COMPANY RESEARCH AND ANALYSIS REPORT

SUN-WA TECHNOS CORPORATION
8137
Tokyo Stock Exchange First Section

18-Jan.-2019
FISCO Ltd. Analyst

Hiroyuki Asakawa

FISCO Ltd.
http://www.fisco.co.jp

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

SUN-WA TECHNOS CORPORATION
8137 Tokyo Stock Exchange First Section

18-Jan.-2019
http://www.sunwa.co.jp/ir/index.html■ Index■Summary---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 01
1. Reported higher sales and profits in 1H FY3/19, limited impact from China risk..........................................

01

2. Making healthy progress in the final year of the medium-term management plan,
expanding the engineering business while raising profitability.....................................................................

01

3. Prospect of continued smooth expansion led by the automotive business in 2H FY3/19. ...........................

01■Results trends--------------------------------------------------------------------------------------------------------------------------------------------------------------- 02
1. Review of 1H FY3/19 results.................. ......................................................................................................

02

2. Segment details...........................................................................................................................................

04

3. Results trends by geographical market........................................................................................................

05■Overview and progress of the medium-term management plan---------------------------------- 07
1. Overview of the medium-term management plan. .......................................................................................

07

2. Progress of the engineering business.... ......................................................................................................

09

3. Progress on the global SCM solutions business. .........................................................................................

11■Outlook-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 12■Shareholder return policy---------------------------------------------------------------------------------------------------------------------------------- 16

We encourage readers to review our complete legal statement on “Disclaimer” page.

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

SUN-WA TECHNOS CORPORATION
8137 Tokyo Stock Exchange First Section

18-Jan.-2019
http://www.sunwa.co.jp/ir/index.html██SummaryContinuing healthy progress in the final year of the medium-term
management plan
Achieving steady growth in the engineering business
SUN-WA TECHNOS CORPORATION <8137> (hereinafter, “the Company”) is an independent trading company thatspecializes in technology products. The Company has steadily expanded its businesses by leveraging coverageof three major areas (electrical machinery, electronics, and general machinery) and two-way trade in which it sells
equipment and materials for manufacturers’ production lines and then procures the products made by thesemanufacturers. In recent years, it has been focusing on the engineering business and global SCM solutions.
1. Reported higher sales and profits in 1H FY3/19, limited impact from China risk
The Company reported higher sales and profits in 1H FY3/19 at ¥72,164mn in net sales (+7.2% YoY) and ¥2,312mn
in ordinary income (+18.5%). Despite concerns about the impact of trade friction between the US and China andother factors, it increased sales of electronics and other products to the automotive industry and steadily expanded
sales to the semiconductor and FPD (flat panel display) industries. Profit met the Company’s initial forecast even withsetbacks from weaker demand than expected in some industries, such as factory automation and other industrial
machinery, due to high smartphone-related demand.
2. Making healthy progress in the final year of the medium-term management plan, expanding theengineering business while raising profitability
This fiscal year (FY3/19) is the final year of Challenge 1500, the current medium-term management plan. The
Company already reached the sales goal one year ahead of time and is working toward realization of profit goals in
FY3/19. Besides existing business growth, a major theme in this plan is expansion of the engineering business andthe global SCM business. The engineering business, in particular, deserves notice. This refers to efforts to pursue
added value through having the three existing businesses share and utilize product and technology information
they respectively possess and sell things in packages rather than on a standalone basis. The profit margin for theengineering business disclosed this time exceeds the Companywide average as targeted by the Company. This
result confirmed healthy growth while raising profitability in the engineering business.
3. Prospect of continued smooth expansion led by the automotive business in 2H FY3/19
For FY3/19, the Company targets ¥150,000mn in net sales (+2.2% YoY) and ¥4,500mn in ordinary income (+3.5%).
While it lowered net sales in light of the 1H outcome, it kept ordinary income at the period-start level. The outlook
expects the 2H business environment to be roughly similar to 1H with automotive-related demand (particularly
safety equipment and other products installed in vehicles) as the main results driver again. Order value and orderbacklog were at all-time high levels in 1H, and we think this position is likely to support healthy expansion in 2H aswell. Some observers expect recovery in Chinese demand to come earlier than anticipated. We advise caution at
this point, but forecast a tailwind for the Company’s results if it happens.

We encourage readers to review our complete legal statement on “Disclaimer” page.

01 17

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

SUN-WA TECHNOS CORPORATION

18-Jan.-2019

8137 Tokyo Stock Exchange First Section

http://www.sunwa.co.jp/ir/index.html

Summary

Key Points
Healthy growth in sales to automotive and FPD industries in the Japanese market and industrial machineryindustry in the Asian market• Making smooth progress toward medium-term management plan goals, determined to reach ¥150bn in net
sales and ¥4.5bn in ordinary income in FY3/19• Likely to continue achieving steady expansion while raising profitability for the engineering business, the top
priority•㻾㼑㼟㼡㼘㼠㼟㻌㼠㼞㼑㼚㼐㼟㻔¥㼙㼚㻕㻺㼑㼠㻌㼟㼍㼘㼑㼟㻌㻔㼘㼑㼒㼠㻕㻞㻜㻜㻘㻜㻜㻜
㻠㻘㻝㻟㻡㻝㻢㻜㻘㻜㻜㻜

㻔¥㼙㼚㻕㻻㼜㼑㼞㼍㼠㼕㼚㼓㻌㼕㼚㼏㼛㼙㼑㻌㻔㼞㼕㼓㼔㼠㻕
㻠㻘㻠㻜㻜

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㻝㻠㻢㻘㻣㻡㻥
㻝㻝㻝㻘㻞㻣㻢

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㻞㻘㻜㻜㻜㻝㻝㻢㻘㻢㻝㻝

㻝㻜㻡㻘㻣㻠㻤

㻠㻜㻘㻜㻜㻜㻝㻘㻜㻜㻜㻜㻜㻲㼅㻟㻛㻝㻡

㻲㼅㻟㻛㻝㻢

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㻲㼅㻟㻛㻝㻤

㻲㼅㻟㻛㻝㻥㻌㻱

Source: Prepared by FISCO from the Company's financial results██Results trends
Posted higher sales and profits YoY with sales gains and improved
gross margin in all three segments
Efficient utilization of SG&A expenses boosted profits too
1. Review of 1H FY3/19 results
The Company reported higher sales and profits in 1H FY3/19 at ¥72,164mn in net sales (+7.2% YoY), ¥2,129mn
in operating income (+20.1%), ¥2,312mn in ordinary income (+18.5%), and ¥1,651mn in net income attributableto owners of the parent (+21.4%).
The Company is putting top priority on realizing its target for ordinary income in FY3/19. While 1H sales missed by
8.1% (¥6,336mn), ordinary income reached the initial target. We think this was a passing result.

We encourage readers to review our complete legal statement on “Disclaimer” page.

02 17

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

SUN-WA TECHNOS CORPORATION

18-Jan.-2019

8137 Tokyo Stock Exchange First Section

http://www.sunwa.co.jp/ir/index.html

Results trends

1H FY3/19 results(¥mn)
FY3/18

FY3/191H

1H forecast

Results

Net sales

67,34878,50072,164

7.2%

-8.1%

48.1%

Operating income

1,773

2,250

2,129

20.1%

-5.4%

48.4%

2.6%

2.9%

3.0%

-

-

Ordinary income

1,951

2,300

2,312

18.5%

0.5%

51.4%

Net income attributable to owners of the parent

1,359

1,600

1,651

21.4%

3.2%

52.4%

Operating margin

YoY

vs. forecast

Progress rate

Source: Prepared by FISCO from the Company's financial results

Net sales rose 7.2% YoY with gains in the three major segments (electrical machinery, electronics, and generalmachinery; details covered below), a generally upbeat trend. The Company also posted higher sales in all regions,
including double-digit advances in Japan and Europe/US and 5-6% increases in Asia and others. By demand sector,
sales to the automotive industry were upbeat, just as in the previous fiscal year with manufacturing equipment
holding at a high level and continued strong growth in the automotive product business. While the semiconductor
and industrial machinery industries slowed versus previous momentum and sales undershot expectations in someareas, the Company still achieved sales gains YoY from these industries.
In earnings, gross margin increased by 0.1ppt from 11.8% in the previous year to 11.9%. The SG&A expenses
ratio improved too with a 0.2ppt decline from 9.2% to 9.0%. The Company expanded gross margin, despite heavy
downward pressure from a product mix change and tougher competition, due to sales efforts and initiatives in theengineering business explained below. In SG&A expenses, while higher logistics costs had been a concern as afactor weighing on profit, stronger sales and rigorous efforts to efficiently utilize spending throughout the Company
offset this impact and enabled reduction of the SG&A expenses ratio. Due to these trends, the operating marginclimbed by 0.4ppt from 2.6% to 3.0% and operating income increased 20.1% YoY.

㼀㼞㼑㼚㼐㼟㻌㼕㼚㻌㼢㼍㼞㼕㼛㼡㼟㻌㼙㼍㼞㼓㼕㼚㼟㻳㼞㼛㼟㼟㻌㼙㼍㼞㼓㼕㼚
㻝㻠㻚㻜㻑

㻝㻟㻚㻝㻑

㻝㻞㻚㻠㻑

㻿㻳㻒㻭㻌㼑㼤㼜㼑㼚㼟㼑㼟㻌㼞㼍㼠㼕㼛

㻝㻞㻚㻢㻑

㻝㻞㻚㻡㻑

㻝㻞㻚㻡㻑

㻻㼜㼑㼞㼍㼠㼕㼚㼓㻌㼙㼍㼞㼓㼕㼚

㻝㻞㻚㻞㻑

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㻲㼅㻟㻛㻝㻡

Source: Prepared by FISCO from the Company's financial results

We encourage readers to review our complete legal statement on “Disclaimer” page.

03 17

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

SUN-WA TECHNOS CORPORATION

18-Jan.-2019

8137 Tokyo Stock Exchange First Section

http://www.sunwa.co.jp/ir/index.html

Results trends

Net sales missed the initial target by 8.1% (¥6,336mn). As explained below, the Company lowered the FY3/19
net sales target by ¥7,500mn with much of the revision coming from a rise in internal eliminations. It removes
transactions to avoid double booking of internal transactions that extend across regions and divisions. A larger
increase in such transactions than in the initial outlook resulted in downward revision of the sales target. The sales
revision has limited impact on earnings because these transactions typically do not involve profits. The Company
posted profits on track with the forecast in 1H and maintained FY3/19 profit targets at roughly existing levels.
Looking at quarterly results trends, sales moved above ¥40bn in 4Q FY3/18, but subsequently dropped back tothe ¥30bn range again in 1-2Q FY3/19, including seasonality. Sales climbed YoY in both 1Q and 2Q and profits
also rose in both quarters.

㻽㼡㼍㼞㼠㼑㼞㼘㼥㻌㼞㼑㼟㼡㼘㼠㼟㻌㼠㼞㼑㼚㼐㼟㻺㼑㼠㻌㼟㼍㼘㼑㼟㻌㻔㼘㼑㼒㼠㻕㻻㼜㼑㼞㼍㼠㼕㼚㼓㻌㼕㼚㼏㼛㼙㼑㻌㻔㼘㼑㼒㼠㻕㻻㼜㼑㼞㼍㼠㼕㼚㼓㻌㼕㼚㼏㼛㼙㼑㻌㼅㼛㼅㻌㼓㼞㼛㼣㼠㼔㻌㼞㼍㼠㼑㻌㻔㼞㼕㼓㼔㼠㻕㻔¥㼙㼚㻕㻠㻡㻘㻜㻜㻜

㻞㻜㻜㻜㻑㻟㻣㻘㻤㻣㻞

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㻡㻜㻜㻑
㻝㻝㻚㻥㻑

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㻜㻑

㻝㻘㻞㻠㻞
㻜

㻙㻡㻜㻜㻑

㻝㻽 㻞㻽 㻟㻽 㻠㻽 㻝㻽 㻞㻽 㻟㻽 㻠㻽 㻝㻽 㻞㻽 㻟㻽 㻠㻽 㻝㻽 㻞㻽 㻟㻽 㻠㻽 㻝㻽 㻞㻽㻲㼅㻟㻛㻝㻡

㻲㼅㻟㻛㻝㻢

㻲㼅㻟㻛㻝㻣

㻲㼅㻟㻛㻝㻤

㻲㼅㻟㻛㻝㻥

Source: Prepared by FISCO from the Company's financial results

Healthy growth in sales to automotive and FPD industries for themainstay Japanese market
Sales to the industrial machinery industry in the Asian market, which
had been a concern, increased too
2. Segment details
The Company has three business segments (electrical machinery, electronics, and general machinery) as mentioned
earlier. Below we review trends for these segments in 1H FY3/19.
(1) Electrical machinery
Sales climbed 7.6% YoY to ¥13,332mn with gains in sales to the FPD industry in Japan and Europe/US and thesemiconductor industry in Japan. However, sales to the industrial machinery industry in Asia weakened.
(2) Electronics
Sales increased 6.4% YoY to ¥53,553mn on advances in sales to automotive and FPD industries in Japan andthe industrial machinery industry in Asia and Europe/US.
We encourage readers to review our complete legal statement on “Disclaimer” page.

04 17

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

SUN-WA TECHNOS CORPORATION
8137 Tokyo Stock Exchange First Section

18-Jan.-2019
http://www.sunwa.co.jp/ir/index.html

Results trends(3) General machinery
Sales expanded 14.3% YoY to ¥5,278mn with increases to automotive, industrial machinery, and amusement
industries in Japan, industrial machinery industry in Asia, and automotive industry in Europe/US.
Net sales trend by segment(¥mn)
FY3/18
Electrical machinery

FY3/19

1Q

2Q

1H

1Q

2Q

1H

6,056

6,333

12,390

6,271

7,061

13,332

YoY

57.0%

20.5%

35.9%

3.5%

11.5%

7.6%

Electronics

23,68026,65850,33925,662

27,89153,553

YoY

38.2%

36.2%

37.1%

8.4%

4.6%

6.4%

1,617

3,001

4,619

2,357

2,921

5,278

General machinery
YoY
Total net sales
YoY

3.0%

19.2%

10.4%

45.7%

-2.7%

14.3%

31,35535,99367,34834,29237,872

72,164

38.4%

31.6%

34.7%

9.4%

5.2%

7.2%

Source: Prepared by FISCO from the Company's financial results

3. Results trends by geographical market
Sales and profits improved YoY in the three regional segments of Japan, Asia, and Europe/US.
(1) Japan
Sales were up 10.1% YoY to ¥57,653mn, and operating income rose 13.9% to ¥1,065mn. The Company boosted
sales by leveraging strengths of products in electrical machinery, electronics, and general machinery segments ina wide range of industries, including the main industries of automotive, semiconductor, and industrial machinery.
(2) Asia
Sales advanced 5.1% YoY to ¥18,646mn, and operating income improved 15.5% to ¥778mn. While growth rates
were substantially slower than in 1H of the previous year, the Company secured higher sales and profits mainly
on increased sales of electronic parts and manufacturing equipment to the industrial machinery industry. Despite
the absence of disclosure of data on China, the largest intraregional market, we think business in China stalled
and this led to significantly weaker sales growth in light of general global trends and activity at main customers.
(3) Europe/US
Sales were up 11.9% YoY to ¥4,204mn, and operating income climbed 69.2% to ¥275mn. The Company achieved
healthy gains in sales to FPD, automotive, and industrial machinery industries. While sales rose sharply by 98.6%
in the previous year, they were still up by double digits in FY3/19. This indicates steady expansion in Europe/US.
Profit margin was 6.5%, the highest in all segments.

We encourage readers to review our complete legal statement on “Disclaimer” page.

05 17

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

SUN-WA TECHNOS CORPORATION
8137 Tokyo Stock Exchange First Section

18-Jan.-2019
http://www.sunwa.co.jp/ir/index.html

Results trends

Results trends by geographical market(¥mn)
FY3/18

Japan

1Q

2Q

1H

1Q

2Q

1H

Net sales

24,09828,28752,38527,66429,98957,653

YOY

34.4%

22.3%

27.6%

14.8%

6.0%

10.1%

154

781

935

345

720

1,065

-

-6.7%

24.5%

123.6%

-7.8%

13.9%

Operating income
YOY

0.6%

2.8%

1.8%

1.2%

2.4%

1.8%

Net sales

8,110

9,624

17,7348,500

10,146

18,646

YOY

40.5%

58.6%

49.7%

4.8%

5.4%

5.1%

338

336

674

376

402

778

138.7%

101.0%

118.3%

11.4%

19.6%

15.5%

Operating margin

Asia

Operating income
YOY

4.2%

3.5%

3.8%

4.4%

4.0%

4.2%

Net sales

2,306

1,452

3,758

2,340

1,864

4,204

YOY

120.7%

71.2%

98.6%

1.5%

28.4%

11.9%

185

-23

162

171

104

275

-

-

868.1%-7.4%-552.2%

69.2%

8.0%

-1.5%

4.3%

7.3%

5.6%

6.5%

Operating margin

Europe/US

FY3/19Operating income
YOY
Operating margin

Source: Prepared by FISCO from the Company's financial results

While simple comparisons of these segment and regional trends by demand industries is not possible because ofmajor differences in core industries and industrial structures by region/country and Japan’s overwhelmingly largepresence in regional breakdowns, we think having many products and demand industries with sales increases in
the main Japanese market indicates the robustness of the Company’s profit stability. In changes over time, sales
continued rising, just as in FY3/18, to the automotive industry (electronics), semiconductor industry (electricalmachinery), and FPD industry (electrical machinery) in Japan, industrial machinery industry (electronics) in Asia,
and FPD industry (electrical machinery) in Europe/US.
Segment and regional trends
Japan
Electricalmachinery
Automotive industry
Semiconductor industry

Asia

Electronics

Generalmachinery○○

Electronics

Europe/US
Generalmachinery

Electricalmachinery

Electronics

Generalmachinery○○

Industrial machinery industry
FPD industry

Electricalmachinery

×

○
○

○

○

○

○
○

Smartphone industry
Amusement industry○

Source: Prepared by FISCO from the Company's financial results

While factory automation and other industrial equipment is still the largest sales source by industry, its ratio has
been trending lower over the past few years. Conversely, the automotive (on-board products) area is sharply raising
its presence. This reflects sales to various on-board product industries within the automotive application. We think
the electronics segment delivers materials and electronic parts. The five major industries that stably hold top-level
ratios have exhibited YoY growth rates that are positive or flat. The automotive (on-board products) area’s ability to
rapidly increase its ratio in this environment attests to strong growth.

We encourage readers to review our complete legal statement on “Disclaimer” page.

06 17

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

SUN-WA TECHNOS CORPORATION
8137 Tokyo Stock Exchange First Section

18-Jan.-2019
http://www.sunwa.co.jp/ir/index.html

Results trends㼀㼞㼑㼚㼐㼟㻌㼕㼚㻌㼟㼍㼘㼑㼟㻌㼞㼍㼠㼕㼛㼟㻌㼎㼥㻌㼕㼚㼐㼡㼟㼠㼞㼥㻌㻔㼒㼕㼢㼑㻌㼙㼍㼖㼛㼞㻌㼕㼚㼐㼡㼟㼠㼞㼕㼑㼟㻕㻲㼍㼏㼠㼛㼞㼥㻌㼍㼡㼠㼛㼙㼍㼠㼕㼛㼚㻌㼍㼚㼐㻌㼛㼠㼔㼑㼞㻌㼕㼚㼐㼡㼟㼠㼞㼕㼍㼘㻌㼑㼝㼡㼕㼜㼙㼑㼚㼠㻭㼡㼠㼛㼙㼛㼠㼕㼢㼑㻌㻔㼛㼚㻙㼎㼛㼍㼞㼐㻌㼜㼞㼛㼐㼡㼏㼠㼟㻕㻭㼡㼠㼛㼙㼛㼠㼕㼢㼑㻌㻔㼑㼝㼡㼕㼜㼙㼑㼚㼠㻕㻿㼑㼙㼕㼏㼛㼚㼐㼡㼏㼠㼛㼞㼟㻌㼍㼚㼐㻌㼘㼕㼝㼡㼕㼐㻌㼏㼞㼥㼟㼠㼍㼘㻌㼐㼕㼟㼜㼘㼍㼥㼟㻾㼛㼎㼛㼠㼟㻌㼍㼚㼐㻌㼙㼛㼡㼚㼠㼑㼞㼟

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㻢㻚㻢㻑

㻝㻜㻚㻠㻑

㻟㻚㻢㻑
㻜㻚㻜㻑

㻝㻣㻛㻟期㻞㻽

㻥㻚㻤㻑

㻣㻚㻠㻑

㻣㻚㻝㻑

㻞㻚㻣㻑

㻞㻚㻠㻑

㻝㻤㻛㻟期㻞㻽

㻝㻥㻛㻟期㻞㻽

Source: Prepared by FISCO from the Company's results briefing materials██Overview and progress of the medium-

term management plan

Determined to reach ¥150bn in net sales and ¥4.5bn in ordinary
income in FY3/19 driven by three business strategies for engineeringbusiness and other areas
1. Overview of the medium-term management plan
The Company formulates three-year medium-term management plans and strives for longer-term growth throughsteady implementation of the plan. The Company is implementing Challenge 1500, the ninth three-year medium-term
management plan, with FY3/19 as the final fiscal year.
Challenge 1500 aims to deepen and advance results from the previous JUMP 1200 medium-term management planthat ended in FY3/16. The “Challenge 1500” name embodies management’s aim to establish a solid foundation forrealizing ¥150bn in net sales in FY3/20, the Company’s 70th anniversary. As explained later in detail, the Company
already reached the sales goal ahead of time in FY3/18 and is working toward realization of profit goals in FY3/19,
the plan’s final year, as the top priority.
The medium-term management plan calls for growth and expansion in three strategic areas – “systems, equipment,
and parts/components sales business,” “engineering business,” and “global SCM solutions business.” Some attention should be given to correlation among these three businesses.

We encourage readers to review our complete legal statement on “Disclaimer” page.

07 17

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

SUN-WA TECHNOS CORPORATION
8137 Tokyo Stock Exchange First Section

18-Jan.-2019
http://www.sunwa.co.jp/ir/index.html

Overview and progress of the medium-term management plan

The “systems, equipment, and parts/components sales business” could be viewed as a renaming of the Company’s
existing three business segments (electrical machinery, electronics, and general machinery). We think it is naturalfor the Company to pursue expansion of this business.
The “engineering business” expresses a sales methodology and strategy for expansion of the “systems, equipment,
and parts/components sales business,” rather than being an independent business. While the Company has a wide
range of products that extend across the three business segments, this area promotes sales by combining multiple
products as a system and proposing solutions to customers, instead of standalone sales of these items.
The “global SCM solutions business” has functionality and characteristics of procurement on behalf of customers
and resembles the engineering business in terms of cutting across the three business segments. The Company
positions it as an income-generating business, rather than a “customer service” to lift sales in the three businesssegments, and is thinking about developing it into an independent business division in the future.
Four basic policies and three business strategies in Challenge 1500

Source: Prepared by FISCO from the Company’s materials

Looking at Challenge 1500 business goals and actual results thus far, just as in the first fiscal year, the Company
reported results in FY3/18, the plan’s second year, substantially exceeding goals after three upward revisions. Sales
surpassed the final-year goal of ¥137,000mn and ordinary income was close to the final-year goal as well.
In light of this outcome, the Company set its period-start targets for FY3/19, the plan’s final year, at ¥157,500mn
in net sales and ¥4,500mn in ordinary income. As explained above, while it lowered the full-year sales target to¥150,000mn due to a rise in internal eliminations at the 1H announcement, it is steadily progressing toward the profit
target on track with the initial plan. The Company places emphasis on both sales and ordinary income as indicatorsin the medium-term management plan and kept the ordinary income target at the period-start level of ¥4,500mn.
Challenge 1500 management targets(¥mn)
FY3/17

Net sales
Operating income
Operating margin
Ordinary income
Ordinary margin

FY3/18

FY3/19Managementtargets

Results

Managementtargets

Results

Managementtargets

Revisedforecast

117,000

116,611

126,000

146,759

137,000

150,000

2,800

3,014

3,500

4,135

4,300

4,400

2.4%

2.6%

2.8%

2.8%

3.1%

2.9%

3,000

3,215

3,700

4,349

4,500

4,500

2.6%

2.8%

2.9%

3.0%

3.3%

3.0%

Source: Prepared by FISCO from the Company's materials

We encourage readers to review our complete legal statement on “Disclaimer” page.

08 17

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

SUN-WA TECHNOS CORPORATION
8137 Tokyo Stock Exchange First Section

18-Jan.-2019
http://www.sunwa.co.jp/ir/index.html

Overview and progress of the medium-term management plan

Continuing steady expansion while improving profitability in toppriority engineering business2. Progress of the engineering business(1) Business overview
The engineering business at the Company is a sales approach for “proposing products from the three segmentsof electrical machinery, electronics, and general machinery as system solutions, rather than standalone items.”
We can use the example of a food supermarket to help explain the positioning of the engineering business.
Up to now, the Company had been selling ingredients, such as meat, fish, and vegetables, to customers. The
engineering business, meanwhile, involves preparing these individual ingredients for delivery to customers. The
extent of processing can vary from selling a prepared item to a side dish or meal box. The Company does notbook sales as the engineering business and related income is allocated to the electrical machinery, electronics,
and general machinery segments.
Engineering business

Source: Company website

We explained the engineering business as a sales methodology, but it offers potential to make actual contributions
to earnings, primarily by improving profit margin. As in the example described above, effort expended to preparea meal box or side dishes constitutes added value and thereby significantly increases profitability. While themargin improvement effect is limited at this point because of the fairly small absolute value of added-value
portion, profitability in the engineering business clearly exceeds the overall average as explained below. We thinkincreasing the added-value portion is likely to be an issue in the next stage considering steady ramp-up of theengineering business as a sales methodology. Expansion of the engineering business helps in obtaining upkeep
and maintenance demand too. It increases the possibility of securing repeat orders as well. We see such related
demand and a positive spillover effect as important benefits from the engineering business.

We encourage readers to review our complete legal statement on “Disclaimer” page.

09 17

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

SUN-WA TECHNOS CORPORATION
8137 Tokyo Stock Exchange First Section

18-Jan.-2019
http://www.sunwa.co.jp/ir/index.html

Overview and progress of the medium-term management plan

(2) Update on progress
The Company implemented various initiatives aimed at accelerating growth in the engineering business from its
previous medium-term management plan period. These include hiring external human resources and carryingout multiple reorganizations. A recent example was revamping the engineering organization in October 2017
into the following sections - robotics promotion, IoT promotion, monitoring and control promotion, automatedrecognition promotion, electrical equipment technology, and technology services. The Company also started
referring internally to the electrical machinery and general machinery segments, which have similar customers
and demand structures, out of its three business segments as the “machinery and electrical division” in order tobolster collaboration awareness and operations.
The Company worked on redefining the “engineering business” again in 1H FY3/19. This is a very important firststep in assessing the engineering business scale and results with consistency. The updated approach defined it
as “sales from bundled selling of two or more types of items rather than standalone product sales.” It is estimatedthat the new definition raises sales value by about ¥5bn compared to the previous calculation method. The key
point is consistency and continuity. We think this definition should facilitate more precise analysis over time.
The engineering business amounted to about ¥5.5bn in 1H FY3/19, or about 44% of the roughly ¥12.6bn in
FY3/18 results. Progress appears to be trailing the previous fiscal year, but this is not that important in our view
because the engineering business often consists of large equipment deals and these results in significant sales
volatility. We focus on profitability (margin) trends and think this is most important. The Company’s definition of
the engineering business implies that the added-value portion should lift profits compared to standalone sales.
We thus believe a key indicator is whether the business is reliably generating profits and profit margin exceeds
the overall average.
The Company disclosed profit margin for the first time in its latest results. According to these values, the engineering business gross margin rose to about 14% in 1H FY3/19, beating the overall average of 11.9% by roughly
3ppt. We have a favorable view of healthy advances as intended. However, it should be noted that profit margin
is often low on large-scale deals. Since these deals are likely to be placed under the engineering business, suchcases might cause a nominal decline in engineering profitability. We think profitability needs to be confirmed ona basis excluding such projects too in cases with large-deal exceptions.

㼀㼞㼑㼚㼐㻌㼕㼚㻌㼑㼚㼓㼕㼚㼑㼑㼞㼕㼚㼓㻌㼎㼡㼟㼕㼚㼑㼟㼟㻌㼟㼍㼘㼑㼟㻺㼑㼠㻌㼟㼍㼘㼑㼟㻳㼞㼛㼟㼟㻌㼙㼍㼞㼓㼕㼚㻯㼛㼙㼜㼍㼚㼥㼣㼕㼐㼑㻌㼓㼞㼛㼟㼟㻌㼙㼍㼞㼓㼕㼚

㻔¥㼎㼚）
㻝㻢㻚㻜
㻝㻠㻚㻜
㻝㻞㻚㻜

㻭㼎㼛㼡㼠㻌
¥㻝㻝㻚㻡㼎㼚

㻝㻡㻚㻜㻑㻭㼎㼛㼡㼠㻌
¥㻝㻟㻚㻡㼎㼚

㻭㼎㼛㼡㼠㻌
¥㻝㻞㻚㻢㼎㼚

㻝㻠㻚㻜㻑
㻝㻟㻚㻜㻑

㻝㻜㻚㻜

㻝㻞㻚㻜㻑

㻤㻚㻜

㻭㼎㼛㼡㼠㻌
¥㻡㻚㻡㼎㼚

㻢㻚㻜

㻝㻜㻚㻜㻑

㻠㻚㻜

㻥㻚㻜㻑

㻞㻚㻜
㻜㻚㻜

㻤㻚㻜㻑
㻲㼅㻟㻛㻝㻢

㻲㼅㻟㻛㻝㻣

㻲㼅㻟㻛㻝㻤

㻝㻴㻌㻲㼅㻟㻛㻝㻥

Source: Prepared by FISCO from the Company's results briefing materials and interviews



㻝㻝㻚㻜㻑



We encourage readers to review our complete legal statement on “Disclaimer” page.

10 17

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

SUN-WA TECHNOS CORPORATION
8137 Tokyo Stock Exchange First Section

18-Jan.-2019
http://www.sunwa.co.jp/ir/index.html

Overview and progress of the medium-term management plan

Incorporating outsourcing needs using the overseas network andinternational logistics knowhow, within reach of the ¥10bn sales
threshold in FY3/19
3. Progress on the global SCM solutions business(1) Business overview
The Company prepared for global SCM solutions during JUMP 1200, the previous medium-term management
plan, and officially started this business in the current medium-term management plan period. Going back further,
however, the Company had already been offering procurement agent, logistics agent, and delivery management
services for some time. The global SCM solutions business is an advanced version of these past services thatleverages the Company’s overseas network (13 overseas local entities and 26 global sites) to create a profitablebusiness. We think the global SCM solutions business can be implemented in a variety of ways. One example
is described here. The Company delivers other items required by the customer at the same time, regardless ofwhether they are the Company’s catalog products or not, in addition to the ordered product when delivering
products based on an order from the customer. It intends to operate this service as a profitable business, obtaining
margin on each of the products.
Conceptual image of global SCM solutions business

Source: Company website

The Company’s motivation and aim in promotion of the global SCM solutions business stem from the lack of global
logistics, inventory management, and materials procurement manpower, even at large manufacturers, following
sustained targeting of these areas in business reorganization reforms and other restructuring. Outsourcing needs
exist in these areas due to the reality of pursuit of greater efficiency in manufacturing and frequent business
transfers that extend across countries, particularly at large companies. The Company wants to incorporate thisdemand using its knowhow accumulated over many years and overseas network. We think there is very large
potential demand for the global SCM solutions business.
(2) Update on progress
The global SCM solutions business has been growing at a healthy pace, similar to the engineering business. Sales
totaled about ¥4.1bn in FY3/17 and rose to roughly ¥7.2bn in FY3/18. The initial FY3/19 budget targets ¥9.8bn,
and the Company reported that this business proceeded in line with the plan through 1H and did not alter the
full-year outlook. The Company is aiming for ¥10bn in sales as a near-term goal for the global SCM solutions
business and appears to be on track to achieving this level in FY3/19.
Deal opportunities from 1H FY3/19 include 1) supplying parts and materials for customized power sources used inbusiness phones from Japan to Thailand, 2) supplying touch panels for airplane audiovisual systems from Taiwan
to Japan, and 3) supplying mobile robot production items from the US to Japan.

We encourage readers to review our complete legal statement on “Disclaimer” page.

11 17

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

SUN-WA TECHNOS CORPORATION

18-Jan.-2019

8137 Tokyo Stock Exchange First Section

http://www.sunwa.co.jp/ir/index.html

Overview and progress of the medium-term management plan㼀㼞㼑㼚㼐㼟㻌㼕㼚㻌㼓㼘㼛㼎㼍㼘㻌㻿㻯㻹㻌㼟㼛㼘㼡㼠㼕㼛㼚㼟㻌㼎㼡㼟㼕㼚㼑㼟㼟㻌㼟㼍㼘㼑㼟
㻔¥㼎㼚㻕
㻝㻞㻚㻜
㻭㼎㼛㼡㼠㻌¥㻥㻚㻤㼎㼚㻝㻜㻚㻜㻭㼎㼛㼡㼠㻌¥㻣㻚㻞㼎㼚

㻤㻚㻜

㻢㻚㻜
㻭㼎㼛㼡㼠㻌¥㻠㻚㻝㼎㼚
㻠㻚㻜
㻞㻚㻜
㻜㻚㻜

㻲㼅㻟㻛㻝㻣

㻲㼅㻟㻛㻝㻤

㻲㼅㻟㻛㻝㻥㻌㻱

Source: Prepared by FISCO from the Company's results briefing materials██Outlook
Lowered the sales target, but kept ordinary income at the periodstart level(1) Overview
The Company partly revised the FY3/19 forecast in light of 1H results. Updated targets are ¥150,000mn in net
sales (+2.2% YoY), ¥4,400mn in operating income (+6.4%), ¥4,500mn in ordinary income (+3.5%), and ¥3,150mn
in net income attributable to owners of the parent (+2.1%).
While the Company lowered net sales by ¥7,500mn and operating income by ¥50mn, it kept ordinary income
and following values at initial levels.
Overview of FY3/19 forecasts(¥mn)
FY3/18

FY3/192H

1H

2H

Full year

1H

Net sales

67,34879,411

146,759

72,164

Operating income

1,773

2,362

4,135

2,129

2.6%

3.0%

2.8%

Ordinary income

1,951

2,398

Net income attributable toowners of the parent

1,359

1,726

Operating margin

Full year
YoY

Initialforecast

Revisedforecast

77,836-2.0%

157,500

150,000

2.2%

2,271

-3.9%

4,450

4,400

6.4%

3.0%

2.9%

-

2.8%

2.9%

-

4,349

2,312

2,188

-8.8%

4,500

4,500

3.5%

3,085

1,651

1,499

-13.2%

3,150

3,150

2.1%

Forecast

Source: Prepared by FISCO from the Company's financial results

We encourage readers to review our complete legal statement on “Disclaimer” page.

12 17

YoY

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

SUN-WA TECHNOS CORPORATION
8137 Tokyo Stock Exchange First Section

18-Jan.-2019
http://www.sunwa.co.jp/ir/index.html

Outlook

Increased internal eliminations were the primary reason for lowering the sales estimate as explained above. While
shortfalls in orders versus the forecast due to weaker capital investment demand in China and Japan affected theoutlook on a real basis, we estimate that these impacts only amounted to about 20% of the downward revision.
This content limited impact on profits from reducing the sales outlook to just ¥50mn at the operating income
stage. The Company retained ordinary income and following values at initial levels.
Order value and order backlog, which are key amounts for assessing 2H FY3/19 prospects, reached all-timehighs in 1H. These values will be booked as sales in 2H. Additionally, for the 2H orders outlook, sales activities
are showing signs of recovery in the Chinese market at the start of next year. If this happens, expectations arelikely to build for sales upside in 2H. Yet we advise against excessive expectations because of stalled economic
activity for about two weeks in February for the Chinese New Year.

㻻㼞㼐㼑㼞㻌㼢㼍㼘㼡㼑㻌㼍㼚㼐㻌㼛㼞㼐㼑㼞㻌㼎㼍㼏㼗㼘㼛㼓㻌㼠㼞㼑㼚㼐㼟㻻㼞㼐㼑㼞㻌㼢㼍㼘㼡㼑㻔¥㼙㼚㻕㻝㻢㻜㻘㻜㻜㻜

㻝㻞㻜㻘㻜㻜㻜

㻝㻝㻞㻘㻢㻞㻠

㻼㼑㼞㼕㼛㼐㻙㼑㼚㼐㻌㼛㼞㼐㼑㼞㻌㼎㼍㼏㼗㼘㼛㼓㻝㻡㻟㻘㻡㻞㻣

㻝㻞㻜㻘㻤㻢㻟
㻝㻜㻠㻘㻢㻣㻤

㻣㻟㻘㻝㻡㻝

㻤㻜㻘㻜㻜㻜

㻠㻜㻘㻜㻜㻜
㻝㻤㻘㻡㻢㻞

㻞㻜㻘㻤㻟㻥

㻞㻡㻘㻠㻝㻜

㻞㻣㻘㻢㻜㻤

㻞㻤㻘㻡㻥㻡

㻜㻲㼅㻟㻛㻝㻡

㻲㼅㻟㻛㻝㻢

㻲㼅㻟㻛㻝㻣

㻲㼅㻟㻛㻝㻤

㻝㻴㻌㻲㼅㻟㻛㻝㻥

Source: Prepared by FISCO from the Company's results briefing materials

From an industry perspective, automotive (on-board products) business is likely to continue growing. The
Company supplies parts and materials mainly for the safe driving assistance. Demand should steadily increasein this area, even if total automobile output modestly declines, because usage begins with luxury vehicles andthen broadens to other models. The Company books sales from these parts and materials under the electronics
segment among its three divisions.
For profits, conditions in 2H should fundamentally continue trends seen in 1H. The Company needs ¥2,271mn in
2H operating income in order to reach the FY3/19 target. This corresponds to a 2.9% operating margin, a slightly
lower level than 1H’s 3.0%. We think the discrepancy simply reflects how the values worked out and does notconstitute a message.
Nevertheless, we recommend a cautious approach to 2H margin because of the outlook for a rise in the ratioof automotive (on-board products) sales. Growth in this area might weigh on profit margin due to less favorable
product mix since it typically has lower margin than the Company’s average. While there is a possibility of sales
upside on large order backlog and early recovery by the Chinese market, as noted above, we think emphasisshould be placed first on whether the Company achieves forecast.

We encourage readers to review our complete legal statement on “Disclaimer” page.

13 17

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

SUN-WA TECHNOS CORPORATION
8137 Tokyo Stock Exchange First Section

18-Jan.-2019
http://www.sunwa.co.jp/ir/index.html

Outlook(2) Business segment outlooksa) Electrical machinery
The FY3/19 sales target is ¥27,500mn (+1.2% YoY). The Company reduced the target by ¥2,400mn from theperiod-start level of ¥29,900mn. We believe internal eliminations had a large impact, just as with the generalmachinery segment covered below. Domestic sales to the semiconductor and FPD industries rose in 1H, andwe expect this trend to continue in 2H. We also project stronger electrical machinery sales if Chinese demand
has an early recovery.
b) Electronics
The FY3/19 sales target is ¥109,000mn (-1.3% YoY). The Company reduced the target by ¥2,000mn fromthe initial level. We do not expect a major setback for this segment because it handles sales of a wide rangeof products to many industries and think the downward revision reflects media reports forecasting a 30% YoY
decline in orders placed for factory automation and other industrial equipment industries that are the main sourceof customers. While the outlook implies a 7.7% YoY drop in 2H sales, this stance seems reasonable given the
1H trend in orders from Chinese companies. However, there is also a possibility of upside in the case of an earlyrecovery in Chinese demand, just as for the electrical machinery segment.
c) General machinery
The FY3/19 sales target is ¥13,500mn (+47.4% YoY). The Company reduced the target by ¥3,100mn from theinitial level, though primarily due to higher internal eliminations. It expects a steep rise in sales on the prospectof booking large-scale deals from automotive and food product manufacturers. These opportunities seem to beproceeding roughly as planned and have not been lost. We will be closely monitoring trends.
Net sales outlook by segment(¥mn)
FY3/18

FY3/191H

2H

Full year

1H

2H E

Full year (initial
forecast)

Full year(revised
forecast)
27,50012,39014,77627,166

13,332

14,16829,900

YoY

35.9%

27.1%

31.0%

7.6%

-4.1%

10.1%

1.2%

Electronics

50,33960,097

110,436

53,55355,447

111,000

109,000

YoY

37.1%

22.4%

28.7%

6.4%

-7.7%

0.5%

-1.3%

4,619

4,537

9,156

5,278

8,222

16,60013,500Electrical machinery

General machinery
YoY
Total net sales
YoY

10.4%

-22.7%

-8.9%

14.3%

81.2%

81.3%

47.4%

67,34879,411

146,759

72,164

77,836

157,500

150,000

34.7%

19.2%

25.9%

7.2%

-2.0%

7.3%

2.2%

Source: Prepared by FISCO from the Company's results briefing materials

We encourage readers to review our complete legal statement on “Disclaimer” page.

14 17

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

SUN-WA TECHNOS CORPORATION
8137 Tokyo Stock Exchange First Section

18-Jan.-2019
http://www.sunwa.co.jp/ir/index.html

Outlook

Summary income statement(¥mn)
FY3/191H

Full year(revised
forecast)

146,759

72,164150,000

25.9%

7.2%

2.2%

14,255

16,883

8,609

-

12.5%

12.2%

11.5%

11.9%

-

10,516

10,812

11,24012,747

6,479

-

YoY

11.1%

2.8%

4.0%

13.4%

5.0%

-

SG&A expenses ratio

9.5%

10.2%

9.6%

8.7%

9.0%

-

3,471

2,444

3,014

4,135

2,129

4,400

YoY

8.1%

-29.6%

23.3%

37.2%

20.1%

6.4%

Operating margin

3.1%

2.3%

2.6%

2.8%

3.0%

2.9%

3,761

2,645

3,215

4,349

2,312

4,500

9.4%

-29.7%

21.6%

35.3%

18.5%

3.5%
3,150

FY3/15

FY3/16

FY3/17

FY3/18Net sales

111,276

105,748

116,611

YoY

9.8%

-5.0%

10.3%

Gross profit

13,98813,256Gross margin

12.6%

SG&A expenses

Operating income

Ordinary income
YoY
Net income attributable toowners of the parent

2,466

1,690

1,584

3,085

1,651

YoY

13.8%

-31.5%

-6.3%

94.8%

21.4%

2.1%

EPS (¥)

171.83117.76113.64222.65103.23196.93

Dividend (¥)

26.00

28.00

28.00

30.00

17.00

34.00

Source: Prepared by FISCO from the Company's financial results

Summary balance sheet(¥mn)
FY3/15

FY3/16

FY3/17

FY3/181H FY3/19

49,23946,85755,50765,852

65,158Cash and deposits

7,584

6,359

6,759

8,596

12,631

Notes and accounts receivable

35,14534,554

41,16846,07740,703

9,509

8,581

9,309

11,401

10,395

3,879

3,788

3,056

3,005

3,022

243

240

222

168

127

5,386

4,553

6,030

8,227

7,246

Total assets

58,74855,43964,816

77,25475,554Current liabilities

32,37028,691

36,596

43,07738,997

Notes and accounts payable – trade27,496

24,732

31,182

34,29830,009

Short-term loans payable, etc.

2,782

2,317

2,489

5,722

6,481

4,426

4,484

4,581

6,182

4,945

2,100

2,400

2,300

3,500

2,900

Shareholders’ equity

18,92920,217

21,03423,731

28,351

Capital stock

2,553

2,553

2,553

2,553

3,727

Capital surplus

1,958

1,958

1,958

1,958

3,548

Retained earnings

14,472

15,761

16,95019,64721,077

Current assets

Non-current assets
Property, plant and equipment
Intangible assets
Investments and other assets

Non-current liabilities
Long-term loans payable

-54

-54

-427

-428

-

Total accumulated other comprehensive income

3,022

2,045

2,603

4,262

3,259

Net assets

21,951

22,26323,63727,99331,611

Total liabilities and net assets

58,74855,43964,816

77,25475,554

Treasury shares

Source: Prepared by FISCO from the Company's financial results

We encourage readers to review our complete legal statement on “Disclaimer” page.

15 17

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

SUN-WA TECHNOS CORPORATION

18-Jan.-2019

8137 Tokyo Stock Exchange First Section

http://www.sunwa.co.jp/ir/index.html

OutlookCash flow statement(¥mn)
FY3/15

FY3/16

FY3/17

FY3/181H FY3/19
1,247

Cash flow from operating activities

1,353

-60

1,679

-2,221

Cash flow from investing activities

-444

-384

-235

29

-119

Cash flow from financing activities

-470

-654

-818

3,962

3,001

Effect of exchange rate change on cash and cash equivalents

209

-125

-226

67

-94

Net increase (decrease) in cash and cash equivalents

647-1,225

400

1,837

4,034

Cash and cash equivalents at beginning of period

6,453

7,100

5,875

6,275

8,112

Cash and cash equivalents at end of period

7,100

5,875

6,275

8,112

12,147

Source: Prepared by FISCO from the Company's financial results██Shareholder return policy
Plans to pay a ¥34 dividend (+¥4) in FY3/19 based on healthy profit
growthThe Company’s basic policy is to provide returns to shareholders in the form of dividends. Management prioritizes
providing stable, continuous dividends, as demonstrated in its track record to date. While the Company does not
sharply raise dividends in response to temporary rapid profit expansion, it has steadily increased them in keepingwith earnings growth.
The Company disclosed a dividend target of ¥34 (¥17 as an interim dividend and ¥17 as the period-end dividend),
an increase of ¥4. This corresponds to a dividend payout ratio of 17.3% using the profit outlook for ¥196.93 pershare. We think it decided to raise the dividend as a reflection of healthy profit growth given the forecast of higher
sales and profits and a stance of paying shareholder return premised on sustaining a stable dividend.
The Company has not presented FY3/20 earnings and dividend outlooks yet, but arrival of the 70th anniversary in
November 2019 during the fiscal year is likely to be a factor in assessing shareholder return in FY3/20.

We encourage readers to review our complete legal statement on “Disclaimer” page.

16 17

COMPANY RESEARCH AND ANALYSIS REPORTFISCO Ltd.
http://www.fisco.co.jp

SUN-WA TECHNOS CORPORATION

18-Jan.-2019

8137 Tokyo Stock Exchange First Section

http://www.sunwa.co.jp/ir/index.html

Shareholder return policy㻱㼍㼞㼚㼕㼚㼓㼟㻌㼜㼑㼞㻌㼟㼔㼍㼞㼑㻘㻌㼐㼕㼢㼕㼐㼑㼚㼐㻌㼍㼚㼐㻌㼜㼍㼥㼛㼡㼠㻌㼞㼍㼠㼕㼛㻱㼍㼞㼚㼕㼚㼓㼟㻌㼜㼑㼞㻌㼟㼔㼍㼞㼑㻌㻔㼘㼑㼒㼠㻕㻰㼕㼢㼕㼐㼑㼚㼐㻌㼜㼍㼥㼛㼡㼠㻌㼞㼍㼠㼕㼛㻌㻔㼞㼕㼓㼔㼠㻕㻔¥㻕㻰㼕㼢㼕㼐㼑㼚㼐㻌㻔㼘㼑㼒㼠㻕㻞㻡㻜㻚㻜㻜
㻞㻟㻚㻤㻑㻞㻜㻜㻚㻜㻜

㻞㻠㻚㻢㻑

㻟㻜㻚㻜㻑

㻞㻞㻞㻚㻢㻡
㻝㻥㻢㻚㻟㻡

㻞㻠㻚㻜㻑㻝㻣㻝㻚㻤㻟
㻝㻣㻚㻟㻑㻝㻡㻜㻚㻜㻜

㻝㻡㻚㻝㻑

㻝㻤㻚㻜㻑
㻝㻝㻣㻚㻣㻢

㻝㻟㻚㻡㻑㻝㻝㻟㻚㻢㻠

㻝㻜㻜㻚㻜㻜
㻡㻜㻚㻜㻜

㻝㻞㻚㻜㻑

㻞㻢㻚㻜

㻞㻤㻚㻜

㻞㻤㻚㻜

㻟㻜㻚㻜

㻟㻠㻚㻜

㻲㼅㻟㻛㻝㻡

㻲㼅㻟㻛㻝㻢

㻲㼅㻟㻛㻝㻣

㻲㼅㻟㻛㻝㻤

㻲㼅㻟㻛㻝㻥㻌㻱

㻜㻚㻜㻜

㻢㻚㻜㻑
㻜㻚㻜㻑

Source: Prepared by FISCO from the Company's financial results

We encourage readers to review our complete legal statement on “Disclaimer” page.

17 17

Disclaimer
FISCO Ltd. (the terms “FISCO”, “we”, mean FISCO Ltd.) has legal agreements with theTokyo Stock Exchange, the Osaka Exchange,and Nikkei Inc. as to the usage of stock priceand index information. The trademark and value of the “JASDAQ INDEX” are the intellectual
properties of the Tokyo Stock Exchange, and therefore all rights to them belong to the Tokyo
Stock Exchange.
This report is based on information that we believe to be reliable, but we do not confirm or
guarantee its accuracy, timeliness,or completeness, or the value of the securities issued bycompanies cited in this report. Regardless of purpose,investors should decide how to use
this report and take full responsibility for such use. We shall not be liable for any result of its
use. We provide this report solely for the purpose of information, not to induce investment or
any other action.
This report was prepared at the request of its subject company using information provided
by the company in interviews, but the entire content of the report, including suppositions andconclusions, is the result of our analysis. The content of this report is based on informationthat was current at the time the report was produced, but this information and the content of
this report are subject to change without prior notice.
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The final selection of investments and determination of appropriate prices for investment
transactions are decisions for the recipients of this report.
FISCO Ltd.