Category

ESG

Sep 26
0
Smartkarma The Investment Intelligence Platform

Daily Brief ESG: Out of Sight and more

By | Daily Briefs, ESG

In today’s briefing:

  • Out of Sight, Out of Mind

Out of Sight, Out of Mind

By Aki Matsumoto

  • For companies that view the measures to reduce administrative burden of AGM as part of compensation for filing annual securities reports before AGM, only a few days’ earlier submission is possible.
  • Meanwhile, with returns on capital still insufficient, there is growing discussion about increasing the number of individual investors as a way to prepare for attacks from foreign investors.
  • With many companies still failing to improve stock valuations and return on equity, it makes no sense to increase the number of individual shareholders simply to get corporate proposals approved.

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Sep 24
0
Smartkarma The Investment Intelligence Platform

Daily Brief ESG: Without Fundamental Solutions and more

By | Daily Briefs, ESG

In today’s briefing:

  • Without Fundamental Solutions, Tackling Issues by Comparing to Other Countries Is the Usual Pattern

Without Fundamental Solutions, Tackling Issues by Comparing to Other Countries Is the Usual Pattern

By Aki Matsumoto

  • Companies should consider that things may not go according to the assumption that showering individual shareholders with shareholder benefits will lead them to vote in favor of the company’s proposals.
  • Discussions of trading one share at a time based on trading conditions in other countries or comparative competitiveness fail to address the fundamental issue of inequality in shareholder rights.
  • Unless the fundamental issues are addressed, these measures will be ineffective, and—just as with TSE’s market reforms—it will take a long time to reach a fundamental solution.

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Sep 22
0
Smartkarma The Investment Intelligence Platform

Daily Brief ESG: Problems Won’t Be Solved if a Company Gets Caught up in Debates over the Means to an End and more

By | Daily Briefs, ESG

In today’s briefing:

  • Problems Won’t Be Solved if a Company Gets Caught up in Debates over the Means to an End

Problems Won’t Be Solved if a Company Gets Caught up in Debates over the Means to an End

By Aki Matsumoto

  • “The fact that Japanese companies hold vast cash reserves” is one aspect of the issue, but it’s not root cause. Focusing solely on the means won’t actually solve the problem.
  • While increasing growth investments and improving board practices are not wrong as strategies, few companies truly understand why they should pursue these initiatives or are able to implement them effectively.
  • Both investment and improvements in board practices are necessary measures for achieving the management goal of sustainably increasing shareholder interest. It is the responsibility of management to achieve this goal.

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Sep 20
0
Smartkarma The Investment Intelligence Platform

Daily Brief ESG: Companies Don’t Understand Why They Need to “Manage with Capital Costs and Stock Prices in Mind”? and more

By | Daily Briefs, ESG

In today’s briefing:

  • Companies Don’t Understand Why They Need to “Manage with Capital Costs and Stock Prices in Mind”?

Companies Don’t Understand Why They Need to “Manage with Capital Costs and Stock Prices in Mind”?

By Aki Matsumoto

  • Only 10% in Prime/Standard market were identified by investors as “showing progress in initiatives.” Unless managers return to management facing shareholders head-on, initiatives addressing specific, individual challenges will remain superficial.
  • Investors should have voiced their opinions regarding the disclosure in  annual securities report prior to AGM, change in the record date, and postponement of the AGM by approximately one month.
  • Rather than focusing on resolving specific individual issues, the TSE should educate companies on the fact that management has fiduciary duties and must fulfill them.

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Sep 19
0
Smartkarma The Investment Intelligence Platform

Daily Brief ESG: Have Japanese-GAAP Helped Reduce the Number of Failed M&A Deals? and more

By | Daily Briefs, ESG

In today’s briefing:

  • Have Japanese-GAAP Helped Reduce the Number of Failed M&A Deals?

Have Japanese-GAAP Helped Reduce the Number of Failed M&A Deals?

By Aki Matsumoto

  • Since companies that have listed on NYSE through ADR etc have been reporting their financial results under US-GAAP, it is expected that more companies will transition to IFRS as needed.
  • If IFRS is promoted on the assumption that “eliminating the periodic amortization of goodwill under Japanese-GAAP will likely lead to increased M&A,” the discussion risks heading in the wrong direction.
  • Needless to say, successfully implementing PMI to increase future profits and cash flow is both more difficult and more important.

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Sep 16
0
Smartkarma The Investment Intelligence Platform

Daily Brief ESG: The Solution Is to Improve the Gross Profit Margin and Return Excess Cash to Shareholders and more

By | Daily Briefs, ESG

In today’s briefing:

  • The Solution Is to Improve the Gross Profit Margin and Return Excess Cash to Shareholders

The Solution Is to Improve the Gross Profit Margin and Return Excess Cash to Shareholders

By Aki Matsumoto

  • Since FY2022, the NP Margin and Equity Ratio have moved in parallel, indicating that the improvement in non-operating income and expenses has directly contributed to the increase in equity.
  • Over the past few years, while sales growth driven by passing on inflationary costs has gradually boosted operating profit, the improvement in the operating profit margin has been negligible.
  • To raise profit margins to a level that can stand up to comparisons with companies in other countries, create products with high gross profit margins to increase cash flow.

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Sep 15
0
Smartkarma The Investment Intelligence Platform

Daily Brief ESG: Infinitt Healthcare: Announces Dividend Amount of 65 Bn Won for 3Q26 to 2Q27 (24% of Market Cap) and more

By | Daily Briefs, ESG

In today’s briefing:

  • Infinitt Healthcare: Announces Dividend Amount of 65 Bn Won for 3Q26 to 2Q27 (24% of Market Cap)

Infinitt Healthcare: Announces Dividend Amount of 65 Bn Won for 3Q26 to 2Q27 (24% of Market Cap)

By Douglas Kim

  • Infinitt Healthcare (071200 KS) announced a major dividend program of providing 65.4 billion won in dividends to shareholders from 3Q 2026 to 2Q 2027.
  • Given the company’s current market cap of 276 billion won, the dividend amount of 65.4 billion won represents 24% of its market cap.
  • The company has a strong balance sheet. Net cash was 212 billion won at the end of 2Q 2026, representing 79% of market cap.

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Sep 14
0
Smartkarma The Investment Intelligence Platform

Daily Brief ESG: Will This Revision to the Corporate Governance Code Be the Third Time’s the Charm? and more

By | Daily Briefs, ESG

In today’s briefing:

  • Will This Revision to the Corporate Governance Code Be the Third Time’s the Charm?

Will This Revision to the Corporate Governance Code Be the Third Time’s the Charm?

By Aki Matsumoto

  • There is certainly concern that, even with this revision, many companies cannot escape the process of simply checking off items to be achieved in accordance with the guidelines for interpretation.
  • Even with this latest revision to corporate governance, there is no significant difference from the approach in which regulators have been dictating even the minutest details.
  • A lack of understanding of fiduciary duties is a factor contributing to poor profitability among Japanese companies. Has this revision to the Code managed to breathe life into the framework?

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Sep 12
0
Smartkarma The Investment Intelligence Platform

Daily Brief ESG: Will They Keep Requesting a Reduction in the Minimum Investment Amount from Now On? and more

By | Daily Briefs, ESG

In today’s briefing:

  • Will They Keep Requesting a Reduction in the Minimum Investment Amount from Now On?

Will They Keep Requesting a Reduction in the Minimum Investment Amount from Now On?

By Aki Matsumoto

  • As expectations are growing for individual investors to serve as “stable shareholders,” the trend of lowering minimum trading unit is beginning to spread even to companies with high stock prices.
  • The 2001 amendment to the Commercial Code, which authorized the current minimum trading unit system, neglects the rights of shareholders holding less than the minimum trading unit.
  • The issue of wealth inequality can no longer be ignored. To prevent social instability, individuals with limited assets should be given opportunities to invest, even in smaller amounts.

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Sep 11
0
Smartkarma The Investment Intelligence Platform

Daily Brief ESG: Simply Aiming to Reduce Cash on Hand Is Dangerous—a Shift in Mindset Is Needed and more

By | Daily Briefs, ESG

In today’s briefing:

  • Simply Aiming to Reduce Cash on Hand Is Dangerous—a Shift in Mindset Is Needed

Simply Aiming to Reduce Cash on Hand Is Dangerous—a Shift in Mindset Is Needed

By Aki Matsumoto

  • When shareholders have a certain degree of influence through voting rights, management should be expected to conduct operations with discipline and accountability through dialogue with shareholders.
  • Simply aiming to reduce cash reserves is risky. The problem with Japanese companies is a lack of awareness that mission is to maximize shareholder interest and sustainably grow corporate value.
  • This revision to the Corporate Governance Code may have given investors mixed signals regarding the ongoing formalization—and potential regression—of corporate governance at Japanese companies.

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