KITZ Corporation (6498)
President Yasuyuki Hotta
Yasuyuki Hotta
Corporate Profile
KITZ Corporation
Code No.
TSE 1st Section
Machinery (Manufacturing)
1-10-1 Nakase, Mihama-ku, Chiba, Japan
Stock Information
Share Price Shares Outstanding Market Cap. ROE (actual) Trading Unit
¥994 97,342,575 shares ¥96,759 million 8.7% 100 shares
DPS (Est.) Dividend Yield (Est.) EPS (Est.) PER (Est.) BPS (actual) PBR (actual)
¥19.00 1.9% ¥72.93 13.6 x ¥782.98 1.3 x
Note: Share price is as of closing on May 25, 2017.
Number of shares outstanding is as of the end of the most recent quarter, and does not include treasury shares.
Consolidated Earnings Trends
Fiscal Year Sales Operating
EPS (¥) Dividend (¥)
March 2015 117,036 6,886 7,581 6,881 63.22 13.00
March 2016 117,278 7,245 7,300 4,915 45.50 13.00
March 2017 114,101 8,929 8,799 5,400 51.43 13.00
March 2018 124,566 10,117 9,733 6,518 65.50 17.00
March 2019 Est. 132,000 11,200 10,900 7,100 72.93 19.00
Note: Estimates are those of the Company. From the fiscal year ended March 2016, the definition of net income has been changed to net income attributable to parent company shareholders (the same goes for the rest of the report).
This Bridge Report presents details and analysis of KITZ Corporation's earnings results for the fiscal year ending March 2018 and earnings estimates for the fiscal year ending March 2019.
Key Points
Company Overview
KITZ is an integrated manufacturer of valves and other fluid control equipment and devices. In valve manufacturing, it ranks highest in Japan and within the top 10 worldwide. Valves are made of various materials depending on their application, including bronze, brass, cast iron, ductile cast iron (cast iron with greater strength and ductility) and stainless steel. KITZ in principle assumes integrated production (casting, processing, assembling, inspecting, packaging and shipping) of products from raw materials. The KITZ Group consists of 36 domestic and overseas subsidiaries. In addition to the production and sale of brass bars used for valves, water faucets and gas equipment (KITZ is ranked among the top manufacturers of brass bars within Japan), the Group also operates a hotel business. [Corporate Philosophy: To contribute to the global prosperity, KITZ is dedicated to continually enriching its corporate value by offering originality and quality in all products and services.] KITZ believes that corporate value is equivalent to shareholder value from a medium- to long-term perspective. To continue increasing this value, it says that it must achieve sustained growth accompanied by earnings through earning the trust of customers. And by improving corporate value, the Company desires to help create a more prosperous and fulfilling society by providing many types of benefits to its shareholders, customers, employees, business partners, and society. Setting these goals in the KITZ Statement of Corporate Mission, the Company seeks to further progress in the future.
Action Guide Do it KITZ Way Do it True (Sincerity and Honesty) Do it Now (In a Timely Manner) Do it New (Unique and Challenge) KITZ'Statement of Corporate Mission To contribute to the global prosperity, KITZ is dedicated to continually enriching its corporate value by offering originality and quality in all products and services.
Do it True In human relationships, one must be sincere to the other. The pursuit of the essence of things is important; not of superficial things. "Do it True" are words that are designed to remind employees of these basic principles when conducting corporate activities. Do it Now "Do it Now" expresses the image of dynamic employees who lose no time in obtaining information, making prompt decisions, and putting them into practice with certainty. Do it New "Do it New" expresses the image of employees who think outside the box to show creative ways forward and take on new challenges in response to changes. <Overview of KITZ's Business Segments> KITZ's businesses consist of the valve manufacturing, brass bar manufacturing and other (including hotel and restaurant management) segments. During the fiscal year ended March 2018, these segments accounted for 78.8%, 18.9%, and 2.3% of total sales, respectively. Valve Manufacturing Business Valves are used to pass, stop and adjust the flow of fluids in various pipe systems (water, air, gas and other substances). They are used in building facilities, residential utility systems, water supply facilities, fresh water and sewer systems, fire prevention equipment, machinery and industrial equipment manufacturing facilities, chemical, medical, and petrochemical product manufacturing facilities, semiconductor manufacturing facilities, oil refineries and other industrial complexes, among other applications. The Company operates an integrated production system that begins with the casting process (KITZ was the first Japanese company to acquire ISO 9001 international quality standard certification). The Company's product offerings include commercial valves, which are made of corrosion-resistant bronze and highly economical brass for use in the building construction sector, including building facilities and residential utility systems, and industrial stainless steel valves such as high-value-added ball valves. The Company has a high share of the domestic market in these mainstay product areas. Regarding sales activities within Japan, the Company's sales bases in major cities and meticulous network of distributors leave no part of the country unattended. For overseas sales, the Company has established representative offices in India, the U.A.E and Philippine. KITZ also has a global sales network, with bases in China, Hong Kong, South Korea, Singapore, Malaysia, Thailand, the United States, Brazil, Germany and Spain. With regard to production, in addition to domestic plants, the Company has production sites (China, Taiwan, South Korea, Thailand, India, Germany, Spain and Brazil), constituting a global production network to realize global costs and production at the optimum location. Brass Bar Manufacturing Business Copper alloy can take many different shapes, including sheets, strips, pipes, bars and wires through hot or cold deformation processing such as dissolution, casting, rolling, extruding, and forging. It can be made with a range of different materials, including brass (copper with zinc), phosphor bronze (copper with tin and phosphorous), and nickel silver (copper with nickel and zinc). The KITZ Group's brass bar manufacturing business is led by KITZ Metal Works Corporation and Hokutoh Giken Kogyo Corporation. These companies manufacture and sell brass bars, which are used not only as material for valves, but also in the manufacture of water faucets, gas equipment, electrical appliances and other brass-derived items. Other KITZ subsidiary Hotel Beniya Co., Ltd., operates a resort hotel in the city of Suwa, Nagano Prefecture. The hotel is located in a highly picturesque setting close to Lake Suwa with hot spring bathing facilities with sunset views and has a number of small and large banquet halls. The hotel also has a large convention hall, giving it the capacity to hold international conferences.
Fiscal Year Ending March 2018 Earnings Results
Sales and operating income grew 9.2% and 13.3%, respectively, year on year. Sales were 124,566 million yen, up 9.2% year on year. The sales consisted of 98,162 million yen (+0.4% from the estimate), up 7.0% year on year from the valve manufacturing business, and 23,535 million yen (+4.6% from the estimate), up 21.7% year on year from the brass bar manufacturing business. The ratio of overseas sales was 27.9%, down 1.8 points (it was 29.7% in FY 3/2017). In terms of profits, despite a reduction in income from the brass bar manufacturing business due to a decline in the copper market in the fourth quarter, losses were offset by the increase in profit from the valve manufacturing business, thanks to cost reductions, price revisions, strong sales targeted at domestic construction equipment, etc. Operating income was 10,117 million yen, up 13.3% year on year. Ordinary income grew 10.6% year on year to 9,733 million yen by offsetting the increase in non-operating expenses through appropriation for foreign exchange losses of 208 million yen (19 million yen in the previous term), etc. Improvements in extraordinary income/loss increased the net income to 6,518 million yen, up 20.7% year on year (extraordinary income fell due to a decline in gains on sale of securities, but extraordinary loss also fell due to reduced impairment loss). Valve Manufacturing Business Domestic sales increased 9.5% (5,552 million yen) year on year to 64,202 million yen, and overseas sales grew 2.5% (843 million yen) year on year to 33,960 million yen, but in real terms, overseas sales dropped due to a 944 million yen increase by foreign exchange fluctuations. In Japan, the sales of mainstay products for construction equipment were 27,300 million yen, up 7% year on year, mainly related to redevelopment projects in the Tokyo metropolitan area. In addition, sales of products for semiconductor manufacturing equipment grew 43% year on year to 8,000 million yen. There were few large-scale investments made in the industrial valve market (which among others, targets industries involving machinery, petro-refining, petro-chemistry, general chemistry, food and paper manufacturing, and electric and gas power), but sales of industrial valves increased by roughly 5-10%, mainly for the maintenance and renovation of existing plants. Although the local government in Tokyo was slow to expend their budget, the water market increased by 5%. Overseas, while sales in Europe and the U.S. were sluggish, sales for semiconductor manufacturing equipment grew in South Korea and China. Sales targeted at construction equipment, such as data centers, remained strong in China. In addition, by utilizing bases located in other countries, the development of ASEAN sales distributors progressed slightly. Business in Europe was stagnant, and may remain that way in the foreseeable future; however, investments related to oil and gas in the U.S. began to increase. Deliveries of valves for the large-scale project targeted at the Middle East was also changed to the first half of the fiscal year ending March 2019, due to changes in specifications, etc. Operating income was 12,798 million yen, up 11.8% (1,353 million yen) year on year. Raw material prices and other expenses increased due to market conditions, but the Company was able to absorb the increase in raw material costs for the full term, due to a large cost reduction effect (resulting in a 1,620 million yen profit gain) and new prices (revised in May) taking hold in the second half. Brass Bar Manufacturing Business The market price of copper, which has a significant impact on product prices, fell in the fourth quarter, but rose steadily from the start of 2017 and stayed at a high of around 800,000 yen/ton in the third quarter. The total weight of copper sold decreased slightly, but segment sales were 23,535 million yen, up 21.7% year on year due to higher sales prices. Operating income was 699 million yen, down 16.0% from the previous term, in which copper price grew significantly. Other The hotel business accounts for the majority of other income, and profits are weighted towards the first half due to seasonal influence. During this term, due to a rebound effect that occurred after the previous term's "Ombashira festival," which is held every seven years, as well as difficulties in attracting inbound group customers, sales fell to 2,867 million yen (down 4.5% year on year), and an operating loss of 28 million yen was incurred (operating income was 59 million yen in the previous term). Total assets at the end of the term increased 15,039 million yen from the end of the previous term to 134,187 million yen. In addition to an increase in cash and interest-bearing debts due to the issuance of straight bonds for raising 10,000 million yen in Mar. 2018, accounts receivable and accounts payable also augmented, because the term ended during a holiday for financial institutions. Intangible assets also grew due to updating core systems. The Company acquired treasury stock (3,532 million yen) and retired them (10 million shares, 6,562 million yen). Equity ratio was 56.8% (61.9% at the end of the previous term). Because the term ended during a holiday for financial institutions, collection of accounts receivable was pushed into the next period, causing working capital to increase and operating CF to decline. Meanwhile, investing CF grew due to an increase in capital investment, including an update to core systems. The Company obtained necessary funds by issuing straight bonds and increasing the amount of long-term debts. *ROE (Return on equity) is obtained by multiplying "net income rate (net income ÷ sales)," "total asset turnover (sales ÷ total assets)," and "leverage (total assets ÷ equity capital, or the reciprocal of capital-to-asset ratio)." ROE = Net Income Rate × Total Asset Turnover × Leverage *The above values were calculated based on the data of brief financial reports and securities reports. The total assets and equity capital used for the calculation were the average values of the balances as of the end of the previous term and as of the end of the current term. (Since the capital-to-asset ratio posted in brief financial reports and securities reports is the term-end value, and so its reciprocal does not necessarily equal the above average.) (4) TopicsEstablished new sales bases in Hong Kong and Malaysia Established a sales base in Hong Kong The Company established KITZ Hong Kong Company Limited (hereinafter referred to as KHC) in the Kowloon district of Hong Kong in July 2017, transferred order receiving tasks from KITZ Corporation of Shanghai to KHC, and started operations in Jan. 2018. The Company has a long history in the Hong Kong market, and has been selling valves to Hong Kong via trading companies since the 1970s. Hong Kong is also supported by the strong Chinese economy, and established record high GDP four years in a row. In the midst of active investment in real estate and a "scrap-and-build" construction cycle, the Company plans to capture demand for products targeted at construction equipment and further increase its market share by discovering demand for products which are currently not provided. Established a sales base in Malaysia The Company considers ASEAN countries to be a priority, and it is expanding its bases one after another. Local distributors are already active in Vietnam and the Philippines, and the third distributor, KITZ Valve & Actuation (Malaysia) Sdn. Bhd. (hereinafter referred to as KVM) was established in Johor Bahru, Malaysia, in Dec. 2017. KVM began operations in Apr. 2018. Johor Bahru is conducting large-scale investment called the Iskandar Plan (a total of 10 trillion yen is to be invested by 2025), and demand for valves is expected to grow in the future. KVM is aiming for a new business model that mixes two sales channels (distributor sales and direct sales), and will strive to improve its inventory and develop new sales agencies.
Fiscal Year Ending March 2019 Earnings Estimates
Sales expected to increase 6.0%, and operating income 10.7% year on year Sales are estimated to grow in both the valve manufacturing business and the brass bar manufacturing business. In the valve manufacturing business, sales are expected to hit record highs as a result of strong demand for construction equipment and semiconductor-related business, as well as the anticipated recovery of the North America and ASEAN markets. Profitability is expected to improve for the valve manufacturing business, but the Company is carefully watching the brass bar manufacturing business, which is largely affected by copper market conditions. The Company is planning for capital investment of 10,500 million yen (9,800 million yen in the fiscal year ended March 2018). Depreciation and amortization expenses are expected to be 5,000 million yen (4,200 million yen in the fiscal year ended March 2018). Valve Manufacturing Business In Japan, delivery of redevelopment-related products in the Tokyo metropolitan area is nearing a peak for construction equipment (in terms of marketing, the Company will shift to efforts for meeting the demand related to the Olympics). The industrial valve market is expected to remain strong as the Company focuses on maintenance and updates for existing plants, and some new investments are also taking place. The semiconductor market entered a super-cycle, and continue to display the same strong performance it had in the previous term. Effects of improved production capacity of valves for semiconductor manufacturing equipment are also to be expected. Furthermore, price revisions were made in May based on the steep rise in parts, sub-materials, and logistics costs in addition to rising raw material prices. Full effects of the price revisions are likely to appear from the second half onwards. Outside Japan, although the business in Europe continues to struggle, sales remain strong in China and South Korea, mainly in valves for semiconductor manufacturing equipment. ASEAN countries and the Americas are also on a recovery trend. In China, commercial valves for data centers, etc. are expected to sell well. Industrial valves will also follow a recovery trend, due to successfully receiving orders for large transactions, etc. In South Korea, the Company will pursue synergy with an acquired company, Cephas Pipelines Corp. (mentioned below). Oil and gas-related investment is on a recovery trend in North America, and distributors are beginning to expand their inventory. The Company is also expanding its marketing bases and strengthening its structure by establishing technical bases in ASEAN countries, and business there is steadily recovering. Meanwhile, the European market, where the Company's biggest seller is industrial valves, does not show any signs of recovery, so they intend to support the market with a regional headquarters. Delivery for the large-scale project in the Middle East will be completed in the first half. In terms of profits, in addition to market factors and logistics costs, depreciation expenses are expected to rise, as well as expenses accompanying M&As and the establishment of overseas subsidiaries, but these will be offset due to increased sales and cost reductions, resulting in an improvement in profitability. Brass Bar Manufacturing Business Copper price is assumed to be 800,000 yen/ton (average market price in the previous term was 760,000 yen/ton). Domestic demand for brass bars is likely to decline slightly from the previous term, but the Company plans to maintain production volume and increase its market share. Profits are expected to fall due to an increase in depreciation accompanying large-scale capital investment (totaling 5,300 million yen) and higher labor costs. The important point is how much can be covered by cost reduction by improving productivity and promoting sales of high value-added products. Other Increased sales and profits are anticipated in the hotel business, thanks to measures such as improving customer satisfaction with room renovations (10th floor, 11th floor), and increasing the number of online reservations and domestic group reservations. (3) Topics Revised domestic sales price (announced Apr. 5, 2018) Although the Company is working on cost reductions and reducing overhead expenses by improving productivity and efficiency, due to soaring prices of parts, sub-materials, and logistics on top of higher raw material costs, it is becoming more difficult to offset expenses through corporate efforts alone. For this reason, on May 1, 2018, prices were revised as follows. Acquired Cephas Pipelines Corp. in Korea In Apr. 2018, the Company purchased the Korean industrial butterfly valve manufacturer Cephas Pipelines Corp. (CPL) for about 3,752 million yen. CPL is a specialized manufacturer capable of producing large-diameter butterfly valves. While KITZ butterfly valves are mainly used for construction equipment and industrial machinery, CPL products are mainly used for power generation, water treatment, oil and gas, and shipbuilding. Also, since the diameter of KITZ valves range from 40-1,350 mm, and CPL valves from 50-4,000 mm, their applicable fields and production ranges complement each other well. KITZ has procured CPL butterfly valves since 2014, and has already delivered a large number of them both in Japan and overseas. In recent years, as the scale of plants has become larger, the diameter of pipes used in the plants also tends to be larger, therefore the demand for large-diameter butterfly valves is increasing. Furthermore, valves capable of handling high temperature, high pressure, and a variety of liquid substances are often required, and overall demand for butterfly valves can be expected to rise. In the future, in addition to building a production system that takes advantage of the strengths of both companies, the Company plans to promote sales of CPL products by utilizing KITZ's global network. CPL's sales in FY2016 were 30,802 million won (about 3,080 million yen). A hydrogen station completed at the Nagasaka Plant Construction of a hydrogen station using small-package units at the Nagasaka Plant (Hokuto city, Yamanashi Prefecture) was completed on Apr. 6, 2018. Because hydrogen energy contributes to the realization of a low-carbon society, it is also backed by the Japanese government. According to newspaper reports, the government is promoting the widespread use of fuel cell vehicles (FCV), has set an installation target for hydrogen stations from an infrastructure standpoint, and is further considering measures such as regulatory reform. The Company will begin to utilize fuel cell vehicles and fuel cell forklifts themselves, and through the operation of this hydrogen station, they will gather technological information to be used for valve development. In addition, the Company is also considering proposals to the market for small-package units, which would be compact, high-performance, and inexpensive. The completed hydrogen station uses an off-site supply system (an expandable type that can also be packaged with dispensers) with a compressor/accumulator package unit, and a supply capacity of 55 Nm3/h. Two full FCVs can be filled in one hour (70 Mpa of pressure required to fill an FCV, 35 MPa for a fuel cell forklift). Large-scale capital investment by Kitz Metal Works The equipment used by KITZ Metal Works to produce brass bars, and which handles production for the brass bar manufacturing business, has several issues related to long-term operation, such as increased maintenance costs and reduced production efficiency. Meanwhile, in Europe, regulation of lead used in copper alloys for automobiles and electronic components is expected to become stricter in the coming years, and the demand for more environmental materials is expected to increase worldwide. For this reason, the Company decided to invest 5,300 million yen into updating aging manufacturing equipment such as forges, bar manufacturing equipment, and buildings, in order to improve product quality and productivity. Completion and operation are scheduled for June 2019. (4) Shareholder returns The Company will raise the interim dividend and term-end dividend by 1 yen/share each, bringing the interim dividend to 8 yen/share and the term-end dividend to 11 yen/share, for a total of 19 yen/share for the full year (the estimated payout ratio is 26.1%). Based on a dividend payout ratio of around 25%, the Company intends to acquire treasury shares with a total return ratio of 33% or more (around one third of profit attributable to owners of parent).
Medium-Term Management Plan
The 3rd Medium-term Management Plan (FY 3/2017 - FY 3/2019) is currently under way. The 3rd Medium-term Management Plan has 4 basic policies: (1) Achieve operating income in excess of 10,000 million yen in the fiscal year ending March 2019 (and a record 12,500 million yen in the fiscal year ending March 2021, the final year of the long-term management plan). (2) Thoroughly focus on profit and cash flow and achieve an ROE of 8% or more, (3) Concentrate management resources in key areas of the market where strengths can be utilized, and (4) Improve return to shareholders. Progress The original plan for the fiscal year ending March 2019 was to achieve sales of 120,000 million yen, an operating income of 10,000 million yen, an ordinary income of 9,700 million yen, and a net income of 6,300 million yen, but both sales and profits were achieved one year ahead of schedule, in the fiscal year ended March 2018. In the valve manufacturing business, sales growth and cost reductions have improved profitability more than anticipated. The Company also achieved an ROE of 8.7% in the fiscal year ended March 2018, and expect to see it increase to 9.1% in the fiscal year ending March 2019. Total return rate is high, at 92.5% in the fiscal year ended March 2017 and 80.0% in the fiscal year ended March 2018. Additionally, 10 million shares (6,562 million yen) were retired in the fiscal year ended March 2018. Valve Manufacturing Business The Company primarily focuses on the construction equipment, petro-chemistry, general chemistry, and clean energy (hydrogen, LNG) markets, and its business areas include Japan, three main regions (Europe, the Americas, and ASEAN countries), and two marketing bases (China and India). In particular, it places focus on ASEAN countries and the Americas. The Company's goal is to increase its market share by releasing new, specialized products and multi-functional products, specially tailored to each area. In fact, "construction equipment" has been blessed by a good business environment and is growing steadily. Efforts are progressing in "petro-chemistry" and "general chemistry," such as the development and introduction of high-performance butterfly valves made for specific projects, and providing large-diameter butterfly valves through M&A. The same is true for "clean energy (hydrogen, LNG)." As for the various regions, there are still a number of challenges in Europe, but there are visible results in the Americas and ASEAN countries. Also, the Company subsidized the Indian industrial valve manufacturer Micro Pneumatics Pvt. Ltd. in Feb. 2015, the Brazilian industrial ball valve manufacturer MGA in Nov. 2015, and the Korean industrial butterfly valve manufacturer Cephas Pipelines Corp. in Apr. 2018, laying the groundwork for market growth. In addition, KITZ is also working to strengthen management in terms of both organizations and products, by using a matrix system where the vertical lists "organizations by function" and the horizontal lists "cross company organizations." Brass Bar Manufacturing Business The Company is striving to maximize profits by improving productivity, and increase added value by restructuring business. As previously mentioned, KITZ Metal Works, the main entity responsible for the brass bar manufacturing business, decided to invest 5,300 million yen into updating aging production equipment such as forges, brass bar manufacturing equipment, and buildings, with the goal of improving product quality and productivity. Besides the items mentioned above, new businesses are also being developed which make use of KITZ smart farming and water treatment technology. KITZ smart farming is based on growing demand in the global fisheries market and the lack of natural resources. Meanwhile, for businesses that make use of water treatment technology, KITZ, Toyo Valve, Shimizu Alloy Manufacturing, KITZ Microfilter, etc. can cooperate to meet the increasing global water demand and increase environmental awareness. Long-Term Management Plan "KITZ Global Vision 2020" KITZ aims to maximize corporate value and realize a good, strong company with the slogan "Evolving into a truly global company." Numerical goals are as follows.
Future remarkable points
In the fiscal year ending March 2019, sales for the valve manufacturing business are expected to hit record highs. The business environment in regards to redevelopment in the Tokyo metropolitan area and Olympic-related business was favorable in Japan, and as for overseas business, sales for semiconductor manufacturing equipment are strong, and ASEAN countries and North America are on a recovery trend. In domestic market, the Company carried out price revisions for the second consecutive year. As many competitors raised the price this year, following KITZ, customers will understand the background and accept price revision. The new prices are expected to penetrate in the market during the term's second half. As the fiscal year ending March 2019 has just begun, it may be somewhat early to mention, but the fiscal year ending March 2020 will bring the final goal of the long-term management plan "KITZ Global Vision 2020" into sight. In the fiscal year ending March 2021, the 70th anniversary of the Company's founding, sales and profit targets are sales of 135,000 million yen and an operating income of 12,500 million yen. Based on actual results for the fiscal year ended March 2018, progress rates are 92% and 81%, respectively. If business performance for the fiscal year ending March 2019 is in line with initial estimates, the progress rates will rise to 98% and 90% respectively, and from there it will be just one step away from reaching the goal. It seems possible to achieve the long-term business plan ahead of schedule.
<Reference: Concerning corporate governance>
◎Corporate governance reportUpdated on: June 28, 2017 It is our corporate philosophy to continually improve corporate value by offering creative and high-quality products and services. With this corporate philosophy in mind, as a socially responsible company, we are working to realize the management that takes into consideration all stakeholders including our shareholders. In addition, we are working to enhance corporate governance through various measures to realize prompt, efficient, sound and highly transparent management based on requests from stakeholders and social trends to strengthen management efficiency and compliance. <Reasons for Non-compliance with the Principles of the Corporate Governance Code (Excerpts)> We undertake all principles of the Corporate Governance Code. <Disclosure Based on the Principles of the Corporate Governance Code (Excerpts)> 9. Policy for Constructive Dialogue with Shareholders (Principle 5-1) We recognize that, in order to achieve sustainable growth and enhance medium- to long-term corporate values, it is important to be aware of the accountability as a trustee of management, disclose information to stakeholders such as shareholders and investors in a timely and appropriate manner, and maintain fairness and transparency in management. We also believe that it is important to provide necessary information on an ongoing basis and also to conduct IR activities to utilize opinions and requests from external viewpoints for management improvement. Therefore, in order to promote constructive dialogue with shareholders and gain their understanding regarding management strategies and plans, the Company has established an IR system centered around the representative director and IR executive officer, and is implementing the following policies: 1) The Company appoints an executive officer to be in charge of IR. As a rule, the head of the IR department responds to shareholders' requests for consultations, but either the representative director or IR executive officer may respond depending on the purpose of the consultation and the number of shares held. 2) With a focus on IR executive officers, the Company seeks to coordinate and collaborate with its departments, and holds meetings with the IR department, management planning department, accounting department, general affairs and human resources department, legal department, etc. as necessary. 3) The Company conducts meetings for institutional investors and analysts each quarter, with financial results briefings in March (end of the term) and September (2nd quarter), and analyst meetings regarding financial results in the 1st and 3rd quarters. In addition, company briefings for individual investors are held every year. At these company briefings, explanations are given by the president himself. In addition to information regarding financial results, such as summary of financial results and securities report, other information is also disclosed on the Company website, regarding IR topics such as management information, information on shares and shareholders meetings, and reports on corporate governance. 4) The Company periodically reports opinions gathered from dialogue with institutional investors and analysts to the representative director and IR executive officer. If necessary, the representative director will inform the Board of Directors and management committee. 5) The Company pays close attention to managing insider information, and considers the executive officer in charge of the accounting department to be responsible for handling information. The accounting executive officer, IR department, and management planning department discuss details regarding information disclosure prior to opening a dialogue with institutional investors and analysts. 6) The Company examines the status of practical shareholders from the shareholder registry at the end of March and September every year, and uses this information for IR activities. 7) The Company drew up a long-term management plan and medium-term management plan, and established target figures for items such as sales, operating income, ordinary income, the ratio of overseas sales, the amount of interest-bearing debt, equity ratio and return on equity (ROE). The Company discloses these values on its website, etc. and at financial results briefings, explains in detail what steps must be taken to achieving these goals. In addition, the medium-term management plan has been appropriately reviewed based on business performance, social conditions, economic conditions, etc. When changes occur, the reasons and details regarding the change will be explained at general shareholders' meetings and financial results briefings.
This report is intended solely for information purposes, and is not intended as a solicitation to invest in the shares of this company. The information and opinions contained within this report are based on data made publicly available by the Company, and comes from sources that we judge to be reliable. However, we cannot guarantee the accuracy or completeness of the data. This report is not a guarantee of the accuracy, completeness or validity of said information and or opinions, nor do we bear any responsibility for the same. All rights pertaining to this report belong to Investment Bridge Co., Ltd., which may change the contents thereof at any time without prior notice. All investment decisions are the responsibility of the individual and should be made only after proper consideration.
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