(611A) Cados Corporation - New Analyst Report 7/19

Cados Corporation first grasps requests from land owners, and carries out a “construction business” that designs and constructs distribution stores and “real estate business” that leases in-house buildings, starting from matching land owners with distribution companies such as drugstores, convenience stores (hereinafter, convenience stores), electronics retailers, and restaurants that are planning to open stores.

The construction business accounted for 80% of sales in the 23/7 fiscal year, and the real estate business accounted for 20%. The main business area of Cados Corporation is from Okayama prefecture to northern Fukuoka prefecture, centered around Yamaguchi prefecture.

As a construction business, Cados Corporation mainly designs and constructs distribution stores such as convenience stores, drug stores, restaurants, electronics retailers, and home centers, mainly in Yamaguchi and Hiroshima prefectures. According to Cados Corporation's unique business model, Cados Corporation has received orders as the main contractor, and construction is carried out by partner companies.

One characteristic of Cados Corporation's business model is that it is thoroughly close to land owners.

The construction of a general distribution store is based on the intention of an enterprise (hereinafter referred to as a tenant enterprise) that performs distribution business, searches for land suitable for opening a store, negotiates with the land owner, secures a location to open a store, and then starts construction of the store. Meanwhile, Cados Corporation finds land utilization methods based on the needs of land owners based on thick pipes with land owners considering effective use of land, and provides land information by setting store design plans to tenant companies searching for store opening candidate sites, leading to matching between the two.

Sales of the construction business in the 23/7 fiscal year were 4,503 million yen, up 29.1% from the previous fiscal year, but 4051 million yen (the ratio of construction business sales is 90.0%) related to national chain stores that Cados Corporation mainly targets, and 452 million yen (10.0%) other than national chains, such as for local companies, etc., and the ratio for national chains is overwhelmingly high.

The real estate business began when the needs of land owners and tenant companies do not match in construction business sales activities, Cados Corporation enters between them and devises a system to establish a project in line with the intention of the land owner. The same project is also being developed mainly in Yamaguchi and Hiroshima prefectures.