In today’s briefing:
- Canon (7751) – OK 2023 Results, Better Guidance, Bigger, Longer, Slower Buyback
- To Raise ROE, Breaking Away from Familiar Relationships and Creating Tension in Management Is Key
Canon (7751) – OK 2023 Results, Better Guidance, Bigger, Longer, Slower Buyback
- Canon Inc (7751 JP) announced 2023 full-year results on 30 January. Results were mixed. Revenues did OK. Net Profit underperformed expectations. 2024 Net Profit Guidance is 1% higher than consensus.
- Canon has a 15yr history of one kind of buyback. ¥50bn every time. 19 times in a row. Short (10 weeks max), sharp, executions (executed in 3-5 weeks). Every time.
- This time offers a new buyback. ¥100bn. Over the space of a year. That’s only 3% of ADV but the shareholder structure is different than you think it is.
To Raise ROE, Breaking Away from Familiar Relationships and Creating Tension in Management Is Key
- If the ISS ROE criteria, which seems somewhat slow, were to be resumed, many companies would still be below 5%. However, how many companies are feeling threatened?
- About 40% of the companies have large shareholders holding more than 20% of their shares, which is one reason why many companies do not feel a sense of threat.
- Domestic institutional investors should apply the Proxy Voting Guidelines more strictly to companies that do not make maximum efforts to increase their ROE.
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