Tachikawa (TYO:7989) said it will step up efforts to improve capital efficiency and shareholder returns, targeting a return on equity of 7% by fiscal 2028 and a price-to-book ratio above 1x, according to a Tuesday filing on the Tokyo Stock Exchange.

The interior fittings maker said its cost of capital is around 5.5% to 6%, while ROE for fiscal 2025 was 5.9%, weighed down by higher equity following the full acquisition of a listed subsidiary in 2024. The company said asset reduction and capital optimization are key priorities.

Tachikawa said it will focus on strengthening its core interior and exterior products business, expanding into renovation and exterior markets through alliances and M&A, and improving asset efficiency by selling cross-shareholdings and idle assets.

The company also said it will maintain a progressive dividend policy, set a minimum dividend-on-equity ratio of 4% under its medium-term plan through 2028, and consider share buybacks as needed.