Takamiya Co., Ltd | 2445
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April. 10, 2023

Aiming to build a platform and establish a recurring businessmodel fueled by the widespread use of next-generation
scaffolding Iq System

INITIATION

Summary
Accelerating de facto standardization of the Iq System
The Iq System, a next-generation scaffolding system used at construction sites, is a revolutionary
product in the already mature scaffolding equipment market, offering superior work spacecoverage, ease of assembly, and transportation efficiency. In addition, Takamiya offers a highly
economical and convenient service for customers by providing them with the storage,
management, and operation of the Iq System purchased by the customer in one package. The
company is highly strategic in its efforts to develop and provide groundbreaking services that
disrupts the long-established supply chain of buying or renting temporary construction equipment.
Guiding for double-digit growth in sales and profit in FY23/3
After bottoming out in FY2021/3, when sales and profits dropped following the COVID-19
pandemic, the company's performance has been steadily recovering. In FY2022/3, sales rose 2.5%
YoY to ¥39,800 mn and operating profit rose 6.0% YoY to ¥1,682 mn, driven by strong
performance in the sales business despite the continued impact of the pandemic. For FY2023/3,
the company projects double-digit growth in both sales and profit, with sales rising 13.1% YoY to¥45,000 mn and operating profit rising 36.7% YoY to ¥2,300 mn. Utilization rates for the Iq Systemremained high, with maintenance and repair projects in the metropolitan area and other projects
underway. In addition, as some civil engineering projects that had been suspended or postponed
have begun to resume and start, related equipment rental volume picked up, which boosted
utilization rates of rental assets as well. Accordingly, higher sales and profits in the rental businesswill likely fuel earnings growth.
Roadmap for sustainable growth
Takamiya is currently implementing its medium-term management plan ending in FY2024/3.
The company set aggressive key performance targets for the final year of the plan, aiming forsales of ¥60 bn, operating profit of ¥5 bn, and an ROE of 12.0%. The medium-term management
plan is positioned as a roadmap for sustainable growth that will lead to further long-term growth,and consists of the following four basic strategies to (1) develop services that blend hardware andsoftware, with a focus on the Iq System (i.e., establishing the Takamiya Platform); (2) strengthen
products for maintenance/repairs and infrastructure redevelopment; (3) nurture businesses
beyond the temporary equipment sector; and (4) redevelop overseas business bases. The
company's management vision is to shift from a non-recurring business model characterized by
the conventional scaffolding rental business to a recurring business model with high growthpotential.
FY

2018/3
2019/32020/32021/32022/32023/3CE

Net Sales
(¥mn)

YoY
(%)

36,114 (1.8)
42,182 16.8
46,0659.2
38,812 (15.7)
39,8002.5
45,000 13.1

Oper. Profit
(¥mn)

YoY
(%)

1,690 (30.4)
2,713 60.5
3,703 36.4
1,586 (57.2)
1,682
6.1
2,300 36.7

Source: compiled by SIR from the company IR material.

Recur. Profit YoY Profit ATOP YoY
(¥mn)
（％）
(¥mn)
（％）

1,610 -31.1
2,662 65.4
3,541 33.0
1,569 -55.7
1,954 24.5
2,150 10.0

1,252 (17.4)
1,637 30.8
2,370 44.8
857 (63.8)
965 12.5
1,450 50.2

EPS
(¥)

DPS
(¥)

29.26
38.22
52.74
18.41
20.73
31.30

11.0
11.0
14.0
14.0
14.0
14.0

Focus Points:
Vertically integrated provider of
construction and related
equipment with potentiallydisruptive business model that lets
users share equipment, reducing
labor, transportation, storage, andmaintenance costs.

Key Indicators
Share price (4/7)
YH (2/28)
YL (1/10)
10YH (15/1/5)
10YL (16/2/12)
Shrs out. (mn shrs)
Mkt cap (¥ bn)
Shr equity ratio (3/31)
23.3 P/E (CE)23.3 EV/EBITDA (CE)22.3 P/B (act)22.3 ROE (act)22.3 DY (act)

408
445
357
1,197
306
46.58619.01
32.43%
13.1x
40.80
0.9x
5.11%
3.8%

1Y Chart

Source: TRADING VIEW

Toshihiko Nakajima
Senior Analyst
research@sessapartners.co.jp

This report was prepared by Sessa
Partners on behalf of the subject
company. Please refer to the legal
disclaimer at the end for details.

1TakamiyaCo., Ltd | 2445
カイオム・バイオサイエンス
Table of contents

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Summary1■ Company description Takamiya, a major manufacturer of temporary
construction equipment
History
Management policy and management structure
Domestic and overseas consolidated group companies

3
3
5
5

■ Business modelBusiness strategy and business model
Market size and business domains
Recurring and non-recurring business modelBusiness portfolio
Next-generation scaffolding Iq System
Production facilities, equipment base

7
7
8
9
12
14

■Financial analysis

Key financial indicators
Cash flow
Capital expenditures and rental asset investments
Employee count and sales per employee

15
16
16
17

■Earnings Trends

3Q FY2023/3 earnings summary
FY2023/3 full-year earnings forecast

18
19

Outline of medium-term management plan20

■ Medium-termManagement Plan

■ Shareholders anddividends■ Share price insights■ Supplemental
information

1. Develop services that blend hardware and software,with a focus on the Iq System
2. Strengthen products for maintenance/repairs andinfrastructure redevelopment
3. Nurture businesses beyond the temporary equipment
sector
4. Redevelop overseas business bases
Major shareholders

20
21
23
24

Dividend policy

25
26

Share price
Valuation
Share price catalysts

27
27
28

Income statement
Balance sheet
Cash flow statement
Other supplemental materials

29
30
31
32

2

TakamiyaCo., Ltd | 2445
カイオム・バイオサイエンス
Company
description

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Takamiya, a major manufacturer of temporary construction equipment
Takamiya is a leading provider of temporary construction equipment, offering a one-stop
comprehensive service that includes development, manufacturing, sales, rental, design,
construction, management, and logistics for scaffoldings, which is essential for construction andcivil engineering work. The company offers a wide range of temporary scaffolding equipment for
private-sector construction and civil engineering work as well as for new construction andmaintenance/repair of public infrastructure. In FY2022/3, the sales business accounted for 31.5%
of total sales, the rental business 53.7%, and the overseas business 14.8%. The core of Takamiya's
business model is the Iq System, a next-generation scaffolding system launched by the company
in 2014, as well as its associated services. Compared to conventional scaffolds, the Iq System issuperior in terms of work space coverage, ease of assembly, and transportation efficiency, andhas been designated by the Ministry of Land, Infrastructure, Transport, and Tourism as a newtechnology promotion product under its New Technology Information System (NETIS). Customers
who purchase the product can enjoy storage and management services from Takamiya for a fee,allowing them to use the same type of Iq System at any of the 29 equipment sites operated by
the company, regardless of where they purchased the equipment, without the need to maintaintheir own storage space. Customer’s idle products may be rented by the company, but any
shortfalls can be made up on the spot with additional purchases or rentals, so customers canachieve a 100% of utilization rate for their equipment by purchasing only what they need. The
economic benefits to customers are substantial, and the company has established a new supply
chain system for the temporary construction equipment industry. Takamiya promotes thedevelopment of a “platform” business that can introduce new business model and provide
services that break with conventional temporary construction industry practice.
History
Shin Kansai Co., Ltd., the predecessor of Takamiya, was established in 1969 primarily to sell
scaffolding for use in construction. 1970 saw a construction boom as Japan's first World Expo washeld in Osaka, but after the Expo was over, construction companies were not able to manage thescaffolding and faced with the need to sell the scaffolding they had purchased. Seeing this as abusiness opportunity, Kansai-based Takamiya entered the rental business by purchasing scaffoldings
in bulk. After enjoying the economic bubble of the 1990s, general contractors sold off their surplus
inventory of temporary construction equipment as the bubble collapsed. Takamiya once again saw
this as a business opportunity and built business bases across Japan by not only purchasing thesurplus equipment, but also by leasing equipment centers owned by general contractors. This led
to the company’s current nationwide business base. In the construction industry, where there aremany conventional practices, Takamiya’s key strategy is to develop innovative products and services.
In 1979, the company was one of the first to establish a computing center for computerized
inventory control, and in 1998, it established a subsidiary for scaffolding design. In 2010, thecompany made temporary construction equipment manufacturer Hory Corporation its wholly
owned subsidiary, creating a vertically integrated model that encompasses everything from the
manufacture of temporary construction equipment to sales and rentals. This structure has led tothe development and deployment of the Iq System, the company's current mainstay product, as
described later in this report.
Date
1969 Jun.
1973 Jun.
1974 Apr.
1983 Jun.
1984 Nov.
1985 May

Event
Founded as Shin Kansai Co.,Ltd., existing SRG TAKAMIYA Co.,Ltd. in Osaka City.
Moved head office registration to Settsu City, Osaka.
Changed purpose to rental of temporary materials.
SRG TILESTONE TRADING PTE.LTD. (consolidated subsidiary, trade name changed to SRG
TAKAMIYA ENGINEERING(S) PTE.LTD.) established in Singapore to expand overseas in thetemporary construction equipment rental business.
SRG TAKAMIYA Co., Ltd., a subsidiary then, was established in Chuou-ku, Tokyo.
A used PC retailer(subsidiary company, renamed SRG Standby Co., Ltd.), established in Naniwaku, Osaka City.
<<Continued to next page>>3

TakamiyaCo., Ltd | 2445
カイオム・バイオサイエンス
Date1987 Dec.
1988 Apr.
1988 Sep.
1990 Mar.
1990 Jun.
1994 Jul.
1994 Aug.
1994 Dec.
1996 Jan.
1998 Feb.
1998 Mar.
1998 Sep.
2000 May.
2002 Dec.
2004 Oct.

2005 Feb.
2005 Mar.
2005 Jun.
2006 Apr.
2006 Aug.
2007 Dec.
2008 Jan.
2008 Oct.
2009 Aug.

2010 Sep.
2011 Apr.
2013 Aug.
2014 Apr.
2014 Aug.
2014 Dec.
2015 Apr.
2015 Jul.
2016 Apr.
2016 Oct.
2017 Jan.
2017 Apr.
2018 Jan.
2018 Feb.
2018 Apr.
2019 Apr.
2022 Apr.
2022 Jun.

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Event
Merged the subsidiary, reestablished as SRG TAKAMIYA Co., Ltd. The former SRG Takamiya Co., Ltd. isrenamed the Tokyo Branch.
Head office moved to Kita-ku, Osaka.
The Tohoku Sendai Branch is established in Aoba-ku, Sendai City.
Iwata Ltd., existing IWATA Co., Ltd., a consolidated subsidiary, was established in Wakayama Prefecture.
Nagoya Branch opened in Nakagawa-ku, Nagoya.
Rental Nagakita Ltd., existing SHINKEN NAGAKITA Co., Ltd., a consolidated subsidiary, was established in
Niigata Prefecture.
Tatsumi Ltd., existing TATSUMI Co., Ltd., a consolidated subsidiary, was established in Ibaraki Prefecture.
Fully acquired SRG Stanbai Ltd. (a group company) and began PC retail business.
Osaka Branch opened in Kita-ku, Osaka.
Exited the computer retail business.
Established Techno Kobo Ltd. (currently a consolidated subsidiary, Cadian Co., Ltd., Chuo-ku, Tokyo) in
Kita-ku, Osaka City, to design temporary construction drawings.
Kyushu Branch (currently Kyushu-Fukuoka Branch) was established in Hakata-ku, Fukuoka City.
Non-consolidated subsidiary, currantly Tsukubamirai City, Ibaraki Prefecture) was established in Settsu
City, Osaka Prefecture.
Head office was relocated to Shibata-cho, Kita-ku, Osaka.
Established HIRAMATSU Co., Ltd. currently a consolidated subsidiary in Haibara-cho, Shizuoka Pref.
Established SN Biltec Co., Ltd. in Kita-ku, Osaka (currently a consolidated subsidiary, Total Toshiseibi Co.,Ltd.)
Liquidated SRG TAKAMIYA ENGINEERING(S) PTE.LTD.（a consolidated subsidiary）
Listed by JASDAQ Securities Exchange. (Ticker Symbol: 2445)
Acquired 100% of the outstanding shares of Cadian Co., ltd.
Head office and Osaka branch relocated to Chayamachi, Kita-ku, Osaka.
Listed by Tokyo Stock Exchange the second part.
JASDAQ Securities Exchange delisting.
AOMORI ATOM Co.,Ltd., a consolidated subsidiary, was established in Aomori Prefecture.
Ishijima Kizai Seisakusho Co.,Ltd., existing TOTAL TOSHISEIBI Co., Ltd., became a consolidated subsidiary.
Acquired all shares of Hory Corporation and makes Hory and its wholly owned subsidiary, Hory Korea
Corporation, consolidated subsidiaries.
Nagakita Corp. takes over the business of Shinken Kizai Corp. and changes its name to Shinken Nagakita
Corp.
Established HORY VIETNAM Co., Ltd. (currently a consolidated subsidiary) in Vietnam.
Acquired all shares of ASAHI INDUSTRIES CO., LTD. In Osaka (currently a consolidated subsidiary, Nextec
Co., in Kita-ku, Osaka)
Head office and Osaka branch relocated to Ohfuka-cho, Kita-ku, Osaka.
Assigned on Tokyo Stock Exchange First Section.
Integrated the sales department of Hory Corporation.
DIMENSION-ALL Inc. (Philippines), sales and rental of Aluminum formwork, a consolidated subsidiary.
Integrated the sales division (building materials and environmental sales division) of Hory Co.
Niigata Branch opened in Chuo-ku, Niigata City.
Merged SHINKEN NAGAKITA Co., Ltd., a consolidated subsidiary, and then Niigata branch office wasestablished.
Merged TATSUMI Co., Ltd., a consolidated subsidiary, and then Ibaraki branch office was established.
Merged HORY corporation. a consolidated subsidiary.
Merged Nakaya Kizai Co., Ltd.（in Shimane Prefecture) a consolidated subsidiary.

With SN Biltec Co., Ltd., a consolidated subsidiary, as the surviving company, and Total Toshiseibi Co.,
Ltd., a consolidated subsidiary, as the extinct company, it will be merged to form a company name, Total
Toshiseibi Co., Ltd.
Changed company name to "Takamiya Co., Ltd." and redesigned the logo as well.
Due to the revision of the market classification of the Tokyo Stock Exchange, the company moves fromthe First Section of the Tokyo Stock Exchange to the Prime Market.
Transition to a company with an audit and supervisory committee.

4

TakamiyaCo., Ltd | 2445
カイオム・バイオサイエンス

Representative Director
President and Chairman
Mr. Kazumasa Takamiya

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Management policy and management structure
The management team consists of Kazumasa Takamiya, Chairman and President, one executive
vice president, five directors, two outside directors, four audit and supervisory board members(one full-time and three outside), and eleven executive officers.
Kazumasa Takamiya, Chairman and President, joined the company in March 1992, became
Director and General Manager of the Build Techno Rental Division in November 1995, Managing
Director and General Manager of the Build Techno Rental Division in June 1997, and waspromoted to Vice President and Representative Director in January 2001. In June 2002, he became
the second generation of the founding family to serve as President and Representative Director.
Since June 2017, he has also served as Chairman.
The company mission statement is "love," and the three management principles of "loveyourself," "love others," and "love the company" are the foundation of the company's
management philosophy. This management philosophy is based on the idea that modern society
is constantly on the move, driven by the complex intertwining of national economies and thebusiness activities of countless companies, and that individual companies are made up of theuntiring endeavors of their members. Moreover, the company believes that people’s own
ambitions and consideration for their families are the driving force that motivates them, and this iswhat the company aims to use as the driving force for its growth
Takamiya’s basic approach to corporate governance is to maximize corporate value by ensuring
thorough compliance, management transparency, and efficiency for shareholders and otherstakeholders. The company also aims to achieve sustainable development in a highly transparent
business environment by contributing to the development of users and the industry as a wholethrough the stable supply of safe, high value-added products, and by building an industry that isclearly recognized as excellent by society and investors.
Domestic and overseas consolidated group companies
Takamiya has nine consolidated subsidiaries: six in Japan and three overseas in Asia. The
company's two domestic plants (in Gunma and Gifu prefectures) and its overseas subsidiaries,
Hory Korea and HORY VIETNAM, manufacture temporary construction equipment and otherproducts, which are sold to customers in Japan and overseas, and also to group companies
engaged in the rental business. In addition, the company has 8 branches, 12 sales offices, and 29
equipment centers in Japan. Takamiya provides products, purchased items, rental and installation
services to its domestic customers and group companies through those subsidiaries. The
company's domestic subsidiaries play an important role. While general temporary construction
equipment such as scaffolding and shoring materials are available through the parent company,
the domestic subsidiaries provide temporary construction equipment and services required forhighly specialized construction projects. Taking advantage of the synergy of the group, including
the domestic subsidiaries, the company provides temporary construction equipment not only for
general construction and civil engineering work sites, but also for sites that require specialized
technology, such as high-rise buildings, underground, plant, and shield construction.

Domestic and overseas consolidated subsidiaries
Paid-in
Main% of voting
Description
capitalbusinessrights held
IWATA Co., Ltd.
Wakayama Pref.
10 mn
Rental
60.0% Rents and sells temporary construction equipment from the company
Cadian Co., Ltd.
Tokyo
30 mn
Rental100.0% The company requests drawings for temporary construction
HIRAMATSU Co., Ltd.
Shizuoka Pref.
10 mn
Rental100.0% Requests the company to deliver temporary construction equipment
TOTAL TOSHISEIBI Co., Ltd. Tokyo
30 mn
Rental100.0% Rents and sells temporary construction equipment from the company
AOMORI ATOM Co., Ltd.
Aomori Pref.
10 mn
Rental100.0% Rents and sells temporary construction equipment from the company
Nakaya Kizai Co., Ltd.
Shimane Pref.
10 mn
Rental100.0% Rents and sells temporary construction equipment from the company
Hory Korea Co., Ltd.
South Korea
100.0% Sells temporary construction equipment to the company
KRW4,400 mn Overseas
HORY VIETNAM Co., Ltd.
Vietnam
USD9.6 mn Overseas
100.0% Sells temporary construction equipment to the company
DIMENSION-ALL INC.
Philippines
100.0% Sells temporary construction equipment from the company
PHP247 mn Overseas
Source: compiled by Sessa Partners from YUHO (Annual Securities Report) financial statements
Company

Address5

TakamiyaCo., Ltd | 2445
カイオム・バイオサイエンス

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Consolidated group business chart
Hory Korea
HORY VIETNAM

Sell

Sell, rent, install

Sell

Sell

Sell

Purchase

Transport

Requesttransport
HIRAMATSU
Request transport

CadianProvidedrawings
Orderdrawings

Rent, install

Sell
IWATA, AOMORI ATOM, TOTALTOSHISEIBI, Nakaya Kizai

Rent, install
Provide drawings

Rental business

Providedrawings

Order drawings

Sales business

Sell

Overseas businessSell, rent, install
Customers (construction companies, residential developers,
agricultural businesses, etc)

Suppliers (raw material manufacturers, temporary construction
equipment manufacturers, trading companies, etc.)

Purchase

Source: compiled by SIR from Company presentation materials

The three overseas subsidiaries play an important role for the company in expanding its
business in the Asian market. South Korea-based Hory Korea manufactures, sells, and rents
temporary construction equipment and solar panel mounts. HORY VIETNAM manufacturesand sells highly versatile clamps (tools for fastening and securing temporary construction
equipment with screws, etc.) and other temporary construction equipment to parent
company Takamiya. DIMENSION-ALL INC. in the Philippines is engaged in the sale andrental of construction forms and shoring equipment. Demand for temporary construction
equipment is expected to be extremely high owing to strong construction demand in thePhilippines and the lifting of COVID-19 travel restrictions by the Philippine government.

Business chart of three overseas subsidiaries
Philippines (DAI)

Sell
Japan (Takamiya Group)

Sell, rent

Local
construction
companies

Manufacture, Sell

Manufacture,
Sell

Korea
(Hory Korea)

Sell, rent

Local
construction
companies,
Neighboring
countries

Manufacture,
Sell

Vietnam(HORY VIETNAM)

Source: compiled by SIR from Company presentation materials

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TakamiyaCo., Ltd | 2445
カイオム・バイオサイエンス
Business model

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Business strategy and business model
Takamiya is a manufacturer of scaffolding and other temporary construction equipment
essential for a wide variety of private and public construction projects. Originally, the company
started out in the business of renting out temporary construction equipment, but transformed
itself into a one-stop temporary construction equipment manufacturer capable of providing
services in the five areas of development and manufacturing, sales, rental, design and installation,and management and logistics to improve customer service.
Currently, Takamiya is working to further advance its business model. The cornerstone of thisadvancement is the Iq System, a next-generation scaffold launched in 2014 that is superior toconventional scaffolds in terms of work space coverage, ease of assembly, transportation
efficiency, and other features. The company aims to establish a new supply chain system neverbefore seen in the temporary construction equipment industry, not only selling and renting the Iq
System, but also managing and operating the Iq System purchased by customers and promptly
delivering it to customers when needed. The company calls this business foundation that enables
it to continue to evolve into a highly profitable business model by providing products and services
that challenge the industry norms its "platform business," and aims to further boost its corporate
value.
In addition to sales from its three business segments (sales, rental, and overseas business), thecompany also tracks platform sales, which are sales from services created by combining hardware
such as the superior Iq System product with software such as management, operation, andconsulting services. In other words, the progress of the "platform business" that the company isaiming to build can be monitored by looking at platform sales. Platform sales in 1H FY2023/3
amounted to ¥758 mn, coming in 18% higher than full-year FY2022/3 sales of ¥641 mn.
Market size and business domains
In addition to excavators, cranes, bulldozers, and other construction equipment, temporary
scaffolding equipment is essential for construction and civil engineering projects. Temporary
construction equipment is classified into three categories according to the field of construction:
heavy temporary construction equipment, light temporary construction equipment, andresidential temporary construction equipment.
Heavy temporary construction equipment refers to steel materials that are installed before themain construction work and removed when the foundation work is completed, and mainly
consists of large, heavy equipment such as steel sheet piles, H-shaped steel, steel pile retaining
materials, steel covering plates, etc. Residential temporary construction equipment includes
scaffolding for low-rise apartment buildings and detached houses. Takamiya provides a one-stop
comprehensive service covering everything from the development and manufacture of lighttemporary construction equipment to sales, rentals, design, installation, management, andlogistics. The company's business domain is extensive, with its light temporary construction
equipment scaffolding used in general construction civil engineering work, bridge construction,
underground construction, slope disaster prevention work, harbor construction, and repair work,
among other areas.
Of the three types of leases listed in the Ministry of Land, Infrastructure, Transport, andTourism's "Survey Report on Construction-Related Industries," sales from the company's rental
business are included in the statistics for the light temporary construction equipment leasing
industry. According to the next page chart, the market size in FY2021 is ¥225.1 bn, and themarket size in April-December, FY2022 has already exceeded figures for the same period FY2021.
Since general construction and civil engineering work is seasonally more concentrated in 2H, themarket size for FY2022 will most likely exceed that of FY2021. In addition, the Research Institute7

TakamiyaCo., Ltd | 2445
カイオム・バイオサイエンス

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ResearchResearchof Construction and Economy (RICE) projects that domestic construction investment in FY2022 willrise 1.5% YoY to ¥67.62 tn. According to RICE, corporate capital investment sentiment is expected
to recover in FY2022 following the slump stemming from the COVID-19 pandemic, and privatesector non-housing construction investment is currently expected to climb steadily, not only forwarehouse and distribution facilities, which saw higher demand spurred by the pandemic, butalso for factory construction and other non-residential construction projects.
Survey of Construction-Related Industries (112 companies in construction machineryand equipment leasing industry):By industry
Fiscal year

Construction
machinery andequipment
leasingHeavy
temporary
construction
equipment
leasingLight temporary
construction
equipment
leasing

Total(¥ mn)

Fiscal year

Domestic
construction
investment(¥ 100 mn)

2016

497,182

67,752

220,540

785,474 2016

587,3992017

521,062

68,258229,772

819,092 2017613,2512018

540,428

73,122

247,118

860,668 2018618,2712019

568,927

73,942230,958

873,827 2019624,900

2020

541,564

70,268210,208

822,040 2020

653,600

2021

529,91267,941

225,161

823,014 2021

666,000

2022(Apr. 2022–Oct. 2022)

414,41251,018180,063645,493 2022 estimate

676,200

Source: Ministry of Land, Infrastructure, Transport, and Tourism

Light Temporary Construction Equipment Leasing vs. Domestic Construction Investment(Unit: 100mn)(¥mn)

Source: Compiled by SIR based on Ministry of Land, Infrastructure, Transport and Tourism statistics and ResearchInstitute of Construction and Economy data

Recurring and non-recurring business model
Takamiya’s basic strategy is to integrate its recurring business model with its nonrecurring business model. Specifically, the company aims to establish a recurring businessby growing its platform's user base and enabling it to generate stable earnings.

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TakamiyaCo., Ltd | 2445
カイオム・バイオサイエンス

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Business portfolio
Takamiya’s business portfolio consists of three segments: sales, rental, and overseas
businesses.
① Sales business
In FY2022/3, the sales business accounted for 31.5% of total sales and 52.1% of total
operating profit, with a segment operating profit margin of 12.0%. The sales business includes
the following four business fields.
Temporary construction equipment accounted for the largest share of sales in this segment,
at 72.0%. The company sells temporary construction equipment covering a wide variety of
construction sites, and its core products include the Iq System, a next-generation scaffold
launched in 2014 that offers superior work space coverage, ease of assembly, andtransportation efficiency; the Spider Panel and VMAX suspended rack scaffold systems used intransportation infrastructure maintenance and repair work; and the YT Lock System, a scaffold
used for non-vertical jobsites such as on bridges, piers, and mountainside projects.
The environment-related business accounts for 13.1% of the sales business, and includes
two businesses: the photovoltaic (PV) business, which sells solar panel mounts and solar
carports, and the agricultural business, which manufactures, sells, and installs high-performancegreenhouses for agriculture by leveraging the company's metalworking technology developedin the temporary construction business.
Used equipment sales represents 9.8% of the sales business, and primarily consists of buying
equipment to fulfill customer Iq System replacement demand and selling the equipment tocustomers who need it.
Construction material sales accounts for 5.1% of the sales business, and includes sales ofvibration control devices that greatly reduces the shaking of houses caused by earthquakes andother disasters.
Sales Business (FY2022/3, Unit: ¥mn, Figures in parentheses are sales mix percentages)

Source: Compiled by SIR based on company data

Sales business (Unit: ¥mn)
FY13/3 FY14/3 FY15/3 FY16/3 FY17/3 FY18/3 FY19/3 FY20/3 FY21/3 FY22/3
Segment sales

13,475

17,17820,326

15,865

16,48912,44913,513

15,29911,99013,629Segment operating profit

1,577

2,046

2,655

1,531

2,537

1,192

1,670

1,934

1,404

1,633

Segment sales % of total

45.5%

49.7%

52.1%

38.5%

38.4%

31.4%

30.3%

31.4%

29.0%

31.5%

Segment operating profit % of total

61.2%

50.3%

57.2%

34.6%

57.2%

39.1%

40.2%

36.0%

45.3%

52.1%

Source: Compiled by SIR based on company data

9

TakamiyaCo., Ltd | 2445
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In FY2022/3, the rental business accounted for 53.7% of total sales and 39.0% of total operating
profit, with a segment operating profit margin of 5.2%. Most of the scaffolding equipment that thecompany manufactures and sells is also available for rental. In addition, the company owns
temporary construction equipment equivalent to approximately ¥70 bn in new equipment, which
can be used for a wide range of projects, from underground to high-rise construction sites.
Quarterly segment operating profit margin plunged in 3Q and 4Q FY2021/3, and has remained
low after bottoming out through FY2022/3. This was mainly attributed to the completion of the
Hokuriku Shinkansen extension and the pandemic, which led to sluggish sales growth, as well as
higher costs, including an increase in equipment maintenance costs stemming from the return of
temporary equipment used for the Hokuriku Shinkansen extension and an increase in transportation
costs for temporary equipment following the relocation of the equipment center, which pressured
profits. In FY2023/3, the segment operating profit margin began rebounding sharply in 1Q-3Q
FY2023/3 as customers who were reluctant to purchase temporary construction equipment shifted
toward renting it while maintenance and transportation costs came down.
In addition, utilization rates for all of the company's rental assets continued to rise in Q1 and Q2of FY2023/3, with utilization for the Iq System rising to 76.7% in Q3 of FY2023/3, roughly on par withthe record high of 76.8% posted in Q3 of FY2022/3.

Quarterly sales in Rental Business(Unit: ¥mn)
7000

Bottomed out
and rebounding

16.0%

6000

14.0%

5000

12.0%

4000

10.0%

3000

8.0%

2000

6.0%

1000

4.0%
2.0%

0

1Q
-1000

2Q

3Q

FY21/3

Segment sales

4Q

1Q

2Q

3Q

FY22/3

Segment operating profit

4Q

1Q

2Q

FY23/33Q
0.0%

Segment operating profit margin

Source: Compiled by SIR based on company data

Utilization rates of rental assets

Source: excerpt from IR results briefing materials.

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Rental business (Unit: ¥mn)
FY13/3

Segment sales
Segment operating profit

FY14/3 FY15/3 FY16/3 FY17/3 FY18/3 FY19/3 FY20/3 FY21/3 FY22/3

16,115 17,375 18,687 20,513 22,213 21,382 23,519 26,118 24,009 23,283
998

2,019

1,984

2,697

2,267

1,705

2,464

3,025

1,793

1,221

Segment sales % of total

54.5%

50.3%

47.9%

49.8%

51.8%

53.9%

52.8%

53.6%

58.1%

53.7%

Segment operating profit% of total

38.8%

49.7%

42.8%

61.2%

51.1%

55.9%

59.2%

56.3%

57.9%

39.0%

<% of total>

Source: Compiled by SIR based on company data

③ Overseas business
The company began disclosing segment information for its overseas business in
FY2017/3. In FY2022/3, the overseas business accounted for 14.8% of total sales and 8.8%of total operating profit, with a segment operating profit margin of 4.3%. There are no
direct exports from Takamiya (parent) to overseas customers, and sales and profits fromoverseas operations reflect the performance of three overseas consolidated subsidiaries:
Hory Korea (Korea), HORY VIETNAM (Vietnam), and DIMENSION-ALL INC. (Philippines).
Hory Korea is engaged in the manufacture, sale, and rental of temporary construction
equipment and solar panel mounts, while HORY VIETNAM manufactures and sells versatile
clamps (tools for fastening and securing temporary construction equipment with screws,etc.) to the parent company Takamiya. DIMENSION-ALL INC. in the Philippines is engaged
in the sale and rental of construction forms and shoring equipment. Demand for
temporary construction equipment is expected to be extremely high owing to strong
construction demand in the Philippines and the lifting of COVID-19 travel restrictions by
the Philippine government.
The segment reported an operating loss in FY2021/3 owing to restrictions on thebusiness activities of overseas subsidiaries stemming from the COVID-19 pandemic, butbounced back and posted an operating profit of ¥277mn in FY2022/3 thanks to higher
production utilization rates and lower SG&A expenses.
Overseas business (Unit: ¥mn)
FY16/3

Segment sales

FY17/3

FY18/3

FY19/3

FY20/3

FY21/3

FY22/3

4,806

4,198

5,832

7,535

7,306

5,300

6,410

179

(189)

149

24

410

(99)

277

Segment sales % of total

11.7%

9.8%

14.7%

16.9%

15.0%

12.8%

14.8%

Segment operating profit % of total

4.1%

-

4.9%

0.6%

7.6%

-

8.8%

Segment operating profit<% of total>

Source: Compiled by SIR based on company data
(1) The overseas business became a reporting segment in FY2017/3

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TakamiyaCo., Ltd | 2445
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Next Generation Scaffolding Iq System
Takamiya's most important strategic product is the Iq System, a next-generation scaffold
launched in 2014. Compared to conventional scaffolds, the Iq System is superior in terms ofwork space coverage, ease of assembly, and transportation efficiency, and has been designatedby the Ministry of Land, Infrastructure, Transport, and Tourism as a new technology promotion
product under its New Technology Information System (NETIS). Customers can purchase or rent
the Iq System.
The company has set a goal of making the Iq System the de facto standard in the scaffolding
market, and has completed its strategic investment in establishing its rental assets by replacing
all of its existing scaffolding with the next-generation Iq System by FY2017/3. The company now
has a full-fledged promotion system in place to fulfill its aggressive performance targets set in its
medium-term management plan, which will be discussed later in this report.
▶︎ Characteristics• Safety and workability
The standard advance handrails are installed at a height of 1,010mm, which is higher than
the standard required by the Occupational Safety and Health Regulations. The height from thefloor to the ceiling is 1,900 mm, 200 mm higher than the conventional floor height, enabling
workers wearing safety shoes and helmets to pass through without bending over. This
provides a spacious work space, with enhanced safety and workability.
• Ease of assemblyLightweight high-tensile steel pipe is used. Compared to the conventional wedgetensioned scaffold support columns (standard length of 3,800mm), the support column
for Iq System weighs 2kg less, making it much easier to work with. In addition, it can beassembled and disassembled by using a crane.
• Ease of operation
The components can be divided into separate parts, which significantly reduces thevolume. The Iq System requires only 21.06 m² of storage space, compared to 52.62 m² forconventional framed scaffolding (1,000 set equivalent). Transportation efficiency is greatly
improved, with the Iq System only requiring two trucks for every 2,000 m² of installed area,
instead of three truck for conventional scaffolds. In addition, while conventional scaffolds
come in fixed sizes and were selected for construction projects based on their size, customers
can adjust the size of the Iq system to suit project requirements by picking each component
except for the support columns. This makes the Iq System highly versatile, which boosts its
utilization rate.
▶︎ Sales trends
Sales of the Iq System over the past six years are shown in the chart on the next page.
FY2017/3 sales reached ¥2.51 bn, nearly doubling from ¥1.344 bn in FY2016/3. In FY2018/3,
sales fell below ¥2 bn owing to a reactionary drop from the large orders received in theprevious year, but sales grew substantially until April 2020, when the Japanese government
declared a state of emergency as a result of the COVID-19 pandemic. Since then, Iq Systemsales have fallen below FY2020/3 highs owing to delays and interruptions in construction andcivil engineering projects stemming from the pandemic, as well as the completion of theTokyo Olympics-related construction projects. In 2Q FY2023/3, sales rose 2.2% YoY to ¥2,726
mn. The company noted that since the beginning of FY23/3, there have been someconstruction delays since the beginning of FY2023/3 caused by a shortage of foreign workers
due to the pandemic, but the impact has not been as severe as before. Instead, the sharp
depreciation of the yen has pushed up the price of construction materials, which has caused
delays and interruptions in construction projects.
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Impact of Covid-19,
The end of the work of Tokyo Olympics andHokuriku Shinkansen extension

Iq System Sales (Unit: ¥mn)
4,294

Surge in large orders
3,270

3,244

3,504

2,510
1,939

FY17/3

FY18/3

+2.2%
YoY
2,726

2,667

FY19/3

FY20/3

FY21/3

FY22/32Q FY23/3

Cumulative sales of the Iq System (company sales only) : ¥23.5 bn
Source: compiled by SIR from Company presentation materials▶︎ Penetration and medium-term market size
Takamiya’s cumulative Iq System customer base and usage floor area at the parent level
have continued to grow markedly, with a total of 452 customers as of 3Q FY2023/3.
According to the company's own research, the ratio of conventional scaffolding to nextgeneration scaffolding is approximately 7:3, and the share of next-generation scaffolding has
not yet reached a majority. Its Iq System accounts for 37% of the next-generation scaffold
market. The growth potential of the Iq System is tremendous as companies continue toreplace conventional scaffolds with next-generation scaffolds.
Conventional scaffolds have been a mainstay of temporary construction equipment for along time and are highly versatile, with a certain degree of compatibility, even amongproducts made by different manufacturers. On the other hand, next-generation scaffolds,
including the company's Iq System, are not compatible with other companies' products.
One of the catalysts driving the replacement of conventional scaffolding with nextgeneration scaffolding is the need to prevent work-related accidents, including back and neckpain among construction workers caused by the low 170-cm height of conventional
scaffolding. Workers are required to wear safety helmets and safety shoes. Since the averageheight of men, who make up the majority of workers, is 172 cm, less than 10% of workers
can work without bending over when the floor height is 170 cm. However, more than 90% of
workers can work without bending over when the floor height is 190 cm. Growing concern
over the need to create a comfortable and safe work environment as a measure to address
the shortage of construction workers is likely to have a substantial impact on the pace of
replacement. In addition, stricter work safety regulations will likely drive replacement.
Another factor that will further accelerate replacement is the upcoming deadline in April
2024 for establishing a cap on working hours, which has been a problem stemming fromlabor shortages in the construction industry.
Takamiya’s next generation Iq System provides a highly competitive offering, designed witha floor height of 190 cm that provides a safe and comfortable working environment evenwhen workers are wearing thick work shoes and helmets, compared to the average 180cm
height of other companies' next generation scaffolds. In addition, the company's service ofcentrally managing and operating the Iq System regardless of where purchased, purchased
Iq System new customer count &cumulative customer countScaffold market share

Cumulative customer
New customer
Repeat(Unit: No. of company)

Conventional
scaffolds
about 70%

Next-generation scaffold market share

Iq System
about 11%
Other nextgeneration scaffolds
about 20%

Iq System
about 37%
Other nextgeneration scaffolds
about 63%

Source: compiled by SIR from Company presentation materials

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The company estimates that the medium-term market for next-generation scaffolding
including the Iq System, will grow the market size to ¥150 bn. If the Iq System becomes
the de facto standard, the impact on earnings will be extremely significant.
Production facilities, Equipment base, and Equipment center
Takamiya has two production facilities for temporary construction equipment in Japan,
one in Kiryu City, Gunma Prefecture, and the other in Anpachi-gun, Gifu Prefecture. Its
overseas bases include two factories for manufacturing temporary construction
equipment at consolidated subsidiaries, Hory Korea and HORY VIETNAM.
The company maintains 29 equipment bases and equipment centers around Japan,
including Takamiya Lab. West, which also serves as a base. The equipment bases andcenters play two major roles. One is to arrange for the shipment of temporary equipment
to be rented out to customers, and the other is to maintain and service the temporary
equipment returned by customers. The company has been opening equipment centersnear urban areas, making it convenient for customers to borrow and return temporary
scaffolding equipment. The reason the company is able to keep its equipment centersnear urban areas is that most of its temporary scaffolding equipment has already been
replaced with next-generation scaffolding, which requires only about 50% of the storage
space of conventional scaffolding.
(*The name was changed from “Equipment center" to "Equipment base" as of April 1, 2023.)

Equipment baseKoshinetsu/
Hokuriku area
甲信越・北陸Kinki
近畿 areaTakamiya Lab. West（Base）

兵庫県尼崎市
Amagasaki-city,
Hyogo Pref.

Tohoku東北 area

新潟横越センター
Niigata
Yokoetsu Center
新潟⻑岡センター
Niigata
Nagaoka Center
Shinsyu
Nagano Center信州⻑野センター
Nagano Iida Center⻑野飯⽥センター
Ishikawa Kanazawa Center
⽯川⾦沢センター
Hukui
Sabae Center

Aomori Totsu Center⻘森東通センター
Iwate Morioka Center
岩⼿盛岡センター
Miyagi Sendai Second Center
宮城仙台第⼆センター
Fukushima Hirono Center
福島広野センター

Kanto
関東 area

福井鯖江センター

滋賀近江⼋幡Base
Shiga
Oumi hachimanBase
⼤阪枚⽅Base
Osaka
Hirakata Base
⼤阪摂津Base
Osaka Settsu Base
和歌⼭桃⼭Base
Wakayama
Momoyama兵庫東条Base
Base
Hyogo
Tojo Base
兵庫神⼾Base
Hyogo Kobe Base

Chugoku/Shikoku
area
中四国
Hiroshima
Shiwa Center
広島志和センター
KagawaSanuki Center
⾹川さぬきセンター

Kyusyu area
九州
沖縄那覇センター
Okinawa Naha Center

Tokai area
東海

Ibaraki Chuo Center
茨城中央センター
Ibaraki Tsukuba Center
茨城つくばセンター
Ibaraki Dejima Center
茨城出島センター
Chiba Ichihara Center
千葉市原センター
Chiba Okido Center
千葉⼤⽊⼾センター
Saitama Kuki Center
埼⽟久喜センター
Kanagawa Aikawa Center
神奈川愛川センター

静岡吉⽥センター
Shizuoka Yoshida Center
東海⽊曽岬センター
Toukai Kisomisaki Center

Source: compiled by SIR from Company IR materials

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Financial analysis

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Key financial indicators
Takamiya's key financial indicators for the past five years are shown in the chart below.
Sales, operating profit, and net profit reached record highs in FY2020/3. On the other
hand, ROE and ROA reached record highs of 21.5% and 8.4%, respectively, in FY2014/3.
Over the past five years, the company's P/L-related financial indicators reached aturning point in FY2020/3, as large-scale public works projects, including construction offacilities related to the Tokyo Olympics and the Hokuriku Shinkansen Kanazawa-Tsuruga
line extension, drove growth in demand for temporary construction equipment andmaterials in the three years leading up to FY2020/3. At about the same time that thesemajor public works projects were completed, the COVID-19 pandemic broke out globally,
causing many delays and interruptions in private and public works projects, which has
affected the company's business performance since then. For example, operating profit
margin and net profit margin in FY2022/3 came in at about half of what they were in
FY2020/3, when the company posted record highs. Moreover, the average rental asset
utilization rate fell to 54.7% in FY2021/3 and 50.8% in FY2022/3, compared to 60.4% in
FY2020/3, when the company posted record highs. As a result, the company's total asset
turnover ratio dropped from 0.8 in FY2020/3 to 0.7 in FY2022/3. While its equity ratio
was higher than FY2020/3, coming in at 31.8% in FY2022/3, its leverage ratio, which is theinverse of the equity ratio, was 3.1 in FY2022/3. Additionally, return on sales came in atwas 2.5% in FY2022/3, down from 5.1% in FY2020/3, resulting in a ROE of 5.2% in
FY2022/3, well below the 14.7% recorded in FY2020/3. Net debt-to-equity ratio improved
to 1.0 in FY2022/3 thanks to a decrease in net interest-bearing debt.
As of 3Q FY2023/3, the average rental asset utilization rate recovered to 54.8% from
50.8% in FY2022/3, with utilization for Iq System coming in at 71.4%. In its FY2023/3
forecast, the company expects return on sales to expand to 3.2%, which would likely
boost its ROE in FY2023/3.
Key financial indicators for the past 5 years
Year

FY18/3

FY19/3

FY20/3

FY21/3

FY22/3

Net sales (¥mn)

36,11442,182

46,05538,81239,800Operating profit(¥mn)

1,690

2,713

3,703

1,586

1,682

Net profit(¥mn)

1,252

1,637

2,370

857

965

EBITDA (¥mn)

6,353

7,491

8,508

6,402

6,466

Operating profit margin

4.7

6.4

8.0

4.1

4.2

Net profit margin

3.5

3.9

5.1

2.2

2.4

Total asset turnover

0.7

0.8

0.8

0.7

0.7

Financial leverage

4.0

3.8

3.5

3.2

3.1

ROE (%)

9.8

12.0

14.7

4.7

5.2

ROA (%)

3.1

5.0

6.2

2.7

3.4

Equity Ratio(%)

25.0

26.0

30.5

32.3

31.8

Interest-bearing debt (¥mn)(1)29,497

29,124

29,63327,62028,209Net interest-bearing debt (¥mn)

24,34723,39022,39019,58819,373

D/E ratio (X)

2.2

2.1

1.6

1.5

1.5

Net D/E ratio (X)

1.8

1.7

1.2

1.1

1.0

Interest Bearing Debt／EBITDA

4.6

3.9

3.5

4.3

4.4

Source: compiled by Sessa Partners from YUHO (Annual Securities Report) financial statements(1) Interest-bearing debt is the sum of short-term borrowings, current portion of bonds, current portion of long-termborrowings, short-term and long-term lease obligations, bonds, long-term borrowings, and accrued installments

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Cash flow
In terms of cash flow, Takamiya generated positive free cash flow for two consecutive
periods in FY2021/3 and FY2022/3. The negative free cash flow in FY2020/3 was largely
attributable to the purchase of property, plant, and equipment for the planned openingof a new equipment center (Takamiya Lab. West) in the Osaka Bay area. In addition,
FY2020/3 was the only period in the last five years when the company generated apositive financial cash flow. This was mainly due to proceeds from new long-termborrowings of ¥4,320 mn, proceeds from bond issuance of ¥1,285 mn, proceeds fromstock issuance of ¥619 mn, and proceeds from sale of treasury stock of ¥1,594 mn, which
offset repayment of long-term borrowings of ¥5,949 mn.
Key financial indicators for the past 5 years
Fiscal year

FY18/3

FY19/3

FY20/3

FY21/3

FY22/3

Cash flows from operating activities (1)

1,714

3,653

3,771

5,035

4,294

Cash flows from investing activities (2)(1,909)(1,728)(3,836)(1,382)(2,979)Cash flows from financing activities(222)(1,243)

1,590(2,873)(588)

FCF (1)+(2)

(195)

1,925

(65)

3,653

1,315

Cash and deposits

4,750

5,414

6,922

7,712

8,516

Source: compiled by SIR from YUHO (Annual Securities Report) financial statements.

Capital expenditures and rental asset investments
Takamiya strategically invests in rental assets, mainly the Iq System with monitoringmarket conditions, in order to accelerate its penetration and make it the de facto
standard in next-generation scaffolding. The company has covered its cash shortage
arising from investments that exceed free cash flow through bank financing.

Capital Investment and Rental Estimated Investment

5,434

(LHS)
(LHS)
Source: compiled by SIR from YUHO (Annual Securities Report) financial statements.

(RHS)

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Employee count and sales per employee
In FY2022/3, Takamiya had 1,222 employees, and sales per employee amounted to ¥33
mn. There has been no major change compared to the ¥35 mn posted in FY2020/3, when
the company booked record-high sales. The drop in sales per employee has been roughly
the same as the percentage drop in employee count. On the other hand, a 10-year
historical comparison shows that sales per employee were generally higher in the first
five years than in the second five years. This is due to the company's aggressive hiring ofyoung employees who can flexibly respond to new technologies and science amid theongoing digital transformation movement. This is also preparation for business expansion
period, as hiring is expected to become more challenging going forward.
Employee count and sales per employee
Year

FY18/3

FY19/3

FY20/3

FY21/3

FY23/3(est.)(1)

FY22/3

Employee countSales (¥mn)

1,144
36,114

1,204
42,182

1,298
46,065

1,221
38,812

1,222
39,8001,284
45,000

Sales peremployee (¥mn)

32

35

35

32

33

35

Year

FY13/3

FY14/3

FY15/3

FY16/3

FY17/3

Employee countSales (¥mn)

710
28,113693
32,443903
34,261

979
34,3501,010
36,763

Sales peremployee (¥mn)

40

47

38

35

36

Source: compiled by SIR from YUHO (Annual Securities Report) financial statements

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3Q FY2023/3 earnings summary
In its 3Q consolidated earnings released on February 10, 2023, Takamiya reported salesof ¥30,686 mn (+2.9% YoY), operating profit of ¥1,606 mn (+62.8% YoY), recurring profit of¥1,724 mn (+54.9% YoY), and net profit of ¥1,176 mn (+229.4% YoY). Sales in the sales
business fell owing to construction delays and postponements in the timing of temporary
equipment purchases, but overall sales rose 2.9% YoY on the back of higher sales in therental business and overseas business. Operating profit jumped 62.8% YoY thanks to thecontinued strong performance of the rental business as well as efforts to curb SG&A
expenses. The following is a summary by business segment.
The sales business reported lower sales and profits, with sales of ¥9,509 mn (-5.4%
YoY) and operating profit of ¥830 mn (-21.5% YoY). In the temporary equipment sector,
some customers postponed their purchases owing to construction delays caused bysoaring material prices and a shortage of foreign workers, as well as fears over economic
uncertainty stemming from the rapid depreciation of the yen. In addition, somecustomers shifted toward renting equipment under these circumstances, which led to adouble-digit drop in segment sales. Despite this environment, interest in the company’sbusiness platform centered on the Iq System remained strong, and inquiries for newpurchases, replacement, and additional purchases remained steady. However, sales of
the Iq System fell 2.2% YoY to ¥2,726 mn as a result of price hikes implemented in April
and October 2022 in response to soaring raw material prices, as well as delays andpostponements in construction and civil engineering projects, which led to customers
becoming increasingly dependent on renting the product. Outside of temporary
construction equipment, sales in the environment-related business were down 12.0%
YoY to ¥1,211 mn as a major agricultural high-performance glass house construction
project came to a close in 1H FY2022/3. Meanwhile, sales of construction materials rose
17.8% YoY to ¥641 mn and sales of used equipment slipped 21.1% YoY to ¥768 mn.
The rental business posted sales of ¥18,090 mn (+4.4% YoY) and operating profit of¥1,894 million (+131.5% YoY). In private construction projects, rental volume of Iq
System remained strong, mainly for maintenance and repair work in the Tokyo
metropolitan area, despite the continuing challenging business environment, withconstruction suspensions, delays, and postponements of construction starts since theprevious fiscal year. In public works, although some construction starts were postponed,
Iq System rental volume rose YoY. For the three-month period of 3Q (October–
December), Iq System utilization was at 76.7%, compared to the record high of 76.8%
seen in 3Q FY2022/3.
The overseas business posted sales of ¥6,772 mn (+42.8% YoY) and operating profit of¥327 mn (+53.0% YoY). There were no major disruptions in raw material and partsprocurement at HORY VIETNAM and Hory Korea, and shipments of temporary
construction equipment to Japan remained strong. At Hory Korea, sales and rental
business in Korea also expanded steadily. At DIMENSION-ALL INC. (Philippines), inquiries
for temporary construction equipment for infrastructure projects increased as thePhilippine government lifted COVID-19 related travel restrictions.
Takamiya’s operating profit margin was 5.2%, up substantially from 3.3% in 3Q
FY2022/3. This was mainly driven by a favorable change in sales mix, with growth in sales
from the high-margin rental business. The significant 229.4% YoY jump in net profit waslargely due to the absence of a ¥284 mn loss on valuation of investment securities
recorded in 3Q FY2022/3.

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Segment sales and operating profit (Unit: ¥mn)
Segment sales
FY22/3 Q3 FY23/3 Q3
10,054
9,509

Sales business

Segment operating profit
YoY
FY22/3 Q3 FY23/3 Q3
-5.4%
1057
830

Segment operating profit margin

10.5%

8.7%

818

1,894
10.5%

131.5%
52.8%

4.5%

327
4.8%

2,090

3,052

46.0%

Rental business
Segment operating profit margin

17,32718,090

4.4%

Overseas business
Segment operating profit margin

4,743

6,772

42.8%

214

TOTAL

32,12634,3727.0%

4.7%

Segment operating profit margin

YoY-21.5%

-

-

-

6.5%

8.9%

-

Adj.

(2,301)(3,686)-(1,103)(1,445)-quarterly consolidated profit/loss

29,82430,686

2.9%

986

1606

62.9%

Source: Compiled by SIR based on company data

FY2023/3 full-year earnings forecast
Takamiya's full-year FY2023/3 earnings forecast calls for sales of ¥45.0 bn (+13.1% YoY),
operating profit of ¥2.3 bn (+36.7% YoY), recurring profit of ¥2.1 bn (+10.0% YoY), and net
profit of ¥1,450 mn (+50.2% YoY). The company's earnings is seasonally more concentrated in
2H as temporary construction equipment demand for public infrastructure is high. Looking atquarterly results at the parent company level, sales rose steadily going into 2H, starting from
¥9,017 mn in 1Q to ¥10,782 mn in 2Q and then to ¥10,887 mn in 3Q. Similarly, operating
profit expanded substantially from ¥181 mn in 1Q to ¥582 mn in 2Q, and then to ¥843 mn in
3Q. Sales in the sales business came in below initial plan owing to price hikes stemming fromhigher raw material prices as well as construction delays and postponed purchases, with thecompany continuing to rely more on rentals. At the same time, equipment utilization rates for
the Iq System and other equipment have surpassed projections, and sales in the rental
business have continued to rise.
Quarterly business performance and progress (Unit: ¥mn)
Progress(vs. FY forecast)

FY23/3 (CE)

1Q

2Q

3Q

FY (CE)(As of 3Q)

9,017

19,79930,68645,00068.2%

Operating profit

181

763

1,606

2,300

69.8%

Operating profit margin

2.0%

3.9%

5.2%

5.1%

-

Ordinary profit

436

1,137

1,724

2,150

80.2%

Net profit

313

746

1,176

1,450

81.1%

-2.4%

-1.1%

2.9%

13.1%

-

Operating profit

133.2%

0.5%

62.8%

36.7%

-

Ordinary profit

198.0%

26.9%

54.9%

10.0%

-

Net profit

14.2X

176.0%

229.4%

50.2%-

Net Sales(Growth rate vs.)Net Sales

Source: Compiled by SIR based on company data

19

TakamiyaCo., Ltd | 2445
カイオム・バイオサイエンス
Medium-term
management plan

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Outline of medium-term management plan
In May 2021, Takamiya formulated a medium-term management plan ending in FY2024/3.
Its quantitative targets for the final year of the plan calls for sales of ¥60 bn, operating profit of¥5 bn, and operating profit margin of at least 8.0%, while other financial targets include ROE of
12%, ROA of 6%, and equity ratio of 35%. The company has identified the four key measureslisted below to promote the medium-term management plan. Its shareholder return policy
involves enhancing corporate value through business growth and paying dividends in line withearnings while maintaining the current dividend payout ratio.
1. Develop services that blend hardware and software, with a focus on the Iq System
2. Strengthen products for maintenance/repairs and infrastructure redevelopment
3. Nurture businesses beyond the temporary equipment sector
4. Redevelop overseas business bases
Key Indicators of the Medium-Term Management Plan
FY23/3Item

Net sales (¥mn)
Operating profit (¥mn)
Operating profit margin
EBITDA (¥mn)
Investment in equipment and rental assets(¥mn)
Depreciation
Equity Ratio (%)
ROAROENet profit margin (%)
Total Assets Turnover
Financial Leverage

FY22/339,800
1,682
4.2%
6,466
5,434
4,784
31.8%
3.4%
5.2%
2.4%
0.7
3.1

FY24/3(Final year of
mid-term plan)(CE)

45,000
2,300
5.1%
7,250
6,954
4,950
3.2%
-

60,0005,000
8.3%¥10 bn or more
7,850
5,170
35% or more
6% or more
12% or more
4.8%
0.9
2.8

Source: Compiled by SIR from the company's Integrated Report and other materials

1. Develop services that blend hardware and software, with a focus on the Iq System
The first basic strategy is to roll out a platform business by developing services that
integrate hardware such as the Iq System and other high value-added temporary
construction equipment with software consisting of five functions including development
and manufacturing, sales, rental, design and construction, and management and logistics.
Takamiya will manage, operate, and provide consulting services for temporary equipment
through its platform, enabling customers to use the company's temporary construction
business infrastructure as their own business foundation. Furthermore, customers will beable to expand their business by leveraging the company's functions such as its diverse
product development capabilities in temporary construction, construction materials, andagricultural products; manufacturing system with four domestic and overseas plants;
domestic and overseas sales network and used equipment market; temporary construction
equipment that can be used across a variety of job sites from high-rise to undergroundconstruction; design technology, BIM/CIM, and domestic construction network; and 29
equipment supply bases across Japan.
In addition, as part of the services provided on the platform, the company will manage(maintain, ship and receive, preserve quality, etc.) its customers’ Iq System products, whichenables them to ship and receive their own equipment from the company's equipment
supply centers located throughout Japan. Any missing or peripheral parts or materials can berented on the spot.
20

TakamiyaCo., Ltd | 2445
カイオム・バイオサイエンス

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Moreover, the company offers its OPERA online ordering system, which enables
customers to order rental equipment and schedule delivery. In addition to the current
features, the company plans to expand the functionality of the platform to enable
integrated digital management of highly convenient services to be added to the platformin the future. The platform will be accessible via the OPERA system, which will play acentral role as a portal for the platform.
Takamiya Lab. West, the core of the platform, will take on the roles of both an R&D
facility and an urban equipment supply base, providing a wide variety of services that go
beyond conventional equipment supply base, including the fastest equipment shipping
and receiving in the industry, accurate equipment inspections and counts, productexhibits and joint development, and various educational training programs.
2. Strengthen products for maintenance/repairs and infrastructure redevelopment
The second basic strategy of the medium-term management plan is to boost earnings
in the maintenance and repair business, including public infrastructure. The mix ofmaintenance and repair (renovation and renewal) work as a percentage of domestic
construction work completed by prime contractors is on the rise, as it has been about 50
years since the construction of public infrastructure such as Shinkansen bullet trains,expressways, and railroads, making maintenance and repair work necessary. In addition,
condominiums and other private-sector building structures built in the late 1990s andearly 2000s are also entering a repair work cycle, with high demand for maintenance andrepair-related products expected from the construction and civil engineering industries
over the medium term. Core maintenance and repair products are as follows:➢ Lift climber
Lift climbersare an innovative electric-powered mobile scaffold elevator system for all
types of construction and civil engineering work, including building construction,
condominium repairs, warehouse construction, plant construction, etc. Lift climbers are
the first of their kind in the world. Compared to conventional scaffolding, lift climbers
offer overwhelming advantages in terms of work safety, efficiency, and labor savings, andcan address the shortage of workers in the construction and civil engineering industry.
Especially recently, condominiums built around 2000 are coming due for repairs, creatingstrong demand for repair work. Unlike conventional methods, there is no need to cover
the entire building with a sheet, which helps maintain the condominium’s appearance,
ensures daylight for each unit, and provides a high level of security during repair works.
Because of these outstanding features, the company's mast climber was registered with
the Ministry of Land, Infrastructure, Transport, and Tourism's New Technology
Information System (NETIS) for construction and civil engineering technology in 2012, andis widely used in the construction and civil engineering industry. Furthermore, the use of
new technologies registered with NETIS is mandatory for construction and civil engineering
work as of 2020, and this is one of the reasons why the company continues to hold the top
share of the mobile scaffold elevator market. Currently, the company has over 200 lift
climbers, which are used at approximately 1,000 construction sites throughout Japan.
Lift climber registered with the
Ministry of Land, Infrastructure,
Transport and Tourism's NETIS
and maintains good appearance
during construction

Source: compiled by SIR from Company materials

21

TakamiyaCo., Ltd | 2445
カイオム・バイオサイエンス

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ResearchResearch➢ Suspended scaffold systems (Spider Panel, VMAX)

Suspended scaffolds are scaffolds that incorporate suspension chains, suspension
girders, joists, scaffold boards, safety nets, etc., and are widely used for new construction,
repair work, painting, and inspection of highways and bridges. Compared to conventional
suspended scaffolds, the company's suspended scaffold systems offer substantial
improvements in labor savings, work efficiency, and cost savings. In addition, they can be
configured systematically and easily to create a gap-free floor space, enabling a visibly
safer work environment. There are two types of systems: the panel type spider panel
system and the unit type VMAX system. The spider panel system is an advanced
suspended panel scaffold system offering a gap and step-free safe work space thanks to
its built-in latches at the edges of the panel. The VMAX system can handle all types of
construction from heavy to light loads and can be built using a wide range of construction
methods, including bulk, modular, and panel assembly methods.
The Spider Panel system
features a flat suspended
scaffold with no unevensurfaces compared toconventional products.

The VMAX system (unittype) improves safety andworkability while
maintaining appearance
during construction.
Source: Complied by SIR based on company data

➢ YT Lock System
The YT Lock System is a scaffolding product for non-vertical job sites such as bridges, piers,
and mountainside projects. Like the Iq System, the YT Lock System reduces labor andimproves safety, but it operates on a wider variety of construction sites and can be usedregardless of the skill level of the worker. The improved safety is achieved through a onetouch snap-in connection system that requires no tools and produces no hammeringsound during assembly. Since no tools are required, workers can use both hands whenworking. With reduced labor and logistics costs, total scaffold costs can be saved by up to
30%, depending on the scale of the project.

YT Lock System enables assembly of platforms for cranes and other heavy equipment without
any tools
Source: Complied by SIR based on company data

22

TakamiyaCo., Ltd | 2445
カイオム・バイオサイエンス

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3. Nurture businesses beyond the temporary equipment sector
The third basic strategy of the medium-term management plan is to focus on businessexpansion outside of the core temporary equipment sector and to strengthen the earnings
base by improving the business portfolio mix. Currently, the agriculture business described
below plays a central role in this strategy.
➢ Agriculture businessTakamiya newly entered the agriculture business in 2014. Currently, its main focus is on the
manufacture, sale, and installation of agricultural greenhouses. The company's entry into thisbusiness was driven by its advanced metalworking technologies cultivated over many years ofexperience in the manufacture of temporary construction equipment, as well as by its structural
calculation expertise enabling it to achieve both high strength and low cost. In addition, thecompany's factory is equipped with facilities for testing the strength of temporary scaffolding
products, which enables it to conduct weather resistance tests for agricultural greenhouseproducts in consideration of the actual operating environment in the event of wind damage,snow damage, or other weather-related disasters. Furthermore, the company's network ofexisting scaffolding installation partner companies enables it to quickly install agricultural
greenhouses throughout Japan.
With this highly competitive production system, the company offers two proprietary products:
the G-Castle Series, which offers two grades of weather resistance, and the Pipe House, which is
resistant to natural disasters. In addition, the company is also carrying out demonstration fruitand vegetable cultivation under the Hanyu Aisai Project in Hanyu City, Saitama Prefecture,
which it established with the aim of developing and manufacturing agricultural greenhouses
that meet the needs of farmers in the field. This demonstration farm not only evaluates theperformance of the company's agricultural greenhouses, but also plays an important role inhosting customer tours of the facility, verifying the environmental control equipment inside thegreenhouses and optimal cultivation methods, and using the verification results to promote thesale of agricultural greenhouses. The company is also focusing on expanding its agriculturebusiness by introducing sensor technology to collect various types of data related to cultivationand providing this data to its customers for secondary use.

G-Castle series with two gradesof weather resistanceNatural disaster-resistant Pipe
House

Source: Complied by SIR based on company data

23

TakamiyaCo., Ltd | 2445
カイオム・バイオサイエンス

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4. Redevelop overseas business bases
The fourth basic strategy in the medium-term management plan is to redevelop
overseas operations, particularly in the ASEAN region, including operations in thePhilippines, which have been severely affected by the COVID-19 pandemic. Currently, thecompany has consolidated subsidiaries in Korea, Vietnam, and the Philippines. Throughits three subsidiaries the company is working to expand its temporary equipment
business in the ASEAN region. In South Korea, the company manufactures, sells, and rents
temporary construction equipment and solar panel mounts; in Vietnam, it manufactures
products bound for Japan; and in the Philippines, it mainly engages in sales and rental
operations. In FY2022/3, the overseas business reported ¥6,410 mn in sales and ¥277 mn
in operating profit. As a result of the pandemic, the company has not been able to reachits previous highs of ¥7,535 mn in sales (FY2019/3) and ¥410 mn in operating profit(FY2020/3). As part of the current medium-term management plan formulated in
FY2021/3, the company aims to achieve ¥9 bn of sales from its overseas business in the
final year of FY2024/3, compared to its target of ¥60 bn in total sales. However, as
mentioned earlier in the report, sales in the overseas business already surpassed the ¥6bn mark ahead of plan. In addition, the company plans to accelerate businessdevelopment in the ASEAN region outside of the areas where it operates by building an
alliance network with other companies in the same industry.

24

TakamiyaCo., Ltd | 2445
カイオム・バイオサイエンス
Shareholders anddividends

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Major shareholders
President and Chairman, Kazumasa Takamiya owns 2.89% of outstanding shares, andExecutive Vice President Akiyoshi Takamiya owns 2.76%. Tojitsu Takamiya, the founderand father of Kazumasa Takamiya and Akiyoshi Takamiya, holds 11.50% of outstanding
shares. Although Tojitsu Takamiya and other family members own 18.49% of thecompany, are not involved in the management of the company. In addition, Takamiya
Y.K. (an asset management company owned by Kazumasa Takamiya) holds 16.38% of
outstanding shares.

Major Shareholders and Shareholdings

Takamiya Ltd.

Shareholding
ratio (%)
7,629
16.38%

Tojitsu Takamiya

5,356

11.50%The Master Trust Bank of Japan, Ltd. (Trust account)

3,393

7.28%

Custody Bank of Japan, Ltd. (Trust account)

2,992

6.42%

Takamiya Employee Stock Ownership Plan

1,774

3.81%

Toyoji Takamiya

1,678

3.60%

Chikako Takamiya

1,579

3.39%

Kazumasa Takamiya

1,350

2.89%

Akiyoshi Takamiya

1,288

2.76%

Quattro Co., Ltd.

1,000

2.14%

28,03960.17%

46,585100.00%7

0.02%

Major shareholders

Shares held (1,000s)

Total
Issued shares
Treasury shares
Source: Complied by SIR based on the company's 2Q FY2023/3 Semi-annual Securities Report25

TakamiyaCo., Ltd | 2445
カイオム・バイオサイエンス

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Dividend policy
Takamiya pays an annual dividend of ¥14.00 per share, consisting of an interim
dividend of ¥6.00 per share and a year-end dividend of ¥8.00 per share. The company
has not announced a specific dividend payout ratio or other shareholder return policy,
but it has stated that its policy is to maintain the current dividend level and to pay out
dividends in line with earnings.

Dividends paid
FY23/3

FY18/3

FY19/3

FY20/3

FY21/3

FY22/3

11

11

14

14

14

14

Breakdown: 1Q

－

－

－

－

－

－

2Q

4.0

4.0

6.0

6.0

6.0

6.0

3Q

－

－

－

－

－

－

4Q

7.0

7.0

8.0

8.0

8.0

8.0

Total amount ofdividends (¥mn)

471

471

651

651

652

－

Payout Ratio

37.60%

28.80%

26.50%

76.00%

67.40%－

stock buy-back (¥mn)

0

0

0

0

0

－

Total return
Dividends on equity
ratio

37.60%

28.80%

26.50%

76.00%

67.40%

－

3.70%

3.50%

3.90%

3.60%

3.50%

－

Dividends (¥)（CE）(Payout Ratio×ROE)
Source: Compiled by SIR based on company IR material

26

TakamiyaCo., Ltd | 2445
カイオム・バイオサイエンス
Share price insights

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Share price
The highs and lows of Takamiya’s share price from the beginning of FY2018/3 to April 7,
2023 in FY2023/3 are shown in the chart below. From FY2020/3 onward, the lows haveremained around the ¥300 level. This is roughly in line with the time when the World
Health Organization (WHO) declared the COVID-19 pandemic on March 11, 2020. The
company achieved record profits in FY2020/3, fueled by demand from major projects suchas the Tokyo Olympics and the Hokuriku Shinkansen Kanazawa-Tsuruga line extension.
However, the subsequent two fiscal years saw delays and interruptions in private and public
works projects stemming from the pandemic, resulting in weak earnings from FY2020/3
onward, with the company’s share price remaining within the ¥360-¥400 range for the past
three months. On the other hand, the company's full-year FY2023/3 earnings forecast calls
for a 13.1% YoY jump in sales to ¥45.0 bn, the first double-digit growth in four years, and a
35.7% YoY rise in operating profit to ¥2.3 bn, suggesting that stock market investors may
have not fully factored in this year's earnings growth yet.
Takamiya’s share price from the beginning of FY2018/3 to April 7, 2023 in FY2023/3

FY18/3
FY19/3
FY20/3
FY21/3
FY22/3
FY23/3(CE)Share price (¥)

EPS

High

(¥)

Low

735
777
828
634
618
467

510
600
372
379
348
328

Annualdividend pershare (¥)

29.3
38.2
52.7
18.4
20.7
31.1

11.0
11.0
14.0
14.0
14.0
14.0

BPS
(¥)

307.9
330.6
387.7
392.0
403.0
-

PER (X)
High

25.1
20.3
15.7
34.5
29.9
15.0

Div yield
Low

High

17.4
15.7
7.1
20.6
16.8
10.5

1.5%
1.4%
1.7%
2.2%
2.3%
3.0%

Low

2.2%
1.8%
3.8%
3.7%
4.0%
4.3%

Source: Compiled by SIR based on company IR material and SPEEDA data

Valuation
Stock market investors often compare valuations with similar companies when evaluatingstock prices. However, it is difficult to select similar companies with exactly the sameprofitability, business portfolio, capital structure, and other characteristics. In addition, it ischallenging to convert non-financial indicators, such as scarcity, into an evaluation metric.
Taking these factors into account, SIR looked at the three categories of construction
equipment leasing, heavy temporary construction equipment leasing, and light temporary
construction equipment leasing listed in the Ministry of Land, Infrastructure, Transport andTourism's "Survey Report on Construction-Related Industries," and selected 11 similar
companies engaged in the sale, rental, and leasing of light temporary construction equipment
as a broad reference for valuation. Although some of these 11 companies are also involved inheavy temporary construction equipment, there is no valuation method in the stock market
that clearly reflects the difference in business models between heavy temporary construction
equipment and light temporary construction equipment, so we have included the averages ofkey valuation metrics of the 11 companies as a reference.
Comparison of Valuations of Similar Companies
EV/EVITDACEPBR(X)(X)
PER(X)(1)

ROE(%)DY(%)

OPM(%)

CAR(%)

Takamiya

11.6

5.7

0.9

5.1

3.9

4.2

31.8

Average of 11
peers(3)

14.2

6.3

0.7

6.4

3.5

5.5

50.7

Change in next FY performance(%)(2)+50%＞
growth rate

+10%〜+15% ofgrowth rate

Single-digit
growth rate

0%-decreasein profits

5 firms

4 firms+50.2%
1 firm

1 firmSource: Compiled by SIR from company IR material and SPEEDA data
(1) Calculated based on each company's FY22 EPS forecast(2) The percentage change from FY21 actual EPS to FY22 company forecast EPS(3) The 11 peers: Chuo-build, Shinwa, Daisan, AlINCO, Okabe, KONDOTEC, ASNOVA, Kanamoto, Nishio Holdings, Marubeni
Construction Material Lease, and GECOSS.

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TakamiyaCo., Ltd | 2445
カイオム・バイオサイエンス

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There are no clear valuation differences between the company and the 11-company averagein terms of EV/EBITDA multiple or P/B ratio. Notably, with the exception of ASNOVA, the P/B
ratios of all companies are below 1x. Despite its outstanding YoY performance change,
Takamiya's forward P/E ratio is 13.8x, slightly lower than the 11-company average of 14.2x.
Takamiya’s share price may see a re-rating as the consensus becomes more positive about thethe company’s strong YoY performance changes compared to the other companies.
Share price catalysts
As previously mentioned, Takamiya posted record-high sales and profits in FY2020/3,
largely on the back of higher demand for scaffolding arising from construction of facilities
related to the Tokyo Olympics and a major Hokuriku Shinkansen Kanazawa-Tsuruga line
extension project. The company’s share price ranged from ¥600 to ¥800 per share, reflecting
strong FY2020/3 performance projections until the WHO declared a pandemic on March 11,
2020.
Looking ahead, semi-macro factors such as major private and public construction projects
that substantially affect earnings will continue to be a key catalyst for a rating, as seen in
FY2020/3. Investors should keep a close eye on the progress of these major projects, as well
as newly announced projects, as they will have a direct impact on the company's performance.
The chart below shows the current timetable for major public projects related to theconstruction and civil engineering industry and the temporary construction equipment
industry. While it is impossible to predict at this time whether all of these projects will result insales and rental orders for the company's temporary construction equipment, the fact thatthe company's temporary construction equipment has been used in the construction of the
Hokuriku Shinkansen bullet train extension and other major projects suggests that at least
some of these projects will likely result in higher demand for the company's temporary
construction equipment.
In addition, Takamiya's progress on its medium-term management plan is likely toincreasingly affect its share price going forward. The key performance targets announced in its
medium-term management plan are ambitious, and the company’s earnings growth will be
substantial if it is able to achieve these targets. Accordingly, SIR believes that the progress ofthe medium-term management plan and the pace of Iq System adoption, which will drive
earnings, are also important catalysts.
Major public projects related to the construction and civil engineering industry and the temporary
construction equipment industry

Excerpts from the company's financial results

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TakamiyaCo., Ltd | 2445
カイオム・バイオサイエンス

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Supplemental information➢ Income Statement
FY (¥mn)

FY14/3

FY15/3

FY16/3

FY17/3

FY18/3

FY19/3

FY20/3

FY21/3

FY22/3

Net Sales

32,44334,26134,35036,76336,11542,182

46,06538,81239,800

Cost of Sales

22,61023,40523,05925,772

25,68330,05032,051

27,81528,619Gross Profit

9,833

10,856

11,291

10,992

10,431

12,132

14,014

10,997

11,181Gross Margin

30.3

31.7

32.9

29.9

28.9

28.8

30.4

28.3

28.1

SG&A Expenses

6,781

7,758

8,308

8,562

8,740

9,418

10,311

9,410

9,499

Operating Profit

3,052

3,098

2,983

2,430

1,691

2,714

3,703

1,586

1,682

Operating Profit Margin

9.4

9

8.7

6.6

4.7

6.4

8

4.1

4.2

Non-Operating Profit

389

547

412

330

434

340

329

386

618

Interest and Dividends Income

33

56

47

25

37

32

26

21

14

Non-Operating Expenses

434

319

664

422

515

391

491

403

346

Interest Expenses

235

212

226

209

218

262

275

239

206

Equity Method Income

13

46

71

60

110

3,006

3,326

2,731

2,337

1,610

2,663

3,541

1,570

1,954

Ordinary Profit Margin

9.3

9.7

8

6.4

4.5

6.3

7.7

4

4.9

Extraordinary Gains/Losses

(3)

(3)

481

(13)

172

(81)

100

(111)

(288)

Extraordinary Gain

44

10

589

10

202

8

157

12

90

Extraordinary Loss

47

13

108

23

30

89

57

123

378

3,003

3,323

3,212

2,324

1,782

2,581

3,641

1,459

1,666

9.3

9.7

9.4

6.3

4.9

6.1

7.9

3.8

4.2

Income Taxes

1,217

1,243

1,085

806

526

929

1,241

580

678

Net Profit (ATOP)

1,768

2,071

2,153

1,516

1,252

1,637

2,370

857

965

5.4

6

6.3

4.1

3.5

3.9

5.1

2.2

2.4

Ordinary Profit

Pretax Profit
Pretax Profit Margin

Net Profit Margin (ATOP)

Source: compiled by SIR from SPEEDA and Company data

29

TakamiyaCo., Ltd | 2445
カイオム・バイオサイエンス

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Investment
ResearchResearch➢ Balance sheet
FY (¥mn)

FY14/3

FY15/3

FY16/3

FY17/3

FY18/3

FY19/3

FY20/3

FY21/3

FY22/3

Total Assets
Current Assets
Cash Equivalents
Accounts Receivables
Finished Goods
Merchandise and finished goods
Raw materials and supplies
Deferred Tax Assets – Current
Other
Allowance for Doubtful Accounts
Non-Current Assets
Property, Plant & Equipment (PPE)Assets for rent, net
Land
Other tangible fixed assets
Intangible Assets
Leasehold right
Goodwill
Lease assets
Other
Investments, Others
Investment Securities
Guarantee deposits
Net defined benefit asset
Deferred tax assets
Other
Doubtful Accounts
Total Liabilities
Current Liabilities
Trade Payables
Trade Payables
Bonds
Current portion of long term loans
payableLease obligations
Income taxes payable
Provision for bonuses
Notes payable - facilities
Other
Non-Current Liabilities
Straight Bonds
Long-Term Debt
Lease obligations
Net defined benefit liabilities
Asset retirement obligations
Other
Total Net Assets
Shareholders' Equity
Capital Stock
Capital Surplus
Retained Earnings
Treasury Stock
Accumulated Comprehensive Income
Valuation Difference, ST Securities
Net Unrealized Gains on Derivatives
Foreign Currency Translation Adj
Accumulated adjustment for retirement
benefits
Share Warrants
Non-controlling interest
Total liabilities and Net assets

37,245
15,892
4,420
7,862
1,523
799
746
212
442
(112)
21,353
17,214
10,761
3,922
2,531
731
392
27
118
193
3,408
1,310
497

50,092
19,770
4,643
9,372
2,825
1,098
981
181
834
(164)
30,322
27,051
17,373
4,938
4,740
741
328
157
89
168
2,529
296
624
87
520
1,079
(78)
37,994
21,365
6,110
4,959
632

52,76020,557
5,588
10,189
2,745
624
832
149
588
(158)
32,20328,722
18,723
5,278
4,721
640
328
111
51
150
2,841
421
583
84
799
1,015
(62)
40,061
20,606
5,972
5,163
62

52,814
20,136
5,150
9,548
3,051
805
848
165
747
(178)
32,67728,967
18,263
5,680
5,024
854
328
345
22
159
2,857
490
589
86
755
981
(45)
39,261
20,992
5,350
6,645
62

54,41422,782
5,734
11,401
3,170
966
1,001

59,283
26,4097,243
14,101
2,933
782
1,002

56,45524,908
8,032
11,675
3,184
893
1,023

59,081
26,681
8,836
10,834
3,748
1,193
1,638

138
1,563
(100)
27,487
15,356
5,975
1,201
340

43,521
18,214
4,680
8,259
2,823
851
1,027
206
464
(95)
25,307
21,307
13,132
4,265
3,910
725
392
26
122
184
3,276
1,317
579
117
327
1,017
(82)
31,75818,071
5,935
3,169
302

783
(274)
31,63327,62816,426
5,764
5,438
820
328
213
11
268
3,184
454
578
74
899
1,223
(44)
39,83920,303
5,711
4,621
160

695
(348)
32,874
28,79914,907
7,839
6,053
940
328
159
7
445
3,135
445
691
43
800
1,190
(34)
40,785
21,730
6,427
5,400
421

525
(427)
31,54727,48013,212
7,850
6,418
826
327
498
3,240
504
710
84
774
1,199
(33)
37,686
19,554
5,668
3,478
871

725
(295)
32,39928,32912,179
7,851
8,299
787
327
459
3,282
432
749
74
766
1,292
(33)
39,744
20,035
6,940
2,612
1,047

4,878

5,132

5,639

5,762

5,652

5,858

5,811

6,308

6,001

210
892
201
112
1,546
12,130
810
9,377
472
579
13
878
9,759
8,869
680
1,165
7,025
(1)
645
512
(10)
137

238
812
234
244
2,004
13,688758
10,913
374
642
13
987
11,763
10,648
704
1,190
8,755
(1)
805
528
(33)
282

235
797
227
504
2,261
16,628175
13,304
326
744
12
2,066
12,098
11,565715
1,209
10,345
(703)
201
19
(79)
292

202
776
230
241
2,197
19,455613
15,404
355
853
12
2,217
12,70012,116715
1,209
11,426(1,233)
222
47
(48)
241

171
355
189
246
2,322
18,2701,450
13,653
337
883
16
1,930
13,552
12,952731
1,225
12,229(1,233)
238
81
(38)
209

248
764
223
234
2,483
19,5362,710
13,496
968
900
16
1,446
14,576
14,121732
1,226
13,395(1,233)
50
49
(31)
55

359
766
292
136
2,117
19,054
3,599
11,823
1,377
946
13
1,296
18,49818,142
1,050
1,909
15,187
(3)
-88
16
(15)
-23

368
353
296
344
1,864
18,132
3,278
11,354
1,145
1,001
13
1,339
18,76818,3471,050
1,908
15,392
(3)
-94
55
(6)
-104

374
440
337
147
2,132
19,7084,230
11,942
905
1,023
19
1,585
19,337
18,665
1,052
1,910
15,705
(3)
108
55
(6)
98

6

28

(31)

(18)

(13)

(23)

(66)

(38)

(39)

125
118
37,245182
127
43,521

243
88
50,092271
90
52,760268
94
52,814296
109
54,414306
137
59,283357
157
56,454384
179
59,081

Source: compiled by SIR from Company data

30

TakamiyaCo., Ltd | 2445
カイオム・バイオサイエンス

Sessa
Investment
Sessa
Investment
ResearchResearch➢ Cash Flow Statement¥mn

FY14/3

FY15/3

FY16/3

FY17/3

FY18/3

FY19/3

FY20/3

FY21/3

FY22/3

Cash Flows from Operating Activities

2,840-1,620-1,081

1,163

1,714

3,654

3,772

5,035

4,294

Depreciation - CF

3,369

3,650

4,137

4,503

4,663

4,777

4,805

4,816

4,784

23

28

30

33

33

127

54

54

Amortization of Goodwill - CF
Gain/Loss on Valuation of Securities andInvestment Securities
Gain/Loss on Sale of Investment
Securities

329
(501)

(2)

(27)

(53)

Gain/Loss on Sale of PPE

(36)

(2)

(2)

(6)

11

(5)

(153)

2

(32)

Interest and Dividends Received Operating CF

32

56

43

25

10

40

14

26

7

(240)

(204)

(220)

(213)

(209)

(261)

(275)

(241)

(203)

(1,240)(1,563)(1,737)(1,093)(1,910)(1,728)(3,837)(1,383)(2,979)

(4)

(20)

(3)

(103)

(3)

(18)

(40)

(3)

(275)

48

14

859

20

0

(431)

(1,660)(1,453)(1,169)(1,382)(1,259)(4,075)(1,209)(2,955)

Proceeds from Sales of PPE

66

29

38

19

20

9

596

13

149

Purchases/Sales of Intangible Assets

(22)

(53)

(102)

(29)

(38)

(180)

(227)

(188)

(69)

Interest Paid - Operating CF
Cash Flows from Investing Activities
Payments for Purchases of Investment
Securities
Proceeds from Sales of Securities andInvestment Securities
Payments for Purchases of PPE

Proceeds from Sales of Intangible Assets

1

2

86

2

Cash Flows from Financial Activities

(716)

2,927

2,844

879

(222)

(1,244)

1,591(2,874)(588)

Repayments of Short-Term Borrowings

759

1,894

1,868

22

1,530

(1,174)806(1,992)(910)

Proceeds from Long-Term Borrowings

4,800

6,776

8,102

7,891

3,873

5,270

4,320

5,820

6,610

248

49

482

882

1,428

1,285

540

1,957

(5,775)(5,133)(5,356)(5,676)(5,782)(6,004)(5,949)(5,831)(6,333)

Redemption of Bonds

(612)

(340)

(303)

(633)

(63)

(93)

(160)

(421)

(871)

Proceeds from Issuance of Stock

630

49

21

4

2

2,214

Redemption/Retirement of Stock

0

0

(702)

(530)

0

0

0

(327)

(337)

(563)

(434)

(448)

(471)

(579)

(652)

(652)

Foreign exchange adjustment

18

97

(17)

(4)

(20)

(17)

(18)

11

77

Changes in Cash Flow

903

254

9

945

(438)

664

1,508

790

804

Cash & Cash Equivalent - Beginning

3,077

3,979

4,233

4,243

5,188

4,750

5,414

6,923

7,712

Cash & Cash Equivalent - Ending

3,979

4,233

4,243

5,188

4,750

5,414

6,923

7,712

8,516

Free Cash Flow (FCF)

1,600(3,183)(2,818)

70

(196)

1,926

(65)

3,652

1,315

Proceeds from Issuance of Bonds
Repayments of Long-Term Borrowings

Cash Dividends Paid

Source: compiled by SIR from Company data

31

TakamiyaCo., Ltd | 2445
カイオム・バイオサイエンス

Sessa
Investment
Sessa
Investment
ResearchResearch➢ Other Supplementary Data
FY14/3

FY15/3

FY16/3

FY17/3

FY18/3

FY19/3

FY20/3

FY21/3

FY22/3

693

903

979

1,010

1,144

1,204

1,298

1,221

1,222

Number of Consolidated Subsidiaries

11

12

13

12

11

10

10

10

10

Number of Equity-Method Affiliates

4

5

3

3

0

0

0

0

0

Number of Shares Year End - Ordinary

22.31245.10445.30445.30445.44845.46846.57746.57746.586

Treasury Stock

0.002

0.004

1.578

2.607

2.607

2.607

0.007

0.007

0.007

22.31045.10043.72642.69742.84142.86146.57046.57046.57922.31045.10043.72642.69742.84142.86146.57046.57046.57922.01544.85644.75043.14742.79442.84144.95346.57046.577

Number of Unit-Shareholders

1,997

3,471

4,421

3,395

3,058

2,923

4,092

3,463

4,052

Held by Financial Institutions (mn)

3.551

7.285

6.217

6.939

8.644

9.045

10.60810.91310.306

Held by Other Institutions (mn)5.448

10.954

9.152

9.178

9.352

9.319

9.678

10.89011.126

Held by Foreigners (mn)

1.780

2.913

2.141

1.884

1.744

2.070

3.190

3.573

3.156

Other Individuals (mn)11.42623.63027.25826.85425.43724.88322.78020.99421.699Financial Institutions (%)

15.92

16.15

13.72

15.32

19.02

19.89

22.77

23.43

22.12

Other Institutions (%)

24.42

24.29

20.20

20.26

20.58

20.50

20.78

23.38

23.88

Foreigners (%)

7.98

6.46

4.73

4.16

3.84

4.55

6.85

7.67

6.77

Other Individuals (%)

51.21

52.39

60.17

59.28

55.97

54.73

48.91

45.07

46.58

Dividends per Share

13.00

16.00

10.00

10.00

11.00

11.00

14.00

14.00

14.00

Interim Dividends per Share

5.00

7.00

3.50

3.50

4.00

4.00

6.00

6.00

6.00

Year-End Dividends per Share

8.00

9.00

6.50

6.50

7.00

7.00

8.00

8.00

8.00

Employee Information
Headcount - Year End
Numbers of Affiliated Companies

Shares Outstanding (¥mn)

Number of Shares Year End - Common
Stock, exc. Treasury Stock
Number of Shares Year End - Common andSubordinated Stock, exc. Treasury Stock
Average Shares Outstanding
Share Holding

Dividends

Dividends per Share (Special Dividend)

2.50

2.00

Interim Dividends /Share (Special Dividend)

2.00

Year-End Dividends per Share (Special
Dividend)

2.50

Per Share Information
EPS

80.33

46.17

48.12

35.14

29.26

38.22

52.74

18.41

20.73

EPS - Historical Adjusted

39.63

46.17

47.73

33.47

27.58

36.03

51.44

18.41

20.73

Diluted EPS

77.61

44.63

46.66

34.08

28.38

37.06

51.28

17.89

20.10

BPS

426.48253.95269.09288.97307.89330.62387.68391.96403.04

BPS - Historical Adjusted

213.22253.93259.72272.34290.23311.80387.62391.90402.98* To enable financial comparison between companies from different countries with different accounting standards, the financial items in this section are
standardized. Additionally, certain financial items such as Operating Profit, EBIT, EBITDA are derived figures.
Source: compiled by SIR from Company data and SPEEDA data.

32

Sessa Investment
Research

Sessa Investment Research

LEGAL DISCLAIMER
This report is intended to provide information about the subject company, and it is not intended tosolicit or recommend investment. Although the data and information contained in this report havebeen determined to be reliable, we do not guarantee their authenticity or accuracy.
This report has been prepared by Sessa Partners on behalf of the concerned company for which it hasreceived compensation. Officers and employees of Sessa Partners may be engaged in transactions
such as trading in securities issued by the company, or they may have the possibility of doing so in
the future. For this reason, the forecasts and information contained in this report may lackobjectivity. Sessa Partners assumes no liability for any commercial loss based on use of this report.
The copyright of this report belongs to Sessa Partners. Modification, manipulation, distribution ortransmission of this report constitutes copyright infringement and is strictly prohibited.

Sessa Partners Inc.
#5a i-o Azabu, 2-8-14
Azabujyuban, Minato-ku, Tokyo

info@sessapartners.co.jp