Category

ESG

Feb 26
0

Daily Brief ESG: Pre-AGM Filling of Annual Securities Reports Is Plus and more

By | Daily Briefs, ESG

In today’s briefing:

  • Pre-AGM Filling of Annual Securities Reports Is Plus, but May Take Long Before More Companies Do So

Pre-AGM Filling of Annual Securities Reports Is Plus, but May Take Long Before More Companies Do So

By Aki Matsumoto

  • 42 companies submitted their annual securities reports by the business day before AGM date, and most of them submitted their reports immediately before AGM, such as the day before AGM.
  • If the record date is moved forward from fiscal year-end, the problem of administrative burden will be solved. English-disclosure in annual securities reports will increase, and engagement will be positive.
  • For companies with a record date in their articles of incorporation, changing the record date would require general shareholders’ meeting, but only a few shareholders would oppose the change.

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Feb 24
0

Daily Brief ESG: Effort Goals Are Cozy for Both the Government and the Company and more

By | Daily Briefs, ESG

In today’s briefing:

  • Effort Goals Are Cozy for Both the Government and the Company

Effort Goals Are Cozy for Both the Government and the Company

By Aki Matsumoto

  • The cause of the lower female managerial positions behind gender wage gap is clear, but even proposed amendment to the Act seem to be a detour to solve the problem.
  • What hasn’t worked 40 years after the Equal Employment Opportunity Law is that there’re no penalties and the environment has always been one in which it’s permissible not to achieve.
  • Effort goals are cozy for both the government, which can feel sense of doing by launching effort goals, and companies that will not be blamed if they don’t achieve them.

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Feb 22
0

Daily Brief ESG: Not Promptly Retiring Treasury Stock Has Increased the Market Cap of Japanese-Style Calculations and more

By | Daily Briefs, ESG

In today’s briefing:

  • Not Promptly Retiring Treasury Stock Has Increased the Market Cap of Japanese-Style Calculations

Not Promptly Retiring Treasury Stock Has Increased the Market Cap of Japanese-Style Calculations

By Aki Matsumoto

  • The fact that few companies promptly retire treasury stock is the reason for the large gap between market capitalization including treasury stock and market capitalization calculated without including treasury stock.
  • It’s odd that EV/EBITDA of a company will be smaller after cancelling treasury shares than before, but this shouldn’t be too much trouble for institutional investors who analyze it closely.
  • Although this gap may widen for more companies as more cross-shareholdings will be bought back with treasury stock, the increase in share repurchases is a favorable development.

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Feb 21
0

Daily Brief ESG: M&As Due to Restructuring of Business Portfolios Have Finally Begun to Increase and more

By | Daily Briefs, ESG

In today’s briefing:

  • M&As Due to Restructuring of Business Portfolios Have Finally Begun to Increase

M&As Due to Restructuring of Business Portfolios Have Finally Begun to Increase

By Aki Matsumoto

  • Listed subsidiaries and affiliates are now required by the TSE to disclose their basic thoughts on their business portfolio strategy and the rationale for being listed.
  • M&A is expected because Japanese companies have not taken effective steps to expand their corporate value as cash on hand is building up and ROE is sluggish.
  • M&A is likely to be mostly conducted by domestic companies or investment funds as a result of industry restructuring and business portfolio restructuring in Japan.

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Feb 18
0

Daily Brief ESG: Going Private Is Not a Problem for a Special Company and more

By | Daily Briefs, ESG

In today’s briefing:

  • Going Private Is Not a Problem for a Special Company, but a Common Problem for All Listed Companies

Going Private Is Not a Problem for a Special Company, but a Common Problem for All Listed Companies

By Aki Matsumoto

  • While the homework imposed on companies has been increasing year by year, TSE’s market restructuring and “request to raise P/B” have made companies directly aware of the cost of listing.
  • MBO is a company’s choice to go private as a result of the cost of maintaining a public listing. Many companies have yet to reach this conclusion.
  • The conversion of listed subsidiaries into wholly owned subsidiaries is a conclusion that has finally been reached; 230 listed subsidiaries will have to come to some conclusion eventually.

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Feb 16
0

Daily Brief ESG: Companies Should Consider All Options and more

By | Daily Briefs, ESG

In today’s briefing:

  • Companies Should Consider All Options, Not Just Maintaining Their Listing

Companies Should Consider All Options, Not Just Maintaining Their Listing

By Aki Matsumoto

  • Besides not showing concrete measures to increase corporate value, the feasibility of the plan and the valuation at that time are often not verified, so disclosures that don’t add up.
  • Listed subsidiaries and equity method affiliates account for 31.8% of all listed companies. The company is still in the process of restructuring its business portfolio.
  • The growth of each company’s corporate value and stock market capitalization will be determined by how quickly issues that have not been initiated so far are resolved.

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Feb 14
0

Daily Brief ESG: Companies with More Cash on Hand Are Expected to Use Cross-Shareholdings to Repurchase Shares and more

By | Daily Briefs, ESG

In today’s briefing:

  • Companies with More Cash on Hand Are Expected to Use Cross-Shareholdings to Repurchase Shares

Companies with More Cash on Hand Are Expected to Use Cross-Shareholdings to Repurchase Shares

By Aki Matsumoto

  • Stock sale allows brokers to pass on to the company the attraction of being able to diversify its shareholders, and the cross-shareholding sales scheme allows them to obtain higher commissions.
  • One of the solutions that companies have come up with in the absence of improved return on capital is to reduce their policy shareholdings.
  • The use of share repurchases to buy back cross-shareholdings is a very good way to improve return on capital because it also reduces the amount of cash on hand.

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Feb 12
0

Daily Brief ESG: Activist Investors with Increased AUM Will Also Likely Target Larger Companies for Investment and more

By | Daily Briefs, ESG

In today’s briefing:

  • Activist Investors with Increased AUM Will Also Likely Target Larger Companies for Investment

Activist Investors with Increased AUM Will Also Likely Target Larger Companies for Investment

By Aki Matsumoto

  • Engagement begins only when there is a common understanding that “the management goal is to increase corporate value and shareholder interest.
  • Because of differences in the level of understanding among listed companies, not all companies are able to smoothly discuss solutions to management issues based on the same common understanding.
  • While ROA improved moderately, ROE improved slightly, indicating that more and more companies are committed to shareholder returns.

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Feb 11
0

Daily Brief ESG: The Strategy Is More Important than Whether the Mid-Term Business Plan and the Actual Are Blurred and more

By | Daily Briefs, ESG

In today’s briefing:

  • The Strategy Is More Important than Whether the Mid-Term Business Plan and the Actual Are Blurred

The Strategy Is More Important than Whether the Mid-Term Business Plan and the Actual Are Blurred

By Aki Matsumoto

  • Investors want to see if management can be entrusted with strategies to increase certainty of achieving plans, to build foundations for growth to expand corporate value, and to manage company.
  • The problem is that the disclosed contents of the mid-term management plan do not include necessary information, or the goals themselves are not what investors are looking for.
  • Before disclosing medium-term management plans, companies should estimate how much return on capital can be achieved by the plan and how much the corporate value and stock price will be.

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Feb 09
0

Daily Brief ESG: Investors Are Disappointed that ROE Is Not Improving and more

By | Daily Briefs, ESG

In today’s briefing:

  • Investors Are Disappointed that ROE Is Not Improving, yet Companies Can’t Disclose to Improve It

Investors Are Disappointed that ROE Is Not Improving, yet Companies Can’t Disclose to Improve It

By Aki Matsumoto

  • Companies with high stock price valuations are often characterized by high foreign shareholdings and high return on capital, and valuations cannot be raised simply by disclosure without improving profitability.
  • Companies that proactively disclosed to TSE requests were those with large market capitalization and high foreign ownership. They usually try to use their cash effectively for investment and shareholder returns.
  • Raising profit margin is the best way to improve capital profitability. It’s clear that challenge lies in restructuring the business portfolio and reorganizing the industry, which few companies could do.

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