Unlocking Dainichi Campaign Launches

Statement by Rangeley Capital on “Unlocking Value at Dainichi” (Stock Code: 5951 JT)

Rangeley Capital LLC (“Rangeley”) is the manager to funds that owns ~5% of Dainichi Co., Ltd. (5951 JP) (“Dainichi” or the “Company”). Rangeley invests in companies whose intrinsic value is not reflected in their market price and engages constructively with the management and boards of its investee companies, consistent with the spirit of the Japan FSA’s “Principles for Responsible Institutional Investors” (a/k/a the Japan Stewardship Code).

Rangeley is a long-term shareholder of Dainichi. The Company is an exceptional industrial franchise: a 60-year-old manufacturer headquartered in Niigata City, holding the #1/#2 share of the Japanese kerosene fan heater market, with growing positions in humidifiers, coffee roasters, and fuel cell (ENE-FARM) components. Dainichi is consistently profitable, carries zero interest-bearing debt, and has built a fortress balance sheet – ¥18.7 billion of cash and securities – through decades of disciplined operation. It represents the best of Japanese regional manufacturing.

However, despite this enviable foundation, the Company’s value is profoundly unrecognized by the market. Dainichi trades at just 0.5x book value. Return on Equity has never reached 8% in the past seven years; the dividend was frozen at ¥22 per share for seven years; and the Company has repurchased effectively zero shares in its listed history. Of the ¥10.6 billion of operating cash flow generated since FY2020, ~70% has simply accumulated in securities holdings.

This is precisely the situation the Tokyo Stock Exchange’s “Cost-of-Capital and Stock-Price Conscious Management” reform agenda was designed to address. Dainichi fails both of the TSE’s explicit thresholds – PBR ≥ 1.0x and ROE ≥ 8.0% – and, while management reports having filed a cost-of-capital management plan in June 2025, no such document can be found on the Company’s IR site, in JPX’s published lists, or via EDINET. As Standard Market disclosure expectations tighten, continued inaction will increasingly mark Dainichi as an outlier.

Importantly, this is not only a shareholder issue. A sub-1x PBR and frozen dividend signal a static, declining business to the very Niigata engineering graduates the Company must recruit against Tokyo-based competitors; and inclusion on the TSE’s monthly list of companies failing its capital-efficiency standards damages the employer brand of one of Niigata’s flagship manufacturers. A fairly valued Dainichi is a stronger Dainichi – for employees, customers, the local community, the founding family, and shareholders alike.

Dainichi has a unique opportunity to resolve this discount on its own terms, fully funded from existing resources and without disturbing its operating strategy. Thus, today, Rangeley announces its “Unlocking Value at Dainichi” campaign to urge the Board to adopt a capital allocation roadmap that maximizes corporate value for all stakeholders.

Learn more at unlockdainichi.com.