http://www.tmex.co.jp

1

Corporate Presentation
Fiscal Year Ending March 31, 2014
Interim Financial Results Briefing Information

Code:6838

I. Business Model (Corporate Profile)１

Name Company

A Company with Both History anda Desire to Take on Challenges

Accrediting Organization【contractual partner: GPPV】

Certified February 2004
【Tamagawa Electronics Co., Ltd. 】

Business Policy

Corporate Profile As of September 30, 2013

Established
Capital
Number of shares issued
Representative directors
Principal shareholders
Business lines

Ｎｅｗ
Domestic locations

Consolidated subsidiaries
Number of employees
Main clients

We at Tamagawa Holdings are committed toward striving to be a next-generation
infrastructure solutions provider. This is an objective we are attempting to achieve
by generating greater synergy among all of our subsidiaries in order to maximize theapplication of our No. 1 domestic share in high frequency wireless technology andprovide a supply system for renewal energy that separates us

November 4, 1968 (Fiscal year ends in March)
1,580,170,000 yen
13,183,000 shares (treasury stock 203,493 shares)
Setsuya Fukunaga, President and Representative Director (to be appointed February 2012)
Toru Masuzawa, Representative Director and CEO (to be appointed February 2012)
Marilyn Tang 17.5% CBSG - Bank Julius Baer & Co. Ltd.(Singapore)10.9% Perman Yadi 7.4% Japan Securities Finance Co.,
Ltd. 4.6% Kosuke Shimanuki 4.5% EFG Bank (Hong Kong) 3.5% UBS 2.9% Nomura Securities Co., Ltd. 2.8%
■Electronics and telecommunications equipment business①Device business （the development and supply of high frequency devices supported by high frequency wireless technology）②Systems business（the development and supply of radio communication and broadcasting equipment and high-frequency
application system equipment)■Solar power energy business①Solar energy power system sales business (solar power modules and systems sales direct and through agents)②Solar energy power plant business (ownership, management, and operation of our own solar energy power plants)■ 【Head Office & Factory】 3-11-23 Kamitsuchidata-naka, Ayase-shi, Kanagawa, Japan■ 【Tokyo Office】 1-6-15 Hamamatsu-cho, Minato-ku, Tokyo Japan【Fukuoka Office】 6-9-30 Nishijin, Sawara-ku, Fukuoka-shi, Fukuoka-ken, Japan■ Tamagawa Electronics Co., Ltd. ■ Tamagawa Solar Systems Co., Ltd. ■ GP Energy Co., Ltd. 【each is a 100% owned subsidiary】
129 employees 【Four at the head office; 116 in the electronics and telecommunications equipment division; nine in the solar
energy power division.】
Fujitsu Limited, NEC Corporation, Panasonic Corporation, Toshiba Corporation, Mitsubishi Electric Corporation, Japan Radio Co.,
Ltd., government (and municipal) agencies, The Chugoku Electric Power Co., Inc.

Ｎｅｗ

Ⅰ．Business Model【Stages in the Growth of the Business ①】

２

ＴＡＭＡＧＡＷＡ ＨＤ ～ Restructuring timeline～
High
Frequency radio【Expertise】

Since 1968
Started

Failed business
investments
by the former
sales team

Change in the
management team
【System of twoheads at top】

Since1997

Selectionand focus【Focusing on
profitability 】

Corporate value【Growth model 】

Since 2012
Withdrawa

Details of business and investments

Joint venture with Takegawa Electronics Co., Ltd.(compound1997 semiconductor assembly and test operations)2000
Acquisition of AppLight Technologies Pte Ltd.(Singapore)2007 (HD production devices based on microfabrication technology by

2009

laser)

2009 Establishment of TME Korea Co., Ltd.
Debt consolidation of limited liability partnership2009(¥2.05 million investment)2010 Establishment of BioEnergy Resources Co., Ltd.

Failed business investments

February 2012
●Setsuya Fukunaga inaugurated as representative
director■Announcement of entry into the solar energy powersystem sales business↓●Exclusive distribution agreement reached with GPPV
【Goal】The start of the solar energy systems sales
business that sets the company apart from thecompetition in terms of our track record overseas,
price competitiveness, and high quality. ※ GPPV is amanufacturer of solar power modules and cells

2010

2012

Start of the new
management structure(dual top management
structure)

April 2012
■Electronics and telecommunications equipment
business●Subsidiary: Management overhaul of Tamagawa
Electronics Co., Ltd.
→Renewed record high profits in the FY ended March
2013
June 2012●Toru Masuzawa inaugurated as representative
director Accelerated business development basedon dual top management structure■Announcement of entry into the solar energy power plant

The R&D company for highfrequency wireless technology

Entry into the solar energy power
generation businessR&D activities
2011 Semi-coaxial resonators and filter devices
2009 Power semiconductor test equipment
Variable phase shifters
Processing equipment of high-frequency signals
2008
Resonance damping devices and resonance apparatus
TM dual mode dielectric resonator apparatus
Dielectric resonators and filter devices
Fuse elements and high-frequency devices
2005
Methods of production of thick film circuit board
Triple-mode bandpass filters
Dielectric resonator bandpass filters
Waveguide lines and waveguide converters
2003
Multi-mode semi-coaxial resonator
Half coaxial resonatorbusiness●Initiation of own operations in the solar energy
power plant business The move marks theacquisition of a business with a stable user baseoffering high income and long-term stability.
※ Income is based on the 20-year fixed price, allquantity power buyback program

January 2013

Green Rush Project●Allocation of new shares to a third party andissuance of warrants (fund procurement)
Type

Price of one
share of stock

Number of sharesissuedNumber of dilutive
shares issued

Amount of cashraised（issue cost)Stockcertificate¥130

2,136,000
shares¥277 million

Warrants¥150

4,843,000
shares¥726 million

Ⅰ．Business Model【Stages in the Growth of the Business ②】

３■Topics for activities in the fiscal year ending March 2014

Changes in sales (left axis) and operating income (right axis)

ＴＡＭＡＧＡＷＡ ＨＤ News Releases■Electronics and telecommunications equipment business

FY ending March 2014
(Forecast)【Million yen】

【 Million yen】
Sales [22.7% growth]※Ace Technologies Corp. is a major manufacturer of high-frequency
devices and antennae with production facilities in Guangdong.

¥3,671 million ⇒¥4,504 million

493
5,000
5,000

July 2013●Korea: Business cooperation with Ace Technologies Corp.
【Purpose】Strengthening of price competitiveness

500
500

400
400

November 2013
●Presentation of own products of the Company at theMicrowave Exhibition 2013
【Purpose】 Increasing the percentage of own products

300
300

■Solar energy power business

Operating income [32.2% growth]¥373 million ⇒ ¥493 million

368

4,000
4,000

FY ended March 2013

Profitability reachedthrough management
revolution

4,504
200
200
3,671

3,000
3,000

100
100

3,106

June 2013●Status as qualified institutional investor takes effect【Purpose】 Preparation for the establishment of a solar
energy power plant fund
●Initiation of power sales at the Company's No. 1
Shimonoseki mega-power station【Purpose】Acquiring a business with a stable user baseoffering high income and long-term stability

2,803
2,639

※Income is based on the 20-year fixed price, all-quantity power buyback program

00

2,000
2,000
■Other IR information
▲29

-100
▲１00
May 2013●Out-of-court settlement of litigation with former representative
-200
▲200

H. over dereliction of duty of care and fiduciary duty

1,000
1,000
October 2013
▲226
▲300
-300
▲286

00

-400
▲400
2010
ＦＹ2010/3

2011
ＦＹ2011/3

ＦＹ2012/3
2012

ＦＹ2013/3
2013

ＦＹ2014/3
2014(Forecast)●Completion of exercise of series-4 stock warrants issued
January 2013
November 2013
●Initiation of publication of securities analyst reports on thewebsite of the Company

II. Management Indicators
４(Financial Reporting on the Second Quarter of the FY ending March 2014 – 1. Summary)■Second quarter of the FY ending March 2014

Sales

： 14.5% growth¥1,820 million (same period a year earlier: ¥1,590 million)

Operating income： 2.3-fold increase¥215 million (same period a year earlier: ¥93 million)

Net income： 2.1-fold increase¥190 million (same period a year earlier: ¥91 million)

compared with the year-earlier period

Difference between actual results of the second quarter of the FY ending March 2014 and initial forecasts①※Initial forecasts: Business performance forecast on May 14, 2013②

ＦＹ2013 2Q③③／①
Compared to thesame period last year

1,382

＋ 64

▲2.5％

438

＋ 68

344.8％--ＦＹ2014 2Q

ＦＹ2014 2Q

Unit: Million yen (rounded down)③－②
Variance fromdisclosed
forecast(Actual results)(Initial forecast)【Actual results 】

1,417

１,318

■Solar power energy

98

370

■Biomass energy

74■Electronics and telecommunications equipment

Attainment ratio of
projected sales

-※
-※

10７
10７.8％
Sales

1,590

1,688

Gross income on sales

403

432

SG&A expenses

309

303

Operating income

93

129

Ordinary income

83

124

Quarterly: Net income

91

114

１

２

1,820

＋132

14.5％

Attainment ratio of
projected operating
income

546

＋ 114

35.7％

331

＋ 28

7.3％

166.8％

215＋ 86

129.2％

218＋ 94

163.0％

190＋ 76

108.7％※ FY ending March ■Complete discontinuation of biomass energy operations

ＦＹ2014 2Q１．【Sales】 Expert groups of consolidated companies give high marks.
Points on
variancefrom actual
results（１）■Electronics and telecommunications equipment
・Main industry: Mobile communications developed in line with initial forecasts.
・Second main market: Solid performance in the defense related sector on strong demand for digital devices to replace analog equipment.
・Upgrading of telecommunications infrastructure (countermeasures for dead zones) in preparation for the Olympics in 2020.
（２）■Solar power energy【Solar energy power system sales business】 Favorable performance surrounding system introduction proposals that qualify forGreen Investment Tax Relief Treatment【Solar energy power plant business】 Start of income generation from power sales at the Company’s No. 1 “Shimonoseki mega-power station”
project (June 21, 2013)

２．【Operating income】“Selection and focus” of the profitability oriented management succeeds（１）■Electronics and telecommunications equipment
Profit margins improved on productivity gains from increased orders for system products (analog and digital technology unit products).
（２）■Biomass energy
Finalized decision to discontinue unprofitable operations, effective from the second half of the FY ended March 2013

II. Management Indicators (Financial Reporting on the Second Quarter of
the FY ending March 2014 – 2. Statement of Income and Expenditure)

ＦＹ2013 2Q
Business Portfolio
Reconstruction
Unit: Million yen(rounded down)

ＦＹ2013
2Q

Share
（％）

ＦＹ2014
2Q

Share
（％）

５

ＦＹ2014 2Q
Management
revolution

management reforms

Breakdown of sales
4.7%
6.3 %
24.1%

■Electronics and

89.0％

1,382

75.9％

438

24.1％

1,417
telecommunications equipment■ Solar power energy

98

6.3％

■ Biomass energy

74

4.7％

1,590

100.0％

75.9%
89.0 %

Sales

0.0％

1,820

100.0％

Cost of sales

1,187

74.7％

1,273

70.0％

Gross operating profit

403

25.3％

546

30.0％

SG&A expenses

309

19.4％

331

18.2％

Operating income

93

5.9％

215

11.8％

Non-operating income

1

0.0％

7

0.3％

Non-operating expenses

12

0.７％

3

0.１％

Ordinary income

83

5.2％

218

12.0％

Extraordinary gain

11

0.6％

１

0.0％

Extraordinary loss

0

0.0％

0

0.0％

Net income before income taxes

94

5.9％

220

12.0％

Corporate, inhabitant, andenterprise taxes

2

0.1％

30

1.6％

91

5.7％

190

10.5％

Quarterly: Net income■ Electronics and telecommunications equipment■ Solar power energy■ Biomass energy

Operating Margin for Each Sector
As of the end of thesecond quarter

ＦＹ20132Q

ＦＹ2014
2Q

Remarks■Electronics andtelecommunications
equipment

10.5％

13.6％

Profitmarginsincreased▲23.1％

7.8％

Change toblack
figures▲40.1％-

Complete
discontinu
ation■ Solar power energy■ Biomass energyII. Management Indicators (Financial Reporting on the Second Quarter of
the FY ending March 2014 – 3. Balance Sheet and Statement of Cash Flows)

ＦＹ2014/3
2Q

Cash and cash equivalents

389

992

602

(Unit: Million yen)
ＦＹ2013/3

ＦＹ2014/3
2Q

Change(6-month
interval)

Change(6-month
interval)

ＦＹ2013/3

Units: Million yen, rounded down
Assets６

Total current assets

2,114

2,490

375

Notes and accounts
receivable - trade

1,344

1,088

▲256

Total non-current assets

592

762

170

Property, plant, andequipment

564

727

163

Total assets

2,709

3,255

545

ＦＹ2013/3

ＦＹ2014/3
2Q

ＦＹ2014/3
2Q

ＦＹ2013/3

Change(6-month
interval)①Short-term loans

40

56

16

Total current liabilities

707

634

109
189

38

251

313

166

②Long-term loans
and corporate bonds

151

Total non-current liabilities

191

245

＋54

958

947

275

③Total （①＋②）

Total liabilities

Interest-bearing debt
dependency rate

7.1%

7.4%

＋0.4％

ＦＹ2014/3
2Q

Change(6-month
interval)(Unit: Million yen)

ＦＹ2013/3

ＦＹ2014/3
2Q

Equity ratio

63.4%

70.6%

Liabilities

Ｎet assets

ＦＹ2013/3

Shareholders' equity

1,716

2,293

577

Valuation, translation
adjustments and others

1

2

1

(Unit: Million yen)

Change(6-month
interval)

Change(6-month
interval)＋7.２％(Unit: Million yen)
Warrants

32

10

▲22

1,750

2,307

557

Cash flows (end of second quarter-based)
400

Total net assets

300
200

Cash flow position

ＦＹ2014/3
2Q

ＦＹ2013/3
2Q

ＦＹ2014/3
2Q

▲202

236

394

100
0

Cash flows from operating
activities-100

有価証券取得 ▲1,362百万円
投資有価証券取得 ▲2,020百万円-200

Cash flows from investing activities

4

▲46

▲210

Cash flows from financing activities

▲147

222

418

Cash and cash equivalents
Quarter-end balance

135

437

992

-300

Operating CF
Investing CF
Free CFFY2012 2Q
-202
4
-198

FY2013 2Q
236
-46
190

FY2014 2Q
394
-210
184

II. Management Indicators(Business Performance Forecast for the FY ending March 2014)
Sales Plan by Segment for FY Ending March 2014

Changes in growth model

Compared to thesame period lastyear

ＦＹ2014/3(Forecast)

ＦＹ2013/3

Unit: Million yen

７

FY2014/3(Forecast)

ＦＹ2013/3
High-profit management
Firming up the foundation

Stock-type businessFirming up the foundation■Electronics and
3,155

2,800

▲ 11.3％

441

1,704

286.3％

telecommunications equipment■ Solar power energy

ＦＹ2013/3

ＦＹ2014/3(Forecast)Compared tothe same
period last
year

3,671

4,504

22.7％

2,622

3,340

27.4％

1,048

1,163

11.0％

675

670

▲ 0.7％

373

493

32.2％

374

488

30.4％

339

449

32.3％

EPS (yen) ※

47.1

38.9

ＲＯＥ（％）

27.4

22.4

ＲＯＡ（％）

18.0

15.1

Unit: Million yen■ Biomass energy

74

Sales total

3,671

12.0%

4,504

22.7％

Sales
Cost of sales

Breakdown of sales
37.8%
2.0%

Gross operating profit■ Electronics andtelecommunications equipment

SG&A expenses■ Solar power energy■ Biomass energy

62.2%

Operating income

85.9%

Ordinary income
Operating Income Plan by Segment for FY Ending March 2014
Net income
ＦＹ2013/3

Unit: Million yen

ＦＹ2014/3(Forecast)■Electronics andtelecommunications equipment363（11.５％）

226（8.1％）

40（9.１％）

266（15,6％）(operating margin)■ Solar power energy(operating margin)※FY ended March 2013 calculated based on an average 7,202,647 stocks outstanding during the period.

FY ending March 2014 (forecast) calculated based on an average 11,528,250 stocks outstanding
during the period as of September 30, 2013.

■ Biomass energy(operating margin)▲30（▲40,4％）

Operating income total(operating margin)373（10.2％）■Forecast for the FY ending March 2014493
（11.0％）

Points on the Business Plan

Proactive investment plan for the FY ending March2014 (capital expenditure and R&D expenditure)
Unit: Million yen

ＦＹ2013/3

ＦＹ2014/3(Forecast)Compared to the same
period last year

■Electronics and
146

200

＋54

356

500

＋144

telecommunications equipment■ Solar power energy■Electronics and telecommunications equipment【1】Core market: Mobile communications new product development and solutions【2】Second pillar market: Strengthening of disaster-prevention development and sales【3】 Strengthening of our own product (environmental analysis equipment) solutions■Solar power energy【1】Continuation of work in small elite groups. Construction of a creation network for the
supply of recommended equipment.
【2】The start of sales of solar power plants (mega solar) from the second half of the year.
【3】Aggressive assembly of solar power plants (mega solar).

III. Current of Management Reforms
８(Electronics and Telecommunications Equipment Business: 1. Profit Structure Model)■Electronics andtelecommunications equipment businessTop class in the industry: An expert company in highfrequency technology
High frequency signals have high transmission speeds andare particularly suited for large-volume data transfers andtransmission of video.

Market and Frequency Domain
300KHz

3MHz

30MHz

300MHzUltrashortwave
Ship radio
Aeronautical radio

Amateur radio

The Company manufactures and sells product categories
for supporting functions optimized for specific transmission
environments with regard to the distribution andcomposition of outbound and inbound signals, necessary
frequency selection, and appropriate signal strength leveladjustment.

FM broadcasts
PublicDefense radio
Air traffic control

30GHz

Ultrashortwave
Mobile telephones
Ground wave
Digital television

300GHzMillimeter
wave
(EHF)

Microwave

Short wave
Medium wave

3GHz

Next-generation
mobile telephones
Satellite
transmissions
ETC

Satellite
transmissions
Defense radarSpecific frequencies
ＦＹ2013/3

Device equipment
Sales ratio
Sales ratio
70%70%(High-frequency circuit
elements fortelecommunications use)

Business Portfolio

１
Next-generation
R&D activities

.
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Ascertaining
market trends

Distributors Directional couplers
Attenuators Terminators
Coaxial switchers
Oscillators
RF filters andduplexers, etc.

Sales Percentage by Market
23.0%

In-house production

High frequency
wireless technology

２100%
direct sales
Technology
solutions

３
Diversified low-volume
production orders

In-house products makefor a high-profit structure

Other

61.0%

Defense
16.0%

Mobilecommunications

30.0%
70.0%

Productivity
Productivity
Systems equipment(in-house products,
OEM products)

Fabless

Sales Percentage by ProductIn-house products

４High-frequency amplifiers
Synthesizers
Microwave transceivers
Optical receivers
Radar simulators ETC etc.

30.0%
70.0%

Custom products
Sales ratio
Sales ratio
30%
30%

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III. Current Status of Management Reforms
９(Electronics and Telecommunications Equipment Business: 2. Quarterly Sales Revenue)■Electronics and telecommunications equipment business(Unit: Million yen)
900

Quarterly sales revenue(Unit: 10,000 stations)■Number of domestic wireless stations by quarter (cumulative)(Source: Ministry of Internal Affairs and Communications)

September 2013

1,550
1,550

1,513
March 201３

Increase in wireless basestations Demand growth

1,500
1,500
600

1,462
1,450
1,450

1,402
1,400
1,400
March 201２

1,348

1,350
1,350
300

1,300
1,300

1,288
March 2011

1,250
1,250

1,209
March 2010

1,200
1,200

0

1,165
1,194

1,150
1,150
March 2009

1,140
1,120

1,100
1,100

FY2012/3
ＦＹ2013/3
FY2014/3

1st Quarter
455
693
692

2nd Quarter
550
723
690

3rd Quarter
633
881

4th Quarter
766
857

Strong demand for large-volume, high-speed infrastructure upgrades connecting to expansion
in market potential for high-frequency wireless technology parts

High-income structure based on R&D activities■Business activity topics for second
quarter of FY ending March 2014

(1) Core market: Mobile communications- Completed technology
development for 4G (IMT Advanced) scheduled to start in 2016(2) Shift to in-house production of core products- Highperformance features through in-house production of resistor
elements of main products since the inception of operations(3) Income margin enhanced through productivity gains from risingorder receipts for system products- Increased receipts of unit
orders combining analog technology (filter) and digital technology(signal processing and control) applications(4)Strengthening of own-product development (environmental
analysis equipment)- Strengthening development and propositions
surrounding own products geared at rising demand forenvironmental analysis applications,

Creation of high-income structures in preparation
for period of demand growth(1)Increased price competitiveness and expanded production capacity- Korea: Business cooperation with Ace Technologies Corp.
(2) Response to demand for telecommunications infrastructure
upgrades in preparation for the 2020 Olympics- The Company’s
analog optical fiber technology is highly acclaimed for subway
telecommunication facilities and similar applications(3) Generation of new markets: Disaster damage preventionStrengthening of proposals surrounding milliwave transmission
equipment in response to growing demand for high-vision imaging
for coastal monitoring in connection with natural disaster andterritorial issues with neighboring nations(4) Strengthening of PR efforts surrounding the Company’s technology- Presentation of six new own products at the Microwave Exhibition 2013

III. Current Status of Management Reforms (Electronics and Telecommunications
Equipment Business: 3. Enhancement of Price Competitiveness■Electronics and telecommunications equipment business

Amicable business cooperation withoverseas competitors in manufacturing
Ace Technologies Corp

Tamagawa Electronics Co., Ltd.
Purpose of business cooperation in filter parts production

Ｐｏｉｎｔ

1. Expand market share through increased pricecompetitiveness2. Increase production capacity (without foreignexchange risk)
3. Enable short-term delivery based on the integrated
production system of Ace Technologies Corp.
4. Goal of reducing manufacturing costs by 30%
Filters

Circuitry that processes
only necessary frequency
elements and leaves out
unnecessary components

http://www.acetech.co.kr
Corporate Profile
Established

July 1, 1980

Capital￦8,365 million

Representative

CEO Gwan-Young.Koo

Business lines

Development, manufacture andsales, including high-frequency
devices and antennae (filters)

Higher price competitivenessNew order acquisition

Planning and design
Quality control

Vertically integrated unified
production system
・Aluminum molds
・Machining center・Plating processing
Materials costs
Processing costs
Logistics costs

High-quality,
Low-cost
Volume production withshort turnaround times

１０III. Current Status of Management Reforms (Electronics and Telecommunications
Equipment Business: 4. Shift to In-house Production of Core Technology Products)■Electronics and telecommunications
equipment business

Flow chart of attenuator body manufacture
Surrounded by a vacuum, a thinfilm is attached to the body
substrate material
Cleansing of the body substrate material

Main products since the inception of operations
CleansingFilm attachment

Coaxial attenuators and non-reflective terminators
A coating of resist is applied tothe element substrate material

Attenuators (reduction devices) are used to reduce signal
strength to the appropriate level.
Terminators are implements to suppress signal reflection at
the end of the circuitry and thereby prevent signal corruption. 。

The resist layer is masked and exposed to ultraviolet light

Resist■Main facility investments in the second
quarter of the FY ending March 2014

Exposure

Spin-coater

Baking oven

Exposure

Chemicals are used to etch the metalaway from the substrate areas that are
not covered by a resist layer

The exposed parts of the resist layer are removed using developer liquid

Etching

Shift to in-house manufacture ofcore products
The manufacture of resistor bodies, whichconstitute the core of attenuators (reduction
devices) and terminators, was previously
outsourced.

Development

The body is cut into sections

Trimming

The resistor film is physicallymachined and the resistancevalue adjusted

Cutting↓
The surface of the resistancefilm receives a paint coat

In order to respond to market trends calling forthe development of own high-performance
products, resistor body manufacturing facilities
and technical engineers have been introduced

Paint coating
Clean room

１１III. Current Status of Management Reforms (Electronics and Telecommunications
Equipment Business: 5. PR Efforts Surrounding the Company’s Technology)

１２■Electronics and telecommunications equipment business

70% own-product ratio targeted for the FY ending March 2018
High-income structure and exit from market condition-dependent business structures

Brand

Tamagawa Electronics Co., Ltd. An expert company in melding analog anddigital wireless technologies
Microwave Exhibition 2013

d
dde
A
h
Hig lue
va

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１

２

Microwave coupling devicesePric eness
titiv
mp e

３

Antenna sharing
equipment

Improvement Skill upgrades
propositions Technology
capabilities

４

Rack-mount type

Programmable attenuator

Qualitycontrol５

Rotary attenuator

Optical converters

Product nameProduct characteristics①Signal sampling device
Wireless signal processing equipment enabled for high-speed data transfer②New-type material antennae sharing equipment Designed for weight reduction by replacing aluminum with new-type materials③Rack-mount type optical converter
Enables mounting up to eight 1U-sized E/O or O/E units in order to achieve size reduction①4 to 12 GHz; enabled for high-speed switching up to a maximum variable attenuation④Programmable attenuator
volume of 60②DC up to 6 GHz; highly versatile programmable attenuator for permissible
power range of 50 to 150 W⑤Rotary attenuator
DC up to 6 GHz, rotary attenuator for 0 to 110 (1 step) variable attenuation volume
Increase in
new order receipts

III. Current Status of Management Reforms (Electronics and Telecommunications
Equipment Business: 6. Illustration of New Market Creation)

１３■Electronics and telecommunications equipment businessTamagawa Electronics Co., Ltd.
Own productsof the Company

Market trends
R&D次世代activities

Ｒ＆Ｄ活動

High-income
structure

Value up
Value upTechnology

Test products

試作製品

provision
技術提案

Sales revenue
売上高
500 millionNew
market
新市場
10億円規模 generation
創出

Creation of models for new market generation
New market generation＝Business categories with an extended business expanse

Business expanse
Sales revenue
5 billion

Exit from market conditiondependent business structures= Increase in proposal-based orders

Other activities

20.0％
20.0％
Disaster prevention
measures

Sales

10.0％
10.0％

Other activities

Creation of business opportunities
using high-frequency
wireless technology

15.0％
15.0％
Environment analysis

Public wirelesstelecommunications

Solutions for areas
without signal reception

25.0％
25.0％
Costal monitoring

DefenseHigh speed
telecommunications

Time axis

Mobiletelecommunications

30,0％
30,0％

High-income structure
Ratio of own products to be raised from 30% to 70%
ＦＹ2014/3(Forecast

ＦＹ2018/3(ForecastTimeIII. Current Status of Management Reforms(Solar Energy Power Business: 1. Construction of Profit Structure Model)“Providing high-performance, low-price solar energy generation systems
with a quality assurance and servicing system that meets Japanese standards”
Conversion
efficiency
guarantee

QualitycontrolYieldelectricity
sales

Highperformance
products
modulesPlanning
anddevelopment
productionLandacquisition

Superior
intelligencecompetency

Credibility
track record

November 1968

Quality
According toJapanese standards
Tamagawa
Electronics Co., Ltd.
Ltd .

2012年2月

Prospective
installation
Company
investors

OneStopStopSolution
SolutionOne

December 2012

December 2012

System sales

Operational
management

Tamagawa
Solar Systems Co., Ltd.

GP Energy Co., Ltd

Module production

ＧＰＰＶ
exclusive
distributionagreement)～Energy Value Creation as a System Integrator～～
Phase0Phase1
Project creation
Contract■Explanation of quote・ Balance of payments plan ■Contract signed■Confirmation of the ■Application for
consideration of
power system
connection■Application for■Equipment
equipment certification
accreditation

Phase2Start ofconstruction ①■Civil engineering work
■Solar power installation■Electrical work
■Monitoring systeminstallation■Consideration ofconnection(Basically three months)

Phase3
Start ofconstruction ②■Response regarding
consideration ofconnection■Application forconnection■Construction cost
contribution agreement

Phase4
Solar powersystem completed

Phase5Interconnection
construction

Start selling
power■Connection supply■Blueprint meetings
contract
・Operational reportingand management
and operation Submission -Effectivenessof annual cost report, etc. measurement■Power plant installation

Six months (for 1 Mw)■Procedures with contractual parties

Phase6■Procedures with power company■Procedures with the Ministry of Economy, Trade and Industry

１４III. Current Status of Management Reforms(Solar Energy Power Business: 2. Current Status of the Systems Sales Business)

１５

Our Key Products■Modules with Japanese quality at Chinese prices【１】GPPV has in its track record a successful contract in 2010 with Siemens (Germany) for the adoption of an
MW power generation project.
【2】 Cracks in module cells that are invisible to the naked eye typically occur in the manufacturing process. The
cracking progresses over a number of years, thus leading to a dramatic decrease in the amount of power
generated.
All of our modules undergo inspection by Japanese-made EL testers, and we purchase products that meet thestandards of major Japanese module manufacturers. As a result, the modules made by GPPV do not see any
extreme decrease in the amount of power generated over the long term.
【３】 The Quality Control Department of Tamagawa Electronics (ISO9001 certified) is providing GPPV with quality
control know-how.

■Solar power system sales■Single crystal cell power generation
moduleＧＰＭ２４５－Ｂ－６０
・Module conversion efficiency of 15.1%

・Output performance guarantee of 25
years
Modules for J-PEC“Providing high-performance, low-price solar energy generation systems with a quality assurance
and a servicing system that meets Japanese standards”
Vacant lot■ Delivery record for
FY ended March 2013

12 months

6 months

Ｎｏ Contract period

Address

Installation site

Capacity (kWh)Ｎｏ Contract term

1 Sept. 2011
2 Jan. 2012
3 Apr. 2012
4 Jun. 2012
5
6
7 Jul. 2012
8 Aug. 2012
9
10
11
12
13 Sept. 2012
14
15
16
17
18
19 Oct. 201220
21
22 Nov. 201223 Dec. 2012
24
25
26
27
28
29 Feb. 201330
31 Mar. 2013
32
33
34
35
36

Kitasaku-gun , Nagano
Anjo-shi, Aichi
Fukuoka-shi, Fukuoka
Nogata-shi, Fukuoka
Koga-shi, Fukuoka
Sasaguri, Kasuya-gun, Fukuoka
Ayase-shi, Kanagawa
Toyota-shi, Aichi
Toyota-shi, Aichi
Nakagawa-machi, Chikushi-gun, Fukuoka①
Nakagawa-machi, Chikushi-gun, Fukuoka②
Shime-machi, Kasuya-gun, Fukuoka①
Shime-machi, Kasuya-gun, Fukuoka②
Toyota-shi, Aichi
Kamisu-shi, Ibaraki
Noda-shi, Chiba
Shime-machi, Kasuya-gun, Fukuoka
Kasuga-shi, Fukuoka
Miyaki-gun, Saga
Nobeoka-shi, Miyazaki
Miyoshi-shi, Aichi
Toyota-shi, Aichi
Toyota-shi, Aichi
Higashi-ku, Fukuoka-shi, Fukuoka
Saijo-shi, Ehime ①
Saijo-shi, Ehime ②
Saijo-shi, Ehime③
Saijo-shi, Ehime④
Omuta-shi, Fukuoka
Ukiha-shi, Fukuoka
Kurume-shi, Fukuoka
Omura-shi, Nagasaki
Hamacho, Goto-shi, Nagasaki
Yame-shi, Fukuoka
Saga-shi, Saga
Munakata-shi, Fukuoka

RoofParking lot
Roof
Roof
Roof
Roof
Roof
Roof
Roof
Roof
Roof
Roof
Roof
Roof
Roof
Roof
Roof
Roof
Parking lot
Vacant lot
Roof
Roof
Roof
Roof
Roof
Roof
Roof
Roof
Roof
Mountain forest
Roof
Roof
Vacant lot
Roof
Roof
Mountain forest

11.2
19.2
9.6
10.0
10.0
28.8
12.9
41.2
16.8
40.0
40.0
41.0
41.0
23.0
40.0
13.4
20.4
49.4
42.2
46.0
23.0
11.5
33.6
6.0
33.0
16.2
33.0
10.5
48.0
300.8
49.9
49.9
35.5
79.9
115.6
300.0

1 Apr. 2013
2
3
4
5
6 May. 20137
8 Jun. 2013910
11 Jul. 201312
13
14 Aug. 201315
16
17
18 Sept. 2013
19
20

■Delivery record for second
quarter of FY ending March 2014
Address

Installation site Capacity (kW)Fukuoka-shi, Fukuoka
Fukuoka-shi, Fukuoka
Fukuoka-shi, Fukuoka
Fukuoka-shi, Fukuoka
Hachinohe-shi, Aomori
Hachinohe-shi, Aomori
Fukuoka-shi, Fukuoka
Kume-gun, Okayama
Fukuoka-shi, Fukuoka
Fukuoka-shi, Fukuoka
Fukuoka-shi, Fukuoka
Fukuoka-shi, Fukuoka
Toyota-shi, Aichi
Fukuoka-shi, Fukuoka
Fukuoka-shi, Fukuoka
Fukuoka-shi, Fukuoka
Fukuoka-shi, Fukuoka
Fukuoka-shi, Fukuoka
Fukuoka-shi, Fukuoka
Nagoya-shi, Aichi
Total
Capacity per object

Roof
Roof
Field
Vacant lot
Roof
Vacant lot
Vacant lot
Vacant lot
Vacant lot
Vacant lot
Carport
Roof
Roof
Roof
Roof
Roof
Vacant lot
Vacant lot
Vacant lot
Roof

28.6
25.9
308.9
40.3
16.6
11.5
987.4
51.8
1,911.0
24.1
35.0
10.0
6.8
54.0
54.0
10.8
49.0
49.0
49.0
4.5
3728.1
186.4

Field

Roof

CarportRoof【 12 months 】

ＦＹ2014 2Q【 6 months 】

441

414

Operating income ( ratio)

41 (9.4％)

47 (11.5 ％)Enhanced operating income ratio

Capacity per object

47.3kWh

186.4kWh

3.9-fold increase

69ＦＹ2013/3

Unit: Million yen

Sales revenue

Number of employees

Remarks
On a 6-month basis unchanged
from the year-earlier period+3III. Current Status of Management Reforms(Solar Energy Power Business: 3. Establishment of Business Style)Business Growth Stage

１６

Establishment of Business Style

Since February 2012
Personal connections of the representative= “Point-based” proposal business
Timing●Along with the pursuit of income
also make proposals for local community development

Business activity topics

A first for the Company!
Conclusion of a sales agreement for solar energy modules
July 2012
User company: Chikushigaoka Golf Club(Nakagawa-machi, Chikushi-gun, Fukuoka)
A first for the Company!
Conclusion of a leasing agreement for land for a solar energy power plant
Sept 2012(1.5 mW)Location: Toyoura-cho , Shimonoseki-shi, Yamaguchi (surface area: 24,081.07 square meters )Long-term
stability type
All-quantity power
buyback program

High-income ratio
Increased customer trust andconfidence(Strengthening of thecooperation with local enterprises)

Effective use of
assetsRepresentative of the Company (Fukuoka)
Fukuoka

NaganoYamaguchi

Aichi

OneStopStopSolution
Solution
One
Agreements based on interviews
between the person in charge
and top personnel as necessary

Track record ofoperations
management

Supply track recordof at least 10 mW

Since December 2012
“Broad-based” proposal business geared
at local governments and user companies●(Response capability)(Trust and confidence)
Land information
Negotiations with power companies
Application procedures

TimingBusiness activity topics

High-quality modules
Facility operations andmanagement expertise

Cooperation with the local government (Kurozo area in Goto city with

Indication ofincome yield

CSR type
proposals(Customer-firstprinciple)(Contributions tocommunity development)

Cooperation with local governments
Outright ownership,partial ownership,
Local construction firms
Leasing Power sales
Employment promotion
track record in the region
Contributions to education
Tax advisory

After the start of fixed 47 households)
feed-in regulations
The first in Japan! Conclusion of a leasing agreement for land for a solar energy power plant (1.9mW)Location: Hamacho, Goto-shi, Nagasaki (surface area: 23,936 square
December 2012
meters)Dividend target
10% or more of annual yields

XXX City

Local government
assembly Ａ

Local government
assembly Ｂ

Make proposals that contributeto the local community
systematically, at theorganization level

Local government
assembly Ｃ

Local government
assembly Ｄ

Knowledge of thelocality's characteristics

Interaction with CSR-type
consulting firms

Management ofcustomer information

III. Current Status of Management Reforms(Solar Energy Power Business: 4. Starting the Solar Energy Power Plant Business)

１７“Initiation of power sales revenue recognition according to plan
→ Positive start exceeding initial forecasts”■Solar power energy (power plant)

Outline of Shimonoseki mega-power station
Location and surface area
Power generation capacity
Feed-in price (per 1 kWh)
Facility investment amountComparison of the Company’s track record and the average of 800
kW
locations nationwide based on the NEDO “Solar radiation database

Contract outline

2013②The Company①NEDO
Actual power
Actual power
output (kWh) ) output (kWh)kWh inDifference
percent

Power sales start date

Shimonoseki-shi, Yamaguchi
1.5Ｍｗ
¥42.0
¥413 million
5-year land lease agreement with subsequent landpurchase option agreement
June 22, 2013

②÷①
Discrepancy with the initial forecast for the power plant’s sales revenue

July

157,933.7

193,035.9

August167,866.7

194,697.6+22.2％
W/㎡
W/㎡+16.0％

September

141,234.4

170,441.3+20.7％

October

132,803.9

140,066.5+5.5％

http://tmex.willnet.ad.jp(The current status of power generation is published on the corporate website of the Company)

Unit: Thousand yen
First term sales
revenue (estimate)
Sales revenue(actual)Gross margin (actual)
Gross margin ratio

July

AugustSeptember

Total

6,317

6,714

7,420

20,452

7,372

7,776

8,342

3,880
（52.6％）

4,254（54.7％）

3,612（43.3％）

23,49011,748（50.0％）■Business activity topics (September 19, 2013)
Acknowledged field-trip destination of Yamaguchi prefecture
as “Renewable Energy Case Study Facility”

Success track record of the No. 1 project of the Company→→ Increased trust and confidence→→Increase in information procurement power surrounding new products
Goto Islands power plant■Business activity topics for second
quarter of FY ending March 2014
Location and surface area

Green Rush ProjectPower generation capacity
Feed-in price (per 1 kWh)Contract outline

Goto-shi, Nagasaki
１00,000㎡
6.0Ｍｗ
¥37.8
20-year land lease agreement

Minamishimabara power plant
Minamishimabara-shi, Nagasaki
１2,000㎡
1.0Ｍｗ¥42.0
20-year land lease agreement

Scheduled start of power sales 1st quarter of FY ending March 2016

2nd quarter of FY ending March 2015

Remarks

3rd quarter of FY ending March 2014
Start of 49 kW power sales

Special high-voltage

Note: The above-mentioned solar energy power plants reflect current objectives of the Company that are subject to change.

IV. Future Business Strategies – 1. Establishment of a Solar Energy Power Plant Fund １８■Solar power energy (power plant)

Listings
for sale

ＳＰＣ

Ownership

GP Energy K.K. 1-6

Focus on greater
efficiency of fund use
Creation of profit

Sale

ＳＰＣ

Electric power company
Revenue from sales of electric power

EPC Corporation

Contract agreement
O&M contract
O&M Corporation

y
t
i
l
i
c
a
f
n
o
i
t
a
r
e
n
e
g
r
e
w
o
p
r
a
l
o
S

Specified contract

Project finance

Loan
LenderSilent partnershipSilentpartnership

Business companies, etc.

ReinvestCapital■Status as qualified institutional investor
effective since June 1, 2013

Property lease agreement

Land owners andleaseholders※ EPC: Product management of the three areas of engineering, procurement, and construction.
※O&M (operation & maintenance) contracts Outsourcing of operations and maintenance, etc.

Asset management contract

Asset manager

IV. Future Business Strategies – 2. Concerning Future Fixed Selling Prices

１９Feed-in prices and feed-in price forecasts based on
the all-quantity power buyback program
Size of the domestic market for solar energy power systems and forecasts
Established before 2010
(Millionyen)

Starting from July 2012

Starting from May 2013Market for solar energy power generation systems for public and industrial use

Feed-in priceFeed-in price¥24.0¥ 42.0Feed-in period

Feed-in period:
20 years (fixed)

Market for solar energy power generation system for residential use

Business area of
the Company

Feed-in priceGreen
investment
tax relief

Green
investment
tax relief¥ 38.7Feed-in period:
20 years (fixed

10 years

Forecast for
CY 20XX

Forecast for
CY 20XX

Feed-in priceFeed-in price¥ 34.0¥ 30.0

Downward trend of feed-in prices lasting several years
Note 1: Based on selling prices to end users including installation costs.
Note 2: Divided by category into residential use systems under 10 kW capacities
mostly for installation on residential roof tops and systems for public andindustrial applications with capacities over 10 kW for use under the renewableenergy feed-in regulations without volume limit.

【Source:】Yano Research Institute Ltd.

■Solar energy power system sales business■Solar power energy (power plant)

1.2-fold peak rated output of power conditioners(manufacturer recommendation)

Measure ①Construction cost reduction
Measure ②Optimization of solar energy power systems (deployment
method and equipment selection)■Premises① Initial investment of ¥300 million per megawatt②Initial investment of ¥330 million per 1.2 megawatts③ Annual earnings of ¥40 million at a feed-in price of ¥37.8
Feed-in price ¥37.8
Annual income from power
sales
Cumulative 20-year powersales income
Annual yield

１Ｍｗ
Feed-in price ¥ 30.0
A few years
Annual income from power¥40 million later
sales
Cumulative 20-year power¥800 million
sales income
13,３％Annual yield

Attractive investment yield even at a feed-in price of ¥30.0■ Premises
Initial investment of ¥260 million (consistent with the track record of the Company)
per megawatt
１.2Ｍｗ

In the case of 1 megawatt

FY2013

FY2014¥38 million

Feed-in priceConstruction cost
Internal rate of return (IRR)¥ 42.0¥280 million
12.0％¥ 37.8¥260 million
12.0％¥760 million

A few
years later

11.5％

Attractive IRR even at a feed-in price of ¥30.0

FY20××¥ 30.0¥2５0 million
9.0％～11.0％

7
IV. Future Business Strategies – 3. Medium-term Income Plan

Operating income ratio

Vision 2014～2018
Business growth

ＲＯＥ

Management
index

Sales revenue growth rate

ＴＡＭＡＧＡＷＡ ＨＤ

２０

Average annual growth rate of 23.5% or more
20% or more
20% or more

(Million yen)

Estimate of variation in sales revenue (left axis)
and operating income ratio (right axis)

10,000ＦＹ2018/3(Forecast)■Solar power energy (power plant)
Expectations of decline in feed-in price ⇒Increase surface area and power output volume

21.0％
20.0％

20.0％
27.9%

8,000

20.0%

■Electronics and telecommunications
equipment Promotion of business cooperation
with Ace Technologies Corp. ⇒ Rise in order
receipts based on increased pricecompetitiveness

18.0％
47.0%

6,000

15.0%
24.4%
■ Electronics and telecommunications
equipment

11.0％■ Solar power system sales■ Solar power energy (power
10.0%
plant)

10.2％
4,000■ Electronics andtelecommunications equipment■ Solar power energy■ Biomass energy

4,504

FY2013/3

2,000

3,671

5.0%

12.0%
2.0%

00

0%
FY2013/3
2013

ＦＹ2014 /3
2014 ）(Forecast

ＦＹ2015 /3
2015 ）(Forecast

2016

2017

ＦＹ2018
2018/3(Forecast ）85.9%
Note: The above-mentioned Medium-term Income Plan reflects current objectives of the Company and is subject to change.

■Electronics and telecommunications
equipment
Increase in the percentage of sales of own
products

Enhanced profit margins■Solar power energy (sales)■Solar power energy (power plant)
Policy of using a small number of highly
successful personnel will be continued

Enhanced IRR from capital efficiency gains※IRR(Internal Rate of Return)TAMAGAWA HOLDINGS CO., LTD.
ir@ tmex.co.jp
Tokyo Office
1-6-15 Hamamatsu-cho Place 1F, Hamamatsu-cho, Minato-ku, Tokyo 105-0013 Japan
Tel: +81-3-6435-6933 Fax: +81-3-6435-6934

This content is provided to inform about the business results for the second quarter of the fiscal year ending March 2014. It is not the purpose of this content to solicit
for investment in securities issued by the Company.
In addition, this content was put together on the basis of data available as of November 11, 2013. The opinions, forecasts, and what not listed within this content are
based on the Company’s own judgments at the time of the compilation of the materials. The Company therefore offers no guarantee or promises in regard to theaccuracy or safety of the information. And the information is subject to change without prior notice.