Global ESG Strategy
Shareholder Proposals for Nippo’s 2024 Ordinary General Meeting of Shareholders ……
Press Release
Global ESG Strategy
June 1, 2024Global ESG Strategy’s Shareholder Proposals for Nippo’s 2024 Ordinary General Meeting of ShareholdersSeeking an Increased Dividend and Abolition of Takeover Prevention Measures, etc. in Order to Increase Corporate Value
[Image: https://prtimes.jp/i/135781/19/resize/d135781-19-1f428f8a42b620ba2c5e-0.png&s3=135781-19-dcb8ab201e1663177391928280c73da4-426×134.png ]
Full Press Release
https://prtimes.jp/a/?f=d135781-19-ec11a6334da720724984f5f1905e3b35.pdf Global ESG Strategy (“GES”) is an investment fund managed by Swiss-Asia Financial Services Pte Ltd (“SAFS”) that makes medium- to long-term investments from an ESG (Environment, Social, and
Governance) perspective, and as a responsible investor, its management policy is to support the achievement of improvements in medium- to long-term corporate value and shareholder value of Japanese listed companies through constructive dialogue, etc.In 2023, GES began investing in NIPPO LTD. (“Nippo”) or the “Company”, Securities Code: 9913), a company listed on the TSE Standard Market, and has been engaged with the Company since. As of March 31, 2024, the SAFS-managed fund holds approximately 10% of Nippo’s issued common shares, making it a substantial shareholder. As a result of repeated discussions with Nippo management regarding capital market dialogue, which is demanded of listed companies, and the importance of management that is conscious of capital cost and capital efficiency, GES has submitted the following four shareholder proposals (the “Proposals”) to Nippo for the ordinary general meeting of shareholders scheduled to be held in June 2024 for the purpose of improving capital efficiency, abolishing unnecessary takeover prevention measures, and promoting dialogue with shareholders.Agenda Item 1 (Proposal No. 5):
Appropriation of surplus (dividend of 163 yen per share for
FY2023)Agenda Item 2 (Proposal No. 6): Partial amendment of Articles of Incorporation (Policy on Dividend of Surplus; dividend policy of a 100% dividend payout ratio or 10%+ DOE for FY2024 and FY2025)Agenda Item 3 (Proposal No. 4): Abolition of takeover prevention
measuresAgenda Item 4 (Proposal No. 7): Partial amendment of Articles of Incorporation (Handling by Directors of Interviews with
Shareholders)In addition , GES also issued materials outlining its opinions with respect to the details of the shareholder proposals, as well as the issues surrounding Nippo’s business valuation and financial policies and, by extension, how to maximize corporate value. These materials can be accessed [
https://prtimes.jp/a/?f=d135781-19-a34ab43e660542c1c71ae4f20e092eb3.pdf ].The materials detail, among other things, the fact that (i) although Nippo is valued comparably to similar companies in terms of PER and PBR (as a result of Nippo’s net cash and deposit holdings reducing its corporate value), it has the lowest level of EV/EBITDA although having the highest profit margin in the industry; and (ii) Nippo maintains takeover prevention measures that can easily be operated arbitrarily by management, and function to increase the lack of transparency for the purchase and sale of company shares , such as not being finalized until seeking a judicial ruling even when triggered, and are easily disliked by investors. To resolve these issues, GES has proposed proactive investment and business development, enhanced dialogue with shareholders, the abolition of takeover prevention measures, and large -scale shareholder returns.By taking measures, including the adoption of these shareholder proposals, if the net asset distribution rate were 10% and the dividend yield around 3.0%, Nippo’s share price would increase to approximately 5,450 yen (approximately 2.5x the share price as of May 31, 2024).Contact: globalesg@swissasia-group.com About Global ESG Strategy
Global ESG Strategy (“GES”), an investment fund that is managed by SAFS, makes medium- to long-term investments from an ESG (Environment, Social and Governance) perspective, and its policy is to promote improvements on enterprise value and shareholder value of investee companies through constructive dialogue with investee companies and other means.
About Swiss-Asia Financial Services
SAFS was founded in 2004, and is a Singapore based investment management company that holds a Capital Markets Services (CMS) License under the Singapore Securities and Futures Act (SFA).
More details about this release:
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