December 20, 2023
Company Name: Sun Frontier Fudousan Co., Ltd.
Representative: Seiichi Saito,President and Representative Director(Stock Code: 8934, TSE Prime Market)
Inquiries: Takeshi Hirahara,
Executive Officer and General Manager ofCorporate Planning Department
TEL: 03-5521-1551

Action to Implement Management that is Conscious of Cost of Capital and Stock Price
Since its founding in 1999, the Group has consistently worked toward the realization of The Group philosophy“Protect all employees, pursue the material and intellectual happiness, with the heart of coexistence we contribute tothe prosperity of society and humankind” based on the spirit of altruism. Since the Group was listed on the Tokyo
Stock Exchange in December 2004, we have worked to increase our corporate value by expanding our businesses
with high profitability in order to meet the expectations of our shareholders and investors, who are also important
stakeholders. Under the current medium-term management plan (“the Medium-Term Management Plan”), which ends
the fiscal year ending March 31, 2025, the Group has set targets for ordinary profit margin, return on equity (“ROE”)
and etc., while implementing management that achieves a return on capital that exceeds the cost of capital.
In March this year, the Tokyo Stock Exchange (“TSE”) announced “Action to Implement Management that is
Conscious of Cost of Capital and Stock Price” (“actions”) for companies listed on the TSE Prime Market, andrequested “to have the management of The Group carry out their management duties with more consideration of costof capital and profitability based on the balance sheet, rather than just sales and profit levels on the income statement.”
The Group's management practices employed to achieve the targets of the Medium-Term Management Plan areconsistent with this request from the TSE, and we have explained the initiatives of improving returns on capital to themarket as appropriate.
In response to the Tokyo Stock Exchange's request regarding these actions, The Group has made the following
resolution at the Board of Directors` Meeting held today regarding The Group's recognition of the current situation,
policies and targets, and initiatives for implementing management that is conscious of the cost of capital and stock
prices.
1.

The current situation
The Group has created corporate value by achieving ROE that exceeds shareholders' capital costs, with theexception of FY2021/3, when profits fell temporarily due to the the pandemic of COVID-19.
FY2019/3
FY2020/3
FY2021/3
FY2022/3
ROE (%)
16.8%
17.7%
6.5%
10.8%
Shareholders' capital cost* (%)
7.3%
7.3%
7.3%
7.3%
Net assets per share** (JPY)
1,145.34
1,326.93
1,368.14
1,463.74
Stock price at end of period
1,184820967
1,050(closing price) (JPY)PBR (times)
1.03
0.62
0.71
0.72
*Based on the Capital Asset Pricing Model, **net assets per share at year-end

1FY2023/3
15.3%
7.4%
1,663.33
1,2810.77

The Group recognize that the delay in the recovery of the PBR to 1 time or higher after the pandemic of COVID-19
suggests that there is room for improvement in The Group's explanation to shareholders and investors regarding theGroup's growth potential and sustainable improvement in ROE.
2.

Policies and targets

The Group has been promoting sustainability management with the vision, “We will continue to the realization of asustainable society through our business activities while respecting the heart of altruism.” The Group aim to growour business continuously by working to solve various social issues centered on three important issues (materiality)of “environmental protection”, “regional revitalization”, and “human resource development”, to which we pay specialrespects. In this manner we will continuously improve ROE and PBR to enhance our corporate value.
3.

Initiatives(1) Improve ROE with profit growth by implementing specific measures.
✓We will raise the targets and accelerate the realization of the specific measures that we have valued
as drivers of ROE improvement.

Drivers of improvement in ROE
Focus Points

ROE

Net Profit
MarginContinuation andMaintenance of Highly
Profitable Businesses

Real Estate
Revitalization
Business

Improvement ofPurchase Capability

Improvement ofManufacturing Capability
Enhancement of Productsfor Sale
Shortening of theBusiness Period

Improvement of Leasing
Capability
Site Supervision andConstruction Schedule
Management

Real Estate
ServiceBusiness

Increase Ratio of StockBusiness with High
Profit Margin and Asset
Efficiency

Total Capital
TurnoverIncrease the Number ofClients in a Variety ofReal Estate Services

Service Enhancements

Hotel andTourism
Business

Equity Ratio

Enhancement of Proposalbased Marketing CapabilityCapital Policy

Growth into a Highly
Profitable Business

RevPAR Improvements

Development ofHigh Added Value

Expansion of
Manufacturing Capability

Allocation ofAppropriate Investment

Shift to Active Investment
Verification of
Post-investment Returns

Stable Shareholder
ReturnDividends Based onEarnings Growth(2) Strengthening IR activities✓ We work harder to improve our capital efficiency by further enhancing our briefings on the progressof specific measures to improve ROE through financial results briefings for shareholders, institutional
investors and individual ones in the capital market and individual IR interviews, etc.

2