. The bulk of revenue comprises fees paid by users of these services. BEENOS has two business segments: E-Commerce (90% of revenue and 45% of operating profit in the past three years) and Incubation (10% and 55%).

E-Commerce breaks down into three sub-segments according to products handled and service structure (listed in order of profit contribution): 1) the Global Commerce business operated by tenso, inc. and Shop Airlines, Ltd., which conduct overseas forwarding and proxy purchasing; 2) the Value Cycle business operated by Defactostandard, Ltd. (delisted on January 9, 2020 after it became a wholly owned subsidiary), which operates the apparel reuse business, and JOYLAB, inc., which buys and sells alcoholic beverages; and 3) the Entertainment business operated by monosense, Ltd., which turns media personality- and subculture-based content into merchandise for sale online.

In Incubation, BEENOS invests in and develops e-commerce and other online platform related companies in Japan and overseas via two consolidated subsidiaries and creates new businesses. The Incubation business generates irregular revenue and profit, as the recovery timing of investment capital varies. BEENOS thinks the best earnings opportunities in e-commerce derive from having control over platforms and payment functions. Accordingly, rather than relatively mature e-commerce markets in such countries as China, the US, or Japan, in this segment BEENOS is stepping up investment in companies involved in online marketplaces and payments in emerging markets in Asia, where it thinks e-commerce is set to expand. While operating its own e-commerce business, BEENOS also invests in domestic and overseas businesses that have the potential to become market leaders. This way, it takes a hybrid management approach that also benefits from global growth. In creating new businesses, BEENOS focuses on initiatives that connect overseas platforms with Japanese companies and invests in travel and inbound tourism-related business areas.

Trends and outlook

For FY09/21, BEENOS reported full-year consolidated revenue of JPY25.0bn (-3.3% YoY), operating profit of JPY1.7bn (-50.1% YoY), recurring profit of JPY1.6bn (-49.9% YoY), and net income of JPY691mn attributable to owners of the parent (-63.5% YoY) on gross merchandise value (GMV) handled of JPY64.7bn (+28.2% YoY). The drop in revenue and earnings was attributed largely to smaller gains of roughly JPY400mn on the sale of operational investment securities, down from JPY3.5bn in FY09/20. At its mainstay e-commerce business, both revenue and operating profit finished the year ahead of the company's projections made at the time of its Q3 results announcement (August 12, 2021).

The company did not provide guidance for FY09/22 consolidated results at the time of its FY09/21 results announcement, explaining that the timing of sales of operational investment securities held under its Incubation business was still uncertain, as it depended on the stage of development of the companies in which it has invested, and that the timing and size of investments in new businesses was uncertain. The company did provide guidance with respect to its mainstay e-commerce segment, providing an upwardly revised forecast on May 10, 2022: Range of GMV handled of JPY73.0bn (+13.9% YoY) to JPY81.0bn (+26.4% YoY), e-commerce sales of JPY27.7bn (+13.2% YoY) to JPY30.6bn (+25.0% YoY), and segment operating profit of JPY3.3bn (+6.6% YoY) to JPY4.2bn (+36.2% YoY).

BEENOS has not disclosed a medium-term business plan with numerical targets, but aspires to “create a global platform to bridge Japan and the world.” It views cross-border challenges (different languages, prices, exchange rates, logistics) as business opportunities, and aims to establish a setting whereby Japanese companies can easily sell their products overseas and create markets to increase their distribution, leveraging information technology. When releasing its FY09/21 results, BEENOS announced GMV of JPY100bn, which it had set in 2016 as its medium- to long-term goal, as its target for FY09/23. To this end, the company’s policy is to provide value-added in its cross-border e-commerce by forming alliances with major platforms in Japan and overseas so that it can offer overseas consumers a one-stop shop framework to buy Japanese products.

Based on global population trends and potential e-commerce growth, the company has been focusing development in Asia (excluding China), but has expanded its strategic area of focus to include China, Russia, and other countries. Also, BEENOS plans to extend the Incubation Business, which had mainly focused on Southeast Asia, to startups based in Japan, primarily inbound tourism-related companies.

Strengths and weaknesses

Shared Research sees BEENOS’ strengths as comprehensive services to facilitate cross-border transactions; high profile of Brandear in the apparel reuse industry; and experience in planning and managing licenses of subculture icons. We consider BEENOS’ weaknesses as earnings volatility in the Incubation Business; services that are not necessary for experienced cross-border shoppers; and the necessity for basing business plan assumptions on marketplace trends. (See the Strengths and weaknesses section for details.)

Key financial data

		FY09/12	FY09/13	FY09/14	FY09/15	FY09/16	FY09/17	FY09/18	FY09/19	FY09/20	FY09/21	FY09/22
Income statement (JPYmn)		Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons. Est.
Revenue		9,950	10,309	12,600	16,936	19,227	20,711	22,768	25,277	25,873	25,008	TBD
	YoY	-7.8%	3.6%	22.2%	34.4%	13.5%	7.7%	9.9%	11.0%	2.4%	-3.3%
Gross profit		4,471	4,820	6,064	8,868	10,045	11,186	11,891	12,665	13,745	12,341
	YoY	-4.8%	7.8%	25.8%	46.2%	13.3%	11.4%	6.3%	6.5%	8.5%	-10.2%
	Gross profit margin	44.9%	46.8%	48.1%	52.4%	52.2%	54.0%	52.2%	50.1%	53.1%	49.3%
Operating profit		-311	-225	-359	1,185	1,200	1,507	1,534	1,708	3,376	1,685
	YoY	-	-	-	-	1.3%	25.6%	1.7%	11.4%	97.7%	-50.1%
	Operating profit margin	-3.1%	-2.2%	-2.8%	7.0%	6.2%	7.3%	6.7%	6.8%	13.0%	6.7%
Recurring profit		-130	134	-368	1,148	1,212	1,553	1,729	1,714	3,283	1,646
	YoY	-	-	-	-	5.5%	28.1%	11.3%	-0.9%	91.6%	-49.9%
	Recurring profit margin	-1.3%	1.3%	-2.9%	6.8%	6.3%	7.5%	7.6%	6.8%	12.7%	6.6%
Net income		-351	36	-451	898	941	1,011	923	1,077	1,892	691
	YoY	-	-	-	-	4.7%	7.5%	-8.7%	16.7%	75.6%	-63.5%
	Net margin	-	0.3%	-	5.3%	4.9%	4.9%	4.1%	4.3%	7.3%	2.8%
Per-share data (JPY)
Shares issued (year-end; '000)		113	113	12,267	12,267	12,267	12,333	12,333	12,333	13,336	13,336
EPS		-31.6	3.2	-37.8	73.8	77.1	82.4	75.6	89.6	151.3	53.8
EPS (fully diluted)		-	3.2	-	73.2	76.9	82.4	-	-	-	-
Dividend per share		-	-	-	13.0	13.0	18.0	13.0	18.0	20.0	25.0	-
Book value per share		337.6	360.4	365.2	448.2	548.8	638.1	673.5	713.2	882.1	876.6
Balance sheet (JPYmn)
	Cash and cash equivalents	3,061	2,553	2,458	3,277	6,307	6,542	5,920	5,176	9,976	7,771
Total current assets		4,558	4,294	6,692	8,746	11,787	13,014	13,313	16,407	19,858	17,997
Tangible fixed assets		135	103	72	220	212	254	459	418	342	378
Investments and other assets		1,029	1,606	660	927	917	1,228	1,411	1,531	2,286	2,887
Intangible assets		302	432	282	126	180	254	508	455	543	536
Total assets		6,024	6,436	7,706	10,019	13,095	14,750	15,691	18,811	23,030	21,797
	Accounts payable	402	366	302	398	395	440	379	385	348	234
	Short-term debt	757	864	1,025	920	935	1,148	1,643	3,550	1,900	1,900
Total current liabilities		1,927	2,116	3,079	4,184	4,831	5,255	5,692	8,159	9,684	8,466
	Long-term debt	150	90	10	0	75	83	19	0	1,722	1,738
Total fixed liabilities		240	207	69	156	239	254	208	481	2,136	1,935
Total liabilities		2,167	2,323	3,148	4,340	5,070	5,510	5,900	8,640	11,819	10,401
Total net assets		3,858	4,112	4,558	5,679	8,026	9,240	9,791	10,171	11,210	11,396
Total liabilities and net assets		6,024	6,436	7,706	10,019	13,095	14,750	15,691	18,811	23,030	21,797
Total interest-bearing debt		907	954	1,035	920	1,010	1,231	1,662	3,550	3,622	3,638
Cash flow statement (JPYmn)
Cash flows from operating activities		-303	-126	-828	1,058	1,531	421	-45	-1,769	5,955	-552
Cash flows from investing activities		-501	-410	92	-516	-173	-206	-397	-339	-578	-690
Cash flows from financing activities		-324	-22	836	221	1,873	-169	-123	1,434	-619	-905
Financial ratios
ROA (RP-based)		-	2.1%	-5.2%	13.0%	10.5%	11.2%	11.4%	9.9%	15.7%	7.3%
ROE		-	0.9%	-10.7%	18.2%	15.5%	13.9%	11.5%	12.9%	19.3%	6.2%
Equity ratio		62.4%	62.5%	57.5%	54.5%	51.1%	53.2%	52.4%	45.3%	48.3%	51.7%

Source: Shared Research based on company data
Note: Figures may differ from company materials owing to differences in rounding methods.
Note: The company initiated a 100-for-1 stock split on April 1, 2014. Book value per share, earnings or loss per share, and fully diluted earnings per share are calculated as though the split occurred at the beginning of FY09/10.

Performance by segment

Segment sales and profit				FY09/12	FY09/13	FY09/14	FY09/15	FY09/16	FY09/17	FY09/18	FY09/19	FY09/20	FY09/21
(JPYmn）				Act.	Act.	Act.	Act.	Act.	Act.	Act.	Act.	Act.	Act.
Revenue				9,950	10,309	12,600	16,936	19,227	20,711	22,768	25,277	25,873	25,008
	YoY			-7.8%	3.6%	22.2%	34.4%	13.5%	7.7%	9.9%	11.0%	2.4%	-3.3%
	E-Commerce			9,641	10,294	12,433	15,896	18,023	19,735	21,564	23,031	22,118	24,478
		YoY		-1.3%	6.8%	20.8%	27.9%	13.4%	9.5%	9.3%	6.8%	-4.0%	10.7%
		% of total		96.8%	99.8%	98.7%	93.9%	93.7%	95.3%	94.7%	91.1%	85.2%	97.0%
		Global Commerce		712	1,137	1,821	3,099	3,839	4,153	4,504	4,929	5,926	8,287
			YoY	-	59.8%	60.2%	70.2%	23.9%	8.2%	8.5%	9.4%	20.2%	39.9%
			% of total	7.1%	11.0%	14.5%	18.3%	20.0%	20.1%	19.8%	19.5%	22.8%	32.8%
		Value Cycle		3,405	4,361	6,387	8,622	9,628	10,514	12,424	13,165	12,181	12,027
			YoY	16.0%	28.1%	46.5%	35.0%	11.7%	9.2%	18.2%	6.0%	-7.5%	-1.3%
			% of total	34.2%	42.3%	50.7%	50.9%	50.1%	50.8%	54.6%	52.1%	46.9%	47.6%
		Entertainment		5,524	4,796	4,225	4,174	4,556	5,067	4,636	4,937	4,011	4,164
			YoY	-19.2%	-13.2%	-11.9%	-1.2%	9.2%	11.2%	-8.5%	6.5%	-18.8%	3.8%
			% of total	55.5%	46.5%	33.5%	24.6%	23.7%	24.5%	20.4%	19.5%	15.5%	16.5%
	Incubation			318	16	169	1,040	1,203	978	1,206	2,259	3,842	22
		YoY		-70.1%	-95.0%	957.2%	514.7%	15.6%	-18.7%	23.4%	87.3%	70.0%	-99.4%
		% of total		3.2%	0.2%	1.3%	6.1%	6.3%	4.7%	5.3%	8.9%	14.8%	0.1%
	Adjustments			-9	-1	-3	-1	0	-1	-1	-14	-87	-232
Operating profit				-311	-225	-359	1,185	1,200	1,507	1,534	1,708	3,376	1,685
	YoY			276.1%	-27.5%	-	-	1.3%	25.6%	1.7%	11.4%	97.7%	-50.9%
	E-Commerce			-168	184	96	771	743	1,169	1,246	842	1,698	3,048
		YoY		-	-	-47.9%	702.3%	-3.6%	57.4%	6.5%	-32.4%	101.8%	79.5%
		Operating profit margin		-1.7%	1.8%	0.8%	4.8%	4.1%	5.9%	5.8%	3.7%	7.7%	12.5%
		Global Commerce		122	96	18	425	260	673	685	726	1,686	2,812
			YoY	-	-20.8%	-81.2%	2,249.3%	-38.7%	158.6%	1.7%	6.1%	132.2%	66.8%
			Operating profit margin	-	-	-	13.7%	6.8%	16.2%	15.2%	14.7%	28.5%	33.9%
		Value Cycle		-20	131	149	178	323	439	440	-7	104	68
			YoY	-	-	13.7%	19.0%	81.6%	36.0%	0.2%	-	-	-34.1%
			Operating profit margin	-	-	2.3%	2.1%	3.4%	4.2%	3.5%	-	0.9%	0.6%
		Entertainment		-270	-44	-71	168	160	57	121	123	-91	168
			YoY	-	-	-	-	-4.8%	-64.3%	112.5%	1.3%	-	-
			Operating profit margin	-4.9%	-0.9%	-1.7%	4.0%	3.5%	1.1%	2.6%	2.5%	-	4.0%
	Incubation			-13	-159	-254	744	773	738	788	1,403	2,475	-494
		YoY		-	-	-	-	3.9%	-4.6%	6.8%	77.9%	76.5%	-
		Operating profit margin		-	-	-	71.5%	64.3%	75.5%	65.3%	62.1%	64.4%	-
	Adjustments			-130	-250	-201	-330	-316	-400	-501	-537	-797	-869

Source: Shared Research based on company data
Note: Figures may differ from company materials owing to differences in rounding methods.
Note: Starting in FY09/21, the Cross Border business has been renamed the Global Commerce business, and the Retailing and Licensing business renamed the Entertainment business.

Recent updates

Projection of an increase in consolidated net assets

2022-04-13

On April 12, 2022, BEENOS Inc. has announced its projection of an increase in consolidated net assets.

(Click here for link)

The company announced that it expects an increase in consolidated net assets following the listing of PT GoTo Gojak Tokopedia Tbk (the "GoTo Group"), in which it holds a stake, on the Indonesia Stock Exchange's Main Board market on April 11, 2022.

The company owns approximately 0.3% of the GoTo Group's shares, and the initial listing price for these shares was IDR400 per share. Previously, the company had determined the book value of these shares based on their acquisition price. However, the company will switch to reporting assets at their market value and accordingly expects its consolidated total assets to increase by approximately JPY12.3bn (converted at JPY0.0087 per IDR). After accounting for tax-related impact, the company projects that its consolidated net assets will increase by approximately JPY8.5bn, while deferred tax liabilities grow by about JPY3.7bn. According to the company, the listing of GoTo Group will have no impact on its consolidated income statement because it prepares its consolidated financial statements in accordance with Japanese GAAP.

The extent to which consolidated net assets will increase as a result of GoTo Group's listing may vary depending on future fluctuations in stock prices and foreign exchange rates. According to BEENOS, GoTo Group's shares will be locked up for eight months after the latter company's listing, and at this point in time, the impact of this listing will have no material impact on profit or loss generated by BEENOS in FY09/22.

The investee company, GoTo, gaining approval for IPO on the Indonesia Stock Exchange

2022-03-17

BEENOS Inc. issued a statement concerning approval for the group's investee, GoTo, to carry out an IPO on the Indonesia Stock Exchange (IDX).

BEENOS announced that PT GoTo Gojek Tokopedia Tbk (headquartered in Indonesia; hereinafter referred to as "GoTo"), an investee of the Incubation business, has received approval to carry out an IPO on the Main Board of the Indonesia Stock
Exchange (IDX). The offering price at IPO is expected to be between IDR316 per share and IDR346 per share and the estimated market cap between IDR376.6tn (USD26.2bn at IDR14,400/USD) and IDR413.7tn (USD28.8bn) as announced by GoTo on March 15, 2022. An initial offer (book building) is planned for between March 15–21, 2022, and a public
offering period for March 29–31, 2022, with listing on the Main Board of the IDX taking place thereafter.
.

BEENOS currently owns 3.5bn GoTo shares, which will be subject to an 8-month lock-up period after the GoTo IPO. Based on the initial offer, BEENOS’s market value of the GoTo shares it owns will be USD77–85mn as a result of the IPO.

Notification regarding impact of Russian-Ukrainian conflict on BEENOS group businesses

2022-03-09

On March 8, 2022, BEENOS Inc. issued a statement regarding the impact of the Russian-Ukrainian conflict on its group businesses.

(Click here for press release.)

Working mainly through its Global Commerce business under the E-Commerce segment, BEENOS group companies offer services to 118 countries and regions, including Russia and Ukraine. Given the current conflict between Russia and Ukraine, and rise in oil prices stemming from the turmoil, BEENOS issued a statement regarding the impact of this on group businesses and its outlook for sales and earnings.

The company had temporarily suspended its proxy purchasing service, Buyee and overseas forwarding service, Tenso.com, due to its overseas logistic partners' suspension of service to Russia and Ukraine. According to BEENOS, the financial impact will be minimal to the group's performance, as Russia and Ukraine together accounted for less than 1% of the gross merchandise value handled by the company. Although the company has been putting efforts to build presence in Russia and positioned it as a strategic market from last year, it has currently suspended all promotional measures in Russia. With regard to its Sekaimon global shopping business aimed at Japanese consumers, the company said cancellations of individual cargo flights out of Europe to Japan has caused delays in some inbound shipments. However, the company said shipping service out of Europe had not been suspended, and sees the impact on its performance thus far has been minimal.

With regard to the sharp rise in oil prices, the company said that this had led to large increases in shipping costs all around the world, and that it was already seeing this in the form of fuel surcharges and other add-on charges. As a result, the company said that its Buyee proxy purchasing service would be raising its international shipping rates effective March 14. The company believes it can continue to offer services with competitive price even after the rate hike.

Resolution regarding share repurchase

2022-02-14

BEENOS Inc. has announced a resolution regarding the repurchase of its shares.

(Click here for the Release)

The company held an extraordinary meeting of the Board of Directors, and on the same day announced its decision to repurchase its own shares in order to implement a flexible capital strategy in response to changes in the business environment. The details are as outlined below. As of December 31, 2021, the total number of outstanding shares (excluding treasury stock) was 12,712,915, and treasury shares numbered 623,080.


Shares to be repurchased	Common shares
Total number of shares that may be acquired	300,000 (2.4% of total outstanding shares (excluding treasury stock)
Total acquisition cost	JPY500mn
Acquisition period	February 10, 2022 - April 28, 2022

Trends and outlook

Quarterly trends and results

Cumulative		FY09/20				FY09/21				FY09/22
(JPYmn)		Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2
Revenue		8,129	14,286	19,502	25,873	6,276	12,424	18,341	25,008	6,816	13,994
	YoY	53.1%	22.2%	11.1%	2.4%	-22.8%	-13.0%	-6.0%	-3.3%	8.6%	12.6%
Gross profit		5,076	8,027	10,538	13,745	3,163	6,231	9,180	12,341	2,953	6,196
	YoY	101.7%	44.7%	27.1%	8.5%	-37.7%	-22.4%	-12.9%	-10.2%	-6.7%	-0.6%
	Gross profit margin	62.4%	56.2%	54.0%	53.1%	50.4%	50.2%	50.0%	49.3%	43.3%	44.3%
SG&A expenses		2,709	5,411	7,781	10,369	2,818	5,480	8,089	10,656	2,871	5,682
	YoY	-4.3%	-2.8%	-7.0%	-5.4%	4.0%	1.3%	4.0%	2.8%	1.9%	3.7%
	SG&A ratio	33.3%	37.9%	39.9%	40.1%	44.9%	44.1%	44.1%	42.6%	42.1%	40.6%
Operating profit		2,367	2,616	2,757	3,376	345	751	1,090	1,685	82	513
	YoY	-	-	-	97.7%	-85.4%	-71.3%	-60.5%	-50.1%	-76.3%	-31.7%
	Operating profit margin	29.1%	18.3%	14.1%	13.0%	5.5%	6.0%	5.9%	6.7%	1.2%	3.7%
Recurring profit		2,368	2,606	2,719	3,283	312	733	1,065	1,646	36	444
	YoY	-	-	-	91.6%	-86.8%	-71.9%	-60.8%	-49.9%	-88.5%	-39.4%
	Recurring profit margin	29.1%	18.2%	13.9%	12.7%	5.0%	5.9%	5.8%	6.6%	0.5%	3.2%
Net income		1,595	1,711	1,784	1,892	123	285	449	691	-18	266
	YoY	-	-	-	75.6%	-92.3%	-83.3%	-74.8%	-63.5%	-	-6.7%
	Net margin	19.6%	12.0%	9.1%	7.3%	2.0%	2.3%	2.4%	2.8%	-	1.9%
Quarterly		FY09/20				FY09/21				FY09/22
(JPYmn)		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2
Revenue		8,129	6,157	5,216	6,371	6,276	6,148	5,917	6,667	6,816	7,178
	YoY	53.1%	-3.5%	-11.2%	-17.4%	-22.8%	-0.1%	13.4%	4.7%	8.6%	16.8%
Gross profit		5,076	2,951	2,511	3,207	3,163	3,067	2,949	3,161	2,953	3,243
	YoY	101.7%	-2.7%	-8.3%	-26.7%	-37.7%	3.9%	17.4%	-1.4%	-6.7%	5.7%
	Gross profit margin	62.4%	47.9%	48.1%	50.3%	50.4%	49.9%	49.8%	47.4%	43.3%	45.2%
SG&A expenses		2,709	2,701	2,370	2,588	2,818	2,661	2,610	2,566	2,871	2,811
	YoY	-4.3%	-1.3%	-15.2%	-0.2%	4.0%	-1.5%	10.1%	-0.8%	1.9%	5.6%
	SG&A ratio	33.3%	43.9%	45.4%	40.6%	44.9%	43.3%	44.1%	38.5%	42.1%	39.2%
Operating profit		2,367	249	141	619	345	406	339	595	82	431
	YoY	-	-15.5%	-	-65.3%	-85.4%	62.7%	140.7%	-3.9%	-76.3%	6.2%
	Operating profit margin	29.1%	4.1%	2.7%	9.7%	5.5%	6.6%	5.7%	8.9%	1.2%	6.0%
Recurring profit		2,368	238	113	564	312	421	332	580	36	408
	YoY	-	-17.8%	-	-68.2%	-86.8%	76.8%	194.5%	2.8%	-88.5%	-3.0%
	Recurring profit margin	29.1%	3.9%	2.2%	8.9%	5.0%	6.8%	5.6%	8.7%	0.5%	5.7%
Net income		1,595	117	73	107	123	162	164	242	-18	284
	YoY	-	-11.2%	-	-91.1%	-92.3%	38.7%	125.2%	125.2%	-	75.2%
	Net margin	19.6%	1.9%	1.4%	1.7%	2.0%	2.6%	2.8%	3.6%	-	4.0%

Source: Shared Research based on company data
Note: Figures may differ from company materials owing to differences in rounding methods.
Note: Net income is net income attributable to owners of the parent.

Performance by segment (segment names changed in FY09/21)

By segment (cumulative)				FY09/20				FY09/21				FY09/21
(JPYmn）				Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2
Revenue				8,129	14,286	19,502	25,873	6,276	12,424	18,341	25,008	6,816	13,994
	YoY			53.1%	22.2%	11.1%	2.4%	-22.8%	-13.0%	-6.0%	-3.3%	8.6%	12.6%
	E-Commerce			5,244	11,360	16,244	22,118	6,263	12,339	18,175	24,478	6,911	13,900
		YoY		-1.0%	-1.8%	-6.7%	-4.0%	19.4%	8.6%	11.9%	10.7%	10.4%	12.6%
		% of total		64.3%	79.2%	83.0%	85.2%	99.6%	99.0%	98.8%	97.0%	98.6%	99.3%
		Global Commerce		1,231	2,803	4,216	5,926	1,769	3,838	6,070	8,287	2,331	4,765
			YoY	5.8%	16.6%	14.0%	20.2%	43.7%	36.9%	44.0%	39.9%	31.8%	24.1%
			% of total	15.1%	19.6%	21.5%	22.8%	28.1%	30.8%	33.0%	32.8%	33.3%	34.1%
		Value Cycle		3,149	6,338	9,061	12,181	2,840	5,729	8,767	12,027	3,653	7,361
			YoY	-6.1%	-5.2%	-8.6%	-7.5%	-9.8%	-9.6%	-3.2%	-1.3%	28.6%	28.5%
			% of total	38.6%	44.2%	46.3%	46.9%	45.2%	46.0%	47.6%	47.6%	52.1%	52.6%
		Entertainment		865	2,219	2,967	4,011	1,654	2,772	3,337	4,164	925	1,773
			YoY	10.7%	-10.5%	-21.7%	-18.8%	91.3%	24.9%	12.5%	3.8%	-44.1%	-36.0%
			% of total	10.6%	15.5%	15.2%	15.5%	26.3%	22.2%	18.1%	16.5%	13.2%	12.7%
	Incubation			2,914	2,975	3,325	3,842	22	124	228	762	98	322
		YoY		19,352.1%	2,278.3%	1,877.3%	70.0%	-99.2%	-95.8%	-93.1%	-80.2%	340.5%	159.7%
		% of total		35.7%	20.8%	17.0%	14.8%	0.4%	1.0%	1.2%	3.0%	1.4%	2.3%
Operating profit				2,367	2,616	2,757	3,376	345	751	1,090	1,685	82	513
	YoY			-	-	-	97.7%	-85.4%	-71.3%	-60.5%	-50.1%	-76.3%	-31.7%
	Operating profit margin			29.1%	18.3%	14.1%	13.0%	5.5%	6.0%	5.9%	6.7%	1.2%	3.7%
	E-Commerce			217	816	1,093	1,698	771	1,587	2,334	3,048	636	1,594
		YoY		-	222.6%	146.9%	101.8%	255.8%	94.6%	113.5%	79.5%	-17.6%	0.4%
		Operating profit margin		4.1%	7.2%	6.7%	7.7%	12.3%	12.9%	12.8%	12.5%	9.2%	11.5%
		Global Commerce		283	785	1,140	1,686	579	1,293	2,076	2,812	715	1,554
			YoY	201.0%	171.1%	111.3%	132.2%	104.9%	64.8%	82.1%	66.8%	23.4%	20.1%
			Operating profit margin	23.0%	28.0%	27.0%	28.5%	32.7%	33.7%	34.2%	33.9%	30.7%	32.6%
		Value Cycle		-28	59	17	104	52	131	93	68	-122	-45
			YoY	-	-	-	-	-	120.6%	450.0%	-34.1%	-	-
			Operating profit margin	-	0.9%	0.2%	0.9%	1.8%	2.3%	1.1%	0.6%	-	-
		Entertainment		-38	-29	-64	-91	140	163	165	168	43	84
			YoY	-	-	-	-	-	-	-	-	-69.4%	-
			Operating profit margin	-	-	-	-	8.5%	5.9%	4.9%	4.0%	4.6%	4.7%
	Incubation			2,446	2,249	2,276	2,475	-246	-421	-644	-494	-363	-653
		YoY		-	-	-	76.5%	-	-	-	-	-	-
		Operating profit margin		83.9%	75.6%	68.4%	64.4%	-	-	-	-	-	-

Source: Shared Research based on company data
Note: Figures may differ from company materials owing to differences in rounding methods.
Note: Figures for percentage of total calculated after inter-segment adjustments.

By segment (quarterly)				FY09/20				FY09/21				FY09/22
(JPYmn）				Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2
Revenue				8,129	6,157	5,216	6,371	6,276	6,148	5,917	6,667	6,816	7,178
	YoY			53.1%	-3.5%	-11.2%	-17.4%	-22.8%	-0.1%	13.4%	4.7%	8.6%	16.8%
	E-Commerce			5,244	6,116	4,884	5,874	6,263	6,077	5,835	6,303	6,911	6,989
		YoY		-1.0%	-2.5%	-16.2%	4.4%	19.4%	-0.6%	19.5%	7.3%	10.4%	15.0%
		% of total		64.3%	99.0%	93.3%	91.9%	99.6%	98.4%	98.2%	92.2%	98.6%	100.1%
		Global Commerce		1,231	1,572	1,413	1,710	1,769	2,069	2,232	2,218	2,331	2,434
			YoY	5.8%	26.7%	9.1%	38.9%	43.7%	31.6%	57.9%	29.7%	31.8%	17.6%
			% of total	15.1%	25.5%	27.0%	26.8%	28.1%	33.5%	37.6%	32.4%	33.3%	34.8%
		Value Cycle		3,149	3,189	2,723	3,120	2,840	2,889	3,039	3,259	3,653	3,708
			YoY	-6.1%	-4.4%	-15.6%	-4.0%	-9.8%	-9.4%	11.6%	4.5%	28.6%	28.4%
			% of total	38.6%	51.6%	52.0%	48.8%	45.2%	46.8%	51.2%	47.7%	52.1%	53.1%
		Entertainment		865	1,354	748	1,045	1,654	1,119	565	827	925	848
			YoY	10.7%	-20.2%	-43.0%	-8.9%	91.3%	-17.4%	-24.5%	-20.9%	-44.1%	-24.2%
			% of total	10.6%	21.9%	14.3%	16.3%	26.3%	18.1%	9.5%	12.1%	13.2%	12.1%
	Incubation			2,914	62	350	516	22	102	104	534	98	224
		YoY		19,352.1%	-44.2%	712.4%	-75.3%	-99.2%	65.4%	-70.3%	3.4%	340.5%	120.2%
		% of total		35.7%	1.0%	6.7%	8.1%	0.4%	1.6%	1.8%	7.8%	1.4%	3.2%
Operating profit				2,367	249	141	619	345	406	339	595	82	431
	YoY			-	-15.5%	-	-65.3%	-85.4%	62.7%	140.7%	-3.9%	-76.3%	6.2%
	Operating profit margin			29.1%	4.1%	2.7%	9.7%	5.5%	6.6%	5.7%	8.9%	1.2%	6.0%
	E-Commerce			217	599	277	605	771	816	747	714	636	958
		YoY		-	57.9%	46.1%	51.7%	255.8%	36.2%	169.3%	17.9%	-17.6%	17.4%
		Operating profit margin		4.1%	9.8%	5.7%	10.3%	12.3%	13.4%	12.8%	11.3%	9.2%	13.7%
		Global Commerce		283	502	355	546	579	714	783	736	715	839
			YoY	201.0%	156.7%	42.0%	193.0%	104.9%	42.2%	120.3%	34.8%	23.4%	17.5%
			Operating profit margin	23.0%	31.9%	25.1%	31.9%	32.7%	34.5%	35.1%	33.2%	30.7%	34.5%
		Value Cycle		-28	87	-42	87	52	79	-38	-25	-122	77
			YoY	-	-30.2%	-	-56.2%	-	-9.0%	-	-	-	-2.7%
			Operating profit margin	-	2.7%	-	2.8%	1.8%	2.7%	-	-	-	2.1%
		Entertainment		-38	10	-36	-27	140	23	2	3	43	41
			YoY	-	-83.5%	-	-	-	132.4%	-	-	-69.4%	81.5%
			Operating profit margin	-	0.7%	-	-	8.5%	2.0%	0.3%	0.4%	4.6%	4.8%
	Incubation			2,446	-197	27	200	-246	-176	-222	150	-363	-290
		YoY		-	-	-	-	-	-	-	-	-	-
		Operating profit margin		83.9%	-	7.6%	38.7%	-	-	-	28.0%	-	-

1H FY09/22 results (out May 10, 2022 )

Results for 1H FY09/22 (October 2021–March 2022)

Revenue: JPY14.0bn (+12.6% YoY)
Operating profit: JPY513mn (-31.7% YoY)
Recurring profit: JPY444mn (-39.4% YoY)
Net income attributable to owners of the parent: JPY266mn (-6.7% YoY)
Gross merchandise value: JPY37.1bn (+23.0% YoY).

Background: Gross merchandise value (GMV) of products sold in Japan and overseas rose 23.0% YoY. Sales increased in the mainstay E-Commerce business, but profits declined due to a loss in the Value Cycle business. In the Incubation business, there was only a small amount of sales of operational investment securities and the loss increased.

Results by segment and sub-segment are detailed below.

E-Commerce segment

Segment revenue: JPY13.9bn (+12.6% YoY)
Segment operating profit: JPY1.6bn (+0.4% YoY)

Global Commerce (formerly Cross Border)

Sub-segment revenue: JPY4.8bn (+24.1% YoY)
Sub-segment operating profit: JPY1.6bn (+20.1% YoY)
The company sought to increase its market share by introducing cheaper delivery methods and by marketing using regional characteristics for each country.

Overseas forwarding and proxy purchasing business (from Japan)

ECMS Express, a low-cost international delivery service previously introduced in Taiwan, was expanded to the US, South Korea, Hong Kong, and Singapore. The company also made an effort to improve user convenience by introducing a deferred payment service for Taiwan, where usage of credit cards for payment is low. In addition, since last year, the company had been implementing measures such as significantly lowering the price of its proprietary international delivery service to Russia, which is a key area of strategic focus. However, due to the situation in Russia and Ukraine, the company has suspended the implementation of its measures for Russia and has suspended deliveries to both countries. According to the company, the two countries account for less than 1% of its total distribution volume, so the impact on earnings is expected to be minimal.

On the other hand, the company increased its international shipping fees in response to higher logistics costs caused by soaring crude oil prices. The company believes that its pricing remains competitive even after the price hikes, but expects upward pressure on logistics costs to remain severe. In China, access to websites outside the China has been restricted since the beginning of the year. However, the company has been aware of this risk for some time and has been expanding its distribution to countries other than China to avoid dependence on distribution to China. Therefore, the company believes that the impact of access restrictions access on earnings will be limited.

Global shopping business (To Japan)

To ensure the consistency of profit, the company continued to improve the user interface and implement measures to drive repeat sales for existing users. The company also focused on acquiring new users through improved SEO and other means, and the cumulative number of members of its Sekaimon shopping site grew steadily to over 1 million.

Value Cycle

Sub-segment revenue: JPY7.4bn (+28.5% YoY)
Sub-segment operating loss: JPY45mn (JPY131mn profit in 1H FY09/21)
Strengthened overseas sales and improved convenience for purchasing users.

Brand apparel reuse business

Overseas revenue was strong, rising to 29.3% of total revenue (24.4% in Q1 FY9/22), underpinned by higher sales through collaboration with overseas platforms such as Tmall Global, a major Chinese cross-border e-commerce mall, JD Worldwide, Shopee in Malaysia, and Chrono24, a German marketplace for luxury watches. On the other hand, although demand in Japan was recovering due to the temporary impact of COVID-19, the gross profit margin remained lower than expected, due to an increase in the proportion of high-priced products with relatively low gross profit margins in the sales mix (figures not disclosed).

To handle purchases of luxury handbags and other high-ticket goods, the company increased its total of brick-and-mortar Brandear stores to 11 (including jointly operations with JOYLAB) while further increasing its average purchasing prices. In addition, because of the improvements in the company's purchasing services, such as expanding the operating hours of the online appraising service Brandear Bell to nighttime, the purchase price remained steady.

Liquor mediation business

In terms of sales, the liquor mediation business performed well due to the popularity of high-value items such as Japanese whiskey and wine, which have large sales volumes. On the purchasing side, the opening of new stores, jointly operated with Brandear, and the success of purchase promotions by individual store led to a steady increase in purchase volumes. Purchase prices grew steadily due to competitive purchase prices and other factors.

Entertainment (formerly Retailing and Licensing)

Sub-segment revenue: JPY1.8bn (-36.0% YoY)
Sub-segment operating profit: JPY84mn (-48.4% YoY)
The company is looking to establish a system that is not dependent on holding events.

Entertainment business

Due to COVID-19, large-scale events continued to be held with voluntary restrictions in place or with limited seating, resulting in a decline in product sales at event venues. On the other hand, the company focused on building online revenues through improvements to the user interface of the e-commerce site for artists' merchandise, as well as introducing new functions, and diversifying online revenue opportunities through the operation of fan sites.

Global product business

Sales grew steadily due to the popularity of initiatives featuring globally popular content, such as the Disney Collection Princess design package products for the SWATi fragrance body care brand and Pokémon hand cream under the company's Lavisia cosmetics brand.

Incubation segment

Segment revenue: JPY322mn (+159.7% YoY)
Segment operating loss: JPY653mn (JPY421mn loss in 1H FY09/21)
Limited sales of operational investment securities.

Incubation business

Under its Incubation business, the company primarily invests in online marketplace and online payment businesses in emerging markets and startup companies dealing with consumer goods and services for the inbound tourist market in Japan.

Droom, in which in the company is invested, operates one of India's largest online marketplaces for buying and selling new and used cars, has applied for a listing with the Securities and Exchange Board of India. In addition, various companies in which BEENOS has invested since the seed stage have achieved significant growth, including Nobroker in India which has become a "unicorn" company. In April 2022, GoTo Group, a leading Indonesian transportation and vehicle delivery service and e-commerce company, received approval for a listing in the Indonesia Stock Exchange. In Japan, CaSy Corporation (TSE GRT 9215), which operates housekeeping services, has gone public, and the corporate value of the investee company is increasing.
Although there were only a small amount of sales of operational investment securities in 1H FY09/22, the company will continue to sell at appropriate times to recover the cost of its investments.

New businesses

Groobee, a platform provided by subsidiary Beenos Entertainment that enables users open an entertainment e-commerce site in as little as five business days, is seeing increased takeup by businesses. The company started operation of the shopping site EDITH ONLINE, owned by Edith Co., Ltd. (unlisted), which manages events and merchandising for popular anime and games, and launched a partnership with Yomiuri TV Enterprise Co., Ltd. (unlisted), which operates a merchandising business and the puzzle-solving brand, Play Factory. The company is also expanding its support for Japanese companies looking to participate in major marketplaces in Southeast Asia. Initiatives include a dedicated special Saitama Prefecture store on Singapore's Shopee.

In these tie-ups between overseas platforms and Japanese companies, BEENOS is responsible for system development, translation of product pages, proxy purchasing, multilingual customer support, and overseas delivery.

The company has established a subsidiary, BeenoStorm Corporation, to promote its e-sports business in order to drive increased awareness of e-sports among the digital native generation, the main consumers of e-sports, and to create synergies with other entertainment-related businesses.

Company forecast for FY09/22

		FY09/20			FY09/21			FY09/22
(JPYmn)		1H Act.	2H Act.	FY Act.	1H Act.	2H Act.	FY Act.	1H Act.
Revenue		14,286	11,587	25,873	12,424	12,585	25,008	13,994
	YoY	22.2%	-14.7%	2.4%	-13.0%	8.6%	-3.3%	12.6%
Cost of revenue		6,259	5,868	12,128	6,193	6,475	12,668	7,797
Gross profit		8,027	5,719	13,745	6,231	6,110	12,341	6,196
	Gross profit margin	56.2%	49.4%	53.1%	50.2%	48.6%	49.3%	44.3%
SG&A expenses		5,411	4,959	10,369	5,480	5,176	10,656	5,682
	SG&A ratio	37.9%	42.8%	40.1%	44.1%	41.1%	42.6%	40.6%
Operating profit		2,616	760	3,376	751	934	1,685	513
	YoY	-	-56.0%	97.7%	-71.3%	22.9%	-50.1%	-31.7%
	Operating profit margin	18.3%	6.6%	13.0%	6.0%	7.4%	6.7%	3.7%
Recurring profit		2,606	677	3,283	733	913	1,646	444
	YoY	286,581.6%	-60.5%	91.6%	-71.9%	34.8%	-49.9%	-39.4%
	Recurring profit margin	18.2%	5.8%	12.7%	5.9%	7.3%	6.6%	3.2%
Net income		1,711	180	1,892	285	406	691	266
	YoY	-	-84.3%	75.6%	-83.3%	125.2%	-63.5%	-6.7%
	Net margin	12.0%	1.6%	7.3%	2.3%	3.2%	2.8%	1.9%

Source: Shared Research based on company data
Note: Figures may differ from company materials owing to differences in rounding methods.

The company did not provide guidance for FY09/22 consolidated results at the time of its FY09/21 results announcement, explaining that the timing of sales of operational investment securities held under its Incubation business was still uncertain, as it depended on the stage of development of the companies in which it has invested, and that the timing and size of investments in new businesses was uncertain. The company has announced a range forecast for revenue and operating profit, and revised these upward on May 10, 2022. For the mainstay e-commerce segment, it forecasts GMV of JPY73.0bn (+13.9% YoY) to JPY81.0bn (+26.4% YoY), e-commerce sales of JPY27.7bn (+13.2% YoY) to JPY30.6bn (+25.0% YoY), and segment operating profit of JPY3.3bn (+6.6% YoY) to JPY4.2bn (+36.2% YoY).

The forecast by segment in the E-Commerce Business is as follows.

BEENOS focuses on GMV (total transaction amount for products handled by the group’s various companies) as a key performance indicator, so the initial outlook by segment was previously provided in GMV estimates instead of revenue estimates, but the revised outlook also includes revenue and operating profit estimates from FY09/21.

E-Commerce segment: company estimates for FY09/22

(JPYmn)			FY09/20	FY09/21		FY09/22
			Act.	Act.	YoY	Initial Est.	YoY	Revision (May 10, 2022)	YoY
Gross merchandise value	E-Commerce		50,100	64,081	27.9%	68,900~77,500	8~21%	73,000~81,000	14~26%
		Global Commerce (former Cross Border)	29,700	43,925	47.9%	48,000~53,000	9~21%	50,000~55,000	14~25%
		Value Cycle (former Value Cycle)	12,181	12,026	-1.3%	14,500~16,000	21~33%	15,000~16,000	25~33%
		Entertainment (former Retailing and Licensing)	8,200	8,130	-0.9%	6,400~8,500	-21~5%	8,000~10,000	-2~23%
Revenue	E-Commerce		22,118	24,478	10.7%	26,700~30,400	9~24%	27,700~30,600	13~25%
		Global Commerce (former Cross Border)	5,926	8,287	39.9%	8,900~9,900	7~19%	9,100~10,100	10~22%
		Value Cycle (former Value Cycle)	12,181	12,027	-1.3%	14,500~16,000	21~33%	15,000~16,000	25~33%
		Entertainment (former Retailing and Licensing)	4,011	4,164	3.8%	3,300~4,500	-21~8%	3,600~4,500	-14~8%
Operating profit	E-Commerce		1,698	3,048	79.5%	3,220~4,150	6~36%	3,250~4,150	7~36%
		Global Commerce (former Cross Border)	1,686	2,812	66.8%	2,900~3,600	3~28%	3,000~3,600	7~28%
		Value Cycle (former Value Cycle)	104	68	-34.1%	250~350	266~412%	150~350	120~412%
		Entertainment (former Retailing and Licensing)	-91	168	-	70~200	58~19%	100~200	-40~19%

Source: Shared Research based on company data
Note: Since Value Cycle involves only the sale of goods, GMV and revenue are the same amount.

E-Commerce segment

Segment GMV: JPY73.0bn (+13.9% YoY) to JPY81.0bn (+26.4% YoY)
Segment revenue: JPY27.7bn (+13.2% YoY) to JPY30.6bn (+25.0% YoY)
Segment operating profit: JPY3.3bn (+6.6% YoY) to JPY4.2bn (+36.2% YoY)

Global Commerce business (formerly the Cross Border business)

Sub-segment GMV: JPY50.0bn (+13.8% YoY) to JPY55.0bn(+25.2% YoY)
Sub-segment revenue: JPY9.1bn (+9.8% YoY) to JPY10.1bn (+21.9% YoY)
Sub-segment operating profit: JPY3.0bn (+6.7% YoY) to JPY3.6bn (+28.0% YoY)

Reasons for upward revision: Although international shipping costs have increased due to the sharp rise in crude oil prices and other factors, the company has been able to consolidate its profits through introducing new shipping methods and passing on prices to users as appropriate. In addition, the weak yen is expected to increase the average unit price of purchases by overseas users. The company believes that pressure to raise international shipping costs will continue to be strong, and that the lower end of the plan range is conservative.

Value Cycle business

Sub-segment GMV: JPY15.0bn (+24.7% YoY) to JPY16.0bn (+33.0% YoY)
Sub-segment revenue: JPY15.0bn (+24.7% YoY) to JPY16.0bn (+33.0% YoY)
Sub-segment operating profit: JPY150mn (+119.7% YoY) to JPY350mn (+412.7% YoY)

Reason for upward revision of revenue: The key reasons were a recovery in demand due to a loosening of consumer self-restraint due to COVID-19, and strong sales overseas.

Reason for downward revision of profit: The GPM has been lower than the company's expectations.

Entertainment business (formerly the Retailing and Licensing business)

Sub-segment GMV: JPY8.0bn (-1.6% YoY) to JPY10.0bn (+23.0% YoY)
Sub-segment revenue: JPY3.6bn (-13.5% YoY) to JPY4.5bn (+8.1% YoY)
Sub-segment operating profit: JPY100mn (-40.4% YoY) to JPY200mn (+19.1% YoY)

Reasons for upward revision: Restrictions on the number of participants in events and other restrictions have been eased or removed, and merchandise sales at event venues is expected to increase, in addition to strong merchandise sales via the e-commerce site.

Incubation segment

Incubation business

With regard to the type of investments made by the company under its Incubation business, in the past BEENOS focused mainly on growth markets that it knew well and thus directed most of its investments toward online marketplace operators and online payment companies operating in emerging market countries. Recognizing that it has largely covered these markets and regions, it has recently turned the focus of its investments toward domestic startup companies in businesses catering to overseas tourists in Japan, the domestic travel market, and the domestic entertainment market. While these markets have all shrunk in the wake of the pandemic, the company plans to continue investing in these areas with its eye on growth prospects over the medium to long term.

With regard to its exit strategy, the company noted that among its investments there are companies that are likely to be listed via an IPO in the near future. Having said that, the exact timing of the sales of its holdings is hard to project, as is the amount it might be expect to realize from the sale. Nevertheless, the company said it intends to take full advantage of opportunities to exit existing investments when the timing is right.

In November 2021, Droom Technology Limited (India), a 99.99% subsidiary of BEENOS investee Droom Pte. Ltd. (Singapore), had its listing application accepted by the Securities and Exchange Board of India and expects to start screening in preparation for listing on India's National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). In the same month, BEENOS investee PT Aplikasi Karya Anak Bangsa (Indonesia; hereinafter "GoTo Group") announced a pre-IPO round of funding. In addition, NoBroker Technologies Solutions Pvt. Ltd. (India) raised funds and announced that it has become the first real estate tech company in India to achieve unicorn* status.

A unicorn is a privately held startup valued at USD1bn or more.

New businesses

With respect to new businesses, the company said it will continue focusing its efforts on creating new businesses in the ever-evolving online marketplace and, toward that end, will continue systems development work and looking for new business partners and investment opportunities in this arena. The company noted that it was currently finding opportunities to provide support for problem-solving in the entertainment field and was also expanding support services for companies in the travel business (particularly those providing services for foreign tourists visiting Japan), establishing a special platform to provide data and AI applications. Although the pandemic had forced it to make changes to its initial plans, the company said it will continue monitoring the financial health of the companies in which it has invested and make more investments in this area as appropriate.

Differences between historical company forecasts and results

Results vs. Initial Est.		FY09/12	FY09/13	FY09/14	FY09/15	FY09/16	FY09/17	FY09/18	FY09/19	FY09/20	FY09/21
(JPYmn)		Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.
	Revenue (Initial Est.)	12,000	-	-	17,000	19,600	20,000	-	-	26,000	-
	Revenue (Results)	9,950	10,309	12,600	16,936	19,227	20,711	22,768	25,277	25,873	25,008
Results vs. Initial Est.		-17.1%	-	-	-0.4%	-1.9%	3.6%	-	-	-0.5%	-
	Operating profit (Initial Est.)	250	-	-	600	1,000	1,400	-	-	3,000	-
	Operating profit (Results)	-311	-225	-359	1,185	1,200	1,507	1,534	1,708	3,376	1,658
Results vs. Initial Est.		-	-	-	97.5%	20.0%	7.7%	-	-	12.5%	-
	Recurring profit (Initial Est.)	150	-	-	570	950	1,400	-	-	3,000	-
	Recurring profit (Results)	-130	134	-368	1,148	1,212	1,553	1,729	1,714	3,283	1,646
Results vs. Initial Est.		-	-	-	101.5%	27.5%	10.9%	-	-	9.4%	-
	Net income (Initial Est.)	50	-	-	330	650	750	-	-	1,800	-
	Net income (Results)	-351	36	-451	898	941	1,011	923	1,077	1,892	691
Results vs. Initial Est.		-	-	-	172.2%	44.7%	34.9%	-	-	5.1%	-

Source: Shared Research based on company data
Note: Figures may differ from company materials owing to differences in rounding methods.
Note: There were no initial forecasts for FY09/13, FY09/14, and FY09/19.

Looking at the difference between the company's forecasts and actual results before and after the business restructuring implemented in 2014, the Gathering business was in the process of shrinking from FY09/10 to FY09/12, and both revenue and profits fell short of the initial plan. In contrast, since FY09/15, when the restructuring was completed, the new business portfolio has been focused on cross-border (currently known as Global Commerce) and value cycle businesses, and sales have been almost in line with the plan, with profits slightly above.

The company did not provide guidance for FY09/21, explaining that the timing of sales of operational investment securities held under its Incubation business was still uncertain, as it depended on the stage of development of the companies in which it has invested, and that the timing and size of investments in new businesses was uncertain. The drop in revenue and earnings was attributed largely to narrower gains on the sale of operational investment securities, which were roughly JPY400mn, down from JPY3.5bn in FY09/20. GMV increased 28.2% YoY. Both revenue and operating profit rose in its mainstay E-Commerce business.

Medium-term outlook

BEENOS has not released a medium-term plan, but in December 2016 announced the medium-term target of GMV of JPY100bn in three to five years (no clear time horizon). At the time of its FY09/21 results announcement, the company said it now hopes to achieve this target in FY09/23. It aims to achieve sustained growth driven by further expansion in the E-Commerce Business and by the creation of new businesses.

BEENOS aspires to “create a global platform to bridge Japan and the world.” It views cross-border challenges (different languages, prices, exchange rates, logistics) as business opportunities, and aims to establish a setting whereby Japanese companies can easily sell their products overseas and create markets that increase their distribution by leveraging IT.

To attain the medium-term target, BEENOS seeks to add more value to existing services and differentiate itself from rivals. In the Global Commerce sub-segment of the E-Commerce Business, the company has been building a service that pre-confirms international shipping charges and customs duties at the time of purchase, and in FY09/18 it introduced a system for providing pre-confirmation of shipping charges. In addition, the company began uniformly charging JPY300 per payment in November 2019 (the previous system charged commission of 5% of the total price of goods). With this change, the average unit price spent on goods increased more than 20%. The increased unit price appears to be making a greater contribution to the growth of GMV than the number of purchases. The company also expanded international delivery methods specific to each region in addition to the international express mail service (EMS) with Japan Post, its partner in most countries and regions. As well, the company is forming alliances with major domestic and overseas online shopping platforms to enhance and differentiate its services.

In the Value Cycle business, the company is building a cross-border distribution system in two categories (brand-name apparel and alcoholic beverages) with the goal of raising the ratio of overseas revenue to total revenue to more than 50%. In January 2020, it made Defactostandard, the core company of the Value Cycle business, a wholly owned subsidiary to progress business reforms in cost reduction and purchasing methods amid a shift to high-end products.

In the Entertainment business, the company is building an e-commerce sales platform that specializes in the needs of the industry. BEENOS sees growth potential in Japanese content such as anime, which is popular in Japan and overseas and thus offers possibilities for global merchandise and services.

In the Incubation business, companies that BEENOS has invested in have grown to the stage of forming potential business alliances with BEENOS or becoming collaboration partners. In creating new businesses, the company plans to invest with a medium-term perspective and launch companies quickly, fostering new earnings pillars.

Business

Business model

Online cross-border transactions

BEENOS facilitates online cross-border transactions by offering support for translating websites, settling exchange rates, arranging shipping, and providing customer service. BEENOS has two segments: E-Commerce (97.0% of revenue and OPM of 12.5% in FY09/21) and Incubation (3.0% of revenue and operating loss in FY09/21).

E-Commerce comprises the three following businesses according to items handled and service structure:

Global Commerce: Overseas forwarding and proxy purchasing (main operators: tenso, inc. and Shop Airlines, Ltd.)
Value Cycle: Purchasing and selling of brand-name items, apparel, and alcohol (main operators: Defactostandard, Ltd. and JOYLAB, inc.)
Entertainment: Turning content based on media personalities and popular Japanese anime and game characters into merchandise and selling it online (main operator: monosense, Ltd.)

These services all provide users in Japan and overseas with marketplaces for buying products online. However, they differ by structure and items handled.

BEENOS’ core consolidated subsidiaries operate these businesses, as outlined below.

Business category		Company name	Business description	% for FY09/21
Business category		Company name	Business description	Revenue	Operating profit
E-Commerce	Global Commerce	tenso, inc.	Overseas forwarding and proxy purchasing	32.8%	111.3%
		Tenso UK LTD	Purchasing support
		tenso Hong Kong Ltd.	Purchasing support
		Shop Airlines, Ltd.	Global shopping business
		ShopAirlines America, Inc.
		ShopAirlines Europe B.V.
	Value Cycle	Defactostandard, Ltd.	Purchasing and selling of brand-name items	47.6%	-
	Value Cycle	JOYLAB Inc.	liquor mediation business	47.6%	-
	Entertainment	monosense, Ltd.	Producing and liscensing of merchandise business	16.5%	-
Incubation		BeeCruise Inc.	New business	3.0%	-19.6%
		FASBEE Inc.
		BEENOS Travel Inc.
		BEENOS Entertainment Inc.
		BEENOS Marketing Asia
		BEENOS HR Link Inc.
		BEENOS Asia Pte. Ltd.	Incubation business
		BEENOS Partners, Inc.	Incubation business

Source: Shared Research based on company data

Relationship between gross merchandise value (GMV) and revenue in e-commerce

Even among e-commerce services that use a marketplace business model, GMV and revenue may differ. GMV is the total transaction amount for all products, the overall value of products flowing through the company’s businesses. BEENOS operates e-commerce sites, but not all these sites sell the company’s own products. Some sites simply support e-commerce transactions. In these cases, GMV corresponds to the price of products customers buy plus shipping fees but is not related to BEENOS’ revenue. Still, general trends in GMV can suggest the level of growth in products BEENOS’ sites handle.

In the Value Cycle business, BEENOS buys used goods, and if the items are sold at auction, they generate revenue for BEENOS. Thus, GMV and revenue are the same amount.

GMV and revenue (consolidated)

(JPYmn)	FY09/17		FY09/18		FY09/19		FY09/20		FY09/21
(JPYmn)	Gross merchandise value	Revenue	Gross merchandise value	Revenue	Gross merchandise value	Revenue	Gross merchandise value	Revenue	Gross merchandise value	Revenue
Global Commerce (former Cross Border)	21,324	4,153	23,132	4,504	24,651	4,929	29,702	5,926	43,923	8,287
Value Cycle (former Value Cycle)	10,514	10,514	12,424	12,424	13,165	13,165	12,180	12,181	12,026	12,027
Entertainment (former Retailing and Licensing)	10,537	5,067	10,798	4,636	12,538	4,937	8,226	4,011	8,128	4,164
Incubation	0	977	23,147	1,206	17	2,259	329	3,842	602	762
Total	42,375	20,711	46,370	22,768	50,390	25,277	50,439	25,873	64,679	25,008

Source: Shared Research based on company data
Note: Since Value Cycle involves only the sale of goods, GMV and revenue are the same amount.

E-Commerce (Global Commerce)

Two core subsidiaries operate in the Global Commerce business: tenso and Shop Airlines. tenso helps overseas customers make purchases on Japanese e-commerce sites; Shop Airlines targets Japanese customers who want to buy products on overseas online auction sites (eBay). With tenso, Japanese products flow overseas (the “From Japan” business); with Shop Airlines, the direction is reversed (the “To Japan” business).

tenso

tenso serves as a platform connecting overseas customers with Japanese sites not set up to handle multiple languages, overseas shipping, or other support for overseas customers; the customers would otherwise be unable to purchase items from those Japanese sites. tenso offers overseas customers two services: tenso.com (overseas forwarding business) and Buyee (proxy purchasing business).

tenso.com: Overseas package forwarding

Overseas customers that become tenso.com members are provided with a provisional Japanese postal address, allowing delivery by Japanese e-commerce sites that do not ship overseas (and thereby providing Japanese e-commerce operators with an additional sales route without their needing to alter their operations or extra expenses). Overseas customers conduct purchases directly on Japanese e-commerce sites, so it is assumed they can comprehend Japanese, perhaps via translation tools.

Service structure is as follows:

The overseas customer registers as a tenso.com member if the Japanese e-commerce site they wish to use does not ship overseas.
tenso.com provides the overseas customer with a Japanese shipping address. The customer purchases items on the Japanese site, specifying the Japanese address for shipping. As such, overseas customers can purchase items even on Japanese e-commerce sites which do not ship overseas.
Overseas users directly purchase items on Japanese e-commerce sites and specify the Japanese address provided by tenso.com as shipping address.
Items are shipped to the address, which is the company’s warehouse in Japan.
tenso.com ships purchased items from its warehouse to the member’s registered postal address overseas.

The company also offers a service where multiple purchases from various Japanese e-commerce sites can be bundled for delivery overseas in accordance with customer instructions.

How tenso.com operates

Source: Shared Research based on company data

Buyee: Proxy purchasing

Buyee differs from tenso.com in that customers do not make purchases directly on Japanese e-commerce sites. Instead, Buyee receives information on products handled by partner Japanese e-commerce sites, and translates that information into English and Chinese. Customers then make purchases on the Buyee site. Service structure of Buyee is as follows:

Buyee forms alliances with Japanese e-commerce sites and receives product information listed on those websites (such as product images, prices, and quantities in stock). This information is translated into English and Chinese and placed on Buyee’s site, which handles sales and payment processing.
An overseas customer places an order on Buyee’s site.
Buyee places that order on the affiliated Japanese e-commerce site (proxy purchasing).
Furthermore, using the “Add to Buyee” service, a customer can add to the Buyee shopping cart any product on a Japanese e-commerce site allied with Buyee.
Buyee receives the purchased item at its designated address in Japan (address of a Buyee warehouse).
The item purchased on Buyee’s site is shipped to the overseas customer.

From July 2020, the company also made it easier for online sellers in Japan to make their products available overseas through the launch of its Buyee Connect service, simply by installing a few lines of tags (tracking codes) on the seller’s website. Overseas customers can shop using a multilingual shopping cart and make payments on Buyee using typical methods used internationally such as PayPal, Alipay, and UnionPay credit cards.

How Buyee operates

Source: Shared Research based on company data

Overseas customers who don’t understand Japanese can use Buyee’s site to purchase items from Japan since the product information is translated into other languages. Affiliated e-commerce sites do not sell directly to overseas customers and do not need to modify their sites; Buyee provides them with a sales route to reach overseas customers who do not understand Japanese.

Buyee’s portal site

Source: Buyee website

These two services tenso provides, tenso.com and Buyee, differ as follows:

Buyee was launched after tenso.com.
tenso.com targets overseas customers who want to make purchases on Japanese sites; Buyee is available in 10 languages, including English, Chinese, Indonesian, Thai, Korean, Spanish, German, and Russian, so customers need not understand Japanese.
With tenso.com, members make payments on the Japanese e-commerce sites; with Buyee, customers make payments directly to Buyee.
The fees the company receives differ.

The Buyee service covers a broader range of customers. BEENOS says Buyee offers more extensive services than tenso.com and, accordingly, has higher earning potential.

Differences between tenso and Buyee

	tenso.com	Buyee
Service launched	October 2008	December 2012
Target customers	People who can make purchases in Japanese (on sites that do not ship overseas)	People who do not read or write Japanese
Target customers		People who want to shop on sites that do not accept credit cards issued overseas
Flow of purchases	Overseas customers register as members on tenso.com, and then purchase products at online stores	Overseas customers purchase products on Buyee
Fees	Overseas customers pay fees based on product weight; no fees from individual stores	Overseas customer pay JPY300 per order; no fees from individual stores
Payment method	Depends on e-commerce sites' payment methods	Credit card, PayPal, or Ailpay
Translations	Provided by individual stores, if at all	Provided in ten languages as part of purchasing process; machine translation of product details
Response to inquiries	Support related to overseas shipping	Support related to purchasing and overseas shipping
Fraud-prevention measures	Measures based on own expertise	Uses a proxy purchasing model, so no risk for individual stores
System-related aliances	Unneessary	Product data APIs, Add to Buyee affiliation

Source: Shared Research based on company data

In the category of global commerce transactions, BEENOS launched tenso.com to forward overseas packages early on. As the number of customers engaging in online cross-border transactions has grown, Buyee’s site is being rated highly for its ease of use in terms of both its multilingual presentation and its procedures for purchasing. Accordingly, Buyee’s share of the Global Commerce business in terms of GMV is growing. Comparing tenso.com and Buyee in terms of GMV over the past five years, in FY09/15 tenso.com accounted for 60% and Buyee 40%, whereas in FY09/21 the ratio of tenso.com was down to roughly 14% (Buyee 86%).

Annual gross merchandise value (GMV)

Source: Shared Research based on company data

The graph below shows the GMV of products from Japan (tenso.com and Buyee) within the Global Commerce business. The business environment worsened in 2016 owing to further yen appreciation against the US dollar. From around October 2016 to 2017, the yen depreciated against the dollar, until eventually entering a period of stability. GMV in FY09/17 was down YoY, but has been recovering from FY09/18 onward.

Buyee is more extensive (includes translations and payments) than tenso.com and allows purchases by customers who do not understand Japanese. For these reasons, the Buyee business is more profitable. As Buyee accounts for more of the Global Commerce business’s GMV, the overall take rate* has risen. Shared Research believes these trends will continue. Nevertheless, BEENOS plans to maintain both businesses for the time being.

*Take rate: This rate (also called “monetization rate”) expresses the connection between GMV (trading volume) and revenue, or how well products handled are converted into revenue. (Revenue = GMV x take rate)

“From Japan” business trends (tenso.com plus Buyee)

Source: Shared Research based on company data

BEENOS states that tenso.com and Buyee offer a variety of Japanese items to overseas users and that the number of affiliated Japanese e-commerce sites is increasing, so tenso.com and Buyee are providing increasingly diverse items.

With the rising take rate, BEENOS believes increasing the number of affiliated sites is crucial toward boosting GMV. Buyee accounts for a greater share of the “From Japan” business, so the company thinks this business has room to grow.

Sites affiliated with tenso.com and Buyee

Source: Shared Research based on company data

Shop Airlines, Ltd.

Another core business in Cross Border is Shop Airlines. This company has subsidiaries in the US, and Europe, which mainly handle products and provide shipping service in those areas:

Shop Airlines America, Inc. (US)
Shop Airlines Europe B.V. (Europe)

Shop Airlines operates Sekaimon, a global shopping site, and has an alliance with eBay, the world’s leading online marketplace. Shop Airlines’ service enables Japanese customers to view most product pages listed on eBay in Japanese. Through this service, Japanese customers can place bids and conduct procedures in the event of successful bids—all in Japanese—and make payments in yen.

This arrangement allows customers living in Japan to buy items overseas (on eBay). However, not all items listed on eBay can be purchased via Sekaimon: some items are prohibited by Japanese law. For that reason, the company vets products in advance and does not display information for prohibited products. Because Sekaimon enables Japanese customers to buy items from overseas, BEENOS refers to this as its “To Japan” business. Service structure of Sekaimon is as follows:

Through an alliance with Shop Airlines, eBay (US, UK, Germany, Austria, and Canada) offers data on listed items.
The Sekaimon site provides information on listed items from eBay’s regional sites, translated into Japanese. Items are omitted if they cannot be sold in Japan for legal reasons or are considered unlikely to clear customs. Site information advises customers to this effect.
Japanese customers register as members (providing their shipping address in Japan) and place bids in Japanese on the Sekaimon site.
If a bid is successful, the Japanese customer makes payment via Sekaimon.
Overseas eBay sites ship items to local Sekaimon warehouses (in North America and Europe).

Items are shipped from these overseas warehouses to Japanese customers’ registered addresses.

How Sekaimon operates

Source: Shared Research based on company data

Sekaimon offers features not available on eBay sites. These include Japanese-language information on placing bids, enabling yen-based payments, customer support in Japanese, inspections, and bundled shipping. For these services, customers are charged a Sekaimon usage fee on their purchases.

Regarding bundled shipping, when customers bid successfully on multiple items, shipping dates may differ. A customer would typically need to pay for shipping for each individual item. Instead, items can be grouped for shipment at Sekaimon’s overseas warehouses and a customer can bundle together multiple items for shipping to Japan. Sekaimon members thereby save on international shipping rates. Grouping is not available, however, for items purchased on sites and sent to warehouses in different regions such as the US and Europe.

To date, most items purchased via Sekaimon have been those with substantial price differences in Japan versus overseas: musical instruments, sporting goods, toys and apparel that are higher-priced in Japan due to rarity, and vintage watches that can only be purchased overseas. Shop Airlines notes that most members using Sekaimon are male.

Sekaimon’s top page

Source: Sekaimon website

The graph below shows GMV of Sekaimon, which is within the Global Commerce business.

Taking into account the impact of forex translation, the “To Japan” business is stable but is not growing as fast as the “From Japan” business.

Performance in the “To Japan” (Sekaimon) business

Source: Shared Research based on company data

Member count

The member count in the Global Commerce business (total members of principal subsidiaries tenso and Shop Airlines) is trending upward. Growth in member count at tenso has been high since about 2014. In 2012, tenso added the Buyee service. Because Buyee can also be used by customers who do not know Japanese, BEENOS believes Buyee will be the key to future growth in the Global Commerce business.

Member count in Global Commerce business

Source: Shared Research based on company data

Alliance with overseas sales channel Shopee

In October 2019, the company initiated a strategic alliance with Shopee (operated by Sea Limited [NYSE: SE; head office located in Singapore]), which is one of the largest e-commerce platforms in Taiwan and Southeast Asia. Shopee has a presence in Taiwan, Thailand, the Philippines, Vietnam, Malaysia, Singapore, Indonesia, and Brazil. According to Shopee's Japanese subsidiary, Shopee Japan, Shopee received 2.8bn orders (+132.8% YoY) in 2020 and GMV was USD35.4bn (+101.1% YoY), with cross-border e-commerce sales from Japan growing significantly. Shared Research believes that by partnering with Shopee and supporting domestic businesses develop their overseas sales channel, BEENOS will be able to expand GMV and further energize Buyee.

Details of the alliance are as follows:

By establishing linkage with the BEENOS’ database, companies with e-commerce websites in Japan will also be able to link to the Shopee system.
The BEENOS Group will provide translation and modification of listings on product pages to comply with the rules set by Shopee. The group also handles inquiries from local customers.
Since BEENOS will coordinate product data and provide proxy services related to product pages, customer support, and international shipping, Japanese companies will be able to conduct sales activities targeting customers in Taiwan and Southeast Asia without having to add any special operations on their part.

Shopee

Source: Sea Limited website

The company’s first related project was to provide support to establish Evangelion Store, an official Evangelion* e-commerce site, on the Shopee platform. BEENOS’ consolidated subsidiary BeeCruise has been in charge of providing support. In January 2020, the company began offering support in Singapore and Malaysia, in addition to Taiwan.
As the second related project, in August 2020 the company began providing support to Mercari, Inc. for opening a store on the Shopee platform. Initially targeting Taiwan, it will expand the number of target countries and regions in stages.

* Neon Genesis Evangelion is a Sci-Fi anime created by Gainax Co., Ltd. (a Japanese anime production company). It is set in 2015, fifteen years after a global cataclysm known as the Second Impact, and depicts a war between young men and women (14-year olds) piloting giant bio-machines called Evangelions and mysterious enemies called Angels that attack the futuristic city of Tokyo-3. TV Tokyo broadcast 26 episodes between October 4, 1995, and March 27, 1996. Evangelion, along with Space Battleship Yamato in the 1970s and Mobile Suit Gundam in the 1980s, had a significant impact on later animation projects and caused an explosion of interest in Japanese anime.

In addition to the alliance with Shopee, in October 2020 the company began providing support to Japanese companies establishing stores in Lazada (one of the largest e-commerce platforms in Southeast Asia) in collaboration with the Lazada Group, a subsidiary of the Alibaba Group (NYSE: BABA). In July 2021, it began working with Coupang (NYSE: CPNG), one of the largest e-commerce companies in South Korea, as the first partner in Japan to provide support for Japanese companies entering the South Korean market. The company’s new business development team is running projects to link Japanese companies with overseas platforms, and further alliances with major overseas platforms are planned.

E-Commerce (Value Cycle)

Defactostandard, Ltd.

The core company in the Value Cycle sub-segment is Defactostandard, Ltd. (delisted on January 9, 2020 in accordance with its conversion into a wholly owned subsidiary). The com