Category

ESG

Oct 01
0

Daily Brief ESG: Air France‑KLM (AF) SLBs and more

By | Daily Briefs, ESG

In today’s briefing:

  • Air France‑KLM (AF) SLBs, High Miss Risk Into 2026
  • Japanese Companies Aren’t Good at Adjusting Course or Withdrawing in Line with Environmental Changes

Air France‑KLM (AF) SLBs, High Miss Risk Into 2026

By Evan Campbell, CFA

  • High miss probability: Latest emissions intensity 920 gCO₂e per RTK (YE 2024) vs 851 target for 2025. A 7.5% one‑year cut after flat 2024. Base case miss and event-driven opportunity. 
  • Catalyst within months: The observation window ends YE 2025. Coupons adjust (up to +75bps) from May 2026 on the 2026s and over 2027-2028 on the 2028s, creating a tradable window. 
  • How to position: Own selected credit and optionality rather than step‑up carry. Trade around KPI disclosures and verification when the probability of a miss is priced before payments change. 

Japanese Companies Aren’t Good at Adjusting Course or Withdrawing in Line with Environmental Changes

By Aki Matsumoto

  • Even in parent-subsidiary listings, which form the core of business portfolio restructuring, some large companies have begun taking action, raising expectations for further improvements in capital profitability.
  • Companies that have businesses with low capital profitability often lack clear criteria for exiting those businesses, or even if they have established exit criteria, they aren’t actually applied in practice.
  • Some companies still believe they cannot withdraw because establishing clear criteria would create inconsistencies with their current low-return capital business, forcing someone to clarify where responsibility lies.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Sep 30
0

Daily Brief ESG: PTC India Financial Services Ltd- Governance Turmoil Resurfaces and more

By | Daily Briefs, ESG

In today’s briefing:

  • PTC India Financial Services Ltd- Governance Turmoil Resurfaces
  • Investors Are Less Interested in Companies that Generate Little Cash Despite Shareholder Returns

PTC India Financial Services Ltd- Governance Turmoil Resurfaces

By Nitin Mangal

  • PTC India Financial Services (PTCIF IN) faced a mass exit of Independent directors recently.
  • The IDs flagged compromising independence and constrained in upholding the highest standards of corporate governance as their reasons.
  • This once again brings back the governance issues under limelight, a situation the company is already familiar with.

Investors Are Less Interested in Companies that Generate Little Cash Despite Shareholder Returns

By Aki Matsumoto

  • The shift toward management that creates value through dialogue with overseas investors is evident in the relationship between foreign shareholding ratios, capital profitability, and stock price valuations.
  • There is significant correlation between cash reserves and ROA. ROA, which reflects the cash flow returns generated by a business, is considered to be closely related to stock price valuation.
  • Companies with high cash generation capabilities and large amounts of cash on hand are expected to invest in generating more cash flow and return cash to shareholders.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Sep 29
0

Daily Brief ESG: Behind % Rising Female Board Members and more

By | Daily Briefs, ESG

In today’s briefing:

  • Behind % Rising Female Board Members, How Many Companies Make Progress Reforming Their Boards?

Behind % Rising Female Board Members, How Many Companies Make Progress Reforming Their Boards?

By Aki Matsumoto

  • Amidst very modest improvements in corporate governance over the past few years, the percentage of female board members has steadily increased.
  • Even if the %of female board members rises, there’re concerns that it will be a repeat of governance reforms that have’t achieved to transform management into one that creates value.
  • Whether companies that step forward with diversity-conscious boards of directors can use this as a catalyst for management change, and promote female executive directors within companies, will be closely watched.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Sep 28
0

Daily Brief ESG: The Key to Revitalizing Existing TSE Growth Companies Is Whether They Can Expect Growth Through M&A and more

By | Daily Briefs, ESG

In today’s briefing:

  • The Key to Revitalizing Existing TSE Growth Companies Is Whether They Can Expect Growth Through M&A

The Key to Revitalizing Existing TSE Growth Companies Is Whether They Can Expect Growth Through M&A

By Aki Matsumoto

  • The reason why IPOs tend to become the goal is that many IPOs are conducted for purposes other than company growth after IPOs.
  • In order to correct the notion that “IPO is the goal,” there are expectations for the revitalization of the market for trading unlisted shares and M&A of unlisted companies.
  • With the entry of unlisted stock funds, trading in privately-held stocks will become active, and if M&A for growth and management changes take place, the quality of IPOs will improve.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Sep 26
0

Daily Brief ESG: Annual Securities Reports Are Legal Documents and more

By | Daily Briefs, ESG

In today’s briefing:

  • Annual Securities Reports Are Legal Documents, so They Carry More Significance than Other Documents

Annual Securities Reports Are Legal Documents, so They Carry More Significance than Other Documents

By Aki Matsumoto

  • Companies that responded that they disclosed their annual securities reports prior to the AGM in response to investor needs are considering postponing the timing of their shareholders’ meetings.
  • Annual securities reports are legal documents, and false statements are punishable by law, so the level of authenticity differs from other documents. It takes time to read them for AGM.
  • There needs to be an increase in the number of investors who carefully read annual securities reports and use them to make investment decisions.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Sep 24
0

Daily Brief ESG: Ultimately and more

By | Daily Briefs, ESG

In today’s briefing:

  • Ultimately, It Is the Power of Voting that Can Reform Management

Ultimately, It Is the Power of Voting that Can Reform Management

By Aki Matsumoto

  • Companies with low CEO approval ratings at AGMs are likely to implement measures that will be effective by the following year’s AGM, which is thought to affect stock price performance.
  • A low approval rate tends to mean that foreign shareholding ratio is high. Foreign investors invest in companies with potential to significantly increase corporate value if they can solve problems.
  • Many of the companies that currently enjoy superior returns on capital, stock valuations, and corporate governance practices have improved their management through the backdrop of high foreign ownership (voting power).

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Sep 20
0

Daily Brief ESG: Both Bond Investors and Stock Investors Are Focused on Future Cash Flows that a Company Will Produce and more

By | Daily Briefs, ESG

In today’s briefing:

  • Both Bond Investors and Stock Investors Are Focused on Future Cash Flows that a Company Will Produce

Both Bond Investors and Stock Investors Are Focused on Future Cash Flows that a Company Will Produce

By Aki Matsumoto

  • It’s true that measures to raise P/B that focus on strengthening shareholder returns are unpopular with investors, while excess cash on hand should be returned to shareholders under stagnated ROE.
  • Both bond and equity investors are focused on the future cash flow a company will generate, and increasing cash flow is consistent with the goals of a public company.
  • If a company can’t use cash reserves to increase corporate value, it should either return excess cash to shareholders or change to a manager that can use cash for growth.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Sep 18
0

Daily Brief ESG: As Role of Outside Directors Becomes More Important and more

By | Daily Briefs, ESG

In today’s briefing:

  • As Role of Outside Directors Becomes More Important, Is Effectiveness of BODs Improving Accordingly?

As Role of Outside Directors Becomes More Important, Is Effectiveness of BODs Improving Accordingly?

By Aki Matsumoto

  • Corporate Governance Code, which makes the appointment of outside directors mandatory, was introduced in the hope of restructuring corporate governance and restoring profitability.
  • We must explore why, as the role of outside directors expands and dependence on them grows, the challenges of profitability and rising stock prices remain far from being resolved.
  • It’s a good idea to have half of directors be independent outside directors. Companies with fewer than that should improve the skills of the entire BOD to increase their effectiveness.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


Sep 16
0

Daily Brief ESG: KRBL Ltd- Not Just Another Resignation and more

By | Daily Briefs, ESG

In today’s briefing:

  • KRBL Ltd- Not Just Another Resignation
  • Many Companies that Have Seen Their Founding Family’s Stake Decline but Retain CEO Have Challenges

KRBL Ltd- Not Just Another Resignation

By Nitin Mangal

  • Shares of KRBL Ltd (KRB IN) dropped as much as 12% intraday on September 15th, owing to resignation of Independent Director, Mr. Anil Kumar Chaudhary.
  • His letter highlights suppression of dissent, lack of transparency in decision-making, questionable receivable write-offs, and CSR mismanagement among several governance concerns currently at the company.
  • When triangulated with auditor qualifications, committee overlaps, CSR lapses, frequent Board/CS exits, and major write off, a pattern of weak checks and board oversight emerges.

Many Companies that Have Seen Their Founding Family’s Stake Decline but Retain CEO Have Challenges

By Aki Matsumoto

  • Companies competing in global market are often compared in profitability and practices with global competitors, so they would have moved to reduce cross-shareholdings earlier than companies focused on domestic market.
  • There is little improvement in capital profitability, but lower number of cross-held shares will reduce the number of companies whose proxy votings are influenced by cross-shareholdings, which will improve governance.
  • Companies that maintain top management despite decline in the founding family’s stake tend to be targets of activist investors because they have problems with both corporate governance and capital profitability.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free


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.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars
Sign Up for Free