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Medium-Term Business Strategy

Cost of Capital-Conscious Management

Cost of Capital-Conscious Management (Cost of Capital, Capital Profitablity, Market Valuation)

Deepen "management conscious of cost of capital and stock price" based on the financial policy of the medium-term business strategy

Our understanding of capital costs and related matters is as follows. We have not been able to secure sufficient equity spread, the share price is underperforming TOPIX, and the current PBR is hovering around 1x.

Topic Present(as of May, 2025)
Capital cost
  • ●Cost of equity: 8-10%
Capital profitability
  • ●ROE:

    ROE 5-year average (FY2020-FY2024): 7.4%
    FY2024: 8.1%

Shareholder return
  • ●Dividend per share:

    FY2022: 68 yen
    FY2023: 84 yen
    FY2024: 100 yen
    FY2025 (planned): 100 yen

  • ●Repurchase of shares:

    Conduct shaer repurchases up to 20 billion yen during the period from May 12, 2025 to April 30, 2026.

Market valuation
  • ●PBR:

    P/B ratio 5-year average(FY2020-FY2024): 1.01x
    As of the end of FY2024: 1.00x

  • ●TSR:

    TSR(FY2020-FY2024)including dividend: 185.6%
    (TOPIX: 213.4%)

Capital cost

The current cost of equity is estimated around 8% to 10%. It is calculated based on CAPM, but since it varies depending on the timing of calculation and different assumptions, it is taken as a range. We will continue to transform our business portfolio and reduce the cost of equity while also utilizing interest-bearing debt.

Capital profitability

ROE has averaged 7.4% over the past five years. Our basic policy is to soundly increase ROE through business growth, and we aim to achieve a level of ROE (10% or more) maintaining an equity spread.

Shareholder return

Our basic policy is to provide stable and continuous shareholder returns. Under the medium-term business strategy "CS B2027",we will provide a minimum annual dividend of 100 yen per share, aiming for a payout ratio of 40%. Additionally, we plan to repurchase a total of 60 billion yen of our own shares during the CS B2027 period. Furthermore, we will consider additional returns based on performance and other factors.
For FY2024, we will pay an annual dividend of 100 yen per share, an increase of 16 yen from the previous year. For FY2025, we also plan to pay an annual dividend of 100 yen per share. In addition, we will conduct share repurchases up to 20 billion yen during the period from May 12, 2025 to April 30, 2026.

Market valuation

The price-to-book ratio (PBR) has averaged 1.01 times in the past five years and was 1.00 times as of the end of FY2024. Total shareholder retuen (TSR) including dividends over the past five years was 185.6%, which is below the TOPIX. We plan to further improve the PBR and TSR by improving profitability and promoting business portfolio transformation through continuous growth investment.

We will further deepen our management conscious of cost of capital and ROI based on the financial policy of our CS B2027 in order to meet the expectations of our stakeholders, achieve sustainable growth, and enhance corporate value.

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