■New Mid-Term Management Plan
3. Toward improving corporate value
We believe that improving corporate value is also an issue, and it is our policy to continue to advance management that is conscious of capital costs. Therefore, ROE was set as a company-wide target management index, and the goal was to achieve 10% with the lower limit of 8%, which exceeds the estimated capital cost of 6%. Furthermore, ROIC (return on invested capital) is set as a management index for each business, WACC (weighted average cost of capital) and ROIC by business are regularly monitored, and management management based on ROIC is penetrated by distribution of management resources by business, determination of whether investments are possible, etc. NEC ＜1723＞ currently exceeds PBR (stock price-net asset ratio) by 1 times, but it is proceeding with management conscious of stock prices in response to a request (*1) from the Tokyo Stock Exchange (hereinafter TSE) for “response to realize management that is conscious of capital costs and stock prices,” and aims to create corporate value that is continuously evaluated by the market by implementing growth strategies and improving capital profitability. Therefore, in addition to existing measures such as strengthening shareholder returns (described later) and revisions to incentive type rewards, we are also considering taking measures such as growth investment through improved profits, further sustainability efforts, IR enhancement/enhancement, and even flexible share acquisitions and DOE*2 reviews.
*1 Request by the Tokyo Stock Exchange: We are requesting companies that have a PBR split by 1 times to operate with stock prices in mind.
*2 DOE (Dividend on Equity Ratio): Consolidated dividend on shareholders' equity ratio. An indicator showing how much dividends a company is paying on shareholders' equity.
(Written by FISCO Visiting Analyst Miyata Hitomitsu)