*Tokyo Steel’s capital efficiency and plant utilization rates remain at low levels, while management has failed to take effective measures to address these structural issues. The Company has also recorded significant impairment losses and repeatedly revised down earnings forecasts over the past three fiscal years, raising serious concerns regarding management credibility and earnings visibility

*Oasis urges shareholders to vote AGAINST the re-election of President Nara and the election of Mr. Tsuda as a director at the upcoming 2026 AGM

* Oasis has published specific strategic recommendations, including proposals for the effective utilization of the Company’s assets, aimed at significantly improving Tokyo Steel’s corporate value and capital efficiency

*Oasis’s plan calls on Tokyo Steel to use underutilized steel plants as data centers to spur growth

*Oasis sees at least 115% stock upside through improving ROE from 2.9% to 8% and PBR from 0.5x to 1.4x within 3 years

More information available at www.ABetterTokyoSteel.com

Oasis Management Company Ltd. (“Oasis”) is the manager to funds that beneficially own approximately 8.7% of Tokyo Steel Manufacturing Co., Ltd. (“Tokyo Steel” or the “Company”). Oasis has adopted the Japan FSA’s Principles for Responsible Institutional Investors (a/k/a the Japan Stewardship Code) and, in line with those principles, Oasis monitors and engages with its investee companies.

Oasis has engaged continuously with Tokyo Steel as a long-term shareholder. Through its dialogue with the Company, Oasis has urged Tokyo Steel to improve its persistently low capital efficiency, review its excessive production capacity, and establish a clear capital allocation policy. However, these proposals have not been sufficiently implemented, and the Company’s low profitability structure and weak capital efficiency remain unresolved. Oasis was also not even given the opportunity to meet with Tokyo Steel’s directors, and we see no signs that our proposals to improve the Company were meaningfully considered. As a result, Tokyo Steel has continued to generate weak total shareholder returns (“TSR”) over the long term, while its valuation in the equity market remains significantly depressed.

Failure of the Founding Family and Current Management to Respond to Structural Changes in Japan’s Steel Industry

Japan’s steel industry is undergoing significant transformation driven by structural changes in domestic steel demand. While industry peers are executing structural reforms and reviewing their business portfolios, Tokyo Steel’s founding family and current management have lagged behind in implementing such initiatives and have failed to respond effectively to these changes.

Oasis believes that Tokyo Steel’s prolonged deterioration in corporate value is attributable to four issues, which the current management has failed to adequately address:

1. Decline in market confidence in management
   Tokyo Steel has recorded significant impairment losses related to its investment in the Tahara plant, which was effectively the Company’s only large-scale capital investment in the past 20 years. In addition, the Company has repeatedly revised its earnings forecasts downward over the past three fiscal years, undermining market confidence in management’s planning capabilities and business judgment.
   
   Further, the Company has announced a plan to double its production volume from the current level of approximately 3 million tons to 6 million tons by 2030. However, the market has strongly questioned the feasibility of this plan, which effectively assumes a doubling of demand, and management has failed to establish credibility regarding the achievement of these targets.
   
   
2. Low operating rates and inefficient asset utilization
   Tokyo Steel’s plant utilization rates remain significantly below those of its industry peers, and the Company continues to operate inefficiently while maintaining excess production capacity. Despite these circumstances, management has failed to take sufficient measures to improve asset utilization.
   
   
3. Inefficient cash and capital policy
   The Company maintains an excessive level of cash and deposits while failing to articulate a clear capital allocation policy. Oasis believes that Tokyo Steel’s efforts to improve capital efficiency have been insufficient.
   
   
4. Insufficient corporate governance
   The Company has maintained a founding family-centered management structure for many years. In addition, management share ownership and compensation structures appear to have only limited alignment with shareholder value, raising concerns that effective external oversight and accountability mechanisms are not functioning effectively.

Oasis believes that the Company’s prolonged weak performance and delayed response to these structural challenges have become increasingly pronounced under the current management team, and that corporate value destruction is continuing under the entrenched and insufficiently accountable leadership of President Nobuaki Nara and the founding family.

Further, Oasis believes that the proposed appointment of Mr. Soichiro Tsuda, the son-in-law of founding family member Mr. Masanari Iketani, as a new director, risks further entrenchment of the current management structure and raises serious corporate governance concerns.

Oasis’s Proposals

Oasis believes that Tokyo Steel’s underlying business franchise and asset base possess significant potential, and that the implementation of more fundamental and effective reforms could substantially improve the Company’s capital efficiency and market valuation, resulting in meaningful medium- to long-term enhancement of corporate value.

In light of these circumstances, and consistent with its large shareholding report disclosures, Oasis proposes the following three strategic recommendations to address Tokyo Steel’s structural challenges and significantly enhance corporate value:

1. Effective utilization of assets through the sale of excess facilities or conversion of such facilities into data centers.
2. Establishment and achievement of clear medium- to long-term financial targets.
3. Strengthening corporate governance through reform of the director compensation system and moving away from the founding family-centered management structure.

Oasis believes that if Tokyo Steel implements our recommendations outlined above, the Company’s ROE could improve from the currently projected 2.9% to approximately 8% within three years, while its P/B could increase from the currently projected 0.5x to 1.4x. In addition, Oasis believes that the Company’s share price could have upside potential of at least 115%.

Oasis believes that realizing Tokyo Steel’s intrinsic value will require a renewal of the Company’s leadership, and that, as a first step, shareholders should reject the proposals to re-elect President Nara and to appoint Mr. Tsuda as a director.

Oasis urges all shareholders who are interested in improving Tokyo Steel’s corporate value through enhancements to the Company’s governance and operations to vote AGAINST the re-election of Director Nara and the election of Mr. Tsuda as a director candidate.

To learn more about Oasis’s proposals, please visit www.ABetterTokyoSteel.com. We welcome all stakeholders to contact Oasis at info@abetterTokyoSteel.com to help realize A Better Tokyo Steel.

***

Oasis manages private investment funds focused on opportunities in a wide array of asset classes across countries and sectors. Oasis was founded in 2002 by Seth H. Fischer, who leads the firm as its Chief Investment Officer. More information about Oasis is available at https://oasiscm.com. Oasis has adopted the Japan FSA’s “Principles of Responsible Institutional Investors” (a/k/a the Japan Stewardship Code) and, in line with those principles, Oasis monitors and engages with our investee companies.

The information and opinion contained in this press release (referred to as the "Document") is provided by Oasis for informational purposes only or for reference purposes only.

Oasis is not in any way soliciting or requesting shareholders to jointly exercise their voting rights together with Oasis. Shareholders that have an agreement to jointly exercise their voting rights are regarded as “Joint Holders” under the Japanese large shareholding disclosure rules, and they must file a notification of their aggregate share ownership with the relevant Japanese authority for public disclosure. Oasis disclaims any intention to be treated as a Joint Holder and/or a Specially Related Person with any other shareholder under the Japanese Financial Instruments and Exchange Act (“FIEA”) by virtue of the expression of views and opinions and/or any engagement with shareholders and other third parties in or through this document, any public statements or any other information or materials created and/or published by Oasis (whether written or oral, and regardless of medium). Oasis has no intention to receive any power to represent other shareholders in relation to the exercise of their voting rights. This document exclusively represents the opinions, interpretations, and estimates of Oasis. Oasis is expressing such opinions solely in its capacity as an investment advisor to the Oasis funds. Oasis and/or the investment funds it advises hold, and may in the future hold, investments in the company referenced in this document. Accordingly, the views and opinions expressed in this document should not be regarded as impartial. Nothing in this document should be taken as any indication of Oasis’ current or future trading, voting or other intentions which may change at any time. Nothing stated herein is intended to be or should be construed as a proposal for the purposes of paragraph 1 of Article 14-8-2 of the Order for Enforcement of the FIEA (Cabinet Order No 321 of 1965), as amended by Cabinet Order No 247 of 4 July 2025 or otherwise, unless otherwise expressly indicated. The Document exclusively represents the opinions, interpretations, and estimates of Oasis.

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