Announcement Regarding the Establishment of Mid-Term Vision

Merchant Bankers Co., Ltd. (hereinafter referred to as 'Merchant Bankers') announces that it has formulated the group's mid-term goal, 'MBK Group Mid-Term Vision 2029' (hereinafter referred to as the 'Mid-Term Vision'), for the implementation period from June 2026 to October 2029 (3 years and 5 months), which was resolved at the Board of Directors meeting held on June 15, 2026.

Based on this Mid-Term Vision, the company plans to formulate its mid-term management plan for the three fiscal years from October 2027 to October 2029, to be completed within the October 2026 fiscal period.

Details are as follows:

1. Basic Policy

Merchant Bankers has consistently strived for timely disclosures and transparent financial reporting. However, due to the nature of its business—particularly activities involving unpredictable gains and losses from real estate and securities trading—the company had refrained from issuing mid-term management plans until now.

Sales peaked at 10,522 million yen in the fiscal year ending March 2007. Affected by the Lehman Shock, sales declined to 1,794 million yen by March 2018. Since then, the company has recovered to 4,446 million yen in the October 2024 fiscal year through rental income and sales from real estate investment properties.

After extensive discussions, the Board of Directors has unanimously resolved to pursue further high growth, leading to the establishment of this Mid-Term Vision.

Merchant Bankers operates in real estate and finance—infrastructure-level businesses applicable across industries. In today’s era, often described as entering the Fifth Industrial Revolution, AI is recognized as the transformative force driving change across all sectors.

Merchant Bankers is now fully committed, as a unified organization, to enhancing its financial and real estate businesses and integrating AI into its operations to achieve transformation into a high-growth enterprise.

2. Specific Initiatives

(1) Correcting Over-Reliance on Real Estate Business

Although Merchant Bankers has publicly positioned itself as operating on dual pillars of financial and real estate businesses, in practice, it has been heavily reliant on real estate.

As a result, the company's valuation in the securities market has largely been based on real estate industry standards.

Going forward, resources previously allocated to real estate will be redistributed to other business areas to drive transformation toward high-growth ventures.

In real estate, the company will shift from reliance on rental income and property sales to higher-value, stable revenue streams by engaging in M&A and strengthening human capital for firms focused on income-generating and securitized real estate assets.

(2) Diversification of Financial Business

The company has scarcely engaged in pure financial business to date. Moving forward, it will expand its financial operations through M&A and human capital enhancement in financial-sector companies.

Specifically, it will pursue revenue through proprietary investments, fee-based businesses such as M&A advisory services, and stable income via PIPEs (Private Investments in Public Equity).

(3) Investment in AI Business

Merchant Bankers has not previously engaged in AI-related businesses. However, the company now strongly feels a sense of urgency: failing to integrate rapidly evolving AI into its operations risks falling behind in business efficiency.

Therefore, bringing AI-related companies into the Merchant Bankers group is recognized as an urgent priority.

Currently, the company is actively engaging with multiple AI-related firms to accelerate its real estate and financial businesses.

(4) Strengthening Human Capital Investment

To transition from stagnation to growth across its businesses, Merchant Bankers considers enhanced human capital investment—alongside M&A—as essential. The company will reskill existing employees and proactively recruit top external talent to expand business opportunities.

(5) Enhancement of IR Functions

Merchant Bankers will transform into a company with comprehensive IR capabilities by securing IR personnel and strengthening IR activities, including actions it has not previously undertaken: establishing a mid-term vision, publishing mid-term management plans, holding financial results briefings, releasing briefing materials, and conducting regular investor meetings.

The company will make every effort to ensure investors understand its business goals and place confidence in Merchant Bankers, aiming to achieve market valuations commensurate with its future growth.

3. Management Metrics and Shareholder Return Policy

(1) Management Metrics

The most critical metric set by Merchant Bankers at the time of establishing this vision is achieving a market capitalization of over 20 billion yen by the October 2029 fiscal year. KPIs for each business, sales and profit targets, and other management indicators will be announced upon formulation of the mid-term management plan.

(2) Shareholder Return Policy

Merchant Bankers has historically focused on stable dividend payments as its primary shareholder return method. It has also enhanced capital efficiency through treasury stock purchases and offered shareholder perks such as QUO card gifts.

However, it acknowledges that its shareholder returns have been merely 'average' compared to peers.

With the upcoming formulation of the mid-term management plan, the company intends to introduce more rewarding shareholder return policies tied to performance achievements. We invite stakeholders to look forward to Merchant Bankers’ 'high-growth transformation.'

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