Summary

Asaka Riken Co., Ltd. is a company engaged primarily in precious metal recycling and environmental businesses, recovering precious metals from so-called urban mines. Since its establishment, the company has pursued continuous technological innovation and has established processes to efficiently separate and refine high-purity gold, silver, platinum, and palladium. It recovers precious metals from discarded electronic components and printed circuit boards and supplies them to trading companies and material manufacturers.

Asaka Riken’s business model places strong emphasis on technological capabilities, product value, and the creation of a sustainable society, with particular focus on the recycling of lithium-ion batteries. Although its financial results for the fiscal year ended September 2024 show a slight decline in profits, investments in the lithium-ion battery recycling business are regarded as a key driver of future growth.

The precious metals business accounts for approximately 75% of total revenue and recorded year-on-year sales growth, while the environmental business faces intensifying competition but is showing signs of revenue recovery. Asaka Riken aims to realize a sustainable, circular resource-based society, with each business segment functioning in a complementary manner. In particular, growth in the precious metals business enhances the company’s overall competitiveness.

In its medium-term management plan, the promotion of the lithium-ion battery recycling business and the development of new technologies are positioned as key priorities, which are expected to expand the company’s growth potential. Risk factors include earnings volatility, industry-specific risks, financial risks, risks associated with technological innovation, overseas expansion risks, and risks related to natural disasters and geopolitical conditions, all of which require appropriate management.

Asaka Riken positions sustainable growth and environmental contribution as core elements of its corporate value and maintains strong competitiveness while advancing its recycling and new business initiatives. For investors, the successful execution of its growth strategy is expected to be the key to generating sustainable returns.

1. Overview of Cumulative Financial Results for the Fiscal Year Ended September 2024

Asaka Riken’s consolidated results for the cumulative period of the fiscal year ended September 2024 (October 2023 to September 2024) showed net sales of ¥7,967 million, representing a 3.8% year-on-year decline, and operating profit of ¥266 million. However, net profit increased year on year to ¥371 million.

The decrease in sales was mainly attributable to intensified competition in the precious metals business and cost of sales management issues. In particular, increased research and development expenses weighed on operating profit, while improvements in non-operating income helped maintain positive net profit.

The precious metals business recorded net sales of ¥6,530 million and segment profit of ¥142 million, both increasing year on year, supported by improved recycling efficiency. The environmental business generated sales of ¥1,202 million, but faces intense competition and requires further improvement in profit margins. The systems business recorded sales of ¥216 million, with support for building quality control frameworks contributing to enhanced customer trust.

Overall, Asaka Riken’s business segments function in a complementary manner, underpinned by growth in the precious metals business, demonstrating the company’s commitment to sustainable growth. Looking ahead, the company plans to strengthen investments in lithium-ion battery recycling to expand its growth domains. For investors, while short-term profit decline is evident, signs of future growth suggest expectations for a recovery in performance.

2. Financial Outlook for the Fiscal Year Ended September 2024

The financial outlook for the fiscal year ended September 2024 forecasts net sales of ¥7,967 million, operating profit of ¥266 million, and net profit of ¥371 million, indicating a slight year-on-year decline in earnings. This is mainly due to aggressive investment in the lithium-ion battery (LiB) recycling business, which has led to increased research and development expenses. Nevertheless, improvements in non-operating income are expected to result in net profit exceeding the previous year’s level.

In the precious metals business, recovered volumes have increased year on year, while the environmental business is showing a recovery trend. However, intensified competition may exert downward pressure on profitability. Asaka Riken is pursuing a diversification strategy with an eye on future growth, particularly emphasizing the full-scale development of the LiB recycling business.

These initiatives are expected to contribute both to the realization of a sustainable circular resource-based society and to the enhancement of the company’s competitiveness. For investors, while a short-term decline in earnings is anticipated, the outlook reflects significant long-term growth potential. Flexible strategies in response to market conditions and competitive dynamics will be required, with particular importance placed on new technology development and responsiveness to customer needs. Asaka Riken remains committed to strengthening its recycling operations and ensuring earnings stability while pursuing sustainable growth.

3. Medium- to Long-Term Growth Strategy

Asaka Riken’s medium- to long-term growth strategy focuses on strengthening its precious metals and environmental businesses, with particular emphasis on the lithium-ion battery (LiB) recycling business, in order to realize a sustainable circular resource-based society. In its medium-term management plan, the company aims to fully launch its new LiB recycling business by 2025, improve the efficiency of precious metal recovery from urban mines, and enhance profitability through the regeneration of spent ferric chloride solutions in the environmental business.

By thoroughly improving the efficiency of existing businesses while allocating resources to new ventures, Asaka Riken seeks to maintain a high level of competitiveness. Its investment strategy prioritizes capital expenditure and research and development, with the mass production operation of the Iwaki plant positioned as a key initiative for the LiB recycling business. The company plans to introduce state-of-the-art equipment and improve production process efficiency.

Furthermore, through the enhancement of metal recovery technologies from waste lithium-ion batteries, Asaka Riken aims to achieve recycling efficiency exceeding industry averages. Strengthening organizational structures and human resource development are also key priorities, with the formation of specialized teams and the expansion of training programs intended to boost employee motivation and overall organizational performance.

Risk management is emphasized, with flexible strategies adopted to respond to rapid market changes and intensified competition, and operational plans reviewed as necessary. Through these efforts, Asaka Riken aims to achieve sustainable growth and enhance its attractiveness to investors. Against the backdrop of growth in the lithium-ion battery market, the company intends to establish new business models and contribute to the realization of a sustainable society.

・ Although cumulative sales for the fiscal year ended September 2024 declined by 3.8% year on year, net profit increased to ¥371 million, reflecting a commitment to sustainable growth supported by the expansion of the precious metals business.

・ For the fiscal year ended September 2024, net sales of ¥7,967 million, operating profit of ¥266 million, and net profit of ¥371 million are forecast. While investments in lithium-ion battery recycling impact earnings, the outlook retains strong long-term growth potential.

・ Asaka Riken aims to maintain competitiveness by strengthening its lithium-ion battery recycling and environmental businesses while promoting capital investment and R&D in line with its medium-term management plan, with the goal of realizing a sustainable circular resource-based society.

Business Overview

1. Overview of the Business Model

Asaka Riken Co., Ltd. operates primarily in the precious metals recycling and environmental businesses and has been engaged in the recovery of precious metals from urban mines for several decades. Since its founding, the company has consistently pursued technological innovation, utilizing a solvent extraction method based on its proprietary **HIECT system** to separate and refine high-purity gold, silver, platinum, and palladium. Through this technology, Asaka Riken efficiently recovers precious metals from discarded electronic components and printed circuit boards and supplies them to trading companies and material manufacturers. This process creates value from waste materials and is highly regarded for its ability to reduce environmental impact.

Asaka Riken’s business model is built on three core pillars: technological capability, product value, and the creation of a sustainable society. In particular, the company aims to realize a circular, resource-recycling-oriented society with a strong emphasis on sustainability, positioning its recycling operations as a meaningful contribution to addressing environmental challenges. In recent years, Asaka Riken has also intensified its efforts in the lithium-ion battery (LiB) recycling business as part of its initiatives toward achieving carbon neutrality by 2050. This new business domain is expected to become an important source of revenue growth.

2. Main Business Segments

Asaka Riken’s operations are broadly classified into three business segments: the **Precious Metals Business**, the **Environmental Business**, and the **Systems Business**, each serving distinct market needs.

Precious Metals Business

The precious metals business is the company’s core segment, accounting for approximately 75% of total revenue. In its most recent performance, the segment recorded net sales of ¥6,530 million, an increase of 11.3% year on year, and segment profit of ¥142 million, representing a 111.9% year-on-year increase. This growth was driven by higher recovery volumes in line with expansion of the precious metals market. The segment has established a process for efficiently recovering precious metals such as gold and palladium from electronic waste, refining them to high purity, and selling them to customers.

Environmental Business

The environmental business engages in a wide range of activities, from the regeneration of spent etching solutions to the recovery of copper. Through initiatives aimed at increasing recycling rates and reducing environmental burden, net sales recovered to ¥1,202 million in the previous fiscal year. However, competition in the existing market remains intense, making the company’s commitment to sustainable resource utilization increasingly important.

Systems Business

The systems business focuses primarily on the development and provision of quality control systems and automated measurement systems. Although sales in this segment amounted to ¥216 million, it plays a critical role in supporting productivity improvements for manufacturing customers. In particular, assistance in building quality management frameworks has contributed to strengthening customer trust. Going forward, further initiatives will be required to respond to emerging market trends.

Through these complementary business segments, Asaka Riken enhances overall profitability. In particular, growth in the precious metals business has a positive spillover effect on other segments and serves as a key driver of the company’s overall competitiveness.

3. Market Position and Competitive Advantages

Asaka Riken holds a strong market position in the precious metals recycling industry, supported by a high market share and competitive advantages rooted in its proprietary technologies. In particular, its selective stripping technologies and separation and refining processes enable the company to deliver high-quality products that differentiate it from competitors, thereby enhancing market credibility. Continuous technological improvements allow Asaka Riken to respond flexibly to customer needs, earning strong trust from its business partners.

The company is also actively engaged in initiatives aimed at realizing a sustainable society, collaborating with a wide range of domestic and international partners. Its environmentally conscious business model aligns closely with growing social demand and provides a significant competitive edge over competitors. This positions Asaka Riken to simultaneously contribute to a circular resource-based society and achieve corporate growth.

Furthermore, expansion into lithium-ion battery recycling and partnerships with key customers have further strengthened the company’s adaptability in the market. In particular, the ability to rapidly respond to the emergence of new battery technologies is expected to support medium- to long-term growth.

4.  Market Environment

The precious metals recycling market is currently experiencing rapid growth, driven by a global shift toward sustainable material utilization. As environmental issues become more severe, the recycling industry is increasingly regarded not only as a matter of corporate social responsibility but also as a critical strategic domain. Recycling activities, particularly the recovery of resources from urban mines, are considered essential to achieving sustainable development, with policy support and rising market demand further accelerating growth.

The expanding demand for lithium-ion batteries presents a significant new growth opportunity for Asaka Riken. Strengthened environmental policies and the widespread adoption of electric vehicles are expected to drive a sharp increase in recycling demand, enabling expansion of the company’s existing business model and further enhancement of its competitiveness.

At the same time, the competitive environment remains challenging, requiring flexibility in responding to price volatility and changing market conditions. By continuing technological innovation, Asaka Riken is expected to deliver differentiated value relative to competitors. As the recycling industry’s potential market continues to expand, a clear long-term vision will be a critical factor for future success.

Guided by its philosophy of precious metals recycling and environmental stewardship, Asaka Riken is proactively advancing strategies aimed at building a sustainable society. Its ability to adapt to market changes while enhancing corporate value is likely to remain a key point of interest for investors.

Performance Trends

1. Overview of Recent Performance

Asaka Riken’s performance for the fiscal year ended September 2024 showed a slight year-on-year decline in earnings; however, the company continued to strengthen its growth areas through proactive investment in the lithium-ion battery (LiB) recycling business. Net sales decreased to ¥7,967 million from ¥8,285 million in the previous fiscal year, while operating profit declined from ¥395 million to ¥266 million. This decrease was mainly attributable to increased research and development expenses.

Despite this, net profit reached ¥371 million, remaining positive compared with the previous year. In particular, the increase in net profit was driven by improvements in non-operating income, indicating the soundness of the company’s financial foundation.

Behind these results lie intensified competition in the precious metals and environmental businesses, as well as the impact of dependence on certain major customers. As part of its overall strategy, Asaka Riken is advancing diversification, with increased development of new technologies and a rise in patent applications expected to support medium- to long-term growth. For investors, while the results reflect short-term earnings pressure, signs of future growth are emerging, drawing attention to the company’s outlook.

2. Income Statement Analysis

In the income statement for the fiscal year ended September 2024, net sales declined by approximately 3.8% year on year to ¥7,967 million, and operating profit fell to ¥266 million. This decline was mainly due to intensified competition in the precious metals business and challenges in managing cost of sales. Cost of sales amounted to ¥6,032 million, and although the gross profit margin remained at a solid level of approximately 24.2%, further cost reduction remains an issue.

The decline in operating profit was largely attributable to increased research and development expenses for the LiB recycling business. While these proactive investments may promise future profitability, they also entail short-term risks to operating earnings. Selling, general and administrative expenses increased due to new marketing initiatives and the expansion of sales channels, and their effectiveness will need to be closely monitored. Overall, flexible strategies to secure profitability are required, and investors need clear information to assess the associated trade-offs.

3. Balance Sheet Analysis

An examination of the balance sheet for the fiscal year ended September 2024 shows that Asaka Riken’s total assets are on an upward trend, with current assets—particularly cash and deposits—showing a notable increase. This improvement in liquidity supports the company’s short-term solvency and reflects a stable financial position. The increase in current assets also suggests that the company is building a foundation to capture future growth opportunities.

On the other hand, total liabilities amount to approximately ¥8,880 million, with a relatively high proportion of interest-bearing debt. This raises concerns regarding sensitivity to interest rate fluctuations and the rigor of debt management. Nevertheless, the equity ratio stands at 35.39%, which contributes to the company’s brand strength and overall financial stability. While a review of capital structure may be warranted, ongoing investments to support growth represent a significant advantage for Asaka Riken. For investors, careful attention to the balance between assets and liabilities remains essential.

4. Cash Flow Statement Analysis

According to the cash flow statement, operating cash flow for the fiscal year ended September 2024 amounted to ¥792 million, representing an improvement from the previous year. The ability to generate free cash flow through stable operating activities is a key indicator of a company’s fundamental financial health. This cash flow supports continued investment and underpins future growth.

Investment cash flow primarily reflects capital expenditures related to the LiB recycling business, indicating active investment in new production technologies and facilities. Meanwhile, financing cash flow shows an increase in new borrowings, highlighting the need for careful cash management. To support its growth strategy, Asaka Riken must continuously analyze these cash flow trends. Investors, in turn, should assess the company’s ongoing financial soundness through these indicators.

5. Analysis of Performance Indicators

Key performance indicators include ROE, ROA, and EBITDA. For the fiscal year ended September 2024, ROE remained at a stable level, while ROA showed a slight decline, which warrants attention. EBITDA amounted to ¥651 million, and if this indicator continues to show steady growth, it will confirm the company’s cash flow generation capability and support expectations for long-term growth.

To achieve higher profit growth, efficient asset utilization is essential, making continuous monitoring of these performance indicators indispensable to corporate management. The effective execution of sustainable growth initiatives will be a key determinant of future performance. Investors should evaluate the company’s competitiveness and growth potential through these metrics.

Overall, Asaka Riken’s performance trends clearly indicate a strategic focus on responding to new market opportunities and implementing growth strategies to enhance competitiveness. Going forward, close attention should be paid to the progress of the lithium-ion battery recycling business, while maintaining a long-term perspective on the company’s growth trajectory.

Medium-Term Management Plan / Growth Strategy

1.  Overview of the Medium-Term Management Plan

Asaka Riken’s medium-term management plan is centered on strengthening its precious metals and environmental businesses, as well as promoting a new lithium-ion battery (LiB) recycling business, with the goal of realizing a sustainable, circular resource-based society. The plan encourages the company to set clear growth targets for the next three to five years and serves as a strategic guideline for business operations. In particular, the new LiB recycling business targeted for launch around 2025 is positioned as an important business opportunity amid growing environmental awareness.

While advancing process improvements to enhance the efficiency of precious metal recovery from urban mines, Asaka Riken also seeks to improve profitability in its environmental business through the regeneration of spent ferric chloride solutions. At the same time, the company is required to thoroughly improve the efficiency of its existing businesses while allocating resources to new growth areas. Through these efforts, Asaka Riken aims to achieve sustainable growth while maintaining a high level of competitiveness.

Experts note that these initiatives will enable the company to deliver products and services that respond to market needs from an environmental protection perspective, thereby securing long-term competitiveness. For investors, this plan serves as evidence of the company’s growth potential and commitment to sustainability.

2. Investment Plan and Priority Initiatives

Asaka Riken’s investment plan places primary emphasis on capital expenditure and research and development. At its core is the lithium-ion battery (LiB) recycling business, with full-scale operations expected to commence from 2025 onward. As part of this strategy, the mass production operation of the Iwaki Plant is positioned as a key initiative, with plans to introduce state-of-the-art equipment and improve production process efficiency.

On the R&D front, the company is making proactive investments in recycling technologies and the development of new materials. In particular, enhancing metal recovery technologies from spent lithium-ion batteries is a critical strategy for differentiation from competitors in the market. Through such technological innovation, Asaka Riken aims to maintain high profit margins while promoting a transition away from a disposable society.

These investment initiatives are designed to achieve sustainable growth over the long term and enhance shareholder value. For investors, whether these initiatives translate into tangible earnings will be a key indicator of the company’s credibility. By establishing an organizational structure capable of responding swiftly to changes in the market environment, Asaka Riken seeks to position itself as a company with strong growth expectations.

3. New Businesses and Segment-Specific Growth Strategies

Asaka Riken is accelerating its growth strategy by strengthening its lithium-ion battery (LiB) recycling business as a new business domain. Demand in this field is rapidly increasing, driven by heightened environmental awareness and the widespread adoption of electric vehicles (EVs), resulting in a highly active recycling market. By recovering rare metals from spent LiBs, Asaka Riken aims to establish a new business model and contribute to the realization of a sustainable society.

The target market continues to expand, and growth in the EV market in particular is expected to have a significant impact on future demand forecasts. In this context, Asaka Riken is expected to leverage its technological capabilities to achieve recycling efficiency exceeding industry averages. Experts believe that as recycling needs in the EV market intensify, the company’s business expansion is likely to proceed smoothly.

At the same time, Asaka Riken is working to expand its environmental-related businesses, aiming to stabilize earnings through the regeneration of waste liquids and the effective utilization of by-products. These efforts are expected to promote overall corporate growth and strengthen the company’s presence in competitive markets. Investors should closely monitor how progress in new businesses affects the company’s overall profitability.

4. Strengthening Organizational Structure and Human Resource Development

As part of its medium-term management plan, Asaka Riken is focusing on reviewing its organizational structure and enhancing human resource development. In particular, to improve operational efficiency and quality assurance, the company is forming teams with specialized expertise and expanding its training programs. These initiatives are expected to boost employee morale and improve overall organizational performance.

The establishment and enhancement of education systems play a vital role in an increasingly competitive environment. By equipping employees with the skills needed to respond to new technologies and evolving market trends, Asaka Riken enables its workforce to contribute directly to corporate growth. Accordingly, the company is committed to investing in human capital as a foundation for sustainable management.

Experts point out that improvements in the working environment and the recruitment of diverse talent directly enhance corporate competitiveness. For investors, these initiatives are worth close attention, as they are likely to contribute to sustainable growth and improved earnings.

5. Approach to Risk Management

Asaka Riken positions risk management as a critical component of its medium-term management plan. In an environment characterized by rapid market changes, intensifying competition, and ongoing technological innovation, a variety of risk factors must be addressed. Identifying, analyzing, and appropriately managing these risks is essential to the company’s growth.

For example, imbalances in supply and demand in the lithium-ion battery market could significantly affect the profitability of the recycling business. In addition, falling behind competitors in technological innovation could result in a loss of competitiveness. To mitigate these risks, Asaka Riken adopts flexible strategies and maintains a readiness to review and revise its action plans as necessary.

For investors, effective risk management is a key evaluation criterion, as companies with robust risk controls are more likely to achieve stable long-term growth. If risks are managed appropriately, new growth opportunities may emerge.

Asaka Riken positions sustainable growth and environmental contribution as core elements of its corporate value and maintains strong competitiveness while promoting its recycling and new business initiatives. For investors, the successful execution of its growth strategy is expected to be the key to generating sustainable returns.

News and Topics

1.  Further Expansion of the Environmental and Precious Metals Businesses

Asaka Riken is intensifying research and development efforts in both its environmental and precious metals businesses. Aiming to build a sustainable circular society, the company is working on innovations in recycling technologies and the development of new materials. In particular, the joint development agreement concluded in April 2023 with Prime Planet Energy & Solutions is expected to accelerate the lithium-ion battery (LiB) recycling business.

Through this partnership, Asaka Riken plans to recycle waste materials from spent LiBs and establish a domestic recycling supply chain. Experts view this initiative positively, noting that the joint development of processes to reduce CO₂ emissions will contribute to a sustainable resource-circulating society. From an investor perspective, improvements in recycling rates are expected to enhance competitiveness in securing resources. On the other hand, as technological development requires time, there are risks associated with short-term returns.

2.  Investment Plan and Financing

Looking ahead to 2024, Asaka Riken has decided to make additional investments of approximately ¥7.0 billion in its LiB business. Of the planned ¥6.0 billion in financing, funds will be raised through syndicated loans and allocated to the installation of new production lines and technological improvements. Experts point out that building an efficient production structure in response to stricter environmental regulations and market demands will enhance competitiveness.

This investment is expected to be supported by subsidies from Japan’s Ministry of Economy, Trade and Industry, making the availability of stable financing an attractive factor for investors. However, fundraising also entails interest burdens and repayment risks, underscoring the importance of careful cash flow management.

3. Rising Global Environmental Awareness

In recent years, global warming and resource depletion have drawn increasing attention, heightening the importance of environmental protection. In response to this trend, Asaka Riken is expanding its recycling businesses for precious metals and chemical materials. In particular, initiatives aligned with the Paris Agreement and the Sustainable Development Goals (SDGs) are highly regarded, as corporate social responsibility is increasingly emphasized.

Markets are highly sensitive to these trends, and business expansion through the application of recycling technologies is seen as a factor that enhances corporate image. From an investor standpoint, environmental initiatives are expected to strengthen brand value and competitiveness. However, companies must respond swiftly to international regulations and market changes, requiring close monitoring of their long-term impact on performance.

4. Initiatives Related to Corporate Social Responsibility (CSR)

Asaka Riken is also actively engaged in environmental protection activities as part of its commitment to corporate social responsibility. Recent disclosures have reported specific figures for CO₂ reductions achieved through precious metal recovery and environmental businesses, highlighting year-on-year reductions and improvements in recycling rates. These highly regarded initiatives enhance trust among customers and shareholders and contribute to strengthening the company’s brand.

Experts evaluate sincere CSR efforts as a factor that improves social reputation and secures long-term competitive advantage. For investors, management aligned with rising environmental awareness has the potential to generate new demand, supporting expectations for sustainable growth.

5. Strengthening Risk Management

Asaka Riken is strengthening its risk management framework. In particular, in response to recent infectious disease outbreaks and global supply chain disruptions, the company is advancing plans to secure alternative suppliers and diversify logistics routes. In addition, measures are being implemented to minimize risks by enhancing preparedness for natural disasters.

Such initiatives are critical to ensuring business continuity and align with recent demands for corporate stability. For investors, strengthened risk management enhances corporate reliability and contributes to investment risk mitigation.

6. Growth of the Lithium-Ion Battery (LiB) Market

The lithium-ion battery market is expanding rapidly, driven by the widespread adoption of electric vehicles (EVs) and renewable energy. Asaka Riken plans to launch its LiB recycling business on a full scale in 2025, and preparations are steadily progressing. Strengthening competitiveness in this field is considered essential for meeting future customer requirements.

Experts believe that Asaka Riken’s business strategy aligns well with market needs, given the expected surge in LiB demand and the importance of stable supply in the coming years. However, as competition and regulatory requirements continue to intensify, swift responses will be necessary, requiring ongoing attention to business performance.

7. Securing and Developing Human Resources

Securing and developing talented human resources is essential to supporting business performance. Asaka Riken is enhancing its education and training systems and strengthening initiatives to attract talent. In particular, by improving the working environment and employment conditions, the company aims to enhance its attractiveness as an employer and retain highly skilled employees.

Experts highlight that promoting diversity—such as increasing the participation of women and improving childcare leave utilization rates—can enhance corporate competitiveness. From an investor perspective, companies that prioritize human resource development are viewed favorably, as strong talent pools underpin sustainable growth.

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Asaka Riken’s sustainable business development is expected to attract increasing attention in the future. The company’s ability to respond swiftly to change and collaborate effectively with the market is a key factor in earning investor trust, and its growth potential is regarded with high expectations.

Company Overview

1. Basic Information (Company Profile, Location, etc.)

Asaka Riken Co., Ltd. is a precious metals recycling company headquartered in Koriyama City, Fukushima Prefecture, Japan. Founded in 1969, the company’s core business is based on technologies for separating and recovering precious metals and rare metals—such as gold, silver, platinum, and palladium—from urban mines. In particular, Asaka Riken possesses advanced technological capabilities in the recycling of printed circuit boards and electronic components.

In its environmental business, the company also regenerates spent etching chemicals and recovers and sells copper powder, resulting in a diversified business portfolio. In addition, Asaka Riken plans to launch a lithium-ion battery recycling business in 2025, reflecting its proactive approach to business diversification aimed at realizing a sustainable society.

The company is also engaged in contract development of quality management systems and data processing software, providing customers with high-quality products and services. Asaka Riken has 194 employees on a consolidated basis and places great importance on earning society’s trust through contributions to environmental protection while pursuing sustainable business operations. Its management philosophy emphasizes the realization of a sustainable society through environmental protection and effective resource utilization, a stance that also enhances its appeal to investors.

2. Corporate History and Key Milestones

Since its establishment in 1969, Asaka Riken has spent more than 50 years engaged in recycling operations and environmental protection initiatives. In 1971, the company developed gold recovery technology and began recovering precious metals from printed circuit boards. In 1992, it established the Fukuyama Plant in Koriyama City, Fukushima Prefecture, strengthening its production framework.

In 2003, Asaka Riken expanded overseas by opening a branch office in Taiwan. The company was listed on the JASDAQ Securities Exchange in 2008 and later transitioned to the JASDAQ market of the Tokyo Stock Exchange in 2013, milestones that supported its corporate growth.

In 2019, Asaka Riken launched initiatives in lithium-ion battery recycling and has announced plans to commercialize this business fully by 2025. This move is regarded as a strategic step toward building a sustainable resource-circulating model and contributes significantly to reducing environmental impact. The company’s management philosophy continues to emphasize environmental protection and effective resource utilization, with the pursuit of innovation positioned as an integral component.

3. Organizational Structure and Key Management

Asaka Riken’s organizational structure is built around three core business pillars: the Precious Metals Business, the Environmental Business, and the Systems Business. Each segment is supported by specialized teams, fostering a corporate culture that prioritizes addressing environmental challenges.

The management team consists of professionals with extensive expertise and experience. In particular, President **Kota Yamada** is widely recognized within the industry for his achievements and is regarded as a leading expert in recycling technologies.

The management team demonstrates strong commitment to supply chain optimization and the development of new businesses, with high expectations placed on the growth potential of the lithium-ion battery recycling business. At Asaka Riken, management and employees work together toward building a sustainable society, creating a strong sense of unity and high morale. In an era that demands transparency in corporate management, this organizational structure provides reassurance to investors.

4. Major Subsidiaries and Affiliates

Asaka Riken has Asaka Koun Co., Ltd. as a consolidated subsidiary, which primarily handles logistics and transportation services. Asaka Koun plays a critical role in supporting the logistics essential to Asaka Riken’s recycling processes, contributing to improved overall operational efficiency. This enables smooth recovery and sale of precious metals and rare metals and supports the scaling of the company’s business.

In addition, Asaka Riken collaborates with research institutions and technology partners, with a particular focus on developing new technologies related to lithium-ion batteries. Such industry collaboration accelerates technological innovation and strengthens competitiveness for global expansion. Through these efforts, Asaka Riken aims to maintain a sustainable business model while fulfilling its social responsibility toward environmental issues.

5. Geographic Expansion and Market Trends

While maintaining strong competitiveness in domestic markets, Asaka Riken is accelerating its international expansion. In particular, the company has established a foothold in overseas markets through its base in Taiwan, pursuing strategies that emphasize global business development. This approach is an effective means of expanding recycling operations internationally in line with industry growth and supports sustainable corporate growth.

Looking ahead, demand in the lithium-ion battery market is expected to expand significantly, particularly in electric vehicles and new energy sectors. Based on these market trends, Asaka Riken is required to flexibly adjust its business strategies to maintain competitiveness. Corporate strategies centered on sustainability are expected to strengthen trust among environmentally conscious customers and contribute to enhanced corporate value.

6. Research and Development Framework

Asaka Riken has built a strong research and development framework, particularly in recycling technologies and materials development. The design and implementation of new technologies and processes for recovering precious and rare metals are key factors underpinning the company’s competitive advantage. These capabilities enable the company to consistently deliver high-quality products to the market and enhance customer satisfaction.

To maximize employee expertise, Asaka Riken has established systems that promote regular training and skill development. The growth of engineers serves as a catalyst for innovation across the organization. Investment in recycling technologies and product development is a critical pillar supporting long-term business growth and remains indispensable to Asaka Riken’s continued development.

7. ESG and Sustainability Initiatives

Asaka Riken places strong emphasis on sustainable business operations from the perspectives of Environmental, Social, and Governance (ESG). Fulfilling corporate social responsibility is considered essential, and the company’s environmental initiatives attract significant attention from investors. Recycling operations play a vital role not only in reducing waste and promoting efficient resource utilization but also in lowering the overall environmental burden on society.

By integrating sustainability initiatives into its corporate strategy, Asaka Riken builds trust with customers and investors alike. Beyond environmental considerations, the company actively works toward realizing a sustainable society, positioning these efforts as a key driver of long-term business growth. For investors, such initiatives serve as strong indicators of long-term investment value.

Asaka Riken, committed to pursuing a sustainable business model, is expected to continue meeting societal expectations amid growing urgency surrounding environmental issues. Looking ahead, the company is anticipated to sustain its growth through ongoing challenges aimed at realizing a prosperous future, enhancing recycling technologies, and expanding its diversified business portfolio.

Shareholder Returns

1. Significance of Shareholder Returns and Asaka Riken’s Policy

Shareholder returns are an important measure through which companies distribute generated profits to shareholders and are closely linked to corporate credibility and growth strategies. Asaka Riken Co., Ltd. positions shareholder returns as one of its most important management priorities and adopts a stance of meeting shareholder expectations through a stable dividend policy. This approach strengthens returns to shareholders and also serves as an indicator of the company’s financial soundness and sustainability.

Asaka Riken’s dividend policy is based on a flexible and responsive framework that allows the company to adapt to changes in the business environment. While strengthening retained earnings, the company also places strong emphasis on returning value to shareholders. Specifically, Asaka Riken plans to pay dividends twice a year starting in 2025, with the goal of securing stable earnings to support this policy. The company’s dividend track record has been stable, providing investors with a sense of reliability and confidence.

Through these efforts, Asaka Riken aims to further deepen trust with shareholders and build a solid foundation to support sustainable corporate growth. Going forward, balancing growth with shareholder returns will be a key element of corporate strategy, and management is expected to continue striving to achieve this balance.

2. Dividend Policy Performance and Outlook

Asaka Riken’s dividend policy combines flexibility with stability, with a forward-looking perspective. The company plans to pay a dividend of ¥12 per share for the fiscal year ending September 2025, a significant increase from ¥8 per share in the previous year. Such a dividend increase demonstrates the company’s ability to generate stable profits and sends a strong message of commitment to shareholders.

In addition, Asaka Riken aims to maintain a payout ratio of 30% or higher and to set a dividend on equity (DOE) ratio of 3.0% or higher, signaling its intention to position itself as a company with stable earnings. These targets provide shareholders with greater motivation to continue investing in anticipation of the company’s future growth.

Based on past performance, Asaka Riken’s dividend policy has evolved in line with its management plans, and its stability has been well established. Looking ahead, as growth is expected in areas such as the lithium-ion battery recycling business, the dividend policy will become an increasingly important element in maximizing value for both the company and its shareholders. In particular, with expectations for further dividend increases beyond 2036, investors are likely to demonstrate stronger confidence in the company’s long-term growth potential.

3. Share Repurchase Strategy and Its Impact

Asaka Riken actively implements share repurchases as part of its shareholder return measures. Share buybacks involve the company repurchasing its own shares from the market, thereby reducing the number of outstanding shares and improving earnings per share (EPS). This policy supports the share price and enhances returns for existing shareholders.

In recent board resolutions, share repurchases have been adopted as a means of increasing management flexibility. For example, the company acquired 35 shares of treasury stock at a total cost of ¥36,645. Such actions not only directly enhance shareholder value but also contribute to improving corporate credibility and market valuation. In particular, with the anticipated growth of lithium-ion battery-related businesses, attention is focused on whether share repurchases will meaningfully contribute to improved corporate performance.

Careful timing of share repurchases is essential, as excessive capital allocation could potentially undermine growth opportunities. By maintaining a well-balanced share repurchase policy, Asaka Riken is expected to continue creating shareholder value over the long term.

4. Alignment Between Financial Strategy and Shareholder Returns

Asaka Riken’s shareholder return policy is closely aligned with its overall financial strategy. Management places a strong emphasis on securing stable profits and adopts a strategy of strengthening retained earnings to support future growth. The dividend policy is designed based on this long-term vision, with priority given to maintaining a stable financial foundation.

To address future economic uncertainties and changes in market conditions, the company maintains a flexible financial policy. This enables prudent financial management and ensures sufficient capacity for shareholder returns. Initiatives such as dividend payments and share repurchases also serve as indicators of the company’s financial health, helping to build investor confidence.

At the same time, ongoing investment for sustainable long-term growth is essential, requiring appropriate allocation of earnings. How the company balances shareholder returns with internal growth investments will remain a key management challenge going forward.

5. Sustainability of Shareholder Returns in the Medium to Long Term

Asaka Riken places importance on the sustainability of shareholder returns over the medium to long term and aims to balance investments in growth businesses with consistent returns to shareholders. To achieve this, it is essential to implement flexible dividend policies and share repurchase strategies in line with corporate growth.

In particular, as growth in the lithium-ion battery business is anticipated, expectations are high that profits from this segment will be reflected in shareholder returns. Furthermore, additional dividend increases are anticipated beyond 2036, which is expected to contribute to enhanced corporate value. These initiatives are expected to strengthen trust with shareholders and support sustainable corporate growth.

However, depending on economic conditions and fluctuations in raw material costs, it may become necessary to review dividend policies. Accordingly, the company is required to maintain a long-term perspective while continuously monitoring and evaluating its shareholder return strategies to ensure their sustainable development.

As attention remains focused on the company’s future growth strategies, Asaka Riken’s management policies are recognized as a key factor in enhancing shareholder value and deepening market trust. Going forward, the company’s continued efforts to strengthen shareholder returns while achieving sustainable growth will be essential. A firm commitment to enhancing shareholder value through stable dividend policies and share repurchases is expected to remain a cornerstone of Asaka Riken’s corporate strategy.

Business Risks

1. Factors Affecting Performance

Asaka Riken’s operations are centered on two main pillars: the precious metals business and the environmental business. The company’s performance is highly dependent on external conditions. In particular, trends in the electronics and automotive industries have a direct impact on results, so changes in market supply and demand can significantly affect performance. Consequently, demand forecasts may not always be accurate, and an imbalance in supply and demand could lead to short-term declines in revenue.

In addition, fluctuations in precious metals prices represent another key factor affecting performance. Prices of gold, silver, platinum, and other metals are closely linked to the global economy and geopolitical risks. If market conditions remain unstable for extended periods, this can directly impact profitability. Overall, multiple variables influence performance, including dependence on specific customers, seasonal factors, and investments in new businesses, all of which carry the potential for unforeseen risks.

As a business strategy, it is essential to diversify the customer base, review pricing strategies, and explore new markets. These measures are crucial to enhancing the stability of performance and supporting long-term growth.

2. Industry-Specific Risks

The precious metals recycling and environmental sectors in which Asaka Riken operates carry inherent industry risks. One major factor is increasingly stringent environmental regulations. As a business that handles chemical substances, the company must constantly adapt to changing regulations, comply with newly introduced standards, and make additional investments to meet these requirements. These costs may put pressure on financial results.

With technological innovation advancing, competitors are also improving their capabilities, creating a competitive environment in which market share is contested. Moreover, the company must respond promptly to changing customer needs. If Asaka Riken’s products fail to meet demand for sustainable options, there is a risk of losing customers.

Finally, fluctuations in raw material costs, particularly those related to recovering precious metals from waste, cannot be ignored. These changes could reduce competitiveness and compress profit margins. Understanding and managing industry-specific risks is therefore essential.

3. Financial and Managerial Risks

Asaka Riken faces a range of financial and managerial risks. One concern is the high reliance on interest-bearing debt. Elevated debt levels could strain cash flow if interest rates rise, a risk that becomes more pronounced during periods of economic instability. Additionally, violation of financial covenants could not only tighten borrowing conditions but also require immediate repayment under contractual obligations.

Governance-related risks are also significant. Inadequate internal controls may lead to legal violations or misconduct, which could damage the company’s social credibility. Maintaining high ethical standards is therefore essential.

Workforce management is another key risk. Failing to attract, retain, and develop talented personnel could negatively affect long-term growth. Continuous monitoring and appropriate risk management are critical to mitigating financial risks.

4. Risks Associated with Technological Innovation

Technological advances have a significant impact on market competition. Securing a competitive edge in recycling operations requires the development of new technologies. However, R&D requires substantial capital, and unsuccessful projects may result in wasted investment. Additionally, if new technologies are not accepted by the market, expected returns may not materialize.

Therefore, careful evaluation of investments in recycling technology development is essential. In particular, with lithium-ion batteries (LiBs) emerging as a renewable energy source, progress in related technology development is a critical factor requiring careful balance of risk and return.

5. Risks Related to Overseas Expansion

International expansion is important for diversifying demand, but it entails significant risks. Entering emerging markets and adapting to changing international trade conditions can profoundly affect operations. Foreign exchange risk is another concern, as currency fluctuations may compress profits, particularly for a multinational operation.

Compliance with foreign environmental regulations and standards often requires additional costs and investment in equipment that meets new technical requirements. Failure to address these factors can reduce competitiveness in overseas markets. Thorough research and risk assessment are essential for successful international operations.

6. Natural Disaster and Geopolitical Risks

Natural disasters and geopolitical events also pose serious risks to Asaka Riken’s operations. Earthquakes, floods, or operating in conflict zones can strain financial resources depending on the situation. Supply chain disruptions could halt operations, leading to substantial revenue losses.

Geopolitical tensions and trade restrictions must also be considered. Dependence on suppliers or markets in specific regions increases the company’s exposure to regional instability. Establishing robust risk management systems is essential for sustainable corporate growth.

Summary

Considering the above risk factors, Asaka Riken faces a diverse set of business risks. These include performance volatility, industry-specific risks, uncertainties related to financial management and technological innovation, risks associated with international expansion, and exposure to natural disasters and geopolitical events. Investors should understand these risks and evaluate the company’s resilience through proper risk management and information gathering. By doing so, the company’s potential to capitalize on future growth opportunities can be maximized.