Independent Leading Corporate Governance Research

Metrical Inc

METRICAL INC. is an independent leading Corporate Governance research firm in Japan where Corporate Governance is increasingly recognized as an important element on corporate management in these days. Thus, CG research and solutions would become an essential component of global capital markets and play important to contribute to transparency of the markets and maximize shareholders’ value in Japan. 

METRICAL INC. provides Corporate Governance research and analysis including rating services, and  also offers investment research and IR services with solutions and customized profound research on CG and IR issues.

Is the Rise in TOPIX Anticipating the Actual Rise in ROE+DOE?

A Market with a Low Average ROE Favors Valuations for Companies with More Reliable Cash Flow

Maybe Management Is Finally Becoming Aware of the Cost of Listing

MBOs Would Open the Door to Investment for Companies that Weren’t Invested for Fear Of "Value Trap"

Meaningful If "P/B Below 1x" Is a Change of Mindset that Makes Managers Decide to Take an MBO

ROE Isn't Rising Because Managers Don't Think of the Value of the Company and Meaning of the Listing

Valuations Will Rise when the Management Changes To "Maximizing Shareholder Interest"

Executive Director, Metrical Inc

Aki Matsumoto

Executive Director

<ul>
<li>TSE data (April 2022-October 2023) shows that the correlation between TOPIX and ROE for prime market listed companies is extremely low, while the correlation between TOPIX and BPS is high.</li>
<li>It may be that a company that can sustainably increase cash flow and build up net assets is more trustworthy than a temporary increase in profits.</li>
<li>It's presumed that the company increased EPS to the extent that it did not reduce ROE and implemented a certain degree of shareholder return to slow the increase in BPS.</li>
</ul>


TSE data (April 2022-October 2023) shows that the correlation between TOPIX and ROE for prime market listed companies is extremely low, while the correlation between TOPIX and BPS is high.
It may be that a company that can sustainably increase cash flow and build up net assets is more trustworthy than a temporary increase in profits.
It's presumed that the company increased EPS to the extent that it did not reduce ROE and implemented a certain degree of shareholder return to slow the increase in BPS.


Determining the Cause of the Sluggish ROE Growth Is More Important for Future ROE Increases

TSE Tokyo Price Index TOPIX

Determining the Cause of the Sluggish ROE Growth Is More Important for Future ROE Increases