Sanoh Industrial (6584) Investor presentation summary

Background and strategic direction

• Emphasis on capital efficiency and share price awareness in response to governance reforms and market demands.

• Focus on sustainable growth and improved capital efficiency by reinvesting generated capital into growth areas.

• Structural transformation in the automotive industry and high uncertainty drive the need for a stronger earnings structure and business portfolio quality.

• Management aims to clarify policies for profitability and capital efficiency, with ongoing disclosure and market dialogue.

Mid-term strategy and progress

• Targeting ¥200 billion revenue and ROE of 15% or higher by FY2030, with structural reforms and growth investments underway.

• Launching new operations in the Americas and expanding into new businesses, including the data center sector.

• Share price performance remains weak, but profitability improvements and growth investments are expected to enhance corporate value.

• Investments in India and Mexico have improved market share and profitability; data center business has secured large-scale project orders.

• Progress in non-ICE businesses is ongoing but not yet sufficient to offset ICE downsizing.

Financial performance and market evaluation

• Share price has underperformed industry peers and diverged from overall market trends since 2019.

• ROIC, ROE, and operating margins have declined over decades, with recent years showing increased ROE volatility.

• Net income margin is lower and more volatile than industry peers; financial leverage is high due to reliance on external funding.

• Only Americas and Asia segments exceed target ROIC; Japan, China, and Europe require restructuring.

• PBR and forward PER are discounted relative to the TSE Prime market, highlighting the need for business transformation.