45th Report toShareholders(From April 1, 2019 to March 31, 2020)
Securities code: 6787

Financial highlights
Net sales

115,479
Consolidated balance sheet
End of FY2018(As of March 31, 2019)

Net income attributable to owners of parent

Operating income

million yen（in million yen）

5,189

Consolidated statement of income

At the end of this period

Previous period(year to date)(As of March 31, 2020)

Assetsmillion yen（in million yen）

(April 1, 2019 to March 31, 2020)

118,910

115,479

Current assets

56,021

59,716

Noncurrent assets

64,63469,520

Cost of sales

98,862

98,73358,55362,997269

827

Gross proﬁt

20,04816,745

Selling, general and administrative expenses

Property, plant and equipment
Intangible assets

5,811

5,696

120,655

129,237

Current liabilities

47,93252,064

Noncurrent liabilities

39,13544,691

Total liabilities

87,06896,75530,44632,116

12,88812,888Investments and other assets
Total assets
Liabilities

Net assets
Shareholders equity
Capital

6,464

6,464

Retained earnings

11,48913,159Treasury stocks

△396

△396

Cumulative other comprehensive income

3,141

172

Valuation diﬀerence on available-for-sale securities

△65

△8

Deferred gains or losses on hedges

183

30

Foreign currency translation adjustment

3,322

375

Remeasurements of deﬁned beneﬁt plans△298

Capital surplus

Total net assets
Total liabilities and net assets△224

33,58732,482

120,655

129,237

11,121

11,556

Operating income

8,926

5,189

Non-operating income

1,752

760

Non-operating expenses

2,067

1,160

Ordinary income

8,610

4,789

Extraordinary income

1

331

Extraordinary losses

750

1,855

Net income before income taxes

7,862

3,265

Income taxes

1,119

717

Net income

6,743

2,548

Net income (loss) attributable to non-controlling interest―△37

Net income attributable to owners of parent

6,743

2,586

Key points of the ﬁnancial results●Consolidated statement of income

In this term, COVID-19 spread all over the world at the end of the fiscal year. Accordingly, ourgroup was forced to stop operations in our Guangzhou Plant and Wuhan Plant over a long periodof time following the measures taken by the Chinese authorities to prevent infections. This madeus produce our products in the other plants to supply them to our important customers.
Therefore, our business performance was impacted by a decline in sales and the burden of fixedplant costs during the period of suspended operation in the fourth quarter.
As a result, we posted net sales of 115,479 million yen (-2.9% year on year), down 3,431 million
yen compared with the previous year. Concerning profits and losses, operating income was
5,189 million yen (-41.9% year on year), ordinary income 4,789 million yen (-44.4% year on year)
and net income attributable to owners of parent 2,586 million yen (-61.6% year on year).

Consolidated statement of cash ﬂows

Current period(year to date)(April 1, 2018 to March 31, 2019)

Net sales

2,586
Previous period(year to date)million yen（in million yen）
Current period(year to date)(April 1, 2018 to March 31, 2019)(April 1, 2019 to March 31, 2020)

Net cash generated from operating activities

11,466

11,240Net cash expended in investment activities△17,292△14,937

Net cash generated from (expended in) ﬁnancing activities

1,956

6,249

The eﬀect of changes in the exchange rate on cash and cash equivalents

98

△325

Cash and cash equivalents at the beginning of the period

15,19011,419Cash and cash equivalents at the end of the period

11,41913,646●Consolidated balance sheet

Total assets stood at 129,237 million yen, an increase of 8,582 million yen from the end of theprevious consolidated fiscal year. This increase is mainly due to an increase of 2,232 million
yen in cash and deposits, a decrease of 1,385 million yen in notes and accounts
receivable-trade, and an increase of 2,982 million yen in inventories, which were all recorded
under current assets. Factors behind the increase in total assets also included an increase of
4,443 million yen in property, plant and equipment, an increase of 1,695 million yen in investment
securities and a decrease of 2,037 million yen in other in investments and other assets, whichwere recorded under noncurrent assets.
Net assets totaled 32,482 million yen, a decrease of 1,105 million yen from the end of theprevious consolidated fiscal year, due primarily to an increase of 1,670 million yen in retained
earnings and a decrease of 2,946 million yen in foreign currency translation adjustment.

Interview with the President

To our shareholders
I would like to express my sincere gratitude to all shareholders and investors for theoutstanding support.
The following is a report summarizing the operating results for the term ended March
2020.

Yuichiro Naya, President & CEO
Consolidated results for FY2019(in 100 million yen)
Year on year

Results for Results for
FY2018FY20191,189

Net sales

89

Operating income

-2.9%

52

year. However, COVID-19 spread all over the world from 2020, resulting in measures-37-41.9%

taken by various countries to prevent the spread of infections such as lockdowns.

48

-38

-44.4%

Therefore, social activities were restricted, and demand became sluggish.

26

-41

-61.6%

7.2%

Net income attributableto owners of parent

4.1%

5.6%

2.2%

Exchange
USD/YENrate

111.04108.93

67

Results for FY2018 Results for FY2019
Operating income(Operating margin)

Automobiles

547

Smartphones/
tablets

325

Others

317

Total

1,189

39

534

7.1%

38

249

11.7%

12
89

7.5%

Plant, whose operation was resumed, produced our products in place of Wuhan Plant.

-10

5.4％

-2.4%

-25.6%

18

-76

-20

7.2%

-23.4%-52.6%

1.3%

1,155

55

-7

17.4%

-58.3%

52

-34

-37

4.5%

-2.9%

-41.9%

Results for
FY2019Forecast for
FY2020

1,155

1,100

(in 100 million yen)
Year on year
Increase/decrease Increase/decrease rate

-55

-4.8%

3.2%

-17

-32.7%

4.1%

2.3%

-23

-47.9%

2.2%

1.5%

-9

-34.6%

108.93108.0052

Operating income(operating margin)

35

4.5%

48

Ordinary income(ordinary income rate)25

26

Net income attributableto owners of parent(net margin)

Exchange
USD/YEN
rate

Year on year

-13

Consolidated earnings forecast for FY2020

Net sales

infections. During that period, plants in Vietnam and Japan as well as our Guangzhou

29

5

372

3.8%

(in 100 million yen)

Operating income
Sales Operating income(Operating margin) (growth rate)(growth rate)

Sales

17

Results for FY2019 Forecast for FY2020
Sales

29

534

Automobiles
Smartphones/
tablets
IoT, AI,
amusement
Other fields(includes R&D expenses)

249

EMS

96

Total

1,155

18

256

7

98

-2

157

0

153

52

1,100

7.2%

86

8.1%

190

-1.1%
0.0%
4.5%

10

436

5.4%

Year on year

Operating income
Sales Operating income(Operating margin) (growth rate)(growth rate)

Sales

2.3％

-98

-19

-18.4%-65.5%

7.8％

2.8%

11.1%

8.2％

14.0%

14.3%

-3.2％

-17.4%

150.0%

1.3％

59.4%

3.2％

-4.8%

20
8

-5
2

35

7

Smartphones/tablets

Forecast for
FY2020IoT/AI appliances

436

Results for
FY2019534

Results for
FY2018

547
0

200

12

-33
57

-55

Sales are forecasted to decrease by 5.5 billion yen in our group next term due to thedrop in demand resulting from the spread of COVID-19. Looking at the breakdown by
product applications, sales for automotive PCBs are estimated to decrease by 9.8 billion
yen. Sales of smartphone PCBs would be sluggish due to the suspended operations in
our Wuhan Plant. Nevertheless, from the second quarter onward, sales of PCBs for
5G-compatible smartphones are expected to increase, which will result in sales increase of
700 million yen year-on-year. Sales in the IoT, AI and amusement fields is expected toincrease by 1.2 billion yen year-on-year thanks to the favorable demand in communication
modules, AI speakers, etc. In the EMS field, sales are estimated to increase by 5.7 billion
yen year-on-year.
to sales decline, automation investment and structural reform promotion.

Impact of novel coronavirus infections on business
The spread of COVID-19 has resulted in the suspension of corporate activities
worldwide, and had serious impacts on various industries. In response to the changes in1

the external environment, we will bolster IoT, AI and amusement, module PCB and EMS-3businesses as well as automotive PCB and smartphone PCB ones, so that we can2

mitigate the impact of COVID-19 on our business performance.

‑-17-32.7%

Amusement

Storage

256

34 80
28 12
153
70 31

Oﬃce equipment

Digital home appliances

55 80
26 15 96
60 40

325
600

Regarding the next term(in 100 million yen)

249

400

burden of fixed plant costs during the period of suspended operation in the fourth quarter.

2

Results for each product in FY2019
Automobiles

Nevertheless, our business performance was impacted by a decline in sales and the

The forecast of the operating profit is 3.5 billion yen due to a cost reduction in response

Revenue forecast from each product in FY2020 (in 100 million yen)
Operating income(Operating margin)

Under these circumstances, our group stopped operations in our Guangzhou Plant andin our Wuhan Plant from January 30 to February 9 and from January 30 to March 22,
respectively in response to measures taken by the Chinese authorities to prevent

Revenue from each product in FY2019
Sales

The electronic parts industry seemed to have bottomed out in this consolidated fiscal

-34

4.5%

Ordinary income

Regarding full-year business results

1,155

7.5%

86

Increase/decrease Increase/decrease rate

800

65 76
13 21 5244 46
1,000 1,200

Other ﬁelds

Other ﬁelds

Results for each spec in FY2019
Double-sided PCB

Four-layer PCB

Six-layer or more

1,100

Forecast for 43 204
FY20201,155

Results for 65
FY2019264

1,189

Results for 76
FY2018

300

0

200

HDI PCB187(in 100 million yen)Heat dissipation board

23
19 153
16

455

222

451

222
400

485
600

Flexible PCBs and others

800

28
15 96
14
13
23
13 52
18
1,000 1,200

Other ﬁelds

1,100
1,155

1,189

EMS

Special Feature

Regarding investment plans
We planned to invest 15 billion yen in the fiscal year ended March 31, 2020.
However, we actually invested 12 billion yen as the automobile market
deteriorated rapidly. By the end of the fiscal year ending March 31, 2021, weplan to invest 10 billion yen. This is to meet the increasing demand for 5G andStrengthening of 5G businessWe are continuing to invest in smartphone PCB production plants withan expansion in the 5G market on the horizon.

High multilayer PCBs
Memory PKG PCBs Trends in the Printed Circuit Board Market

No. of Smartphones Produced Worldwide No. of Self-driving Cars Produced Worldwide
Unit: 100 million smartphones

Non-5G

Macro cellCommunication carrier

Unit: 1 million cars

Low transmission loss PCBs
Medium-high multilayer PCBs

Serverstrengthen our module PCB business.

Optical communications line

Regarding the plan to strengthen the 5G business

Small cellWi-Firouter

The investments we have performed so far paved the way to increase orders
for the 5G business in the fiscal year ending March 31, 2021. The main
application of 5G PCBs is for smartphones. The smartphone market will bebearish overall. However, revenue will increase due to a rise in 5G demand.

Wuhan Plant

Multilayer thick copper PCBs
High heat dissipation PCBs

Vietnam Plant■Additional investment in the third factory
accompanying an increase in high-end
5G smartphone orders■Expansion in the AnyLayer line toward thehigher deﬁnition of high-end 5G smartphones

Regarding the plan to strengthen module PCBs

RF module PCBs
AnyLayer PCBs

RF module PCBs
Low transmission loss PCBs

5G priority ﬁelds*According to research by our company in January 2020

Demand for module PCBs is expected to grow dramatically as a promising
driving force for revenue. Accordingly, we have decided to tackle this field in
earnest. We are already working on memory and communication applications.
Furthermore, as demand will grow globally, we have been building a production
structure for them in Japan, China and Vietnam.

Strengthening of module PCB businessWe will launch module business following on from automotive PCBs and smartphone PCBs
to establish products with an impact on semiconductors in general.
Pillars of PCB businesses

Regarding the plan to strengthen the EMS business

Smartphone PCBs

Automotive PCBs
Thick copper PCBs

Reinforcing business

HDI PCBs

Module PCBs

High density
HDI PCBs

We will further enhance our profitability in the EMS business throughintegrated production – from the supply of PCBs to the mounting and assemblyof parts. We will expand orders in a wide range of fields (e.g., the automotive

We will work on promoting multi-fabrication in the development and mass production of module PCBs.

mounting, smartphone/tablet, digital home appliances and IoT) in the fiscal year

Wuhan Plant (China)

Thang Long Plant (Vietnam)

Handles mainly
Chinese customers

Establishment of a plant
dedicated to modules

Ishinomaki Plant (Japan)

ending March 31, 2021.

Regarding the plan to strengthen the FPC businessWe have increased production of FPC boards for smartphones and tablets inContinuing support
Expansion for automotive PCBs

the FPC business. In addition, we will also expand the business for automotive,
industrial equipment, office equipment and amusement.
Strengthening of EMS and FPC businesses

Regarding dividends
Our company recognizes the increase of profits for shareholders as animportant managerial mission. For the time being, we will prioritize investment to

EMS business

FPC business(in 100 million yen)(in 100 million yen)
Other ﬁelds

expand the business scale of the Company and focus on increasing sales. In line

IoT and AI home applianceswith this, we are looking to increase profits and dividends. We set the year-end

Digital home appliances

dividends for this term at 15 yen per share. Combined with the interim dividends,

Smartphones/tablets

annual dividends were 30 yen.

Automobiles

In order to live up to the support and expectations from stakeholders, including
shareholders, we will take improvement measures with utmost effort, to improve
our performance and corporate value. We would appreciate your continued
support and encouragement.

Investment policy
Capital investment(in 100 million yen)

FY2019: Completed investment in the ﬁrst stage of the construction of a new building in Vietnam
From FY2020 onward: Continuation of strategic investment in 5G/modules with a focus on ROIC・Strengthening of eﬀorts for joint development projects of products(e.g., medical, healthcare and AGV)
Development → Design → Manufacturing of PCBs → Mounting
and Assembly → Sale・Increase in requests to supply products with PCBs mounted→ Uncovering of demand for PCBs from EMS projects

We expanded our Vietnam ﬁrst plant under the aimof strengthening our FPC and EMS businesses.
Vietnam Plants
Third Plant

120

100

Depreciation

Actual for FY2019

Plan for FY2020

68

75

Completed in July 2019

Eﬀorts in China: Mask Production (Guangzhou Plant)

・It became diﬃcult to procure masks. Therefore, we started production of masks in a clean room in our Guangzhou Plant. (Monthly production: 2 million masks)

Eﬀorts in Vietnam: Artiﬁcial Respirator Production

・Joint production with the National Institute of Medical Device andConstruction (NIMEC) in the Vietnamese Ministry of HealthPlan for FY2019

Expansion in theﬁrst plantEﬀorts for a Post-Novel Coronavirus Society

Reduction by 3 billion yen

150

First Plant
Second Plant

Design, development and mass production structure preparation
for artiﬁcial respirators and other medical equipment

MANAGEMENT VOICE

Yosuke Nishiyama
Outside Director

VOL.

8

I was appointed as outside director at the General Meeting of Shareholders in June 2019. Since
then, I have been fulﬁlling my duties expected in the position. The establishment of corporate
governance has become a prerequisite for companies to survive in recent years. Against thisbackdrop, I have been proactively and objectively giving opinions and making proposals as anindependent outside director to further enhance corporate value for the beneﬁt of all stakeholders involved in the Company ‒ shareholders, customers and business partners ‒ based on mymany years of experience in manufacturing, technology and management.
The changes in the environment surrounding us are always dynamic. Occasionally, we are subjected to upheaval beyond our expectations like with COVID-19. Even under such circumstances,
I always keep in mind continuous improvement of productivity that forms the basis of growth inour company, maximization of competitiveness and minimization of risk that is the mostimportant factor in a predicament like the one we are in. With this, I will work my hardest withthe aim of making our company an even better one. Thus, I truly ask for your continued support.

Corporate data (As of March 31, 2020)
Corporate Proﬁle

Stock Information

MEIKO ELECTRONICS CO., LTD.
November 25, 1975
12,888 million yen
12,232 (consolidated)(Japan: 854) (Overseas: 11,378)
Outline of Business Design and manufacturing andsales of PCBs and auxiliaryelectronics business

Number of Shares Authorized

70,000,000 shares

Number of Shares Issued

26,173,893 shares

Number of Shareholders

4,744

Name
Established
CapitalNo. of Employees(excluding treasury stock of 629,427 shares)

Principal Shareholders

President & CEO
Director and Senior Managing Executive Officer
Director and Senior Managing Executive Officer
Director and Managing Executive Officer
Director and Managing Executive Officer
Director
Director
Director
Audit & Supervisory Board Member (Standing)
Audit & Supervisory Board Member
Audit & Supervisory Board Member

Yuichiro Naya
Takahide Hirayama
Masakuni Shinozaki
Takahiro Matsuda
Junya Wada
Yoon Ho, Shin
Nao Tsuchiya
Yosuke Nishiyama
Toyohiko Tsuyuki
Takashi Harada
Takayuki SatoAﬃliated Companies
Yamagata Meiko Electronics Co., Ltd.
Meiko Tech Co., Ltd.
Meiko Techno Co., Ltd.
Meiko Electronics (Guangzhou Nansha) Co., Ltd.
Meiko Electronics (Wuhan) Co., Ltd.
Meiko Elec. Hong Kong. Co., Ltd.
Meiko Electronics Vietnam Co., Ltd.
Meiko Electronics Thang Long Co., Ltd.
Meiko Electronics America, Inc.
Meiko Electronics Europe GmbH
Meiko Towada Vietnam Co., Ltd.

Auxiliary electronics business
Auxiliary electronics business
Auxiliary electronics business
Auxiliary electronics business
Auxiliary electronics business
Auxiliary electronics business
Auxiliary electronics business
Auxiliary electronics business
Auxiliary electronics business
Auxiliary electronics business
Auxiliary electronics business

Fiscal year

Yuichiro Naya

4,703

17.97

Japan Trustee Services Bank, Ltd.
(Trust Account)

2,650

10.12

The Master Trust Bank of Japan, Ltd. (Trust Account)

1,114

4.26

BNP PARIBAS SECURITIES SERVICES LUXEMBOURG/JASDEC/FIM/LUXEMBOURG FUNDS/UCITS ASSETS

1,080

4.13

JP MORGAN CHASE BANK 385632

684

2.62

Meiko Kosan Co., Ltd.

608

2.32

Trust & Custody Services Bank, Ltd. (Security Investment Trust Account)

551

2.11

Yuho, Ltd.

521

1.99

STATE STREET BANK AND TRUST COMPANY 505019

484

1.85

Seiichi Naya

435

1.66

*The Company owns treasury stock of 629,427 shares and is excluded from theabove principal shareholders. The percentages for the total number of issued
shares have been calculated after excluding treasury stock.

Shareholding Structure（Common Stock）
Individuals and others 41.41%
Financial institutions 26.42%
Foreign institutions and others 22.40%
Other institutions

5.82%

Financial instruments business operators 1.60%
Treasury stock

Headquarters: 5-14-15 Ogami, Ayase, Kanagawa, 252-1104 Japan
Tel: 0467-76-6001 (main)
URL:
https://www.meiko-elec.com/
Notes on Forecasts
The information in this report contains future forecasts, such as the plans and business results of the Company.
These forecasts are based on information available at the time when these forecasts were made and certain
preconditions that the Company believes to be reasonable. Please note that actual business results may differ fromthe forecasts herein due to a variety of factors.

2.35%

April 1 to March 31 of the following year

Annual shareholders’ June
meeting
Record dateYear-end dividends: March 31
Interim dividends: September 30
Transfer agent

Sumitomo Mitsui Trust Bank, Limited
1-4-1 Marunouchi, Chiyoda-ku, Tokyo,
100-8233 Japan

Transfer office

Sumitomo Mitsui Trust Bank, Limited Stock
Transfer Agency Dept. 1-4-1 Marunouchi,
Chiyoda-ku, Tokyo, 100-8233 Japan
Sumitomo Mitsui Trust Bank, Limited
Stock Transfer Agency Dept.
2-8-4 Izumi, Suginami-ku, Tokyo,
168-0063 Japan

Number of shares held
% of shares held
(thousands of shares)

Name of shareholder

Executives

Shareholders’ Information

Address forsending mails

Contact

Tel: 0120-782-031

Stock exchange JASDAQ (Standard), Tokyo Stock Exchange
Method ofpublic noticeElectronic public notice in our official page
Official Page:
https://www.meiko-elec.com/ir/pa.shtml
In the event of an accident or other
unforeseen
eventsthat
prevent
publication of the electronic public notice,
it will be published in The Nikkei.

Enquiries concerning shareholdings•Shareholders who need to update information onshareholdings, including change of address andmethod of receiving dividends, are advised to contact
the securities companies where securities accounts
are held.
•Shareholders who do not have accounts withsecurities companies and need to process paymentsof dividends are advised to contact Sumitomo Mitsui
Trust Bank, Limited Stock Transfer Agency Dept. asstated above.