Statement by Oasis Management Company Ltd. on “A Better DG”(Stock Code: 4819 JT)* Oasis launches campaign to transform Digital Garage into Japan’s leading payment service
provider* Oasis urges restructuring of Digital Garage into two entities and a full divestment of Kakaku
sharesMore information available at www.ABetterDG.com
December 21, 2022, Tokyo and Hong Kong – Oasis Management Company Ltd. (“Oasis”) is the manager
to funds that beneficially own 9.3% of payment service provider Digital Garage Inc. (4819 JT) (“DigitalGarage”, “DG” or the “Company”). Oasis has adopted the Japan FSA’s “Principles of ResponsibleOwnership” (a/k/a the Japan Stewardship Code) and in line with those principles, Oasis monitors andengages with its investee companies.
Today, Oasis announces its “A Better DG” campaign in an effort to transform Digital Garage into Japan’s
leading payment service provider and a key beneficiary from Japan’s transition toward cashless payments.
Oasis has been actively engaged with DG since 2020. Although the Company has a strong position within
its payments business, we are concerned about the management’s lack of sufficient focus on the opportunity
presented by the market shift in Japan towards cashless payments.
We must not allow DG to miss this opportunity. Therefore, Oasis today announces its “A Better DG”
campaign in order to urge transformational change at Digital Garage in order to enhance the Company’sbusiness and governance for every stakeholder. We believe our plan, if implemented, would increase theprofit before tax from the current JPY4.5bn to JPY11.4bn in 2024, and result in nearly 100% upside fromthe current stock price.
To create A Better DG, Oasis proposes that the Company:
1. Spin-off the Financial Technology and Marketing Technology segments to create DG Financial
Technology, expanding the payment service provider business;
2. Operate the remaining business as DG Investments, expanding startup and venture capital
investments; and3. Divest its shares of Kakaku.com, Inc. (“Kakaku”).
First, by splitting DG into two independent entities, we believe DG will accelerate growth in each of its
businesses and benefit from the substantial opportunity in Financial Technology amid the growth ofcashless transactions in Japan, resulting in significant value creation over the long-term to the benefit of allstakeholders.

The shift towards cashless transactions in Japan represents a once-in-a-generation growth opportunity for
payment service providers. While currently just 32.5% of Japan’s payments are cashless today according
to a METI presentation, the government aims to increase Japan’s cashless settlement ratio to 80%. The
payment service provider market is assumed to grow from current JPY23.0tr to JPY33.8tr in the next fouryears. With its strong position in the Financial Technology segment as a payment service provider, DG
must not miss this opportunity.
However, DG has not done enough to prepare to benefit from this market transition. The payment service
provider market has grown 18% annually over the last three years, while DG has grown 17% annually, inline with the market. DG’s largest competitor, GMO Payment Gateway, Inc. (“GMO PG”), has grown 26%
per year over the same period. We believe that DG product quality is superior to that of GMO PG, and thisunderperformance is primarily driven by mismanagement, as DG’s management has been distracted byother business ventures and has not been able to fully focus on the opportunity presented by the rise incashless transactions. The valuation of DG has also fallen behind GMO PG: while DG is valued at 19.4x
FY2P/E, GMO PG trades at 55.1x FY2P/E.
To remedy this, we propose a tax-free spin-off of the Company’s Financial Technology and MarketingTechnology businesses, creating a new entity called DG Financial Technology. We believe that this will
ensure focus and accountability, accelerate growth, and prevent DG from missing the opportunity presentedby the shift to cashless transactions. We urge DG’s Board of Directors to formally propose this spin-off
plan at the Company’s next annual general meeting of shareholders (“AGM”). Prior to the AGM, DG
should update investors about this plan by no later than mid-March 2023, as a milestone.
Second, we propose that the remaining business operate as DG Investments, including the Incubation
Technology and Long-term Incubation segments, with an increased focus on start-up and VC investments,
and new dedicated management.
DG’s Chairman, Mr. Kaoru Hayashi, is a visionary founder of the business. However, we believe he has
been distracted by other businesses, preventing him from fully focusing on the opportunity in the Financial
Technology segment. Among other roles, Mr. Hayashi serves as the Chairman of Kakaku. We believe heshould step down from his role as Kakaku Chairman so he can fully focus on the DG Financial Technologybusiness.
Third, moreover, DG’s Kakaku shares should be sold and the proceeds returned to shareholders. We
applaud the Company’s announcement on November 16, 2022, that it would divest some of its Kakaku
shares. However, we believe that DG should sell the entirety of its stake and return the capital toshareholders. We note that the value of DG’s Kakaku shares post-tax accounts for 32% of DG’s market cap.
Seth Fischer, Founder and Chief Investment Officer of Oasis, said:“Digital Garage has a great payment service provider business, and yet, they have not done enough tocapture the shift toward cashless payments in Japan. As shareholders, we can no longer sit idly by andallow this great company to miss this opportunity. This is a call to action for DG’s management.”
Full details of Oasis’s proposals are available at www.ABetterDG.com.

We welcome all stakeholders to contact Oasis at info@ABetterDG.com to help build A Better DG. We willcontinue our efforts to engage constructively with management to help further enhance corporate value andcorporate governance in order to realize “A Better DG”.
***Oasis Management Company Ltd. manages private investment funds focused on opportunities in a wide arrayof asset classes across countries and sectors. Oasis was founded in 2002 by Seth H. Fischer, who leads the firm
as its Chief Investment Officer. More information about Oasis is available at https://oasiscm.com. Oasis has
adopted the Japan FSA’s “Principles of Responsible Institutional Investors” (a/k/a Japan Stewardship Code)and in line with those principles, Oasis monitors and engages with our investee companies.
The information contained in this press release (referred to as the "Document") is an information resource forshareholders in DG offered by Oasis, the investment manager to funds that are shareholders of DG (the "OasisFunds"). The Document is not intended to solicit or seek shareholders' agreements to jointly exercise any
voting rights with Oasis. Shareholders that have an agreement to jointly exercise their voting rights are
regarded as Joint Holders under the Japanese large shareholding disclosure rules and they must file
notification of their aggregate share ownership with the relevant Japanese authority for public disclosure under
the Financial Instruments and Exchange Act. Oasis does not intend to be subjected to such notification
requirement. The Document exclusively represents the opinions, interpretations, and estimates of Oasis.
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