Daily BriefsJapan

Japan: Toshiba Tec, Premier Anti-Aging, Toyota Motor, Tokyo Stock Exchange Tokyo Price Index Topix and more

In today’s briefing:

  • Toshiba Tec – What You Should Probably Own Instead of Toshiba
  • Premier Anti-Aging Company Ageing Gracefully
  • Toyota – New Tundra Could Drive Double Digit OP Uplift
  • Japan’s Governance: Nomination Committee

Toshiba Tec – What You Should Probably Own Instead of Toshiba

By Mio Kato

We believe that Toshiba Tec could offer potential buyers a unique strategic asset that could easily be painted with any number of buzzwords – AI, big data, O2O, SaaS, DX etc. As such, we believe it offers a better play on Toshiba’s drive to please its activist shareholders than Toshiba itself.

Premier Anti-Aging Company Ageing Gracefully

By Oshadhi Kumarasiri

  • Premier Anti-Aging (4934 JP) is a relatively small Japanese cosmetics company with a limited number of brands that focuses on the skin cleansing segment. The company was listed on the TSE mothers section in October last year at an IPO price of ¥4,140 per share. After a relatively slow start, the company’s shares rallied 353% to ¥18,740 per share by July 2021. Shares are currently trading at ¥15,060 a piece, around 20% below the previous peak.

Toyota – New Tundra Could Drive Double Digit OP Uplift

By Mio Kato

We have been anticipating the full model change of the Tundra for about three years now. Toyota has not disappointed with its first major change since 2007 and we believe investors need to pay attention to reception of the new model as it could expand Toyota’s share within the largest segment of the US market.

Japan’s Governance: Nomination Committee

By Aki Matsumoto

Nominating committees are the most difficult issue in corporate governance practices. Since the election (nomination) of directors is a matter that involves personnel rights, and personnel is also a matter that has a great deal to do with compensation, the CEO is still deeply involved in this decision in many companies, especially in Japan where the board of directors is composed of many inside directors. It is not difficult to imagine that there would be resistance to delegating this decision-making authority to independent outside directors. To conclude, even if a nominating committee has been established, it is impossible to know whether the committee is functioning properly without a close examination of the substance of the committee. In order to check whether the nominating committee is functioning properly, the first point to be considered is whether the majority of the members of the committee are independent outside directors, and whether the committee is chaired by an independent outside director. However, a prerequisite for this is that the board of directors must be prepared to accept decisions on director nominations made through a transparent and objective process. This can be thought of as the board of directors itself being operated in a transparent and objective manner. As a measure of this, I would like to examine whether independent outside directors make up the majority of the board of directors. If the board of directors is dominated by inside directors, it is unclear whether the process of nominating directors is carried out in a transparent and objective manner, and it is also unclear whether the board of directors approves the proposed candidates for directors submitted by the nominating committee.

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