Chugoku Marine Paints 4617

Transcription

1 This PDF document is an updated note on the company. A comprehensive version of the report on the company, including this latest update, is available on our website at and various professional platforms. Our sponsored research reports provide an in-depth and informative view of the companies we cover, and contain the latest available information updated in a timely manner. On May 6, 2016, Chugoku Marine Paints, Ltd. announced its Full-Year FY03/16 earnings results, and plans for a dividend increase and share buyback. Income statement FY03/14 FY03/15 FY03/16 FY03/17 (JPYmn) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY FY FY FY Est. % of FY FY Sales 20,231 23,733 22,680 24,257 22,932 27,531 27,792 28,482 27,991 31,581 28,984 26,510 90, , , , % 90,000 YoY 3.1% 1.0% 9.6% 22.3% 13.4% 16.0% 22.5% 17.4% 22.1% 14.7% 4.3% -6.9% 8.7% 17.4% 7.8% 7.7% -21.8% Gross profit 5,456 6,402 6,363 7,006 6,277 7,759 7,495 7,893 8,243 9,677 9,331 8,888 GPM 27.0% 27.0% 28.1% 28.9% 27.4% 28.2% 27.0% 27.7% 29.4% 30.6% 32.2% 33.5% SG&A expenses 4,630 5,653 5,239 5,646 5,000 5,733 5,347 5,902 6,083 6,811 6,520 6,713 YoY 1.8% 32.3% 23.8% 31.0% 8.0% 1.4% 2.1% 4.5% 21.7% 18.8% 21.9% 13.7% SG&A / sales 22.9% 23.8% 23.1% 23.3% 21.8% 20.8% 19.2% 20.7% 21.7% 21.6% 22.5% 25.3% Operating profit ,124 1,359 1,277 2,026 2,147 1,992 2,160 2,866 2,811 2,175 4,058 7,442 10,012 9, % 6,800 YoY 3.6% -62.0% -10.4% 97.0% 54.8% 170.1% 91.0% 46.6% 69.1% 41.5% 30.9% 9.2% -13.9% 83.4% 34.5% 20.9% -32.1% OPM 4.1% 3.2% 5.0% 5.6% 5.6% 7.4% 7.7% 7.0% 7.7% 9.1% 9.7% 8.2% 4.5% 7.0% 8.7% 7.8% 7.6% OP before dep. & amortization of g 1,189 1,150 1,520 1,788 1,678 2,439 2,581 2,445 2,584 3,303 3,255 2,637 YoY 4.5% -50.6% -6.5% 66.8% 41.1% 112.1% 69.8% 36.7% 54.0% 35.4% 26.1% 7.9% OPM 5.9% 4.8% 6.7% 7.4% 7.3% 8.9% 9.3% 8.6% 9.2% 10.5% 11.2% 9.9% Non-operating profit Financial income Gains on foreign exchange Other non-operating profit Recurring profit 1, ,405 1,504 1,431 2,182 2,491 2,255 2,534 3,043 2,795 2,044 5,058 8,359 10,416 9, % 7,000 YoY 21.0% -47.7% -2.8% 76.9% 21.0% 125.9% 77.3% 49.9% 77.1% 39.5% 12.2% -9.4% -1.2% 65.3% 24.6% 17.2% -32.8% RPM 5.8% 4.1% 6.2% 6.2% 6.2% 7.9% 9.0% 7.9% 9.1% 9.6% 9.6% 7.7% 5.6% 7.8% 9.1% 8.5% 7.8% Extraordinary profit Income taxes Implied tax rate 38.5% 39.3% 29.1% 35.3% 22.5% 27.8% 27.3% 40.9% 29.3% 26.8% 27.2% 30.4% Minority interests Net income , ,388 1, ,558 1,930 1,792 1,222 3,269 4,748 6,502 6, % 4,000 YoY 21.9% -52.7% 11.2% 175.4% 51.1% 171.1% 39.0% -16.0% 64.2% 39.0% 13.9% 46.0% 9.8% 45.2% 36.9% 26.4% -38.5% Net margin 3.1% 2.2% 5.0% 4.1% 4.1% 5.0% 5.7% 2.9% 5.6% 6.1% 6.2% 4.6% 3.6% 4.4% 5.7% 5.2% 4.4% Performance by segment FY03/14 FY03/15 FY03/16 FY03/17 (JPYmn) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY FY FY FY Est. % of FY FY Sales 20,231 23,733 22,680 24,257 22,932 27,531 27,792 28,482 27,991 31,581 28,984 26,510 90, , , , % Japan 8,661 8,795 8,604 8,948 8,872 8,779 9,780 9,101 9,945 9,565 10,027 8,964 35,008 36,532 38,501 China 5,440 7,168 6,699 6,756 6,021 9,608 9,257 9,470 7,540 9,766 8,129 6,424 26,063 34,356 31,859 Korea 1,727 2,182 2,071 2,492 2,620 2,749 2,838 3,368 3,798 4,613 3,880 3,551 8,472 11,575 15,842 Southeast Asia 2,189 2,887 2,543 2,929 2,594 2,964 2,750 3,508 2,869 3,514 3,249 3,553 10,548 11,816 13,185 Europe/US 2,212 2,701 2,762 3,133 2,823 3,432 3,166 3,035 3,837 4,123 3,700 4,018 10,808 12,456 15,678 Marine paints 14,453 17,162 16,540 18,567 17,362 20,027 20,418 21,943 21,607 24,967 23,291 22,198 66,722 79,750 92,063 Industrial paints 3,014 3,105 3,228 3,098 3,153 3,140 3,209 3,183 2,990 2,958 3,273 3,020 12,445 12,685 12,241 Container paints 2,686 3,378 2,841 2,511 2,333 4,282 4,086 3,271 3,318 3,571 2,339 1,207 11,416 13,972 10,435 Other YoY 3.1% 1.0% 9.6% 22.3% 13.4% 16.0% 22.5% 17.4% 22.1% 14.7% 4.3% -6.9% 8.7% 17.4% 7.8% 7.7% Japan -3.1% 2.3% 0.7% 10.5% 2.4% -0.2% 13.7% 1.7% 12.1% 9.0% 2.5% -1.5% 2.4% 4.4% 5.4% China 0.0% -20.8% -5.4% 11.3% 10.7% 34.0% 38.2% 40.2% 25.2% 1.6% -12.2% -32.2% -5.7% 31.8% -7.3% Korea 1.0% 45.5% 48.6% 55.9% 51.7% 26.0% 37.0% 35.2% 45.0% 67.8% 36.7% 5.4% 36.6% 36.6% 36.9% Southeast Asia 23.6% 26.4% 30.3% 31.2% 18.5% 2.7% 8.1% 19.8% 10.6% 18.6% 18.1% 1.3% 28.0% 12.0% 11.6% Europe/US 25.3% 30.1% 60.4% 71.4% 27.6% 27.1% 14.6% -3.1% 35.9% 20.1% 16.9% 32.4% 46.2% 15.2% 25.9% Marine paints -9.8% -1.9% 7.2% 24.4% 20.1% 16.7% 23.4% 18.2% 24.4% 24.7% 14.1% 1.2% 4.5% 19.5% 15.4% Industrial paints 9.4% 14.6% 11.8% 17.3% 4.6% 1.1% -0.6% 2.7% -5.2% -5.8% 2.0% -5.1% 13.2% 1.9% -3.5% Container paints 257.7% 5.2% 23.7% 16.1% -13.1% 26.8% 43.8% 30.3% 42.2% -16.6% -42.8% -63.1% 35.6% 22.4% -25.3% Operating profit ,124 1,359 1,277 2,026 2,147 1,992 2,160 2,866 2,811 2,175 4,058 7,442 10,012 9, % Japan ,966 1,598 2,773 China ,345 2,063 Korea Southeast Asia ,477 1,984 2,907 Europe/US ,042 Elimination ,402 1,962 2,796 OPM 4.1% 3.2% 5.0% 5.6% 5.6% 7.4% 7.7% 7.0% 7.7% 9.1% 9.7% 8.2% 4.5% 7.0% 8.7% 7.8% Japan 5.4% 6.6% 5.5% 4.9% 4.9% 4.0% 4.0% 4.7% 6.8% 6.5% 9.3% 6.1% 5.6% 4.4% 7.2% China -1.1% -9.2% -1.9% 3.4% 1.7% 7.9% 9.3% 6.6% 4.6% 7.9% 7.0% 5.9% -2.4% 6.8% 6.5% Korea 1.7% 7.7% 8.5% 0.1% 2.3% 1.4% 0.8% 1.0% 2.4% 3.5% 2.9% 4.2% 4.4% 1.3% 3.2% Southeast Asia 11.9% 14.2% 15.7% 13.9% 16.0% 16.7% 16.4% 17.8% 19.6% 21.7% 24.8% 21.9% 14.0% 16.8% 22.0% Europe/US -5.8% -5.2% -6.0% -3.4% -2.6% -3.3% -4.6% -8.8% -7.7% -4.6% -8.5% -6.0% -5.0% -4.8% -6.6% Sales by product category (JPYmn) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY FY FY Marine paints 14,453 17,162 16,540 18,567 17,362 20,027 20,418 21,943 21,607 24,967 23,291 22,198 66,722 79,750 92,063 Japan 6,988 7,094 6,853 7,162 7,229 7,331 8,163 7,653 8,456 8,143 8,454 7,476 28,097 30,376 32,529 China 2,681 3,703 3,691 4,222 3,598 5,087 4,987 6,038 4,324 6,113 5,639 5,095 14,297 19,710 21,171 Korea 1,722 2,157 2,064 2,480 2,578 2,679 2,815 3,344 3,787 4,578 3,866 3,540 8,423 11,416 15,771 Southeast Asia 937 1,584 1,276 1,682 1,300 1,713 1,411 1,970 1,461 2,150 1,791 2,226 5,479 6,394 7,628 Europe/US 2,122 2,626 2,656 3,021 2,656 3,217 3,041 2,938 3,578 3,981 3,542 3,861 10,425 11,852 14,962 YoY -9.8% -1.9% 7.2% 24.4% 20.1% 16.7% 23.4% 18.2% 24.4% 24.7% 14.1% 1.2% 4.5% 19.5% 15.4% Japan -4.6% 0.9% 0.3% 8.0% 3.4% 3.3% 19.1% 6.9% 17.0% 11.1% 3.6% -2.3% 1.0% 8.1% 7.1% China -40.6% -34.0% -19.9% 11.8% 34.2% 37.4% 35.1% 43.0% 20.2% 20.2% 13.1% -15.6% -22.8% 37.9% 7.4% Korea 1.2% 44.3% 48.4% 56.1% 49.7% 24.2% 36.4% 34.8% 46.9% 70.9% 37.3% 5.9% 36.4% 35.5% 38.1% Southeast Asia 15.5% 17.9% 36.6% 45.4% 38.7% 8.1% 10.6% 17.1% 12.4% 25.5% 26.9% 13.0% 29.1% 16.7% 19.3% Europe/US 26.5% 30.5% 60.1% 70.2% 25.2% 22.5% 14.5% -2.7% 34.7% 23.7% 16.5% 31.4% 46.3% 13.7% 26.2% Industrial paints 3,014 3,105 3,228 3,098 3,153 3,140 3,209 3,183 2,990 2,958 3,273 3,020 12,445 12,685 12,241 Japan 1,594 1,616 1,679 1,706 1,560 1,365 1,539 1,363 1,414 1,337 1,491 1,403 6,595 5,827 5,645 China ,582 1,948 1,705 Korea Southeast Asia 1,020 1,027 1, ,049 1,020 1,108 1,274 1,151 1,103 1,208 1,080 4,053 4,451 4,542 Europe/US YoY 9.4% 14.6% 11.8% 17.3% 4.6% 1.1% -0.6% 2.7% -5.2% -5.8% 2.0% -5.1% 13.2% 1.9% -3.5% Japan 4.7% 9.9% 3.1% 24.3% -2.1% -15.5% -8.3% -20.1% -9.4% -2.1% -3.1% 2.9% 10.0% -11.6% -3.1% China -5.7% -8.2% 9.6% 4.1% 21.6% 32.0% 6.9% 35.7% -20.4% -21.9% 0.2% -8.1% -0.2% 23.1% -12.5% Korea -37.5% 300.0% 166.7% 50.0% 740.0% 191.7% 175.0% 100.0% -73.8% -51.4% -36.4% -54.2% 96.0% 222.4% -55.7% Southeast Asia 28.6% 35.8% 25.8% 9.6% 2.8% -0.7% 8.3% 29.6% 9.7% 8.1% 9.0% -15.2% 24.4% 9.8% 2.0% Europe/US -23.3% -7.1% 188.9% 95.2% 67.4% 446.2% -21.2% -4.9% -2.6% -57.0% 41.5% 115.4% 29.9% 81.2% -7.0% Container paints 2,686 3,378 2,841 2,511 2,333 4,282 4,086 3,271 3,318 3,571 2,339 1,207 11,416 13,972 10,435 China 2,411 3,054 2,541 2,177 2,000 3,977 3,771 2,949 2,878 3,229 1, ,183 12,697 8,982 Southeast Asia , ,014 Europe/US YoY 257.7% 5.2% 23.7% 16.1% -13.1% 26.8% 43.8% 30.3% 42.2% -16.6% -42.8% -63.1% 35.6% 22.4% -25.3% China 332.9% 2.1% 24.2% 11.5% -17.0% 30.2% 48.4% 35.5% 43.9% -18.8% -47.2% -70.0% 34.9% 24.7% -29.3% Southeast Asia 38.6% 49.7% 20.2% 48.0% 5.7% -16.2% -4.9% -0.8% 5.3% 12.5% 7.8% -6.1% 38.6% -4.5% 4.5% Europe/US 65.4% 36.1% 22.2% 115.6% 107.0% 49.0% 52.7% -15.9% 105.6% 11.0% 17.9% 29.3% 55.4% 40.7% 44.1% 1/7

2 Cumulative Q3 sales (left and middle charts) and operating profit (right chart) Quarterly earnings (JPYbn) Exchange rate assumptions (mid-year and year-end) Earnings summary Market conditions for container paints stalled from Q3 but results generally firm owing to repair demand and bottoming demand for new ships For full-year FY03/16, sales were JPY115.1bn (up 7.8% YoY) and operating profit was JPY10.0bn (up 34.5% YoY). Sales would have increased nearly 7% even excluding foreign exchange effects (equivalent to a sales increase of JPY5bn). Further, sales, operating and recurring profits, and net income all posted record highs, with sales and profits outstripping the company s forecasts. Shared Research attributes the overshoot to two factors: decline in material prices due to lower crude oil prices, which domestically was not factored into the company s forecasts, and conservative default risk forecasts. 2/7

3 The company also announced that it would raise its year-end dividend (from JPY8 to JPY9, resulting in a full year dividend of JPY16), a share buyback to be executed by between May 9, 2016 and July 29, 2016 (upper limit of 900,000 shares for JPY500mn; 1.4% of total shares outstanding), and changes in the unit number of shares (from the present 1000 shares to 100 shares from October 2016). The company left both its full-year forecast and dividend forecast unchanged. In mainstay marine paints, production volume of new ships continued to bottom in key shipbuilding countries (such as Japan, Korea, and China), while demand was steady in ship repairs. By capturing steady demand in these markets, the company saw sales in marine paints rise by 15.4% YoY to JPY92.1bn, bolstering overall consolidated results. However, soft market conditions for container paints from Q3 and weak performance overall for industrial paints restrained consolidated sales growth at 7.8%. GPM improving on cost-cutting measures and better product mix; in SG&A expenses, allowance for dubious accounts less than expected Gross profit margin continued to improve in Q4. China s VOC consumption tax impacted CMP s performance in Q3. However, there were several favorable factors: 1) the sales increase; 2) the effects of measures to reduce purchase prices, such as integration or scrapping of products and materials, were gradually emerging; and 3) the sales ratio of container paints, which have relatively low profitability, decreased. Concerning declines in material prices due to lower crude oil prices, Shared Research believes that the favorable effects mainly seen overseas in 1H have been spreading to Japan in 2H. SG&A expenses increased due to higher sales commission fees and personnel expenses. Risk from customers defaulting seen as a concern in the revised forecasts for FY03/16 did not prove to be a major issue. As a result, operating profit was JPY10.0bn (up JPY2.6bn YoY), and OPM was 8.7% (up 1.7pp YoY). Naphtha CIF prices (thousand yen/kl) and GPM Brief look at the FY03/17 forecasts The forecast calls for sales of JPY90.0bn (-21.8% YoY) and operating profit of JPY6.8bn (-32.1% YoY) in FY03/17. Signs point to a gloomy outlook in the global economy, and the company recognizes that its operating environment will remain sluggish for the time being, citing: an expected slowdown in the pace of new ship construction and temporary reductions in container box production because of a weak marine transport market possible contraction in demand for ship repair 3/7

4 sluggish industrial demand on stagnating growth in developing countries As a result, the market appears set to go from an expansion to an adjustment phase, and as it undergoes the adjustment process, there is an increased risk that various losses could emerge, particularly overseas. That said, given the ongoing strength of developed country economies, the company has not ruled out the possibility of the adjustment phase winding down quickly, prompted by the bottoming of developing country economies. Implementing continuous cost-cutting measures, tightening credit risk management, and launch of new businesses are potential issues for FY03/17. In this business environment, as issues for FY03/17, the company cited implementation of continuous cost-cutting measures, tightening of credit risk management, and launching of new businesses. Regarding costs, material prices appeared to be positive, but the company plans to continue implementing cost-cutting measures, such as integration and scrapping of products and materials. The company also aims to tighten management of credit risk, including sales-related risk. In sales activities, CMP plans to place emphasis on the strict management of credit risk even it loses some of its market share overseas. Though the company may miss the chance to capture demand for marine paints for some new ships, Shared Research believes that CMP aims to increase profits by decreasing losses. Launching new businesses is also a medium-term target, and the company plans to make efforts to foster new businesses in FY03/17. Marine paints Marine paints Industrial paints 4/7

5 Industrial paints Domestic sales and new housing starts Container paints Container paints China (export) containerized freight index Source: Shared Research based on Bloomberg data 5/7

6 Breakdown of sales Sales by product category (JPYmn) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY FY FY Marine paints 14,453 17,162 16,540 18,567 17,362 20,027 20,418 21,943 21,607 24,967 23,291 22,198 66,722 79,750 92,063 Japan 6,988 7,094 6,853 7,162 7,229 7,331 8,163 7,653 8,456 8,143 8,454 7,476 28,097 30,376 32,529 China 2,681 3,703 3,691 4,222 3,598 5,087 4,987 6,038 4,324 6,113 5,639 5,095 14,297 19,710 21,171 Korea 1,722 2,157 2,064 2,480 2,578 2,679 2,815 3,344 3,787 4,578 3,866 3,540 8,423 11,416 15,771 Southeast Asia 937 1,584 1,276 1,682 1,300 1,713 1,411 1,970 1,461 2,150 1,791 2,226 5,479 6,394 7,628 Europe/US 2,122 2,626 2,656 3,021 2,656 3,217 3,041 2,938 3,578 3,981 3,542 3,861 10,425 11,852 14,962 YoY -9.8% -1.9% 7.2% 24.4% 20.1% 16.7% 23.4% 18.2% 24.4% 24.7% 14.1% 1.2% 4.5% 19.5% 15.4% Japan -4.6% 0.9% 0.3% 8.0% 3.4% 3.3% 19.1% 6.9% 17.0% 11.1% 3.6% -2.3% 1.0% 8.1% 7.1% China -40.6% -34.0% -19.9% 11.8% 34.2% 37.4% 35.1% 43.0% 20.2% 20.2% 13.1% -15.6% -22.8% 37.9% 7.4% Korea 1.2% 44.3% 48.4% 56.1% 49.7% 24.2% 36.4% 34.8% 46.9% 70.9% 37.3% 5.9% 36.4% 35.5% 38.1% Southeast Asia 15.5% 17.9% 36.6% 45.4% 38.7% 8.1% 10.6% 17.1% 12.4% 25.5% 26.9% 13.0% 29.1% 16.7% 19.3% Europe/US 26.5% 30.5% 60.1% 70.2% 25.2% 22.5% 14.5% -2.7% 34.7% 23.7% 16.5% 31.4% 46.3% 13.7% 26.2% Industrial paints 3,014 3,105 3,228 3,098 3,153 3,140 3,209 3,183 2,990 2,958 3,273 3,020 12,445 12,685 12,241 Japan 1,594 1,616 1,679 1,706 1,560 1,365 1,539 1,363 1,414 1,337 1,491 1,403 6,595 5,827 5,645 China ,582 1,948 1,705 Korea Southeast Asia 1,020 1,027 1, ,049 1,020 1,108 1,274 1,151 1,103 1,208 1,080 4,053 4,451 4,542 Europe/US YoY 9.4% 14.6% 11.8% 17.3% 4.6% 1.1% -0.6% 2.7% -5.2% -5.8% 2.0% -5.1% 13.2% 1.9% -3.5% Japan 4.7% 9.9% 3.1% 24.3% -2.1% -15.5% -8.3% -20.1% -9.4% -2.1% -3.1% 2.9% 10.0% -11.6% -3.1% China -5.7% -8.2% 9.6% 4.1% 21.6% 32.0% 6.9% 35.7% -20.4% -21.9% 0.2% -8.1% -0.2% 23.1% -12.5% Korea -37.5% 300.0% 166.7% 50.0% 740.0% 191.7% 175.0% 100.0% -73.8% -51.4% -36.4% -54.2% 96.0% 222.4% -55.7% Southeast Asia 28.6% 35.8% 25.8% 9.6% 2.8% -0.7% 8.3% 29.6% 9.7% 8.1% 9.0% -15.2% 24.4% 9.8% 2.0% Europe/US -23.3% -7.1% 188.9% 95.2% 67.4% 446.2% -21.2% -4.9% -2.6% -57.0% 41.5% 115.4% 29.9% 81.2% -7.0% Container paints 2,686 3,378 2,841 2,511 2,333 4,282 4,086 3,271 3,318 3,571 2,339 1,207 11,416 13,972 10,435 China 2,411 3,054 2,541 2,177 2,000 3,977 3,771 2,949 2,878 3,229 1, ,183 12,697 8,982 Southeast Asia , ,014 Europe/US YoY 257.7% 5.2% 23.7% 16.1% -13.1% 26.8% 43.8% 30.3% 42.2% -16.6% -42.8% -63.1% 35.6% 22.4% -25.3% China 332.9% 2.1% 24.2% 11.5% -17.0% 30.2% 48.4% 35.5% 43.9% -18.8% -47.2% -70.0% 34.9% 24.7% -29.3% Southeast Asia 38.6% 49.7% 20.2% 48.0% 5.7% -16.2% -4.9% -0.8% 5.3% 12.5% 7.8% -6.1% 38.6% -4.5% 4.5% Europe/US 65.4% 36.1% 22.2% 115.6% 107.0% 49.0% 52.7% -15.9% 105.6% 11.0% 17.9% 29.3% 55.4% 40.7% 44.1% Full-year company forecasts (out October 29, 2015) Income statement FY03/17 Est. (JPYmn) 1H 2H FY 1H 2H FY 1H 2H FY 1H 2H FY Sales 43,964 46,937 90,901 50,463 56, ,737 59,572 55, ,066 40,000 50,000 90,000 YoY 1.9% 15.8% 8.7% 14.8% 19.9% 17.4% 18.1% -1.4% 7.8% -32.9% -9.9% -21.8% Operating profit 1,575 2,483 4,058 3,303 4,139 7,442 5,026 4,986 10,012 3,000 3,800 6,800 YoY -43.2% 27.7% -13.9% 109.7% 66.7% 83.4% 52.2% 20.5% 34.5% -40.3% -23.8% -32.1% OPM 3.6% 5.3% 4.5% 6.5% 7.4% 7.0% 8.4% 9.0% 8.7% 7.5% 7.6% 7.6% Recurring profit 2,149 2,909 5,058 3,613 4,746 8,359 5,577 4,839 10,416 3,100 3,900 7,000 YoY -23.9% 26.8% -1.2% 68.1% 63.1% 65.3% 54.4% 2.0% 24.6% -44.4% -19.4% -32.8% RPM 4.9% 6.2% 5.6% 7.2% 8.4% 7.8% 9.4% 8.7% 9.1% 7.8% 7.8% 7.8% Net income 1,140 2,129 3,269 2,337 2,411 4,748 3,488 3,014 6,502 1,800 2,200 4,000 YoY -28.7% 54.3% 9.8% 105.0% 13.2% 45.2% 49.3% 25.0% 36.9% -48.4% -27.0% -38.5% Net margin 2.6% 4.5% 3.6% 4.6% 4.3% 4.4% 5.9% 5.4% 5.7% 4.5% 4.4% 4.4% This note is the most recent addition to the full report. 6/7

7 About Shared Research Inc. We offer corporate clients comprehensive report coverage, a service that allows them to better inform investors and other stakeholders by presenting a continuously updated third-party view of business fundamentals, independent of investment biases. Shared Research can be found on the web at Disclaimer This document is provided for informational purposes only. No investment opinion or advice is provided, intended, or solicited. Shared Research Inc. offers no warranty, either expressed or implied, regarding the veracity of data or interpretations of data included in this report. Shared Research Inc. shall not be held responsible for any damage caused by the use of this report. The copyright of this report and the rights regarding the creation and exploitation of the derivative work of this and other s belong to Shared Research Inc. This report may be reproduced or modified for personal use; distribution, transfer, or other uses of this report are strictly prohibited and a violation of the copyright of this report. SR Inc. officers and employees may currently, or in the future, have a position in securities of the companies mentioned in this report, which may affect this report s objectivity. Japanese Financial Instruments and Exchange Law (FIEL) Disclaimer The report has been prepared by Shared Research Inc. ( SR ) under a contract with the company described in this report ( the Company ). Opinions and views presented are SR s where so stated. Such opinions and views attributed to the Company are interpretations made by SR. SR represents that if this report is deemed to include an opinion by SR that could influence investment decisions in the Company, such opinion may be in exchange for consideration or promise of consideration from the Company to SR. Contact Details Shared Research.inc Sendagi Bunkyo-ku Tokyo, Japan Phone: +81 (0) info@sharedresearch.jp 7/7