Following the reorganization of market segment of Tokyo Stock Exchange (TSE) beginning from April this year, the result of the relocation of segments chosen by the listed companies was publicized on January 11.
As for the industrial gas-related stocks, it seems that the companies listed on the first section will be classified into Prime and those listed on the second section and the JASDAQ market into Standard.
TSE has at present four market segments of “First Section,” “Second Section,” “MOTHERS,” and JASDAQ (Standard & Growth). However, the current positioning of each market segment is ambiguous and there lies an issue that the standard for withdrawal from listing is lower-leveled than that for a new stock for listing, which is not appropriately structured for new comers aiming to endeavor to upgrade their corporate value.
Reviewing the existing concept and listing standard, they reorganized the market division into Prime, Standard and Growth to be implemented from April 4. Each listed company applied for a chosen segment for transition from September to December last year after ascertaining adaptability to being listed on the new market segment.
According to TSE’s announcement, out of the listed 3,777 stocks, 1,841 chose Prime, 1,477 chose Standard and 459 chose Growth. Basically, the flow has been arranged for the companies now listed on the first section to be shifted into Prime, companies listed on the second section, JASDAQ (Standard) Standard, while Mothers and JASDAQ (Growth) into Growth. However, 344 stocks out of those listed on the first section chose Standard. 　
In the new market segment, there are some stocks whose current market capitalization and rate are not compatible with the standard of the new segment chosen. In this case they are entitled to take transitional measures by means of showing a remedy plan aiming for compatibility with the standard. The probation period of remedy may be determined by the corresponding companies themselves, two years up to three years in many cases.
The segments chosen by the industrial gas companies are as shown in the list. Toho Acetylene out of the companies which chose Prime did not satisfy the standard of the new segment and showed their remedy plan to comply with the standard. Concretely, the company showed a remedy plan to an increase of the net profit for the term (FY2021) from 0.95 to 1.6 billion yen by FY2025 of the ending year of the subsequent mid-term business plan and to raise the stock value to 2650 yen from the current 1,200 to 1,300 yen level. The company also showed a plan to raise the circulating shares to a level of 40,000 units from 32,793, making the current circulating market capitalization from 4.05 billion yen to 10.6 billion yen.
In this connection, the company posted up strategies to invest in a high-pressure gas logistics company as a new business, the application development of hydrogen, the expansion of scale by investment in a food manufacturer and participation in the home healthcare business, in addition to sexpanding own production of gases in the existing business lineup.
Furthermore, the next mid-term plan is scheduled to be announced in May of this year.
Together with the stock market segment TSE is planning to review the TOPIX which consists of the stocks in the first section of the stock market.
While converting to the policy of adoption regardless of listing on the market, the weight of stocks with circulating market capitalization less than 10 billion yen will be phased down and excluded ultimately. They will make a gradual transition from October 2022 to January 2025.