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“DX Stocks 2020” and “Noteworthy DX Companies 2020” Selected

- Selection of TSE-listed companies engaged in changing business models and management practices based on digital technologies -

August 25, 2020

The Ministry of Economy, Trade and Industry (METI) and the Tokyo Stock Exchange (TSE) jointly selected the stocks of outstanding companies as “Digital Transformation Stocks (DX Stocks)” under the Digital Transformation Stock Selection (DX Stock) 2020 program and, on August 25, 2020, announced the selected companies--35 for the “DX Stocks 2020” category and 21 for the “Noteworthy DX Companies 2020” category. These companies were selected for their outstanding efforts in dealing with dramatic changes in business environments; changing their products, services and business models to meet the demands of customers and society by taking advantage of data and digital technologies; and also changing their business itself, organizations, processes, corporate cultures and corporate climate, so that they can establish competitive advantage. Moreover, they are expected to play leadership roles in their various industries by taking advantage of digital technologies to the maximum extent possible even during the pandemic of the novel coronavirus disease.

1. Outline of the DX Stocks

From among TSE-listed companies, METI and the TSE select outstanding companies in each industrial category which have established internal systems for promoting digital transformation (DX)* (which is an approach that contributes to improving corporate value) and which have achieved outstanding digital utilization, and they introduce the selected companies to investors as “DX Stocks”. Companies which are considered to be promoting DX are those that are not only introducing exceptional information systems and utilizing data, but also boldly taking efforts to change business models and management practices in a continuous manner based on digital technologies. They are also expected to play leadership roles in their various industries.

To assess current efforts to implement DX, METI conducted a survey titled “2020 Survey on Digital Transformation” targeting TSE-listed companies in Japan. In screening candidate companies, METI and the TSE assigned scores to the responses to the survey concerning the following six items and financial indices, and finally selected 35 companies in the final examination by the assessment committee.

In addition, aiming to strongly encourage companies’ efforts to implement DX, METI and the TSE selected two outstanding companies, i.e., Komatsu Ltd. and Trusco Nakayama Corporation, as “companies exercising leadership in the digital era” from among the companies indicated above and announced them as winners of the “DX Grand Prix 2020.”

I. Visions and business models
II. Strategies
II-i. Organization, systems, etc.
II-ii. Utilization of digital technologies and information systems
III. Sharing of achievements and important achievement indices
IV. Governance

<Selection criteria>

  1. The score for the questionnaire responses and ROE should be above a pre-determined level.
  2. The assessment score by the assessment committee should be above a pre-determined level.
  3. Companies must not be found committing serious legal or regulatory violations.
*Note: The term “digital transformation (DX)” refers to a situation where a company takes advantage of data and digital technologies to deal with dramatic changes in business environments, change its products, services and business models to meet the demands of customers and society and change its business itself, organizations, processes, corporate culture and corporate climate, so that it can establish a competitive advantage.

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