Daily Brief Consumer: Asahi Broadcasting, Tokyo Stock Exchange Tokyo Price Index Topix, Wynn Macau Ltd and more

• Over the last 5 years, share prices of major terrestrial TV broadcasters have substantially underperformed TOPIX, in large part due to the unprecedented, challenging environment as annual data by Dentsu showed total internet advertising expenditures exceeded total television media advertising expenditures in 2019 for the first time ever, and the annual MIC survey on average time spent using main media showed internet usage time exceeded TV real-time viewing in 2020.
• However, this underperformance trend has begun to change in 2023, as the stock market begins to discount the potential to commercialize the IP value of broadcaster content libraries.
• In February, USEN-NEXT HOLDINGS announced plans to acquire Premium PlatformJapan, Inc. (PPJ), the operator of “Paravi” subscription video distribution service.

• Since a few companies include ROE and ROIC as KPIs in their mid-term management plans and present compelling measures, now is the time to promote shareholder returns in short-term measures.
• Companies that expect stock price to rise should ensure that they make progress on the issues that overseas investors are focused on (improving profitability, corporate governance, capital allocation and disclosures).
• Companies with foreign ownership in 30% range are expected to work on issues of interest to overseas investors, while companies with low foreign ownership take indifferent response to shareholder proposals.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Wynn Macau’s ESG as “Adequate”, in line with its Environmental, Social and Governance scores. Controversies are “Immaterial” and Disclosure is “Adequate”.