TAKUMA- PathfindersAn investment research platform
to support a Japanese Economic Renaissance

November 24, 2011

DOSHISHA CORPORATION7483
TSE 1stSection

Summary of Business Results
for the Second Quarter of the Fiscal Year ending March 31, 2012

On November 16, 2011, DOSHISHA CORPORATION (hereinafter DOSHISHA or the Company)
held its Business Results Meeting for Q2 FY3/12. The following is a summary of the meeting.

Consolidated Business Results for 1H FY3/12
As seen in Table 1, consolidated net sales and income in 1H FY3/12 exceeded that reported in 1H
FY3/11. Net sales of the Company’s Product Development Model business, which features a higher
gross margin rate than its Wholesale Model, grew 30.8% year-on-year (y/y), contributing to profit
growth. Compared to the increase in sales, moreover, its SG&A expenses ratio decreased as
promotional expenses and workforce payroll were kept under control.

【Table 1】 1H FY3/12 Consolidated Business Results Summary

Consolidated（\ million）

FY3/11 1H
ActualRatio toNet Sales

FY3/12 1HMay 10Forecast

ActualRatio toNet Sales

Net Sales
100.0%
100.0%
41,71844,60050,940
Product Development Model
50.3%
53.8%
20,971
22,50027,428Wholesale Model
47.3%
44.0%
19,743
21,10022,399Others
2.4%
2.2%
1,003
1,000
1,112
Gross Proft
25.5%
24.5%
10,634
11,20012,461
SG&A Expenses
18.1%
16.3%
7,555
8,000
8,293
Operating Income
7.4%
8.2%
3,079
3,200
4,167
Ordinary Income
7.3%
8.2%
3,041
3,200
4,167
Net Sales
4.2%
4.8%
1,768
1,900
2,424
Note: All tables prepared by Trias Corp. with the data disclosed by DOSHISHA CORPORATION.

Y/Y Chg
22.1%
30.8%
13.5%
10.9%
17.2%
9.8%
35.3%
37.0%
37.1%

The Product Development Model business saw special replacement demand for LCD TVs take off in
2H FY3/11 as a result of the government’s eco-point incentive system and transition from analog todigital TV broadcasting from July 2011. But in 1H FY3/12, the business reported even stronger LCD
TV sales. This was due to two factors—the first being that carry-over demand for LCD TVs remainedrobust. Secondly, manufacturers, projecting a major shift in consumer needs as a result of thepost-March 11 calamity and subsequent energy shortage, began rolling out products that emphasize
superior energy conservation and other temperature-control features. This trend was particularly
evident from the increase in sales of electric fans, LED lighting units and other energy conservation
products. As for such new products as perspiration wipes and mist fans introduced in the first half,
DOSHISHA was able to ramp up smoothly in meeting special demand generated following theThis Memo is for reference purposes only and is not intended as a solicitatio n for investment. The contents contained herein areprepared based on reliable
information that already exists in the public domain. The Company, however, does not guarantee complete accuracy. Any pinionrinformation contatined in theMemo is relevant as of the day of the Information Meeting and/or Company Visit, although the views and/or facts may be altered without prior notific ation.
Final investment decisions shall be made by investors themselves based solely on their own judgment and responsivility.
Copyright © 2011

Trias Corporation

All rights reserved.

|1

TAKUMA- PathfindersAn investment research platform
to support a Japanese Economic Renaissance

November 24, 2011

calamity because the volume production regime for these products had already been prepared,paving the way to the sales increase. Moreover, 1H sales growth was driven by the commencementof licensed production of products related to One Piece, a popular animated TV feature, thereby
pushing up sales of character goods in general. Sales of special-function shampoos, sportswear
and clothes hangers specially designed to maximize limited storage space also rose as steps weretaken to reinforce marketing efforts that targeted niche markets.
The Wholesale Model business reported a sizeable increase in sales of get-well gifts and otherhospitality presents following the March 11 calamity. The Tohoku region, which was hit hardest by
the earthquake and tsunami, saw a gain of 130% in sales of such gifts. Sales of gift packages ofbeer also performed well. Sales of handbags and wristwatches continued to grow as well, a trendthat carried over from the previous term.
As for sales by channel, sales to home centers grew by 29.0% y/y due to the special post-March 11
demand, while sales to volume consumer electronics discounters grew by 41.6% y/y, driven by LCD
TV sales. In addition, sales to drug store chains, Internet marketing, 100-yen shops and foreign
markets also posted increases.
DOSHISHA’s consolidated balance sheets posted a special note on merchandise and finishedgoods, which decreased by 230 million yen versus FY3/11 end. This was due to initiatives to control
inventory, resulting in a smaller inventory even as sales grew.
As for cash flows, depreciation increased by 77 million yen, which was due to the acquisition of thenew Tokyo head office costing 4.6 billion yen, including tax, in February 2011. The Company
believes the new facility, given its strategic location, will enable better communication between its
sales force and clients, thereby contributing indirectly to improved performance.

FY3/12 Business Forecast
Table 2 presents DOSHISHA’s FY3/12 business forecast, which does not deviate from the revised
forecast issued on October 6, 2011. While there is some concern regarding the sustainability of the1H surge in sales of LCD TVs and products meeting special reconstruction demand in 2H, the truthis that sales on a monthly basis in the current half reveals that it is performing at a pace well beyond
that reported in the previous fiscal year. It should also be noted that the Company has alreadyfactored that special reconstruction demand will slump in 2H in its forecast. Sales of audiovisual
products in 2H are projected to decline by 2.0 billion yen versus the 3.6 billion yen increase in salesin 1H, for example.

This Memo is for reference purposes only and is not intended as a solicitatio n for investment. The contents contained herein areprepared based on reliable
information that already exists in the public domain. The Company, however, does not guarantee complete accuracy. Any pinionrinformation contatined in theMemo is relevant as of the day of the Information Meeting and/or Company Visit, although the views and/or facts may be altered without prior notific ation.
Final investment decisions shall be made by investors themselves based solely on their own judgment and responsivility.
Copyright © 2011

Trias Corporation

All rights reserved.

|2

TAKUMA- PathfindersAn investment research platform
to support a Japanese Economic RenaissanceNovember 24, 2011

【Table 2】 FY3/12 Business Forecast

Consolidated（\ million）

1HFY3/11 (Actual)
2H

Net Sales
41,71851,776
Product Development Model
20,971
28,310Wholesale Model
19,74322,248Others・Affiliates
1,003
1,218
Gross Profit
10,634
12,495
SG&A Expenses
7,555
7,876
Operating Income
3,079
4,619
Ordinary Income
3,041
4,573
Net Income
1,768
2,627
Note: FY3/12 forecasts announced on Oct 6, 2011

FY

93,49449,281
41,991
2,221
23,12915,431
7,698
7,614
4,395

1H (Actual)

FY3/122H (Fcst) FY (Fcst)

Y/Y chg

50,94027,42822,3991,112
12,461
8,293
4,167
4,1672,424

52,060 103,000
27,93055,35822,91045,3091,220
2,332
12,93925,4008,107
16,400
4,833
9,000
4,833
9,000
2,876
5,300

10.2%
12.3%
7.9%
5.0%
9.8%
6.3%
16.9%
18.2%
20.6%

In its Product Development Model business, DOSHISHA has chosen to specialize in smaller LCD
TVs with screens smaller than 21 inches rather than large-screen units, out of the belief that
second-unit demand was sure to follow demand for the larger TVs. The Company also believes that
consumer preferences will continue to evolve in the aftermath of the March 11 calamity and hasbolstered its product development regime in order to cater to consumer demand for products
boasting superior energy conservation and for meals eaten at home rather than out. In addition, it isplanning to upgrade its design capabilities and develop such products as humidifiers and heatersthat will excel both in terms of design and function, which should lead to higher sales. And because
the variety and type of products being sold to 100-yen shops are on the increase, DOSHISHA isupgrading marketing efforts to this channel.
In its Wholesale Model Business, the Company aims to expand sales of gifts and premier brandproducts by creating new markets that do not depend on conventional retail outlets.

【Table 3】 Select Goods from 2H FY3/12 Product LineupBusiness
ModelDivision

Main Category

Product
Home Living
Development
Life Style
Model

Storage interiorHouseware
Design home appliances

Audio&Visual

New Products
ExampleLED lighting
Pressure pans,
Hollow ware pots
Ceramic heater

Power saving

Digital signage

New field

Small-medium sized LCD TVs Mini-TV for car/bathroom
Portable battery

Wholesale
ModelFoods・Liquor

Confectioneries

Gifts

Original gifts

Famous Brands Watch, Bag, Jewelry

Project Theme, etc.

Energy saving
Energy saving
By useEnergy storage

Decorating chocolate pencil New project
Sales floor project
Sales floor projectThis Memo is for reference purposes only and is not intended as a solicitatio n for investment. The contents contained herein areprepared based on reliable
information that already exists in the public domain. The Company, however, does not guarantee complete accuracy. Any pinionrinformation contatined in theMemo is relevant as of the day of the Information Meeting and/or Company Visit, although the views and/or facts may be altered without prior notific ation.
Final investment decisions shall be made by investors themselves based solely on their own judgment and responsivility.
Copyright © 2011

Trias CorporationAll rights reserved.

|3TAKUMA- PathfindersAn investment research platform
to support a Japanese Economic Renaissance

November 24, 2011

Approach to FY3/13 and Beyond
DOSHISHA expects net sales will surpass 100 billion yen in FY3/12 and recognizes that it
represents the start of a new phase in its development. Among the competitive advantages of theCompany’s business model are:1) Its ability to develop or procure niche market merchandise that are too difficult for major retailers
and manufacturers to develop or handle; 2) With over 3,500 business partners, its ability
manufacture a broad range of products on either a small-lot or large-volume basis at low cost; 3) It isa fabless maker with over 1,500 suppliers; 4) It has a fast product development regime and schemethat can meet the needs of a wide variety of businesses and clients; 5) It has strengthened suchin-house manufacturing functions as quality control and analyses testing; and 6) It is committed tolow-cost management
By capitalizing on these six competitive advantages, the Company has begun to set out towards acorporate vision that calls for annual sales of 5 billion yen per department and a 50-department
structure. To achieve this, DOSHISHA has been reinforcing its overseas marketing regime from2010 and plans to enter the European market first, followed by China, Korea and other markets. The
goal is to reach net sales of some 1 billion yen at the earliest possible date.

Q&A Session
Q1: Regarding the forecast for the current fiscal year, are you taking a somewhat
conservative position by taking into account that the special demand recorded in 2H is likely
to contract?
A1: Sales in October 2011 are exceeding both the forecast and that sales posted in the same month
last year, with no indication that it is slowing down. The forecast not only incorporates a decline in
special demand in audiovisual products, it also includes added sales generated from the rollout ofother new products.
Q2: Does DOSHISHA plan to issue mid-term goals, initiatives or strategies by the time it
releases its full-year business results?
A2: We are currently working on it.
Q3: How will DOSHISHA be exploiting the high yen rate from 2H?
A3: Profits are not a direct result of the strong yen. A high yen rate will help lower prices of productsThis Memo is for reference purposes only and is not intended as a solicitatio n for investment. The contents contained herein areprepared based on reliable
information that already exists in the public domain. The Company, however, does not guarantee complete accuracy. Any pinionrinformation contatined in theMemo is relevant as of the day of the Information Meeting and/or Company Visit, although the views and/or facts may be altered without prior notific ation.
Final investment decisions shall be made by investors themselves based solely on their own judgment and responsivility.
Copyright © 2011

Trias Corporation

All rights reserved.

|4

TAKUMA- PathfindersAn investment research platform
to support a Japanese Economic Renaissance

November 24, 2011

sold in stores, or allow us to expand the range of foreign products that were previously too
expensive to procure, which in turn could generate higher sales and greater profit.
Q4: Gross margin is expected to improve because the ratio of LCD TV sales will fall after thenext term. To what extent will it improve?
A4: As of now, we believe it will improve from 25%, which is the level recorded before the special
demand phase, to about 25.5%.

This Memo is for reference purposes only and is not intended as a solicitatio n for investment. The contents contained herein areprepared based on reliable
information that already exists in the public domain. The Company, however, does not guarantee complete accuracy. Any pinionrinformation contatined in theMemo is relevant as of the day of the Information Meeting and/or Company Visit, although the views and/or facts may be altered without prior notific ation.
Final investment decisions shall be made by investors themselves based solely on their own judgment and responsivility.
Copyright © 2011

Trias Corporation

All rights reserved.

|5

TAKUMA- PathfindersAn investment research platform
to support a Japanese Economic RenaissanceNovember 24, 2011

Key Stock Indicators and Financial Data

No. of Shares Issued
No. of Treasury Stock
Market Value (\million)
BPS (\)ROE (%)ROA (%)PER (times）PCFR(times)
PBR (times)
Share Price (\)
Unit Share (shares)
Average Daily Volume (shares)

Sept. 2011
18,687,818
Sept. 2011
538,117
Nov. 28, 201137,133Mar. 2011
2,226.15
Mar. 2011
10.9
Mar. 2011
8.3
FY3/12 fcst.
6.8
Mar. 2011
7.8
Mar. 2011
0.9
Nov. 28, 2011
1,987
Nov. 28, 2011100
Nov. 28, 2011
64,650Total Assets (\million)
Mar. 2011
Shareholders' Equity (\million)
Mar. 2011
Interest-Bearing Debt (\million)
Mar. 2011
Equity Ratio (%)
Mar. 2011
Ratio of Interest-Bearing Debt (%) Mar. 2011
Free Cash Flows (\million)
Sept. 2011

53,15440,403
5,095
76.0
12.6
3,996

ROE=Current Net Income÷Averaged Shareholders' Equity
of beginning of term and term end
ROA=Current Net Income÷Averaged Total Assets
of beginning of term and term end
PCFR=Maket Value÷(Current Net Income+Depreciation)
Average Daily Volume=Ave. Daily Volume for the last 12 months
Ratio=Interest-Bearing Debts÷Shareholders' Equity
Free Cash Flows=Operating CF+Investment CF

Consolidated
Operating
Net Sales(\million）
IncomeFY3/08
83,1405,143
FY3/0980,8985,014
FY3/1086,6297,701
FY3/11
93,494
7,698
1H FY3/1250,940
4,167
FY3/12 fcst.
103,000
9,000
Note: FY3/12 forecast announced on Oct. 6, 2011

Ordinary
Net Income
Income
5,183
2,849
5,131
2,558
7,593
4,293
7,614
4,395
4,167
2,424
9,000
5,300

EPS (\)DPS (\)

154.42140.94236.54242.20133.57292.02

45.00
45.00
55.00
55.00
30.00
60.00

Share Price Charts and RSI（Yen）
2,500

RSI300

250

2,000

200
1,500

Share Price (Close)
1 Month Moving Average

150

3 Months Moving Average

1,000

RSI 14 Days Moving Average (RHS)

100
705050030

11/2
8/1109/28/
1110/28/
1108/28/1106/28/1107/28/1104/2
8/
1105
/2
8/
1102/28/1103/28/1101/2
8/
110

11/2
8/
1012/28/100

Source: Prepared by Trias Corp. with Bloomberg data.
Note: RSI, Relative Strength Index, is the index representing the ratio of overbought or oversold share prices.
In general, over 70 in RSI shows overbought share price range, while below 30 shows oversold share price range.
RSI=averaged share price appreciation for N days÷(averaged share price appreciation for N days
+averaged share price decline for N days) x100

This Memo is for reference purposes only and is not intended as a solicitatio n for investment. The contents contained herein areprepared based on reliable
information that already exists in the public domain. The Company, however, does not guarantee complete accuracy. Any pinionrinformation contatined in theMemo is relevant as of the day of the Information Meeting and/or Company Visit, although the views and/or facts may be altered without prior notific ation.
Final investment decisions shall be made by investors themselves based solely on their own judgment and responsivility.
Copyright © 2011

Trias Corporation

All rights reserved.

|6