For Management That is Conscious of Capital Cost and the Share Price
I would like to begin this message by expressing my sincere appreciation to our shareholders and investors for their ongoing support.
The environment surrounding the Company is changing constantly, reflecting the COVID-19 pandemic, growing globalization and the diversification of values. Although both public- and private-sector investment in construction have been on an upward trend, the situation facing the construction industry warrants continuing attention given the effects of surging prices of construction materials as well as rising labor costs reflecting the manpower shortage.
Under such business climate, the Company has been approaching management with an emphasis on capital cost and the share price.
To increase the share price and improve the PBR, it is imperative to achieve a return on equity (ROE) exceeding the capital cost and maintain and improve the price earnings ratio (PER).
With regard to ROE, the Company has delivered shareholder returns on a large scale under the Medium-Term Management Plan 2023 that was announced in May 2021. It is pursuing management with an awareness of financial leverage, such as adopting financial discipline and investing in growth by using interest-bearing debt. Meanwhile, the Company is working to improve the profit margins of the Domestic Building Business and the Overseas Civil Engineering Business based on the Revenue Improvement Plan under the Medium-Term Management Plan 2025 that was announced in February 2023.
With regard to PER, the Company will continue to improve the delivery of sustainability-related information, aiming to increase its share price with measures such as improving its ESG rating and having its stock selected as an ESG stock. The Company will also strive to enhance the information it discloses to investors, such as paths to the future growth of the Asset Value-Added Business and the Regional Environmental Solutions Business as well as the results of collaborations with partner companies from different industries, including ITOCHU Corporation.
Through these initiatives, the Company aims to further improve its PBR, which has been around 1.
We ask all our shareholders and investors for their continued guidance and encouragement.
June 26, 2024
Yuichi Kono
Representative Director and Executive Vice President