Hioki E.E.Corporation Adjusts Capital Cost Estimates and Outlines Strategic Initiatives

TOKYO, Aug 07 (Pulse News Wire) – Hioki E.e.corporation (6866.T) revised its estimated cost of capital to around 10% percent from 7% to 8% percent during a board meeting held. The adjustment reflects ongoing discussions with shareholders and investors since August 2024.

Additionally, the company raised its target operating profit margin (ROE) to 15% percent from 10% percent in February 2025. In recent months, the company's stock price and market valuation have improved significantly following the publication of its first quarter results in April 2026. However, while the current ROE stands at 13.0% percent, surpassing the estimated cost of capital of 10% percent, it still falls short of the targeted level of 15% percent. Based on projected figures for the fiscal year ending December 2026, the company expects its ROE to reach approximately 16% percent by year-end. To further enhance capital efficiency, Hioki plans to manage its balance sheet according to established guidelines aimed at minimizing weighted average cost of capital (WACC).

Specifically, the company intends to maintain cash and deposits within 20% percent of total assets, targeting an annual average range of 25% to 30% percent. Furthermore, Hioki seeks to adjust its equity ratio to around 60% percent, currently aiming for levels near 70% percent. Additionally, the firm continues efforts to reduce holdings of policy shares, having sold five securities in the fiscal year ended December 2025. Despite maintaining a halt on share purchases through trading partner holding associations, the number of shares increased due to dividend reinvestment, which was unintended by the company. Hioki also outlined strategies to boost shareholder returns, including opportunistic repurchases of its own shares based on favorable valuations.

The company disclosed its intention to pursue such activities on June 5, 2026.