Sanshin Electronics : Notice Regarding Announcement of Business Forecast and Dividend Forecast

(This notice has been translated from the original notice in Japanese. In the event of any discrepancy, the original in Japanese shall prevail.)

August 5, 2020

Name of Company: Sanshin Electronics Co., Ltd.

Representative: Toshiro Suzuki (Representative Director, COO)

(Code No. 8150 Listed in the First Section of the Tokyo Stock Exchange) Enquiries to: Akio Misono (Director, Senior Operating Officer and Senior General Manager of Finance & Accounting Division)

(Tel: [phone])

For Immediate Release:

Notice Regarding Announcement of Business Forecast and Dividend Forecast

The business forecast and dividend forecast for the first half of the fiscal year ending March 31, 2021, which had their announcement postponed in the "Summary of Financial Results for Fiscal Year Ended March 31, 2020 [Japan Standards] (Consolidated)" that was released on May 27, 2020, are now announced as follows.

Details

1. Consolidated business results forecast for the first half of the fiscal year ending March 31, 2021 (April 1, 2020 to September 30, 2020)

				Net profit
	Net sales	Operating	Ordinary	attributable to		Net profit
	profit	profit	shareholders of		per share
				parent company
	Million yen	Million yen	Million yen	Million yen		Yen
Previous Forecast (A)	－	－	－	－		－
Current Forecast (B)	52,000	400	350	300	15.64
Increase/Decrease (B-A)	－	－	－	－
Rate of Increase/Decrease (%)	－	－	－	－
(Reference) Results for First Half of	66,413	1,191	1,118	859	44.83
Previous Term (Ended September 30, 2019)

2. Reason for announcing the consolidated business performance forecast for the first half of the fiscal year ending March 31, 2021

The spread of COVID-19 continues to cause strong uncertainty and make it difficult to forecast the future. However, the emergency declaration has been lifted and economic activities are gradually resuming. As such, the Group announced the forecast shown above for consolidated business performance in the first half of the fiscal year ending March 31, 2021, which was previously undisclosed. The forecast values are based on business progress until

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the first quarter of the Group and on information which is currently available.

In the device segment, the operating systems of production plants at suppliers in countries such as China are gradually normalizing. Conversely, although there are regional differences, the spread of COVID-19 continues to significantly impact Western markets which are the main markets for end products. In the solution segment, the spread of COVID-19 had only a slight impact in the consolidated first quarter. However, depending on the situation from the second quarter onwards, there is the possibility that the scale of facilities investment at customers will decrease, that such investment will be postponed, or that a portion of delayed deliveries will become apparent in conjunction with stagnated production activities at suppliers.

Based on these conditions, the business performance forecast for the consolidated first half period is as follows: Net sales of ¥52,000 million (down 21.7% year-on-year), operating profit of ¥400 million (down 66.4% year-on-year), ordinary profit of ¥350 million (down 68.7% year-on-year), and net profit attributable to shareholders of parent company of ¥300 million (down 65.1% year-on-year).

Regarding the consolidated business performance forecast for the full fiscal year ending March 31, 2021, we expect that COVID-19 will continue to impact the device segment and solution segment from the second quarter and onward. However, the degree of impact will fluctuate greatly due to factors such as infection conditions in each country, and relaxation/intensification of countermeasures. Therefore, it is currently difficult for the Company to reasonably estimate the business performance forecast and we will continue to postpone the announcement. The Company will promptly announce once it becomes possible to reasonably calculate the business performance forecast.

3. Dividend forecast for the fiscal year ending March 31, 2021

			(Yen)
		Dividend per share
	2Q-end	Year-end	Annual
Previous Forecast	－	－	－
Current Forecast	8.00	Unannounced	Unannounced
Results for Previous Term	15.00	55.00	70.00
(Ended March 31, 2019)

4. Reason for announcing dividend forecast

While aiming for a consolidated payout ratio of 50%, our basic policy is to decide on dividends while considering a balance of return to shareholders, investment for acquiring growth opportunities, maintenance of internal reserves for enabling sustainable growth, and improvement of capital efficiency. Based on this policy, in regards to the previously unannounced second quarter dividend forecast of the fiscal year ending March 31, 2021, we announced the dividend shown above based on the forecasted amount of net profit attributable to shareholders of parent company in the consolidated first half period.

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Also, we plan to determine and announce the year-end dividend forecast together with the full-term business performance forecast.

Note: The projected results and forward-looking statements included in this document reflect the Company's expectations based on information available at the time of release, and are not intended as a guarantee that the Company will achieve these targets. Actual performance may differ considerably from the forecast due to various factors.

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