Hibiki Path Advisors(“Hibiki”) gave a presentation (link below) and had a discussion on March 16, to/with CEO Mr. Nishimura and two other directors of Daiwabo Holdings Co., Ltd. (“Daiwabo”) on business strategy and valuation improvement.

Daiwabo implemented ROIC goal as one of its KPIs, and it seemed that Daiwabo would strictly manage each business segment based on ROIC as well as that CEO Mr. Nishimura also had a strong awareness of the importance of ROIC management. It was a significant opportunity to exchange constructive opinions.

Daiwabo’s valuation is about P/E 8.2x (as of 28 Apr 2022, Shikiho’s FY23 estimate) and its expected permanent growth rate is approx. -3.6% being calculated back from its 8.6% cost of equity publicized in Daiwabo’s mid-term management plan, therefore its stock price is undervalued and Hibiki will hold Daiwabo from a long-term perspective.

Hibiki will also continue to discuss future measures with the management team and report back to you in our media and will keep carrying out our constructive engagement to Daiwabo!

This document does not constitute an offer, recommendation or solicitation to buy or sell any security or enter into any other transaction. Hibiki does not purport to provide any investment, financial, legal or other expert advice or recommendation in this document.

DISCUSSION MATERIAL FOR BUSINESS STRATEGY AND VALUATION IMPROVEMENT