May 23, 2024
For Immediate Release
TOKAI Holdings Corporation
Katsuo Oguri, Representative Director, President and CEO(Code No. 3167, TSE Prime Market)

Regarding Initiatives for Implementing Management
Focused on Capital Costs and Stock Prices
We wish to inform you that our company has presented to the board of directors, at the meeting held on May 23,
2024, our initiatives for implementing management focused on capital costs and stock prices. After analyzing andevaluating the current situation, we have established a policy aimed at enhancing future corporate value.
For more details, please refer to the attached document titled "Policy for Initiatives towards Implementing
Management Focused on Capital Costs and Stock Prices".

Contact: Toshinori Nakamura
Managing Executive Officer and Head of Business Administration Division
TEL: +81-(0)54－275－0007

Policy for Initiatives towards
Implementing Management
Focused on Capital Costs andStock Prices
TOKAI Holdings Corporation(Code No. 3167)

May 23, 2024
©2023 TOKAI Holdings Corporation. All Rights Reserved.

Contents

1. Current Situation Analysis(1) Trends in our PBR (Price Book Ratio)(2) Trends in our ROE (Return on Equity)(3) Trends in our PER (Price Earnings Ratio)(4) Our positioning compared to competitors

2. Initiatives for Enhancing Corporate Value(1) Overall picture of the initiatives©2023 TOKAI Holdings Corporation. All Rights Reserved.

(2) Initiatives towards business portfolio management(3) Promotion of expansion and efficiency in each business(4) Initiatives towards ESG management

Additional Notes

1１．Current Situation Analysis

2©2023 TOKAI Holdings Corporation. All Rights Reserved.

（ １ ） Tr e n d s i n o u r P B R ( P r i c e B o o k R a t i o ) Since our establishment, our PBR (Price Book Ratio) has been consistently exceeding the level of 1.0.
Comprehensive MarketEvaluation

PBR（Price Book Ratio）＝Current Profitability

ROE（Return on Equity）

×

Future Growth Potential

PER（Price Earnings Ratio）

PBR Trends

2.3

2.5
1.9

2.0
©2023 TOKAI Holdings Corporation. All Rights Reserved.

1.6

1.5

1.5

1.4
1.1

1.9

1.9
1.7
1.5

1.4

1.4

1.1

1.0
PBR 1.0 Line

0.50.0FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023

3

（ ２ ） Tr e n d s i n o u r R O E ( R e t u r n o n E q u i t y ) Our company's ROE has been consistently exceeding the estimated cost of equity capital.
Comprehensive MarketEvaluation＝PBR（Price Book Ratio）

Current Profitability

ROE（Return on Equity）

ROE Trends©2023 TOKAI Holdings Corporation. All Rights Reserved.

16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0

In fFY2022, we implemented
goodwill impairment forVietnamese stocks.

15.2
13.2×13.0 12.7
11.4 12.6
11.8
10.4

Future Growth Potential

PER（Price Earnings Ratio）

 The cost of equity capital is estimatedusing the CAPM (Capital AssetPricing Model) approach.
Risk-Free Rate＋

10.0

9.9
8.3
8.2

Market Risk
Premium

7.4

×… Calculated based on
TOPIX including
dividends…Using ourcompany's 5-year
weekly beta value(around 0.7)

β Value

The cost of equity capital is generally
recognized as around 5%…Using 10-year
government bond yield(around 0.6%)

Cost of Equity
Capital… Around 5%4（ ３ ） Tr e n d s i n o u r P E R ( P r i c e E a r n i n g s R a t i o ) The PER has been fluctuating around 15 times, contributing to the improvement of our PBR.
Comprehensive Market
Evaluation

PBR（Price Book Ratio）＝Current Profitability

ROE（Return on Equity）

×Future Growth Potential

PER（Price Earnings Ratio）

PER Trends

25.0
21.1
19.5

20.0

17.7

©2023 TOKAI Holdings Corporation. All Rights Reserved.

15.5

14.6

15.5

15.3
13.3

15.0

14.9

14.2 12.6

15.2

10.9

10.0

PER 15 times line5.00.0
FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY20235

（４）Our positioning compared to competitors
 Our company's ROE×PER positioning is at a higher level compared to our competitors.
 We will continue to improve profitability and growth, meeting the expectations of our shareholders.
*Compared with companies focusing on LP gas and city gas. Based on each company's performance in FY2023.

（Future Growth Potential

50

PBR 1.0 times line

4540Towards furtherimprovement ofprofitability & growth353025）
PER©2023 TOKAI Holdings Corporation. All Rights Reserved.

20TOKAIHD

1510500%

5%

10%15%20%

25%

Current Profitability（ROE）

6２．Initiatives for Enhancing
Corporate Value©2023 TOKAI Holdings Corporation. All Rights Reserved.

7

（１）Overall picture of the initiatives
 We will promote three initiatives to improve profitability and growth.

FY2025 target: 10.8%

×Current Profitability

ROE（Return on Equity）

Future Growth Potential

PER（Price Earnings Ratio）

Initiative ❶©2023 TOKAI Holdings Corporation. All Rights Reserved.

Initiatives towards
portfolio managementInitiative ❷Initiative ❸Expansion and efficiency
improvement of eachbusinessInitiatives towards ESGmanagement

8（２）Initiatives towards business portfolio management
 We will strengthen management towards building a portfolio that realizes group-wide optimization,
understanding the business portfolio on two axes: capital profitability and growth.
Our business portfolio©2023 TOKAI Holdings Corporation. All Rights Reserved.

Market growth and our expectations

Expected area

Management policy of business portfolio

Growth area

Establishment of business model &stable profitability

Expansion of area & services

Renewable energy and other
GX related

EnergyOverseas

Corporate Information
Communication

Regional collaboration

Building facilities real estate

Improvement Area
Business profit improvement
Withdrawal/Divestiture decision

Mature area
Efficiency & customer basestrengthening & stable growth
Personal information
communication

CATV
Home delivery drinking water• Implement management that１

supports the expansion andefficiency of each businessaccording to the positioning on
the portfolio.

2•

Continue efforts to create new
businesses in the expectedareas for the sustainablegrowth of the group.

• Strengthen collaboration
３

between businesses and leadto the creation of furthersynergies.

Capital profitability（ROIC Spread）※※Capital profitability for each business is calculated by the ROIC Spread for each business (ROIC for each business - WACC for each business).
ROIC for each business is calculated as "NOPAT ÷ (operating capital + fixed assets)". WACC for each business is calculated based on the risk of each business, according toour own standards.

9（３）Promotion of expansion and efficiency in each business We will promote expansion and efficiency measures for each business, based on their positioning inthe business portfolio.
Area and Policy

Growth Area
・Actively invest andpromote area &service expansion

Main Business Initiative Policy
EnergyImprove nationwide share through investment for customer base expansion
 Promote share increase through M&A and area expansion, aiming for sustainable growth Promote cost reduction through business efficiency improvement by DX

Corporate Information Communication

Expand area & services through active investment, leading growth©2023 TOKAI Holdings Corporation. All Rights Reserved.

 Business area expansion through infrastructure investment
 Strengthen digital foundation for growth by acquiring AWS Premier Partner and expanding DX
personnel

Expected Area
・Establishment ofbusiness model andstable profitability

Renewable &GX-relatedOverseas

 Promote the spread of solar power generation (including PPA) and storagebatteries
 Investment in renewable energy business Business expansion mainly in Vietnam and the Philippines for energy, andIndonesia and Taiwan for information communication

RegionalCollaboration  Promote community-based services and public-private collaboration

10（４）Initiatives towards ESG management
 By accelerating our efforts towards ESG that lead to sustainable growth, we aim to further improve
our PER.

EnvironmentPromotion of low-carbon anddecarbonization towards 2050
carbon neutralityPromotion of GX in customer's
energy use

 Promotion of energy-saving
equipment Promotion of renewable energy
introduction©2023 TOKAI Holdings Corporation. All Rights Reserved.

 Promotion of renewable energy
introduction
 Decarbonization of raw materials

Promotion of GX in our own
business activities

 Efficiency improvement andautomatic meter reading of LP gas
business by DX promotion
 Installation of solar power generation
in-houseSocietyMaximization of human resourcesand organizational vitality
Improvement of employee wellbeingRealization of “OdealIndividual" Autonomous career support system,reskilling support, etc.

Realization of “IdealOrganization"

 Realization of diverse work styles
 System revision to enhance job
satisfaction (base salary Increase,promotion personnel, etc.)

Governance

Thorough compliance andgovernanceCultivate an organizational
culture where compliance andgovernance enhancement areestablished Strengthen executive and manager
training to further enhance theorganization's compliance awareness Strengthen internal controls andpermeate governance throughout theorganization

 Practice of Executive-level HealthManagement

Psychological Safety Training andCoaching Training for Managers

 Renewable energy for electricity usedin business establishments

11Additional Notes

12©2023 TOKAI Holdings Corporation. All Rights Reserved.

More smiles for a better life.
 Under our new corporate message and corporate slogan, our group will unite as one to aim for theenhancement of corporate value and sustainable growth.

We face challenges with open minds tobring more smiles to life and joy insociety.

©2023 TOKAI Holdings Corporation. All Rights Reserved.

Since our establishment in December 1950, we, the TOKAIGroup, have always been committed to providing a wide
range of services that ensure safety, convenience, andcomfort from the perspective of our customers.

More smiles

These services are underpinned by the ‘innovative thinking’and ‘challenge’ of our group employees.

life.

for a better

Through new proposals born from these driving force, we willcontinue to create a better life and a better society.
We aim to spread 'smiles' that make life brighter and moreenjoyable to our communities and society, contributing to therealization of a sustainable society where hope can be heldfor tomorrow.

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The performance forecasts and forward-looking statements in these materials are
based on information currently available to the company, and include potential risks anduncertainties. Please be aware that due to changes in a variety of factors, actual results
may differ materially from the projections and other forward-looking statements in thesematerials.
Amounts are rounded down to the nearest million yen, and all other figures are rounded to thenearest whole number.

Please contact us with any questions regarding these materials.
©2023 TOKAI Holdings Corporation. All Rights Reserved.

Head of Business Administration Division
TOKAI Holdings Corporation
1-2-20 Kaigan, Minato-ku, Tokyo
Phone: +81- (0)54-275-0007
https://www.tokaiholdings.co.jp/english/
e-mail： hd-info@tokaigroup.co.jp

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