Nagaileben
7447 Tokyo Stock Exchange First Section
Company Research and Analysis Report
FISCO Ltd.
http://www.fisco.co.jp

28-Jan-14
Important disclosuresand disclaimers appear
at the back of thisdocument.

FISCO Ltd. Analyst
Noboru Terashima■Performance towards medium-term targets
Nagaileben is the largest manufacturer of clothing for medical use in Japan,
with a market share of more than 60%. In the first quarter of the fiscal year
through August 2014, i.e., in Q1 FY8/14, the company raised its sales by 7.5%
year-on-year (y-o-y) to \3,201mn, its operating profit by 13.1% to \922mn, andits recurring profit by 8.5% to \1,000mn. Sales and operating profit surpassed
the company’s forecasts.
For FY8/14, the company forecasts a 2.4% y-o-y rise in sales to \16,000mn,
a 0.1% upturn in operating profit to \4,880mn, a 9.1% decline in recurring profit
to \4,923mn, and a 2.8% fall in net profit to \3,030mn. The projected decline inrecurring profit reflects the expectation of an absence of special non-operating
profit, such as the foreign currency exchange profit earned in FY8/13.
However, if current yen exchange rates persist, the company may earn enoughforeign currency exchange profit to increase its recurring profit.
Nagaileben’s financial position remains strong. At the end of Q1 FY8/14,
its equity ratio stood at 91.0%. At the same time, the company takes a positive
attitude towards shareholder returns, or improving capital efficiency. It has
pledged to maintain a dividend payout ratio of 50% or more, on a parentcompany basis, and it intends to buy back shares at opportune moments.
In FY8/16, the final year of the company’s current medium-term plan, thecompany aims to generate sales of \16,800mn and earn an operating profit of\5,100mn. The company projects an operating profit of \4,880mn for FY8/14,
so its operating profit target for FY8/15 appears attainable. In June 2013, theCabinet Office announced a strategy to rebuild Japan. One goal of this strategy
is to extend the healthy lifespan of Japanese people by preparing andexpanding an environment conducive to this goal. Japan’s current healthcare
market is about \16 trillion, but the Cabinet Office forecasts that this market
will grow to \26 trillion by 2020 and to \37 trillion by 2030. As the averageage of residents of Japan continues to rise, the number of nursing careproviders is increasing. In 2012, there were 1.49mn such providers, and thegovernment projects that this number will grow to about 2.49mn by 2025. This
trend should support Nagaileben’s growth.

■Check Points
・Holds an unchallenged position in its industry
・Sales of healthcare wear and doctors’ wear remain brisk
・Company’s stable financial position allows it to maintain a dividend payout
ratio of at least 50%

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

1

28-Jan-14

Nagaileben

Consolidated Sales and Operating Profit (\mn),
FY8/09-FY8/14E and FY8/16 plan
Sales (left axis)(\mn)

Operating Profit (right axis)
16,80017,000

(\mn)
6,000

16,00016,00015,625
15,175
5,100

15,00014,57813,669

4,880

4,642

14,076
14,000

4,873

5,000

4,358

4,000

4,005
13,000
3,638

0
3,000

12,0000
FY8/09FY8/10FY8/11

FY8/12

FY8/13

FY8/14E

FY8/16E■Company Outline
Largest maker of clothing for medical use in Japan, with amarket share of more than 60%(1) History
Nagaileben specializes in the manufacture of clothing for nurses, doctors andpatients. The company started out in 1915 as Nagai Shoten in Tokyo, andexpanded its business content and geographical coverage to all of Japan, as
detailed in the table below. It is now the leading maker of medical clothing inJapan, with more than a 60% share of the market.

Company History
Koji Nagai established Nagai Shoten, a proprietorship engaged in manufacturing white clothing, in Jimbocho-Kanda area of Tokyo. In
1915
1942, Nagai Shoten expanded to become Tokyo Sanitary White Clothing Co.
1950 Tokyo Sanitary White Clothing Co. disbanded. Koji Nagai and Tatsuro Sawanobori established Nagai Shoten Co., Ltd.
1969

Established subsidiary Nagai White Clothing Industry Co., Ltd. in Akita Prefecture to expand production. Mr. Sawanobori becamepresident. Company specialized in producing and selling white clothing for medical use.

1977

Constructed Goods Center 2 in Kamedo, Tokyo. Established a business alliance with GD Searle, of the US; established Nippon
Surgical Apparel Co. in Hiroshima City to expand sales of new operating room apparel.

1978

Established technical agreements with Angelica Co., of the US, and with Toray, of Japan. Developed clothing made of new materials
for lease.

1980

Changed company name to Nagai Co., Ltd. Set up a sales office in Takamatsu City. Concluded a license agreement with designer
Kansai Yamamoto.

1982 Concluded a license agreement with designer Sachiko Hanai.
1988

Nagai Co. spun off some of its operations as a new company, Emit Co. Subsequently, these companies traded names. Emit Co.
became the overall group manager, while Nagai Co. became the sales company.

1989

Built the Nagai Luminous plant in Akita Prefecture to produce high-grade goods. Started overseas production, planned to divide
business internationally.

1994 Nagai Co. changed its name to Nagaileben Co., Ltd. Built a distribution center in Akita Prefecture.
1995

Nagaileben registered its shares on Japan’s over-the-counter market. Developed a clothing line for the aged as the second main
product line. Vice President Ichiro Sawanobori became president.

1996 Concluded a license agreement with French designer Courreges.
1999 Opened a sales office in Nagoya. Concluded a license agreement with designer Atsuro Utayama.
2001 Listed shares on the Second Section of the Tokyo Stock Exchange
2002

Concluded technical agreements in surgical textiles with Standard Textiles Inc., of the US, and with Toray. Upgraded Nagoya sales
office to a branch office.

2004

Acquired SO 9001 certification. Listed shares on the First Section of the Tokyo Stock Exchange. Absorbed Nagai Hokkaido andopened a branch office in Hokkaido.

2005 Acquired ISO 14001 certification. Concluded a license agreement with designer Keita Maruyama.
2006 Concluded a license agreement with designer Minako Yokomori.

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

2

28-Jan-14

Nagaileben■Company Outline

Sales representatives maintain contact with customer
institutions to ascertain their needs and the needs of end(2) Description of Businesses○Consolidated Sales Breakdowns
All of Nagaileben ’ s products are medical clothing or related items. The
company ’ s sales can be broken down by item, or type of clothing, bygeographical market, and by clothing classification. By item, as detailed in thepie chart below, in FY8/13, healthcare wear provided 57.9% of total sales,
doctors ’ wear provided 16.4%, surgical wear supplied 9.5%, patient wear
contributed 8.2%, utility wear provided 5.1%, shoes, etc. provided 1.6%, and otherproducts accounted for 1.4%. Profitability does not vary much by item, but shoes
and other products, which are purchased, are less profitable than the other typesof clothing, which are made in-house.

Breakdown of FY8/13 Consolidated Sales by Item

Surgical wear
9.5%

Shoes
1.6%

Other products
1.4%

Patient wear
8.2%
Utility wear
5.1%
Healthcare wear,
57.9%
Doctors’ wear
16.4%

By geographical market, eastern Japan accounted for 53.7% of total sales in
FY8/13, western Japan, for 35.3%, central Japan, for 10.2%, and overseas for
0.9%. The overseas sales ratio could grow in coming years.

Breakdown of FY8/13 Consolidated Sales byGeographical Market
Overseas, 0.9%

Western Japan,
35.3%
Eastern Japan,
53.7%

Central Japan,
10.2%

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

3

28-Jan-14

Nagaileben■Company Outline

By product classification, advanced function goods supplied 46.2% of total
sales in FY8/13, standard function goods supplied 41.2%, mass-market goods
provided 6.7%, and designer-character (DC) brand goods provided 6.0%. The priceranges of nurse wear by classification are as follows: mass-market \5,000 or
less, standard function \5,000–7,500, advanced function \7,500–10,000, and DC
brand \10,000 or more. The higher priced classifications are more profitable
than lower priced classifications.

Breakdown of FY8/13 Consolidated Sales by
Product Classification
Mass-market
6.7%Standardfunction
41.2%

DC brand
6.0%

Advancedfunction
46.2%○Sales Routes and Manufacturing
Since the end-users of Nagaileben’s products are mainly doctors, nurses andpatients, the company’s main customers are hospitals, other medical facilities,
and nursing homes. All of the company’s sales are made through intermediarycompanies. Thus, the company has no direct selling cost. However, its sales
representatives maintain contact with customer institutions to ascertain theirneeds and the needs of the end-users.
In the past, most customer institutions purchased Nagaileben’s clothing andwashed it in-house. In recent years, however, more institutions have leased theclothing, returning it to the company for washing. These leases are usually for
four years and are regularly renewed, contributing to the steady growth ofNagaileben’s sales and profits.
In FY8/13, 97.4% of the products sold by Nagaileben were made in-house and2.6% were purchased. Products made by the company in Japan accounted for
56.7% of sales, and products made overseas accounted for 40.7%. Nagaileben
does not own overseas plants. Its products made overseas are manufactured atplants owned by partner companies in the host country, i.e., the country where
the goods are manufactured. This arrangement minimizes Nagaileben ’ s costs
and investment risk.

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

4

28-Jan-14

Nagaileben■Company Outline

Holds an unchallenged position in its industry(3) Distinctive Features and Strengths
Nagaileben’s dominance in the production of medical clothing stems in partfrom its integrated operations. The company performs all stages of work, fromproduct planning to the procurement of raw materials, manufacturing, and sales.
Thus, it can design products that reflect customer needs, procure the bestmaterials for these products, manufacture cheaply, and sell at a reasonableprofit margin.
Nagaileben ’ s production system is superior to those of competitors. The
company has many contracted plants that manufacture several thousand
clothing items, enabling the company to respond to a wide range of customer
needs. With almost 1,000 sales agents throughout Japan, the company has anextensive sales coverage at minimal cost.
As a result of these strengths, Nagaileben has gained a more than 60% shareof the Japanese market for medical clothing. According to the company, thesecond largest seller of this clothing has only a 7 – 8% market share, while
companies ranking third or below have shares of only a few percentage points.
In FY8/13, Nagaileben earned a gross profit margin of 47.0%, which is high for
any industry. The company ’ s high market share and profitability reflect thesatisfaction of its customers with its products and services. This customer
satisfaction is probably the company’s greatest strength.

■Business Trends
Sales of healthcare wear and doctors’ wear remain strong(1) Q1 FY8/14 Results
In Q1 FY8/14, Nagaileben increased its consolidated sales by 7.5% y-o-y to\3,201mn, its operating profit by 13.1% to \922mn, its recurring profit by 8.5%
to \1,000mn, and its net profit by 9.3% to \616mn. Sales of healthcare wear anddoctors’ wear led overall sales growth.
The costs of raw materials and processing rose, but sales also increased, andthe company limited the adverse impact of yen depreciation against the US dollar
on its cost of goods sold through forward currency exchange contracts.
Furthermore, the sales weighting of goods produced overseas rose, and thesegoods provide higher gross profit margins than goods produced in Japan.
Reflecting these factors, the gross profit margin fell only marginally to 46.8%
from 47.1% in FY8/13. The company had expected a decline of this size.
SGA costs fell to \576mn in H1 FY3/14 from \586mn in H1 FY3/13. These
costs were lower than the company had projected, mainly because some repair
costs and other costs originally budgeted for Q1 were postponed. For the full
fiscal year, the company still forecasts a y-o-y increase in its SGA costs.
The net non-operating profit declined y-o-y in H1 FY3/14, but it was larger
than the company had projected because the company recorded a currency
exchange gain of \62mn on its US dollar bank deposits, whereas it had forecast
no such gain.

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

5

28-Jan-14

Nagaileben

Consolidated Sales and Profit (\mn) Breakdown
for Q1 FY8/13 and Q1 FY8/14■Business Trends

Q1 FY8/13
AmountSales
Gross profit
SGA cost
Operating profit
Recurring profit
Net profit

2,978
1,402
586
816
921
563

Sales %

Amount100.0%
47.1%
19.7%
27.4%
30.9%
18.9%

3,201
1,499
576
922
1,000
616

Q1 FY8/14
ChangeSales %
amount100.0%
222
46.8%
96
18.0%
-10
28.8%
106
31.2%
78
19.3%
52

y-o-y
7.5%
6.9%
-1.8%
13.1%
8.5%
9.3%

Sales Breakdowns
Sales in Q1 FY8/13 and Q1 FY8/14 are broken down by item in the following
table. The market for healthcare wear was stable in H1 FY8/14, and manyleases of this wear were renewed. Thus, sales surpassed the company ’ s
expectation. Sales of doctors ’ wear were supported by strong sales of new
products. Sales of utility wear were static as the market for such wear
continued to deteriorate. Utility wear is worn over aprons, doctors’ coats, andother wear, and utility wear has been supplanted in recent years by apparel
serving the functions of both utility wear and the wear beneath it, but themarket for utility wear appears to be bottoming out. Sales of patient wear andsurgical wear increased reflecting the company ’ s greater penetration of themarkets for this wear.

Breakdown of Consolidated Sales (\mn) by Item,
Q1 FY8/13-Q1 FY8/14

Healthcare wear
Doctors’ wear
Utility wear
Patient wear
Surgical wear
Shoes
Other products
Total

Q1 FY8/13
Amount
1,654
455
170
304
295
44
53
2,978

Q1 FY8/14
Amount
y-o-y
1,776
7.3%
504
10.7%
171
0.7%
314
3.3%
334
13.0%
36
-16.9%
63
18.7%
3,201
7.5%

Financial Condition
Cash and deposits declined by \1,525mn in Q1 FY8/14 (see balance sheet
below), notes and accounts receivable shrank by \769mn, and inventories grewby \484mn. Thus, current assets decreased by \1,657mn to \24,589mn.
Tangible fixed assets fell by \30mn to \7,609mn, intangible fixed assets droppedby \1mn to \86mn, and long-term investments and other assets grew by \78mn
to \3,157mn. Thus, total fixed assets increased by \46mn to \10,853mn. Total
assets declined by \1,611mn to \35,443mn.
Corporate taxes payable decreased by \999mn, contributing to a \810mn
drop in current liabilities to \2,545mn. Fixed liabilities increased by \25mn to\635mn, and total liabilities decreased by \785mn to \3,180mn.
Q1 FY3/14 net profit of \616mn accrued to retained earnings, but thecompany paid \1,541mn in dividends. Consequently, its total equity decreased by\826mn in Q1 to \32,262mn.

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

6

28-Jan-14

Nagaileben■Business Trends

Summary Consolidated Balance Sheet (\mn), at 8/13 and 11/13
Cash and deposits
Notes and accounts receivable
Inventories
Current assets
Buildings and other structures
Land
Construction in progress
Long-term investments, other
Fixed assets
Total assets
Bills and accounts payable
Corporate taxes payable
Total liabilities
Retained earnings
Treasury stock
Total equity
Total liabilities and equity

8/13
17,456
4,622
3,524
26,247
1,645
4,692
768
3,079
10,80737,054
1,385
1,344
3,966
31,886-3,401
33,08837,054

11/13
15,9303,853
4,008
24,589
1,618
4,692
773
3,157
10,85335,443
1,467
344
3,180
30,961-3,401
32,26235,443

Change-1,525-769
484-1,657
-26
0
5
78
46
-1,611
81
-999
-785
-924
0
-826
-1,611Gross profit margin projected to remain constant y-o-y(2) Company Forecasts for FY8/14
For FY8/14, the company projects a 2.4% y-o-y rise in consolidated sales to\16bn, a 0.1% increase in operating profit to \4,880mn, a 9.1% decline inrecurring profit to \4,923mn, and a 2.9% fall in net profit to \3,030mn.
Reflecting uncertainty about the impact of the increase in Japan’s consumption
tax from April 1, 2014, the company makes a conservative forecast of its sales
growth. The company foresees an increase in its US dollar cost of raw materials
and an additional increase in production costs due to an expected depreciation of
the yen against the US dollar. On the other hand, it foresees increased sales ofhigher-margin products, and it expects to reap additional gross profit by raising
its overseas production ratio. On balance, the company forecasts a gross profit
margin of 47.0% for FY8/14, unchanged from the margin in FY8/13.
The company projects a \167mn increase in its SGA cost in FY8/14, to\2,640mn, including \93mn to move into the new head office. The company
foresees no non-operating profit in FY8/14 similar to the \500mn foreignexchange gain that it logged in FY8/14. Thus, it forecasts a 9.1% y-o-y fall inrecurring profit to \4,923mn. However, if the current exchange rate between the
yen and the US dollar persists, the company is likely to earn a foreign exchange
gain and to report a larger recurring profit than it now projects. The company
also foresees no extraordinary loss in FY8/14 similar to the \332mn asset
impairment loss it declared in FY8/13. Therefore, it projects only a 2.9% y-o-ydrop in net profit in FY8/14 to \3,030mn. However, the company may earn an
extraordinary gain on the sale of its current head office building, although its
forecast of net profit does not consider this possibility. Its net profit may
therefore grow.
Nagaileben plans to invest \859mn in plant and equipment in FY8/14. Of this,\577mn is scheduled for the new head office, \95mn is for the renovation ofequipment at distribution centers, and \50mn is for production facilities. The
company estimates that its depreciation cost will come to \344mn in FY8/14.

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

7

28-Jan-14

Nagaileben■Business Trends

Consolidated Sales and Profit (\mn) Breakdown for
FY8/13 and FY8/14E
FY8/13
AmountSales
Gross profit
SGA cost
Operating profit
Recurring profit
Net profit

Sales %

15,625
7,346
2,473
4,873
5,418
3,119

100.0%
47.0%
15.8%
31.2%
34.7%
20.0%

Amount16,000
7,520
2,640
4,880
4,923
3,030

FY8/14
ChangeSales %
amount100.0%
375
47.0%
174
16.5%
167
30.5%
7
30.8%
-495
18.9%
-89

y-o-y
2.4%
2.4%
6.8%
0.1%
-9.1%
-2.9%

■Medium-term Management Plan
To promote sales of patient wear and surgical wear
(1) Aiming for consolidated sales of \16.8bn and operating profit of \5.1bn in
FY8/15For FY8/16, Nagaileben targets consolidated sales of \16.8bn and operating
profit of \5.1bn. As the company forecasts an operating profit of \4.88bn for
F8/14 and made significant progress toward that forecast in Q1, it should be
able to achieve its operating profit target for FY8/15. To reach the sales target,
the company plans the following developments.
Sales by item
Over the next two fiscal years, the company intends to promote sales of two
newer items, patient wear and surgical wear. In FY8/13, these items accounted
for 8.2% and 9.5% of total sales, respectively, but by FY8/15, the company
hopes to raise these ratios to 9.0% and 11.0%, respectively. The company
foresees sales growth for other items, too, but not as much as the growth itprojects for these items.
Sales by geographical market
The company’s strategy for promoting growth by geographical market is thesame as its strategy for promoting growth by item, i.e., it will promote sales in
the areas where its market share is low. Thus, the company will try to raise its
sales weighting from western Japan from 35.3% in FY8/13 to 38.0% in FY8/15,
but not at the expense of growth in eastern Japan.
Sales by product classification
The company has gained customer credibility in advanced function clothing
and plans to build on this trust to expand the sales weighting of thisclassification from 46.2% in FY8/13 to 52.0% in FY8/15. As noted earlier, many
hospitals now lease the company ’ s products through three-year or four-yearleases. When these leases are renewed, the company promotes new products forthe new lease term. Using this approach, the company will probably be able toincrease its sales weighting in advanced function clothing.

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

8

28-Jan-14

Nagaileben■Medium-termManagement Plan

Numbers of nurses and nursing care workers to grow rapidly(2) Prospective Market Environment
The market environment for Nagaileben may change in the following ways.
Increases in markets for nursing and nursing care
In June 2013, the Cabinet Office announced a strategy to rebuild Japan. One
goal of this strategy is to extend the healthy lifespan of Japanese people bypreparing and expanding market environments conducive to this goal, including
markets for healthy lifestyles, the prevention of disease, nursing care,pharmaceuticals, medical equipment, and nursing homes. Japan ’ s current
healthcare market is about \16 trillion, but the Cabinet Office forecasts that thismarket will grow to \26 trillion by 2020 and to \37 trillion by 2030. For thegovernment’s fiscal 2014, which runs from April 1, 2014 through the end of
March 2015, the Ministry of Health, Labor and Welfare has requested a recordhigh budget of \30 trillion.

Population of Japanese Aged 65 and Older, 2007-2060F（thousand）

Above 75

65-74

Above 75 Ratio to Population

45,00030.0%

40,00025.0%
35,00030,00020.0%

25,00015.0%
20,00015,00010.0%

10,000
5.0%
5,000
0

0.0%
2007200820092010 2011201220152020 2025203020352040 2045205020552060（Year）

Source: National Institute of Population and Social Security Research, Ministry of Internal Affairs andCommunications

In December 2012, Japan’s Ministry of Labor projected that the number ofnurses in Japan would grow by an average annual rate of 2.57% between 2010
and 2015, when this number would reach 1.65mn. Similarly, the ministry
forecasted that the number of nursing care workers would grow by an averageannual rate of 5.1% over the same period to 1.73mn. Furthermore, the Cabinet
Office has forecasted that the number of nursing care workers would increase
from 1.49mn in 2012 to a maximum of 2.49mn in 2025. The growth in thenumbers of these professionals is likely to support the growth of Nagaileben’sbusiness.

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

9

28-Jan-14

Nagaileben■Medium-termManagement Plan

Source: Company

Source: Company

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

10

28-Jan-14

Nagaileben■Medium-termManagement Plan

Changes in medical costs
Nagaileben sells clothing for medical use, so its business is not directly
affected by changes in official drug prices or fees for medical diagnosis andtreatment. However, as these prices and fees are reduced or raised minimally,
hospitals and other medical facilities cut their costs. As part of their costcutting, they prolong the replacement period for medical clothing. In April 2012,
Japan ’ s official fees for medical diagnosis and treatment were raised by
0.004%. In April 2014, these fees will be raised by 0.1%.
Rise in the consumption tax to 8%
The government will raise Japan’s consumption tax from 5% to 8% in April
2014. Nagaileben expects this tax increase to have only a minor impact on theJapanese market for its products. The demand for these products is likely toincrease before the tax hike and to weaken after the hike, but the net impact
should be modest.
Rise in costs of raw materials and product processing
The company ’s cost of polyester may increase, reflecting an upturn in the
US dollar cost of crude oil and depreciation of the yen against the US dollar.
Furthermore, the cost of product processing at partner manufacturers in China
and Southeast Asia is likely to rise. To counter these possible cost hikes, thecompany plans to modify its production processes and to seek partner
manufacturers in countries with lower labor costs than those at its current
partners.
Increase in overseas production cost due to yen depreciation
As explained earlier, 40.7% of the products sold by Nagaileben in FY8/13 were
manufactured overseas. The profits from sales of these products are reduced byyen depreciation against other currencies, mainly the US dollar. To minimize theimpact of changes in yen exchange rates on profits, the company covers about
80% of its imports planned for the coming two-three years with forward
currency exchange contracts. Thus, changes in these rates affect profits only
gradually.
As a hedge against the impact of yen depreciation against the US dollar, thecompany maintains US dollar bank deposits. Because of yen depreciation against
the US dollar in FY8/13, the company ’ s US dollar deposits earned a nonoperating valuation gain of about \500mn, which boosted recurring profit.

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

11

28-Jan-14

Nagaileben■Shareholder Returns
and Improvement of Capital Efficiency
Company’s stable financial position allows it to maintain adividend payout ratio of at least 50%
As noted earlier, Nagaileben is financially stable, with an equity ratio of 91.0%
at the end of Q1 FY8/14. Given its sound business, the company is likely tocontinue to earn steady profits. If it kept all its net profit as retained earnings,
its return on equity would drop. Therefore, the company has vowed to maintaina dividend payout ratio of 50% or more against its parent-company net profit.
Management has also stated that it would buy back shares if there were a
promising occasion to do so. Thus, it is quite conscious of the importance of
maintaining attractive shareholder returns and of using capital efficiently.

Dividends (\) and Dividend Payout Ratio (parent
basis) (%), FY8/18-FY8/14E
Dividend per ShareDividend Payout Ratio

（\）

80

（%）

51.4

51.9

55.1

51.3

51.0

70

60
50

60
40

50
40
30

65

30

70
45

20

45

35

20
10

10

0

0
FY8/10FY8/11

FY8/12

FY8/13

FY8/14E

Note: The company made a two-for-one stock split on September 1, 2011

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

12

Disclaimer
FISCO Ltd. (the terms “ FISCO ” , “ we ” , mean FISCO Ltd.) has legal
agreements with the Tokyo Stock Exchange, the Osaka Securities Exchange, andNikkei Inc. as to the usage of stock price and 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 notconfirm or guarantee its accuracy, timeliness, or completeness, or the value of the
securities issued by companies cited in this report. Regardless of purpose,
investors should decide how to use this report and take full responsibility for suchuse. 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 thereport, including suppositions and conclusions, is the result of our analysis. The
content of this report is based on information that was current at the time thereport was produced, but this information and the content of this report are
subject to change without prior notice.
All intellectual property rights to this report, including copyrights to its text anddata, are held exclusively by FISCO. Any alteration or processing of the report or
duplications of the report, without the express written consent of FISCO, isstrictly prohibited. Any transmission, reproduction, distribution or transfer of thereport or its duplications is also strictly prohibited.
The final selection of investments and determination of appropriate prices forinvestment transactions are decisions for the recipients of this report.