December 28, 2023
To whom it may concern
Company Name: AVANT GROUP CORPORATIONName of Representative: Tetsuji Morikawa,President and Group CEO(Code: 3836, TSE Prime Market)
Inquiries: Naoyoshi Kasuga, Director and Group CFO(TEL: 03-6388-6739)

Measures to achieve cost of capital and share price conscious management.

We have analyzed and evaluated the current status of our actions to achieve cost-of-capital andstock price conscious management and have prepared the attached notice regarding our policy forfuture efforts to improve the situation.
Ends3836 TSE PrimeAvant Group Corporation

Measures to achieve cost of capital andshare price conscious management
December 28, 2023

This is an unofficial translation. In case of any difference in meaning between the original
Japanese text and the English translation, the Japanese text shall prevail.

©AVANT GROUP CORPORATION. All Rights Reserved.

Executive Summary
Share price analysis is included in the regular agenda of the Board of Directors of the Avant Group and thefollowing topics are discussed on an ongoing basis.
◼ Status quo assessment•Our ROE is running at around 20%, which is well above the range of our assumed cost of equity (around 7%).

•The P/B ratio has averaged 5.8x from FY2020 to the most recent Q1 FY2024, which suggests that growthpotential is valued by investors.

•The PER has been in the range of 20x-40x, which is above the competitive level of the current business model,
but below that of SaaS companies that are consistently profitable.

◼ Policies and objectives•

As for ROE, the aim is to achieve an average of 20% throughout the medium-term plan period.

•As for PER, the aim is to achieve a business model change and improve it.

•Growth investments are planned to transform the business model and achieve high growth potential.

◼ Efforts/period of implementation•The share grant system was introduced to raise employees' awareness of the need to improve their own
company's corporate value, to encourage employees to contribute to the enhancement of corporate value throughtheir own actions, to link this to proactive initiatives, and to share medium- and long-term results with otherstakeholders.

©AVANT GROUP CORPORATION. All Rights Reserved.

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Status quo assessment©AVANT GROUP CORPORATION. All Rights Reserved.

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Status quo assessment ～ ROE ～◼ ROE has averaged 20%, which is well above the range of our assumed cost of equity (around 7%).

（単位：百万円）

Net Asset

ROE ※14,00030%

12,00025%

19.8%

10,000

20%
8,000

15%
6,000

Cost of equity capital

4,000

10%

5%

2,000
-0%

Q1

Q2

Q3

FY20/06

Q4

Q1

Q2

Q3

FY21/06

Q4

Q1

Q2

Q3

FY22/06

Q4

Q1

Q2

Q3

FY23/06

Q4

Q1
FY24/06※Figures are calculated based on the past four quarters.
Effective from the beginning of the first quarter of FY6/22, the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020)and others have been applied.

©AVANT GROUP CORPORATION. All Rights Reserved.

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Status quo assessment ～ PBR ～◼ The P/B ratio has averaged 5.8x from FY2020 to the most recent Q1 FY2024, which suggests thatgrowth potential is valued by investors.

Changes in PBR
1098
7Ave. 5.865432
10Q1Q2Q3

Q4

FY20/06©AVANT GROUP CORPORATION. All Rights Reserved.

Q1Q2Q3FY21/06

Q4Q1Q2Q3

FY22/06

Q4Q1Q2Q3

FY23/06

Q4Q1
FY24/06
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Status quo assessment ～ PER ～◼ The PER has been in the range of 20x-40x, which is above the competitive level of the current businessmodel, but below that of SaaS companies that are consistently profitable.
◼ The medium-term management plan aims to change the business model and aims for a PER above thelevel of SaaS companies.

Changes in PER
SaaS company level454035302520Current competitor level

151050Q1Q2Q3Q4

FY20/06©AVANT GROUP CORPORATION. All Rights Reserved.

Q1

Q2

Q3

FY21/06

Q4

Q1

Q2

Q3

FY22/06

Q4

Q1

Q2Q3

FY23/06

Q4

Q1
FY24/06
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Policies and objectives©AVANT GROUP CORPORATION. All Rights Reserved.

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Medium-term management plan BE GLOBAL 2028 (BG28) Outlook◼ As for ROE, the aim is to achieve an average of 20% throughout the medium-term planperiod.

©AVANT GROUP CORPORATION. All Rights Reserved.

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BG28 Focus Markets◼ Position self in management DX market for companies where enhancing corporate value is a serious issue
New segment
name

TAM (Total Addressable Market) andpositioning of each market
Know-howServiceHigh

M1

Investor Perspective Next
Generation Management
Information Platform Market

Deepen existingmarket

FY6/23¥6.7bnLatent SAM¥272bnBI, Data Infrastructure& DX Market

New segment
name

M3

Service Available Market

M2

M2

Capture growthmarket

Capture growth market

Consolidated
Financial Disclosure
Market¥112.3bn

M1

Client baseSoftware）

Creation of newmarket

Low
Realization riskHigh

Management DX market©AVANT GROUP CORPORATION. All Rights Reserved.

FY6/23

FY6/28¥14bnOPM
19.5％→27.2%
Digital Transformation Promotion Business

CAGR
17.8％

FY6/28¥16.3bn¥7.2bnNew segment
nameM3

Deepen existingmarket

Low

CAGR
17.3％

Creation of new market¥690bn-¥720bn（Consolidated Financial
Disclosure Business

FY23¥7.9bnOPM
15.0％→19.9%
Management Solutions Business

CAGR
13.2％

FY28

¥14.7bn
OPM
16.7％→28.7%
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Business model transformation targeted by BG28
◼ Investment in growth to transform the business model and improve PER.

M1
Deepen existing market

M2

Business Model

Current Status/Issue Recognition

BPOSaaS• Comprised of outsourcing and software
businesses, the ratio of recurring sales ishigh and comparable to SaaS companies.
• The company has identified the difference ingross profit margins compared to SaaS
companies, which is a target for businessmodel change, as an issue.

SI• The company has achieved stable growth in a
growing market with strong demand in the SI
business specialising in data platforms and BI.
• The level of headcount growth is perceived as achallenge compared to companies that haveachieved the same level of headcount growth assales growth and whose growth potential is also
highly regarded by the market.

Capture growth market•M3
Creation of new market©AVANT GROUP CORPORATION. All Rights Reserved.

SI＋Consulting↓

ConsultingSaaS•

In the business management market, the company
handles not only its own products but also those ofother companies and has achieved growth mainly inthe flow business of SI+Consulting.
Compared with companies that have achieved a highlevel of growth in the recurring business, mainly insoftware, the company has identified lower sales
growth and a lower proportion of software sales as achallenge.

Growth Investment

New cross-selling products
AI-based research on models
for automating the financial
disclosure process
Establishment of recruitment
and training processes toachieve higher-than-planned
headcount growthDevelopment and market
success of own products as
growth drivers

10Capital Allocation◼ A total of JPY 20 billion will be invested in growth investments over the five-year period of
the mid-term plan to achieve the business model transformation.
Direction of primary growth investment.

10billion

35billion

5billion©AVANT GROUP CORPORATION. All Rights Reserved.

Internal investment = Human capital investment•Implement R&D that contributes to the achievementof the business plan•

Development of functions with economies of scale.

Business growth Asset procurement investment•

Minority-financed•

Software purchase

Reserve funds• VC investment, etc.

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Efforts/period of implementation©AVANT GROUP CORPORATION. All Rights Reserved.

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Introduction of a restricted share grant scheme for employees (RS Trust)◼ Strengthen the spiral from human capital value creation to corporate value creation bymaking all employees shareholders.
To a company where all Employees
are shareholders
In order to raise awareness of the need to increase thecompany's corporate value, all employees who
belonged to the company for a full year are granted
equity compensation at the end of each financial
year.(approx. 500 million yen over five years).

©AVANT GROUP CORPORATION. All Rights Reserved.

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