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).

San-ki Kogyo Co., Ltd. actively engages in shareholder returns. Based on the shareholder return policy under the mid-term management plan "Century 2025" Phase 3, stable returns have been implemented. For the fiscal year ending March 2025, with the revision of the earnings forecast, the dividend estimate has been raised to 110.0 yen for the full year. The dividend payout ratio will be 50.4%. Additionally, it is planned to repurchase 1.5 million shares of treasury stock by the end of March 2025, and on August 19, 2024, the company will carry out a retirement of 2 million shares of treasury stock. As a result, the total return ratio for the fiscal year ending March 2025 is expected to be 85.2%.

The company also positively responds to stakeholders other than shareholders. Regarding payment terms for partner companies, starting from the fiscal year ending March 2020, full cash payment has been implemented for partner companies with capital under 40 million yen, and since November 2022, the payment period has been shortened from 120 days to 60 days for transaction partners that have a capital of 40 million yen or more and have received invoices.

Such proactive approaches towards shareholder returns and various stakeholders by the company are highly commendable.

(Written by FISCO guest analyst Noboru Terashima)