TOKYO, March 26, 2025 /PRNewswire/ -- FY25 marks our 140th anniversary and the final year of our current Medium-Term Management Plan (MTMP). As we reach this milestone, we are reaffirming our commitment to continuous corporate value enhancement.
Since FY20, our PBR had been below 1.0x, and with our profit outlook for FY24, we recognize that there are concerns from investors about achieving an ROE of 8% in the next fiscal year. We recognize the importance of addressing these concerns with urgency.
Since the announcement of current MTMP, we have accelerated our efforts to enhance corporate value. On January 31, we clearly committed to achieving a ROE of 8% in FY25 and demonstrated our willingness to aim for an ROE exceeding 10% around FY30. Capital efficiency is the core financial metric that our team uses and we believe shareholders should also use to evaluate our financial performance over time. We promised to present our key themes for the next MTMP by the end of March, and we are committed to prioritizing dialogue with stakeholders as we formulate our next MTMP.
Achieving high ROE targets is not an easy task for a company like ours, which is required to hold a significant amount of assets to be able to provide stable infrastructure services. However, we believe we can achieve these targets by leveraging our solid domestic customer base and assets to enhance the profitability and asset value of our existing businesses. Additionally, we believe expanding into adjacent and interconnecting our businesses to create new value will better position us to achieve our targets. Domestically, we aim to increase corporate value by cross-selling gas, electricity, and solutions to our customer base, further strengthening the customer base itself, and converting existing real estate assets in our urban development business, integrating building and energy system development/operation. Internationally, we will focus on ensuring profitability in our shale gas business while expanding into mid/downstream operations in the U.S. and LNG trading. Furthermore, strengthening resilience of existing infrastructure and working towards carbon neutrality are also crucial missions that support these efforts.
Growth investments are essential for continuous value creation, and we are strengthening our investment discipline and elevating our investment strategies. For example, in the shale gas business, we learned from past experiences to invest in a US shale company with management familiar with local operations, strengthen governance, and gradually acquire a majority stake. This has allowed us to execute advanced area strategies and expansion investments. As a result, our shale gas business is expected to become a major profit pillar in FY25.
Under the current MTMP, our financial strategy, which is instrumental for our growth, includes a highly flexible capital return policy. This policy includes a baseline target total return ratio of 40%, with room for opportunistic increases beyond that target as appropriate. To maintain capital efficiency, we are conducting significant share buybacks in FY25, as we did in FY24, to reverse the increase in equity from strong performance over the past two years to appropriate levels. We aim to enhance corporate value through this dual approach of steady growth investments and appropriate capital policies.
With this announcement, we hope to convey our plan to deliver continuous corporate value enhancement, earning the trust of our multiple stakeholders and securing your support over the medium- to long-term.
Media Contacts
Kekst CNC
In Tokyo:
Ai Saito
ai.saito@kekstcnc.com
In New York:
Nick Capuano
nicholas.capuano@kekstcnc.com
** The press release content is from PR Newswire. Bastille Post is not involved in its creation. **
TOKYO GAS Co., Ltd.: Action Policy Toward Continuous Corporate Value Enhancement
HONG KONG, March 29, 2025 /PRNewswire/ -- On March 24, the launch ceremony of ADC Submarine Cable's commissioning was successfully held at the Everbright Centre in Hong Kong. The event brought together over a hundred distinguished guests, including prominent figures from the political and business sectors, industry experts, and representatives from leading media organizations.
The ADC Submarine Cable project is jointly constructed by China Telecom, China Unicom, Singapore Telecom, Japan's SoftBank, TATA Communications, Vietnam's VIETTEL, Thailand's NT, and the Philippines' PLDT. As the only international submarine cable initiative launched in the Asia-Pacific region over the past nine years, it boasts the highest system transmission capacity and the largest number of fiber pairs in the region. Spanning 9,988 kilometers, the ADC Submarine Cable links mainland China, Hong Kong, Japan, Singapore, and multiple other countries and regions across the Asia-Pacific. Designed with an open cable architecture and cutting-edge high-capacity optical transmission technology, it features a per-fiber pair design capacity exceeding 20 Tb/s, with a total system capacity surpassing 160 Tb/s. By offering diverse routing options, the ADC Submarine Cable significantly strengthens network resilience and stability across the Asia-Pacific, reinforcing the region's digital infrastructure.
At the event, Prof. Sun Dong, Secretary for Innovation, Technology and Industry, the Government of HKSAR, emphasized that as a key gateway for the country's opening-up, Hong Kong will fully harness its unique advantages under the "one country, two systems" framework. Leveraging its strategic roles as a "super connector" and "super value-adder," Hong Kong aims to facilitate the global expansion of mainland enterprises while attracting international businesses. The Hong Kong SAR Government remains committed to enhancing the innovation and technology ecosystem through institutional innovation, policy coordination, and international collaboration. He encouraged industry leaders, including China Telecom, to embrace national and SAR government initiatives, capitalize on the opportunities presented by the digital economy, and intensify R&D efforts to drive breakthroughs in artificial intelligence, big data, and other frontier technologies. At the same time, he expressed confidence that more enterprises would actively contribute to Hong Kong's innovation and technology landscape, fostering an open and inclusive ecosystem and reinforcing the city's position as a globally influential hub for technological advancement.
Ms. Liu Ying, Executive Vice President of China Telecommunications Corporation Ltd. (hereinafter referred to as "China Telecom"), indicated that the official launch of the ADC Submarine Cable marks a significant milestone in international cooperation. This achievement not only reaffirms China Telecom's long-standing commitment to its global expansion strategy, cloud-network integration, and digital transformation but also ushers in a new era of collaboration with global partners to drive technological progress and shared prosperity. She also highlighted that China Telecom's international business will continue to leverage Hong Kong as a strategic hub, dedicated to fostering a more open and collaborative ecosystem, advancing digital technology innovation, and accelerating the growth of the digital economy. The company remains committed to delivering more efficient, secure, and intelligent communication services to global users while working with industry partners to build a dynamic, inclusive, and mutually beneficial digital landscape.
As one of the organizers of the ADC Submarine Cable project, Mr. Yin Jin, CEO of China Telecom Global introduced that the ADC Submarine Cable will add over 50 Tb/s of bandwidth capacity to the Asia-Pacific region, supporting the exponential growth in data demand driven by artificial intelligence, the Internet of Things, and cloud computing. By offering a high-speed and resilient submarine communication network, the project not only enhances international telecommunications cooperation but also plays a vital role in fostering the high-quality development of the digital economy. In alignment with Hong Kong's vision of becoming an International Innovation and Technology Hub, China Telecom Global is accelerating the development of major infrastructure projects, including the Tseung Kwan O Data Center, the Chung Hom Kok Cable Landing Station, and the New Eurasia and New Asia-Pacific submarine cables. The company is also strengthening its R&D capabilities through the establishment of AI and cybersecurity innovation centers, reinforcing its long-term commitment to driving technological progress and contributing to Hong Kong's continued prosperity.
As the backbone of the global internet, submarine cables serve as a vital lifeline for international data transmission. In the future, China Telecom will collaborate with major global operators to continuously promote more submarine cable construction projects, further reinforcing the infrastructure that underpins 5G, AI, and digital technologies. By enhancing global connectivity, the company aims to accelerate the digital transformation landscape and contribute to the high-quality advancement of the digital economy.
** The press release content is from PR Newswire. Bastille Post is not involved in its creation. **
Accelerating Connectivity in the Asia-Pacific: ADC Submarine Cable Empowers the Digital Future
