Management conscious of cost of capital and stock price

The Company estimates cost of capital using the CAPM assuming cost of equity of approximately 5%. ROE in the fiscal year ended April 30, 2024 was 8.7% and has consistently exceeded the cost of equity, indicating the Company is generating a return on capital. However, with the aim of further improving return to capital, we have set medium- to long-term ROE targets of 13.0% for the medium-term and 15.0% for the long-term.

In order to further improve return on capital and increase support from the market, the Company has set ROE targets of 13.0% for the medium term and 15.0% for the long term. To achieve these targets, the Company is working to lift the net profit margin (by increasing profitability through efficiency gains and reducing the selling, general & administrative [SG&A] expenses ratio through business expansion) and improve financial leverage (by returning profits to shareholders and using borrowings to invest in growth).

As of the end of the fiscal year ended April 2024, the PBR was 1.56x, and has continuously remained above 1x, which we believe is a certain level of market valuation. Going forward, we intend to improve the PBR through business growth, shareholder returns, and other measures to increase ROE.