Question WW2 Japanese Navy Flag?

[erech100]

I'm trying to figure out exactly what this flag means, what it signifies, and if it could be authentic. A friend of mine recently inherited a box full of his grandfather's belongings from his military days, but he is unable to identify this piece. I've never seen anything like it and was hoping someone could point me in the right direction. Any information will help! I'm a newbie when it comes to military history, but I'm eager to learn!

 

[mdchachi]

The kanji looks like 宅品 or 品宅 but not sure what it means. Maybe "home goods" or maybe a name.

 

[Uncle Frank]

A slight possibility it might have something to do with the island of Kiribati? The wavy lines at the bottom are on their flag that they use today. The image I posted mentioned WWII and the island.

 

[Majestic]

Is that the back/reverse side of the flag? My guess would be 宇品 (Ujina), a place name in Hiroshima.

宇品 - Wikipedia

ja.wikipedia.org