Management That Is Conscious of Cost of Capital and Stock Price

The Company has formulated “Blue Print 2027,” a medium-term management plan with the fiscal year ending December 31, 2027 as the final year, and aims to accelerate sustainable growth based on stable business foundations and further expand the management base for the next stage. For the most recent three years (from 2023 to 2025), ROE (return on equity) has remained at around 20% and PBR (price-to-book ratio) has remained at around 2x to 3x, due to factors such as the sustainable growth of existing businesses and the implementation of agile capital policies. The Company believes that it has secured a certain level of capital profitability and received a certain level of market valuation.
However, the Company recognizes that, despite its strong profitability, its share price remains at an undervalued level. The Company also recognizes the following issues:
・Investors have not yet gained a sufficient understanding of its business strategy and growth strategy for sustainable growth
・The number of tradable shares, the tradable share ratio, and trading volume are low
・Its market capitalization is small, making it less likely to become an investment target for institutional investors

*The Company conducted a share split at a ratio of 2 shares for each common share of the Company, effective April 1, 2025. For each indicator, figures for periods prior to the share split date are also presented after adjustment for the share split.

The Company aims to further improve capital profitability and market valuation through the execution of the strategies set forth in its medium-term management plan “Blue Print 2027,” the achievement of key management indicators, investment for sustainable growth, the enhancement of stable and continuous shareholder returns, and the promotion of IR activities and the strengthening of dialogue aimed at enhancing information disclosure for investors.

In order to achieve the medium-term quantitative targets set forth in the medium-term management plan “Blue Print 2027,” namely, EBITDA of ￥13.5 billion, ROE of 15-20%, and a payout ratio of 50% or more, the Company will promote the following initiatives.

 

(i) Sustainable business growth

(Lifestyle Products segment)

・Digital Product Business: Increase the number of units sold by capturing demand for GIGA School devices and strengthening sourcing

・Fashion Resale Business: Increase the number of items listed and sold by strengthening BtoB auctions, and expand purchase and sale amounts by strengthening promotion for the business targeting consumers

(Mobility & Energy segment)

・Increase share in used vehicle auctions by improving the convenience of the membership website, and increase the number of vehicles inspected by strengthening the inspection system

 

(ii) Enhancement of growth investment and shareholder returns

Through the following measures, the Company aims to achieve the optimal allocation of management resources while taking into account the balance between growth investment and shareholder returns, as well as the effect of improving capital efficiency.

・Set a budget of ￥5-7 billion in the medium-term management plan to promote growth investment, including M&A, and focus on selecting target businesses for investment, executing investments, and conducting PMI after execution

・Make proactive investments in human capital in preparation for future business growth

・Raise the consolidated payout ratio to 50% or more and maintain that level, while promoting agile capital policies to improve the tradable share ratio

 

(iii) Promotion of IR activities and strengthening of dialogue

Through the following measures, the Company will strengthen dialogue with domestic and overseas investors.

・Eliminate information asymmetry with investors by enhancing explanations of business activities and management strategy and by expanding disclosure and improving its quality

・Conduct proactive investor meetings and share the details of dialogue with the Board of Directors in a timely manner

・Strengthen IR activities for individual investors through lowering the investment unit price by means of a share split and exhibiting at IR fairs

・Strengthen communication with overseas investors by simultaneously disclosing English-language versions of financial results summaries, financial results presentation materials, etc.