ANALYST NET Company Report

GCC Management™ Analysis Report: Tamagawa Holdings Co., Ltd.
JASDAQ (Standard)

Securities Code: 6838

September 10,2020

Creating shareholder value consistent with Sustainable Development
Goals, in high-growing communication and energy infrastructure fields, bydeploying technology and financial prowess

This report analyzes corporate value based on the perspective of GCC ManagementTM which emphasizes
three elements: Growth (sales growth), Connection (of all stakeholders, leading to improved profitabilityof capital), and Confidence (enhanced trust and lowered business risks).

Basic report

Specializing in electronic and communication devices and renewable energy

Tamagawa Holdings Co., Ltd. (referred to here as the Tamagawa HD Group, including
consolidated subsidiaries, or simply Tamagawa) originated as Tamagawa Electronics,
established in 1968 to develop, manufacture, and sell high-frequency devices, which are
key components for communication and broadcasting equipment. After becoming an overthe-counter company registered in the Japan Securities Dealers Association (present
JASDAQ Market) in 1999, Tamagawa was forced to report a loss by intense price competitionand other influences, became a holding company in 2007, and restructured business undera management mainly of former investment bankers. In fiscal 2009 (ended March 2010),
Tamagawa diversified into renewable energy. In the electronic and communication device
business In addition to the high-frequency devices, Tamagawa became competitive intechnologies to provide public infrastructure systems that combined analog, highfrequency technologies with digital, software technologies. In its renewable energy
business Tamagawa uses its financing capability in developing solar, wind, and other power
generation projects.

Some businesses have 10-20 times growth potential for five years ahead
Tamagawa’s recovery and strategy were successful; it posted record-high operating profit of¥805 million, up 426% y-o-y, on a 64.9% growth in sales to ¥6,332 million, in fiscal 2019. Its
forecasts for fiscal 2020 are also robust. Sales are expected to increase by 9.5% y-o-y andoperating profit by 5.5%, despite anticipating some COVID-19 impact. Medium-term key
factors include 1) wind power generation business in Hokkaido, where 4-times growth isexpected in 2017-2027; 2) benefit from the projected 17-times global growth in 5G-related
investment in 2019-2025; and 3) over 20 times growth in investment in hydropower
generation in Indonesia in 2020-2025, according to the METI’s survey. Other highlights
include initiatives in advanced technologies, such as joint development projects with
Tohoku University for optimizing equipment control/monitoring system for surplus energy
and small atomic clocks.

2-3 times upside potential in shareholder value from the GCC managementTM
perspective
On August 28, the Tamagawa HD Group announced a third-party allocation of shares withexpected funding of about ¥2.5 billion at maximum. J-Phoenix Research (JPR) expects thatthe funding will accelerate Tamagawa’s investment in high-growth areas. Based on thisassumption, JPR used the excess profit method in estimating Tamagawa’s long-term
shareholder value, which turned out to be ¥16.9 billion in a conservative scenario, ¥33.6
billion when incorporating highly-feasible potential growth, and ¥43.6 billion if advanced
technologies are commercialized. Theoretically, this means 2-3 times upside potential inmarket cap, relative to its current level, in a 2-3 year investment period.

Written and Edited by
J-Phoenix Research Inc.

Corporate ProfileH e a d q u a r t e r s Minato-ku, Tokyo
President & CEO

Toru Masuzawa

EstablishedNov. 1968

C a p i t a l 1,961 million yen
L

i

s

U

t
R

e

d

July, 1999

Lwww.tmex.co.jp

I n d u s t r yElectric
equipment

Key Indicators(as of August 31, 2020)
Stock

price

2,128

Highest in 52 weeks

3,960

Lowest in 52 weeks

1,311

Outstanding Shares 5,471,100 stocks
Tra d i n g U n i t s

100 stocks

M a r k e t
Capitalization
Prospective
D i v i d e n d
Established Profit
B a s eE P S
Estimated PER
Actual BPS(March 2019)
Actual PBR

11,642
million yen
5.00
92.24 yen
23.07 times
823.03 yen
2.59 times

1. Use of the three elements is a concept of the GCC ManagementTM, a pending trademark registered by J-Phoenix Research in Japan. It is a framework to visualize a value-creating by categorizing drivers ofcorporate value into three elements of Growth/Connection/Confidence, or GCC, finding how they associate with satisfying needs and demand of all stakeholders, and analyzing the process of creating sustainable value.

1/40
This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

1. Corporate summary
Corporatesummary andhistory

Corporate summary
Corporate name
Established
Representative
Location
CapitalTAMAGAWA HOLDINGS CO., LTD.
November 1968
Toru Masuzawa
VORT Hamamatsu-cho I, 2F
1-6-15, Hamamatsu-cho, Minato-ku, Tokyo, Japan
¥1,961.82 million (as of March 31, 2020)

Employees

240 (Consolidated; as of March 31, 2020)

Fiscal year end
Business activities
Listing

March 31
Electronic and communication devices; renewable energy
JASDAQ (Standard)［Securities code: 6838］

Source: Prepared by JPR based on disclosed information

History
Year

Month

1968

Nov.

Event
Established Tamagawa Electronics Co., Ltd. in Ota-ku, Tokyo; began development, manufacturing, and sale of high-frequency circuit elements

1999

Aug.

Became an over-the-counter company registered in the Japan Securities Dealers Association (present JASDAQ Market)

2007

Oct.

Conducted a company split, renamed to Tamagawa Holdings Co., Ltd., and made Tamagawa Electronics Co., Ltd. its subsidiary

2009

Nov.

Established an environment-related business planning office, to prepare for entry into the renewable energy business

2010

Oct.

Established a solar energy business planning office

2012

Sep.

Established GP Energy Co., Ltd. as a subsidiary specialized in a solar power plant operating business

2013

Feb.

Established Tamagawa Solar Systems as a sales subsidiary of solar power generation system

June

April

Registered with the Financial Services Agency as a qualified institutional investor; began electricity sales at a mega solar power plant in
Shimonoseki, Yamaguchi Pref.
Entered the geothermal power generation business
Renamed the Solar Energy Business to the Renewable Energy Business
Began electricity sales at a mega solar power plant in Sodegaura, Chiba Pref.; announced memorandum of understanding regarding businessalliance with Etrion Japan
Subsidiary Tamagawa Electronics established Tamagawa Electronics Vietnam Co., Ltd.

May

Renamed Tamagawa Solar Systems to Tamagawa Energy

Jan.
March

Established a hydropower business planning officeInstalled solar power tracking systems at a mega solar power plant in Sodegaura, Chiba Pref.
Began electricity sales at small wind power plant in Tateyama, Chiba Pref.

June

Acquired a 30% equity stake in Etrion Energy 5 LLC and made it an equity-method affiliate

Oct.
Nov.

Began operation of an optical distributed antenna system (DAS) for an airport multi-channel access (MCA) radio network at Narita
International Airport
Received an order for the subsystem for next-generation weather forecasting equipment from Toshiba Corporation

2014

Dec.

2015

March

2016

2017
2018

Apr.

Began electricity sales at a solar power plant in Kasumigaura, Ibaraki Pref.

Sep.

Began electricity sales at a solar power plant in Misawa, Aomori Pref., upon completion of construction

Feb.

Acquired small-scale wind power sale interest in 50 projects in Tohoku and Hokkaido

Apr.

Began electricity sales at a solar sharing power plant in Shimada, Shizuoka Pref.
Began electricity sales at a mega solar power plant in Goto, Nagasaki Pref.
Began electricity sales at a small wind power plant in Ooma, Shimokita-gun, Aomori Pref.

Oct.

Established THEG PTE. LTD. in Singapore

Nov.

Began electricity sales at mega solar power plant in Noboribetsu, Hokkaido

March

2019

March
July

Began development and verification test of Green Energy Surplus Power Managing & Coordinated Operation System GEMCOS

Sep.

Sold a mega solar power plant in Shimonoseki, Yamaguchi Pref.

Nov.

Adopted as a joint operator of the small hydropower generation business in Indonesia for the “Facility Assistant Business among the Joint
Crediting Mechanism Funding Support Business”
Sold all of its equity holding of Etrion Energy 5 G.K.

Dec.
2020

Subsidiary Tamagawa Electronics opened an office in Ho Chi Minh City
Sold a mega solar power plant in Sodegaura, Chiba Pref.

March

Subsidiary Tamagawa Electronics successfully made a general public bid for “Manufacturing of lower-power high-frequency circuit and beam
monitor circuit system for next-generation synchroton radiation facilities” of the National Institutes for Quantum and Radiological Scienceand Technology.
Sold a mega solar power plant in Tateyama, Chiba Pref.; expanded a mega solar power plant in Goto, Nagasaki Pref.

Source: Prepared by JPR based on disclosed information

2/40
This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

Businesscomposition

The Tamagawa HD Group has three business segments: 1) Electronic andCommunication Devicess; 2) Renewable Energy System Sales; and 3) Renewable
Energy Power Plants. Segments 2) and 3) are aggregated as a renewable energy
business for explanation purposes.

Electronic and Communication Device BusinessTamagawa makes use of its key technologies in high-frequency wireless, opticaltransmission, and digital signal processing for provision of devices for mobile
infrastructure, terrestrial digital broadcasting, satellite earth stations, disasterprevention, measurement, public transportation, and the public-sector.

Renewable Energy BusinessTamagawa is engaged in the business of selling renewable energy system (onestop solution offering, from system adoption to management) and the renewableenergy power station business (power plant development, and operation of theGroup’s own power plants).
Business segments and fiscal 2019 sales
Business segment

Sales(Sales ratio)

Segment
profitBusiness activities

Electronic andCommunication
Devices¥3,417million(54.0%)¥348 million

Development, manufacturing and sale of high-frequency devices of wireless and communicationequipment and public infrastructure systems with strength in high-frequency wireless technology.
Engaged in system integration by combining optical transmission, digital signal processing in
addition to high-frequency technology. A wide range of adoption from communication
infrastructure to terrestrial digital broadcasting, satellite earth stations, disaster prevention,measurement, traffic systems, etc.

Renewable Energy
System Sales¥823 million(13.0%)▲¥27 million

Planning, installment, inspection, operation, and maintenance of renewable energy systems forcompanies and general consumers

Renewable Energy
Power Plants¥2,091 million(33.0%)¥698 million

Development of solar, wind power and other renewable energy power plants by the Tamagawa HD
Group and sale of generated power to electric power companies. Daily power generation volume:
approximately 50,000kWh (2020/4/30)

Source: Prepared by JPR based on the Company’s Financial Summary, Integrated Report for the 60th Term Integrated Report, corporate website, etc.

Group structure

Source: Prepared by JPR based on disclosed information

3/40
This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

Corporatemission andpolicyCorporate philosophy is towork on the three “Re”

Work on three “Re” and support abundant lives of people
Experts in raising shareholder value joined Tamagawa
Since 2007 when the Tamagawa HD Group was established, Tamagawa has hired
financial, accounting, and real estate experts in corporate regeneration andcreation of shareholder value, and has adopted as a corporate mission to work on
three “Re” by using expertise of those professionals.
Conceptual differentiation of the Tamagawa HD Group

Source: The Tamagawa HD Group’s website

First “Re”:
Corporate “Re”generation,
making the Electronic andCommunication Device
Business highly profitable

First “Re” → Corporate “Re”generation

The first mission is corporate regeneration. The Electronic and Communication
Device Business, once a chronic loss-maker, broke away from the pricecompetitive component business, raised its own capability to combine analog
technologies with digital ones and hardware with software and construct systems,
added more value to its products and services, focused on less-competitive nicheareas, and regenerated itself.

Second “Re”:
Increasing use of“Re”newable energy

Second “Re” → Use of “Re”newable energy

Third “Re”:“Re”investment of cash

Third “Re” → “Re”investment of cash

The second mission is to contribute to increased reliance on renewable energy. Fundraising capability for use of land sites, and for capital spending, is one key for the
renewable energy business. Tamagawa therefore expanded business by strengthening
its human resources by hiring professionals in real estate, finance, and accounting.

The third mission is to reinvest cash raised from realization of the first and second
mission, and thereby contribute to abundant living of people.

Contributing to an improved future

Tamagawa’s corporate strategy is, through these three “Re”, to effectively use
limited resources, combine diverse technologies to enrich people’s daily lives, andinvest in sustainable business with high profitability and ROE with the ultimate aim
at enhancing the basis for improving abundance in the daily lives of people, andthe well-being of the planet.

4/40
This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

Capability andprovision ofvalue

Three types of capability
to enhance corporate
value

Capability to realize corporate mission and policy
Three types of capability that enables flexible business portfolio
conversion
The Tamagawa HD Group is continuing its business portfolio conversion, startingfrom regenerating its original business in electronics and communication devices.
Entry into the renewable energy business is another conversion. In this new
business, Tamagawa has shifted from solar power generation to wind power
generation, and has also ventured into an overseas investment project in Indonesia.
Moreover, Tamagawa invests in technologies for achieving long-term growth, suchas joint development with Tohoku University for optimizing equipment control andmonitoring systems for surplus energy and small atomic clocks.
Tamagawa’s future corporate value depends on whether these business
investments will be successful, but aside from this the company is expected to raise
its value thanks to its following three types of capability.

(1) Capability to read future social needs

Capability to identify a suitable direction for business portfolio conversion, with theaim of optimizing corporate value(2) Capability to find optimal resources in solving problems

Capability to allocate optimal managerial resources for business portfolio
conversion(3) Capability to maximize business value

Project management capability to maximize the value of the business portfolio
Tamagawa strives to provide solutions in communication infrastructure and energy
infrastructure by adhering to the above concepts.
Three types of capability and value provision

Value provision

Three types of capability

To clients(1) Capability to readfuture social needs

Capability to identify asuitable direction forbusiness portfolio
conversion(2) Capability to findoptimal resources insolving problems
Capability to allocate
optimal managerial
resources for businessportfolio conversion(3) Capability tomaximize business
value

Project management
capability to maximize
the value of the businessportfolioÆÆÆElectronic and Communication
Device Business・ Overseas production to
reduce cost・ Shift from sale ofcomponents to sale ofsystems
・ Use of complex coretechnologies in one-stop
solutions to satisfy clients’
needs
Renewable Energy Business・ Provision of renewableenergy・ Provision of energy
infrastructure
・ Development of related
technology so as to provide
advanced solutions

To overall society

・・Provision of devices that
support communication
infrastructure
Proposals of higher valueadded solutions

Æ・・Provision of clean energy
Support of infrastructurebuilding in developing
countries

Source: Prepared by JPR based on the interviews

5/40This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

A company with a diversified approach in achieving SDGs

SDGs

Contributing to achievement of SDGs
The Tamagawa HD Group’s corporate mission and policy are in accord with
Sustainable Development Goals (SDGs) for 2016 to 2030, as adopted by all United
Nations member states in 2015. Among the SDGs, Tamagawa is contributing
particularly to acheivement of the following four.

Four SDGS that the Tamagawa HD Group keeps foremost

Renewable Energy BusinessElectronic and Communication Device BusinessContributing to ensuring access tocheap, reliable, sustainable, modern
energy for all people

The Electronic and Communication Device
Business to contribute to realizing inclusive,
safe, resilient, sustainable cities and humaninhabitation

Contributing to CO2 emission reduction
and climate control measures byproactively conducting renewableenergy business, such as solar or wind
power generation, in lieu of using
carbon energy (coal, oil, natural gas,
etc.)

Contributing to development of high-quality,
reliable, sustainable, and resilient
infrastructure, including regional ortransborder infrastructure, so as to support
economic development and human welfare,with a focus on cheap, fair access for all
peopleSource: Prepared by JPR based on the Company’s website, etc.

ESG

A company with a diversified approach in achieving SDGs
in the environmental business and engaged inestablishment of comunication infrastructure

The Tamagawa HD Group is working at the following initiatives from a viewpoint ofEnvironment, Social, and Governance (ESG).
The Tamagawa HD Group’s ESG initiatives
・ Expansion and promotion of Renewable Energy Business・ Obtaining ISO140011 certification

・ CSR initiatives2
・ Obtaining quality standard ISO90013 certification
・ Establishment of an organization that empowers all
employees
・ Promotion of diversity4

・ Timely appropriate disclosure; proactive PR disclosure
・ Corporate compliance
・ Enhanced corporate governance system
1: ISO14001 is an international standard concerning environmental management.
2: CSR stands for Corporate Social Responsibility, a management style that is considerate of many
stakeholders in a community.
3: ISO9001 requires an organization to establish quality management systems and prepares and maintains
documentation.
4: Diversity in corporate management is to accept diversity in gender, race, age, personality, academic
background, values, etc. and to use diverse human resources for productivity enhancement.
Source: Prepared by JPR based on the Company’s website, etc.

6/40
This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

Long-term
performance▉

Achieve record-high profit in fiscal 2019
The Tamagawa HD Group achieved record-high operating profit in fiscal 2019(ended March 2020), with a notable contribution by the three “Re” initiatives, andoperating margin was 12.7%.

Long-term operating performance

Source: Prepared by JPR based on disclosed information

7/40
This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

1. Business development up to now and outlook
Electronic and Communication Device BusinessBusiness

Huge growth potential in the 5G era

development
up to nowThe Electronic and Communication Device Business, that Tamagawa has been
engaged in since the beginning, has strength in providing solutions centered aroundhigh-frequency circuit devices that support wireless transmission. High-frequency
solutions are indispensable for capital investment related to 5G, which is projected
to increase by 17 times1 from 2019 to 2025. In the future, application is expected to
expand for millimeter and submillimeter waves and opticals, which transmit moredata than what they replace, and for various electric and energy systems that use
high-frequency technology. Ultimately Tamagawa plans to contribute to so-called
Smart City2 and Smart Grid infrastructure.

1. Source: Infinium Global Research. 5G Infrastructure Market: Global Industry Analysis, Trends, Market Size, and Forecasts up
to 2025
2. Smart City is an eco-friendly urban area that uses IT for efficient use of energy and resources. It aims to create a pleasant,safe, sustainable society for environmentally-conscious people.

Wireless information communication systems, future technological outlook, and Tamagawa’s strategy
Telecommunication
technologies
that
information transmission
Technology
DetailEnhance data transmission capacity ― key points in the 5G era
Key points of
information
Detailstransmission capacity
High-speed, highcapacity
communication

・ Use millimeter wavelength to ensure a broad frequency
band
・ Use modulation technology to increase data transmission
volume.

Long-distancecommunication andoptical transmission
technology

・ Use optical technology in long-distance communication
・ Low-loss, low-noise information transformation by use of
RoF technology that corresponds to Sub 6 and millimeterbands
・ Use in blind zones or for indoor information
communication
・ Multi-band by adding new bands to existing bands
・ Multi-wave duplexer to support multi-band
・ Branch synthesizer to expand frequency waves

Multi-band support;
sharing of frequency
waves

Modulation anddemodulation

improve

Development of modulators anddemodulators by use of digital signal
processing

High integration

Development of highly integrated small
high-frequency modules via multi-layers

SDR

Wireless software that supports wide
frequency bands

Opticaltransmission

E/O and O/E converters for opticalmodulation technology
Development of U/C and D/C with IF
frequency bands that support millimeter
waves
Wire bonding mounting to improve
mounting technology that supports
millimeter wave components

Frequency
conversion
Mounting
technology

Types and applications of radio wave: Expanding role of high-frequency waves in the 5G era

Wavelength
frequency
Name ofwavelength
Application

Less linear
Smaller transmission ofdata volume“High frequency” is 10KHz or more according to Japan’s Radio Act 1
300KhzSuper long,
Very long,Long

MediumVessel/aircraft AM
beacons
broadcastingStandard
wave

3MHz

30MHz

300MHzMore linear
Greater transmissionof data volume

3GHz

30GHz

300GHz

3THz

Short

Very short

Ultra-short

Micro

Millimeter

Submillimeter

Optic2

Ocean vessel
comm.
Shortwave
broadcasting
Aviation
comm.
Amateur radio
comm.

FM
broadcasting
Public,defensecomm.
Aviation
comm.

Mobile phone
Terrestrial
digitalTV
broadcasting

5G mobile
phone
Satellite
comm.
ETC
Wireless LAN

5G mobile
phone
Radio
astronomy
Satellite
comm.
Convenienceradio
RadarsFixed wireless
comm.
Radio
astronomy
Nondestructive
medical test
image fordiagnosis

Infraredcomm.
OpticalwirelessLAN
Outer space
Optical comm.

The Tamagawa HD Group’s high-frequency wave domains
Source: Prepared by JPR based on materials of Fujitsu Laboratories Ltd. and the “Principal Uses and Characteristics of Radio Wave” on the website of the Ministry of Internal
Affairs and Communications
1. The Radio Law stipulates that any person who wishes to install telegraphy, telephony or other telecommunications facilities which apply a radio frequency current of
10kHz or above to the wired system, or those using a radio frequency current of 10kHz or above such as industrial heating equipment, medical equipment and others, shallobtain individual permission as a rule. Therefore, a radio frequency current of 10kHz or above is called “high-frequency” in this report.
https://www.tele.soumu.go.jp/e/sys/others/highfre/
2. Includes infrared rays and visible rays.

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This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

Loss making in the 2000s

Five strategies thatenhancedcompetitiveness(1) Development ofsystem devices(2) Enhanced R&D(3) Focus on niche areas(4) Selective acceptanceof orders; immediatedelivery system(5) Globalization

In the 2000s, Tamagawa had Japan’s top share in high-frequency devices for mobile
communication bases, which represented 70-80% of the segment sales. However,
due to 1) Korean makers’ entry and intensified price war, 2) decline in sales in an inbetween period of investment cycles, and 3) acceptance of low-profit orders, thesegment made loss for five out of ten years during the period of FY3/2001 to
FY3/2011.

Strategy to move out of loss made Tamagawa more competitive
The Tamagawa HD Group enhanced the five strategies to end loss-making.
Strategy①Development ofsystem devices②

Enhanced R&D③

Focus on niche
areas

④

Selective
acceptance oforders;immediatedelivery system⑤

Globalization

DetailTargeted direction

Targeted direction

Aimed to be in the top league inhigh-frequency solutions by
combining analog with digitaland software with hardware.
From simple devices andEnhanced analog technologies,
components to system
digital technologies forequipment and systemdeveloping systems anddevelopment
equipment, hiring of humanresources for both areas. Also
promoted strengthening
comprehensive capacity inhardware and software.
Engineers, hired forsytemization, worked closely
Enhance relationship with majorwith major makers and researchcommunication companies,
institutes for creating prototypes
manufacturers, and university
flexibly at reasonable
research institutes, and foresee
development cost. Collaboration
potential growth areas for R&D
was enhanced and Tamagawa’s
R&D capability was boosted.
Provided total solutions by
Break away from excess
collaborating with engineers,
dependence on mobile
hired for systemization. By
communication, which has
becoming one of the industry’s
volatile capital expenditure
top provider of high-frequency
cycles, and focus on difficult
solutions, thoroughly responded
niche areas (defense, traffic,
to clients’ niche needs, obtained
vehicle installation, broadcasting,their trust, and established aspace, satellite, and medical).
solid relationship with them.
Be selective in order acceptanceby considering profitability.
Established a system to manage
Establish an immediate delivery order acceptance by consideringsystem through close relation
profitability. Established anwith clients, information
immediate delivery system asgathering, demand forecasting,targeted.
and inventory stocking.
Established a manufacturing
Raised the quality of devicebase in Vietnam in 2015, so as to manufacturing at a
globally provide competitive,
manufacturing base in Vietnam
Japan-quality products.
to the level in Japan.

Source: Prepared by JPR based on the interviews, etc.

Strategy results and outlook: 1) development of system devices and2) enhanced R&D
Development of high-value-added products

Entry of overseas makers has intensified price competition of the component
9/40
This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

Testing to ensure reliability andfunctionality of power semiconductors

Enhanced hiring of midcareer engineers who arestrong in software anddigitalmarket, which focuses more on costs. Tamagawa therefore shifted fromcomponents to functional modules of multiple components and further to systems
so as to add higher value. Tamagawa further enhanced analog technologies – anarea of strength since foundation – and hired experienced engineers in systems. At
the same time, Tamagawa aggressively enhanced digital technologies in order toestablish core technologies, such as for control and signal processing needed insystem devices and system development, and hired personnel. A key point in theenhanced comprehensive strength in hardware and software was to make use of its
strength in analog high-frequency technologies to expand to optical transmission,
signal processing and software as core competence.
With regard to optical transmission technology, that converts wireless signals to
optical signals and transmit them via an optical fiber network, Tamagawa developed
optical transmission equipment used for railway wireless systems and opticaltransmission systems against a problem of blind areas of electric waves and for
expansion of communication areas. Representative examples of their adoption
include commercial wireless systems installed at subways and airports, and in the
public sector for radars used in weather forecasting of torrential rain and tornadoes.
In addition to analog high-frequency and optical transmission, Tamagawa
responded to digitalization requirements and further developed solutions in signal
processing and software. This has led to its internal development of burn-in
equipment for testing to ensure reliability and functionality of semiconductors, andto capturing of the growing demand for power semiconductors.
Optical transmission system

Phased increase in value
added from components
to modules, then tosystems
Expanding from highfrequency technologies
to optical transmission
and signal processing
technologies

Source: The Tamagawa HD Group’s Financial Result Briefing for fiscal 2016

Successfully received a major project

The Tamagawa HD Group has also proactively strengthened initiatives in potential
growth areas. By leveraging its strong technological capability, Tamagawa
established a strong relationship with major telecommunication companies,
manufacturers, and university research institutes, and enhanced its system for
Proactive pursuit ofdeveloping future growth areas.
One good example manifesting Tamagawa’s successful addition of more value via its
future growth areas
strategies for systemization and R&D is that it has received an order to manufacture
a low-power high-frequency circuit and beam monitor circuit system for nextgeneration synchroton radiation facilities, which was announced on March 12, 2020.
Strong relationship with Reasons for successful bid include Tamagawa’s enhanced hiring of engineers whoare strong in software so as to promote systemization. Even with the progress in
major
digitalization, analog transfer continues to be needed at the end of signal
telecommunication
processing. As a result, analog technologies, where Tamagawa has accumulated
strength since foundation, have received renewed attention and reevaluation.
companies,
Tamagawa has been successfully hiring engineers with technical skills in broad areas
manufacturers, university as some engineers find Tamagawa as an attractive workplace that allows analog
research institutions
technologies to be incorporated in software. Hiring of capable engineers
contributed to Tamagawa’s strong business results and a virtuous cycle has thus
been established.
10/40
This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

Kick-off of research on small atomic clocks and their applications

Working on developmentof an atomic clock, a key
device in realizing SmartCity

On July 6, 2020, the Tamagawa HD Group disclosed that it started joint research on
small atomic clocks which are expected to be mounted on mobile terminals, and an
application using an atomic clock with Professor Takahito Ono of Tohoku University.
As the first step, a prototype of IoT (Internet of Things) system using an atomic clock
was developed.
Prototype of IoT (Internet of Things) system using an atomic clock

Source: The Tamagawa HD Group’s press release of July 6, 2020

Accuracy of a small
atomic clock is a key formore optimal energy
allocation and moreaccurate information
analysis

An atomic clock is a clock based on the frequency of electromagnetic waves
absorbed or radiated by an atom (also including neutral and ionic). It was invented
in the United States1 in 1949. A small atomic clock is as approximately 100,000 to
1,000,000 times as accurate as the widely used crystal oscillator and has been
expected to be used mounted on artificial satellites for time synchronization of
information communication networks as the standard signal source in the space
where GNSS (Global Navigation Satellite System) transmissions cannot function.
Recently, reduction in energy consumption and downsizing have increased inimportance and in this connection atomic clocks are anticipated to be mounted inclocks, base stations, and mobile terminals used in the next-generation mobile
communication system because of their highly accurate time synchronization
function. Higher accuracy and quality of a small atomic clock embedded in a highfrequency solution system enables higher precision in synchronization of thefunction timing of different devices, and hence more optimal energy allocation andmore accurate information analysis. Reduction of energy consumption, highreliability, and high precision can mean adoption of small atomic clocks for generaluse, such as by being embedded in smartphones and other devices, and can become
indispensable in realizing a better Smart City2.
1. Source: Wikipedia
2. Smart City is an eco-friendly urban area that uses IT for efficient use of energy and resources. It aims to create a pleasant,safe, sustainable society for environmentally-conscious people.

Business expansion fromSub 6 to millimeter
waves

Development outlook of millimeter products for potential use in 5G

In March 2000, NTT Docomo, KDDI, and other companies launched commercial
services of 5G (Fifth-Generation Mobile Communications System) in Japan. Initially,a frequency band of 450MHz to 6GHz (so-called “Sub 6” or “low-band”) was used
11/40

This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

and it was planned that next a high-volume high-frequency band of 24.5GHz or overand millimeter waves will be used. Millimeter and other high-frequency waves have
not yet fully been used for commercial applications, due to feasible applications
being limited, but increase in commercial applications is expected to substantiallyexpand its market. In addition to the public network service, Tamagawa plans tocommercialize its own 5G (local) service and offer a wide range of practicalapplications that span from Sub 6 to millimeter waves.
Tamagawa’s strong technology in the high-frequency band can be applied in the areaof millimeter waves. Thanks to its efforts for 1) systemization and 2) enhancementof R&D, Tamagawa, despite being a small-scale operator, has the industry’s top-level
experienced engineers in high-frequency solutions that combine analog & digitaltechnologies, and software & hardware. The company also has high-spec
cleanrooms and testing equipment that are indispensable in development ofadvanced high-frequency solutions. Being positioned close to major companies,
Tamagawa intends to use these management resources, leverage its credibility andachievement in the high-frequency area, and explore the market. As this area has adifferent sales channel, a challenge for Tamagawa is to build an aggressive sales andmarketing strategy, especially with a focus in a niche area where it would not haveto compete with major makers (described later).

The industry’s top-level
experience in highfrequency solutions thatcombine analog & digitaltechnologies, andsoftware & hardware
Anticipating a dramatic
growth in the 5G field

Commercial use of millimeter waves and Tamagawa’s growth strategy

Types and applications of radio wave: Expanding role of high-frequency waves in the 5G era
Less linear
Smaller transmission ofdata volume

Wavelength
frequency
Name ofwavelength
Application“High frequency” is 10KHz or more according to Japan’s Radio Act 1
300Khz3MHzSuper long,
Very long,
MediumLong
Vessel/aircraft AM
beacons
broadcastingStandard
wave

30MHz

300MHz3GHz

More linear
Greatertransmission of data
volume30GHz

300GHz

3THz

Short

Very short

Ultra-short

Micro

Millimeter

Submillimeter

Optic2

Ocean vessel
comm.
Shortwave
broadcasting
Aviation
comm.
Amateurradio comm.

FMbroadcasting
Public,defensecomm.
Aviation
comm.

Mobilephone
Terrestrial
digitalTV
broadcasting

5G mobile
phone
Satellite
comm.
ETC
WirelessLAN

5G mobile
phone
Radio
astronomy
Satellite
comm.
Convenienceradio
RadarsFixed wireless
comm.
Radio
astronomy
Nondestructive
medical test
image fordiagnosis

Infraredcomm.
OpticalwirelessLAN
Outer space
Opticalcomm.

The Tamagawa HD Group’s
high-frequency wave domains
Commercialized by the public networks: 5G in 450MHz - 6GHz（Sub 6）５G

Own network (Local 5G): Companies and municipalities precede and independently
operate the network in millimeter waves
Potential for full development: 5G in 24.5GHz and more (millimeter wave)
Tamagawa develops high-quality high-frequency solutions with a focus on nicheareas with its industryʼs top-level comprehensive strength
Source: Prepared by JPR based on materials of Fujitsu Laboratories Ltd. and the “Principal Uses and Characteristics of Radio Wave” on thewebsite of the Ministry of Internal Affairs and Communications

12/40
This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

Capital and business alliance with Nabiq
Nabiq provides advanced
outsourced services in
the wireless broadband
environment

Nabiq + Tamagawa = Realization of real 5G
On August 26, 2020, the Tamagawa HD Group’s Board of Directors made aresolution to enter into a capital and business alliance with Nabiq Inc.
(headquartered in Chiyoda-ku, Tokyo; Tomonari Takatsu as representative). Nabiq isa consolidated subsidiary of JTOWER Inc. (headquartered in Minato-ku, Tokyo;
Atsushi Tanaka as representative), which is listed in the TSE Mothers Market.
Nabiq provides advanced outsourced services in the wireless broadband
environment and is engaged in constructing the access environment in which the
Wi-Fi application technologies are combined with the existing fixed broadband
lines. Sale of Local 5G-related services, that target hospitals, hotels, and otherplaces, in cooperation with Tamagawa, is expected to generate synergies andcontribute to expansion of their operating base and business. Moreover, JTOWER,
the largest shareholder of Nabiq, has provided services to large facilities in its
domestic IBS* business and has 5G and other diverse related services in its businessportfolio with its main focus on infrastructure sharing solutions that unite indoor
facilities of mobile phones. A wide range of synergies, therefore, can be expected interms of business development capacity.
* JTOWER’s In-Building Solution (IBS) business is to install its own-developed equipment to be shared by mobile career
operators, each of which, up to now, invested on its own for building indoor mobile infrastructure.

Features of Public 5G and Local 5G: Early realization of real 5G with Local 5G

Capital and businessalliances to enable earlier
realization of real 5G by
use of millimeter waves

What is 5G?
High speed and high capacity: 20Gbps at max (100 times vs. 4G)
Super low latency: 1ms (one-tenth vs. 4G)
Massive connectivity: 1 million devices/km2 (10 times vs. 4G)↓↓

Public 5G

Local 5G

Operated by mobile phone companies(public network)
Nationwide diffusion (expected to take2-3 years)
Sub 6 (below 6GHz), which aretechnically less difficult to install for awide-area coverage↓

Operated by certified operators otherthan mobile phone companies
within specific buildings or areas
Millimeter waves (over 28GHz), which
are technically difficult to install for awide-area coverage↓
In case of a limited area or building,

Use of millimeter waves may be 2-3
years away

Local 5G enables more data to betransmitted at a higher speed.

Enable to realize real 5G thatuses millimeter waves

Source: Prepared by JPR from various materials

As described above, there are two usages of 5G: Public 5G to be developed bymobile phone operators; and Local 5G to be developed by other certified operators.
Due to short wave-lengths, signals of which cannot smoothly travel throughbuildings and other objects, the 5G network requires installment of many base
13/40
This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

Longer-term expectationfor early realization ofreal 5G by use of small
atomic clocks in the eraof edge computing and
AI/IoTstations. Thus, it is expected to take 2-3 years for Public 5G to be built. In contrast,
Local 5G, which is installed in a limited area or within a building, is relatively easily
constructed. Millimeter waves enables more data transmission at higher speed, andthe millimeter-wave network can be customized, leading to early realization ofreal 5G.
Nabiq + Tamagawa + small atomic clocks= Early realization of real 5G in the era of edge computing and AI/IoT
Real 5G enables to transmit high-resolution images in low latency. This is to be used
for the automated driving system, which requires accurate information on position
or image, Smart Factories that need advanced automatic control, and advanced
remote medical treatment (remote surgical procedures) among other usages.
Edge computing, that enables data processing and storing tasks run by devices, isimportant for development of advanced IoT. In edge computing, each IoT device atthe edge of the network must capture accurate time of each data and one of keys
is to develop a small atomic clock, which is to be mounted in a device of the size ofa smartphone. Tamagawa’s aforementioned development project of small atomic
clocks is noteworthy from this reason as well.
Combination of the Wi-Fi-based business development capability of Nabiq and
JTOWER with Tamagawa HD Group’s technological capability in circuit installment,
applications, systemization, and R&D technology is an extremely noteworthy step
forward in the pursuit of real 5G in the era of edge computing and AI/IoT. Further,edge computing is expected to be critically important in key technology ofdispersion-type power generation, another business area of Tamagawa (moredetails in the Renewable Energy Business section). The strengths of Nabiq,
JTOWER, and Tamagawa will be a strong driving force in the pursuit of efficiency indispersion-type power generation.

Significance of the capital and business alliance in early realization of real 5G in the eraof edge computing and AI/IoT
Nabiq + JTOWER

Strength in WiFi-based businessdevelopment for individual buildings↓

Tamagawa HD GroupStrength in millimeter wave
application technology,
systemization, R&D, anddevelopment of small atomic clocks↓

Early realization of real 5G by use of millimeter waves
in the era of edge computing and AI/IoT

High-precision synchronization of dispersed, stored/processed data in the “edge”
devices, with a mounted small atomic clock for each enables more-advanced data usage,
safe reliable remote operations, Smart Factory, and remote medical treatment.

Also becoming a strong driving force in the pursuit of
optimization in the dispersion-type power generation era
Source: Prepared by JPR from various materials

14/40
This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

Selection andconcentration for the
pursuit of profit
Prior arrangement andbulk orders led to cost
reduction andestablishment of animmediate delivery
systemStrategy results and outlook: 3) focus on niche markets and 4)
selective acceptance of orders and immediate delivery

In the highly price competitive mobile area, in addition to a selective, targeted
strategy to highly-profitable orders, Tamagawa shifted focus on acquiring highvolume orders in the defense, transportation, broadcasting, and satellite fields andorders for a large system. Tamagawa also focused on collecting demand informationahead of orderers and made prior arrangement to place a bulk order forcomponents. This resulted in substantial cost reduction while an immediate delivery
system was established in product supply.
These efforts have resulted in achieving high profit margin of around 10% in recent
years. Sales destinations have become better balanced with one third each for themobile communication, governments, and public-related sectors, with reduced
dependency on the mobile communication field.
Electronic and Communication Device Business: Segment sales and profit, andsales ratio to mobile communication and to others

More stable businessportfolio

Source: Prepared by JPR based on disclosed materials

Strategy results and outlook: 5) globalization
Tamagawa’s subsidiary in
Vietnam

Tamagawa’s base in Vietnam focuses on cost control and preparationfor overseas expansion

In order to enhance unrivaled price competitiveness particularly in the pricecompetitive mobile field and expand overseas for a broader market coverage,
Tamagawa established a subsidiary in Vietnam in April 2015. At present, almost all
high-frequency components used especially in Japan’s telecommunication
infrastructure are manufactured in Vietnam, while high-function products andmulti-system products for the government and public-related sectors, is done inJapan. Both in Japan and Vietnam, Tamagawa has outsourced production processes
from circuit mounting to testing, so as to reduce costs and secure resources, andhas realized aggressive capital investment and expansion in production capacity.
Continued quality guidance from Japan has improved products made in Vietnam
to the equivalent quality level to those made in Japan. The Vietnamese subsidiay
now plans to promote marketing and sales of their products to overseas
telecommunication manufacturers.
Establishment of a subsidiary in Vietnam

Source: The Company’s Presentation Materials on fiscal 2016

15/40
This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

Aiming to be a global top
niche company in highfrequency solutions

Providing a wide range of solutions
As a result of the above measures, Tamagawa provides diverse high-grade, highvalue-added, high-frequency components and a wide range of high-frequency
solutions that support wireless communication infrastructure. It also develops
systems that combine signal processing, software, high-frequency technologies,
and optical transmission technologies with system devices which embed the highfrequency components. This has enabled Tamagawa to supply products in theniche, difficult areas.
Tamagawa’s broad-based high-frequency solution business
The Tamagawa HD Groupʼs diverse high-frequency devices

Use of diverse highfrequency devices indevelopment ofadvanced solutions

Use of the above devices in developing system equipment and systems, and supply
of comprehensive analog and digital, software and hardware solutions in signal
processing, software, high-frequency radio, and optical transmission

Focus on niches, difficult areas, and customized solutions

Source: Prepared by JPR based on Tamagawa Electronicsʼ website

16/40
This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

Long-term operating performance
The Electronic and Communication Device Business’ long-term results in sales,
operating profit, and operating margin are shown below. The figures up to fiscal
2006 are for the overall company as it was only engaged in the Electronic andCommunication Device Business. Operating performance has been stable since
fiscal 2012, with the exception of fiscal 2015 when the overall capital spending forthe domestic mobile infrastructure temporarily dropped.
Electronic and Communication Device Business: Sales, operating profit, and margin
営業利益率_電⼦・通信機器事業
Segment profit ratio

10.2%

2,626

7.7%

8.6%

2,605

-0.5%

-9.9%

-10.7%

-5.0%

9.4%

13.7%

14.9%

11.9%

2.6%

2.4%

2.2%

0.7%

-8.1%

-5.6%

-1.8%

2.4%

5.9%

7.9%

[単位︓百万円]

Million yen

6,765

6,027
3,417

2,854

3,400

3,229

3,155

2,091

2,406

2,389

2,709

3,247

3,114

2,551

2,359

2,743

3,376

3,784

4,290

221

2018/03

2019/03348

225

2017/03

2015/03245

467

2014/03-11480

2013/032020/03

2016/032012/03

2011/03

2010/03

2009/03

374

62

-291

-236

2008/03-162

90

2007/03

2005/03

2006/03-49

2004/03

2003/03

2002/03

-132

-349

2001/03

2000/03

69

19

198

164

476

売上⾼_電⼦・通信機器事業
Sales

営業利益_電⼦・通信機器事業
ProfitSource: Prepared by JPR based on the Companyʼs Financial Summary, etc.

17/40
This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

Renewable Energy Business
Diverse initiatives as a company with a diversified approach torenewable energy
The Tamagawa HD Group became interested in the potential of renewable energy
business as a new pillar in 2009 and since then has been engaged in diverse
renewable energy related businesses.
Renewable Energy Business: Power resource development done and managerial technology
Renewable energy;
Biomass

Solar

Geothermall Import raw
l Start of solarl Geothermal powermaterials forenergy businessgen. businessbiomass energyl Exclusivefrom Southeast Asia
distributorshipwith an overseas
panel makerl Sale of solar powerl Joint installation ofgen. systems.
a biomass boiler
Identification of
optimal systems
for diverse sitesl Operation andcontroll Transfer of biomass
fuel technology
l CO2 emission credit
acquisitionl Power gen.
business of owned
facilities
l Use of solar
sharing andfarmland in solar
power gen.

Wind power

Hydropower

efficient use of surplus

l Sale of small wind
power gen.
equipmentl Investment insmall wind powergen. in Indonesia

powerl Developed
GEMCOS, a system
to store andeffectively use
surplus powerl Small power gen.
businessl Study on large
power gen.
businessl Underconsideration:
onshore wind
power plant

Source: Prepared by JPR based on the Companyʼs Financial Summary, etc.

Tamagawa has also made use of its financing know-how in building a mechanism
to pursue economies of scale and high internal rate of return (IRR). Major
initiatives are listed below. One feature of Tamagawa is maximum use of diverse
initiatives in the pursuit of high IRR.
Financial prowess that maximizes diverse investment effects
Initiative

Detaills
・

Project financeCollaboration scheme as aqualified institutional investor

・
・
・
・

Joint operation withcompanies which own realestate・・

Use of the Joint Crediting
Mechanism (JCM)・・Maximize an investment amount by use of low-interest-rate borrowing, leveraging thefuture cash inflow
Cooperation by deep-pocketed global investors
Seek to raise efficiency in use of capital and to realize larger-scle investments in order toachieve higher IRR
As a qualified institutional investor, Tamagawa forms and manages joint power plants withcompanies and financial institutions, and uses securitization in so doing.
Seek to diversify business risks, expand scale, and raise efficiency in use of capital torealize higher IRR
Joint business with companies who want to effectively use real estate holdings
Seek to diversify business risks, expand scale, and raise efficiency in use of capital torealize higher IRR
The Joint Crediting Mechanism (JCM) is a system to cooperate with developing countries
for reducing greenhouse gas emissions, in which the result of reduction is shared by bothpartner countries and Japan.
Use of the JCM enables use of Japan’s financing, credit, and technological capability for
global activities in CO2 emission reduction. It also promotes globalization of the renewableenergy business. The high spread between Japan’s low interest rates and emerging
countries’ higher yield is beneficial in pursuit of high IRR.

Source: Prepared by JPR based on the Companyʼs Financial Summary, etc.

18/40
This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

[Power resource development and managerial technology prowess]
X [Financial prowess to maximize investment effect]＝ A company with a diversified approach to renewable energy
Tamagawa’s broad experience and achievement in power resource development
and managerial technology prowess, as well as financial prowess for soliciting
investment will be a source of great strength for global expansion of the renewableenergy market. Such strength of Tamagawa has been fostered by having
professional staff in investment banking, accounting, real estate, etc. Tamagawa
intends to form an optimal team of professionals in each region, while use ofrenewable energy is growing.

Becoming a company
with a diversified
approach to renewableenergyStrengths of Tamagawa’s Renewable Energy Business

Pofessionals in investment banking,accounting, real estate, etc.
↓
Develop high-potential businessbased onf technology in power source↓
Use smart finance to maximize
investment effects of technologies in
power source development anddevelopment and management

management↓↓

Creation of optimal renewable energy businesses by diverse
combination of technologies and finances

Becoming a company with a diversified
approach to renewable energy
Source: Prepared by JPR based on the Companyʼs Financial Summary, etc.

Solar power generation business, a driver of the Renewable Energy
Business
The solar power generation business was a driver for significant profit growth infiscal 2019. At present, the secondary market that trades solar power plants isbooming and Tamagawa, partly due to its high credibility as a listed company, has
successfully sold some plants at favorable pricing, including two in Shimonoseki
and Tateyama in fiscal 2019.
Solar power plants that Tamagawa owns at present
Generation
amountYen/kWh

Start date ofselling power

Solar sharing plants, Shimada, Shizuoka

406Kw

36

3/20/2018

Solar power plants, Goto, Nagasaki

5.3Mw

36

3/30/2018

Solar power plants, Noboribetsu, Hokkaido

2.0Mw

40

11/2/2018

Power plant nameSource: Prepared by JPR based on disclosed materials

19/40
This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

Small wind power
generation business willbe the next driver
Hokkaido Electric Poweris expected to quadruple
purchase of wind powerfrom 2017 to 2027

Efficient use of surplus
power is of key
importance for adispersed power
generation

Small wind power generation business with its high FIT of ¥55
While limited in terms of locations in Japan, compared to other renewable energy
sources, small wind power plants have high feed-in tariffs (FIT scheme of thegovernment’s renewable energy promotion measures) of ¥55/kwh. Tamagawa
acquired power sales rights for 50 small wind power plants by the end of fiscal
2018. It selected favorable projects that are located at the coast of Hokkaido,
benefit from stable westerlies, have access to a distribution network and relatively
cheap land prices. On March 11, 2019, Tamagawa also began small wind power
generation business under an SPC scheme with AURA-Green Energy Co., Ltd.,
which is widely engaged in development of renewable energy in Tohoku andHokkaido. AURA has approximately 500 power sales rights (fixed purchase price of¥55/kwh) and land use rights. Their five power plants are currently in operation.
Tamagawa plans to deepen its alliance with AURA and construct power stations
based on judgement using criteria including IRR comparison, etc.
As an aside, Hokkaido Electric Power is said to quadruple its purchase of wind
power from 2017 to 2027 (Nikkei Shimbun, March 7, 2017). This suggests a CAGR
of 15%.

GEMCOS promotes local generation and local consumption of powerby effective use of surplus power
Use of surplus power is a challenge for renewable energy, which is usually
generated in small-scale plants in dispersed locations. With an objective of
establishing a business that uses surplus power, Tamagawa started a joint research
project with Tohoku University in February 2019 and developed GEMCOS, a system
to store and effectively use surplus power, jointly with AURA and System-I Inc. in
July 2019. System-I is a company engaged in design and manufacturing of electric
control equipment.
How GEMCOS is used (schematic)

Source: Prepared by JPR based on disclosed materials

20/40
This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

Playing an important rolein the electric power
infrastructure ofdeveloping countries

Relationship of trust withlocal people is a key fordevelopment of an
offshore power plant

Tamagawa’s executives(ex-investment bankers)
use their network of
personal contacts inbuilding the electric
power infrastructure inIndonesia

Contributing withJapanese technology andfinancial capacity

GEMCOS has two key points. The first point is use of surplus power. As an example,
the peak of electric power demand is during the night for homes and during the
day for offices. Such different demand peaks are preferably leveled as surplus
power is to be converted to heat and disposed unless users have a power storage
equipment. However, such equipment is expensive. Moreover, if surplus power is
to be used at a remote location, long-distance transmission loss must be expected.
The second point for GEMCOS is a how to estimate power demand and distribute
power. GEMCOS’ current assumption is that power is used in a relatively small area
under the concept of local generation and local consumption, which enables
efficient, flexible use of renewable energy. This system can be used not only for useof surplus power but also for disaster power supply, and in emerging countries
where the electric power infrastructure has been underdeveloped, as GEMCOS
does not require any large-scale facility.

Large wind power generation project, with potential in offshore wind
power generation
Tamagawa is constructing a large wind power plant (1.984MW) in Nemuro,
Hokkaido, jointly with AURA. A wind condition study has been smoothly
implemented since April 2020 and an IRR of 25.5% is estimated for this project.
Given limited onshore site availability, however, an offshore wind power plant isunder consideration. In that case, as a potential location may affect local
fisheries, patient negotiation with fisheries officials must be held. GEMCOS may
bring about a breakthrough as the company may become able to offer stable useof surplus power for fishery and agriculture use, contribute to the community,and build a good local connection with communities.

Indonesian hydropower generation project as a stepping stone foroverseas expansion
The Tamagawa HD Group’s 1.75MW small hydropower generation project for the
Wae Lega River in Flores Island, in Nusa Tenggara Timur, Indonesia was approvedfor coverage by the Joint Crediting Mechanism (JCM) Funding Support Business of
the Ministry of the Environment. It is Tamagawa’s first overseas project. Afterinstallation, power will be sold to the Indonesian national electricity company.
Partly due to the Japanese government’s subsidy, Tamagawa estimates IRR at 25%,
similar to that of a large wind power generation project. This project, in a location
far away from urban areas, is difficult to undertake even by a major trading
company and patient local efforts are required. Tamagawa’s executives haveinsights regarding Southeast Asia and have built a network of personal contacts inIndonesia, when Tamagawa entered into a biomass power generation business andpurchased palm shells from Indonesia. The new project is also a joint undertaking
with AURA, a frontrunner among Japanese peers, whose biomass power
generation projects were also adopted for the JCM Funding Support Business.
According to the METI’s study1, hydropower generation volume in Indonesia is
projected to increase by 23.7 times from 154MW in 2020 to 3,675MW by 2025. If
Tamagawa captures a decent share of such a rapid-growing market opportunities,
dramatic growth can be anticipated.
1. Fiscal 2017 JCM Infrastructure Development Research Project; METI, March 2018

21/40
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be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

JCM’s project for greenhouse gas emission reduction

Source: Prepared by JPR based on Tamagawa HD Group’s fiscal 2019, Second Quarter financial presentation material

Reference: Japan’s promotion of public-private environmental
infrastructure investment in developing countries
When Prime Minister Abe gave a speech at the COP 21 (21st Session of theConference of the Parties to the United Nations (UN) Framework Convention on
Climate Change) Summit Meeting, he said that Japan will provide ¥1.3 trillion of
public and private climate finance to developing countries which suffer fromenvironmental changes. The Ministry of the Environment also projected in its
Overseas Development Strategy (Environment) over ¥23 trillion investment
opportunities for energy saving and renewable energy fields in developing
countries, and encouraged use of Japan’s technology to lead global
decarbonization. In competing with Western and Chinese companies that seek tocompete through price competitiveness and business formation capability inenergy saving and renewable energy businesses, the Ministry argues that it isimportant to build a strong public-private partnership system and is committed topromoting overseas development of infrastructure where Japan has a comparativeadvantage by utilizing the JCM. For the Tamagawa HD Group, overseas expansion,in particular to developing countries with high growth potential, is expected to bebeneficial. The government’s environmental strategy, which emphasizes publicprivate partnership, provides a strong boost.

22/40
This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

Long-term operating performance
The Renewable Energy Business’ long-term results in sales, operating profit, andoperating margin are shown below. The business achieved a record-high operating
profit of ¥671 million in fiscal 2019. The graph shows how Tamagawa’s broad-based
initiatives have steadily succeeded.
Renewable Energy Business: Sales, operating profit, and margin

Segment profit ratio
営業利益率_再⽣エネルギー事業
23.0%

9.6%

9.9%
-1.1%

6.2%

7.9%

3.4%

2.3%

-10.2%-18.8%

5,168[単位︓百万円]

2,914

1,837

1,693

671

981
94

182

32

12

134

322

622

941

515

699

250

-7

-71

-47

2020/03

2019/032018/032017/03

2016/03

2015/03

2014/032013/032012/03

2011/03

Sales
売上⾼_再⽣エネルギー事業

Profit
営業利益_再⽣エネルギー事業

Source: Prepared by JPR based on the Company’s Financial Summary, etc.

23/40
This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

Results infiscal 2019and outlook
for fiscal 2020

Operating results in fiscal 2019
Achieved significant growth in sales and profit
In fiscal 2019 ended March 2020, the Tamagawa HD Group increased sales by
64.9%y-o-y to ¥6,332 million and operating profit by 426% to a record-high of ¥805
million. The Electronic and Communication Device Business increased sales by
19.7% and operating profit by 57.5%, while the Renewable Energy Businessincreased sales by 197% and operating profit by whopping 613%.
Fiscal 2019 operating results

Sales, up 64.9% y-o-yOperating profit, up
426%

Combined effects ofpast efforts brought
about a successful
outcomeElectronic and Communication Device Business
Orders received, up
35.6% y-o-ySales growth was attributable to order receipts in the mobile communication
infrastructure field, for the semiconductor reliability evaluation equipment in themeasurement field, and repeat order receipts from governments. Profitability
improved as production for some projects was brought forward for leveling ofproduction, and resulted in actual sales as planned. Orders received grew by 35.6%
y-o-y to ¥4,334 million, which suggests sales growth potential for fiscal 2020 andafter.
Sales and segment profit by client industry

Source: Prepared by JPR based on the Company’s Presentation Materials

Other measures taken in fiscal 2019 are summarized in the next table. It shows thatthe five strategies of systemization, enhanced R&D, focus on niche areas, selective
acceptance of orders and immediate delivery system, and globalization had further
progressed in the year.

24/40
This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

Measures taken in fiscal 2019

Source: Prepared by JPR based on the Company’s Presentation Materials

Renewable Energy Business
Development and sale of solar or small wind power plants have gone well and thesolar power plants in operation are steadily selling power. The solar power plant in
Kojindake, Goto, Nagasaki Prefecture completed ae 500kW extension construction
and started selling power generated by this increment at the fixed purchase price of¥36/kwh. The entire power generation scale expanded to 5,847kW. The solar power
plant in Shimonoseki Toyouracho, Yamaguchi Prefecture was sold in September
2019 and the one in Tateyama, Chiba Prefecture were sold on March 25, 2020, in
order to raise cash for the next business development. These had contributed to
growth of 197% y-o-y in sales and 613% in operating profit.

25/40
This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

Outlook for fiscal 2020
Steady growth in sales and profit are projected by Tamagawa, despitesome impact from the spread of coronavirus
Tamagawa is forecasting steady y-o-y growth of 9.5% in sales and 5.5% in operating
profit.
Forecasts for fiscal 2020

Source: Prepared by JPR based on the Company’s Presentation Materials

Electronic and Communication Device BusinessIn fiscal 2020 ending March 2021, Tamagawa is focusing on product development
related to full-fledge 5G investment, which will replace 4GLTE in the mobile
infrastructure area, and proactive PR activities for business expansion. Tamagawa
also aims at enhancing its existing business by putting efforts in receiving orders forreliability evaluation and testing equipment in the measurement field, where
demand continued to be robust since the previous year, in addition to commercialuse wireless devices and monitoring systems for the public and government sectors.
Moreover, it will develop products for the millimeter waveband where demand is
expected to increase and explore new demand for expansion of business fields.

Renewable Energy BusinessTamagawa is considering development and sales of renewable energy power
generation systems other than solar power generation systems. They include smallor large wind power generation projects, and small hydropower power generation
projects. Through industry-academia projects with Tohoku University, Tamagawa is
expected to establish a corporate organization that responds to Japan’s social
innovation, such as next-generation social concepts, and do business accordingly.
Measures to take in fiscal 2020 by both businesses are summarized below.

26/40
This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

Electronic and Communication Device Business: Major measures in fiscal 2020

Source: Prepared by JPR based on the Company’s Presentation Materials

Renewable Energy Business: Major measures in and after fiscal 2020

Source: Prepared by JPR based on the Company’s Presentation Materials

27/40
This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

1Q fiscal 2020 operating results
1Q fiscal 2020
operatingresults

In the first quarter of fiscal 2020 (April to June 2020) the Tamagawa HD Group increased
consolidated sales by 63% y-o-y and generated an operating profit (compared to theoperating loss in the 1Q of the previous year.) The Electronic and Communication Device
Business increased sales by 97.5% and has turned into an operating profit position since
fiscal 2019. Favorable results were driven by sales efforts mainly in the 5G-related market
and the public sector, marketing focus on new markets and client development, and theresultant orders received in the new areas.
The Renewable Energy Business tends to be affected by purchase and sale of power
stations. In the 1Q, sales and operating profit decreased by 5.5% and 86.7% y-o-yrespectively. The power stations in operation did well in selling power but the sale of two
mega solar power stations in fiscal 2019 resulted to a decline in sales and profit.
1Q fiscal 2020 operating results

The Electronic andCommunication Device
Business turned. profitable
on a 97.5% sales gain

Renewable Energy Businessrecorded a decline in sales
and profit, due to the sale oftwo mega solar power
stations in fiscal 2019

Source: Prepared by JPR based on interviews

28/40
This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

Contributing to Smart City communication/energy
infrastructure

Going forward

As explained in the “up to now” section (page 8), the Electronic and Communication
Device Business was regenerated and then focused on cost reduction and adding
higher value, which resulted in maintaining a 10% operating margin, sales expansion,and more stability of business. The Electronic and Communication Device Business
shifted to selective acceptance of projects, based on profitability prospects, and fromsale of components to sale of systems, while the Renewable Energy Business took up
a challenge on all types of renewable energy business, reallocated businessresources for optimal investment efficiency, and dynamically shifted a businessportfolio from solar power generation to wind power generation.
Going forward, Tamagawa will accelerate investment from funding based on theseachievement and experiences, focus on achieving the four SDGs (page 6), andcontribute to betterment of the communication/energy infrastructure. This is
expected to lead to higher growth and more profit for the company. In fact,achievement of the SDGS will contribute to the formation of Smart Cities. This issummarized in the next figure. Tamagawa is expected to broadly contribute to theformation of Smart Cities in four ways: 1) by establishing optimal renewable energy
supply; 2) by analyzing data; 3) by helping to optimally allocate surplus power; and
4) by synchronizing the accurate timing of different devices.

Three types of capability and their direction to be enhanced

Direction taken and to be taken

Three types of capability
(1)

(2)

(3)

Capability to read futuresocial needs
Capability to identify
direction for businessportfolio conversion

Up to nowÆCapability to find optimal
resources in solving
problems
Capability to allocate
optimal management
resources for businessportfolio conversion

ÆCapability to maximize
business value
Project management
capability to maximize
value of the businessportfolioÆGoing forward

Electronic and Communication
Device Business・ Selective acceptance of
projects, based on
profitability prospects
・ From sale of components tosale of systems
Renewable Energy Business・ Venturing in all kinds ofrenewable energy businesses
・ Reallocation of resources forachieving optimal investment
efficiency
Shifting from solar power towind power

Electronic and Communication
Device BusinessÆ＋Renewable Energy BusinessÈ
Achieve 4 SDGs, and contributeto the communication/energy
infrastructure of Smart Cities

Source: Prepared by JPR based on the interviews

29/40
This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

Accelerating infrastructure spending into the global market
Significance ofequityfinancingAnnounced equity financing
of about ¥2.5 billion

On August 28, 2020, the Tamagawa HD Group disclosed equity financing for
approximately ¥2.5 billion by use of issuance of stock acquisition rights. This will havea dilutive effect of 23% relative to the number of outstanding shares as of the end of
the 1Q of fiscal 2020. On August 31, the next trading day, Tamagawa’s stock price,
however, declined merely by 2.7% from the closing price on 28th.
The new acquisition rights will be entirely allocated to Ms. Marilyn Hweetiang Tang,the current largest shareholder of Tamagawa with an approximately 17% stake. The
existing shareholder’s intention of taking the rights seems to suggest her expectation
for Tamagawa’s upside potential in value resulting from the financing. The exercise
price of the new acquisition rights is set to be 90% of the closing price of Tamagawa
on the last trading day prior to the effective date of exercising the rights, which is thestandard condition. Use of the funds is summarized below. If the financing goes asplanned, Tamagawa’s investment in high-growth areas (aforementioned in details inthis report) is expected to accelerate.
Assuming after-tax IRR of 20% and shareholders’ equity cost of 7%, the financing isestimated to generate about ¥7.1 billion in shareholder value, or equivalent to threetimes the financing amount. Considering what have been discussed so far in thisreport, this value creation should be quite possible in JPR’s view.

Investment in potentiallyhigh-profit projects mayquite possibly create ¥7.1
billion in shareholder value,equal to 3 times thefinancing amount

Use of the fund from the equity finance
Major use offunds
Renewableenergydevelopment inJapan and abroad
M&A-related
investments
R&D investment
in 5G and othertelecom
technologies

Details
Investment in projects related to renewable energy development(solar, wind, hydro, and biomass power generation, etc.) in Japanand abroad
Investment mainly in IT companies in Japan and abroad, andindustry-academia joint development projects; acquisition ofoverseas companies for overseas business expansion, etc.
Joint R&D projects and capital/business alliances with companies
with advanced 5G-related technology, with the aim of early R&D
in the related mobile communication technologies

Source: Prepared by JPR based on the interviews

The Tamagawa HD Group’s business development and structure of value creation,
which is to be accelerated by the equity financing, are summarized in the following
table.

30/40
This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

Development possibilities of four SDGS that the Tamagawa HD Group will be working on for the next 10 years
Contributing to ensuring access tocheap, reliable, sustainable, modern
energy for all people

The Electronic and Communication Device
Business to contribute to realizing
inclusive, safe, resilient, sustainable cities
and human inhabitation

Contributing to CO2 emission
reduction and climate control
measures by proactively conducting
renewable energy business, such as
solar or wind power generation, inlieu of using carbon energy (coal, oil,natural gas, etc.)

Contributing to development of highquality, reliable, sustainable, and resilient
infrastructure, including regional ortransborder infrastructure, so as to support
economic development and humanwelfare, with a focus on cheap, fair accessfor all peopleÈLinks to the four SDGs

Smart City

Smart City is an eco-friendly urban area that uses IT for efficient use of energy and resources.
Its aim is to create a pleasant, safe, sustainable society for environmentally-conscious people.

È

Four ways that Tamagawa can achieve 4 SDGs and contribute to thecommunication/energy infrastructure of Smart Cities
È

È

È

È

(1) Establish optimal
renewable energy(2) Analyze data

(3) Optimally allocate
surplus power(4) Synchronize theaccurate timing ofdifferent devices

Establishment of optimal
renewable energy to each area

High-frequency wireless, opticaltransmission, digital signal
processing technologies, thatenable high-volume datatransmission and analysis

Optimal allocation of surplus
power, generated in diverse,
dispersed sites

Small atomic clocks forsynchronizing the accurate timeof devices that are out of a GPS
service area

Track record of diverse
renewable energy power
development

System development thatcombines analog highfrequency waves withdigital software technology
in the Electronic andCommunication Device
Busines

Joint research with Tohoku
University
GEMCOS

Small atomic clocks jointly
developed with Tohoku
University

Ç

Ç

Ç

Ç

Realization of the above four potentials can be accelerated by enhanced
financing prowess employed to help raise ¥2.5 billionÈAccelerate investment in areas of 2.5 - 23 times growth in the next 5 years
31/40
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be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

Source: Prepared by JPR based on the interviews

Related areas with high growth potential
Segment

Electronic andCommunication
Device Business

Details

5G capitalspending

Small atomic
clocksWind power
generation

Renewable
EnergyBusiness

Hydropower
generation inIndonesia

Global 5G-related capex estimate: $3.6 bln in 2020 to$41.8 bln in 2026
(Source: https://edge-of-cloud.blogspot.com/2017/06/5gand-lte-infrastructure-spending.html)
Global 5G-related capex estimate: CAGR of 64.1% in 2017 2025
(Source: Infinium Global Research)
The world’s market for small atomic clocks: $9.402 mln in2017 to $23.402 mln in 2025
(Source: QY Research “Global Miniature Atomic ClockMarket Insights, Forecast to 2025”)
Hokkaido Electric Power’s purchase of wind power: toquadruple from 2017 to 2027
(Source: Nikkei Shimbun, March 7, 2017)
Hydropower generation volume in Indonesia: 154MW
in2020 to 3,657MW in 2025
(Source: METI; FY 2017 Study of infrastructuredevelopment project to obtain joint credit, etc. [Study ofinternational contribution quantification and JCM
feasibility])

Period and CAGR
2020 - 2026
50.5% (11.6 times)
2017 - 2025
64.1% (17.4 times)
2017 - 2025
12.1% (2.5 times)
2017 - 2027
15.8% (4 times)

2020 - 2025
88.4% (23.7 times)

Source: Prepared by JPR based on the Companyʼs Financial Summary, etc.

This report has so far explained the Tamagawa HD Group’s regeneration of theElectronic and Communication Device Business and investment development of theRenewable Energy Business. By raising ¥2.5 billion as disclosed on August 28, 2020,
Tamagawa will accelerate investment, with a ballpark IRR target at 15%, into areas
where Tamagawa’s technology insights accumulated in the Electronic andCommunication Device Business, exploiting its capability and using its management’s
financial strength.

32/40This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

GEMCOS is utilized to accelerate overseas investment, starting inIndonesia
The GEMCOS system is to be adopted for small hydropower generation in Indonesia.
Indonesia consists of numerous islands, which makes it hard to establish a large
electric power infrastructure, including a power grid. Therefore, GEMCOS, whichenables establishment of an optimal local power network, can be very effective.
Based on interviews at Tamagawa, a high IRR of about 20% can be expected andTamagawa is likely to henceforth accelerate renewable energy-related overseas
infrastructure investment.

Small wind power projects in favorable locations in Hokkaido
Tamagawa currently has five small wind power generators in operation. Tamagawa
holds power sales rights for 50 places and has 150 joint projects with AURA. These
200 projects in total are projected to be operating by fiscal 2022. They are located in
Hokkaido where stable wind is available as a power resource. Turbine operation
requires little maintenance, which will be outsourced to local companies without any
problem in normal circumstances. Based on such an assumption, an IRR of 17% isestimated, including maintenance cost and insurance, in addition to facilities cost.
The present value of cash inflow estimated from the small wind power generation
business is ¥1.69 billion, indicating a rapid growth of about 22 times of the current
cash inflow in the accumulated cash inflow over the next three years (see a chart
below).
Present value of cash inflows of the next three years (50+150 wind power
generators)(Million yen)

Source: Prepared by JPR based on disclosed materials and interviews to the Tamagawa HD Group

Further, Tamagawa can potentially develop additional 300 wind power generators. If
these 300 generators are developed over 5 years starting from 2023, assuming an
IRR of 17%, additional cash inflow can be ¥2.39 billion. The total amount, which
includes the almost-certain cash inflow of the next three years, is estimated to be¥4.08 billion. This is 53.7 times the current cash inflow and 2.4 times of the cash
inflow over the next three years. Small wind power generation is clearly a key for
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This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

Tamagawa’s expansion in the Renewable Energy Business.

Present value of cash inflows, including potential projects(Million yen)

Source: Prepared by JPR based on disclosed information and the interviews to the Tamagawa HD Group

34/40
This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

2. GCC ManagementTM analysis of Tamagawa’s business strategy
Structure of Tamagawa’s value creation, using GCC
ManagementTM
Tamagawa’s value creation strategy is summarized below from the three perspectives.
Growth: The Electronic and Communication Device Business will grow in the 5G fieldwith focus on niche areas, while the Renewable Energy Business will make investment
in areas where high IRR and high growth can be expected. Combining these two,
Tamagawa seeks to contribute to the communication/energy infrastructure of Smart
Cities and to achieve high growth.
Connection: In the Electronic and Communication Device Business, Tamagawa
cooperated with universities and major manufacturers, aggressively hired engineers,
established the industry’s top-level technology in analog/digital, software/hardware
high-frequency wave and optical devices, and developed higher added-value
products. In the Renewable Energy Business, Tamagawa will seek to achieve high IRR
and high return on invested capital (ROIC) by establishing long-term relationships oftrust and working with universities.
Confidence: Tamagawa’s main members of the management team have backgrounds
in financing and accounting, where compliance is a strict requirement. They use theirexpertise in finance and real estate management, avoid potentially unprofitableprojects based on their own assessment, and lower business risks and protect
investors’ expected return.
The following figure describes the structure in detail.
Structure of Tamagawa’s value creation, using GCC ManagementTM

Source: JPR

35/40
This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

3. Shareholder value estimates
Estimates
using theexcess return
methodShareholder value estimates by use of the excess return
method1
The Tamagawa HD Group’s long-term shareholder value is estimated by use of theexcess return method, in light of the context so far described. The value isestimated to be ¥16.9 billion in a conservative scenario, ¥33.6 billion whenincorporated very feasible potential development, and ¥43.6 billion if a business iscreated from leading-edge technologies. This means theoretical upside potentialof 2-3 times to the current market cap during an investment period of 2-3 years.
Assumptions in detail are stated on the next page.

Structure of shareholder value by use of the excess return method and value gap analysis

Source: Prepared by JPR based on interviews to the Tamagawa HD Group

36/40
This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

Basis for estimating the structure of shareholder value by use of the excess return method

Source: Prepared by JPR based on interviews

37/40
This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

Reference material
What is an analytical framework of the GCC
managementTM?
Integrating financial and non-financial informationthat capture the hearts and minds of all stakeholders
The GCC management🄬 is an analytical framework developed by J-Phoenix
Research in order to evaluate sustainability of shareholder value by integrating nonfinancial information and financial information with a focus on the happiness of all
stakeholders. Happiness of investors is measured by a framework of three elementsof corporate value, while happiness of employees is measured by the five-tiermodel of human needs, created by Abraham Maslow, a prominent American
psychologist. People can feel happy when their five needs are satisfied. For
example, a company with a built-in framework to raise happiness of employees
should be determined as more sustainable than a company with the same
shareholder value but without this framework.
The concepts that associate the five levels of needs with the three factors ofcorporate value are Growth (in sales), Connection (of people and businesses,
leading to improve Return on Invested Capital), and Confidence. JPR has defined“Excess return generated from a strategy that incorporates the enhancement ofhappiness of all employees under the GCC concept” as Happiness Value Added🄬.
The enhancement of happiness is “why such a company exists,” the raison d’etre of
a company, while the viewpoint of corporate value is “how the enhancement ofhappiness is associated with its value.” Use of this framework makes it easy to
explain the concept of creating corporate value to its employees. Moreover, thisfacilitates disclosure of non-financial information, which is required for complying
with the Stewardship Code. It also facilitates (1) integration of financial and nonfinancial information, (2) management in consideration of ROIC and capital costs(addressing corporate governance), and (3) systemization and visualization in
coping with ESG and SDGs.
GCC managementTM

Source: JPR

38/40
This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

Corporatevalue
estimateby use of
ROIC andexcessreturn

Excess return analysis framework
Excess profit or economic value added is widely used worldwide as an indicator toestimate corporate value, evidenced by being adopted by Kao Corporation, a GrandPrix winner of the Tokyo Stock Exchange Fifth Corporate Value Improvement Award(FY2016). In the calculation of excess return, corporate value can be broken down
to four elements: invested capital, excess return value, growth value, and nonbusiness assets. This facilitates better understanding of a structure to create
corporate value. A company might be overvalued when its market cap is higher thanits theoretical corporate value, and undervalued when the market cap is lower.
Contribution of each year’s corporate value can be visualized in the following figure,in which shareholders’ equity is simply represented as a sum of invested capital andnon-business asset, subtracting interest-bearing debts. The figure below allows us
to estimate how many years of growth might be incorporated in the stock price.
Breakdown of corporate value using excess return▉Source: JPR

Estimated excess ireturn is profit that exceeds investors’ return expecations against
invested capital. Its present value is “excess return value” while a potentiallygrowing portion of excess return is “growth value.” Moreover, assets which are notused in business are added as non-business asset value in estimating a theoretical
corporate value. Theoretically, the estimated corporate value using excess returnshould be the same as the value estimated by using the discount cash flow (DCF)
model. This report calculates excess return by using the following figures in thesimplified way.
l

Excess return = NOPAT – Invested capital X WACCl

Net Operating Profit After Tax (NOPAT) = Operating profit X (1- Effective tax rate)lInvested capital = Total assets – Non-business assets – Current liabilities excluding Interest
bearing debtlNon-business assets = Cash and deposits that exceed 10% of sales + Short-term investment
securities + Investment securities + Deferred gains or losses on hedges + Land revaluationdifference + Foreign currency translation adjustmentslWeighted average cost of capital (WACC)＝ After-tax interest rate of interest-bearing debt ☓（D/(E+D)＋Cost of shareholders’ equity ☓（E/D+E）l

Cost of shareholders’ equity＝0.5%＋5%☓βlβ = Slope of a linear regression line of five-year daily returns of TOPIX and the stock price of thetarget companyl

E = Market cap at the time of calculationl

D = Short-term interest-bearing debt + Long-term liabilities + Minority interests in the latest
financial statements at the time of calculation

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This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.

TAMGAWA HOLDINGS CO., LTD. [JASDAQ (standard) #6838] September 10, 2020

Disclaimer
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In principle, issuers do not seek a review or authorization against the contents herein. (However, wepoint out to the authors only if there are errors or incorrect wording.)□

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have already been involved or may be involved in some trading of securities of target companies in the
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Although authors collected information during interviews with the target companies in order to create
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Although this report is based on information that the authors believed to be reliable, we do notguarantee the accuracy, completeness and/or timeliness of the contents. The opinions and forecasts inthis report are conducted at the time of publication and may be changed without notice.

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This report is created by J-Phoenix Research Inc. (hereinafter JPR) simply for the purpose of providing information to the investors, not for soliciting any trading of securities. Although the report isbased on information and resources that JPR believed to be reliable, JPR does not guarantee against the accuracy, reliability, completeness, conformity or timeliness of any of the content. JPR shall not
be liable for any direct or indirect damage caused by the investors resulting from the use or reliance on the information contained herein. Investors are responsible for their own trading of securities
and other financial products. The intellectual property rights of this report belong to Toward the Infinite World, Inc. No part of this report may be reproduced, transcribed or cited without the writtenconsent of the company.