Financial Resultsfor
Q3 FY2021.3(April 1, 2020 ~ December 31, 2020)

Asahi Holdings, Inc.
These forecast performance figures are based on information currently available to the company’s management and certain
assumptions judged rationally. Accordingly, there might be cases in which actual results materially differ from forecasts of this report.
0

Copyright © Asahi Holdings, Inc. All rights reserved.

Business Performance1Key Points of Q3 FY2021.3 Financial Results
Business Performance
Q3 FY2021.3
Financial results
Revised Forecast for full-year
FY2021.3

Operating profit: ¥17.2 billion (YoY increase of ¥5.0 billion)
Operating profit: ¥24.0 billion (YoY increase of ¥6.0 billion)* Upward revision: ¥3.0 billion increase from previous forecast of ¥21.0 billon* Expected to be fourth straight year of record setting profit

Management Policies and Topics
Shareholder returns¥10 increase of year-end dividend (Annual divided: ¥160¥170)*Dividend payout ratio: 50% or more
*Stable dividend payment* Increase of ¥40 from previous fiscal year

Stock split

Implementation of a stock split with a split ratio of two-for-one※ Reference date: March 31 Effective date: April 1

Impact of COVID-19

The impact of COVID-19 remained slight in comparison with forecasts at the beginning of
the financial year for both the Precious Metals and the Environmental Preservation
businesses.
*Refer to slide number 3 for impact by business

Share transfer of INTER CENTRALTransfer of all the shares of INTER CENTRAL, INC. to OTEC CORPORATION※Expecting a synergy in improving the construction network and equipment sales※Proceeding optimal allocation of management resources on a group wide level

Change in accounting policy*From FY2021.3 financial results

Change in the classification for recording interest on borrowing for metal procurement inNorth American business* Financial expenses→Cost of sales* The figures in FY2020.3 financial results are changed for comparison purpose

Upgrading the incinerator at
Kitakyushu OfficeUpgrading the incinerator at Kitakyushu Office and Hibiki Plant of Asahi Pretec Corp.
* Contributing to the preservation of global environment and creation of recycling society
through thermal recycling2

Copyright © Asahi Holdings, Inc. All rights reserved.

• Revenue and operating profit for Q3 FY2021.3 increased substantially compared withthe same period of the previous year.
• As the operating performance is expected to remain strong in Q4 2021.3, revised
upward the forecast for full-year FY2021.3.
• Will increase the year-end dividend by ¥10 to ¥90. As a result, annual dividend in
FY2020 will be ¥170, an increase of ¥40 compared with FY2019.
• Will implement a stock split with a split ratio of two-for-one stock split toimprove the liquidity of the Company’s shares and expand the investor base.
• The impact of COVID-19 remained slight in comparison with forecasts at the
beginning of the financial year for both the Precious Metals and the Environmental
Preservation businesses. Please refer to slide number 3 for details.
• Resolved the transfer of all the shares of INTER CENTRAL, INC, consolidated
subsidiary, to OTEC CORPORATION. Will expect to create a synergy in improving
the existing construction network and equipment sales. Please refer to slide number
17 for details.
• Starting with the FY2021.3 financial results, the classification for recording interest on
borrowing for metal procurement in North American business will be changed fromfinancial expenses to cost of sales. The figures before the accounting policy change
are shown here for reference to improve comparability with the FY2020.3 financial
results.
• Updated the incinerator at Kitakyushu Office and Hibiki Plant of Asahi Pretec Corp.
The photos of new facilities are shown in slide number 18-19.

2

Impact of COVID-19■Precious Metals Business
The precious metal recycling business in Japan and Asia was partially affected in dentistry and sector field, but the volume of collection frommanufacturing-related sectors, including computers and games, remained high, and that from automotive sector recovered.

Business Field

Impact on our business

Dentistry

The volume of collection declined due to a drop in the number of patients as a result of restrictions of medical
treatments

Jewelry

The volume of collection increased in line with the stagnation of other businesses in distribution and purchases aswell as the slowdown of the reuse trade, despite a contraction in manufacturing and distribution.

Catalyst

The volume of collection in Japan increased thanks to the recovery of replacement of automobiles, and the volume
of collection of automobile catalyst production in the Asian region remained solid.

Electronics

The volume of collection from vehicle-mounted devices recovered, and the volume of collection in manufacturingrelated sectors including computers, game consoles and smartphones remained high.

North American
Refining

The volume of product processing, marketing and financial transactions increased.

■Environmental Preservation Business
The volume of collection from education institutions automobiles has recovered, and that from the chemical and medical industry remained
strong. However, due to the stagnation of the construction and foods industry, the total volume of collection decreased.

Industry

Impact on our business

Education/ Research
The volume of collection was secured as the activities at universities and public institutions recovered.
institutions

Construction

The volume of collection of sludge, saw dust, etc. dropped as the stagnation of housing-related production and new
construction demand continued.

Automobiles

The volume of liquid waste collected from semiconductor factories for vehicle-mounted devices was secured due toa recovery in new automobile sales.

Foods

The volume of residue and glass bottles collected from restaurants dropped due to stagnation of the food service
industry, although the impact to food manufacturer was limited.

Medicals

The volume of collection and incineration from medical-related businesses remained high.

Chemicals

The volume of collection from disinfectant-related businesses remained high.
3

Copyright © Asahi Holdings, Inc. All rights reserved.

• The impact of COVID-19 differed by each business field and industry.
• The volume of collection from the dental field decreased due to a drop in the numberof patients as a result of restrictions of medical treatments caused by strengthening of
nosocomial infection measures.
• The volume of collection from jewelry field increased in line with the stagnation ofother businesses in distribution and purchases as well as the slowdown of the reusetrade, despite a contraction in manufacturing and distribution.
• The volume of collection from catalyst field in Japan increased thanks to the recoveryof replacement of automobiles, and the volume of collection of automobile catalyst
production in the Asian region remained solid.
• The volume of collection from vehicle-mounted devices recovered, and the volume ofcollection in manufacturing-related sectors including computers, game consoles andsmartphones remained high as the production of electric devices was active backed
by demand for stay-at-home goods• In the North American refining business, product processing and marketing as well as
trading and other financial transactions increased.
• In the Environmental Protection business, the volume of collection from education
institutions automobiles has recovered, and that from the chemical and medical
industry remained strong. However, due to the stagnation of the construction andfoods industry, the total volume of collection decreased.

3

Consolidated Results<Results for Q3 FY2021.3>
Precious Metals Business is strong, driving results → Significant increase in revenue and profit<Forecast for full-year FY2021.3>
Operating performance is expected to remain solid, centered on the Precious Metals BusinessUpward revision: ¥3.0 billion increase of operating profit from previous forecast
Expected to be fourth straight year of record setting profit
Introduction of a consolidated taxation system and tax effects by organizational restructuring of the Group(¥8.2 increase of profit attributable to owners of parent)[Unit: ¥ billion]
FY2020.3
Q3

FY2021.3
Q3

FY2021.3
Full-year (forecast)

Results*1

Results

ChangeForecast

Previousyear

ChangePrevious
forecast

ChangeRevenue

99.1

120.0

20.9

165.0

135.6

29.4

165.0

0

Operatingprofit

12.2

17.2

5.0

24.0

18.0

6.0

21.0

3.0

Operatingprofit ratio

12.4%

14.4%

2.0%

14.5%

13.3%

1.3%

12.7%

1.8%

Profit before
tax

12.1

17.3

5.3

24.9

17.7

7.2

20.8

4.1

Profit *2

6.4

12.0

5.6

25.0

9.8

15.2

14.0

11.0

Capitalinvestment

2.3

3.6

1.3

Depreciation

2.2

1.9

(0.3)

*1 Starting with the FY2021.3 financial results, the classification for recording interest on borrowing for metal procurement in North
American business is changed from financial expenses to cost of sales. The figures in FY2020.3 financial results are changed
for comparison purpose.
4*2 Profit attributable to owners of parent.
Copyright © Asahi Holdings, Inc. All rights reserved.

• In Q3 FY2021.3, the Precious Metals Business was strong and drove
consolidated results, resulting in a significant increase in revenue andoperating profit compared to the same period of the previous year.
• Operating profit increased ¥5.0 billion year on year to ¥17.2 billion.
• Raised the forecast of operating profit for the full year of FY2021.3 to ¥24.0
billion, ¥3.0 billion increase from the previous forecast, expecting the fourthstraight year of record setting profit.
• Plan to record deferred tax assets of ¥8.2 billion in Q4 FY2021.3 following the
introduction of a consolidated taxation system and organizational restructuringof the Group. As a result, profit attributable to owners of parent is expected toincrease ¥15.2 billion from the previous year to ¥25.0 billion.

4

Consolidated Results (by Business Segment)<Results for Q3 FY2021.3>
Precious Metals: Significant increase in revenue and operating profit
Environmental Preservation: Revenue decreased from the same period in the previous year due to reduction in volume ofindustrial waste processing, while operating profit was at almost the same level compared withthe same period in the previous year due to the increase of the price of processing, etc.
<Forecast for full-year FY2021.3>
Precious Metals: Operating performance remains solid and expecting increase in revenue and operating profit.
Environmental Preservation: Gradually recovering, but both revenue and operating profit is expected to decrease y/y.
[Unit: ¥ billion]
FY2020.3
Q3

Precious
MetalsEnvironmental
Preservation

FY2021.3
Full-year (forecast)

Results *Results

ChangeForecast

Previousyear

ChangePrevious
forecast

ChangeRevenue

82.8

105.6

22.8

145.0

113.8

31.2

143.3

1.7

Operatingprofit

10.8

16.2

5.5

22.9

15.9

7.0

19.9

3.0

Income ratio

13.0%

15.4%

2.4%

15.8%

14.0%

1.8%

13.9%

1.9%

Revenue

15.3

14.5

(0.8)

20.0

20.7

(0.7)

21.7

(1.7)

Operatingprofit

3.0

2.8

(0.2)

3.7

4.4

(0.7)

4.0

(0.3)

19.8%

19.6%

(0.2%)

18.5%

21.0%

(2.5%)

18.4%

0.1%

Income ratio

Consolidated

FY2021.3
Q3

Revenue

99.1

120.0

20.9

165.0

135.6

29.4

165.0

0

Operatingprofit

12.2

17.2

5.0

24.0

18.0

6.0

21.0

3.0

Income ratio

12.4%

14.4%

2.0%

14.5%

13.3%

1.3%

12.7%

1.8%

* Starting with the FY2020 financial results, the classification for recording interest on borrowing for metal procurement in North American business5
is changed from financial expenses to cost of sales. The figures in FY2020.3 financial results are changed for comparison purpose.
Copyright © Asahi Holdings, Inc. All rights reserved.

<Results for 1H FY2021.3>• Looking at the performance by business segment, revenue and operating profit
increased significantly in the Precious Metals Business, while revenue decreased andoperating profit was at almost the same level in the Environmental Preservation
Business.
• In Precious Metals Business, both precious metal recycling business in Japan andAsia and the refining business in North America performed well, resulting in asignificant increase in revenue and operating profit.
• In Environmental Preservation Business, revenue decreased from the same period in
the previous year as the total disposal volume of industrial waste decreased although
there were signs of improvement for some industrial and production activities.
Operating profit was at almost the same level compared with the same period in theprevious year due to maintaining the utilization rate at the Company’s facilities,
increasing the price of processing and other factors.
<Forecast for full-year FY2021.3>• In Precious Metals Business, operating performance is expected to remain solid in Q4
2021.3. The full-year earnings forecast are for higher revenue and operating profit
compared to the previous year.
• In Environmental Preservation Business, although the disposal volume of industrial
waste is expected to gradually increase because of the restart of industrial production,
revenue and operating profit are expected to decline year on year.

5Precious Metals Business
Precious Metals Recycling Business (Japan and Asia):<Results for Q3 FY2021.3>
 Revenue and operating profit increased thanks to the rise in precious metal prices and the stable achievement ofprecious metal collection in volume.
<Forecast for full-year FY2021.3>
 Operating performance is expected to remain solid.
Refining Business in North America:<Results for Q3 FY2021.3>
 Revenue and operating profit increased thanks to the increase of product processing/sales and financialtransactions.
<Forecast for full-year FY2021.3>
 Operating performance is expected to remain solid.
[Unit: ¥ billion]

Precious
Metals

FY2020.3
Q3

FY2021.3
Q3

FY2021.3
Full year (forecast)

Results

Results

ChangeForecast

Previousyear

ChangePrevious
forecast

ChangeRevenue

82.8

105.6

22.8

145.0

113.8

31.2

143.3

1.7

Operatingprofit

10.8

16.2

5.5

22.9

15.9

7.0

19.9

3.0

Operatingprofit ratio

13.0%

15.4%

2.4%

15.8%

14.0%

1.8%

13.9%

1.9%

* Starting with the FY2021.3 financial results, the classification for recording interest on borrowing for metal procurement inNorth American business is changed from financial expenses to cost of sales. The figures in FY2020.3 financial results arechanged for comparison purpose.
6

Copyright © Asahi Holdings, Inc. All rights reserved.

<Precious Metals Recycling Business (Japan and Asia)>• Revenue and operating profit in precious metal recycling business in Japanand other countries increased from the same period in the previous year
thanks to the rise in precious metal prices and the stable achievement ofprecious metal collection in volume. As a result, revenue and operating profit in
Q3 FY2021.3 increased from the same period in the previous year.
• As for Q4 2021.3, the operating performance is expected to remain strong.
<Refining Business in North America>• In reference to incoming raw materials, gold stayed almost flat while silver
decreased from the same period of the previous year. On the other hand,product processing/sales of coins and small bars, and financial transactions
such as advance trading increased. As a result, revenue and operating profit
in Q3 FY2021.3 increased significantly compared to the same period of theprevious year.
• As for Q4 2021.3, the operating performance is expected to remain strong.

6Reference: Changes in the Volume of Precious Metals Collected and Precious Metal Prices[Amount Collected for Precious Metal Recycling]
FY2020.3
Q3 Results[Unit: kg]

FY2021.3
Q3 Results

ChangeGold12,70913,714

1,005

Palladium

5,262

5,015

(247)

Silver

53,33352,438(895)

Platinum

3,021

3,364

343

[Precious Metal Prices (per gram) ]FY2020.3
Q3 Mid-term average
price[Unit: Yen]FY2021.3
Q3 Mid-term
average price

Change

Gold

4,989

6,274

1,285

Palladium

5,548

7,426

1,878

Silver

58.7

75.3

16.6

Platinum

3,154

3,073

(81)
7

Copyright © Asahi Holdings, Inc. All rights reserved.

• The table shows changes in the price of precious metals and amount ofprecious metals collected by precious metals recycling business.
• The amount collected in Q3 FY2021.3 increased for gold and platinum, while
the amount of silver and palladium collected reduced.
• Prices of gold, palladium and silver rose significantly in Q3 FY2021.3, while
price of platinum dropped slightly.

7

Environmental Preservation Business<Results for Q3 FY2021.3>
 Revenue decreased from the same period in the previous year as the total disposal volume ofindustrial waste decreased although there were signs of improvement for some industrial andproduction activities. Operating profit was at almost the same level compared with the same period
in the previous year due to maintaining the utilization rate at the Company’s facilities, increasing theprice of processing and other factors.
<Forecast for full-year FY2021.3>
 Although the disposal volume of industrial waste is expected to gradually increase because of therestart of industrial production, revenue and operating profit are expected to decline year on year.
[Unit: ¥ billion]

Environmental
Preservation

FY2020.3
Q3

FY2021.3
Q3

FY2021.3
Full year (forecast)

Results

Results

ChangeForecast

Previousyear

ChangePrevious
forecast

ChangeRevenue

15.3

14.5

(0.8)

20.0

20.7

(0.7)

21.7

(1.7)

Operatingprofit

3.0

2.8

(0.2)

3.7

4.4

(0.7)

4.0

(0.3)

Operatingprofit ratio

19.8%

19.6%

(0.2%)

18.5%

21.0%

2.5%

18.4%

0.1%

8

Copyright © Asahi Holdings, Inc. All rights reserved.

• In reference to Q3 FY2021.3 performance of Environmental Preservation
Business, although there were signs of improvement for some industrial andproduction activities, the total disposal volume of industrial waste decreased.
Given these market conditions, revenue decreased from the same period in
the previous year, but operating profit was at almost the same level comparedwith the same period in the previous year due to maintaining the utilization rate
at the Company’s facilities, increasing the price of processing and other factors.
• Regarding Q4 FY20201.3, although the disposal volume of industrial waste is
expected to gradually increase because of the restart of industrial production,
revenue and operating profit are expected to decline year on year.

8Financial Position[Unit: ¥ billion]
March 31,2020

Current assets
Trade receivables

187.6
119.8

December 31,
2020

221.5
144.1

ChangeRemarks

33.9
24.4 Approx. 90% of balance and increase of trade receivables
are receivables that constitute borrowings to match metal
procurement in North American business. For details, see
the remarks column in “Bonds and loans”.

Inventories

37.7

55.2

17.4 Most of the inventories are collected raw materials that
contain precious materials, works-in-progress and finishedproducts in the precious metal recycling business. Risks
associated with price fluctuations and quality degradation
remain minimal because the precious metal content isanalyzed before making a purchase and the precious
metal prices are hedged on the futures market at the timeof purchase.

OthersNon-current assets
Total assets
Liabilities
Bonds and loans

30.1
42.4
230.0
160.8
126.8

22.3
44.9
266.5
188.7
152.1

(7.8)
2.6
36.5
27.9
25.3 Approx. 80% of balance and most increase of bonds andloans are loans for metal procurement in North Americanbusiness. Risks associated with price fluctuations and bad
debts remain minimal because, in principle, loans aretaken out within the scope of the precious metal content
analysis conducted on incoming raw materials andprecious metal prices are hedged on the futures market atthe time of loan.

OthersCapital
Total equity and liabilities

34.0
69.2
230.0

36.6
77.8
266.5

2.6
8.6
36.5
9

Copyright © Asahi Holdings, Inc. All rights reserved.

•

Total assets as of December 31, 2020 increased ¥36.5 billion from the end of the previous
fiscal year to ¥266.5 billion. Among assets, trade receivables and inventories increased, andamong liabilities, loans increased.

•

Approx. 80% of the balance of bonds and loans is attributed to loans for metal procurement inNorth American refining business. Approx. 90% of the balance of trade receivables stems froma matching increase in loans.

•

Aggressive efforts are being made to promote financial transactions, which constitute one ofthe pillars of earnings for North American business. A typical example of financial transactions
is the “Advance Trading," shown in slide number 16 of the reference material. While it generally
takes about a week for raw materials for refining received from mining customers are finishedin the product form, some clients prefer to have the products returned in the product form
before they are finished. In such cases, precious metal is purchased with loans from a bankand the advance return is made in exchange for interest payment based on the term ofadvance delivery shortened.

•

The precious metal content of raw materials received is analyzed before making an advancedelivery so that deliveries would not exceed the content. This means that the transactions aresubstantially free from bad-debt risks. They also avoid risks associated with price fluctuations
because precious metal prices are hedged on the futures market at the time of the borrowing.

•

Most of the Group’s inventory is raw materials, works-in-progress, and products in the precious
metal recycling business. The precious metal content of these items are analyzed at the time ofcollection. Regarding fluctuations in precious metal prices, hedging in the futures market isemployed to eliminate risks. In addition, since the inventory assets are precious metals ormaterials that contain precious metal, they are free from the risk of quality degradation, andthey can be cashed in the market once they are converted into products.

•

The increase in borrowings, matching claims and inventories has inflated the balance sheet butthat has not necessarily compromised the integrity of finance.

9Cash Flow
[Unit: ¥ billion]

Q3 FY2021.3
Operating CF

Remarks(10.8)

Change ininventories(17.4) Of the changes, (17.3) billion yen are attributable to changes in the collected raw

Change in tradereceivables, etc.

(18.5) Of the changes, (22.7) billion yen are matching claims for loans for metal

Others25.1

materials that contain precious materials, works-in-progress and finished products
in precious metal recycling business. Risks associated with price fluctuations andquality degradation remain minimal because the precious metal content isanalyzed before making a purchase and the precious metal prices are hedged on
the futures market at the time of purchase.
procurement in North American business. Regarding loans, risks associated withprice fluctuations and bad debts remain minimal because, in principle, loans aretaken out within the scope of the analysis of precious metal content conducted on
incoming raw materials and precious metal prices are hedged on the futures
market at the time of loan.

Investment CF(4.5)

Financing CF

0.5

Changes in shortterm loans

6.7

Dividends(5.9)

Others(0.3)

Changes in cash
deposits(15.2)
10

Copyright © Asahi Holdings, Inc. All rights reserved.

• The operating cash flow ended in the deficit of ¥10.8 billion. This is primarily
attributed to an increase in inventories and trade receivables.
• Most of the inventories are collected raw materials that contain precious
materials, works-in-progress and finished products from precious metal
recycling business and are free from risks associated with quality degradationand price fluctuations are avoided by hedging. Raw materials and works-inprogress can be cashed in the market once they are finished. In this sense,
these items are something akin to cash.
• Trade receivables are mainly composed of claims that match the borrowing formetal procurement in North American business and are extremely low-risk
assets free from the risks associated with bad-debts or price fluctuations.
• The operating cash flow excluding the increase in those safe assets is in thepositive of over ¥29.0 billion.

10

Dividend
Basic policy: Approximately 50% or more of the consolidated net income
FY2021.3: ¥10 increase of year-end dividend (Annual dividend: ¥160  ¥170)* Increase of ¥40 from the previous year’s results of ¥130
FY2016.3
Earnings Per Share（yen）

FY2017.3

FY2018.3

270.77FY2019.3

FY2020.3

228.14FY2021.3(Forecast)

87.48(37.24)

Annual Dividend（yen）

250.24635.35

60

60

63

120

130

170

Dividend Payout Ratio (%)

68.6

-

23.3

52.6

52.0

26.8

635.35270.77250.24228.14

170
87.48

60

60

63

FY2017.3

FY2018.3120130FY2019.3

FY2020.3(37.24)FY2016.3

Earnings Per Share (yen)FY2021.3(FORECAST)

Annual Dividend（yen）

11

Copyright © Asahi Holdings, Inc. All rights reserved.

• The annual dividend for FY2021.3 will be ¥170 per year, increased by ¥10 fromthe previous forecast of ¥160.
• The company seeks to continuously realize a stable dividend payment.

11

Stock Split
Implementation of a stock split with a split ratio of two-for-one
Purpose

Improving the liquidity of stocks and expanding theinvestor base by reducing the amount of an investment unit.

Procedure forthe stock split

With the reference date set on Wednesday, March 31, 2021,
each common share held by shareholders registered orrecorded in the final list of shareholders of the day will be
divided with a split ratio of two-for-one.

Schedule for the stock split
Date of notice ofstock split

March 16, 2021

Reference date

March 31, 2021

Effective date

April 1, 2021

* This stock split will not change the amount of stated capital.

12

Copyright © Asahi Holdings, Inc. All rights reserved.

• Implement a stock split with a split ratio of two-for-one to create anenvironment where investors can more easily invest by reducing the amount of
an investment unit, boosting our shares' liquidity, and expanding the investor
base.
• The reference date will be on March 31, 2021, and the effective date on April 1,
2021.

12

Reference
Materials

13Changes in Accounting Policy (From FY2021.3 Financial Statements)
 Starting with the financial statements for FY2021.3, interest on borrowing for metal procurement inNorth American business is recorded as “cost of sales”, which was recorded as “financial expenses”
until FY2020.3. (The figures in FY2020.3 financial results are also changed for comparison purpose.) As a result of this change, expenses for income from financial services in North America isappropriately processed and operating profit is more reflective of the actual conditions.
[Unit: ¥ billion]△

Q3 2020.3

BeforechangeRevenue
Cost of sales
Gross profit
Selling, general andadministrative expenses
Operating profit
Financial income
Financial expenses
Profit before tax
Corporate income tax
Profit attributable to owners of parent

Change inaccounting
policy99.1(79.3)(1.6)

Q3 2021.3

AfterchangeBeforechange

99.1

120.0

(80.9)(96.8)

Change inaccounting
policyAfterchange
120.0

(0.7)

(97.5)

19.9

18.2

23.2

22.6

(6.0)

(6.0)

(5.3)

(5.3)

13.9

12.2

17.9

17.2

0

0

0.2

0.2

(0.1)

(0.7)

(1.8)

+1.6

+0.7

(0.1)

12.1

12.1

17.3

17.3

(4.5)

(4.5)

(5.4)

(5.4)

6.4

6.4

12.0

12.0
14

Copyright © Asahi Holdings, Inc. All rights reserved.

14

Main Revenue Elements of Precious Metals Business
Precious Metals Recycling Business:
 Income from yield differential is added to refining fees, which is a stable source of fixed income.
Refining Business in North America: Refining fees are a stable source of income. In financial revenue, earning opportunities increase inline with the growth in incoming raw materials.
Business
Segment

Category

Impact on Revenue

Precious
MetalsRecycling

Refining fees

Refining fees increase in line with the expansion of the amount collected.
The unit price for refining fees is higher for those that require difficult preprocessing, which means the average unit price rises when the
proportion of items that require difficult processing is higher.

Yield differential (differential
between actual yield andcontracted yield = free metal)

The volume of free metal expands when the actual yield climbs on
account of improvements in technical capabilities and processes.
Income from free metal increases in line with a hike in prices.

Refining feesRefining inNorth America
Yield differential (differential
between actual yield andcontracted yield = free metal)

Financial revenue









The amount of fees expands when the volume of incoming raw materials(dore) increases.
The unit fee cost does not change over short term because contracts are
long-term.
The volume of free metal expands when the actual yield climbs on
account of improvements in technical capabilities and processes.
Income from free metal increases in line with a hike in prices.
Income opportunities for financial transactions increase when a larger
amount of raw materials is received.
Income increases when the interest rate for advanced delivery is
improved in contracts with mines.
Income increases when the period of advanced delivery is extended.
Financial revenue increases when metal procurement costs fall, and theinterest rate spread expands.
15

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15

“Advance Trading” in North American Business We provide “Advance Trading” service in North American business that we return thegold promptly after arrival of raw materials by shortening the delivery time.
 By providing this service, we receive "interest for the number of days delivered inadvance" from the client, while the risk is contained since “Advance Trading” isperformed after receiving raw materials from the client.
Financial
Institutions

Clients(Mining Companies)(1) Arrival of raw
materials(3) Delivery inadvance(2) Loan(4) Finishing(5) Repayment

The financial service in North American business is a safe model to realize
profits founded on the refining business16

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16

Share Transfer of INTER CENTRAL Resolved the transfer of all the shares of INTER CENTRAL, INC,
consolidated subsidiary, to OTEC CORPORATION.
 Expecting to create a synergy in improving the existing construction networkand equipment sales by addition of INTER CENTRAL to the OTEC Group.
 Proceeding optimal allocation of management resources on a group widelevel.
Schedule
January 29, 2021: Conclusion of a basic agreement
March 31, 2021: Share transfer (scheduled)※ INTER CENTRAL is expected to be excluded from the list of consolidated subsidiaries.

OTEC CORPORATION•

Contributing to society through two businesses: "Environmental System Business," devoted
to designing, constructing, and maintaining automatic air conditioning control systems, and"Plumbing Equipment Business," dedicated to selling plumbing equipment and household
equipment.

•

Listed on the JASDAQ market in 2000, continues to grow by seeking the convenience ofbuilding, environmental improvement and enhancement of energy efficiency.
17

Copyright (c) Asahi Holdings, Inc. All rights reserved.

17

Upgrading the Incinerator / Constructing a New Power Generation Facility
 Asahi Pretec Corp. upgraded incinerator at Kitakyushu Office(processing capacity: 90 ton/day) By installing power generation facility which utilizes waste heat generated through industrial waste
incineration, we contribute to the preservation of global environment and creation of recycling society
through thermal recycling.

18

Copyright (c) Asahi Holdings, Inc. All rights reserved.

18

Incinerator Renewal
 ASAHI PRETEC renewed an incinerator (with a processing capacity of 45 tons/day) at its Hibiki
Plant (Wakamatsu-ku, Kitakyushu-shi)
 Waste incineration efficiency (the fuel consumption required for waste incineration) improved
compared with conventional waste incinerators

19

Copyright (c) Asahi Holdings, Inc. All rights reserved.

19

Trend in Metal Prices (Au, Ag)(Unit: JPY per gram)

Gold
7,000

FY2019.3

FY2021.3

FY2020.3

6,500
6,000
5,500
5,000
4,500
4,000
2019/01

2019/04

2019/07

2019/102020/01

2020/04

2020/07

2020/102021/01

2020/102021/01
20

Silver100

FY2019.3

FY2021.3

FY2020.3

90
80
70
60
50
40
2019/01

2019/04

2019/07

2019/102020/01

2020/04

2020/07

Copyright © Asahi Holdings, Inc. All rights reserved.

20

Trend in Metal Prices (Pd, Pt)(Unit: JPY per gram)

Palladium10,000FY2019.3

FY2021.3

FY2020.3

9,000
8,000
7,000
6,000
5,000
4,000
3,000
2019/01

2019/04

2019/07

2019/102020/01

2020/04

2020/07

2020/102021/01

2020/102021/01
21

Platinum
4,000

FY2019.3

FY2021.3

FY2020.3

3,500

3,000

2,500

2,000
2019/01

2019/04

2019/07

2019/102020/01

2020/04

2020/07

Copyright © Asahi Holdings, Inc. All rights reserved.

21

Trend in Prices (Gold <USD/Toz>, EXC <USD/JPY>)
Gold USD/Toz
2,000

FY2019.3

FY2021.3

FY2020.3

1,900
1,800
1,700
1,600
1,500
1,400
1,300
1,200
1,100
1,000
2019/01

2019/04

2019/07

2019/102020/01

2020/04

2020/07

2020/102021/01

2020/102021/01
22

Exchange Rate USD/JPY115

FY2019.3

FY2021.3

FY2020.3

110

105

100
2019/01

2019/04

2019/07

2019/102020/01

2020/04

2020/07

Copyright © Asahi Holdings, Inc. All rights reserved.

22