KITO CORPORATION
(Code 6409: First Section of the Tokyo Stock Exchange)

Basic Information
Issue Date: September 9, 2013

Operating Leverage may Bring Profit Growth Higher than Sales Growth

• Global Leader in Hoist and Crane Market：
  Kito Corporation mainly manufactures chain blocks, lever blocks, chain hoists, wire rope hoists, and cranes -- all of which are used on material handling sites to lift, carry and/or fix heavy materials. The products are used on construction sites, inside factories, and in the yards. The company has a dominant share of 60% in Japan and is also a market leader in the United States and China.

• Established Competitive Superiority：
  Since its establishment in 1932, Kito Corporation has responded to its customers’ needs for higher security and productivity. Providing high quality products and services exceeding the customers' expectations in “Safety”, “Durability”, and “Usability” by overcoming cost constraints, the company has established a clear differentiation in its reliable and high quality products and has built strong customer relations through the agency networks. It has established a strong position in company mergers and acquisitions in the hoist markets in Japan, the USA, and China. The company promotes a business model which strengthens competitive superiority together with revolutionary technology. This allows the company to enjoy high profitability for a long time once its leadership position is established. The company is currently implementing this successful business model in Japan, the USA, and China.

• Operating Leverage Brings Profit Growth Higher than Sales Growth：
  Kito Corporation is expanding its demand by increasing public investments, capital investments, and infrastructure maintenance investments -- as well as by raising operation rates of construction equipment. With industrial advancement, the demand for the company’s precise and high quality products is expanding globally. The company is not only expanding its market share in Japan, the USA, and China, but is also developing business bases by establishing agency networks and manufacturing sites in newly industrialized countries. In addition, the company is expanding its production range and its services, and it has achieved a profit growth much higher than its sales growth for the past three years due to the operating leverage effect. As the company is promoting a strategy in which it is expanding its business while controlling fixed expenses, the operating leverage is expected to continue to bring a higher profit growth in the future. A weak yen is also contributing to the company’s profit ratio increase. The company’s Midterm Management Plan stipulates a target sales amount of 58 billion yen and an operating profit of 7 billion yen for 2015. This operating profit certainly seems to be within reach.

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