Fourth medium-term management plan

I. Corporate profile and businessoverview

1

Corporate Profile(As of March 31, 2024)
Company name TENMA CORPORATIONBusiness
Category

Manufacturing and sale of plastic products

Establishment

August 26, 1949

Headquarters

1-63-6 Akabane, Kita-ku, Tokyo

Capital stock

19.2 billion yen

Representative

Hirohiko Hirono, President and Representative Director

Number of
employees

Consolidated staff: 7,868, non-consolidated staff: 623

Net sales

Consolidated: 92.9 billion yen, non-consolidated: 19.9 billion
yen

Stock

Tokyo Stock Exchange Prime Market securities code: 7958

Company motto

Headquarters(Akabane, Kita-ku, Tokyo)(Established in April 2024)

PURPOSE
Tenma Corporation Purpose“Delivering essential life values for people”●Based on the company motto of “Faith, Hope, Love,” whichreflects the spirit of the founder, we improved the
manufacturing business by placing the greatest importanceon the feelings and thoughts that we put into our products
and services and consideration for customers to makepeople’s lives better.

Faith●The Tenma Group will continue to provide products andservices with our passion to enrich people’s lives, in all its
business activities by considering the essential life values

Hope Loveand thus help people live full and abundant lives, acommitment that has been passed down since theestablishment of the company.

2

Corporate history
Started a business from production of miscellaneous everyday sundries
Started plastic business leading to the existing business(Embarked on a full-scale research and development of technology for injection molding
plastic products)

Launched HW business(Started nationwide operation of plastic household daily
items)

Long-selling productswith cumulative sales
totaling 100 million
units

Started sales of storage item Fits

1949
Established(Arakawa-ku,
Tokyo)

1953

1967

1970

Constructed Noda
factory

Met increasing demand for large
industrial materials, such as colorTVs, automotive parts, and beercontainers

1986

1991

ListedNow production bases infive countries, including
Asian countries●China●Vietnam●Thailand●Indonesia●Mexico

2022

1992

Started a full-scale overseas operation

First Section of theTokyo Stock
Exchange

Transited toPrime Market

Status of overseas operation
1992

Established a factory in Zhongshan, China and started operation in the country

1995

Established a factory in Shanghai, China and started houseware business in the country

2004

Added Shenzhen Meiyang Plastic., Ltd., located in Shenzhen, China, as the third production base in
China to our subsidiaries

2007

Established a factory in Vietnam and started operation in Southeast Asia

2009

We added Tacmic SP Co., Ltd. (now Tenma ASEAN Holdings Co.) as a subsidiary in addition to
subsidiaries in Indonesia (now PT. Tenma Indonesia), Vietnam (now Tenma (HCM) Vietnam co.,Ltd.), Thailand (now Tenma (Thailand) Co., Ltd.), and other countries. We expanded ourmanufacturing bases to three Southeast Asian countries with the addition of Indonesia and Thailand.

2014

Added a factory in Prachinburi, Thailand, and expanded operations in Southeast Asia

2016

Added a factory in Suryacipta, Indonesia and expanded operation in Southeast Asia

2018

Started operation of Noi Bai factory in Tenma (HCM) Vietnam Co., Ltd.

2022

Established PT. Tenma Indonesia Trading in Indonesia

2023

Acquired a mold builder in Indonesia to enter the mold business. Started business operation in North
America and Mexico through M&A

3

Three Strengths of TENMA GroupStrength 1

Strength 2Strength 3Contract-manufactured
product business and inhouse product business“Superb quality”
delivered worldwide

Global network

Tenma manufactures high-quality
products under unified technicalstandards at production bases inJapan as well as overseas. Credibility
for product quality, combined with thecompetitive
advantageofthecontract-manufactured
productbusiness, gives the basis for brandvalue in the in-house productbusiness.

Tenma has 17 production bases,
which are located near customers, inJapan, China, and Southeast Asiawith 1,037 molding machines on agroup-wide basis (at the end of
December 2023).
In 2023, it added a new production
base in Mexico and consequently
expanded a global network to 18
bases.

Tenma is characterized by coveringboth contracted products and inhouse products with the coretechnology of resin injection molding.
Providing high added value, utilizing
development capabilities cultivated byin-house products and technicalcapabilities sophisticated by contractmanufactured products.

4

[Reference] Global network of Tenma Group
6 production factories in Japan
Totally 12 overseas production bases in fivecountries
Hachinohe Factory

Headquarters
TENMA PRECISION(ZHONGSHAN) CO., LTD.

Shiga FactoryShin-Shirakawa Factory

TENMA PRECISION(SHENZHEN) CO., LTD.

SHANGHAI TENMAPLATECH &HOUSEWARES CO., LTD.

TENMA (THAILAND)
CO.,LTD.
(Prachinburi factory)

Yamaguchi Factory
TENMA (HCM) VIETNAM
CO.,LTD.
(Noi Bai factory)
Noda Factory
TACMIC Co., Ltd.

TENMA (THAILAND)
CO.,L.TD.
(Amata City factory)

TENMA VIETNAM CO.,LTD.

PT.Hyuk Jin Indonesia

TENMA (HCM) VIETNAM
CO.,LTD.
(Bien Hoa factory)Tenma Plastic Mexico, S.A. de
C.V

PT. TENMA INDONESIA(Suryacipta factory)

PT.TENMA CIKARANG
INDONESIA

5Picture of business structure●Globally operating business with high quality resin molding technology (ratio of overseas sales: 80%)
●Two-axis strategy using technology developed in contract-manufactured product business of OA and automobile at
in-house product business (HW business)
Clients (mainly major Japanese companies)

Collecting a wide
variety of needs forresin molding

Headquartersfunctions*Sales activities are conducted in each overseas base.

Proposal for various solutions●Product planning anddesign●Mold design●Cost improvement●Idea for environment
measures●Efficient logistics

Sales
department

Cooperation

Development
and technology

BackupAdministration
department

Production
management
department &domestic factories●Sales support●Mold building support●Productivity improvement
support●Product development
support●Human resource support●Managementadministration support●Financial support

Multilateral support byheadquarters functions axis tooverseas bases

Dividend and managerial technicalguidance commission

Overseas production
bases
Growth drivers of Tenma Group●China: 3 bases●Vietnam: 3 bases●Thailand: 2 bases●Indonesia: 3 bases●United States and Mexico:
1 base6

Business flow
●Realizing values and functions required by customers through high quality solutions
supported by technology and experience and after-sales service
In-house productbusiness

Contract-manufactured
product business

The Development Department is engaged in the planningand design of products, the Technology Department isengaged in building molds, the Production Management
Department is engaged in selecting an optimum
production factory, and the Sales Department is engaged
in making sales at home improvement stores, daily
furniture specialty stores and the EC site.

We constantly seek information about new models from
customers to propose optimum mold and mass production
methods.
Mass production includes a wide variety of secondary
processing such as assembly, coating, and printing.

[Hearing and proposal for plan][Design and mold building][Mass production and quality check][Shipment and delivery][Contract-manufactured product business] From start of business negotiations to start of mass
production: 9–12 months in the OA category, about two years in the automobile category[In-house product business] From launching of product plan to start of mass production: 8–12 months

7

Product lineup●Contract-manufactured product business: Divided into five business categories: OA,
automobile, home appliance, housing, and other●In-house product business: Single business houseware (HW) category”
In-house productbusiness

Contract-manufactured
product business

OA category

Automobile category

Home appliancecategory

Housing category

HW category

BUMPER
Air conditioners

ADF units
DOOR
TRIM

Paper feeding
units

BLOWER
Case

Toilets

Storage cases

Other category

Washing
machines

Vacuumcleaners

Media cases

Kitchen items

8

II. Outline of the previous medium-term
management plan

9

Long-term vision and the third mediumterm management plan basic policyLong-term vision of
the Tenma Group

Third medium-term
management plan

(FY 2022/3 to FY 2024/3)

Basic Policy

Improving Our Lives and the Environment Through Coexistence with Plastic

Approach toEnvironmental
Problems

Business
Development and
Evolution

Employee
Growth andHappiness

Address social issues asa resin molding manufacturer

Enjoy the fruits of our businessgrowth with all stakeholders

Become a company offering
opportunities and satisfaction

Basic Policy 1
Strategy (i)Development of Human Assets

Basic Policy 2
Strategy (iv)
Promotion of DX and Factory
Automation

Promoting sustainable management
Strategy (ii)
Environmental Issues

Strategy (iii)
Corporate Governance

Building a foundation for growth
Strategy (v)Promotion of R&D

Strategy (vi)Expand Business Areas

10

Review of the third medium-term management plan(i) Achievements and challenges
Policy and strategy
Promoting sustainable management

Strategy (i)Development of
Human Assets

Strategy (ii)
Address
Environmental Issues

Strategy (iii)
Strengthen
Corporate GovernanceAchievements (general overview)●Renewal of the personnel system and introduction of Management by objectives （MBO)●Establishment of the system for employing nonregular workers as regular workers●Introduction of systems enabling flexible work style●Increase in employee satisfaction●Appointment of female managers delayed in Japan●Initiatives for developing human resources through academicindustrial alliance●Identification of the materiality of sustainability management●Implementation of measures for reducing GHG emissions●Development of products made fully from recycled materials and start of sales●Start of operation of a recycle center●Make products by recycled pellets●Achievement of the reduction target for GHG emissions●Continuing operation of voluntary nomination and remuneration committee●Securing at least one-third of the board occupied by independent outside directors●New establishment of internal control office for promoting preparation of regulations●Promotion of strengthening of audit in cooperation with external agencies●Preparation of regulations in all bases including overseas
subsidiaries●Complete implementation of PMI of overseas subsidiaries
acquired by M&A●Introduction of automated warehouses in Tenma Thailand.
●Efficient of back-office operations through digitalization of operation processes●Introduction of thin client for purpose of strengthening safety and security of asset●Promotion of automation for increasing the productivity by using sensors and task support
robots●Introduction of automated warehouses in a new Vietnam factoryusing findings from Tenma Thailand●Differentiation from competitors by realization of sophisticatedautomation●Introduction of sales support tools for purpose of strengthening
sales organizations●Introduction and established operation of the next mission-criticalsystem●Achieved practical realization of special molding technologies, such as DSI molding●Promotion of research of using green resins and recycled materials●Introduction of decorating printers giving added value to HW products●Application of research results of special molding technology tobusiness●Strengthening of proposal ability based on physical property
evaluation research of a wide variety of resins●Entry into automotive safety parts (such as resin parts for airbags) through M&A●Start of a full-scale operation of HW category in Southeast Asia
●Acquisition of the mold builder and entry into molding business●Start of agent sale of pregnancy kits for male as a service for resolving social challenges●A full-scale overseas operation of HW category●Progress of molding business●Search for business domains being a medium- and long-term
axis

Strategy (iv)
Establishing a foundation for growth

Promotion of DX
and Factory Automation

Strategy (v)Promotion of R&D

Strategy (vi)Expand Business Areas

Continuing challenges

11Review of the third medium-term management plan(ii) Business results●With regard to management indicators set as a target of the third medium-term
management plan, net sales were above the target while profit and ROE were below thetargets.
■Third medium-term management plan and actual
results for the final year
Plan for FY
2023■Trend in net sales and operating profit (unit: million yen)

Percent
Actual results
ratio to thefor FY 2023
plan

Net sales (million yen)

87,00092,931

107%

Operating profit

4,200

1,362

33%

4.6

3.9

△0.7 pt(million yen)

ROE (%)

Major factors having an effect on the plan
●Production adjustment by major customers in the contractmanufactured product business for the purpose of eliminating excess
inventories●Decreased domestic demand for storage items in the in-house productbusiness●Delayed investment for FY 2021 to FY 2022 during the COVID-19 crisis
having an effect on the progress of cost reductions●Increase in amount converted into yen resulting from the yen weakness

125,000

5,000

100,000

4,000

75,0003,000

50,0002,000

25,0001,000

0Actual resultsfor FY 2021

Actual resultsfor FY 2022

Actual resultsfor FY 2023

Plan
for FY 2023

0

Net sales (left-hand-side axis)
Operating profit (right-hand-side axis)

12

Review of the third medium-term management plan(iii) Shareholder return■Trend in indicators related to shareholder return
FY 2021

FY 2022

FY 2023

Three-year
total●We steadily implement the acquisition of treasury
yen. Treasury shares of about 5.4 billion yen wereshares toward acquiring them totaling 10 billion

TreasurysharesAcquisition amount (million
yen)

2,395

1,001

2,001

5,398

Dividend

Total dividend (million yen)

1,848

1,795

1,752

5,395

acquired in the period of the third medium-term

82

82

82

82

management plan. Treasury shares of about 7.4

DOE

2.71%

2.64%

2.60%

2.65%

billion yen, combined with the already acquired

Total shareholder return(million yen)

4,244

2,796

3,753

10,793401.0 %

99.9%

121.４%

207.4%

Dividend per share (yen)Whole

Total payout ratio(Note) In replacing total net assets, shareholders’ equity was used as a denominator whencalculating DOE.
For dividend per share, DOE and total payout ratio, three-year average represents simple
average for FY 2021 to FY 2023.

Trend in equity price of the company(closing price)

(yen)

3,500
3,000
2,500
2,000
1,500
1,000
500
0

Progress of acquisition oftreasury shares (million yen)amount, were totally acquired.
●Stable dividend was paid independent from short-termbusiness results and in compliance with thedividend policy of DOE of 2.5% or more.
●There was a delay in investment plan for the first halfof the third medium-term management plan becauseof COVID-19 crisis. Total payout ratio remained very

2,604

1,998

high because of the allocation of idle money toshareholder return for avoiding excess internal
reserve.

5,398

April,

April,

April,

April,

April,

2020

2021

2022

2023

2024

●Equity price remained stable due to aggressive
shareholder returns though profit failed to achieve

Acquisition amount for FY 2020
Acquisition amount for the period of
third medium-term management plan
Remaining amount totaling 10 billion yen

the figure in the plan because of the deteriorated
business environment.

13III. Fourth medium-term management plan14

Ideal and positioning of the medium-term
management plan

Our roadmap to become a 100-year company
In 2049, we will celebrate our 100th year in business. Seeking to be a 100year-old company, the Tenma Group established the ideal from a long-term
viewpoint and started a new journey according to the third medium-term
management plan.
The fourth medium-term management plan is the second step towardachievement of the ideal.
The purpose was established on the sidelines of start of the plan.

Established the Purpose
Set the ideal

Fourth mediumterm management
plan
Third
“Transition
period” towardachievement of“1st Step”

FY 2025/3 to FY 2027/3“Transition
period” towardachievement of“2nd Step”[The ideal]Long-term vision

Aim to build “a prosperous society inwhich people and plastics coincide inharmony”
Long-term targets

Fifth“Transition
period” towardachievement of“3rd Step”*(Target numbers for FY2031/3)

ROE
9% levelROIC
9% level＊Net sales and operating profit largely depend on
the external factors of the exchange rate andbusiness environment, and management indicatorsfor long-term goals were changed to ROE and
ROIC.

15

Recognition about business environment(general overview)■Outlook for a trend in demand for resin modeling: Business domains that we particularly focus on●Sales and profit show a recovery to a level before
the COVID-19 crisis in the resin molding business,

Business
category

Net sales
Composition
ratio(FY2023)

OA category

55%

Automobile
category

11%

Home
appliance
category

13%

Housing
category1%

Otherindustrial
items

2%

HW
category

18%

which is our main business, and demand for
injection molding remains solid.
●By product category, demand is expected toincrease in the automobile category and home

Japan

China

Southeast
Asia

UnitedStates/
Mexico--appliance category, including air-conditioners,
while demand is estimated to shrink in the OA
category as a whole market.
●There is a low prospect for growth in domestic
demand in the HW category, which is in the inhouse product business, and it is necessary todevelop overseas markets.
●By country, there is an acceleration of the
movement for a production transfer from
China to Southeast Asia particularly in the OA
category.

＊“-”: Domains where the company does not operate business-

16

Fourth medium-term management plan
Basic policy
Fourth medium-term management plan
(FY 2025/3 to FY 2027/3)

Basic Policy

Increasing enterprise value by promoting sustainable management
Resolving challenges with all bases and sections sharing the way of thinking under the materiality of the Tenma Group,
which was identified in the period of the previous medium-term management plan

Materiality of the Tenma Group
Mitigation of andadaptation to climatechangeRealization of
circular economy

Safety and securityof products

Sustainableprocurement

Success pf a wide varietyof human resources

Safe and secure
workplaces

Strong foundation
for company

Creation of newvalue*The above-mentioned materiality includes six company-wide strategies stated in the previous medium-term management plan.
The continuity of the management strategy is retained.

17

Recognition of and measures to businesschallenges
Promotion of various measures tomateriality

Change of business portfolio

Reconstruction of unprofitablebusiness domain (HW category)

30% reduction of GHG emissions(FY 2030 compared with FY 2019)

Growth in automobile category
driven by R&D and M&A

Rebranding of the core Fits

Realization of circular economy
through recycle of used resin

Strengthening of home appliancecategory through increase in capacityof Thailand baseStrengthening of EC sales

Increase in a ratio of female managers inJapan and development of human resourcesin the overseas subsidiaries

Development of new businessdomain in contract-manufactured
product business

Strengthening of overseas HW
category

Safe and secure working environment⇒Increase in employee satisfaction

Fixed cost reduction andreorganizations

Keeping and strengthening ofcorporate governance system
Change of production system throughautomation and promotion of digitaltransformation

For increasing enterprise value, securing the sustainability of the core resin molding business througha departure from the low profitability by accelerating the individual business strategy andaccumulating nonfinancial capital from the medium- and long-term perspective

18

Financial numeral targets■Fourth medium-term management plan Numerical plan (unit: million yen)
Fourth medium-term management plan
FY 2023

FY2024FY2025

FY2026[OA category]●Remarkable production cut in China (production

Net sales

92,931

100,000

102,000

107,000

Operatingprofit

1,362

2,200

4,000

4,700

●Prospect for sales increase for FY 2026 arising

ROE

3.9%

4.0%

4.3%

5.0%

from start of the operation of the new Vietnam

ROIC

0.8%

1.7%

4.4%

5.1%

(Note) ROE: Net income attributable to owners of parent / (shareholders’ equity + accumulated other comprehensive income x 100%)
ROIC: Operating profit after income taxes / (interest-bearing liabilities + shareholders’ equity + non-controlling interests) x 100%)*Interest bearing liabilities include lease liabilities.

■Sales plan by business (unit: million yen)shift from China to Southeast Asia)

factory in early 2026
[Automobile category]●Increasing the composition ratio with examinationof M&A[Home appliance category]●Growth requiring investment in capacity expansionin Thailand[HW category]●Urgently required to focus on the development ofoverseas sales channels and improve profitability
by reducing domestic fixed costs

19

Business portfolio●Strengthening investment in automobile category to optimize the bias of the portfolio●Vietnam and Thailand absorbing demand of OA departing from China
Business portfolio[FY 2023]

2%
1%[FY 2026][FY 2023][FY 2026]
United Statesand Mexico
Indonesia
3%
6%

18%
13%

Portfolio by country

55%

Other
4%

HW
18%

Housing
1%

11%

Home
appliance
15%

6% 1%
22%

Japan
20%
OA
48%

Automobile
14%

Thailand
25%

25%

China
20%

23%

23%

Vietnam26%

OA

Automobile

Home appliance

Japan

China

Vietnam

Housing

Other

HW

ThailandIndonesia

United States and Mexico

20

Business strategy [OA category](i) Basic strategy
OA category
Net sales from thebusiness (million yen)

FY 2023

FY2024FY2025

FY202651,50050,80052,000

85.7

101.1

98.6

102.4

YoY (%)

Business environment

Main measures*Source: Based on JEITA research report materials and recomposed by the company andfor FY 2023 and beyond, estimated by the company

Strategy and measures
Basic strategy

50,956

1

Responding to movement of
production shift from China to Southeast
Asia

2

Providing high added value including

3

Improving productivity throughautomation of the inspection processmolding as well as the assembly process

Priority investment in Tenma Vietnam●New production base (Ha Long Factory) will start full-scale operation in FY 2026.
The investment will amount to 8.1 billion yen.
●Establishment of the Ha Long factory will make a room for in-house production
capacity of the Que Vo Factory.
⇒ Securing share by obtaining new orders●Market is generally shrinking at OA category (average growth rate was -3.2%
in terms of volume for FY 2018 - FY 2022*). The market bounced back in thesecond half of FY 2022 due to reaction to COVID-19, but it turned down in FY
2023. It will annually shrink within a range of -1% to 3%.
●There is a remarkable movement of production transfer from China toSoutheast Asia. When limited to Chinese market, the market is estimated toannually shrink by -5 to 6%.

21

Business strategy [OA category](ii) Main measures
Purpose and overview of establishmentof the Ha Long Factory in Vietnam

The company has three manufacturing bases in Vietnam,
and the Ha Long Factory will be the fourth factory in
Vietnam.

Background (business environment)
In OA category, the tendency is estimated to be unchanged that
our customer finished goods manufacturers accelerate theproduction transfer from China to Vietnam and Thailand.

Purpose of establishment of the Ha Long Factory
Our subsidiary Tenma Vietnam is the main production base of OA
products, but increasing production volume would result in anexcess of capacity. A new production base is established in
Vietnam for the purpose of securing a trading area andpreventing the outflow to competitors. The Ha Long factory will set
the OA category as an axis while not depending on the specificarea and seeking to achieve stable growth by gradually increasing
new orders in the automobile and home appliance categories.

Noi Bai Factory Que Vo Factory
Ha Long Factory(to be newly
established)

Bien Hoa Factory

Investment scale
We set the total investment amount of 8.1 billion yen with a room
for increasing facilities after determining the business environment.

22

Business strategy [Automobile category](i) Basic strategy
Automobile category

FY 2023

FY2024FY2025

FY2026

9,744

12,00013,40014,200YoY (%)

104.8

123.2

111.7

106.0

Business environment

Strategy and measures
Basic strategy

Net sales from thebusiness (million yen)

Main measures*Source: recomposed by the company in reference to the BFBI “Automobile plastic market scale” and“Automobile exterior plastic market scale”●Trends in the automobile industry, such as environmental preservation and theintroduction of EV increased demand for plastic parts, and this becomes a
tailwind for the company.
●Particularly, it is estimated that the adoption of resin exterior parts will bepromoted to resolve the issues of EVs. Additionally, there is a possibility that

Global business operation using customer

1base in North America base2

Increasing share in Indonesia

3

Expanding the domain ofhandling parts by R&D and M&A

Realizing M&A synergy●Subsidiaries in North America region (Tenma America andTenma Mexico), which were acquired in FY 2023 by M&A, gave
us a customer base in the automobile category and enabled us
to enter into domains other than exterior parts (safety parts
such as air-bag resin parts).
●In the fourth medium-term management plan, we will expand
the automobile category in our group by realizing synergy.

Entry into manufacturing of EV-related parts●It is estimated that demand will increase for battery cases andmotor cases as a result of the introduction of EVs.
●We will proactively examine M&As when entering into a new
domain.

demand is newly generated for battery cases and motor cases.

23

Business strategy [Automobile category](ii) Main measures
Entry into new products other than exterior parts[Main target markets]

EV-relatedparts[Related facilities]

Introduction offacilities formaterials
assessment●Aiming to increase orders of proven exterior
parts and additionally examine the entry into
motor battery parts with the prospect for growth(progress of adoption of resin) and parts forradiator cooling pipes● Proactively examining use of M&A because
these parts are an unproven category for thecompany●Introduced facilities for material assessment toimplement various material assessments at
the Noda factory with the expectation ofhandling new products and implementing
initiatives for basic research in materials by
the research and development office●Completed capital investment for physicalproperty
assessmentofmaterials
Accumulating insights during the period offourth medium-term management plan24

Business strategy [Home appliance category](i) Basic strategy
Home appliancecategory

YoY (%)FY2024FY2025

FY2026

11,74514,80014,70016,200

97.0

126.0

99.3

110.2

Business environment

Strategy and measures
Basic strategy

Net sales from thebusiness (million yen)

FY 2023

1[Thailand]
2[Vietnam]3[China]Main measures*Source: For FY 2019–2022, based on the JRAIA estimated global demand for air conditioners andrecomposed by the company and for FY 2023 and beyond as estimated by the company●According to announcement of International Energy Agency (IEA), it isexpected that global demand for air conditioners will be 300 million units, 2.5
times as many as the current number of units.
●It is expected that our major customers globally operating in the home
appliance business will increase production in Vietnam. There will be demandfor home appliances around the Ha Long factory, which will start operation in

Increasing production capacity ofTenma Thailand to respond to increasing
production of home appliance parts

Expanding business in Tenma Ho Chi

Minh (Southern Vietnam)

Aiming to obtain new orders as alternative

products during the shrinking of the
OA category in Chinese market

Increasing production capacity in Thailand●Having a plan to increase automated warehouses and molding
machines in Tenma Thailand (Amata City factory) based on theforecast of an increase in demand for air conditioner-related products●Increasing net sales of home appliance-related products in Tenma
Thailand (Amata City factory by FY 2026 by 30% or more over FY 2023

Focusing on a trend in demand in China for nextgeneration home appliances●Tenma Shenzhen, the main base in China, focuses on the trend indemand in China for next-generation home appliances because of
estimated shrinking demand in the OA category in China.
●There are orders already received, and we will aggressively conduct
activities for obtaining orders.

Examination of M&A●Continuously examining M&A in Vietnam and countries where wehave not yet entered to expand the home appliance category

FY 2025.

25

Business strategy [Home appliance category](ii) Main measures
Overview of increase in production
capacity of Tenma Thailand

New warehouse building constructed inTenma Thailand

Systematically promoting increase in production capacity ofTenma Thailand (Amata City factory) with the aim of strengthening
the competitive advantage in manufacturing[Step 1] Increase in warehouse capacity●Constructed a new warehouse building and started
operation of the automated warehouse in August 2022
⇒ Cut personnel of logistics and warehouse by 30
persons⇒ Achieved substantial improvement in efficiency oflogistics in the factory●Making additional investments during the period of the
fourth medium-term management plan and planning to
expand the automated warehouse[Step 2] Increase in molding machines●Starting the increase in molding machines, which the
expanded automated warehouse makes possible,
as the next step

Increasing the production capacity in the entire factory by
20% or more

Establishing the automated warehouse in warehouses

26Business strategy [HW category](i) Basic strategy
HW category
Net sales from thebusiness*(million yen)

FY2024FY2025

FY2026

16,296

17,70018,30019,500

97.3

108.6

103.4

106.6

*Net sales from the business include product sales (Reference: actual product sales for FY 2023: 1,997
million yen).

Business environment

Strategy and measures
Basic strategy

YoY (%)FY 2023

Main measures*Source: Based on the Nikkei Value Search and recomposed by the company.

●Sales volume is on a gradual downward trend for the long term in
the HW category. During this, there was a surge in raw material
prices in FY 2022 and a price rise of storage cases in FY 2023.
●Sales volume is on a decreasing trend at physical stores, such ashome centers, while the EC sales channel becomes more

1

Rebranding Fits

2

Strengthening EC sales

3

Developing overseas sales channels

4

Fixed cost reduction andreorganizations

Reconstruction of business promotion system●Forming EC marketing team in the headquarters to build a system foranalyzing global EC data
●Implementing branding measures and EC strategy led by theheadquarters in countries on a top-down approach for developing
overseas markets●Selecting partners for developing overseas markets and entrusting
localization operations while deeply sharing characteristics and thebranding strategy of our products with them

Deepening of business tie-up with JEJ AstageCo., Ltd.

●Announced business tie-up with the competitor JEJ Astage Co., Ltd., in March2023 and promoting comprehensive collaboration concerning an increase inadded value and cost improvement●Further deepening the structure in the period of fourth medium-term
management plan to gain a foothold for business reconstruction

important.

27

Business strategy [HW category](ii) Main measures
Initiatives for developing overseas markets in the HW category
Participation in overseas exhibitions

Examples of measures in business tie-up with JEJ Astage Co., Ltd:
Realization of joint participation in Ambiente 2024 in February 2024
(Frankfurt, Germany)

Expansion of overseas EC channel

Operating overseas EC in China, Thailand, Indonesia,
and other countries

28

Business strategy[Development of new business domains]●Developing new business domains where our resin molding technology can provide
value from a long-term viewpoint
Key domains in developing new business domains

Domains contributing to realization of our group purpose “Help create real abundancefor people,” having a potential for market growth and using the quality of our group

Healthtech

Major initiatives fordeveloping new
business domains

Expanding businessareas in the contractmanufactured productbusiness

Ｒobotics

EnergyIncreasing opportunities forbusiness negotiations to
obtain new orders●Participation in exhibitions●Use of networks of VC funds andtrading houses, and others

andothersResolving technical issues●Promotion of R&D by research anddevelopment office●M&A●Investment in responses to small lot
production, and others(cutting machines, three-dimension printers and others)29

Recognition about increasing enterprise value

Our capital cost remains within 8 - 9%.
CAPM method (comparable company average) was adopted, using the following parameters.
Calculation
method●Risk-free rate was set at about 0.8%, an average of 10-year government bonds.
●Beta was set at about 1.1 in reference to the five-year monthly average of comparable companies. In selecting comparable
companies, companies that are included in industrial plastics in the Nikkei NEEDS business category were used.
●Market risk premium was deemed about 6.9%, in reference to values announced by the Japan Securities Research Institute.

View and major initiatives for creating enterprise value
Understanding the necessity of ROIC (Return on invested capital) exceeding WACC (Weighted
average cost of capital) and promoting the initiatives for increasing ROIC

●In determining investment exceeding a certain size, establishing a hurdle rate reflecting the capital cost and applying
the rate as a requirement for making investment●Having almost no interest-bearing liabilities but examining the use of loans in making large investments in future30

Toward increasing PBR[Major reasons for PBR below 1.0 (our recognition)]

Improvement in
ROE

Improvingcompany
recognition●Our ROE remained low at 1.4% to 3.9% for theperiod of the previous medium-term managementplan.
●We face low company recognition as nonfinancial
capital accumulated to date is improperly evaluated.

[Major initiatives for increasing PBR]

Increasing PBR●We will seek to achieve a long-term target ROE of 9.0%
through improvement in business profitability and propershareholder return in the fourth medium-term management
plan.
●We will strengthen IR and PR activities by continuing to holdbriefings for individual investors to obtain proper evaluationsof our enterprise value to increase company recognition.

31Capital policy (i) Capital allocation■Capital allocation in the fourth medium-term management plan
Sales of
OperatingnonCF
operating(2025/3 assets
2027/3)

Picture of capital allocation in the periodof fourth medium-term management plan

Required
cash anddeposits
Increase

Decrease

Total

Ordinary
investment
andgrowthinvestment●Estimated that currently holding cash + operating
cash flow for the next three years + proceeds fromsales of non-operating assets would total about56.0 billion yen●Secured working capital of 17 billion yen required
as liquidity on hand
●Estimated that ordinary investment and growthinvestment would total about 24.0 billion yen for
the next three years

About 56.0
billion yen

Dividend

About 30.0
billion yen

・Using about 30% among this to establish a new factoryin Vietnam
・Additionally, estimating automation investments in the
expansion of automated warehouses in Thailand andR&D investments (including molds).

About 24.0
billion yen
Acquisition oftreasurysharesPotential
foradditional
loans
M&A

Cash and deposits(end of March 2024)

Total cash
inflows

Financial
marginFinal financial
margin●Estimating that for the M&A investment limit of 5.0
billion yen would be set, but the amount differs
among deals, and loans are used if needed●Estimating that the dividend will keep the DOE of
2.5% or more while the acquisition of treasury
shares will amount to 5.0 billion yen according to
the status of business investments and operatingCF32

Capital policy (ii) Shareholder return

Shareholder return basic policy
The company changed the dividend policy to the consolidated dividend on equity (DOE) of 2.5% or more in 2019 and keeps theshareholder return through the capital policy, including setting the goal of acquiring treasury shares totaling 10 billion yen from2020 for the long term and already acquiring treasury shares of 7.4 billion yen.
Also in the fourth medium-term management plan, we will keep the shareholder return.

Dividend policy

Treasuryshares

Keeping the DOE of 2.5% or more (examining an increase in the dividend according to

improvements in business results and the status of achievement of managerial goals)

Implementing acquisition of treasury shares totaling 10 billion yen, which
was announced in 2020, and then flexibly implementing additional
acquisitions according to conditions

33

Disclaimer about these Materials

These materials are based on the information that the Company obtainedat the time of their preparation. Our business activities and results in the
future may differ from the future prospect stated herein.
Please understand that the information used as the basis for the material
includes financial information based on financial statements as asummary of the financial results and quarterly reports and administrative
figures not based on financial statements, and the said information has
not been audited by an independent certified public accountant or an
audit corporation.

34