April 13, 2023
To whom it may concern:
Company Name: SAKAI HEAVY INDUSTRIES, LTD.
Representative: Ichiro Sakai, President and Representing Director
Securities Code: 6358 (Tokyo Stock Exchange Prime Market)
Contact: Takao Yoshikawa, Executive Officer,
General Manager of Administration Division
Telephone: +81-3-3434-3401

Status of Initiatives for Enhancing Profitability of Capital
SAKAI HEAVY INDUSTRIES, LTD. (the “Company”) hereby announces the status of its initiatives that have beenrequired under “Action to Implement Management that is Conscious of Cost of Capital and Stock Price,” which wasannounced on March 31, 2023.
1. Initiatives to Date
With the belief that its responsibility as a listed company is sustainable growth and the maximization of corporate
value, the Company expressed that it would shift to management supported by the two pillars of “business growth”
and “capital policy,” and announced its targets of “net sales of ¥30.0 billion, operating profit of ¥3.1 billion, ROEof 8% and dividend payout ratio of 50%” for the fiscal year ending March 31, 2026 after formulating the “MediumTerm Management Policy,” which is the Company’s first medium-term management plan, on June 2, 2021.
Furthermore, in order to help others to properly understand the Company’s goal of enhancing corporate value
further by using opportunities while managing environmental and social risk, and working towards reducing thecost of capital to maximize corporate value (a P/B ratio above 1.0), the Company carried out the “ESG Briefing”
on January 26, 2022.
“Medium-Term Management Policy” on June 2, 2021
https://www.sakainet.co.jp/en/ir/item/mtmpm_script_210830.pdf“ESG Briefing” on January 26, 2022
https://www.sakainet.co.jp/en/ir/item/ESGBriefing.pdf
2. Status of Progress of Initiatives
As a result of advancing initiatives in accordance with the “Medium-Term Management Policy,” stock price, P/Bratio and ROE have improved as follows. The Company believes that these are a certain level of results frominitiatives carried out thus far.

March 31, 2020

March 31, 2021

March 31, 2022

March 31, 2023

Stock price¥2,420¥2,245¥3,200¥4,010P/B ratio

0.47 times

0.44 times

0.58 times

0.68 times

2.1%

0.0%

6.3%

6.5%*

ROE

*Forecasted figures based on performance forecasts announced by the Company
Of the continued-listing criteria in the Prime Market, the Company did not satisfy the criteria of “tradable sharemarket capitalization of ¥10.0 billion,” but as a result of the initiatives based on the “Medium-Term ManagementPolicy,” it expects to meet the continued-listing criteria using the Company’s calculations (*).
The Company will make a separate announcement regarding “tradable share market capitalization” in the “Statusof Progress Based on the Plan to Meet the Continued-Listing Criteria” when the status of conformity as of March31, 2023 is determined.
(*) This is based on calculations that utilize the average stock price from January 1, 2023 to March 31, 2023, which is based on thestatus of the distribution of the Company’s shares as of December 31, 2022.

3. Future Policy
As ROE is currently under 8% and the P/B ratio is below 1.0, the Company will continue to advance the various
initiatives stated in the “Medium-Term Management Policy,” and make every effort for the early achievement ofoperating profit of ¥3.1 billion and ROE of 8%, which are the targets for the fiscal year ending March 31, 2026.

Net sales

Fiscal year ended
March 31, 2020
(Actual results)

Fiscal year ended
March 31, 2021
(Actual results)

Fiscal year ended
March 31, 2022
(Actual results)

Fiscal year ending
March 31, 2023
(Forecast)*(Millions of Yen)
Fiscal year ending
March 31, 2026
(Target)22,744

21,624

26,59930,00030,000Operating profit

959

701

1,383

2,020

3,100

ROE

2.1%

0.0%

6.3%

6.5%

8.0%

*Consolidated business forecasts most recently announced.