Category

ESG

May 07
0

Daily Brief ESG: The Postponement of the Parent-Subsidiary Listing Issue Provides Further Investment Opportunities and more

By | Daily Briefs, ESG

In today’s briefing:

  • The Postponement of the Parent-Subsidiary Listing Issue Provides Further Investment Opportunities

The Postponement of the Parent-Subsidiary Listing Issue Provides Further Investment Opportunities

By Aki Matsumoto

  • The dissolution of parent-subsidiary listing was achieved through the sale of a portion of the listed subsidiary’s equity interest. The postponement of this issue is noted as an investment opportunity.
  • The status change of the listed subsidiary doesn’t address concerns regarding the interests of the subsidiary’s minority shareholders, nor does it implement restructuring of the parent company’s entire business portfolio.
  • While investors are disappointed that the problem has been postponed, it also means that there are still many investment opportunities remaining, including for listed affiliates.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


May 05
0

Daily Brief ESG: Pre AGM Annual Securities Report Disclosure as a Clue to a True Dialogue with Investors and more

By | Daily Briefs, ESG

In today’s briefing:

  • Pre AGM Annual Securities Report Disclosure as a Clue to a True Dialogue with Investors

Pre AGM Annual Securities Report Disclosure as a Clue to a True Dialogue with Investors

By Aki Matsumoto

  • Based on experience with “TSE’s request,” it’s impossible to request the same level of disclosure from every company. Companies that overseas investors can target should be requested to disclose proactively.
  • This “FSA’s request” is expected to potentially cause companies to lose the effectiveness of the tactics they have used to control AGMs. Future steps are expected.
  • The slowdown in profit margin growth may also increase calls for improved corporate governance practices, with more companies reducing cross-shareholdings and launching stronger shareholder returns.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


May 03
0

Daily Brief ESG: Substantial “pre AGM Filing of Annual Securities Reports” Will Be After 2027 and more

By | Daily Briefs, ESG

In today’s briefing:

  • Substantial “pre AGM Filing of Annual Securities Reports” Will Be After 2027

Substantial “pre AGM Filing of Annual Securities Reports” Will Be After 2027

By Aki Matsumoto

  • Even if annual securities reports are filed earlier, a few days before the AGM, there is not enough time for institutional investors to use them for proxy voting.
  • Many companies believe that they could control the AGM by two things: diversifying shareholder attention by holding the AGM on the same day and not providing sufficient information to shareholders.
  • In its next request, FSA plans to encourage companies to move AGM to later date by changing “record date.” However, it’ll take time to come to a compromise with companies.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


May 01
0

Daily Brief ESG: A Guide May Be Offered to Disclose MTPs that Focus More on Strategy Rather than Matching Numbers and more

By | Daily Briefs, ESG

In today’s briefing:

  • A Guide May Be Offered to Disclose MTPs that Focus More on Strategy Rather than Matching Numbers

A Guide May Be Offered to Disclose MTPs that Focus More on Strategy Rather than Matching Numbers

By Aki Matsumoto

  • It’s progress that more companies are including ROE and ROIC as KPIs in mid-term management plans. On the other hand, it’s true that many disclosures are misaligned with investors’ perspectives.
  • As a result of not taking action on problem businesses, it’s often the case that deteriorating environment increases losses of the business, leading to revision of the “medium-term management plan.”
  • Investors are more likely to portray corporate value if a company provides measures for problem solving and growth, and reliable execution, rather than goals that are uncertain to be achieved.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Apr 29
0

Daily Brief ESG: Hurdles to Shareholder Proposal Passage Are Still High and more

By | Daily Briefs, ESG

In today’s briefing:

  • Hurdles to Shareholder Proposal Passage Are Still High, but the Announcement Effect Is Significant

Hurdles to Shareholder Proposal Passage Are Still High, but the Announcement Effect Is Significant

By Aki Matsumoto

  • There’re signs, with domestic institutional investors gradually becoming more willing to consider shareholder proposals. However, the hurdle to passage is still high, as shareholder proposals weren’t approved at March AGMs.
  • Regarding proposals that are easy for domestic institutional investors to mechanically approve/disapprove, such as the number of independent directors and female directors, companies are expected to raise the level formally.
  • Since the announcement effect of shareholder proposals is significant, it is expected that companies that did not pass shareholder proposals this time will launch initiatives to strengthen shareholder returns.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Apr 27
0

Daily Brief ESG: Expect Gradual Improvement in the Quality of Listed Companies as More Companies Go Private and more

By | Daily Briefs, ESG

In today’s briefing:

  • Expect Gradual Improvement in the Quality of Listed Companies as More Companies Go Private

Expect Gradual Improvement in the Quality of Listed Companies as More Companies Go Private

By Aki Matsumoto

  • Although it’ll take some time for quality of existing listed companies to improve, a gradual improvement in quality of companies is likely for the time being as more companies delist.
  • The TSE’s “request” was not only for activist investors, but also for other investors who shared the view that the stock market should not be left in the doldrums.
  • A certain number of companies that fail to meet TSE listing criteria will move to the regional stock exchanges, leading to a gradual improvement in the quality of the TSE.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Apr 25
0

Daily Brief ESG: Sheng Siong Group Ltd: Inflection Point for a Great Performer and more

By | Daily Briefs, ESG

In today’s briefing:

  • Sheng Siong Group Ltd: Inflection Point for a Great Performer
  • It Is Not a Question of Whether Investment in Growth or Shareholder Return Is Better

Sheng Siong Group Ltd: Inflection Point for a Great Performer

By Tan Yee Peng

  • We analysed Sheng Siong’s success over the years to see what its secret sauce is and what made the retailer so successful.

  • It has punched its weight above its competitors with a set of strong financial metrics. Its ability to generate free cash flow and achieve a high return on equity are truly impressive.

  • However, Sheng Siong is at an inflection point now as its revenue and net profit have stagnated since the pandemic. 

It Is Not a Question of Whether Investment in Growth or Shareholder Return Is Better

By Aki Matsumoto

  • While the absolute amount of share repurchases has increased, many companies face challenges in using cash, given the slow growth in ROE and depth of equity capital over a decade.
  • While growth investment should increase corporate value, it’s important for managers to manage to earn returns commensurate with investment risk, and to return cash to shareholders without taking unnecessary risks.
  • The question is not whether investment in growth or shareholder return is better, but whether the company was managing its business in a shareholder-friendly manner.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Apr 23
0

Daily Brief ESG: The Key Is to Solve the Root Problem of Women Leaving Their Jobs Due to the Bias of Family Work and more

By | Daily Briefs, ESG

In today’s briefing:

  • The Key Is to Solve the Root Problem of Women Leaving Their Jobs Due to the Bias of Family Work

The Key Is to Solve the Root Problem of Women Leaving Their Jobs Due to the Bias of Family Work

By Aki Matsumoto

  • In many cases, women are promoted as non-statutory executive officers, and there’re very few women in positions where they can be involved in making decisions about the company’s management policies.
  • The bias toward women in family work, such as childbirth and child rearing, leads to women leaving workforce, and their shorter tenure has resulted in fewer women in managerial positions.
  • Female executives who have been appointed after overcoming various difficulties and gaining “experience” are loss to the company, as they face the wall of homogeneity of the senior male community.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Apr 22
0

Daily Brief ESG: The Bigger Issue than the Lack of Higher Compensation for Outside Board Directors Is… and more

By | Daily Briefs, ESG

In today’s briefing:

  • The Bigger Issue than the Lack of Higher Compensation for Outside Board Directors Is…

The Bigger Issue than the Lack of Higher Compensation for Outside Board Directors Is…

By Aki Matsumoto

  • It’s not desirable for shareholders to have outside directors who are comfortable and remain in office for a long period of time while they are expected to fulfill their duties.
  • The high demand for outside directors of the same senior generation as inside directors has led to a situation in which senior outside directors hold positions at several companies.
  • There are few competent young talents to take on the job of outside director among the senior, all-male, internal board directors who are under strong peer pressure.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Apr 19
0

Daily Brief ESG: The Key to Japanese Equity Outperformance Is a Step Beyond Shareholder Returns and more

By | Daily Briefs, ESG

In today’s briefing:

  • The Key to Japanese Equity Outperformance Is a Step Beyond Shareholder Returns

The Key to Japanese Equity Outperformance Is a Step Beyond Shareholder Returns

By Aki Matsumoto

  • A benefit of inflation was expected to shift from management that accumulates cash to management that proactively uses cash. However, it’s been used for shareholder returns but less for apex.
  • Hitachi is one of few companies that manage business in disciplined manner and execute the necessary growth investments. This is more result of overseas investor engagement than corporate governance reform.
  • The key to Japanese equities outperformance is whether management can change to mindset that investors want to see “positive investment and the ability to implement measures to expand corporate value.”

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free