Wacom (6727)
Preparing to transition to a new stage of growth

6 August 2024

Initiating coverage

Market cap: ¥86.4bn• Leader in digital ink and drawing to drive new technological value –Wacom is a technology company specializing in the development ofgraphic tablets (pen tablet products), pen displays (display products),
and related digital interface solutions. Leveraging its high reputation
for its branded products, it is expanding in the OEM solutions market.
Due to changes in market structure driven by demand shifting
towards general-purpose tablets and lengthening replacement cycles,
Wacom is focused on improving its sales mix and earnings quality by
developing a service-centric growth engine. Utilizing its expertise indigital ink, Wacom is prioritizing the education market as an area of
focus. Commercialization of its services has begun, and the company
aims to expand growth initiatives, which are central to its mid-term
management policy ‘Wacom Chapter 4’ for the period from FY3/25 to
FY3/29.

Share price: ¥592

Source: Bloomberg

An integrated approach to growth• Sustainable growth, product portfolio revamp, structural reform,and expansion into new services – Wacom's growth initiatives focus
on 1) achieving sustainable growth in the digital ink and drawing
markets, 2) revamping the product portfolio and implementing
structural reforms in its branded product business, which has
suffered losses for two consecutive periods, to return to profitability,and 3) the implementation of new growth engines with activities in AI(for EdTEch), XR, security, and remote service, which will have highgross margins, recurring revenues and act to increase the installedbase of Wacom’s technologies.
• ESG – we score the company as ‘Amber’ under our AstrisSustainability model scorecard.
• Valuations – on our earnings estimates, the shares are trading on PER
of FY3/25 13.6x, and a free cash flow yield of 8.0%. We estimate a
total shareholder return of 6.8%, based on a ¥3bn buyback. With acapital allocation philosophy that focuses on growth investments tocreate future corporate value, in FY3/26 and FY3/27, we estimatethat it will be possible for the company to maintain an annual
buyback of ¥3.0bn given the well-capitalized balance sheet.

Price PerformanceYear-end

Business Overview

Sales (¥bn)
OP (¥bn)
NI (¥bn)
EPS (¥)DPS (¥)
Sales growth YoY (%)
OP growth YoY (%)
NP growth YoY (%)
EPS growth YoY (%)
PER (x)EV/EBITDA (x)EV/Sales (x)PBR (x)ROE (%)ROCE (%)
FCF yield (%)
Dividend yield (%)
Total shareholder returns (%)

3/23

3/24

3/25E

3/26E

3/27E

112.73
2.01
1.79
11.34
20.00
+3.6
-84.5
-83.6
-83.3
52.2
16.5
0.6
2.1
4.3
4.5
(3.0)
3.4
5.7

118.79
7.06
4.56
29.64
20.00
+5.4
+250.6+154.5+161.5
20.0
7.2
0.6
2.4
11.9
15.4
17.5
3.4
12.1

123.91
9.17
6.69
43.50
21.75
+4.3
+29.9
+46.7
+46.7
13.6
6.0
0.6
2.2
17.6
18.4
8.0
3.4
6.8

128.93
12.85
9.38
60.96
30.48
+4.1
+40.1
+40.1
+40.1
9.7
4.5
0.5
1.8
21.4
22.4
12.9
3.4
6.8

133.36
14.45
10.55
68.53
34.26
+3.4
+12.4
+12.4
+12.4
8.6
4.1
0.5
1.5
20.4
22.0
12.4
3.4
6.8

Source: Company, Astris Advisory (estimates)1

Abs (%)
Rel (%)

YTD
-9.9
-12.4

1M
-27.5
-14.1

3M
-1.3
+10.6

12M
-3.1
-9.5

Company sector
Electronic Components – Misc.
Technology Hardware, Storage & Peripherals

Stock data
Price (¥)
Mkt cap (¥bn)
Mkt cap ($m)
52-week range (¥)
Shares O/S (m)Average daily value ($m)
Free float (%)
Foreign shareholding (%)
TickerExchange
Net Debt/Equity (x)FFO leverage (x)BBG BUY│HOLD│SELL

592
86.4
593.0
507-848
146.0
3.3
85.9
43.6
6727
Tokyo Prime
N/A
N/A
1│1│0
Source: Bloomberg

Wacom specializes in the development of graphics tablets, pen
displays, and related digital interface solutions.

Astris-Sustainability ESG rating
Reference Ratings
MSCI
Sustainalytics
Refinitiv
S&P Global
Bloomberg
CDP

N/A
28.8
N/A
32.0
1.53
B

Next events

Q1 FY3/25 results August 2024
Tel: +81 3 6868 8797
Email: Corporateresearch@astrisadvisory.com

This report has been commissioned and paid forby the company.

Japan Corporate Research
Wacom (6727) – Initiating coverage

Contents
Summary.................................................................................................. 3
Company description ............................................................................... 4
Corporate mission .................................................................................. 10
Business model ...................................................................................... 11Peer group analysis ............................................................................... 13
Balance sheet ........................................................................................ 17
Capital allocation .................................................................................... 18
Recent results ........................................................................................ 20
Medium-term plan .................................................................................. 23
Astris earnings estimates and key assumptions .................................... 26
Company information ............................................................................. 28
Astris Quant Sheet ................................................................................. 31
Astris-Sustainability ESG assessment ................................................... 33
Areas of discussion ................................................................................ 36

2
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727) – Initiating coverage

SummaryCYBERDYNE is arobotics andcybernics company
focused on medical
and healthcare

Wacom specializes in the development of pen tablets, display products, and related
digital interface solutions. It broadly provides two products – market-leading in-houseproducts under the Branded Business, and OEM solutions for major electronics brands suchas Samsung, Lenovo, and HP under the Technology Solution Business.
The company is preparing for a business transformation towards a new growth stage
which will commence in FY3/26 in conjunction with the ‘Wacom Chapter 4’ new mediumterm plan. The key objectives are:

Key objectives are 1)
expand the digital
writing market, 2)
turnaround of
Branded Businesssegment and 3)
implement new
growth engines•

Sustainable growth in the digital ink and drawing market through technologicaladvancements and increasing adoption.

•

Turnaround of the Branded Business through product portfolio renewal andstructural reforms. The in-house brand segment has a strong professional market
following and stimulates engagement with the OEM market.

•

The implementation of new growth engines. This will involve a combination ofactivities in AI (in EdTEch), XR, security, and remote service, aimed at delivering
recurring revenues and improvement in the quality of earnings.

In May 2023, the company set the following as a guide to its financial targets for the next
medium-term management policy period (scheduled to be updated in May 2025):•

Total sales volume of approximately ¥150bn (give or take 10%).

•

OPM level at around 10% (vs a 5-year historic average of 7.2%).

Astris Advisory estimates Wacom will drive medium-term growth via the following factors:•

Steady sales growth in the Technology Solution Business as Wacom continues toexpand OEM projects.

•

The Branded Business is to become profitable due to product portfolio renewal
and structural reform.

•

Incremental improvements in OPM as a result of the sales mix being impacted by
the emergence of recurring services revenue.

On our estimates, the shares are trading on PER FY3/25 13.6x, free cash flow yield of 8.0%
and a total shareholder return of 6.8%.

3
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727) – Initiating coverage

Company description
Overview
Wacom is a leading
name in the field ofdigital pen and tablet
technology

Established in 1983, Wacom specializes in the development of pen tablets, display
products, and related digital interface solutions. It produces its in-house brand of products
spanning entry-level and professional models and provides OEM solutions to major
electronics and PC brands such as Samsung, Lenovo, HP, and Fujitsu. The company has astrong brand, recognized for its high-quality products used and endorsed by artists,
designers, and creative professionals worldwide.
Wacom's key technologies include digital pen technology that uses both EMR(electromagnetic induction) and active ES (active electrostatic coupling), as well as the‘Universal Ink Model’ digital ink technology represented by WILL (Wacom Ink Layer
Language), where digital stroke data is optimally formatted for conversion into services.
This patented IP can be applied to handwriting analysis, examples including visualizing
creative input and tracking progress being made in learning.

A key technology is
the patented
Universal Ink Model

Expansion into
EdTechThe company is expanding into the EdTech sector in partnership with Z-Kai (Zoshinkai
Holdings Co., Ltd.), a prominent Japanese educational services company operating tabletbased online courses. Utilizing knowledge graph (AI) based learning experiences andanalyzing pen stroke data offers students improved user interactions, personalized
learning, and advanced analytics. Access to raw handwriting data gives Wacom an
upstream competitive advantage versus other peers active in EdTech offering learning
management systems (LMS), such as Moodle and Google Classroom.
Key objectives targeted by the company are:

Key objectives are 1)
expand the digital
ink market, 2)
establish a profitable
Branded Businesssegment and 3)
implement new
growth engines•

To grow the digital ink and drawing market through technological advancements
and increasing adoption.

•

Turnaround of the Branded Business through product portfolio renewal andstructural reform; the in-house brand segment has a strong professional market
following and stimulates engagement with the OEM market.

•

The implementation of new growth engines, as guided in the upcoming ‘Wacom
Chapter 4’ medium-term plan covering FY3/26 – FY3/29. This will involve a
combination of activities in AI (in EdTEch), XR, security, and remote services

We view Wacom as a company striving for positive change, and implementing new
growth initiatives. However, earnings visibility for these needs to be developed, but the
introduction of services and license income should improve the sales mix, with recurring
revenues providing greater earnings stability.
The company currently has two core business segments:•

Branded Business – Wacom-branded products and solutions for creative users andenterprises.

•

Technology Solution Business – Technology solution for OEM partners ofsmartphones, tablet PCs, eBooks, and other devices.
4
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727) – Initiating coverageLong track record in the digital ink and drawing industry
Timeline summary
Key dates
July 1983
April 1984
September 1987
April 2002
April 2003
December 2005
May 2021
April 2022

Details
Established Wacom in Ageo City, Japan.
Released the WT series, the world’s first pen tablet with cordless cursors.
Released SD series, the world’s first cordless pen tablet.
Entry into the pen sensor component field (the Technology Solution Business).
IPO on the JASDAQ Exchange.
Listed in the First Section of the Tokyo Stock Exchange.
Release of current ‘Wacom Chapter 3’ medium-term direction (FY3/22-FY3/25)
Transferred to the Prime Market of the Tokyo Stock Exchange.

Source: Company, Refinitiv

Business segment data
Wacom has two core business segments.
Current segment details
Business segment
Brand Business

Description
Wacom-branded products and solutions
for creative users and enterprises.

Technology
Solution BusinessTechnology solution for OEM partners of smartphones, tablets, laptops, and otherdevices.

Product line
Display
Pen tablet
LCD signature pen tablet
AES (active electrostatic)/EMR® (Electro
Magnetic Resonance) digital pen
technology solutions.

Source: Company

Interoperability and standardization
Wacom is rolling out its Universal Pen Framework technology that delivers a standardized
digital pen experience across different devices and platforms. This works seamlessly withvarious devices, ensuring a consistent user experience without the need for multiple pensfor different devices.
There is an industry-wide standard called USI (Universal Stylus Initiative) that ensures crosscompatibility among a wide range of devices from different manufacturers.
While Universal Pen Framework and USI both aim to simplify and standardize the digital
pen experience, Wacom's Universal Pen Framework is a proprietary solution designed towork across Wacom devices and other partnered devices, whereas USI is an open industry
standard promoting cross-compatibility among various manufacturers' devices.

5
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727) – Initiating coverage

Trends in sales
Whilst digital pens had been established by Wacom in the 1980s, the release of the Applepen in 2015 played a significant role in popularizing its use to a mainstream audience. We
note that Wacom’s sales growth of 10-year 5.3% CAGR appears relatively low compared toour estimate of market growth of approximately 10%-15% YoY for the global digital pen
market.

Steady single-digit sales growth
Annual sales trend (¥bn)
140+5.3% CAGR(2015-24)

120
100

80
60
40
20
0
FY3/15

FY3/16

FY3/17

FY3/18

FY3/19FY3/20FY3/21

FY3/22

FY3/23

FY3/24

Source: Company

Per business segment, the Technology Solution business segment grew in line with themarket while the Branded Business segment has been inconsistent.

Technology Solution Business growth appears in line with themarketSegment sales (¥bn)
90
80

CAGR +12.2% YoY

Technology
Solution
Business

70
60
50

BrandedBusiness

CAGR -2.8% YoY

40
30

20
10
0
FY3/15

FY3/16

FY3/17

FY3/18

FY3/19FY3/20FY3/21

FY3/22

FY3/23

FY3/24

Source: Company
Note: Segment sales classification adjustments have occurred in FY3/19 and FY3/24

6
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727) – Initiating coverage

From this, we make the following conclusions:•

There has been a boost in the adoption of digital pens, and some of Apple’scompetitors have responded by partnering with Wacom for OEM solutions.
Wacom’s track record indicates that it has been successful in innovating andimproving its OEM offerings.

•

The inconsistent performance of the Branded Business segment stems fromproduct and upgrade cycles but is also attributed to the shift in demand towardversatile Apple iPad products for non-creative uses. As digital pens have attained
mainstream acceptance, there have been more new entrants, particularly in thebasic to intermediate markets.

Trends in profitability
As the sales mix shifted to OEM solutions in the Technology Solution Business (withhistorically low GPM and low SG&A expense ratios) over the last 10 years, gross profit
margins have consistently declined due to differences in earnings structure with theBranded Products Business (with historically high GPM and high SG&A expense ratios).
Gross margin (%)
45

40

35

30

25

20
FY3/15

FY3/16

FY3/17

FY3/18

FY3/19FY3/20FY3/21

FY3/22

FY3/23

FY3/24

Source: Company

7
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727) – Initiating coverage

OEM solutions have lower brand premiums. Volatility has been
driven by Branded Business; OEM solutions have low marketing
costs
Annual OPM (%)
14
12
10
8
6
4
2
0
-2
-4
FY3/15

FY3/16

FY3/17

FY3/18

FY3/19FY3/20FY3/21

FY3/22

FY3/23

FY3/24

Source: Company

We observe that the Technology Solution Business is stable on a segment basis.

Stable performance at Technology Solution Business
Segment margins

Technology
Solution
Business

25%
20%
15%
10%

BrandedBusiness

5%
0%
-5%
-10%
-15%
-20%
FY3/15

FY3/16

FY3/17

FY3/18

FY3/19FY3/20FY3/21

FY3/22

FY3/23

FY3/24

Source: Company

Factors that have contributed to volatility in the Branded Business are:•

The COVID-19 pandemic led to a surge in demand due to people staying at home
(hobbies at home) and working remotely (DX) (FY3/21 and FY3/22), and theresulting drop in sales and sudden changes in demand led to the recording of
temporary inventory-related processing expenses (particularly in FY3/23 andFY3/24).
8
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727) – Initiating coverage•

Emergence of changes in market structure for the mid to low-end pen tablet
market in FY3/19 and FY3/20.

Group companies
There are 10 group companies which are located overseas.
Disclosed group companies in FY3/24
Subsidiary
Wacom Europe (Germany)Group company
statusConsolidated

Stake
(%)
100.0

Wacom Technology (USA)Consolidated

100.0

Wacom China (China)

Consolidated

100.0

Wacom Korea (South Korea)

Consolidated

100.0

Wacom Australia (Australia)

Consolidated

100.0

Wacom Hong Kong (Hong Kong)

Consolidated

100.0

Wacom Singapore (Singapore)

Consolidated

100.0

Wacom Taiwan Information (Taiwan)

Consolidated

100.0

Wacom India (India)

Consolidated

100.0

Wacom Vietnam Science and Technology
Limited Liability Company (Vietnam)

Consolidated

100.0

Business description
Sales and development of electronicequipment products in Europe, Africa,
and the Middle East.
Sales and development of electronicequipment products in North, Central,and South America.
Sales and development of electronicequipment products in China(excluding Hong Kong).
Sales and development of electronicequipment products in South Korea.
Sales of electronic equipment
products in Oceania.
Sales of electronic equipment
products in Hong Kong.
Sales of electronic equipment
products in SE Asia and South Asia.
Sales and development of electronicequipment products in Taiwan.
Sales of electronic equipment
products in India.
Production management and quality
control for Wacom's electronicequipment products in Vietnam.

Source: Company

9
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727) – Initiating coverage

Corporate mission
Leadership in digital ink and drawing technology
Wacom views itself as a ‘Technology Leadership Company’ that provides customers with aunique and innovative digital pen and ink experience for digital writing and drawing.
Its vision is that through its technology, it will continue to provide meaningful experiences
for humans and society over the long term, guided by the vision of ‘life-long ink’ tocontribute to making this world more humane.

Materiality
The company views materiality as follows:•

Expanding technology, product, and service portfolios to create new value andnew businesses as a technology company.

•

Forming communities with partners to create value and implement corporatesocial responsibility.

•

Contributing towards a sustainable society through technologies and products
along with environmental initiatives such as support of the TCFD and JCI
frameworks•

Providing an environment conducive to individual growth.

•

Building a high-quality governance system based on diverse perspectives.

10
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727) – Initiating coverage

Business model
Key concepts and unique selling points
Typically, a technology hardware company drives revenue and earnings by the followingmeans:•

Innovation, investing in R&D to develop competitive offerings, and staying aheadof its peers.

•

Customer acquisition (both end users as well as OEM customers) by developing astrong brand and reputation.

•

Developing strategic partnerships with major device manufacturers and software
providers, ensuring compatibility and a seamless experience as a platform-agnostic
player.

We believe Wacom’s model has the following focus:•

Increasing the attach rate of a pen to electronic devices, and growing the
installed base of its products via OEM solutions.

•

Driving a turnaround in the Branded Business.

•

Assuming that the Branded Business will achieve stable profitability throughproduct portfolio renewal and restructuring, Wacom will maintain the brand's
position and trust in the creative community and establish a funnel effectstarting with professional users.

•

Developing a new services business, leveraging the partnerships it has developedwith diverse communities.

Workflow
High-level workflow overview

Source: Company
Note: EMS (Electronics Manufacturing Services), ODM (Original Design Manufacturer), OEM (Original Equipment Manufacturer)

11
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727) – Initiating coverage

Competitive advantages
We believe Wacom has the following competitive advantages:•

Digital ink and access to stroke data – Wacom operates a patented Universal Ink
Model which formats stroke data (such as pressure sensitivity and tilt angle) from a
digital pen that can be used for handwriting analysis. This technology can beutilized to develop new services and technology modules that can be applied to
EdTech such as supporting Learning Management Systems.

•

Brand and reputation – the company has a high reputation with a strong trackrecord of innovative products and endorsement from the creative industry.

•

Financial strength – the company is well-capitalized, and in a position to continue
investing in the business.

ROIC
We believe ROIC is a key indicator of a company’s ability to generate value. Wacom’s 10year average ROIC is 10.3%, with the range showing material fluctuations with a high of
24.2% to a low of -6.1%. This highlights that overall, the company has been able togenerate returns that are likely above its cost of capital, and this trend should continue into
the long term.
The volatility in the trend indicates periods of underperformance, reflecting market
conditions as well as technological challenges, changing competitive dynamics, andbusiness risk. Visible dips in FY3/17 and FY3/23 partly stem from difficulties in the Branded
Business. Business transformation efforts with the introduction of services should
contribute to more consistent returns.

Overall at satisfactory levels but volatile
ROIC (%)
30
25
20
15
10
5
0

-5
-10
FY3/15

FY3/16

FY3/17

FY3/18

FY3/19FY3/20FY3/21

FY3/22

FY3/23

FY3/24

Source: Bloomberg

12
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727) – Initiating coverage

Peer group analysis
We have selected the following peers to assess Wacom’s returns and valuations; as there
are no direct comparable listed peers, we have chosen companies involved in the PC
peripherals space, as well as ePaper and digital content creation and management.
•

Domestic companies – we have selected a combination of PC peripherals andaccessories manufacturers, including a specialist monitor company (EIZO).

•

Overseas companies – our selection includes manufacturers of PC accessories(Logitech, Turtle Beach), haptic specialist Immersion Corporation, digital content
ecosystem Adobe, and ePaper company E Ink Holdings.

Domestic companies
Company
Elecom Co., Ltd.
Melco Holdings Inc.
EIZO Corp.
MCJ Co., Ltd.

Description
Fabless design and manufacture of PC peripherals and accessories.
Fabless manufacturer specializing in networking, storage, and computer peripheralproducts.
Manufacturer of specialist PC monitors used in key markets such as creative, medical,
industrial, and air traffic control.
Manufacturer of PCs and PC hardware accessories.

Source: Companies, Bloomberg

Overseas companies
Company
Logitech International S.A.
Turtle Beach Corporation
Adobe Inc.
Immersion Corporation
E Ink Holdings Inc

Description
Design and manufacture of personal peripherals and devices for various digitalplatforms.
Specialist in gaming audio technology and PC peripherals.
Software and services cater to creative professionals, businesses, and educators,
enabling them to create, manage, and distribute digital content.
Touch technology specialist applying haptics technology to smartphones, gamecontrollers, touchpads, and other devices.
Taiwanese company known for pioneering and leading the development ofelectronic paper display (EPD) technology

Source: Companies, Bloomberg

Core findings•

Profitability – the stark contrast in returns between hardware and software-orientatedmodels is clear, with high double-digit OPM (LTM) for the latter. For hardware names,
the historic 10-year average OPM is higher than the current, indicating
commoditization, intense competition, and impact from component cost fluctuations.

•

Valuations – the key takeaways are:•o

A similar situation presents itself for valuations for hardware versus software
peers, with the former exhibiting higher valuation multiples reflecting higher
returns and expectations for growth.

oHardware names tend to exhibit lower PBRs and higher dividend yields,reflecting a more mature industry growth profile.

Sustainability of earnings (5-year track record):o

The domestic hardware peers illustrate stable low single-digit sales andgrowth, versus a more erratic but higher growth profile from software and13
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727) – Initiating coverage

license-focused overseas peers (Immersion experienced a one-time boost to
its sales 5 years ago).
o•

Domestic peers have experienced flat to falling ROE and ROA; versus doubledigit change for overseas peers (excluding Turtle Beach Corporation). Thissuggests that these companies are facing struggles to generate sufficient
returns and may be facing underlying strategic issues.

For Wacom, we highlight the following:oProfitability has been in line with domestic peers, and a strategic focus onservices provides an opportunity to improve the sales mix.

oWith improved working capital management, our estimated prospective FCF
yield of 8.0% is higher than the domestic peer average of 3.9%.

o

PBR of 2.4x is significantly higher than its domestic peers, highlighting therecent positive stance on shareholder returns. The historic 10-year PBR
multiple is 2.9x.

oExecution of new growth initiatives could provide impetus to increase
valuation multiples as the business model demonstrates positivetransformation.

We conclude that Wacom’s valuations reflect relatively moderate market expectations
for growth. With solid execution of new growth initiatives that are set to be
implemented from FY3/26, this could act as a positive catalyst for change.

14
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727) – Initiating coverage

A clear difference between hardware and software-centric businesses
Peer analysis of key profitability and valuation metrics
Profitability
TickerCompany

6727 JP
Wacom
Domestic companies
6750 JP
Elecom Co., Ltd.
6676 JP
Melco Holdings Inc.
6737 JPEIZO Corp.
6670 JPMCJ Co., Ltd.
Average
Overseas companies
LOGI US
Logitech International S.A.
HEAR US
Turtle Beach Corporation
ADBE US
Adobe Inc.
IMMR US
Immersion Corporation
8069 TT
E Ink Holdings Inc
Average
Source: FactSet, Bloomberg, Astris Advisory
Note: LTM is the last 12 months

Mkt Cap
US$ (m)Valuation
EV/EBITDA
12M Fwd (x)EV/Sales
12M Fwd (x)Div yield
12M Fwd (%)

FCF yield
12M Fwd (%)

PER
12M Fwd (x)

PBR
(x)

OPM LTM(%)

OPM 10-yr
average (%)

ROE LTM (%)

ROIC 10-yr
average (%)

593

5.9

5.9

11.9

10.2

6.0

0.6

3.4

8.0-

13.6

2.4

824
295
578
436

11.2
1.8
4.9
9.2
6.8

12.1
5.4
8.2
7.2
8.3

11.9
4.8
4.4
16.7
9.4

15.0
7.4
4.9
12.5
10.0

3.8
5.4
7.6
3.5
5.1

0.5
0.2
0.8
0.4
0.5

3.3
3.7
5.4
4.2
4.2

5.5
2.2
3.9

11.1
16.8
15.0
8.0
12.7

1.4
0.7
0.6
1.4
1.0

12,983274
225,832
345
8,458

13.9
-3.9
34.9
44.3
24.7
22.8

11.2
-0.6
28.1
2.7
7.4
9.8

27.3
-10.3
31.7
24.2
16.8
17.9

23.1
-4.0
20.1
-1.2
4.0
8.4

15.0
5.1
19.6
4.0
19.3
12.6

2.6
0.8
9.7
3.2
20.5
7.4

1.5
0.0
1.5
7.3
2.6

5.1
10.9
4.0
6.0
2.3
5.7

19.3
10.1
25.7
10.2
3.7
13.8

5.8
2.2
15.4
2.6
25.2
10.2

15
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727) – Initiating coverage

Steady low single-digit growth at domestic hardware names
Peer analysis of track record – growth (5-year CAGR) and change (2019-2024)
Growth 5-year CAGR (%)
Stock
6727 JP
Domestic
6750 JP
6676 JP6737 JP
6670 JP
Average
Overseas
LOGI USHEAR USADBE USIMMR US8069 TT
AverageChange over the last 5 years
Chg. in
Chg.
Chg. inFCF
inGPM
margin
ROE
-3.1
13.2
-4.1

Sales
5.8

EBIT
8.1

Net
Income
3.4

EPS
4.6

BPS
9.6

Total
assetsgrowth
8.9

2.1
6.0
2.0
6.4
4.1

3.0
-4.4
6.9
12.5
4.5

5.2
-4.6
4.8
12.9
4.6

5.0
-0.9
5.6
12.8
5.6

13.1
6.6
7.2
15.5
10.6

9.5
1.6
6.3
10.5
7.0

1.0
-1.6
-1.7
1.9
-0.1

-0.7
2.0
3.9
0.7
1.5

-6.7
-2.8
-0.3
-1.7
-2.9

-1.9
-1.7
-0.2
1.3
-0.6

9.0
18.0
18.9
20.0
15.4
-2.1
13.1
16.6
19.1
15.9
17.9
13.6
-21.1
-4.7
-9.0
-9.6
12.4
13.8
25.5
24.5
24.2
11.6
3.2
14.5
12.6
13.1
13.2
Source: FactSet, Bloomberg
Note: figures are non-adjusted; *ignore outlier Turtle Beach Corporation

12.2
4.2
9.1
8.1
15.1
9.7

3.0
-7.5
3.2
3.0
13.0
2.9

15.7
-4.8
-5.8
144.4
-0.1
29.9

4.1
-308.9
3.2
51.2
6.1
*16.2

3.4
-65.4
1.7
37.6
1.9
*11.2

Name
Wacom
Elecom Co., Ltd.
Melco Holdings Inc.
EIZO Corp.
MCJ Co., Ltd.
Logitech International S.A.
Turtle Beach Corporation
Adobe Inc.
Immersion Corporation
E Ink Holdings Inc

Chg. in
ROA
-1.6

16
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727) – Initiating coverage

Balance sheet
Wacom’s domestic and overseas peers overall share similar characteristics in terms of highliquidity, net cash positions, and equity ratio.
Regarding Wacom, we make the following observations:•

Liquidity – the current and quick ratio is at the lower end of its peer group range,
with efforts made to improve working capital management.

•

Leverage – net cash position pointing to the company’s ability to quickly allocate
capital when required.

•

Efficiency – asset turnover of 1.5x is at the higher end of the peer group range,
indicating that the company is effective at converting its assets into sales.
However, the company has been writing down inventory to achieve this.

We conclude that the company has a well-capitalized balance sheet. This is a positive
position to be in as Wacom heads towards business transformation which may require
further capital allocation.

The peer group is well-capitalized
Liquidity, leverage, and capital efficiency
Company

Liquidity
Leverage
Efficiency
Current Quick Net debt
Net Interest Total Equity
Asset Inventory Inventory Cashratio (x) ratio (x) to equity debt to cover debt toratio turnover turnoverdays cycle(x) EBITDA(x) capital
(%)
(x)
(x)
(days)
(x)
(%)
1.9
1.5
-0.5
-1.8 103.6
28.0
45.2
1.5
4.7
77.5
60.7

Wacom
Domestic
Elecom Co., Ltd.
Melco Holdings Inc.
EIZO Corp.
MCJ Co., Ltd.
Average
Overseas companies
Logitech International
Turtle Beach Corp.
Adobe Inc.
Immersion Corp.
E Ink Holdings Inc
Average
Source: Refinitiv, FactSet

3.5
2.6
4.3
3.2
3.4

3.0
1.9
2.0
2.3
2.3

-0.6
-0.5
-0.1
-0.4
-0.4

-3.3 15656.0
-5.3
-1.6
73.1
-1.8
65.9
-3.0 5265.0

0.6
0.0
4.3
15.9
5.2

73.6
66.6
78.5
65.6
71.1

1.0
1.5
0.5
1.7
1.2

4.9
5.0
1.2
5.0
4.0

73.9
73.4
303.5
73.5
131.1

58.0
75.9
360.1
88.7
145.7

2.4
1.8
1.0
6.4
1.3
2.6

2.0
0.9
1.0
6.4
1.2
2.3

-0.6
0.3
-0.2
-0.9
-0.1
-0.3

-2.1
-7.5
-0.3
-5.7
-0.8
-3.3

3.3
30.9
20.9
0.0
28.1
16.7

62.0
48.5
53.8
82.3
59.0
61.1

1.2
1.6
0.7
0.2
0.4
0.8

4.7
3.2
3.7
3.9

77.9
114.6
98.9
97.1

64.9
129.1
-13.4
240.0
84.1
100.9

-10.1
73.1
26.6
29.9

17
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727) – Initiating coverage

Capital allocation
Over the 5 years between FY3/20 to FY3/24, the company’s cumulative cash flow shows apositive net free cash flow versus cash-outs which have focused on shareholder returns.
However, Wacom generated negative cash flow in FY3/22 and FY3/23 (related to increasing
inventories impacting working capital), highlighting its historical trend of intermittent
positive free cash flow stemming from product launch cycles and inventory management.

A focus on shareholder returns
5-year cumulative capital generation and allocation (¥bn, FY3/20 – FY3/24)
40
35
30

M&A

25
20
15

Dividends
paidFree cash
flow

10

Share
buyback

5

Debt
repayment0

Cash-inCash-out

Source: Company

Outlook for capital allocation
Wacom is well-capitalized with a ¥17.7bn net cash balance in FY3/24, together with longterm investments of ¥1.61bn (total making up 54% of shareholders equity). The company
aims to prioritize growth and strategic investments to generate future corporate value.
Additionally, it aims to enhance shareholder returns by leveraging capital efficiency
through leverage (debt) while ensuring financial soundness.

18
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727) – Initiating coverage

The company has the following policy for capital allocation for the period FY3/24 – FY3/25.

Continued focus on improving operating cash flow and shareholder
returns
Company policy for capital allocation
Item

Capex
Growth investment (R&D)
Shareholder returns
Dividend payout ratio
Treasury stock
Operating cash flow
Operating profit (excluding R&D)
Inventory reduction
Financial leverage

Planned spend
for FY3/24FY3/25(approximate)

Actual FY3/24

Implied for
FY3/25

Guidance
FY3/25¥5.0bn¥16.0bn¥2.32bn¥7.68bn¥2.68bn¥8.32bn¥2.0bn¥8.0bnMaintain stable
DPS or 30%
payout ratio
Up to ¥15bn¥20 DPS, 67.5%
payout ratio-¥20 DPS, 46.9%
payout ratio¥7.51bn¥7.49bn

Up to ¥3.0bn bySeptember 2024

¥31.0bn¥7.0bn¥14.74bn¥7.85bn (goods
only)
0.4x

¥16.26bn-¥16.50bn---

DE ratio 0.3x to
0.5x

Source: Company

There is a flexible stance on share buybacks, which can act as a lever for enabling capitalefficiency and balancing needs for investment opportunities and overall financial position.

M&A
Historically, M&A activity has been a relatively low-priority strategy. However, as thecompany remains well-capitalized, opportunities would be considered in hardware as well
as data-related aspects of digital ink.
Capital ties with external parties would focus on collaboration with technology and open
innovation (as opposed to developing closed platforms).

Longer-term outlook
With the upcoming new medium-term plan (Wacom Chapter 4) commencing in FY3/26, we
do not expect a major change in capital allocation at Wacom. However, considering 1) an
emerging proportion of recurring revenue from subscriptions, 2) improved inventory
management, and 3) limited capital intensity, we believe the business is transforming to
generate more sustained free cash flow. The size of strategic technology investments and
M&A priorities will determine the scope for shareholder returns.
For H1 FY3/25, the company has set aside ¥3bn for share buybacks, culminating in a
¥12.5bn allocation from FY3/22. During the ‘Wacom Chapter 3’ current medium-term
direction (covering FY3/22-FY3/25), up to ¥20bn was indicated for buybacks – this implies if
the resolutions executed in the H1 FY3/24 are carried out to the limit, there is ¥4.5bn left
to allocate in H2 FY3/25.

19
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727) – Initiating coverage

Recent results
Q1-4 FY3/24 results
Gross margin improvement acted as the core earnings driver YoY
Key financials
(¥bn)

Q1-4
FY3/23

Q1-4
FY3/24

YoY
(%)

Sales
Gross profit/(loss)
Gross margins (%)
SG&A costs
Operating profit/(loss)
Operating margins (%)
Profit before tax
Net income attributable to the parent

112.73
31.17
27.7
29.16
2.01
1.8
2.87
1.79

118.80
36.77
30.9
29.71
7.06
5.9
9.85
4.56

+5.4
+17.9
+1.9
+250.6

Average FX rate
USD
EUR
CNY

134.95141.2419.69

144.40156.80
20.14

+7.0
+11.0
+2.3

+243.6+154.5

Source: Company

Technology Solution Business driving sales and OP growth
Per business segment (pre-elimination)
(¥bn)
Sales
Branded BusinessTechnology Solution Business
Segmental profit/(loss)
Branded BusinessTechnology Solution Business
Adjustments
Segmental profit margins (%)
Branded BusinessTechnology Solution Business

Q1-4
FY3/23

Q1-4
FY3/24

YoY
(%)

41.16
71.57

33.81
84.98

-17.8
+18.7

(3.98)
10.76(4.76)(4.52)
16.48(4.90)

+53.2
-

-9.7
15.0

-13.4
19.4

Source: Company

The Technology Solution segment continues to dominate the mix
Business segment sales mix
BrandedBusiness

BrandedBusiness

28%
37%

FY3/24

FY3/2363%
Technology
Solution
Business

Technology
Solution
Business

72%

Source: Company

20
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727) – Initiating coverage

Technology Solution (sales all recognized in Japan) driving growthGeographic sales mix
Asia/Oceania

Asia/Oceania
Japan

11%
Germany

9%

9%
11%

US

Germany

US

6%

Japan

9%

FY3/23

FY3/2469%

76%

Source: Company

The Technology Solution business has OEM customers with sales networks catering tocustomers all over the world; sales are all recorded in Japan (sales prices are mainly
denominated in US dollars).

Key highlights
The key takeaways for FY3/24 results were as follows:

Challenges remain in the Branded Business
For the second consecutive year, the Branded Business had a negative segment profit
margin; there were also one-time extraordinary loss items:•

Difficulty over gauging demand – actual sales were ¥33.81bn (-17.8% YoY) versus
initial guidance of ¥41.50bn (+0.8% YoY). There was reduced demand for display
products and pen tablet products in the mid-price range and professional models.

•

Demand decline resulting in excess materials and inventory – the company
booked a purchase order valuation allowance of ¥2bn and a ¥1bn inventory
writedown.

•

One-time events – there were 1) ¥2.5bn settlement payments to some suppliers
to address surplus materials that had been purchased, and 2) an extraordinary lossof ¥0.9 bn in fixed assets in the Branded Business.

Robust performance in Technology Solution Business
Sales of ¥85.0bn were ahead of the initial guidance of ¥64.5bn, driven by strong demand
from OEM partners as well as a tailwind from a weak Japanese Yen YoY contributing¥5.4bn.
Segment profit margins increased to 19.4% from 15.0%, driven by increasing sales volume,a decrease YoY in purchase contract valuation allowance, and the FX tailwind contributing¥1.3bn in segment profit.

21
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727) – Initiating coverage

Improvements in working capital management
Total inventory levels fell to ¥13.1bn in FY3/24 from a high of ¥33.7bn in Q2 FY3/23, adecline of 39%. Although this involved a total inventory write-down of an estimated ¥9.7bn(¥8.4bn in FY3/23, and ¥1.3bn in FY3/24) as well as a small loss on disposal and settlement
costs, the company has lowered its working capital requirements by a significant margin
concerning its Branded Business.

Preparations for change in the business modelWith FY3/24 being the penultimate year of the current medium-term ‘Wacom Chapter 3’
plan, there are indications that the company is making progress in transforming its businessmodel with new service development around EdTech, as well as new growth engines basedon a services model. These include ongoing progress in the following:•

Real-world use case in EdTech in digital ink services with Z-Kai, a prominent
Japanese educational services company operating tablet-based online courses. AI
is used to provide knowledge graph-based learning experiences analyzing pen
stroke data, allowing educational platforms to provide personalized instructionand experience.

•‘Wacom Bridge’ is a cloud-based solution that provides optimal pen input toprofessional designers in remote environments, and uses display products without
the need to switch settings in both local and remote environments.

•‘Wacom Yuify’, a digital watermark solution to certify creator artwork.

22
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727) – Initiating coverage

Medium-term plan
Current medium-term strategy ‘Wacom Chapter 3’(FY3/22-FY3/25)
The current medium-term plan (‘Wacom Chapter 3’) covering FY3/24 – FY3/25 is describedas ‘the period of transformation for the business structure’, with the view to connect withfurther growth in ‘Wacom Chapter 4’ covering FY3/26 – FY/29. The focus is on eight
objectives, as opposed to headline financial targets with a focus on gross margin uplift.
We believe market conditions have been far more challenging than expected for Wacom,
particularly in the Brand Business. The core objectives are as follows.

Significant areas left to execute in FY3/25
Wacom Chapter 3 core objectives and status in FY3/24
Objective
Branded Business
1. Renew product portfolio andraise GPM

Status vs plan
at FY3/24

DetailUndershooting-

2. Market development intargeted areas

In progress-

3. Enhance sales channel
management for GPM
improvement

Undershooting-

Technology Solution
Business
4. Expand customers and pen& ink use case-In progress-

New product releases (two in Q3 FY3/24, and one in
April 2024).
Raised price points for certain products, but inventory
clearance promotions led to falling GPM overall.
Progress in the creative education sector.
Launch of the commercial version of ‘Wacom Bridge’.
Assessing the regional approach to solution-based
delivery.
Develop direct channels in the B2B business - B2B ratio
achieved approx. 30% as targeted. (vs 25% in FY3/23).
A registered user program called ‘Wacom Adventure’
aimed at attracting users to the online store increased
the sales ratio to 13%+ (from 10% in FY3/23).

5. Market development ingeneral education
Corporate
6. Improve inventory
management
7. Capital management, Returnto shareholders

In progress-

Progress is being made in implementing market
standardization for pens e.g. supporting the new
Samsung Galaxy S Pen, and introducing a Universal
Pen for use with all standards.
Increasing customer acquisitions and project numbers.
In the process of planning and developing proprietary
hardware.
Next-gen solution for general education in development.
The commercialized service has been updated.

Achieved-

Inventory reduction has been executed.

In progress-

8. New service businessdevelopment

In progress-

Sustained R&D activity¥12.5bn share buyback planned up to September 2024
(total budget ¥20bn).
Preparations are underway to launch the following services in
FY3/25:- AI: commercialization in the education sector, providing
knowledge graph-based learning experiences.
- XR (cross reality): commercialization with a new input
VR pen.
- Security: announced market introduction of the Wacom
Yuify beta version.
- Remote: conducted release of the commercial version of
the remote solution ‘Wacom Bridge’.

Source: Company

23
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727) – Initiating coverage

We believe that it will be important for Wacom to demonstrate that it has developed
service businesses that will achieve the following:•

Introduce new growth engines and transform the business, based on a services
model with higher returns.

•

Targeting large addressable markets, such as EdTech and DX.

•

Resulting in more sustainable free cash flow generation.

Outlook for ‘Wacom Chapter 4’ (FY3/26-FY3/29)
This is viewed as the implementation phase of the preparations conducted during ‘Wacom
Chapter 3’ as new business drivers are commercialized and scaled.
In May 2023, the company set the following as a guide to its financial targets for the next
medium-term management policy period (scheduled to be updated in May 2025).
•

Total sales volume of approximately ¥150bn (give or take 10%).

•

OPM level at around 10% (vs a 5-year historic average of 7.2%).

These targets roughly indicate that the company is aiming for sales growth of +6% CAGR
(FY3/25CE ¥120bn to ¥150bn) which is in line with its 10-year CAGR, and an improvementin OPM.
The new growth engines have been identified as follows:•

Digital ink services – the combination of:o

AI – application of knowledge graph-based learning management systems.

o

XR – new input VR pens.

oSecurity – digital watermark service.

oRemote services – ‘Wacom Bridge’ to provide a remote desktop solution,connecting creatives to a host computer.

•

Deliver integrated pen experience for specific OEM applications, encompassing
hardware, software, services, and UI (user interface).

•

Portable creative products – products for new use cases, such as the Wacom
Movink OLED professional display product.

During ‘Wacom Chapter 4’, the company disclosed a target of approximately ¥5bn in sales
from digital ink services with high gross margins. From FY3/26 onwards, the company plansto record material annual recurring revenues.
Current disclosure aims to provide some direction to the company’s strategic initiatives. An
update is planned for November 2024, followed by an official unveiling in May 2025.

24
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727) – Initiating coverage

Our views on a growth scenario
Wacom has embarked on a multi-year initiative to demonstrate future growth potential indigital content creation, workflow/DX, and education, taking a unique and competitive
approach with its technology. With some new service development in advanced stages, we
believe progress is being made.
To aim for steady profitability, we believe that the company needs to achieve its goal of
returning to profitability through product portfolio renewal and structural reform. Thisbusiness is seen as a key touch point for creators to engage with the company, and acting
as a capability statement to current and prospective OEM partners.
Wacom is readying the implementation of new growth engines, and we view expansion in
the EdTech market by applying analytical AI to learning management systems to have highearnings potential. Services revenue should enhance the sales mix, although this could
become less visible if an integrated approach is taken with hardware (pen) sales to cater toa growing installed base. We view the partnership with Japanese educational services
company Z-Kai as a high-impact test case to attract domestic customers from bothprivate and public education sectors. However, the learning management system market
is already in place with major overseas players such as Moodle, Blackboard, Canvas, Google
Classroom, Cornerstone, SAP Litmos, and TalentLMS.

25
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727) – Initiating coverage

Astris earnings estimates and key
assumptions
We believe that the core earnings driver for FY3/25 to FY3/27 will be a combination of 1)
steady high single-digit sales growth in the Technology Solution Business with stable torising segmental margins, and 2) turnaround at the Branded Business as segment losses
begin to reach breakeven. In essence, we believe that the business can generate an OPM at
the 10% level without the impact of new growth engines.
We have estimated a small earnings contribution from new growth drivers from FY3/26 aspart of the ‘Wacom Chapter 4’ medium-term plan. We have factored in some incremental
improvements in OPM as a result of the sales mix being impacted by the emergence ofrecurring services revenue. However, we believe that some upfront investment costs (suchas marketing) will be required to scale, and earnings visibility currently remains limited.

Our estimates reflect a stable Technology Solution Business and aturnaround in the Branded Business
Astris Advisory earnings estimates
Year-end

FY3/25
guidance

FY3/25E

FY3/26E

FY3/27E

120.00_+1.0

123.91+4.3

128.93+4.1

133.36
+3.4

8.50
7.0

9.17
7.4

12.85
10.0

14.45
10.8

EBITDA (¥bn)
EBITDA margins (%)

-

11.65
9.4

15.43
12.0

17.11
12.8

FCF (¥bn)
FCF margin (%)
FCF conversion (%)
FCF yield (%)

-

6.51
5.3
71.0
6.2

11.39
8.8
88.7
10.9

10.65
8.0
73.8
10.2

20.0
46.9
3.4
6.8

20.0
46.0
3.4
6.8

20.0
32.8
3.4
6.8

20.0
29.2
3.4
6.8

Sales
Growth YoY (%)
OP (¥bn)
OPM (%)DPS (¥)
Dividend payout ratio (%)
Dividend yield (%)
Total shareholder returns (%)
Source: Astris Advisory
Note: FCF conversion is FCF/Pre-tax Profit

The core assumptions of our estimates are as follows:•

Sales growth – the core driver is sustained growth in the Technology Solution
Business as Wacom continues to win OEM projects.

•

Profitability – steady OPM improvement driven as the Branded Business reduces
its segmental losses.

•

Positive free cash flow generation – we estimate that the company will
demonstrate a more sustained profile for free cash flow generation after
improvements in working capital management, and the sales mix favoring thestable Technology Solution business.
26
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727) – Initiating coverage

Our estimates on shareholder returns•

Dividends – we estimate a DPS of ¥20 for FY3/25 – FY3/27, as we believe thecompany will opt for steady dividends.

•

Buybacks – Wacom has conducted buybacks on an annual basis from FY3/22.
While there has been no guide from the company regarding sustained activity, we
believe buybacks are likely to continue into FY3/26 and FY3/27 for the following
reasons:oWacom is well-capitalized with a ¥17.66bn net cash balance in FY3/24,
together with long-term investments of ¥1.61bn (total making up 54% ofshareholders equity). There is excess capital ready for deployment.

oWith improved working capital management and the stable Technology
Solution Business driving earnings, free cash flow generation should
become more sustained resulting in more capital.

We have estimated ¥3bn annual buybacks for FY3/25 to FY3/27.

27
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727) – Initiating coverage

Company information
Management (9 members, 11% female ratio, 67% outside members)
President, Chief Executive Officer
Number of shares held
Career history
April 1995
August 2013
April 2015
July 2015
April 2017
June 2017
April 2018
February 2021

Director, Chief Technology Officer
Number of shares held
Career history
March 1987
April 1998
June 1999
June 2004
April 2010
April 2014
April 2015

Nobutaka Ide
90,731 Shares (as of March 31, 2024)
Joined Sharp Corporation
Joined Wacom Co., Ltd., General Manager, Technology Marketing Department,
Component Business Unit
Vice President, Technology Solution Business Unit
Senior Vice President, Technology Solution Business Unit
Executive Vice President, Technology Solution Business Unit and Platforms &Applications Business Unit
Director
President & Chief Executive Officer (current position)
Representative Director, Connected Ink Village, General Incorporated Association(current position)

Sadao Yamamoto
780,358 (FY3/24)
Joined Wacom Co., Ltd
General Manager of Basic Development of ESD
Director
Director and Operating Officer in charge of R&D
Director, Operating Officer, and General Manager of the R&D OfficeDirector, Operating Officer, and Division General Manager of Technology Development
Division
Director and Chief Technology Officer (current position)

Director
Number of shares held
Career history
October 1996
April 2001
July 2005
November 2011
September 2017
October 2020
January 2022
June 2024

Sayatake Komine-

Outside Director
Number of shares held
Career history
January 2010
January 2012

Ken Inazumi-

April 2013
February 2014
October 2015
March 2017
December 2017
June 2018
June 2019
June 2021
March 2023
March 2024

Joined Chuo Audit Corporation
Registered as a certified public accountant, qualified in Japan
Joined PricewaterhouseCoopers Dallas
Joined Wacom Co., Ltd., Manager of Finance Department
Vice President, Technology Solution Business Unit
Executive Vice President, Technology Solution Business Unit (current position)
Outside Director, sdtech Inc. (current position)
Director of the Company (current position)

Director, AlixPartners Asia LLC
Operating Officer and Management Planning Manager, NHN Japan Corp.
(current LINE Corporation)
Director and COO, NHN PlayArt Corporation (current NHN Japan Corp.)
President and CEO
President and CEO, NHN Techorus Corporation
Corporate Executive Officer, transcosmos inc
Senior Corporate Executive Managing Officer
Outside Director, Wacom Co., Ltd. (current position)
Director and Senior Corporate Executive Officer, transcosmos Inc.
President and CEO, XPRICE Inc.
Managing Executive Officer, MASH Holdings Co., Ltd. (current position)
Director, PILLBOX JAPAN INC. (current position)28
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727) – Initiating coverage

Outside Director
Number of shares held
Career history
April 1983
November 1993
April 2005
October 2005
October 2013
December 2017
June 2019
January 2020
June 2021
June 2022

Mikako Inamasu
12,000 (FY3/24)
Joined FUJITSU LIMITED
Director, HR Institute Co., Ltd
Professor, Business Management, Business Breakthrough Graduate School(current position)
Executive Vice President, HR Institute Co., Ltd
President and Representative Director
President and CEO, HR Institute USA, Inc. (current position)Councilor, Thunderbird School of Global Management, General Incorporated Foundation(current position)
Chairman and Representative Director, HR Institute Co., Ltd.
Outside Director, Wacom Co., Ltd. (current position)
Representative Director, One Drop Ocean Foundation, General Incorporated Foundation(current position)

Outside Director
Number of shares held
Career history
April 2014
February 2018
May 2023
July 2023
June 2024

Takafumi Nakajima-

Outside Director
Audit Committee
Number of shares held
Career history
April 1982
October 2000

Shigeki Higashiyama

April 2005
April 2006
April 2008
April 2012
April 2015
April 2016
June 2018
June 2022

Outside Director
Audit Committee
Number of shares held
Career history
April 1983
July 1989
April 2005
June 2007
June 2012
July 2017
November 2017
December 2018
June 2019
March 2020
November 2020
July 2023

Representative Director, RE-X Expansion Inc. (current position)
Representative Director, Kumamura Shin Power Inc. (current position)
Representative Director, Gokigen Power Inc. (current position)
Representative Director, TIDA POWER LTD.. (current position)
Outside Director, Wacom Co., Ltd. (current position)

10,000 (FY3/24)
Joined Nomura Research Institute, Ltd.
President, Nomura Research Institute Hong Kong
President, Nomura Research Institute Singapore
Head of Corporate Planning Division, Nomura Research Institute, Ltd.
Senior Managing Director and Head of Personnel Division
Senior Managing Director and Division Manager of Asia Region
Director, iVision Shanghai Co., Ltd.
Senior Managing Director and Division Manager of China & Asia Region
Senior Corporate Managing Director,
President, Nomura Research Institute Asia Pacific Private LimitedCounselor
Outside Director (Audit Committee Member), Wacom Co., Ltd. (current position)
Outside Director, MIMOSA CO. LTD. (current position)

Osamu Hosokubo
1,000 (FY3/24)
Joined Nippon Trust Bank Co., Ltd. (currently Mitsubishi UFJ Trust and Banking Corporation)
Joined JAPAN-ASEAN Investment Co., Ltd. (currently Japan Asia Investment Co., Limited)
Executive Officer
Director
President & CEO
CEO, Great Asia Capital & Consulting LLC (current position)
Outside Director, Saisan Co., Ltd. (current position)
Outside Auditor, Malignant Tumor Treatment Technologies, Inc.
Outside Director (Audit Committee Member), Wacom Co., Ltd. (current position)
Outside Director, Roland DG Corporation (current position)
Outside Director, ANSeeN Inc. (current position)
Outside Director (Audit Committee Member), Malignant Tumor Treatment Technologies, Inc.
(current position)29
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727) – Initiating coverage

Outside Director
Audit Committee
Number of shares held
Career history
April 1991
January 2009
April 2014
April 2017
April 2019
April 2022
April 2023
July 2023
February 2024
June 2024
Source: Company

Yuji Ono
Joined Toyo Trust and Banking Company, Limited (currently Mitsubishi UFJ Trust andBanking Corporation)
Registered as an attorney- at law admitted in Japan
Lecturer, Keio University Law School (current position)
Deputy General Manager, Compliance Management Department, Mitsubishi UFJ Trust andBanking Corporation
General Manager, Legal Department
General Manager, Corporate Risk Management Division The Master Trust Bank of Japan Ltd.
Joined Link Partners Law Office Lawyer (current position)
Outside Audit & Supervisory Board Member, BankGuard Inc. (current position)
Representative Director, Syndic Trust Corporation (current position)
Outside Director (Audit Committee Member), Wacom Co., Ltd. (current position)

Contact details (Tokyo Branch)
Address
Tokyo Branch
Sumitomo Fudosan Shinjuku Grand Tower 31F, 35F,
8-17-1 Nishi-Shinjuku, Shinjuku-ku, TokyoIR Dept.:
Tel: +81-3 5337-6502

Source: Company

Shareholder details (as of March 31, 2024)
Major shareholders

The Master Trust Bank of Japan, Ltd. (Trust Account)
Custody Bank of Japan, Ltd. (Trust Account)
Samsung Electronics Singapore Pte. Ltd.
The Bank Of New York Mellon 140051
State Street Bank And Trust Client Omnibus Account OM02 505002
State Street Bank And Trust Company 505103
AVI Global Trust PLC
Masahiko Yamada
Wilnau Co.
Juniper
Source: Company

Stake (%)
17.72
6.67
5.78
4.94
3.75
3.02
2.96
2.59
2.09
1.94

30
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727) – Initiating coverage

Astris Quant Sheet
Share price chart and factor analysis (from August 2014)
220

1,200
1,000

180
800

160

140

600

120

400

Share price (¥)

August 2014 = 100

200

100
200

80
60
Aug-14 Aug-15 Aug-16 Aug-17 Aug-18 Aug-19 Aug-20 Aug-21 Aug-22 Aug-23

Momentum

Quality

GrowthValue

06727 JP

Source: FactSet

Factors
Momentum: 12 Month - 1 Month Performance
Quality: Free Cash Flow Yield
Growth: Operating Profit Growth
Value: Book to Market

2 Year Corr
0.13
0.45
0.41
0.14

Source: FactSet

5 Year Corr
-0.05
0.11
0.16
0.12

10 Year Corr
-0.02
0.13
0.11
0.01

Wacom exhibits a strong short-term correlation with both the Growth and Quality factors.
However, the correlation with these factors is short-term in nature, with both factors
having a long-term correlation in the low teens.

Calculation method and definition of factors in the time series
Universe
TOPIX500
Factor return calculation
Quartile Range Analysis: Calculate the element return by subtracting the average performance of the lower
quartile from the average performance of the upper quartile for each element forecasted for one month. This
analysis is repeated monthly without considering transaction costs.
FactorMomentum
1-month return
12-month return
Subtracting the most recent 1 month
Quality
FCF yield (estimate)
GrowthOperating profit growth (estimate)
Value
Book-to-market ratio (actual)
Source: FactSet

31
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727) – Initiating coverage

Drivers of stock price performance and multiple regression analysis (since August 2014)
Idiosyncratic

Macro

SectorMarket
0.00

0.10

0.20

0.30

MarketSector

Macro

0.40

0.50

0.60

0.70

Idiosyncratic

Source: FactSet

The sector and macro factors account for almost 40% of Wacom share price movements.
Surprisingly, the broader market impact is negligible.

Calculation method for multiple regression analysis
Multiple regression analysis
Perform regression analysis including all drivers, and conduct individual regression analysis by excluding one driverat a time. To quantify the specific impact of each driver, calculate the partial coefficient of determination (partial Rsquared value) using the formula: (Residual Sum of Squares from regression analysis including all drivers - Residual
Sum of Squares from regression analysis excluding one driver) / Residual Sum of Squares from regression analysis
excluding one driver.
Source: FactSet

Multiple regression analysis results
Factors
MarketTopix 1st Section
Topix Small Cap Index
MSCI Japan
SectorTopix Electrical Appliances
MSCI Japan Information Technology
MSCI Japan Tech Hardware & Equipment
Macro
10Y JGBJPYUSD
CPI Nationwide
Industrial Production
Eco Watchers Outlook
Japan Machine Tool Orders

2Y Corr

5Y Corr

10Y Corr

0.37
0.34
0.37

0.53
0.47
0.54

0.38
0.37
0.38

0.55
0.54
0.53

0.63
0.61
0.59

0.43
0.42
0.40

-0.29
0.28
-0.39
-0.25
0.00
0.00

-0.20
0.13
0.03
0.03
0.26
-0.19

-0.12
0.07
0.04
-0.04
0.22
-0.09

Source: FactSet

Wacom exhibits consistent correlation across a broad range of equity indices. Correlations
are highest among sector-specific indices, such as the Topix Electrical Appliances index,
which has a 5-year correlation of 0.63. Among the macro factors, the Eco Watchers index
has the highest correlation of 0.22 over the last 10 years.

32
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727) – Initiating coverage

Astris-Sustainability ESG assessment
Ratings and scorecard
Our in-house Astris-Sustainability ESG model rates the company with a combined score of
49.9%, placing it in the ‘Amber’ rating of our assessment in FY3/23.
Our in-house methodology* takes what we have selected as core measurable ESG factors,
ranking its performance versus its domestic GICS Technology Hardware and Equipmentwith a market capitalization between ¥50bn to ¥250bn (a total of 46 companies).
Astris-Sustainability ESG model rating for Wacom

Source: Astris Advisory (*Note – for details of our in-house rating system please contact Astris Corporate Advisory)

ESG scorecards
Environmental (6 factors from a selected peer group)
Astris Environmental scoreSocial (7 factors from a selected peer group)
Astris Social score
Governance (35 factors from a selected peer group)
Astris Governance score
TOTAL SCORE (Out of a total of 48 factors)

FY3/23
26.6

FY3/24
26.6

38.1

46.6

65.5

61.1

52.7

51.5

Source: Company, FactSet, Astris Corporate Advisory

Our methodology has highlighted the following key topics:

Environmental
The company has established the ‘Wacom Environmental Quality Guideline’ which specifies
environmental requirements regarding hazardous substances that are contained inmaterials, parts, and products.
It has participated in the Japan Climate Initiative (JCI), endorsed the Task Force on Climaterelated Financial Disclosures (TCFD), and has disclosed its target set for CO2 emissions in
the year 2030 (an intermediate target to achieve carbon neutrality by 2050) to reduce CO2
emissions by 48% by 2030 compared to 2014 as the base year, aiming to emit less than
715 t-CO2.

SocialA Code of Ethics and Business Conduct ensures that all directors and employees abide bythese standards and guidelines to ethically and legally judge and conduct business.

33
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727) – Initiating coverage

There is a Wacom Suppliers Code of Conduct that conforms to the RBA (Responsible
Business Alliance) Code of Conduct.
From the perspective of diversity and inclusion, the company aims to ensure true diversity
and to foster a culture where team members can fully utilize their strengths while finding
their work rewarding. Although there are no specific numerical targets for promoting
individuals with certain attributes such as gender or nationality to managerial positions,
Wacom is actively discussing the ideal vision of diversity and inclusion that it should strive
for.
Currently, the workforce of approximately 1,200 people operates globally, with 60% of staff
being locally employed by overseas group companies. These employees work under local
leadership, leveraging the unique cultures and business characteristics of each country.
Furthermore, for major management positions, the company prioritizes enthusiasm andability to fulfill the mission over attributes such as gender, nationality, or age. As of FY3/24,
women constitute 23% of our company's managerial positions.

GovernanceThe corporate governance system at Wacom. is organized in the following manner:•

Board of directors – currently comprised of nine board members led by President
and CEO Nobutaka Ide, three internal directors, three outside directors, and threeoutside directors (audit and supervisory committee members).

•

Audit Committee – chaired by a full-time audit and supervisory committee
member, the committee consists of three outside directors. Specifics consideredby the Audit and Supervisory Committee include the audit plan and audit policies,
the establishment and operation of systems to ensure the appropriateness ofbusiness operations, the evaluation of the appropriateness of the duties
performed by the external auditor, and consent regarding reappointment,
suitability, and remuneration.

•

Compensation Committee (optional) – chaired by an outside director, thecommittee consists of a total of five members; two outside directors, and threeoutside directors (audit and supervisory committee members). The Committee
meets to discuss the amounts of compensation to be paid to directors, excluding
directors who are members of the Audit Committee, and the amounts of monetaryclaims for the allocation of company shares as restricted stock compensation.
Based on the results of these discussions, the Committee made recommendations
to the Board of Directors. It is worth noting that all members attended both
meetings.

•

Nomination Committee (optional) – chaired by an outside director, the committee
consists of a total of seven members; one internal director, three outside directors,
and three outside directors (audit and supervisory committee members). The
committee advises or makes recommendations to the board of directors on theappointment of directors and key executive officers.

34
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727) – Initiating coverageControversies
We note we have been unable to find major recent controversies that may have significant
financial or reputational repercussions for the company and its shareholders.

35
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727) – Initiating coverage

Areas of discussion
Highlighting key topics for investors
We believe the following will be key areas for discussion with investors:
1. Next Medium-term plan ‘Wacom Chapter 4’
a. 10% OPM guideline – despite recent trends that have pushed down OPM,
with the introduction of new services, should you not be aiming for higher
returns?
b. Further investment costs – what if any additional investment will beneeded when you fully commercialize new services?
c.

Services revenue – what proportion of sales will services comprise in themedium to long term?

d. What is required to maintain positive returns in the Branded Business?
2. Capital allocation
a. Buybacks – ‘Wacom Chapter 3’ outlined an allocation of ¥20bn forbuybacks; what is the direction for ‘Wacom Chapter 4’?
b. Dividends – do you foresee a need to change your current policy (30%
payout ratio and/or steady DPS)?
c.

M&A – expanding into services has taken time; were there no options to
conduct M&A to accelerate this process? Is M&A a realistic option going
forward?

36
www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727)
JGAAP Financial Summary
Income statement
(¥bn)

FY
3/23
112.73
81.56
31.17
27.7
2.01
1.8
0.92
(0.07)

FY
3/24
118.79
82.03
36.77
30.9
7.06
5.9
2.99
(0.19)

FY
3/25E
123.91
85.50
38.41
31.0
9.17
7.4
0.10
(0.10)

FY
3/26E
128.93
88.96
39.97
31.0
12.85
10.0
0.10
(0.10)

FY
3/27E
133.36
90.68
42.67
32.0
14.45
10.8
0.10
(0.10)

2.87
0.00(0.68)
2.19(0.40)
14.0
1.79
1.79

9.85
0.15
(4.09)
5.91(1.35)
13.7
4.56
4.56

9.17
9.17
(2.48)
27.0
6.69
6.69

12.85
12.85
(3.47)
27.0
9.38
9.38

14.45
14.45
(3.90)
27.0
10.55
10.55

Sales growth YoY (%)
OP growth YoY (%)
Pre-tax profit YoY (%)
NI growth YoY (%)

+3.6
-84.5
-84.9
-83.6

+5.4
+250.6+169.6+154.5

+4.3
+29.9
+55.1
+46.7

+4.1
+40.1
+40.1
+40.1

+3.4
+12.4
+12.4
+12.4

Balance sheet(¥bn)
Cash & equivalents
Inventory
Accounts receivables
Other
Current assets
Tangible assets
Goodwill
Intangible assets
Investment
Other
Fixed assets
Total assets
Short term borrowing
Trade creditors
Other
Current liabilities
Long term borrowing
Other LT liabilities
Long term liabilities
Shareholder’s equity
Share acquisitions rights
Non-controlling interests
Total net assets
Total liabilities & net
assets

FY
3/23
20.02
21.73
12.05
6.38
60.17
6.21
1.50
1.26
6.14
15.11
75.28
7.63
10.64
11.77
30.04
2.00
2.75
4.75
40.49
40.49
75.28

FY
3/24
31.66
13.09
12.86
7.07
64.68
5.72
1.53
1.61
6.08
14.94
79.62
7.00
11.48
15.42
33.90
7.00
2.75
9.75
35.97
35.97
79.62

FY
3/25E
33.43
13.65
13.41
7.38
67.88
6.09
1.90
1.61
6.08
15.68
83.56
7.00
12.27
14.57
33.83
7.00
2.75
9.75
39.97
39.97
83.56

FY
3/26E
40.90
14.21
13.95
7.68
76.74
6.47
2.29
1.61
6.08
16.46
93.19
7.00
12.76
16.15
35.92
7.00
2.75
9.75
47.52
47.52
93.19

FY
3/27E
47.22
14.69
14.43
7.94
84.28
6.87
2.69
1.61
6.08
17.26
101.54
7.00
13.01
15.96
35.97
7.00
2.75
9.75
55.82
55.82
101.54Sales
COGS
Gross profit
Gross profit margin (%)
Operating profit
OP margin (%)
Non-operating income
Non-operating
expenses
Recurring profit
Extraordinary gains
Extraordinary losses
Pre-tax profit
Tax
Effective tax rate (%)
Net income
Non-controlling NI
Parent attributable NI

Source: Company, Astris Advisory (estimates)

Cash flow statement(¥bn)
Profit before tax
Depreciation/amortization
Changes in working capital
Other non-cash items
Tax paid
Cash from Operating Activities
Capex
Acquisitions/increase stakes
Other investing cash flow
Cash from Investing Activities
Total cash dividends paid
Debt issuance/(retirement)
Equity financing/(buybacks)
Other
Cash from Financing Activities
FX impact
Net cash flow

FY
3/23
2.19
2.20
(1.43)(0.29)(3.72)(1.06)(1.54)(1.60)(3.14)(3.18)
6.25(2.00)
1.07
1.32(1.81)

FY
3/24
5.91
2.57
9.32
1.68
(2.00)
17.48(2.32)
0.04(2.28)(3.12)
4.21(7.51)(6.43)
2.92
11.68

FY
3/25E
9.17
2.48
(0.92)(2.48)
8.25(1.73)(0.78)(2.52)(3.08)(3.00)(6.08)
2.12
1.77

FY
3/26E
12.85
2.58
1.24
(3.47)
13.20(1.81)(0.37)(2.18)(3.08)(3.00)(6.08)
2.52
7.46

FY
3/27E
14.45
2.67
(0.69)(3.90)
12.52(1.87)(0.58)(2.44)(3.08)(3.00)(6.08)
2.32
6.32

Free cash flow
EBITDA(2.60)
4.21

15.16
9.63

6.51
11.65

11.39
15.43

10.65
17.11

EBITDA margins (%)
Free cash flow margin (%)
Free cash flow conversion (%)
Capex/sales (%)
Capex/depreciation (%)
CFO margin (%)
Key metrics

3.7
8.1
9.4
12.0
-2.3
12.8
5.3
8.8
N/A 256.4
71.0
88.7
1.4
2.0
1.4
1.4
70.1
90.4
70.0
70.0
-0.9
14.7
6.7
10.2
FY
FY
FY
FY
3/23
3/24
3/25E
3/26E

12.8
8.0
73.8
1.4
70.0
9.4
FY
3/27E

27.7
1.8
1.6
2.4
4.3
4.5
3.6

30.9
5.9
3.8
5.9
11.9
15.4
12.2

31.0
7.4
5.4
8.2
17.6
18.4
12.9

31.0
10.0
7.3
10.6
21.4
22.4
16.2

32.0
10.8
7.9
10.8
20.4
22.0
16.1

2.0
1.3

1.9
1.5

2.0
1.6

2.1
1.7

2.3
1.9

0.2
net
cash
0.5
43.9
N/A

0.4
net
cash
0.5
76.0
N/A

0.4
net
cash
0.5
93.6
N/A

0.3
net
cash
0.5
131.1
N/A

0.3
net
cash
0.5
147.4
N/A

11.3
52.2
52.2
20.0
176.4
3.4
5.7

29.6
20.0
20.0
20.0
67.5
3.4
12.1

43.5
13.6
13.6
20.0
46.0
3.4
6.8

61.0
9.7
9.7
20.0
32.8
3.4
6.8

68.5
8.6
8.6
20.0
29.2
3.4
6.8

(3.0)
(3.0)

17.5
17.5

8.0
8.0

12.9
12.9

12.4
12.4

2.1
0.6
16.5
34.6
N/A

2.4
0.6
7.2
9.9
4.6

2.2
0.6
6.0
7.6
10.1

1.8
0.5
4.5
5.4
6.2

1.5
0.5
4.1
4.8
6.5

Profitability
Gross margin (%)
Operating margin (%)
Net margin (%)
ROA (%)ROE (%)ROCE (%)
ROIC (%)
Liquidity
Current ratio (x)Quick ratio (x)Leverage
Debt/Equity ratio (x)Net Debt/Equity ratio (x)Equity ratio (x)Interest cover (x)Net Debt/EBITDA (x)Valuation
EPS reported (¥)
PER (x)
Diluted PER (x)DPS (¥)
Dividend payout ratio (%)
Dividend yield (%)
Total shareholder return(%)
Free cash flow yield (%)
Diluted free cash flow yield(%)
PBR (x)EV/sales (x)EV/EBITDA (x)EV/EBIT (x)EV/FCF (x)37www.corporateresearch.astrisadvisory.com

Japan Corporate Research
Wacom (6727)

Disclaimers
This report has been prepared by Astris Advisory Japan K.K. This report is based on information obtained from public sources that Astris
Advisory Japan K.K. believes to be reliable but which Astris Advisory Japan K.K. has not independently verified, and Astris Advisory
Japan K.K. makes no guarantee, representation, or warranty as to its accuracy or completeness. This report does not and does not
attempt to, contain everything material which there is to be said about the Company. Any opinions expressed herein reflect Astris
Advisory Japan K.K.’s judgment at the time the report was prepared and are subject to change without notice. Forward-looking
information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates ofamounts not yet determinable, and therefore involve known and unknown risks, uncertainties, and other factors that may cause theactual results, performance, or achievements of their subject matter to be materially different from current expectations.
This report has been prepared as general information, is therefore not intended as a personal recommendation of particular financial
instruments or strategies, and does not constitute personal investment advice.
The analyst hereby certifies that (i) the views expressed in this report accurately reflect the research analyst’s personal views about thecompany and the securities that are the subject of this report, and (ii) no part of the research analyst’s compensation was, is, or will be,
directly or indirectly, related to views expressed by that research analyst in this report.
The report has been prepared by Astris Advisory Japan K.K., a Japanese firm organized under the laws of Japan and supervised by theJapanese Financial Services Agency. Details about the extent of our regulation by local authorities are available from us upon request.
Conflict of interest
This report has been commissioned and paid for by the company and is deemed to constitute an acceptable minor non-monetary benefit
as defined in MiFID II.
Readers should assume that Astris Advisory Japan K.K. may currently or may in the coming three months and beyond be providing or
seeking to provide IR/corporate advisory or other services to the company.
Investment in securities mentioned: Astris Advisory Japan K.K. has a restrictive policy over personal dealing for its directors, officers,
employees, and service providers. Astris Advisory Japan K.K. does not conduct any investment business and does not hold any
positions in the securities mentioned in this report.
Limitation of liability
Astris Advisory Japan K.K. assumes no liability as regards any investment, divestment, or retention decision taken by the investor basedon this report. In no event will Astris Advisory Japan K.K. be liable for direct, indirect, incidental, special, or consequential damages(regardless of whether being considered foreseeable or not) resulting from the information in this report.

Copyright 2024 Astris Advisory Japan K.K. All rights reserved.

38
www.corporateresearch.astrisadvisory.com