Independent Leading Corporate Governance Research

Metrical Inc

METRICAL INC. is an independent leading Corporate Governance research firm in Japan where Corporate Governance is increasingly recognized as an important element on corporate management in these days. Thus, CG research and solutions would become an essential component of global capital markets and play important to contribute to transparency of the markets and maximize shareholders’ value in Japan. 

METRICAL INC. provides Corporate Governance research and analysis including rating services, and  also offers investment research and IR services with solutions and customized profound research on CG and IR issues.

Higher Valuations Require Increased Return on Capital to Attract the Attention of Overseas Investors

Adopting DOE Is Step Forward, but Explanation Needed to Step into Strategic Allocation of Cash Flow

Determine Whether Shareholder Return Is a Temporary Measure or a Shift to Value-Creating Management

Improved Profitability to Attract Overseas Investors Key to Raise Valuation Even After TSE's Request

A Market with Small Value Stocks and Investment Opportunities Due to Delisting, Although Taking Time

Isn't It Not Strong Enough to Raise ROE by Higher Profit Margin Due to Escape from Deflation?

What Happens to the Effectiveness of TSE Requests when They Become Effort Obligations?

Executive Director, Metrical Inc

Aki Matsumoto

Executive Director

<ul>
<li>Even after the TSE's request for a P/B increase, it is not possible to raise valuations simply on the expectation of a P/B increase without improving profitability.</li>
<li>Most companies have cash allocation challenges. Companies with higher profitability will accumulate even more cash on hand, so higher level of shareholder return will further positively impact ROE and ROA.</li>
<li>Some of the companies that have reduced valuations include those with relatively high ROE and ROA, so there are small-cap stocks with reduced valuations and increased investment opportunities.</li>
</ul>


Even after the TSE's request for a P/B increase, it is not possible to raise valuations simply on the expectation of a P/B increase without improving profitability.
Most companies have cash allocation challenges. Companies with higher profitability will accumulate even more cash on hand, so higher level of shareholder return will further positively impact ROE and ROA.
Some of the companies that have reduced valuations include those with relatively high ROE and ROA, so there are small-cap stocks with reduced valuations and increased investment opportunities.


Increasing Profitability to Gain Support from Overseas Investors Is a Condition for Higher Valuation

TSE Tokyo Price Index TOPIX

Increasing Profitability to Gain Support from Overseas Investors Is a Condition for Higher Valuation