Japan Specialist

Mark Chadwick

Over 20 years experience in equities and asset management in Asia and Japan. Qualified CFA with experience analyzing companies as a buy-side analyst. In-depth knowledge of company fundamental analysis, corporate governance and valuations.

Kyushu Railway - An Olive Branch to Fir Tree

JR Kyushu <a href="https://www.jrkyushu.co.jp/company/ir_eng/news/__icsFiles/afieldfile/2020/05/11/9142.Shareholder_Proposals.en.pdf" target="_blank" rel="noopener">announced</a> that it had received Shareholder Proposals from Fir Tree Capital Management (Fir Tree). It is a sign of the times that the brash <a href="https://www.abetterwayforjrk.com/presentation" target="_blank" rel="noopener">presentation</a> of yesteryear and demands for a sizeable cash return have disappeared. Despite the significantly more challenging <a href="https://www.jrkyushu.co.jp/company/ir_eng/news/__icsFiles/afieldfile/2020/05/12/9142.FY2019.4q.material.en.pdf" target="_blank" rel="noopener">business environment</a> and implications for cash flows, the need for "real" real estate skills and experience on the board has not disappeared. Neither has the valuation rationale underlying Fir Tree's investment. JR Kyushu scores well on our corporate governance screen. However, the company's top management is dominated by "rail" guys and we agree with Fir Tree that the board could benefit from a greater level of oversight and real estate know-how. In today's environment, with pressures on the balance sheet, that is even more true.

JR Kyushu announced that it had received Shareholder Proposals from Fir Tree Capital Management (Fir Tree). It is a sign of the times that the brash presentation of yesteryear and demands for a sizeable cash return have disappeared. Despite the significantly more challenging business environment and implications for cash flows, the need for "real" real estate skills and experience on the board has not disappeared. Neither has the valuation rationale underlying Fir Tree's investment. JR Kyushu scores well on our corporate governance screen. However, the company's top management is dominated by "rail" guys and we agree with Fir Tree that the board could benefit from a greater level of oversight and real estate know-how. In today's environment, with pressures on the balance sheet, that is even more true.  

Kyushu Railway

JR Kyushu (9142) - A Sign of the Times