Category

ESG

Jul 18
0
Smartkarma The Investment Intelligence Platform

Daily Brief ESG: Old Chang Kee: A Snack Food Powerhouse and more

By | Daily Briefs, ESG

In today’s briefing:

  • Old Chang Kee: A Snack Food Powerhouse
  • Stricter Voting Guideline by Domestic Investors Will Push Managers to Return to Basics of Management

Old Chang Kee: A Snack Food Powerhouse

By Tan Yee Peng

  • Corporate Monitor Limited (CML) is initiating its research on Old Chang Kee (“OCK”), which sells an assortment of snack foods including curry puffs, seafood favourites, and chicken delights.

  • The curry puff specialist has steadily grown its annual revenue past the S$100 million mark, while net profit also grew in tandem to close to S$10 million level for fiscal 2026 (FY2026).

  • OCK achieved this despite seeing its total number of Singapore outlets stabilise at 82, suggesting that the Company was increasing its sales per outlet.

Stricter Voting Guideline by Domestic Investors Will Push Managers to Return to Basics of Management

By Aki Matsumoto

  • From the perspective of voting criteria used by institutional investors, the 8% threshold for three-year average ROE still seems to be slightly too high as a hurdle for smaller-cap companies.
  • Rather than being hindered in improving ROE by policy-held shares, the more serious problem is the risk that management won’t act in the best interests of shareholders, shielded by cross-shareholdings.
  • It’s not “TSE’s request” or Corporate Governance Code that will prompt management to change their ways and begin taking these issues seriously; only proxy voting can change management’s mindset.

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Jul 16
0
Smartkarma The Investment Intelligence Platform

Daily Brief ESG: The Reason for No Improvement in ROE Was that the past 3 Years Lacked a Shareholder Perspective and more

By | Daily Briefs, ESG

In today’s briefing:

  • The Reason for No Improvement in ROE Was that the past 3 Years Lacked a Shareholder Perspective

The Reason for No Improvement in ROE Was that the past 3 Years Lacked a Shareholder Perspective

By Aki Matsumoto

  • Given that the simple average ROE is 7.9%, more companies have profitability below their cost of capital. It’s overly optimistic to assume that these companies could immediately improve their profitability.
  • Regardless of whether the company discloses information in response to requests, it should be held accountable for whether it is implementing measures to create value.
  • Without a shareholder perspective in corporate management, the disclosed measures will not serve the interests of shareholders but will merely be intended to comply with the Tokyo Stock Exchange’s requirements.

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Jul 14
0
Smartkarma The Investment Intelligence Platform

Daily Brief ESG: Won’t Companies Fall into the Trap of Formalism when Amending Laws Just to Build a Track Record? and more

By | Daily Briefs, ESG

In today’s briefing:

  • Won’t Companies Fall into the Trap of Formalism when Amending Laws Just to Build a Track Record?

Won’t Companies Fall into the Trap of Formalism when Amending Laws Just to Build a Track Record?

By Aki Matsumoto

  • Legislative amendments are planned to allow the board of directors to override decisions made by the statutory nomination committee if a majority of the board consists of outside directors.
  • If the Board of Directors can amend a director nomination proposal decided by an independent statutory nomination committee, how does this differ from the current system of voluntary nomination committees?
  • The starting point is for outside directors and executive directors to thoroughly discuss, at board meetings, what kind of skills and backgrounds the company needs in its personnel.

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Jul 12
0
Smartkarma The Investment Intelligence Platform

Daily Brief ESG: Ten Years Have Passed Without Companies Truly Understanding the Essence of Corporate Governance and more

By | Daily Briefs, ESG

In today’s briefing:

  • Ten Years Have Passed Without Companies Truly Understanding the Essence of Corporate Governance

Ten Years Have Passed Without Companies Truly Understanding the Essence of Corporate Governance

By Aki Matsumoto

  • It seems it will take a little longer than two years for Japanese companies to actually start making changes, given the direct link between corporate governance and return on capital.
  • One reason why corporate governance code—set at an achievable level if companies stretch a little—did not bring about any decisive changes in companies or their boards of directors is that…
  • It appears that many companies in Japan are failing to both fulfill their fiduciary duties by implementing growth strategies and meet their accountability obligations.

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Jul 11
0
Smartkarma The Investment Intelligence Platform

Daily Brief ESG: History Shows that Unique Ideas Emerge when Overcoming Harsh External Environments and more

By | Daily Briefs, ESG

In today’s briefing:

  • History Shows that Unique Ideas Emerge when Overcoming Harsh External Environments

History Shows that Unique Ideas Emerge when Overcoming Harsh External Environments

By Aki Matsumoto

  • METI’s “cash should be concentrated on businesses with high capital efficiency, while businesses with low capital efficiency should be considered for sale to others” makes reviewing “parent-subsidiary listings” top priority.
  • As companies became accustomed to increasing profits without creating products that added value, they were increasingly reluctant to make risky investments, resulting in cash piling up in bank deposits.
  • Japanese companies often seem to prefer doling out shareholder returns in small increments because they find it a hassle to explain their decisions directly to shareholders.

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Jul 10
0
Smartkarma The Investment Intelligence Platform

Daily Brief ESG: SATS Ltd Kudos for Flying High and more

By | Daily Briefs, ESG

In today’s briefing:

  • SATS Ltd Kudos for Flying High

SATS Ltd Kudos for Flying High

By Tan Yee Peng

  • Since the acquisition of WFS 3 years ago, SATS has delivered consecutive years of growth in revenue and earnings.
  • In addition, margins, return on equity (ROE) and leverage have also improved.
  • The company is making real progress in meeting or exceeding the very comprehensive set of targets it set for FY2029. 

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Jul 08
0

Daily Brief ESG: How Much Longer Can This Policy of Handing Out Subsidies—designed to Resist Social Change—continue? and more

By | Daily Briefs, ESG

In today’s briefing:

  • How Much Longer Can This Policy of Handing Out Subsidies—designed to Resist Social Change—continue?

How Much Longer Can This Policy of Handing Out Subsidies—designed to Resist Social Change—continue?

By Aki Matsumoto

  • With real household income failing to rise, the environment was far too harsh for women—who had traditionally been responsible for childcare and housework—to balance these duties with their careers.
  • It’s clear that subsidy policies designed merely to create the appearance of action—and to disburse money—have failed to address the problems of declining birthrate, aging population, and population decline.
  • The same applies to corporate governance. Simply “improving” formal practices is not enough; unless management aligns with the diverse needs of consumers, it cannot create value.

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Jul 06
0

Daily Brief ESG: Can the Tokyo Stock Exchange’s “Growth Market Reform” Really Bring About Change? and more

By | Daily Briefs, ESG

In today’s briefing:

  • Can the Tokyo Stock Exchange’s “Growth Market Reform” Really Bring About Change?

Can the Tokyo Stock Exchange’s “Growth Market Reform” Really Bring About Change?

By Aki Matsumoto

  • The problem with Growth Market isn’t only that IPO became the goal, but also that this market environment felt comfortable for all stakeholders—founders, venture capitals, TSE, auditors, and individual investors.
  • TSE Growth Market has historically served as a stepping stone for companies, and many successful companies have subsequently moved to higher-tier markets. Market reforms should be considered on this premise.
  • Raising the listing criteria for Prime Market (traded shares market capitalization of over 10 billion yen) is likely to be a solution for both TSE Growth Market and Prime Market.

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Jul 05
0

Daily Brief ESG: The Days when Simply IPOs in Growth Market Were Opportunities to Exit and Secure Profits Are Over and more

By | Daily Briefs, ESG

In today’s briefing:

  • The Days when Simply IPOs in Growth Market Were Opportunities to Exit and Secure Profits Are Over

The Days when Simply IPOs in Growth Market Were Opportunities to Exit and Secure Profits Are Over

By Aki Matsumoto

  • The Tokyo Stock Exchange’s reforms to its Growth Market are having an impact on startups and venture capital firms. The era of mass IPOs has come to an end.
  • Not only did fewer IPOs occur last year, but the performance of IPO shares was also lackluster. Founders and venture capitals must consider exit strategies that don’t rely on IPOs.
  • Domestic asset owners are showing increasing interest in private asset investments. However, unlike the growing number of delisting cases, the scarcity of high-growth domestic startups presents a challenge.

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Jul 03
0

Daily Brief ESG: The Way to Invigorate the Growth Market Is to Raise the Listing Standards for the Prime Market and more

By | Daily Briefs, ESG

In today’s briefing:

  • The Way to Invigorate the Growth Market Is to Raise the Listing Standards for the Prime Market

The Way to Invigorate the Growth Market Is to Raise the Listing Standards for the Prime Market

By Aki Matsumoto

  • There is no point in companies that meet or exceed the Prime Market listing criteria (market capitalization of 10 billion yen) choosing the Growth Market.
  • If fewer small market capitalizations IPOs list, retail investors will lose interest in Growth Market, and few institutional investors will invest in small capitalization stocks with below 10 billion yen.
  • If the listing criteria for Prime Market are raised, high growth companies will remain on Growth Market until they reach that scale, allowing both individual and institutional investors to invest.

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