In today’s briefing:
- Rohm (6963 JP): Negative Scenario Discounted
- Challenge Is to Raise Governance and Return on Capital for More Companies Beyond Matching Numbers
Rohm (6963 JP): Negative Scenario Discounted
- Japanese semiconductor equipment stocks have started to drop back, but device maker Rohm is already down 25% year-to-date and down 43% from its 52-week high.
- Rohm’s operating profit fell 53% last fiscal year and management is guiding for a 68% decline in in FY Mar-25. Investment in power devices remains strong despite weak sales.
- 1H guidance is for an 80% year-on-year decline in operating profit on a 6% decline in sales. Buy into this weakness. Recovery should start in 2H.
Challenge Is to Raise Governance and Return on Capital for More Companies Beyond Matching Numbers
- The “30% female board member goal” appears to be more about matching numbers with results rather than discussing the positive impact of diversity on the board.
- Over the past year, corporate governance improved only modestly for all listed companies, but few that improved their corporate governance raised the percentages of female board members and independent directors.
- Given the strong influence between improvements in governance and return on capital and foreign ownership, it’s difficult for a company to transform itself without the reach of overseas investor engagement.
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