Basic Views
Basic Stance
Since its foundation by Ichizo Kobayashi, the TOHO Group has always wanted to be a company that retains the trust of all stakeholders, with the corporate raison d’etre (purpose) of “We widely provide inspiring entertainment to the general public;” shared value (value) of “We owe our business to the happiness of the customers;” and principles of conduct (motto) of “We always act with vivacity, modesty, fairness and grace. ”
To this end, the Company has positioned the enhancement of its corporate governance as one of its top management priorities and endeavors to ensure the transparency and fairness of corporate management by achieving prompt and appropriate decision-making by the Board of Directors and strengthening the supervisory and audit functions of independent outside Directors.
With the TOHO Charter, TOHO Group , Sustainability Policy, and TOHO Group Human Rights Policy established as the Group’s policies, the Company has made sure that every employee of the Group is informed of these policies and constructed a Group-wide internal control system and risk management system, thereby striving to achieve its sustainable growth and enhance its corporate value over the medium to long term.
Note that the TOHO Charter, TOHO Group , Sustainability Policy, and TOHO Group Human Rights Policy are disclosed on the Company’s website linked below:
https://www.toho.co.jp/en/company/info/group-policy
Corporate Governance System
*Click to enlarge
- As of October 1, 2024
Actions to Implement Management That Is Conscious of Cost of Capital and Share Price
-
Current Assessment
The Company believes that generating return on equity (ROE) in excess of cost of shareholders' equity is important for improving corporate value. The Company evaluates the cost of shareholders' equity to be around 4-5% in its external assessment(*) based on the CAPM. The ROE against this was 10.4% in the previous fiscal year (fiscal year ended February 28, 2024), and the Company has been able to achieve return on capital that exceeds the cost of shareholders' equity.
The PBR is currently around 2x, and PER is in the mid-20x range, which is above the average for the Prime Market in TSE, and the Company believes that it has received a certain degree of recognition from the stock market in terms of growth potential and other factors.
(*) Evaluation by Plutus Consulting co., Ltd.
Reference: CAPM calculation assumptions
-Beta: around 0.5 to 0.7
-Market risk premium 6.0
-Risk-free interest rate 1.0 -
Targets and Initiatives
Based on the above evaluation, the Company believes that promoting various initiatives in line with the goals and strategies set forth in "TOHO VISION 2032 - Toho Group Management Strategy" will lead to further enhancement of the Group's corporate value.
In "TOHO VISION 2032 - Toho Group Management Strategy,” we set a target of ROE of around 8% to 10% in “Long-term Vision 2032” and more than 8% ROE in “Medium-Term Management Plan 2025”. In addition to improving profitability by promoting growth strategies, we will continue to improve capital efficiency through appropriate shareholder returns and strive to achieve sustainable return on capital that exceeds the cost of shareholders' equity.
Disclosure Policy
The Company will strive to ensure the trust of all stakeholders by disclosing corporate information in a timely and appropriate manner and by adhering to the following items.
-
Information Disclosure Standards
The Company will disclose information in accordance with the Financial Instruments and Exchange Act and other laws and regulations (“laws and regulations”) and the Rules on Timely Disclosure of Corporate Information by Issuers of Listed Securities (“Timely Disclosure Rules”) stipulated by the Tokyo Stock Exchange. In addition, the Company will actively disclose information that it deems important or useful, even if it is not required by laws and regulations or the Timely Disclosure Rules.
-
Information Disclosure
Information that must be disclosed under the Timely Disclosure Rules will be disclosed via the Timely Disclosure network or TDnet operated by the Tokyo Stock Exchange. After disclosure via TDnet, the same information will be promptly posted on our corporate website. Additionally, even if disclosure is not required under the Timely Disclosure Rules, we will publish information deemed desirable to be disclosed on our corporate website, etc.
-
Insider Trading Prevention and Fair Information Disclosure
The Company has established the Insider Trading Prevention Regulations in order to appropriately manage important corporate information, prevent insider trading and ensure fair information disclosure, and strived to ensure that all group employees are thoroughly aware of and understand the regulations.
-
Proper Use of Earnings Forecasts
The forward-looking statements, including earnings forecasts, disclosed by the Company are based on information currently available to the Company and on certain assumptions deemed reasonable by the Company. Actual results may differ significantly from these forecasts due to various factors.
-
Quiet Period
The Company observes a quiet period to prevent leakage of information on financial results and ensure fairness. The quiet period is basically from the end of each quarter until the date on which earnings are announced. During the quiet period, we refrain from responding to or commenting on inquiries regarding financial results or performance. However, if earnings forecast is expected to significantly change during the quiet period, the Company will disclose information in a timely and appropriate manner in accordance with the Timely Disclosure Rules.
-
Internal Systems
The Company will establish and maintain a system to properly implement our disclosure policy and to ensure timely and appropriate information disclosure in accordance with the Timely Disclosure Rules. Our department in charge of disclosure (Corporate Communications Department) will collaborate with the division responsible for the information in question to gather and analyze relevant information. We will strive to clarify the process from the occurrence to the disclosure of information, ensuring that the Company discloses information based on right decisions.