Category

ESG

Sep 12
0

Daily Brief ESG: How Long Can a Model Where Profit Is Helped by Low Growth in Labor Cost and Depreciation Continue? and more

By | Daily Briefs, ESG

In today’s briefing:

  • How Long Can a Model Where Profit Is Helped by Low Growth in Labor Cost and Depreciation Continue?

How Long Can a Model Where Profit Is Helped by Low Growth in Labor Cost and Depreciation Continue?

By Aki Matsumoto

  • As lack of investment, including in human capital, is recognized as a factor behind the lack of growth, there’re plans to enhance disclosure of human capital in annual securities reports.
  • While labor share of large companies has fallen 1.3 ppt over the past year, OP margins increased only 0.3 ppt. It’s necessary to produce products with high gross profit margins.
  • Unable to make bold investments to create higher added-value products, companies instead use cash-flows for shareholders return without increasing cash reserves, resulting in high level of cash on hand.

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Sep 11
0

Daily Brief ESG: IDBI Bank’s Stakeholder Enrichment Programme Begins at the Top and more

By | Daily Briefs, ESG

In today’s briefing:

  • IDBI Bank’s Stakeholder Enrichment Programme Begins at the Top

IDBI Bank’s Stakeholder Enrichment Programme Begins at the Top

By Hemindra Hazari

  • Only very few senior executives have benefitted from privatisation of IDBI Bank
  • Hefty remueration increases given to CEO and two Deputy Managing Directors
  • Major improvement in the bank’s performance on account of government led injection of equity and bank’s share price has under-performed peers. 

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Sep 10
0

Daily Brief ESG: How Long Will the ‘Parent-Subsidiary Listing Prolongation Scheme’ Work? and more

By | Daily Briefs, ESG

In today’s briefing:

  • How Long Will the ‘Parent-Subsidiary Listing Prolongation Scheme’ Work?

How Long Will the ‘Parent-Subsidiary Listing Prolongation Scheme’ Work?

By Aki Matsumoto

  • Investors are disappointed that this is not put forward as a management strategy to resolve the parent-subsidiary listing, but the TSE believes that friendly disclosure is the solution.
  • It’s problematic for parent company’s shareholders to allow the parent’s resources to be used and to leave part of subsidiary’s profits outside the company for a long period of time.
  • For both the parent company and its subsidiaries, this is a lost opportunity to shift to management that can create more value. It’ill only delay the shift to value-creating management.

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Sep 08
0

Daily Brief ESG: Will Change to Annual Securities Report Improve in % of Female Managers and Gender Wage Gap? and more

By | Daily Briefs, ESG

In today’s briefing:

  • Will Change to Annual Securities Report Improve in % of Female Managers and Gender Wage Gap?

Will Change to Annual Securities Report Improve in % of Female Managers and Gender Wage Gap?

By Aki Matsumoto

  • Information regarding ％ of female managers and gender wage gap, which were previously required to be disclosed in annual securities reports, will move to the “Sustainability Philosophy and Initiatives” section.
  • This change in description will make issues such as % of female managers and gender wage gap more clear, thereby improving the inconsistencies with the company’s goals and policies.
  • Since disclosure of compensation incentives for employees other than board members will be required, this may encourage more companies to introduce compensation incentives for non-board members employees.

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Sep 06
0

Daily Brief ESG: Do Managers Who Give Small Amounts of Shareholder Return to Have Other Objectives? and more

By | Daily Briefs, ESG

In today’s briefing:

  • Do Managers Who Give Small Amounts of Shareholder Return to Have Other Objectives?

Do Managers Who Give Small Amounts of Shareholder Return to Have Other Objectives?

By Aki Matsumoto

  • If large companies that posted conservative outlook for FY3/2026 revise their guidance upwards amid weakening of Japanese Yen, there is an expectation that the decline in ROE will be smaller.
  • More companies are strengthening shareholder returns, but a few companies can maintain high enough ROE to create value by hiring large higher shareholder returns to have impact on ROE. 
  • In order to raise ROE to a level that creates value, it is necessary to make investments and shareholder returns to have much impact on ROE.

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Sep 04
0

Daily Brief ESG: What Is More Important in Promoting “Effective Investor Relations”? and more

By | Daily Briefs, ESG

In today’s briefing:

  • What Is More Important in Promoting “Effective Investor Relations”?

What Is More Important in Promoting “Effective Investor Relations”?

By Aki Matsumoto

  • Most companies appointed IR officers and hold some sort of briefing for analysts and investors, but briefings for overseas investors and explanations by the CEO himself are still insufficient.
  • It is valuable to have a direct Q&A session with the CEO about the feasibility of the business plan’s commitments and planned values, and the formulation process.
  • There are still many companies that are reluctant to hold meetings between independent outside directors and investors, and such companies are missing out on an opportunity to create value.

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Sep 03
0

Daily Brief ESG: Vicom Ltd: When Less Is More and more

By | Daily Briefs, ESG

In today’s briefing:

  • Vicom Ltd: When Less Is More

Vicom Ltd: When Less Is More

By Tan Yee Peng

  • What does a company do when its original business is producing good profitability, strong cashflow and return on equity (“ROE”), but no growth?

  • VICOM Ltd. (“VICOM”) is one such company.

  • It is a pioneer in Singapore’s Vehicle Inspection industry and has close to 73% market share, in an industry whose demand is guaranteed by government regulation that all vehicles have to be inspected at regular intervals.

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Sep 02
0

Daily Brief ESG: Continuing Parent-Subsidiary Listings Is Losing Value that Could Be Reliably Obtained and more

By | Daily Briefs, ESG

In today’s briefing:

  • Continuing Parent-Subsidiary Listings Is Losing Value that Could Be Reliably Obtained

Continuing Parent-Subsidiary Listings Is Losing Value that Could Be Reliably Obtained

By Aki Matsumoto

  • Listed subsidiaries focusing on core businesses have higher capital profitability and stock valuations than parent companies, while parent companies with diversified businesses have lower than listed subsidiaries in the both.
  • By converting a listed subsidiary with high capital profitability into a wholly owned subsidiary, or by selling a listed subsidiary with low capital profitability,  it could increase profitability of parent.
  • Even though this was expected, parent-subsidiary listings continue to this day (recently, more subsidiaries are listing on Standard Market), and the value that can be reliably obtained is being lost.

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Aug 30
0

Daily Brief ESG: The Environment Necessary for Disclosure of Annual Securities Report 3 Weeks Prior to AGMs Is… and more

By | Daily Briefs, ESG

In today’s briefing:

  • The Environment Necessary for Disclosure of Annual Securities Report 3 Weeks Prior to AGMs Is…

The Environment Necessary for Disclosure of Annual Securities Report 3 Weeks Prior to AGMs Is…

By Aki Matsumoto

  • There is a clear difference in awareness of pre-AGM disclosure in annual securities reports between companies that are targeted by overseas investors and those that are not.
  • Regarding the postponement of shareholder meetings, companies that have responded to investor needs are considering postponing their AGM dates, while most other companies are reluctant to do so.
  • In order for more companies to disclose their annual securities reports three weeks prior to AGMs and postpone their AGM dates, more companies need to be aware of this need.

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Aug 26
0

Daily Brief ESG: An Option for Implementing Serious Corporate Governance Reforms to Achieve Results Are… and more

By | Daily Briefs, ESG

In today’s briefing:

  • An Option for Implementing Serious Corporate Governance Reforms to Achieve Results Are…
  • Setting Goals Is Key to Achieving Corporate Governance Reform, Rather than the Means to Achieve Them

An Option for Implementing Serious Corporate Governance Reforms to Achieve Results Are…

By Aki Matsumoto

  • Companies that have been unable to achieve growth in corporate value and stock price increases need to shift their management thinking toward sustainable growth in corporate value.
  • When analyzing 1,793 companies in Metrical Universe by independent director ratio group, companies with an independent director ratio of 50% or more show excellent capital profitability and stock price valuation.
  • One option for implementing serious corporate governance reforms in the next revision of the Corporate Governance Code is to raise the standards to a level that cannot be easily manipulated.

Setting Goals Is Key to Achieving Corporate Governance Reform, Rather than the Means to Achieve Them

By Aki Matsumoto

  • Only a few companies fulfill the objectives of Corporate Governance Code. The reason why many fail to achieve them is simply because they do not aim for those goals.
  • The reason why many companies could not improve capital profitability can be explained by the fact that they had not made the sustainable expansion of corporate value a management goal.
  • Even if a company cannot achieve capital profitability that exceeds its cost of capital, it will not be delisted, so many companies may still be seeing through the TSE’s seriousness.

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