Shareholder return strategy: No. 1<3562> changed its shareholder return policy along with the publication of the new mid-term management plan "Evolution 2027" and showed the direction of significantly strengthening shareholder return. So far, we have aimed for stable dividends (30% dividend payout ratio as a guide), but in the future, we plan to implement stable and continuous shareholder dividends based on a policy of aiming for a 30% dividend payout ratio, regardless of changes in annual performance. A notable feature is that we have set a minimum dividend of the previous year's annual dividend per share and will continue to increase dividends, which is a significant enhancement of shareholder return and can also be evaluated as a expression of confidence in profit growth. Moreover, we have a policy of "flexibly implementing under financial discipline" for acquiring our own shares, showing a more proactive stance.* *Considering the gap between our own perception of the stock price and the market evaluation, ROE, capital efficiency, and CF level, we have a policy of implementing it flexibly. Dividends for the fiscal year ending February 2024 will increase by 1 yen from the previous year, as expected at the beginning of the period, to 33 yen per share (mid-term dividend of 16.5 yen and year-end dividend of 16.5 yen). We also acquired 340,000 shares of our own stock (with a purchase price of 397 million yen). Despite the anticipated decline in profits for the fiscal year ending February 2025, we are expected to follow the policy of increasing dividends every period and issue a dividend of 1 yen per share (a commemorative dividend for the 35th anniversary of our founding), with an expected increase of 2 yen from the previous year to 35 yen per share (mid-term dividend of 17.5 yen and year-end dividend of 17.5 yen).

Sanwa Technos <8137> is promoting the enhancement of shareholder return measures as one of its strategies aimed at early realization of PB over 1.0 times. As for the dividend policy, it has decided to aim for a continuous and stable dividend with a DOE of 4.0% starting from the fiscal year ending in March 2025. Furthermore, it has decided to implement a commemorative dividend of 10.0 yen for the fiscal year ending March 2025, celebrating the 75th anniversary of its establishment, and will distribute a total dividend of 120.0 yen (DOE 4.4%), which represents an increase of 25.0 yen from the previous period.

Regarding shareholder benefits, QUO cards are given to shareholders holding 100 shares or more as of the end of March each year, based on the number of shares held and the holding period. For shareholders holding between 100 and less than 500 shares with less than 2 years of holding, a QUO card worth 1,000 yen is given. Shareholders holding for more than 2 years receive a long-term holding benefit* (worth 1,000 yen) in addition, thus receiving a QUO card worth 2,000 yen (for shareholders holding over 500 shares, QUO cards worth 2,000 yen or 3,000 yen are presented respectively). When calculating the investment yield, including dividends and shareholder benefits, based on the stock price on November 15 (2,180 yen), it would yield about 6% for shareholders holding 100 shares, which can be considered an attractive level as an investment target for income gain.

* As of the end of March and the end of September each year, the condition is that the shareholder has been recorded in the shareholder registry with the same shareholder number for 5 consecutive times. Shareholders who have continuously held shares since the end of March 2023 will gain rights to the long-term holding benefits from the first time.

The company aims for early realization of PB over 1.0 times; however, as of the end of October 2024, the PBR remains at 0.66 times in relation to the net assets per share of 3,267 yen. It was in the range of 0.4 times at the end of March 2020, but has gradually risen due to improvements in ROE and enhancement in shareholder returns. Therefore, the company believes that achieving a PBR level exceeding 1.0 times is possible by continuing to maintain and improve ROE, actively enhancing shareholder returns, and conducting IR and SR activities to improve recognition.

(Written by FISCO guest analyst, Jo Sato)