#1Copyright © 2023 Abalance Corporation Financial Results Presentation for 1H FY06/23 Abalance Corporation TSE Standard: 3856 / March 2023 Abalance#2Abalance Corporate Profile Company name ■ Establishment ■ Businesses Major subsidiaries ■ Overseas subsidiaries Equity-method affiliate Head office President & Representative Director ■ Stock listing ■ Fiscal year-end Total assets (end-Dec. 2022) Net assets (end-Dec. 2022) No. of employees (end-Dec. 2022) Consolidated net sales (FY12/22) Financial forecast (FY06/23) Abalance Corporation (Group Holding Company) April 17, 2000 Green energy, construction machinery, IT, healthcare (photocatalyst) WWB, VALORS, VSUN, Japan Photocatalyst Center Consolidation of VSUN Inc. in Vietnam (Oct. 2020) . Largest Japanese solar panel manufacturer (capacity: 5.0GW) (Source data: Bloomberg NEF, Tier1 PV Module Maker List [November 22, 2022]) Preparing UPCOM listing on Hanoi Stock Exchange (HNX) Exploring IPO opportunities on other foreign stock exchanges Expanding exports to the US market Meiji Machine Co., Ltd. Tennozu First Tower 16F 2-2-4 Higashishinagawa, Shinagawa-ku, Tokyo Yasuaki Mitsuyuki TSE Second Section (Oct. 2018) ⇒ TSE Standard (Apr. 2022) June 118.7 billion yen 13.5 billion yen 341 in Japan (incl. affiliates); 1,500 overseas (VSUN) 112.0 billion yen ← Net sales: 175.0 billion yen (upwardly revised: 110.0 billion yen ⇒ 175.0 billion yen) => Ordinary profit: 7.3 billion yen (upwardly revised: 2.8 billion yen ⇒ 7.3 billion yen) Copyright © 2023 Abalance Corporation 1#3Abalance Our Solar Panel Business: Strengths (1) One-stop solution -We offer an end-to-end solution to customers with our own panel manufacturing facility in Vietnam. -Unlike most solar panel distributors, we control the entire supply chain from production to installation. ✔ In-house plant: Largest production capacity among Japan manufacturers Planning Basic Plan Application Land acquisition ⚫METI Local sourcing ●Due diligence Power company Municipality Local residents ●Financial ●Budgeting ●Simulation Legal compliance institutions VSUN Design Surveying • Drawing ●Construction proposal Quotation Quality check Simulation • Budgeting Development and Construction Application process ●Parts procurement • Construction management ●Foundation and civil engineering work ● Installation work ● Electrical engineering Owned In-House ●PPA business Sales ●Investors ●Business corporations ●Municipalities O&M ●Remote monitoring Timely issue resolution Legal inspection Mowing and cleaning ●Repair Recycling •Recycling Used product resale (2) Proven performance record -Our achievements in the Green Energy business: 1. Our own power plant (140 MW), 2. Power plant and facility development (400MW), 3. In-house panel manufacturing (2.9GW) ⇒ Total of 3.5GW -Our goal for in-house capacity 1GW by 2030 (combined for Japan and overseas) -Our focus on solar sharing ⇒ Planning to grow through collaboration with Meiji Machine Co., Copyright © 2023 Abalance Corporation Ltd. 2#4Abalance (3) High-quality modules from VSUN - We were awarded the Bronze Medal from EcoVadis (headquartered in France)* in 2022. *We ranked #64 out of more than 75,000 participating companies worldwide. *EcoVadis is a leading provider of ESG ratings for global supply chains. - We were included in Bloomberg's Tier 1 PV Module Maker List. -We were named one of the "Top Performers" in the "PV Module Reliability Scorecard" by PV Evolution Labs (PVEL)* in 2022. *PVEL is a testing organization specializing in module reliability and performance for solar power generation. (4) Pioneering structure for decarbonized energy -We led the industry in creating a green transformation (GX)-focused organization. -We have strengthened our PPA business → Established "Decarbonization Corporate Business Division" at WWB Corporation. (5) MAXAR: diverse proprietary products - - We have developed Maxar LIGHT series (lightweight modules that use fluorine resin instead of glass, etc.). (6) Module reuse and recycling business -We have established PV Repower Corp. (in Mar. 2021) to address the issue of module disposal. (7) Innovative technologies -We are collaborating with Associate Professor Tanaka of the Graduate School of Engineering, University of Tokyo* (our technical advisor) to explore renewable energy certification systems, supply-demand adjustment systems, etc. *Member of the Nikkei Decarbonization Committee Copyright © 2023 Abalance Corporation 3#5Performance Highlights [Consolidated; 1H FY06/23] ■Net Sales: Approx. 4.2x YoY; Ordinary Profit: Approx. 17.2x YoY Revenue drivers: Global demand for renewable energy, reduced congestion in regional ports and harbors Profit drivers: Price increase to customers, declining transportation fares after reaching a peak, increased electricity sales Ordinary profit (billions of yen) 7 Net sales (billions of yen) 120 Consolidated Performance 112.1 Abalance 6 LO 5 4 3 2 92.4 26.9 26.7 5.9 100 1 11.6 6.7 3.1 0 0.3 FY06/20 FY06/21 FY06/22 1H net sales Full-year net sales Copyright © 2023 Abalance Corporation 80 00 60 60 40 40 20 20 0 FY06/23 1H ordinary profit 4#6Upward Revision to Full-Year Consolidated Forecast (Second Upward Revision for the Current Fiscal year) VSUN's panel sales to Europe and US exceeded our expectations. Profits have improved significantly mainly due to price increases to customers and declining container shipping rates after reaching a peak. Abalance (Billions of yen) FY06/22 FY06/23 Re-revised Actual Initial forecast 1H result forecast Net sales Operating profit 92.4 110.0 175.0 112.1 + 1.7 2.91 7.0 5.2 Ordinary profit 1.5 2.8- 7.3 5.9 Profit attributable to 0.9 1.3 3.4 2.3 owners of parent Plant No. 4 has run at full capacity since January 2023, but we did not include its full output in our re-revised forecast because we cannot reasonably estimate its production capacity at this early stage. We will promptly disclose any further earnings upside from VSUN's strong performance. Copyright © 2023 Abalance Corporation 50#71H Results in Key Segments Solar Panel Manufacturing Business (VSUN) Increased net sales and segment profit significantly Exceeded solar panel sales expectations in Europe and US Less congestion in regional ports and harbors improved shipping conditions Raised prices and container shipping rates declined after reaching a peak →> Improved profitability Net sales Segment profit Abalance 1H FY06/22 1H FY06/23 22.7 0.2 YoY 107.4 Approx. 4.7x 4.6 Approx. 20.7x (Billions of yen) Change Vietnam Sunergy Joint Stock Company (VSUN) +84.7 +4.4 Green Energy Business (WWB, VALORS) Promoted recurring revenue business (in-house ownership) Acquired a solar power plant in Ibaraki Prefecture (expected revenue in initial year: approx. 350 million yen) Started operation of Kamisu Solar Power Plant (Ibaraki Prefecture) Worked on non-FIT projects as a PPA operator (Billions of yen) 1H FY06/22 1H FY06/23 YOY Change Power plant and 2.6 2.8 +10% +0.2 product sales Electricity sales 1.0 1.6 +53% +0.6 and O&M revenue [WWB Kamisu Solar Power Plant] Net sales 3.6 4.4 +22% +0.8 Segment profit 0.6 0.9 +51% +0.3 Copyright © 2023 Abalance Corporation 6#8[Reference] Green Energy Business: Development Examples Kakuda Solar Power Plant (Miyagi Prefecture) (DC): Approx. 18.3MW Hanabatake Solar Power Plant (Gunma Prefecture) (DC): Approx. 3.6MW Miyanoura Solar Power Plant (Kagoshima Prefecture) (DC): Approx. 2.8M W Dai Dung An Ha Factory roof top (Thang Long Power)/Vietnam Copyright © 2023 Abalance Corporation Abalance 7#9[Reference] Share Price Chart (Securities Code: 3856) We recognize that we have entered a phase of valuation expansion, reflecting investor expectations for the growth potential of our Group businesses. We have newly hired an expert in investor relations: Nobuyuki Horiuchi, Executive Officer and Head of the IR & PR Office. Copyright © 2023 Abalance Corporation 3856.T 4月 2022 7月 10月 1,045 2022年3月22日 1月 2023 Share price chart from Reuters (as of March 7, 2023, Closing price) 5,840 5,000 4,000 3,000 2,000 1,000 Abalance 8#10[Topics 1] Completion of Plant No. 4 (VSUN) Plant No. 4 (panel production) has begun operations sequentially from Jan. 2023. The annual production capacity is expected to rise from 2.6GW to 5.0GW. For reference, 1GW of plant capacity is roughly equal to the capacity of one nuclear plant. Top Japanese panel manufacturer (Tier 1 List) [Plant No. 4 exterior/Vietnam] [Inside view of the plant] Copyright © 2023 Abalance Corporation VSUN Izlai NHAP VSUN Innovative & Smart Abalance 9#11[Topics 2] Construction of Solar Cell Plant (VSUN) • We are building our own solar cell plant to produce solar cells, a key component of solar panels. Project details: Annual capacity of 6GW Total investment (planned): Approx. 300 million US dollars (39.45 billion yen*) Note: Calculated based on TTM (mid-point) of 131.50 yen/US dollar published in MUFG's Foreign Exchange Rate List (updated at 9:00 a.m. on February 10, 2023). Abalance • First, Phase 1 will be implemented (to be completed in October 2023) (1) CAPEX: Benefits of in-house production: Lower costs and significantly higher profit margin More control over upstream processes in our supply chain Adapt to changes in market trends (such as import rules in each country) (2) Location: (3) Site area: (4) Production capacity: (5) Manufactured products: (6) Payment method: Approx. 180 million US dollars (23.67 billion yen) Cam Khe Industrial Park, Phu Tho Province, Vietnam Approx. 13.42 hectares Annual production capacity of 3GW Solar cells (key components of solar panel manufacturing) Funded by internal capital and borrowed funds Note: Calculated based on TTM (mid-point) of 131.50 yen/US dollar published in MUFG's Foreign Exchange Rate List (updated at 9:00 a.m. on February 10, 2023). Copyright © 2023 Abalance Corporation 10#12VSUN Solar Cell Plant: Location Map Laos Copyright © 2023 Abalance Corporation ラオカイ ライチャウ ディエンビエン エン カオバン ハザン Solar Cell Plant ソンラ バックカン トゥエンクアン 1 ゲアン タイグエン Hanoi ホアピン タインホア ランソン VSUN 1 バクザン VSUN 2-D クアンニン バク VSUNG イオン Abalance Access • Approx. 84 km from Noi Bai International. Airport • • • Approx. 110 km from Hanoi city center Approx. 130 km from VSUN No. 1 Plant Approx. 130 km from VSUN No. 2 Plant Approx. 134 km from VSUN No. 3 Plant 4174 イン 474715 ・ニンビン Supply chain flow Cell production in Phu Tho Province ↓(Transportation) Panel production factories in Bac Giang and Bac Ninh Provinces 11#13Cell Plant Construction (Phase 1 in Progress) We are on track to complete Phase 1 (3GW) of the 6GW solar cell plant construction project by October 2023. Abalance VSUN Innovative & Smart CƠ SỞ SẢN XUẤT 6GW PIN TOPCON 6GW TOPCON セル プロジェクト Địa điểm thực hiện dự án: Lô số CN02 Khu Công Nghiệp Cẩm Khê, huyện Cầm Khê, tỉnh Phú Thọ Copyright © 2023 Abalance Corporation TÒA NHÀ VĂN PHÒNG/ PH TOA NHA NGHIEN CUU/研究開発棟 CN CẢM KHÊ. AM XUÔNG SÀN XUÁT/生產工場 AHE DOD MANH THC (*) Construction is proceeding smoothly. We will share more details on Phase 2 of the project as soon as they are confirmed. 444 DOOS LICOGI 34-LA 0366 12#14Further Upward Revision of the Medium- Term Management Plan (2nd Upward Revision) Full-year FY06/23 forecast re-revised upward (on Feb. 13, 2023) Full-year FY06/24 medium-term targets re-revised upward (on Feb. 24, 2023) Abalance Plan period→ FY06/22 FY06/23 Revised forecast FY06/24 Revised targets (Millions of yen) Actual (Feb. 13, 2023) (Sep. 28, 2022) Re-revised targets (Feb. 24, 2023) Net sales 92,435 175,000 150,000 251,800 Panel Manufacturing Business 81,775 165,000 138,000 239,000 (=VSUN) Green Energy Business 8,009 6,7001 7,600 7,800 (One-Time Revenue) (Recurring Revenue) Operating profit Green Energy Business 2,651 3,300 4,400 5,000 1,697 7,000 4,500 15,800 Ordinary Profit 1,510 7,300 3,800 15,800 Profit attributable to owners of parent 867 3,400 1,800 8,000 Earnings per share 158.33 yen 204.55 yen 108.29 yen 481.29 yen Our targets will be reviewed again once a practical forecast on the impact of the solar cell plant operation is possible. The plant is expected to be completed in October 2023 and its effect on profit margin improvement will be taken into account. Copyright © 2023 Abalance Corporation 13#15Key Initiatives to Enhance Corporate Value Business management Promotion of main businesses Copyright © 2023 Abalance Corporation Abalance Solar Panel Manufacturing Business Green Energy Business Achieve full-scale operation of Plant No. 4 (raise annual production capacity from 2.6GW to 5GW). Complete cell plant construction (Phase 1) and proceed to Phase 2. Improve and enhance profitability. Promote IPO, including in overseas markets besides Vietnam. Promote on-site consumption projects (non-FIT, non-firm) and solar sharing. Execute M&A for renewable energy-related companies (to accelerate expansion). Develop hydrogen products and promote business. Establish business alliances and strategic partnerships with major corporations, general trading companies, etc. Management & Finance Enhance governance in compliance with the Corporate Governance code. Improve equity ratio to 10% or more and secure various funding sources. Reclassify into the Prime Market of the Tokyo Stock Exchange. IR & PR Appoint an IR expert as an Executive Officer. Enhance and strengthen disclosure (TCFD, English disclosure, etc.). Implement a PR strategy aimed at raising brand awareness. 14#16Shareholder Return Policy We have increased the interim dividend to 3 yen per share, or 9 yen per share pre-stock split, as of the record date of December 31, 2022, which represents a significant increase from the previous interim period. Income gain: We anticipate paying a higher year-end dividend than in previous years, barring any special circumstances that may arise. Capital gain: We aim to enhance shareholder returns by improving our market value through corporate growth and effective management efforts. Decided amount (1H FY06/23) Recent dividend forecast (announced Aug. 15, 2022) Record date December 31, 2022 December 31, 2022 Dividend per share 3 yen Copyright © 2023 Abalance Corporation Undecided Actual dividend amount in the previous period (1H FY06/22) December 31, 2021 8 yen (Regular dividend: 7 yen) (Special dividend: 1 yen) Abalance 15#17Equity Ratio Trends in the Near Term Our equity ratio was 6.8% as of end-Q2 FY06/23 ➤ Marks a moderate improvement ➤ ROE remained high at 17.4% (FY06/22) [Equity Ratio Trend and Outlook] Our equity ratio temporarily dropped to 5.4% as of end-September 2022. However, it has since improved to 6.8% as of end-December 2022. In January 2023, we raised 1.4 billion yen through new share issuance, thereby increasing our capital. Our aim is to increase retained earnings and achieve an equity ratio of 10% or more, with a focus on our solar panel manufacturing and green energy businesses (→ one of our key initiatives). Copyright © 2023 Abalance Corporation Abalance 16#18Abalance Disclaimer】 The information contained in this document has been prepared based on economic and social conditions and certain assumptions that the Group has determined to be reasonable, may change without notice due to changes in the business environment, etc. there is. ■The information provided in this document includes "information regarding future prospects. They are based on the Group's current expectations, forecasts and certain assumptions involving risks, and include uncertainties that may lead to results that differ materially from the statements, and guarantee the realization of plans, etc. not. ■Risks and uncertainties include general industry and market conditions, and international and domestic economic conditions such as interest rate and currency fluctuations. The 4th factory newly established by VSUN in Vietnam is now in operation, but the impact on the import and export of materials and products on the supply chain based on future increases in production capacity and various factors, and exchange rate fluctuations in other markets, etc. Please note that the actual consolidated results may differ from this full-year forecast. 【Contact information) Abalance Co., Ltd. Investors Relation Division https://www.abalance.jp/contact/ * From the inquiry of the website, select "Performance/Financial Results/IR" in the pull-down menu Copyright © 2023 Abalance Corporation 17