Newly Listed Company Introduction Report (Issued by The Stock Research Center)

NOVAC (5079 TSE 2nd Section) - - - - - - - - - - - - - - - - - - - - - - - - - - April 7 ,2022
Solidly managed construction company with high operating profit margin
This report is an English translation of part of the report issued on April 1, 2022.
For inquiries concerning the report, please contract info@stock-r.org【5079 NOVAC Sector：Construction】
Fiscal Year
Apr. 2020
Apr. 2021
Apr. 2022f

Net sales

YoY

Operatingprofit

YoY

Ordinaryprofit

YoYProfitYoYEPSBPSDPS(mn yen)(%)(mn yen)(%)(mn yen)(%)(mn yen)

(%)

(yen)

(yen)

(yen)

27,613-9.6

1,795-32.7

1,821-32.3

1,219-32.8 265.2

2,691.5

15.0

30,551

10.6

2,673

48.9

2,504

37.5

1,712

40.4 372.5

3,051.5

20.0

32,923

7.8

2,718

1.7

2,662

6.3

1,937

13.1 417.6- 100.0

Note: Non-consolidated basis. Figures for the fiscal year ending April 2022 are the company's forecasts.

Construction Company with 100% Prime Contract Ratio
NOVAC is a construction company that conducts civil engineering and construction works.
The civil engineering business accounts for 42.4% of net sales in the fiscal year endedApril 2021 and the construction business accounts for 57.6%. The company also conducts
the real estate leasing business, but net sales from the business in the fiscal year endedApril 2021 was small at 12 million yen.
The ratio of the company being the prime contractor in works of over 50 million yen in bothcategories of civil engineering and construction in the past five fiscal periods is 100%. In
addition, the percentage of employees holding certificates of qualification as managing
engineers is at a high level of 52.9% as of the end of 2021.

Civil Engineering BusinessIn the civil engineering business, the company is engaged in construction works of social
infrastructure including new highway construction works and works on lower parts ofbridges, river works, shield constructions for flood control and road maintenance works.
The company receives about 15 construction orders annually as a prime contractor. Whileother companies’ ratios of public sector demand are around 60% to 70%, almost all of thecompany’s net sales from completed constructions is from works for the public sector.
Major customers include the Ministry of Land, Infrastructure, Transport and Tourism andWest Nippon Expressway.

Construction BusinessIn the construction business, the company is engaged in construction works ofcondominiums, logistics warehouses, welfare and medical facilities, rest facilities in service
areas of expressways and others. In addition to new constructions, it also handles seismic
reinforcements, repairs and renovation works to counter earthquakes and other natural
disasters and extending the life of buildings.
Of the net sales of completed construction contracts in the fiscal year ended April 2021,
94.9% is from the private sector and 5.1% is from the public sector.
In the construction business, the company receives about 15 orders annually, of whicharound two thirds are condominium constructions mainly in the three major metropolitan
areas.

Newly Listed Company Introduction Report

1/2

The contents indicated in the report are based on information as of the date the report was created and are subject to change without prior notice. The Stock Research Center
makes no warranty or representation concerning the accuracy, reliability, completeness, adequacy and reliability of the information indicated in the report, and shall not assume
no responsibility or obligation whatsoever. The Stock Research Center assumes no responsibility for any direct or indirect loss, lost profit, damage or other results from investors
accessing and using the report or relying on the report concerning the distribution of the report. Final investment decisions shall be made by the investors themselves, and entire
responsibility for investments lies with investors that accessed the report. In addition, intellectual rights concerning the report belongs to The Stock Research Center and maynot be copied, reprinted, quoted, etc. without permission.

Newly Listed Company Introduction Report (Issued by The Stock Research Center)

NOVAC (5079 TSE 2nd Section) - - - - - - - - - - - - - - - - - - - - - - - - - - April 7 ,2022
Financial Statements

Statement of income

Fiscal Year

Apr.2020(mn yen)Nine months toJan. 2022

Apr.2021(%)(mn yen)(%)(mn yen)(%)

Net sales

27,613100.0

30,551100.0

26,456

100.0

Cost of sales

24,44988.5

26,562

86.9

22,77086.1

Gross profit

3,163

11.5

3,989

13.1

3,685

13.9

Selling, general and administrative expenses

1,367

5.0

1,315

4.3

1,048

4.0

Operating profit

1,795

6.5

2,673

8.7

2,637

10.0

Non-operating income

59-

37-

9-

Non-operating expenses

33-

206-

17-

Ordinary profit

1,821

6.6

2,504

4.0

2,629

9.9

Profit before income taxes

1,820

6.6

2,499

8.2

2,619

9.9

Net profit

1,219

4.4

1,712

5.6

1,797

6.8

Balance sheet

Fiscal Year

Apr.2020(mn yen)Current assets

Apr.2021(%)(mn yen)Jan. 2022(%)(mn yen)(%)

20,605

94.1

21,846

94.5

26,56095.5

Cash and deposits

3,569

16.3

9,122

39.4

4,769

17.2

Accounts receivable-trade

13,704

62.6

9,842

42.6

21,10875.9

Inventories

1,476

6.7

2,053

8.9

198

0.7

1,290

5.9

1,279

5.5

1,246

4.5

511

2.3

522

2.3

490

1.8

Intangible assets

64

0.3

87

0.4

81

0.3

Investments and other assets

713

3.3

669

2.9

674

2.4

Total assets

21,896100.0

23,126100.0

27,806100.0

Current liabilities

9,332

42.6

8,895

38.511,847

42.6

Trade payables

6,916

31.6

6,378

27.6

7,311

26.3

Non-current assets
Property, plant and equipment

Short-term borrowings
Non-current liabilities
Net assets
Owners' equity

Statement of cash flows

Fiscal Year

Cash flows from operating activities
Depreciation

----

2,100

7.6

188

0.9

200

0.9

213

0.8

12,37556.5

14,03060.7

15,74656.6

12,37556.5

14,03060.7

15,74656.6

Apr.2020

Apr.2021(mn yen)(mn yen)-9,160

5,723

2344

Cash flows from investing activities-104-89

Cash flows from financing activities-104-81-92-68

Net increase in cash and cash equivalents-9,3695,552

Cash and cash equivalents

3,519

9,072

Dividends paid

Note:Nom-consolidated basis.
Source: Prepared by Stock Research Center based on the notifiable prospectus.

Newly Listed Company Introduction Report

2/2

The contents indicated in the report are based on information as of the date the report was created and are subject to change without prior notice. The Stock Research Center
makes no warranty or representation concerning the accuracy, reliability, completeness, adequacy and reliability of the information indicated in the report, and shall not assume
no responsibility or obligation whatsoever. The Stock Research Center assumes no responsibility for any direct or indirect loss, lost profit, damage or other results from investors
accessing and using the report or relying on the report concerning the distribution of the report. Final investment decisions shall be made by the investors themselves, and entire
responsibility for investments lies with investors that accessed the report. In addition, intellectual rights concerning the report belongs to The Stock Research Center and may
not be copied, reprinted, quoted, etc. without permission.

About Stock Research Center
Stock Research Center is engaged in the preparation of analyst reports, mainly on companies that are not sufficiently
covered by analysts, based on a neutral perspective, and broadly disclose the reports to the public with an aim torevitalize the stock market.
Note: Reports prepared by Stock Research Center are created in reference to the Ministry of Economy, Trade andIndustry’s Guidance for Integrated Corporate Disclosure and Company-Investor Dialogues for Collaborative Value
Creation.

Discretionally select companies tocover, interview them and prepare
reports
Listed Companies

TSE, Securities Companies, Audit Companies, etc.

Support

Stock Research Center

Provide reports through websites,smartphone apps, etc. (free of chargein principle)
Investors, Media, etc.

No cost burden on listed companies■Supporting Members
Tokyo Stock Exchange, Inc.
SMBC Nikko Securities Inc.
Nomura Securities Co., Ltd.
Mizuho Securities Co., Ltd.
KPMG AZSA LLC
ICMG Co., Ltd.
Deloitte Touche Tohmatsu LLC
SBI SECURITIES Co., Ltd.
Pricewaterhouse Coopers Kyoto H.S. Securities Co.,Ltd.
A&A Partners
GYOSEI & CO.
TAKARA PRINTING CO., LTD. PRONEXUS INC.
The Securities Analysts Association of Japan

Daiwa Securities Co. Ltd.
Ernst & Young ShinNihon LLC
Grant Thornton Taiyo LLCBDO Sanyu
Ichiyoshi Securities Co., Ltd.
Avantia G.P.
Japan Securities Dealers Association

Certification by Analysts
Analysts indicated in the reports certify that the content indicated in the report precisely reflects the personal opinionsof the analysts on all securities and issuer companies discussed in the report. In addition, it is ensured that the opinions
directly or indirectly indicated in the report will have no influence on the analyst’s compensation in the past, present,and future upon writing the report.

Disclaimer∙ The report is prepared by stock analysts affiliated with the Stock Research Center for the purpose of disclosure to awide range of investors as reference information and not to recommend or solicit to buy or to sell any particular
securities or financial instrument.
∙ The content and indication of the report is based on disclosed information available publicly and is prepared byadding necessary supplementary information gained through interviews by analysts. The writer of the report is,
without exception, prohibited to use insider information, or to acquire such information. The information included in
the report is believed to be precise and reliable, but its preciseness is not verified objectively. In addition, the report
is not intended to comprehensively include all information required by investors.
∙ The information included in the report may become outdated due to changes in the financial market, economicenvironment, etc. There are risks that the prices of stocks featured directly or indirectly in the report will fall below
the par value due to fluctuations in stock prices, changes in management/financial conditions of the issuers,
fluctuations in exchange rates or interest rates, etc. Past performance does not imply or guarantee futureperformance.
∙ The opinions indicated in the report are subject to change without notice and the Stock Research Center has noobligation to update the information or opinions included in the report.
∙ The Stock Research Center does not bear any responsibility for any results, including direct losses, indirect losses,losses of profit and damages, suffered by investors due to using the report or relying on the report. Final investment
decisions shall be made by investors themselves and the sole responsibility concerning the investment lies with theinvestors that viewed the report.
∙ The copyright of the report belongs to the Stock Research Center and it may not be copied, reproduced, quoted, etc.
in any form without prior consent.