Higher Shareholder Returns Offer Hope in 2022 for Recently Volatile Shares of Mitsui Fudosan

We maintain our fair value estimate of JPY 2,800 per share for Mitsui Fudosan, 12% above the current price and equivalent to 0.59 times net asset value assuming a 30% tax rate on unrealized gains. The shares rose 2.5% today following the company’s December-quarter results, which overall were in line with our forecasts. On the positive side, Mitsui Fudosan announced an increase in its planned dividend per share for the current year ending in March from JPY 44 to JPY 55 (30% of our forecast earnings for the year) and a new JPY 15 billion share buyback program valid through September, which represents 0.6% of shares outstanding at the current price. We had already forecast a JPY 15 billion buyback for the year starting in April, so the buyback is in line with our existing forecasts unless Mitsui Fudosan follows it up with an additional one in the second fiscal half after October, which we think is possible but not certain.