关于日经新闻股东回报报道的观点

Kazuo Yoshikawa, CFA Our Take on the Nikkei Reporton Shareholder Returns Hidetaka SuzukiResearch AssociateHidetaka.Suzuki@morganstanleymufg.com+81 3 6836-8402 KIOXIA Holdings (285A.T, 285A JP) An announcement on shareholder returns is likely to be made atthe May earnings release or at the IR Day scheduled for aroundJune. Key Takeaways According to the article, CFO Kawamura stated that the company is discussing apolicy of stable dividends. The company plans FY3/27 capex of approximately ¥400bn, in line with ourexpectations. On April 7, the Nikkei published an interview with Kioxia Holdings’ ExecutiveVice President and CFO, Mr. Kawamura:Assuming the article is accurate, the keypoints from his comments are as follows: (1) Shareholder returns: When consideringshare buybacks versus dividends, the company leans toward dividends. It is currentlydiscussing a policy of stable dividend payments. (2) Capex: Kioxia plans around¥400bn in capex for FY3/27. This represents a 40% increase from the previous fiscalyear but remains below the peak level of approximately ¥510bn in FY3/23. Themajority of the investment will be allocated to technology migration to next-generation products. (3) Production and R&D: From a global strategy perspective,the company is evaluating whether it is sufficient to maintain production anddevelopment solely in Japan. If overseas manufacturing or R&D bases are required,various options are available, including joint ventures with SanDisk. Our viewon shareholder returns:Net interest-bearing debt (including leaseliabilities) stood at approximately ¥1tn as of Dec 2025, but we expect the companyto reach a near net cash position by mid-year. The company has previously stated inits capital allocation policy that it will prioritize achieving a net cash position asoutlined in its long-term financial model, while considering shareholder returns suchas dividends at an appropriate timing. As the realization of a net cash position comesinto view, we expect an announcement regarding shareholder returns either at theMay earnings release or at the IR Day scheduled for around June. Morgan Stanley does and seeks to do business withcompanies covered in Morgan Stanley Research. As a result,investors should be aware that the firm may have a conflict ofinterest that could affect the objectivity of Morgan StanleyResearch. Investors should consider Morgan StanleyResearch as only a single factor in making their investmentdecision. Capex:The reported FY3/27 capex plan of approximately ¥400bn is broadly in linewith our estimate (¥422bn), with no major surprises. Although this represents asignificant increase from FY3/26 capex (approximately ¥280bn), the gap relative toour FY3/27 depreciation forecast (approximately ¥350bn) is not particularly large. For analyst certification and other important disclosures,refer to the Disclosure Section, located at the end of thisreport. Production and R&D structure:At the management policy briefing held in June lastyear, the company indicated that it would expand its front-end production sites inYokkaichi and Kitakami in line with demand (Exhibit 1). While overseas productionand development may be considered in the longer term, we believe there is nochange to the current policy regarding front-end manufacturing for the time being. += Analysts employed by non-U.S. affiliates are not registeredwith FINRA, may not be associated persons of the memberand may not be subject to FINRA restrictions oncommunications with a subject company, public appearancesand trading securities held by a research analyst account. Valuation Methodology and Risks KIOXIA Holdings (285A.T) FY3/27e EPS x 9.5: 20% premium to the multiple of other memory makers during marketexpansion phase (8x), which we based on the solid storage demand outlook for AI inferenceand QLC-SSD, as well as favorable NAND supply outkook due to HDD shortages and expecta-tions for robust HBM demand. Risks to Upside Stronger than expected AI-driven end demand growth, and supply-side adjustment leading totight supply/demand of NAND flash KIOXIA's market share gain in SSD market Risks to Downside Deterioration of end demand, and capacity expansion of Chinese companies leading to pro-longed oversupply of NAND flash Japanese yen appreciation (we estimate one yen appreciation against US$ lowers OP by aboutY6bn annually) Disclosure Section The information and opinions in Morgan Stanley Research were prepared by Morgan Stanley MUFG Securities Co., Ltd. and its affiliates (collectively, "Morgan Stanley").For important disclosures, stock price charts and equity rating histories regarding companies that are the subject of this report, please see the Morgan Stanley Research Disclosure Websiteat www.morganstanley.com/eqr/disclosures/webapp/generalresearch, or contact your investment representative or Morgan Stanley Research at 1585 Broadway, (Attention: ResearchManagement), New York, NY, 10036 USA. For valuation methodology and ri