October11,2023

To All Concerned Parties
Company: CHINO CORPORATION
Representative: Mikio Toyoda, President and CEO（Securities code: 6850, Tokyo Stock Exchange Prime Market）
Contact: Kazumasa Ohmori, Executive Officer, Executive Manager,
Business Management Headquarters（TEL: +81-3-3956-2115）

Action to Implement Management that is Conscious of Cost of Capital and Stock Price

The Company hereby announces that at a meeting of the Board of Directors held on October 11, 2023, it passed aresolution on policies for management that is conscious of capital costs and share prices based on its recognition andanalysis of the current status, with a view toward achieving sustainable growth and improving corporate value overthe medium and long term. Details are as follows.
1. Recognition of the Current Situation
1) ROE: In the Medium-Term Management Plan that started in fiscal 2021, the Company set a target of 10% forfiscal 2026, the final year of the Plan. As a result of initiatives implemented for the achievement of theMedium-Term Management Plan, the Company succeeded in recording an 8.5% ROE in fiscal 2022, thesecond year of the Plan.
2) PBR: The PER as of the end of fiscal 2022 stood at 0.97. It remained higher than 1.0 during the period from Juneto early August this year. Recently, however, it has been lower than 1.0.
2. Analysis of Current Situation
Please refer to “Changes in Results” and “Analysis and Initiatives/Goals” in the attached materials.
3. Policies
1) Growth strategies
By facilitating the business strategies set out in the Medium-Term Management Plan, the final year of which isfiscal 2026, the Company has been striving to achieve targets (net sales of 30.0 billion yen, operating profit of 2.7billion yen, ROE of 10%, etc.).
For the details of the Medium-Term Management Plan, please refer to the “Medium-Term Management Plan2026” (in Japanese) posted on the Company’s website.

2) Financial and capital strategy
The Company will implement the following matters from the perspective of shareholder returns for the current
fiscal year, while also enhancing shareholder returns continuously, going forward.

- Implementation of stable dividend payments, targeting a dividend payout ratio of 30% (yearly)- Resumption of the payment of interim dividends (Record date: September 30, 2023)

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- Continuation of shareholder incentive programs (Record date: March 31, 2024)
In addition, the Company has been gradually reducing cross-shareholdings since fiscal 2021, which will befurther facilitated in the current fiscal year and beyond.

3) Enhancing IR activities
The Company will continue to hold briefings for institutional investors and distribute explanatory video toindividual investors (twice a year, respectively). In addition, it will promote dialogues with investors through theenhancement of opportunities for individual IR meetings, while simultaneously seeking to reflect opinions received
from investors in its business strategies as necessary.
The Company will also work on enhancing the information it discloses on its website by facilitating thedisclosure of non-financial information including sustainability information, not to mention conventional IRinformation.

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（Securities code: 6850, Tokyo Stock Exchange Prime Market）

Action to Implement Managementthat is Conscious of Cost of Capitaland Stock Price

October 11,2023
CHINO CORPORATION
Copyright© CHINO Corporation. All Rights Reserved3Changes in Results
ConsolidatedResults・Capital Cost

FY2018FY2019FY2020

FY2021

FY2022Millions of yen

18,56920,74521,99920,582

21,08021,90823,793Operating Profit

Millions of yen

566
3.0

1,303
6.3

1,718
7.8

1,026
5.0

1,136
5.4

1,499
6.8

2,018
8.5

Millions of yen

373

832

1,113

1,218

1,289

1,050

1,536

ROE (a)

％

2.8

5.9

7.6

8.0

8.1

6.1

8.5

Cost ofEquity(b)

％

4.4

4.4

6.3

7.9

7.0

6.4

5.7

▲1.6+ 1.5

+ 1.3

+ 0.1

+ 1.1

▲ 0.3+ 2.8

Operating Profit
ratio％

Equity Spread(a) – (b)ROIC (c)％2.45.5

7.1

4.0

4.2

5.4

6.8

WACC (d)％

3.6

3.8

5.2

6.3

5.9

5.6

4.9

▲1.2+ 1.7+ 1.9

▲ 2.3

▲ 1.7

▲ 0.2+ 1.9

Yen

1,235

1,477

1,282

1,226

1,455

1,619

2,152

hundredmillions of yen

114.4

136.8

118.7

113.5

134.7

149.9

199.3

PER

times

28.12

15.03

9.75

8.53

9.56

13.05

11.88

PBR

times

0.77

0.87

0.72

0.68

0.74

0.78

0.97

Enterprise Spread(c) – (d)Share price at
end of termMarketValuation

FY2017

Net Sales

ProfitReturn-onInvestment
RatioFY2016

MarketCapitalization at
end of period

Copyright© CHINO Corporation. All Rights Reserved

4Analysis and Initiatives/Goals
Analysis
25,00020,000Net Sales・
15,000
Profit Ratio

10,000Initiatives/Goals

20,745 21,999 20,582 21,080 21,908
18,569
7.8
6.8
6.3
5.4
5.0
3.0
FY2016FY2017FY2018FY2019Net sales (Millions of yen)

FY202023,793

FY2021

8.5

15.0

Initiatives

10.0

・Steady execution of the medium-term
management plan

5.0
FY20220.0

Operating profit ratio（％）

10Return-onInvestment
Ratio・
Capital
Cost

50

5.5
3.62.4FY2016

3.8
FY2017

7.1

6.3

5.2
ROIC < WACCFY20184.0

FY2019

5.9

5.6
5.4

4.2
FY2020MarketValuation

1,000500

Goals（Medium-Term Management Plan,FY2026）

FY2022

・ROE 10%・Maintain ROIC > WACC on an ongoing basis

FY2021

ROIC（％）
2,152

1,477
1,455
0.87 1,282 1,226
0.74
0.68
0.72
0.77

1,619

1,235

FY2016FY2017FY2018・Expand investment in growth businesses
・Efficient use of management resources

6.8
4.9

ROIC > WACC

2,500
1,500

・Net sales ： 30 billion yen
・Operating profit ： 2.7 billion yen・Operating profit ratio： 9.0%

Iinitiatives

WACC（%）

2,000Goals（Medium-Term Management Plan, FY2026 ）FY2019

Share price at end of term（yen）

FY20201.50.97 10.78

FY2021

FY20220.5

PBR at end of term（times）

Copyright© CHINO Corporation. All Rights Reserved

Initiatives
・Maintain stable dividends with a target payout
ratio of 30%
・Strengthen IR activities / Enhance dialogue withshareholders
・Enhanced disclosure of non-financial information

Goals
・Recovery of PBR of 1.0x or more, and continuous
maintenance and improvement of PBR5