Hibiki Path Advisors (“We”), through our customer accounts, are a shareholder of Mandom Corporation (“Mandom”) and, recently on 31st March, we dispatched a letter “Proposal to Enhance Mandom Corporate Value” to the board of Mandom.
We have a preference to invest in companies that have experienced major crises in the past, yet still continue to thrive not losing the vigor in pursuit for growth. Mandom has overcome two major business crises since it has been established in 1927 but has continued to evolve, embodying the very principle that “Successes are seeded during crises”.
Mandom boasts a portfolio of powerful brands, including “GATSBY,” a highly recognized name, “aono,” which holds promising brand potential, and “PIXY” and “SILKYGIRL,” both of which enjoy overwhelming popularity in Southeast Asia. While many of its competitors have only recently intensified their efforts to expand in the Asian market, Mandom has been there for a long time, establishing a strong presence; for example, it is hard to find people who do not know GATSBY brand in Indonesia. Despite having these strengths, Mandom has yet to effectively communicate to investors its true value of its brands, as well as being so cash rich while its shareholder return policy being extremely conservative resulting in low ROE. It is exactly why Mandom stock price valuation looks to be in big discount to its peers.
Given these circumstances, as an engaging minority shareholder, we have outlined the following “Four Proposals” in this letter, as per below.
（１） Proactive brand-specific disclosure to firmly establish each brand’s narrative within the market
（２） Disclose Mandom’s differentiation strategy as a pioneer in Asia while competitors trying to enter the market
（３） Enhance the stock incentive frameworks by expanding eligibility and increasing grant amounts
（４） Establish a double-digit ROE goal supported by focused capital allocation efforts
We are hoping that, by publicly disclosing this proposal letter, not only the management but also all shareholders to think and openly discuss about what can be great for Mandom’s future.
Proposal to Enhance Mandom Corporate Value
This proposal letter does not constitute an offer, recommendation, or solicitation to buy or sell any security or enter into any other transaction. Hibiki does not purport to provide any investment, financial, legal, or other expert advice or recommendation in this document.