Activity related to JOL and JOLCO, driven by tax-saving demand, is gathering pace. This article organizes 20 TSE-listed stocks by revenue model and highlights the tailwinds from regulatory changes and underlying demand.
Against a backdrop of heavy corporate tax burdens and tighter regulation of tax-saving measures, companies centered on the arrangement and sale of Japanese-style operating leases, or JOL/JOLCO, are attracting attention. Supported by a favorable regulatory environment and a recovery in underlying demand, related stocks are reviewed and classified by revenue model, covering 20 TSE-listed stocks.
The article explains the JOL and JOLCO structure, in which aircraft, ships and containers are purchased using contributions to silent partnerships and bank borrowings, with revenue generated from arrangement fees, management fees and gains on sales. It also discusses the revised scope of the new lease accounting standards, emphasizing that small and medium-sized enterprises can continue using their existing accounting treatment.
Using leading arrangers FPG and Japan Investment Adviser as examples, the article examines the factors driving revenue fluctuations, profit structures, resilience from diversifying lease transactions and the impact of quarterly timing on revenue recognition. Performance trends for fiscal 2026, as well as ROE and dividend yield levels, are also highlighted as key points, along with areas to watch going forward.
Based on the background to reported financial results, the article sets out a framework for organizing stocks across five layers of revenue models, including the entry point of capturing tax-saving demand, the creation of underlying demand and the creation of exit opportunities. This is expected to clarify how the drivers of stock prices differ from one company to another within the theme.