September 4, 2023

For Immediate Release
Ryosan Company, Limited
Representative: Kazuhiko Inaba
Representative Director, President
Listing Code No.: 8140
Listing: Prime Market, Tokyo Stock Exchange
Inquiries: Norihiko Takahashi
Executive Officer
General Manager, Corporate Planning
Headquarters
TEL: +81-3-3862-3816

Notice of Basic Agreement on Establishment of Joint Venture with IAT Automobile
Technology Co., Ltd.
Aiming to make a full-scale entry into the Chinese EV market, which is the world’s largest EV market and is rapidly
expanding, Ryosan announced today that it has entered into a basic agreement to establish a joint venture company(hereinafter, “New Co”) with IAT Automobile Technology Co., Ltd. (hereinafter, “IAT”), which is China’s largest
automotive engineering company. This press release states the background and purpose of the establishment, as wellas the strategic positioning of the establishment.

1. Background and purpose of establishment(1) Overview of New Co
China’s EV market is the world’s largest and is rapidly shifting to a platform for core parts. In this business environment,
the New Co will utilize Ryosan’s knowledge in electronic parts and know-how for automotive technology which Ryosanhas accumulated over many years to provide electronic parts necessary for platform development to the client base
(Chinese automobile manufacturers, Teir 1 companies, etc.) held by IAT. By combining the knowledge of an engineer
company with Ryosan’s knowledge, the New Co aims to create a new business model that goes beyond the frameworkof an electronics trading company and to provide an EV platform that prevails throughout the market regardless ofKeiretsu supply-chains.
(2) Roles of both companies
The New Co partner, IAT, is China’s largest independent automotive engineering company. As an international leading
company with state-of-the-art technology, IAT designs finished automobiles, designs and develops automobile parts,and provides technical services. IAT possesses business relationships with more than 100 automobile manufacturers
which include not only China domestic companies but also global players. For the New Co , IAT will provide services
such as development, design, testing, prototyping, and software development of EV platforms mainly for domestic
automobile manufacturers and Tier 1 companies.
Ryosan will provide the New Co with the electronic parts necessary for production by each manufacturer based on
the designs created by IAT. Ryosan will also fulfill roles such as introducing new products, proposing solutions anddevices, and providing technical support to IAT.

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(3) Purpose of investment by both companies and business significance for Ryosan
Through this investment, IAT aims to break away from the individual design contract business and to expand into theplatform design area. IAT seeks to deepen its relationships with domestic automobile manufacturers and Tier 1
companies by securing a stable supply of relevant parts and expanding transactions with global electric suppliers.
In addition to handling parts for the New Co as an opportunity to enter the world’s largest EV market, Ryosan
anticipates a wide range of business significance including the following: 1) increased added value for existing suppliers
by consolidating the needs of the Chinese automobile market, 2) creation of business opportunities that leverage IAT’ssolutions and business platform, 3) expansion of new supplier products, and 4) acquisition of information on trends inthe Chinese EV market, which is ahead of Japan.
The establishment of New Co represents the first full-scale entry into the Chinese EV supply chain by a Japaneseelectronics trading company. This investment project is positioned as having significant business meaning in terms ofhow it crystallizes the trust from Chinese companies which Ryosan has cultivated over 50 years of businessdevelopment in Greater China, as well as how it serves as a successful model for horizontal expansion of knowledge
and know-how accumulated by Ryosan in the automotive electronics field.
(4) Overview of New Co(1) NameSichuan Xin Century Technology LLC(2) AddressChengdu City, Sichuan Province, China(3) Name/Position of

Qiwu Xuan, Chairman

Representative(4) Business Activities

Wholesale of semiconductors and electronic parts(5) Capital

50.0 million RMB(6) Investment Ratio

IAT Automobile Technology Co., Ltd

60%

Zhong Ling International Trading (Shanghai) Co.,Ltd. 40%(5) Overview of IAT(1) Name

IAT Automobile Technology Co., Ltd.

(2) Address

Beijing City, China(3) Position/Name of

Qiwu Xuan, Chairman

Representative(4) Business Activities

Design of finished automobiles, design and development of automobileparts, technical service, etc.

(5) Capital

497.43 million RMB(6) Date of Establishment

May 23, 2007

-2-(7) Main Shareholders andIAT (Beijing) Investment Consulting Co., Ltd.

13.59%

Ownership Ratio

Jiaxing Junwen Yinbao Investment Partnership

3.70%

Ling Lin
Jiangsu Yueda Investment Co., Ltd.

2.69%

IAT Automobile Technology Co., Ltd. - the First Term

2.28%

Employee Stock Ownership Plan

1.96%

Beijing Jirui Branch Science and Technology Innovation
Investment Center

1.92%

Shanghai Yunran Investment Management Co., Ltd. - the11th Yunran Emerging Growth Private Securities

1.42%

Investment FundLiqiang Zhang
Honda Technology Research Industry (China) Investment

1.40%

Co., Ltd

1.34%

Ningbo Hutong Private Fund Management Partnership(Limited Partnership) - Hutong Chuangzhi No.1 Private

1.21%

Securities Investment FundOther
68.49%
2. Positioning of this matter in the business strategy of Ryosan(1) China business strategy
Ryosan entered the Greater China market in the early 1970s. Initially, Ryosan expanded the base of its local transactionsin the form of receiving the commercial rights for transactions of Chinese clients owned by Japanese manufacturers.
However, since the 2010s, Ryosan has explored ways to expand its own trading base. In March 2017, Ryosan acquired
Edal Electronics, a local trading company in the South China region, as a subsidiary. In November 2017, Ryosan madea partial investment (equity-method affiliated) in Qingdao Sanyuan Taike Electronics Technology (China), a local
software development company that excels in inverter control technology. In 2022, Ryosan expanded the base of its
transactions with local companies, such as partial investment in Yamasei Tech, a software development venture formotorcycles in Taiwan.
This New Co with IAT can be expected to expand the base of transactions at once, and is positioned to contribute tothe expansion of transactions with various electronic component suppliers. In addition, through the integration with
Ryoyo Electro, Ryosan is looking forward to horizontal development of new products, mainly solutions, to local
companies, and Ryosan will accelerate the expansion of the Greater China business area through new businessdevelopment.
(2) Company-wide strategy
Ryosan has steadily improved its corporate value as the result of business expansion through the implementation of themeasures set forth in the 11th Medium-Term Business Plan. As already announced, in addition to management
integration with Ryoyo Electro Corporation, Ryosan is shifting toward divisional organization as an efficiency measure,with the aim of accelerating the speed of business promotion. In addition to this new strategic partnership with IAT,
Ryosan will continue to further improve value in the medium to long term.

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Measures inMedium-Term

Results

New Initiatives

Business Plan
Businessin Invested in Yamasei Tech Co., Ltd..

Greater China

Merge with Ryoyo Electro

Deepened cooperation with Qingdao Sanyuan TaikeCorporation. Realize

Electronics Technology (China).

synergies.

Restructured organization in the South China region.
Expansion ofIncreased sales of strategic products by 21.0 billion yenproducts(compared to fiscal 2021).

organization structure.



Increased number of agency contracts by 11 withTransition to a divisional
Enter into strategic
partnership with IAT.

contributions to sales of 3.0 billion yen (compared tofiscal 2021).
Transformation

Invested in Priken Co., Ltd. as equity-method affiliate.

of line ofRestructured the Solutions Headquarters.

businessDiversification

Established a Direct Marketing Team.

of portfolio

Developed system infrastructure.

Increased

Promoted the use of DX in business.

efficiency
3. Impact on business results, etc.
Ryosan has judged that the impact on its consolidated business results for the fiscal year ending March 31, 2024 will beinsignificant. If Ryosan judges that the impact will be significant for its future outlook, Ryosan will promptly disclose
related information.

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