Summary

Green Energy & Company Co., Ltd. is a company that plays a significant role in the renewable energy market, particularly engaged in the development and sale of solar power generation systems and the provision of zero-energy houses. It operates two main business segments: flow business and stock business. In the flow business, the company sells solar power systems to corporate and individual customers, while in the stock business it provides operation and maintenance (O&M) services for power generation facilities that have already been sold.

For fiscal year 2023, the company recorded net sales of ¥8,854 million, representing a 20.1% year-on-year increase, and operating profit reached ¥533 million. Growth in the flow business was especially notable, and further revenue expansion is expected. Under its medium-term management plan “Green 300,” the company aims to achieve ¥30 billion in sales by 2030, with strategies focused on maximizing the development of solar power facilities and stabilizing earnings from the O&M business. The planned mandatory installation of solar panels in Tokyo starting in 2025 is expected to present a business opportunity for the company.

While the market environment is rapidly expanding, competition is intensifying, requiring the company to respond to diversifying customer needs and technological innovation. Financially, the company remains sound, with a current ratio exceeding 150% and an equity ratio of 39%. However, attention must be paid to various risks, including performance volatility, industry-specific risks, social and environmental risks, geopolitical risks, and natural disaster risks. The shareholder return policy targets a dividend payout ratio of approximately 15%, and share buybacks are also being conducted to enhance investor confidence. The company’s efforts toward sustainable growth are expected to attract attention in future market developments and among investors.

1. Overview of FY2023 Performance

In fiscal year 2023, Green Energy & Company Co., Ltd. achieved net sales of ¥8,854 million, representing a 20.1% increase from the previous year. This growth was driven by the expansion of the renewable energy market and the company’s focus on developing and selling solar power systems and grid-scale battery storage. Operating profit rose to ¥533 million from ¥478 million in the previous year, reflecting effective control of SG&A expenses and cost of sales.

Ordinary profit declined year-on-year to ¥408 million; however, the overall earnings structure remains solid, supporting expectations for future growth. On the balance sheet, total assets reached ¥10,303 million, and the current ratio exceeded 150%, indicating strong short-term liquidity. The equity ratio stood at 39%, confirming financial stability.

In the cash flow statement, operating cash flow improved to ¥383 million, while investing cash flow amounted to ¥101 million, reflecting ongoing investment in new projects. Profitability indicators show ROE at 6.7% and ROA at 3.1%, underscoring the company’s sound earnings capacity.

Looking ahead, continued government support for renewable energy and rising environmental awareness are expected to drive sustained growth, although adapting to economic conditions and competitive pressures remains a key challenge. Forecasts indicate net sales of ¥9,676 million in FY2024, ¥11,617 million in FY2025, and ¥17,000 million in FY2026, reflecting expectations for business diversification and responsiveness to new market needs. Overall, the company is clearly committed to achieving sustainable growth while maintaining competitiveness in the renewable energy market.

2. Earnings Outlook for the Fiscal Year Ending March 2024

For the fiscal year ending March 2024, the company forecasts net sales of ¥9,676 million, operating profit of ¥600 million, ordinary profit of ¥500 million, and net income attributable to shareholders of the parent of ¥350 million, continuing its trajectory of revenue and profit growth.

As the renewable energy market expands—particularly with rising demand for solar power systems—the company’s dual structure of flow and stock businesses is expected to support stable growth. In the flow business, increasing demand from corporate clients and a solid backlog of orders are expected to drive revenue growth. Meanwhile, in the stock business, stable income from O&M services for existing facilities will contribute to long-term cash flow stability.

The company is also preparing for the mandatory installation of solar panels from 2025, necessitating enhancements in customer services and product offerings. To sustain growth, effective control of SG&A expenses and optimization of the cost structure will be key challenges. Overall, with strong support from government renewable energy policies, the foundation for sustainable growth is in place. For investors, the combination of growth in the flow business and stability in the stock business enhances the company’s long-term growth prospects.

3. Medium- to Long-Term Growth Strategy

Based on its medium-term management plan “Green 300,” Green Energy & Company Co., Ltd. is pursuing a growth strategy aimed at achieving ¥30 billion in sales by 2030. The plan emphasizes the expansion of solar power generation facilities and grid-scale battery storage development, as well as the stabilization of earnings through the O&M business.

In preparation for the mandatory solar panel installation policy from 2025, the company plans to expand its product lineup to meet customer needs and establish an efficient sales structure, which is expected to further strengthen its market position. Achieving sustainable growth will also require proactive engagement with local communities and environmental issues, contributing to an enhanced corporate brand image.

As a new business initiative, the company is promoting “Green Energy Life,” aiming to provide sustainable living environments through the development of net zero energy houses. Additionally, it is strengthening partnerships with sales agents through a franchise model, enabling market expansion while minimizing initial investment.

The outcomes of the medium-term plan are being clarified through specific KPIs, including a target to increase the proportion of stock revenue from the O&M business to 20%. From a risk management perspective, adapting to environmental regulations and technological changes is essential and supports the expansion of the O&M business.

For investors, the company’s growth trajectory and approach to risk management are key points of interest, and its strategy is expected to support continued growth in the sustainable energy market.

・ In FY2023, net sales grew 20.1% year-on-year to ¥8,854 million, and operating profit increased to ¥533 million, while ordinary profit declined to ¥408 million; future growth is expected, though adapting to economic conditions and competition remains a challenge.

・ For the fiscal year ending March 2024, the company forecasts net sales of ¥9,676 million, operating profit of ¥600 million, ordinary profit of ¥500 million, and net income of ¥350 million, with the dual structure of flow and stock businesses supporting stable growth amid market expansion.

・ Under its medium-term plan “Green 300,” the company aims to achieve ¥30 billion in sales by 2030 by advancing solar power and grid-scale battery development, stabilizing O&M revenues, and promoting sustainable growth through its new “Green Energy Life” business.

Business Overview

1. Overview of the Business Model

Green Energy & Company Co., Ltd., headquartered in Tokushima City, is a company that plays a significant role in the renewable energy market. It operates with two primary business segments—flow business and stock business—through which it develops specialized operations. Its business model includes the development and sale of solar power generation systems, the provision of zero-energy houses, and the delivery of operation and maintenance (O&M) services, all aimed at promoting the adoption of renewable energy.

In the flow business, the company mainly sells solar power systems and net zero energy houses to corporate and individual customers. In contrast, the stock business provides stable O&M services for power generation facilities that have already been sold. This structure clearly reflects a strategy of pursuing sustainable growth by balancing flow-based revenue, which helps recover initial investments, with stock-based revenue that ensures long-term, stable income.

From an expert perspective, this dual business model functions as a hedge against fluctuations in the renewable energy market. Supported by government policies promoting renewable energy, the company has established a solid foundation for strong growth. For investors, the combination of growth potential in the flow business and stability in the stock business enhances expectations for long-term growth.

2. Main Business Segments

Green Energy & Company classifies its operations into two major segments: the flow business and the stock business. This structure clarifies the characteristics and revenue streams of each segment while enabling balanced growth.

Flow Business
The flow business is primarily focused on the development and sale of solar power generation systems, serving both individual consumers and corporate clients. This segment accounts for approximately 70% of total revenue and represents the company’s core business. It provides customized products tailored to the needs of each customer.

In recent years, growing environmental awareness and supportive government policies have driven increasing demand for eco-friendly housing, suggesting strong future growth in this segment.

From an investor’s perspective, the rapid growth of the flow business directly contributes to revenue expansion, and further growth is expected through the expansion of the customer base and product lineup.

Stock Business
The stock business, on the other hand, centers on O&M services for already-sold power generation facilities. It contributes to building long-term relationships with customers and securing stable revenue. This segment accounts for approximately 30% of total sales, with asset management and operation of power facilities serving as the primary sources of income.

This structure allows the company to prioritize new orders in the short term while securing stable long-term earnings. For investors, the consistent cash flow generated by the stock business is a key factor supporting the company’s overall stability.

3. Market Position and Competitive Advantages

Green Energy & Company has established a strong market position and continues to grow, supported by increasing demand driven by government renewable energy policies. One of its key competitive advantages is its ability to provide customized services tailored to customer needs. This approach builds customer trust and leads to repeat orders.

Additionally, the company’s efficient cost management enables it to maintain competitiveness and implement effective pricing strategies compared to its peers. In particular, it is well positioned to benefit from first-mover advantages under government initiatives promoting renewable energy adoption. This also raises barriers to entry for new competitors, contributing to sustained long-term competitiveness.

As the market environment evolves, the company’s technological capabilities and operational efficiency will be critical to maintaining its competitive edge. Government carbon neutrality targets are also expected to further support its business expansion, creating additional growth opportunities.

4. Market Background

The renewable energy market continues to grow rapidly, driven by increasing global awareness of environmental issues and accelerating efforts toward a sustainable society. Solar power generation, in particular, holds a key position within this market, supported by government incentives.

The introduction of mandatory solar panel installation starting in 2025 presents a significant opportunity for business expansion. Rising demand across the market is a favorable factor for the company’s business model and is expected to contribute to future growth.

The company’s community-based approach allows it to respond flexibly to customer needs, providing a clear competitive advantage over other firms. However, competition is expected to intensify gradually, requiring the company to remain adaptable to market changes. To achieve sustainable growth amid diversifying customer needs, technological innovation, and the emergence of new competitors, it will be essential to identify new business opportunities while effectively managing risks.

5. Future Growth Strategy

Green Energy & Company has established a growth strategy based on its ongoing medium-term management plan, “Green 300.” This strategy includes various initiatives aimed at achieving ¥30 billion in revenue by 2030. Key priorities include maximizing development volume in the flow business, expanding its network, and stabilizing revenue from the stock business.

In preparation for the mandatory solar panel installation policy from 2025, the company is expected to enhance its products and services for customers, potentially strengthening its market position further. Expanding its product lineup to meet customer needs and building an efficient sales structure will be critical drivers of growth.

Furthermore, as part of its commitment to sustainable growth, the company is expected to proactively address regional and environmental issues. This will not only contribute to society but also enhance its brand image and increase investor confidence.

In this way, Green Energy & Company has developed a well-grounded growth strategy aligned with current market conditions, and its initiatives are expected to significantly contribute to sustainable growth going forward. As competition intensifies, the company’s growth trajectory will remain an important point of focus for stakeholders.

Through this business overview, it is evident that growth opportunities in the renewable energy market remain substantial. The company’s unique business model and its ability to adapt to market conditions indicate strong potential for continued expansion. For investors, this growth potential is highly attractive, and the company’s future developments will be worth close attention.

Performance Trends

1. Recent Performance Overview

Green Energy & Company’s recent performance reflects sustainable growth, with net sales reaching ¥8,854 million in FY2023, representing a 20.1% year-on-year increase. This growth is driven not only by the expansion of the renewable energy market but also by the company’s strong focus on the development and sale of solar power systems and grid-scale battery storage. In particular, its revenue structure—built on the dual pillars of flow and stock businesses—has enabled more stable growth.

A notable highlight is the increase in operating profit, which reached ¥533 million in FY2023, marking an improvement from the previous year. This growth is attributed to effective control of SG&A expenses and cost of sales, contributing to the establishment of a sustainable earnings base. The business environment has also been favorable, supported by renewable energy policies and growing environmental awareness, trends that are expected to continue in the coming years.

With this strategy leveraging both flow and stock businesses, the company is positioned for continued growth. Net sales are projected to reach ¥9,676 million in FY2024, ¥11,617 million in FY2025, and ¥17,000 million in FY2026, reflecting expectations for business diversification and responsiveness to emerging market needs.

2. Detailed Analysis of the Income Statement

Based on the FY2023 income statement, a detailed analysis of revenue and profit structure shows that net sales reached ¥8,854 million, with further growth expected in FY2024. This growth is supported by increasing corporate demand in the solar power business, with order backlogs also progressing steadily.

Cost of sales amounted to ¥6,666 million, indicating a need for further improvement in profit margins, alongside a review of the cost structure.

Operating profit stood at ¥533 million, up from ¥478 million in the previous year. This increase suggests an improvement in operating margins and highlights the importance of operational efficiency and cost control. SG&A expenses totaled ¥1,657 million, reflecting investments aimed at market expansion, though they remain within a reasonable range.

Ordinary profit was ¥408 million, representing a decline year-on-year, partly due to an increase in non-operating expenses. This indicates a need for future countermeasures. Overall, while the profit structure remains solid, careful cost management and flexible responses to new market strategies will be essential.

3. Balance Sheet Analysis and Financial Soundness

The balance sheet provides key insights into the company’s financial condition. In FY2023, total assets reached ¥10,303 million, with current assets maintained at a high level. The current ratio exceeded 150%, indicating strong short-term liquidity. In particular, cash and deposits amounted to ¥2,003 million, contributing to stable day-to-day cash flow management.

Non-current assets also increased, reflecting ongoing investment in solar power generation facilities. This not only strengthens the future earnings base but is also expected to improve operational efficiency.

On the liabilities side, interest-bearing debt decreased compared to the previous year, indicating appropriate financial management. The equity ratio remained stable at 39%, demonstrating a solid financial foundation. This healthy balance between assets and liabilities provides a strong base for future growth.

4. Cash Flow Management and Strategy

The cash flow statement shows the movement of operating funds, with operating cash flow reaching ¥383 million in FY2023, an improvement from the previous year. Growth in operating profit is a key factor in generating stable cash flow.

Investing cash flow totaled ¥101 million, reflecting purchases of fixed assets and indicating continued development related to new projects.

In financing cash flow, borrowings are being managed appropriately, demonstrating sound financial discipline in terms of funding. Maintaining healthy cash flow enables the company to secure the resources needed for growth investments.

Effective cash flow management is also critical for ensuring sufficient operating funds and executing capital investments, requiring a robust management framework.

5. Evaluation of Performance Indicators and Future Outlook

Based on key performance indicators such as ROE, ROA, and EBITDA, the company demonstrates stable growth. In FY2023, ROE reached 6.7% and ROA 3.1%, both of which are important indicators of operational efficiency. EBITDA grew to ¥694 million, highlighting the company’s healthy profitability. Improvements in these metrics are expected to enhance investor confidence going forward.

Overall, the improvement in these performance indicators provides a positive foundation for achieving sustainable growth. As the company continues to expand its business in line with market needs, steady progress is highly anticipated.

Looking ahead, government policy support and market growth are expected to serve as tailwinds, enabling further expansion. However, adapting to economic conditions, responding to competitive pressures, and executing sustainable growth strategies will be key factors influencing future performance. Continuously evolving in response to market changes will be essential in supporting the company’s long-term growth trajectory.

Medium-Term Management Plan and Growth Strategy

1. Overview of the Medium-Term Management Plan

Green Energy & Company’s medium-term management plan, “Green 300,” aims to achieve further growth in the renewable energy sector over the five-year period from 2025 to 2029. The plan sets targets of ¥100 billion in net sales and ¥2 billion in operating profit by FY2035, with a particular emphasis on a strategy of “maximizing development volume.” Specifically, the company plans to advance the development of solar power generation facilities and grid-scale battery storage while stabilizing revenue through its operation and maintenance (O&M) business.

Based on its long-term vision, “Sustaina Growth 2035,” the plan represents a shift toward realizing a sustainable energy society and requires alignment with concrete measures to enhance the company’s social value. The fact that the company has already achieved record-high sales suggests strong feasibility. However, investors need to fully understand both the processes required to achieve these targets and the associated risks. In practice, maintaining competitiveness will require the utilization of technology and investment in human capital, both of which are recognized as key drivers of growth.

2. Investment Plan and Key Initiatives

Under the “Green 300” plan, total investments of approximately ¥17.5 billion are scheduled. These investments will primarily focus on the development of solar power facilities and grid-scale battery storage. Improving the quality of capital investment will enable the company to better meet customer needs and establish a stronger operational foundation. This investment direction is essential for building the infrastructure of an environmentally friendly future society and will also contribute to technological innovation in the solar energy field.

From an R&D perspective, the company places strong emphasis on the adoption of AI and digital transformation (DX). These initiatives aim to improve operational efficiency, and the company is already introducing smart technologies aligned with market needs. Overall, the plan prioritizes not only short-term profit generation but also the development of infrastructure necessary for long-term sustainable growth.

Human resource development is another key element. Through the establishment of “Green Energy University,” the company seeks to promote knowledge sharing within the organization and the local community, enhancing employee skills and strengthening competitiveness. These initiatives highlight strategic efforts that are expected to improve profitability over the long term.

3. New Businesses and Segment-Specific Growth Strategies

Within the “Green 300” framework, the company is developing a new business called “Green Energy Life.” This initiative includes the development of net zero energy houses and aims to provide sustainable living environments. As environmental awareness continues to rise, the company is actively developing products that meet customer needs while exploring new markets.

In its existing businesses, the company is also implementing a strategy to build a new franchise model and strengthen partnerships with sales agents. This approach enables market expansion while keeping initial investment low, creating conditions for further profit generation.

To respond quickly to market changes, the company continues to build a flexible operational structure. Through these efforts, it aims to deliver new value beyond simple electricity supply and contribute to the realization of a sustainable energy society. For investors, attention should be given to the long-term growth potential created by this diversification strategy.

4. Outcomes, Expected Effects, and KPIs

The outcomes and expected effects of the “Green 300” plan are clarified through the establishment of specific KPIs. The company aims to achieve ¥30 billion in net sales and ¥2 billion in operating profit by the fiscal year ending April 2029, while increasing the proportion of stock revenue from the O&M business to 20%. This will stabilize the earnings base and allow the effectiveness of each initiative to be quantitatively evaluated.

The company also regularly assesses the progress of each business and revises strategies as necessary. In particular, the promotion of non-FIT projects and the role of technological innovation are expected to be key factors in establishing a competitive advantage within the industry. These efforts are anticipated to sustain growth above industry benchmarks and strengthen the company’s market position.

From an investor’s perspective, clearly defined numerical targets improve capital efficiency and enhance earnings transparency, thereby reducing corporate risk. As a result, the company is creating an increasingly attractive investment environment.

5. Approach to Risk Factors

Effective risk management is essential for achieving sustainable growth. Under “Green 300,” the company is strengthening its in-house development capabilities while promoting initiatives related to non-FIT projects. This flexible approach to unprecedented market changes is expected to help mitigate risks. Additionally, aligning market strategies with global trends in renewable energy contributes to enhancing competitiveness.

In particular, preparing for changes in environmental regulations and technology is critical and supports the expansion of the O&M business. By establishing systems to diversify risk, the company can minimize factors that may hinder growth. For investors, a well-functioning risk management framework enhances the reliability of future earnings.

As the renewable energy market continues to evolve rapidly, attention will undoubtedly focus on how Green Energy & Company maintains its competitiveness and achieves growth.

The initiatives under “Green 300” serve as an important guide to the company’s future growth strategy and its ability to adapt to market changes, making them a key area of ongoing interest for investors.

News & Topics

1. Mandatory Installation of Solar Panels in Tokyo

Starting in 2025, newly built detached houses in Tokyo will be required to install solar panels. This measure is part of a carbon reduction policy aimed at halving greenhouse gas emissions by 2030, imposing new obligations on many homebuilders. The regulation applies to housing companies with a total floor area of 20,000 square meters or more, requiring approximately 50 companies to comply with the new rules.

This mandate is positioned as a key initiative to promote the adoption of renewable energy. While it serves as a tailwind for companies developing environmentally friendly housing, it raises barriers for firms with limited experience in solar panel installation. In particular, new entrants will face increased competition, as they must establish construction capabilities, sales methods, and secure material procurement.

If companies can successfully adapt to these new regulations and formulate appropriate strategies, they will have opportunities to expand their market share over the long term. Conversely, delayed responses could result in a loss of competitiveness, making it important for investors to closely monitor how these developments impact business operations.

2. Precedents in Western Markets and Future Outlook

In Europe and the United States, mandates for solar panel installation are already underway. The EU has announced a policy requiring solar panels on new residential buildings by 2029, and in Germany, such mandates have already been enacted in seven states. In the United States, California and New York City have implemented similar measures.

These developments are expected to accelerate the trend of mandatory solar panel installation in Japan, including Tokyo’s policy. In particular, at COP28, a global agreement was reached to triple renewable energy capacity by 2030, further reinforcing this momentum. The renewable energy market is experiencing rapid growth, requiring companies to develop new business models.

The response of domestic companies to these global trends will significantly impact the future market environment. Companies that can effectively adapt to technological innovation and policy changes in renewable energy will be well positioned to compete internationally, making this an important point of focus for investors.

3. Green Energy & Company’s Business Strategy “Green 300”

Green Energy & Company has formulated its medium-term management plan “Green 300,” aiming to maximize the number of green energy facility developments over the next five years. The company targets net sales of ¥30 billion and operating profit of ¥2 billion for the fiscal year ending April 2029, with a particular focus on expanding solar power installations for detached houses.

Future initiatives emphasize rapid development and early monetization through operational revenue. Of the approximately 28.75 million homes nationwide, only 2.67 million currently have installed solar panels, indicating significant remaining growth potential in the market. This presents opportunities for companies to maintain competitiveness while acquiring new customers.

To meet market demand, it is essential to develop construction technologies and effective sales methods. Strategic allocation of resources and differentiation from competitors will be key factors for investors to watch. If the expansion of the sustainable energy market continues to support corporate growth, the company is expected to become an increasingly attractive investment target.

4. Market Environment and Risk Factors

While the renewable energy market is growing rapidly, competition is becoming increasingly intense. In particular, relying solely on low-cost materials and construction methods is no longer sufficient to meet market demands. Green Energy & Company must leverage its proprietary expertise in land acquisition and construction technology to develop new products and services.

In addition, risks arising from climate change and natural disasters cannot be ignored. Companies must review supply chains and diversify procurement sources, making it essential to adopt strategies that address these challenges. Successfully managing these factors while maintaining stable operations will be a critical component of sustainable growth.

For investors, it is important to continuously monitor market changes and evolving risks, and to respond flexibly. How companies manage these risk factors will have a significant impact on future profitability.

5. Sustainable Management and Social Responsibility

To achieve sustainable growth, companies must focus not only on economic performance but also on environmental considerations and social responsibility. Green Energy & Company is strengthening investment in human capital, with a focus on improving working conditions and developing talent. Initiatives such as supporting women’s participation in the workforce and promoting parental leave can enhance the company’s social image.

From a risk management perspective, it is also essential to closely monitor market trends and regulatory changes while maintaining strong internal control systems. By adopting flexible adaptation strategies, companies can build resilience to change.

Companies committed to sustainable management are increasingly viewed as attractive investment opportunities. Investors should carefully evaluate whether a company is pursuing growth while fulfilling its social responsibilities.

6. Summary

This report has examined how the growth of the renewable energy market and corporate strategic initiatives—triggered in part by Tokyo’s solar panel mandate—are likely to impact the industry. In particular, Green Energy & Company’s medium-term management plan, market positioning, and commitment to social responsibility will be key factors shaping its future development.

For investors, it is important to adopt a flexible perspective when determining where to focus within a group of companies expected to achieve sustainable growth. Closely monitoring future developments and making informed investment decisions will be essential.

Company Overview

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

Green Energy & Company Co., Ltd. (hereinafter “the Company”) was established in April 2009 in Tokushima City, Tokushima Prefecture. Its core business focuses on renewable energy, particularly the development of solar power generation systems and the provision of net zero energy houses. As of April 2024, the Company has capital of ¥970 million, 152 consolidated employees, and consolidated net sales of ¥9.6 billion. It is listed on the Tokyo Stock Exchange Growth Market under the securities code 1436.

The Company operates with headquarters in Minato-ku, Tokyo, and Matsushige-cho, Itano-gun, Tokushima Prefecture, while pursuing a community-based business model that contributes to decarbonization across society.

Its vision is to “realize a participatory energy society driven by individuals,” aiming to build a sustainable energy system. By balancing environmental considerations with economic benefits, the Company creates value in collaboration with local communities. In particular, its GX (green transformation) approach provides new value to customers.

2. History and Key Milestones

The Company’s history began in 2009 with the establishment of Suzuken & Creation Co., Ltd. Initially focused on integrating construction and service businesses, it changed its name to FIT Co., Ltd. in 2010 and obtained a general construction business license.

In 2012, the Company entered the net zero energy house (ZEH) and clean energy sectors, promoting corporate transformation to meet customer needs despite an industry downturn.

A major milestone was its listing on the Tokyo Stock Exchange Mothers market in 2016—the first such listing for a company from Tokushima Prefecture—which marked a significant step in its growth. The Company has since advanced various projects, including the launch of the clean energy marketplace “Datsutan So Dekirukun” in 2022. In 2023, it transitioned to a holding company structure and changed its name to Green Energy & Company Co., Ltd., clarifying its strategy to build a sustainable energy society. It has also established a long-term sustainability-based growth plan, “Sustaina Growth 2035,” aiming to develop a regional implementation model by 2045.

3. Organizational Structure and Key Management

The Company’s organizational structure consists of 12 consolidated subsidiaries, 2 non-consolidated subsidiaries, and 2 affiliated companies. President and CEO Takafumi Suzue entered the industry in 1997 and has demonstrated strong leadership in driving corporate growth based on his extensive experience. His broad expertise influences the entire management team, enabling flexible strategies and efficient organizational operations.

In particular, his vision of “realizing a sustainable society through a new common sense” has permeated the organization. Through financial support for regional small and medium-sized enterprises, the Company is also addressing social challenges. A management team with diverse backgrounds has come together to form a strong corporate culture focused on sustainability, supporting overall growth.

4. Business Activities and Structure

The Company specializes in renewable energy, with a strong focus on solar power generation and net zero energy house (ZEH) businesses. Leveraging its expertise and technological capabilities, it operates a business model that combines flow and stock businesses. This enables the Company to provide cost-efficient energy solutions while delivering environmentally friendly products that are highly valued by customers.

Its main offerings include promoting clean energy investment for both individuals and corporations, as well as improving energy efficiency through smart homes. Community-based initiatives, such as the “Ietochi Honpo” strategy, have contributed to building strong customer trust. This diversified business structure enables the Company to achieve both economic benefits and environmental sustainability.

5. Geographic Expansion and Regional Contribution

The Company is headquartered in Matsushige-cho, Itano-gun, Tokushima Prefecture, with an additional office in Minato-ku, Tokyo. While aiming for nationwide expansion, it places strong emphasis on collaboration with local communities, playing a key role in supporting regional economies.

Its initiatives include supporting local SMEs and promoting energy efficiency for individuals, contributing to the development of sustainable communities. The Company’s participation in initiatives such as the Nikkei Decarbonization Project reflects its commitment to growing alongside local communities, and its future regional impact is expected to increase. This community-oriented business model is also attractive to investors who prioritize sustainability.

6. ESG and Sustainability Initiatives

The Company places strong emphasis on environmental, social, and governance (ESG) considerations and prioritizes sustainable development. Its active involvement in renewable energy and management practices that emphasize coexistence with local communities directly contribute to its ESG evaluation. In particular, its efforts to provide sustainable energy solutions aligned with carbon neutrality policies are a key feature.

This corporate stance is viewed positively by investors and serves as an important factor in ESG investment decisions. Fulfilling social responsibility enhances the Company’s reputation and builds a foundation of trust. Looking ahead, a sustainable business model will remain essential, and the Company’s ongoing initiatives are expected to contribute significantly to its continued growth.

The Company has established a solid position in the renewable energy market, and its growth model is attracting attention both within and outside the industry. With its diversified business development and sustainability-driven management strategy, it is well positioned for future expansion.

Shareholder Returns

1. Dividend Policy and History

Green Energy & Company prioritizes shareholder returns while maintaining a solid financial foundation as its basic policy. It targets a dividend payout ratio of approximately 15%, based on its long-term growth strategy outlined in the medium-term management plan “Green 300.” This policy is supported by increasing sales that strengthen operating cash flow (CF) and by maintaining profit margins.

However, dividend policy can be significantly influenced by external factors. In 2023, rising global interest rates and inflation raised concerns about higher financing costs, necessitating careful financial management. Accordingly, while promoting shareholder returns, the company must remain flexible in responding to external conditions.

Looking at its dividend history, the company plans to pay ¥13 per share in 2023, which also serves as an indicator of its commitment to sustainable growth. Its track record of stable dividend payments has strengthened shareholder confidence. Furthermore, as the medium-term plan progresses, higher returns are expected in the future. The company’s dividend policy is closely linked to its management strategy and designed with a long-term perspective on shareholder returns.

In this way, Green Energy & Company adopts a dividend policy that balances sustainability and growth, striving to meet shareholder expectations.

2. Share Buybacks and Their Impact

Share buybacks are an important measure employed by Green Energy & Company to enhance shareholder value and are implemented as part of its overall shareholder return strategy. By reducing the number of shares outstanding, buybacks are expected to improve earnings per share (EPS), which can in turn support stock price appreciation—providing a positive signal to investors.

In FY2024, the company repurchased treasury shares, resulting in a relative increase in ownership for existing shareholders. Specifically, it acquired 65 shares for a total of ¥142 thousand, delivering immediate value to shareholders. This action demonstrates the company’s confidence in its own stock and plays an important role in strengthening market trust.

Share buybacks also provide flexibility in capital strategy, enabling the company to pursue future investment opportunities while simultaneously returning capital to shareholders. However, management must execute buybacks at appropriate times—particularly when the stock is undervalued—to optimize capital costs. As such, share buybacks are expected to remain a key component of the company’s shareholder return policy.

3. Total Payout Ratio and Shareholder Return Strategy

The total payout ratio indicates the extent to which a company returns profits to shareholders and is an important metric for Green Energy & Company. The combination of dividends and share buybacks determines the overall level of shareholder returns.

Based on its growth strategy, the company aims to increase total shareholder returns while maintaining stable cash flow. With projected operating cash flow in the range of ¥4–5 billion, it plans to allocate approximately ¥500 million to shareholder returns. This reflects a policy grounded in a stable earnings base and expectations for future growth.

From an investor’s perspective, improving the total payout ratio can enhance market valuation, making alignment between growth strategy and shareholder return policy essential. Since shareholder returns are closely tied to financial performance and growth outlook, investors need to carefully analyze these factors when making long-term investment decisions.

Green Energy & Company’s shareholder return policy integrates dividends and share buybacks to strengthen investor confidence, and this approach is expected to further enhance shareholder returns over time.

4. Shareholder Returns from a Medium- to Long-Term Perspective

The company views shareholder returns not only in terms of short-term profits but also from a medium- to long-term perspective. Its growth strategy is designed to achieve sustainable earnings, with shareholder return policies forming a key part of that foundation.

Under the medium-term management plan “Green 300,” the company is implementing measures to expand its renewable energy business and drive growth. By aligning its financial strategy with shareholder returns, it demonstrates a clear commitment to sustainable growth. Such long-term planning helps establish the company as a reliable and credible investment option.

By focusing not only on short-term gains but also on investing for future growth and linking those outcomes to shareholder returns, the company can gain stronger investor support. This balanced approach enhances overall competitiveness.

5. Approach to Investor Communication

Effective communication with investors is essential for strengthening relationships with shareholders. Green Energy & Company actively provides information on shareholder returns while maintaining transparency, helping investors better understand its policies and performance. Its efforts to clearly communicate progress and plans through general meetings and financial reports contribute to building trust.

The company also proactively shares information on shareholder benefit programs and dividend policies, fostering market expectations. Its commitment to stable dividend policies and attractive shareholder benefits serves as an important factor in gaining investor support.

Looking ahead, proactive disclosure and open communication will be crucial in raising investor expectations. In a challenging market environment, providing accurate information and building strong relationships with shareholders will help establish a solid support base.

The company also encourages the exercise of voting rights and promotes transparent governance. Through these efforts, it aims to deepen mutual understanding with investors and achieve sustainable management.

In summary, Green Energy & Company’s approach to shareholder returns reflects both its current position and future outlook. As the company pursues sustainable growth, shareholder returns remain a key element, and strengthening communication with investors is essential for building trust. Going forward, attention should be paid to its evolving strategies and the further enhancement of shareholder returns.

Business Risks

1. Factors Causing Performance Fluctuations

Green Energy & Company, Inc. aims to grow in the renewable energy market, and its performance is influenced by a wide range of factors, including economic conditions, policy changes, customer trends, and material costs. In particular, economic trends are a key factor, directly affecting consumer purchasing behavior. Demand for renewable energy tends to increase during economic expansions, while it may decline during downturns.

Government renewable energy policies also have a direct impact on performance. For example, changes to the Feed-in Tariff (FIT) system could alter established revenue models and pose significant risks to profitability. In addition, rising raw material and labor costs cannot be ignored. If procurement or construction costs increase sharply, profit margins may deteriorate. There are also risks associated with outsourced construction management—if subcontractor performance declines, it may lead to project delays.

Given the interplay of these complex factors, performance is likely to fluctuate, making it essential for Green Energy & Company to establish systems that allow for rapid adaptation. Investors should be aware of these risks and remain flexible in revising their strategies.

2. Industry-Specific Risks

While the renewable energy industry is experiencing rapid growth, it also faces unique risks. The pace of technological innovation is directly tied to corporate competitiveness, and companies that fail to adapt risk being pushed out of the market. Intensifying competition also leads to price competition, which tends to compress profit margins.

Additionally, changes in regulations and government subsidy programs significantly impact the industry. For instance, revisions to incentive return (IR) schemes or environmental regulations are closely linked to business operations, requiring prompt responses. Competition for resources is also intensifying, and fluctuations in the supply and demand of materials such as solar panels and wind turbines may affect cost structures.

As such, the industry carries multiple inherent risks, making it essential for companies to develop appropriate strategies to address them. Investors are expected to broaden their perspective by understanding industry trends and risk factors to properly assess business sustainability.

3. Financial and Managerial Risks

The financial condition of Green Energy & Company is influenced by various factors, with concerns particularly around unstable cash flow and increasing debt levels. Market fluctuations, construction delays, and rising material costs can all impact cash flow, increasing the risk of difficulties in securing funding as planned.

Moreover, the rise in interest-bearing debt raises concerns about future interest burdens and potential deterioration in financial structure. In unstable economic environments, securing new financing may become more difficult, potentially hindering business growth.

Corporate governance issues may also have an impact. Insufficient internal controls or lack of transparency can lead to delays or errors in decision-making. These risks can directly affect corporate image and credibility, potentially hindering long-term growth, making it essential to establish robust management systems.

Investors must fully understand these risks and prioritize financial health and governance transparency in their investment decisions.

4. Social and Environmental Risks

In the renewable energy sector, rising environmental awareness directly influences business success. As customers become more sensitive to companies’ environmental initiatives, ensuring corporate social responsibility (CSR) has become an urgent priority. Failure in this area can significantly damage brand value and undermine competitive advantage.

Compliance with environmental regulations is also essential. New regulations from national and local governments, as well as international agreements, can drastically alter market conditions, requiring swift adaptation. In particular, new laws may necessitate additional capital investment and strategic adjustments.

Companies that fail to meet societal expectations face serious risks to their long-term viability. Investors should continuously monitor how companies respond to external environmental factors and evaluate their efforts.

5. Geopolitical Risks

If Green Energy & Company expands overseas, geopolitical risks cannot be overlooked. Changes in international political conditions may directly affect market entry and business operations. In particular, expansion into emerging markets involves risks such as legal uncertainty and political instability, which can significantly impact business success.

Differences in national energy policies and global competition also pose risks in international markets. To gain an advantage over local competitors, companies must understand cultural and market needs and implement appropriate strategies. Failure to properly manage these geopolitical risks may negatively affect long-term investment returns.

Investors should closely monitor international affairs and diplomatic policies and ensure that the company’s risk management strategies remain appropriate.

6. Natural Disaster Risks

Natural disasters represent a significant risk for renewable energy businesses. Events such as earthquakes and typhoons may cause direct damage to power generation facilities and construction sites. This can result in reduced generation capacity and increased repair costs, significantly impacting profitability.

Incorporating disaster risk into business planning is essential, requiring robust risk management systems. Developing crisis management plans and Business Continuity Plans (BCP) is critical for maintaining stable operations. Having protocols in place to respond quickly in the event of a disaster is particularly important.

Investors are expected to continuously evaluate how effectively companies manage natural disaster risks. Transparency in this area is key.

Understanding the risks companies face while striving for sustainable growth is a critical task for investors. By properly identifying risks and implementing proactive risk management strategies, investors can capture future growth opportunities. Companies themselves must also strengthen their frameworks for sustainable growth and ensure transparent disclosure of information.