Search for 100-bagger (100x stock)! November 2, 2020 issue

1. 100% Bagger (2x stock) candidate

4464 Soft99 Corporation, listed on Tokyo Stock Exchange Second Section

TICKER CODE COMPANY LISTING YEAR

4464 Soft99

Corporation 2001

Current market capitalization (billion yen) Target market capitalization (billion yen) 2x market capitalization (billion yen)

224 401 452

Business model

Major car用品 chemicals maker, manufacturing and sales of car wash products and repair agents. Sale of industrial materials for semiconductors.

Service business, real estate-related business

* Listing year notes are the dates of listing on the First Section, Second Section, Mothers, or JASDAQ of the Tokyo Stock Exchange.

* Target market capitalization and 2x market capitalization are calculated from the current market capitalization.

2. Key points

1. A long-established Osaka-based company with a focus on car用品 and a wide range of businesses including chemicals, semiconductors, automotive-related operations, services, and real estate. It has maintained net profitability for 11 consecutive years since 2010, indicating high earnings stability.

2. From an investor’s perspective, the biggest point is [poor capital efficiency]; the fact that assets held are not being used effectively is the main factor depressing the company’s stock price.

3. In August 2020, fully acquired Aztech, which manufactures and sells medical supplies, to strengthen the medical business as another pillar of the porous materials segment.

4. From this fiscal year, the company shifted its dividend payout ratio to around 25% of consolidated operating income and announced a policy to strengthen shareholder returns. At the same time, given the company’s financial strength, it is possible to further raise the payout ratio and implement share buybacks; the extent to which shareholder returns can be enhanced will be a focal point for improving corporate value.

5. On Monday, October 26, the company announced an upward revision to earnings and dividends. From an initially expected decline in profits to an expected increase, and the annual dividend is revised to 27 yen per share (up 2 yen). The company is a latent growth stock with a gradual growth trajectory, and a correction in share price levels is expected to occur in the future.

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