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 Holdings <5929> follows the basic principle of shareholder returns through dividends. In order to implement this, it maintains a stable dividend payout ratio to promote management towards increased corporate value while improving corporate body and strengthening business foundations. Specifically, while the dividend payment ratio for net income attributable to the parent company's shareholders was aimed at 35.0% as a benchmark, the target has been raised to 40.0% in the middle-term management plan for March 2024.

Reflecting a significant improvement in business performance, the annual dividend for the March 2024 year increased by ¥20.0 compared to the previous year, and the dividend payout ratio rose to 39.8%, with a substantial increase in dividends implemented (interim dividend of ¥29.0 and year-end dividend of ¥49.0). Although a decline in earnings is projected for the March 2025 period, based on the policy of stable dividends, the company plans to maintain an annual dividend of ¥78.0 (interim dividend of ¥39.0 and year-end dividend of ¥39.0), with a projected increase in dividend payout ratio to 40.2%. The dividend payout ratio exceeds the Prime Market all-industry average of 34.7% for the March 2023 period. In addition, the company has frequently implemented share buybacks until the March 2020 period. For the March 2025 period, it will make strategic investments as needed while considering cash on hand and reviewing share buybacks. Furthermore, for many years, it has provided shareholder benefits to shareholders listed or recorded on the final shareholder registry on March 31 each year (shareholders holding 100 or more shares will receive an original QUO card worth 500 yen, while shareholders holding 1,000 or more shares (held for 2 years or more) will receive an original QUO card worth 2,000 yen). These shareholder incentives can be evaluated as demonstrating the company group's management attitude towards prioritizing shareholders.

(Written by FISCO guest analyst Nozomi Kokushige).