ORIX Corporation (8591) Earnings Call Transcript & Summary

Since it is time, we now would like to get started. Thank you for joining this telephone conference of ORIX Corporation for first quarter financial results for the 3-month period ended June 30, 2025. I am Nakane from IR. We have today as an attendee, Kazuki Yamamoto, Operating Officer in charge of Investor Relations. Yamamoto-san will explain, and this will be followed by Q&A. We plan to have a 1-hour session. So over to you, Yamamoto-san.

Thank you very much for taking the time to attend the ORIX Group's earnings call today. I'm Operating Officer in charge of Corporate Planning and IR. I am Kazuki Yamamoto. Let me quickly explain the financial results for the first quarter of fiscal year ending March 2026. On Page 2, you can see this page contains the key points I want to cover today. The first point is net income and ROE. Net income for the first quarter was JPY 107.3 billion, an increase of JPY 20.6 billion year-on-year with an annualized ROE of 10.4%. Against the annual forecast, JPY 380 billion, progress rate was 28.2%. As was announced in July, we plan to record gains from the sale of Greenko and ORIX Asset Management & Loan Services Corporation in the second quarter, and earnings are favorable. Meanwhile, considering the increasing macroeconomic uncertainty, it is necessary to carefully review our planned H2 exits and second half performance in line with the market. While we expect earnings to be more heavily skewed to H2, we are currently undertaking a thorough review of full year net income target. Second is pretax profit and capital recycling. Pretax profit was JPY 155.5 billion, an increase of JPY 35.3 billion from last year. Finance, Operation and Investments, in all 3 categories saw profit increases year-on-year. Investments. including the Hotel Universal Port VITA and other valuation gains from listed stocks recorded total capital gain of JPY 45.1 billion from multiple gains on exits. Number three, shareholder returns. As of the end of July, we have completed the acquisition of JPY 40.9 billion out of total JPY 100 billion share buyback program announced in May this year. We will continue to repurchase shares based on the existing program and aim to flexibly implement our shareholder return policy based on both our full year outlook and progress with new investments. As in the previous fiscal year, our current policy is to set the interim DPS at a payout ratio of 39% in first half net income. Please go to the next page. As outlined earlier, for Q1, ORIX reported net income of JPY 107.3 billion, up 24%, ROE was 10.4% annualized. In light of the investment gains we expect to book in Q2, the outlook for first half is very strong. Please go to Page 4. I'll explain pretax profits for each of the categories. Three categories: Finance, Operation and Investments. You can see first quarter results of the previous and current fiscal year. First, at the top, the dark blue bar is finance. Profit increased by 5% year-on-year to JPY 49 billion with a progress rate of 27% against full year forecast. Corporate Financial Services and Banking were generally solid. ORIX Life increased its investment income and finance revenues grew in Australia and Singapore. Next, second from the top, light blue shows Operation. Profit increased by 5% year-on-year to JPY 55.8 billion with a progress rate of 24% against the full year forecast. In the Environment and Energy segment, we closed the sale of Zeeklite, which operates waste disposal plans and recorded a gain. Elawan increased its electricity sales revenue and the Kinokawa Energy Stores Plant, one of the largest in Japan, began commercial operations last December, which also was a contribution. Furthermore, Rentec saw higher equipment rental income on Windows PC placement demand and airport concessions continue to see growth in international passenger numbers. Finally, Red bar in the third row from the top shows Investments. Profit increased significantly by 61% year-on-year to JPY 60.1 billion. In addition to the gain from the sale of Hotel Universal Port VITA, valuation gains on our remaining stake in NYSE-listed renewable energy company Ormat contributed to this result. Performance at domestic PE investees was solid, resulting in growth in profit contributions. As a result, segment profit for Q1 increased by 20% year-on-year to a total of JPY 164.9 billion. Pretax profit increased by 29% year-on-year to JPY 155.5 billion. The difference of JPY 9.4 billion between total segment profit and pretax profit is administrative expenses. Please go to Page 5. On this page, I will explain ROE and shareholders' equity for each of the 3 categories. Towards the right, please look at the graph. In dark blue is Finance, ROE. This improved from 8.2% at the end of the previous fiscal year to 8.7%, plus 0.5%. We are disclosing the amount of allocated capital by category beginning this fiscal year. And for Finance, it is JPY 1.7 trillion. The light blue circle towards the left, with the sale of Zeeklite, ROE for Operation improved from 13.5% to 14%, likewise, up 0.5%. Allocated capital was JPY 1.2 trillion. The red category Investments rose from 7.4% to 10.3%, significant increase due to sale of hotels. The allocated capital is JPY 1.7 trillion. The total allocated capital, if you add all them up, is JPY 4.5 trillion, which is slightly different from shareholder equity amount of JPY 4.1 trillion on this consolidated [ BS ]. This is because allocated capital is based on management accounting. So that is why it's higher. Next, on Page 6, regarding the ROA and asset size of the 3 categories. You can see that finance and operation remained stable and investment improved its ROA in the first quarter. Page 7, this is the matrix chart of 3 categories and 10 segments. As a change, we have added in business verticals, the transportation equipment row from the bottom. In the Operation column, we have added ship brokerage company, SOMEC. Page 8 shows progress in capital recycling. In first quarter, we recorded capital gain of JPY 45.1 billion, as you can see in the center, with cash flows from sales amounting to JPY 130 billion below that and cash flows -- outflows from new investment executions amounting to JPY 150 billion. Major new investments in the first quarter include PE investment in the capsule toy specialty store operator, LULUARQ, as well as aircraft and MICE-IR. We also have announced the sale of our partial stake in Greenko, a new investment in AM Green and the sale of ORIX Asset Management & Loan Services Corporation. You can see towards the right. We aim to close the Hilco Global transaction by the end of September '25. So regarding Greenko AM Green transaction in Hilco, I will provide some additional information in the following slides. Please go to Page 9. This is about the Greenko share transfer agreement and our new investment in AM Green. We held 20% of the shares in Greenko, a major Indian renewable energy company and sold 17.5% to AM Green Power, a company owned by the founders of Greenko. You can see the structure in the chart. The sale proceeds were USD 1,282 billion -- sorry, USD 1.282 billion with a gain on sale of JPY 93.4 billion. This amount are unchanged from previous announcement and will be finalized at the time of Q2 financial closing. We plan to continue to hold our remaining 2.5% stake in Greenko for the time being. Meanwhile, AMG, the parent company of AM Green Power, plans to produce 5 million tons of green ammonia annually as a group and is advancing green hydrogen and green ammonia production projects. AMG has also agreed on basic terms with Germany's energy company, Uniper SE and Belgium's ammonia trading and sales company, Yara Green Ammonia, to supply green ammonia to Europe. We have invested in convertible notes issued by AM Green Luxembourg, the 100% owned parent company of AMG. The amount is $331 million. The transfer of Greenko shares and the investment in convertible notes of AMG parent company are part of our portfolio optimization strategy achieved through capital recycling in the globally evolving renewable energy industry. Next, moving on to Page 10, our investment in Hilco Global. ORIX has agreed with stakeholders to acquire 71.4% stake in Hilco Global, a world-leading company in asset valuation, we signed in July. We are moving forward in accordance with the transfer agreement and aim to complete the acquisition by the end of September. Since its establishment in 1987, as you can see towards the right, Hilco Global has gradually expanded its businesses to include Asset Valuation services, Asset-based Lending and Inventory sales and asset liquidation within the group. The first, Asset Valuation service provides to banks and others appraisal services for collateral assets. The second, Asset-based Lending refers to the provision of loans collateralized by various assets. And third, Inventory sales and asset liquidation involves the purchase and resell of inventory assets among other things. With Hilco Global joining the ORIX Group, ORIX USA will acquire a platform for ABL. Hilco's origination capability and value increase model can be utilized through ORIX USA. By utilizing third-party investor funds, we hope to further expand the ABL business and promote the asset management business centered on private assets and real assets. Next, please turn to the next page. The investment pipeline outlined on this page is ample at JPY 2 trillion and heavily focused on Operation and Investments. We're aiming for sustainable growth by investing both in projects and contribute to revenue immediately after investment and those requiring longer development periods. Please turn to Page 12. Now this is about inbound tourism. The concession business centered around Kansai International Airport is experiencing growth in international passenger numbers due to inbound tourist demand and performance is steady. The performance of Kansai Airport is reflected in ORIX consolidated results with a 3-month lag. So Q1 results reflect Kansai Airport's performance from January to March of this year. However, with the start of Expo 2025 Osaka, Kansai in April and the launch of international charter flights at Kobe Airport in April, we expect earnings growth to continue. In facility operation, RevPAR at hotels has been improving, primarily in the Kansai area. In this January, Suginoi Hotel opened a new building, Hoshi Kan. And in April, Hilco's top luxury brand, Waldorf Astoria Osaka also opened at the Umekita area. We anticipate steady demand for facility operations such as hotels and inns in the future. But due to the impact of inflation and rising construction costs, we will carefully select new investments while aiming for sustainable growth. Well, the Aircraft and Ships segment, including aircraft leasing, is performing well and increased in passenger traffic, mainly in the -- we expect these 3 tourism-related business, including those impacted by inbound tourism to continue to drive performance this fiscal year. Page 13 and 14 are the summary of segment information. For details, please refer to the slides from Page 18 and onwards. But first, let me give you the report about the Corporate Financial Services and Maintenance Leasing. The segment profit increased by JPY 3.8 billion or 19% year-on-year to JPY 23.6 billion. The Corporate Financial Services unit saw growth in fee revenues, resulting in higher profits. The auto unit continued to benefit from a strong used car market, achieving record profits for the first quarter. Rentec expanded its inventory-based rental of ICT equipment, thanks to Windows PC replacement demand and increased its profits. Segment assets amounted to JPY 1.87 trillion, a decrease of JPY 14.6 billion from the end of the previous fiscal year, reflecting the sale of ORIX Asset Management & Loan Services Corporation. Next, the segment profit for the Real Estate was up by JPY 21.9 billion, an increase of 157% year-over-year to JPY 35.9 billion. So this is due to the sales of the Hotel Universal Port VITA and a sharp increase in facility operation earnings in hotels and inns has contributed. Assets in the Real Estate segment was flat versus the end of last fiscal year. For the PE Investment and Concession segment, it recorded a decrease of JPY 8 billion year-over-year or minus 25% in segment profits, reaching JPY 24 billion, out of which the PE Investment unit reported lower profits owing to the absence of a gain on the sale of Sasaeah Holdings recorded in the previous year. On the other hand, the performance of existing investees such as DHC and Toshiba was strong, resulting in profit growth when the impact from the aforementioned reason is excluded. In the Concession unit, as mentioned earlier, enjoyed impressive performance at Kansai International Airport. A slight decrease in profit compared to the previous year is due to seasonal factors. The segment assets of PE Investment and Concession increased by JPY 31.6 billion from last fiscal year to JPY 1,054.5 billion. The main reason for the increase was a new investment in LULUARQ and increase in equity method investment incomes from investees. Segment profit for the Environment and Energy segment increased by JPY 18.4 billion year-over-year to JPY 17.9 billion. In addition to the gain on sales of shares of Zeeklite, both sales volume and unit sales price in the electricity retailing business increased. As I have mentioned, the start of operation at the Kinokawa Energy Storage Plant had a positive impact. Additionally, recovery in electricity sales revenue from Elawan and valuation gain in Ormat shares also contributed to the increase. Segment assets were slightly lower, owing to capital recycling and the ForEx impact. Segment profits in the insurance segment was up JPY 2.1 billion or 10% year-over-year to JPY 24 billion. Profits were higher on the growth in investment income and performance improved sharply quarter-on-quarter. So because we have booked the losses on the sales of bonds associated portfolio allocation, you can see the performance improved based on this reason. On the business side, this June, we have started the sales of revised insurance income protection insurance keep up. This has been strong. Segment assets were up JPY 38.8 billion (sic) [ JPY 38.5 billion ] to JPY 3.477 trillion -- JPY 3,047.7 billion, excuse me. For the segment profits in banking and credit were up JPY 3.5 billion or 51% year-over-year to JPY 9.9 billion. So in terms of the environment, while the interest rates were rising and the funding cost for deposits are becoming higher, the yield on total investments is improving. For the first quarter, due to one-off factors, the profit has grown. Segment assets were up JPY 71.9 billion to JPY 3,216.5 billion. In July, ORIX Bank paid the parent company a JPY 30 billion dividend with the aim to improve the segment ROE. In the Aircraft and Ships segment, segment profit decreased by JPY 1.9 billion, a 16% decline to reach JPY 9.9 billion. Although there was a slight decrease in profits for aircraft, the business outlook remains positive as the number of owned aircraft increased amid high lease rate levels. Avolon saw an increase in profits compared to the previous fiscal year, partly due to profit contribution from Castlelake, which was acquired in January this year. In terms of the credit rating, in May of this year, Moody's and Fitch upgraded the rating. Standard & Poor's has revised its outlook to positive. In terms of the fiscal situation, they enhanced their health. The Ships segment experienced a decrease in profits due to the reduced financial income from ship financing and the market factors, but the impact from tariffs is limited. Segment profit for the ORIX USA segment decreased by JPY 11.2 billion year-over-year, amounting to JPY 600 million. The budget for ORIX USA forecast earnings to be more heavily concentrated to the first half and earnings are generally in line with the forecast. The private credit business experienced a decrease in profit due to the absence of reversals of credit costs booked in March fiscal 2025. Real estate profits were down on the absence of gain on the sales of a fund equity stake that was booked the previous year. The main reason for the decline in profits in the private equity business was the impairment of our investment in an equity method affiliate owing to the tariff impacts coming between the United States and China. Segment assets decreased by JPY 5.7 billion to JPY 1,588.2 billion. ForEx had a negative JPY 51.7 billion impact, but assets increased slightly in U.S. dollar terms as we made a bolt-on investment aiming to enhance the value of an existing investee in this business. The segment profit of ORIX Europe was JPY 1.2 billion lower year-over-year. This is an 11% decrease to reach JPY 9.9 billion. The decrease in profit is due to the absence of performance fees recorded in the same period of the previous year. On the other hand, ORIX Europe continues to see net inflows, expanding AUM to a record high of JPY 401.9 billion (sic) [ JPY 401.7 billion ], mainly coming from ROBECO and management fees are on the rise. Lastly, in the Asia/Australia segment, profit increased by JPY 100 million year-on-year, reaching JPY 9 billion. Although income from investees in the Greater China region was lower, financial revenues from leasing in Australia and Singapore increased, resulting in profit growth. Segment assets decreased by JPY 13 billion from the end of the previous fiscal year to JPY 1,712.6 billion. The decline is mainly due to maintaining a conservative investment and financing stance in the Greater China region. This concludes the explanation of each segment. Please turn to Page 15. This slide is about the shareholder returns. Regarding the acquisition of treasury stock, as the end of July, we have acquired JPY 40.9 billion of the total JPY 100 billion buyback program we announced in May. Regarding the interim dividend, as mentioned at the beginning, the current dividend policy is set at a payout ratio of 39% versus the first half net profit. As I have explained, in the second quarter, we anticipate gains from the sales of Greenko and new investments. And for our full year earnings forecast is currently under review. We will inform you any updates if there is a progress in this area. Please turn to Page 16. This slide is about the ROE and EPS growth, enhancing corporate value. Since announcing the 3-year medium-term plan and long-term vision in May, our CEO, Inoue and COO, Takahashi, have been actively engaging in direct dialogue with institutional investors, both domestically and internationally. In this context, we will strive to enhance the corporate value by increasing opportunities for direct dialogue with the market and focusing on improving ROE, which is our most important management goal as well as EPS growth and capital cost, which we also consider as critical. So this is the end of my remarks for the first quarter results. Thank you for your attention.

[Operator Instructions] From JPMorgan Securities, Sato-san, please.

This is Sato from JPMorgan. I have one question. Mainly in the US-related business, what are your views as to the risk arising from those businesses? The tariff was agreed with U.S. and there was evolution of incentives for renewable energy. So your existing assets or any of your renewable energy businesses, will it impact your strategy? And apart from that, regarding exposure in the U.S., what is your views? And how do you see it?

Thank you for your question. First of all, ORIX U.S., let me talk about the business outlook. If you could refer to Page 33, I would like to make additional remarks. For ORIX USA, focusing on middle market, it provides finance solution and mortgage business for the real estate and also PE investments. And right now, with inflation and Trump's tariff, the interest is now high. So especially when it comes to real estate mortgage finance and investment in operations -- businesses, the environment is against wind segment, profit is JPY 14 million for operation. So we have been rather conservative. So we're in red. And as was mentioned in a minority investment due to tariff, we have been recognizing impairment for some of them. So we will be conservative and try to reduce the level of our assets. And for the real estate in the property, the high interest rate is continuing more so than we had expected. So we have been struggling in origination for investing in properties. So we are focusing on asset management. So for the segment profit, we are now more or less breakeven. So given this environment, whether it will improve or not, it continues to be opaque. The fundamentals in the U.S., we don't consider this to be bad, but for ORIX U.S. business, to a certain extent, we need to take into consideration the possible capital recycling. Meanwhile, the credit business has been quite solid, leverage loan structured finance and infrastructure finance in these areas, in these debt services, we have achieved a solid result. Having said that, using balance sheet for some of the businesses, we will have to minimize the risk as much as possible. Also, we would like to drive our asset management. So we will pursue a hybrid model between our own equity and third-party fund. And for Hilco Global, this is rather countercyclical. It's very strong against the economic cycle in overall the U.S. So we will continue to invest in Hilco Global and shift to a better profitable assets. We need to recycle. And as to your question about the tariff by Trump about renewable energy, the direct exposure in the U.S. is quite limited. However, for renewable energy as an infrastructure, one is price competitiveness and second is the power business itself, whether it has a strong connectivity with it will be critical. Also, of course, there may be tax system changes. But globally, the winning path in renewable energy, how to be in a better position, we need to be very flexible in working on our assets. So that is why we decided to sell Greenko and reinvest in AM Green. And also for Avolon, we have been driving forward. So for the policy of renewable energy business overall, we will not change because of the Trump tariff. That was all.

Next, SMBC Nikko Securities, Muraki-san, please.

I am Muraki from SMBC Nikko. This is Page 8, capital recycling and capital profit and loss outlook. I would like to ask a question about that. The first quarter, JPY 45 billion in profit and Greenko will be reflected. So even putting on that, so JPY 140 billion seems to be the number. It seems that you'll be able to reach the full year plan. It says that you will consider observations. In terms of the capital loss, what is your outlook? So in the fourth quarter, so for instance, a long-term impairment or the goodwill impairment or the credit loss, CCL losses will be accumulated and ORIX Life in terms of the unrealized loss, it was over JPY 600 billion for the bond portfolio. So utilizing this profit and to be able to improve the profit for next fiscal year, how are your discussions going forward in terms of the portfolio realignment?

So as I mentioned on the right-hand side on Page 8, against the full year forecast, so basically, this is the same as we have announced our budget. So currently, it's under review. That's the reason we are saying this is under review. As you have pointed out, this JPY 41.5 billion in the first quarter, the Greenko gains about JPY 93 billion. If you add that, the full year capital gain budget, including the exit strategy project by project, we are reviewing the outcome. In terms of the -- if we are going to change our financial outlook, it is not only what we have conducted in the past, but in terms of our planning, is truly for this fiscal year, correct, for this fiscal year, we should be considering next fiscal year as an opportunity. In terms of the capital gain, the optimal timing, we are taking stock and trying -- reviewing about the timing. In terms of the capital loss in the past fiscal year in the fourth quarter, so in terms of the [indiscernible] plant, there has been some partial impairment. And in the U.S., individual impairment and the credit loss impairment has occurred. As you have made a question for CCL, until the previous year, there has been some reversals, but that has stopped. But from this fiscal year and onwards, currently, we are trying to review what will be the right level of reserves. But basically, we think that the outlook is more or less conservative. So this will be some of the things that we want to reflect for the full year outlook. In terms of the ORIX Life's bond portfolio impaired under unrealized loss, which has improved compared to last fiscal year, but this is linked to the liabilities. In terms of the actual performance against the real business, as long as there's no large surrenders and cancellations, that is the standard portfolio management conducted by life insurances. But for ORIX Life, the long-term lump sum payment type of insurance, the surrender risk having that type of risk is limited because basically offer medical protection type of insurance. So in terms of that nature of the insurance, I think they can absorb the risk. However, that said, in terms of the asset value and going forward valuation, if there is something that will have a negative impact for the next fiscal year and onwards, they will address that. But currently, in terms of the capital loss, there is no major considerations they are considering -- conducting right now. Has this answered your question?

So if that is the case, in terms of the direction on a net basis, the Greenko -- JPY 93.4 billion of Greenko's shares will come in. So for the -- delaying some of the sales or even if there's some capital loss, will they come up? But in terms of the direction, you are looking at kind of upward trajectory.

Yes. As you have mentioned, in terms of each of the exit deals of projects, more than we have assumed more high-quality investors and the interest rate environment, we have to individually review with the top management of each of the segments are considering these type of factors. And we are waiting for the review, and then we want to communicate that as quickly as possible.

Moving on, from Daiwa Securities, Watanabe-san, please.

This is Watanabe from Daiwa Securities. Regarding capital recycling, I would like to ask you regarding Ascentech TOB period did not extend and Panasonic projector business was gained in a short period of time. So what's the investment discipline? Were there any changes in your approach? And also JPY 30 billion dividend, you will be carrying out. So why at this timing are you going to carry out the dividend payout?

Well, thank you very much for your question. Regarding Panasonic Connect projector business, I would like to explain why the agreement was released. So we were supposed to sign an agreement with Panasonic Group, and we had prepared accordingly. As was announced, both parties had worked together, and that's a fact. Meanwhile, due to tariff impact and economic situation, the outlook of this business was revisited. And given the strategy on our end and between ourselves, there were gap between the 2 companies regarding the expectation on the future business, and we quickly consulted with each other. So based on agreement, we decided to release the agreement. We decided to terminate the discussion. So it's not that we were not able to reach an agreement. Rather, based on a rationale discussion, we discussed and agreed that we will not be making investment. So within a certain risk tolerance, the initial business plan did we -- were we -- were they feasible or not? In light of that, we made a decision. And for Ascentech TOB, it did not achieve the number that we had expected. And thereafter, the price compared to R TOB price, it has been faring higher. It seems like. Meanwhile, Ascentech's management team, we had a discussion many times. So we discussed about whether there's a business synergy or is there a room for collaboration to improve corporate values. We have a relationship to continue to hold these discussions going forward as well. So this has been extend -- the period has not been extended and the price were not revisited. And as you said, based on investment discipline, in light of the business value that we estimated, of course, we will not change our investment discipline just because we want to purchase. So because of the decision by the business side, we did not -- we decided not to extend and not revisit the price. In terms of timing, Ascentech, there was an announcement this morning and also the market situation. These are impacting factors every time there's TOB. So I'm sure certain accommodation will be necessary going forward. But every time we take time to make a final investment decision. So every time we will consider within the defined ratio of investment. And also the dividend payout, this was announced. We have been stacking up the profit and also the revenue has been growing. But in 3 categories, the finance segment, in terms of profitability, ORIX Bank compared to the peers, of course, they are not behind. It has maintained its decent profitability and asset has grown to a certain level, and it is being distributed. So in order to grow profitability higher, we decided to return the capital to a certain extent. So in a stand-alone basis, at this point in time, the financial soundness of ORIX Bank has no issue whatsoever. And upon that, we decided to carry out the dividend. And going forward, for each group companies and the business segments, in order to contribute to a higher ROE of a group, we need to go into one by one and be mindful of ROE. So the dividend of ORIX Bank was based on the business strategy going forward. I hope this answered your question.

Mizuho Securities, Sakamaki-san, please.

This is Sakamaki from Mizuho Securities. So I have one question. In terms of the shareholder return, so in terms of the flexibility of share buybacks in the year plan, you have been talking about that. You have been good in your process in terms of the sales of Greenko, in terms of the capital, you have more room. So what type of internal discussions have been conducted in terms of this shareholder return policy?

Thank you very much for your question. So in this Board of Directors is conducted today in the Q1 financial results based on that results, in terms of the discussions that has been conducted, I think basically, the discussions will focus on the forecast going forward or the outlook going forward. I think in terms of the market environment that is solid in Japan, how much will be impact of the Trump tariff? And I think each of the corporations are trying to discern about that. The second point is that in the United States and China, we -- at ORIX as a group, what type of business outlook should we establish. In terms of the shareholder policies to be able to make a decision for these materials, we will have to look more deeply and then decide about our policy. So that is the reason why we are saying that it is under review. But this fiscal year in May, we have said that we have a framework of JPY 100 billion and the program, this will be quite flexible. In terms of the investment pipeline, for the Panasonic Connect Company, we have terminated that agreement. And with the Greenko sales, we have invested in green. And in terms of Hilco M&A, we have reached an agreement. So for the major projects, I think basically, we have some visibility. So in terms of the -- looking at the investment and the payback, if we consider that we have the capacity and as the market condition shows that if there is a -- capital market shows that it's a good timing to conduct share buybacks, if we make that type of decision, we will make a decision under -- after conducting discussions. So maybe not an answer that may satisfy you.

Next, BofA Securities, Tsujino-san, please.