Hello there, this is Yuya Shimizu, CIO of Hibiki Path Advisors. It’s been some time since I last shared my personal commentary, and I hope this message finds you well. I would like to share something with you which is a little different from Hibiki tradition.
Yesterday, we issued a public commentary of our shareholder proposals for JAPAN PURE CHEMICAL CO., LTD (the “Company”, or “JPC”), which is our largest holdings in the portfolio and our favorite company who has top market share on gold plating for semi-conductor connectors. By the way, today, we have just submitted a Large Shareholding Report, and our stake has increased by 1% which make our ownership at18.19% (or 19.10% in terms of voting rights excluding treasury shares). We are by far the largest owner of the company and we are becoming vocal.
We have submitted shareholder proposals to JPC at its AGM for three consecutive years since 2023. The contents of these proposals are outlined below in the table. Additionally, during the intervals of these shareholder proposals, we also publicly advocated for the implementation of bold and transformative corporate value enhancement strategies, including the option of taking the company private¹.
We have long engaged sincerely with JPC’s management since 2021, standing by their side over the years. However, this year marks a clear departure from our previous tone. We do not tolerate this mess any more since we believe that the management is destructing values for shareholders, especially the Honorary Chairman Watanabe, and CEO Kojima.
We are now taking a firm stand to protect the common interests of shareholders over the long term due to the management’s continued reluctance to confront the Company’s critical issues such as (i) worsening business performance, which has been further dragged down in recent years given the delays in, responding to renewed inflation after covid-19 and, also in asking for higher prices to customers accordingly to offset such rising costs, AND (ii) the fundamental issues related to Company’s balance sheet where nearly 80% of the assets are non-business related net cash and public securities!
We are raising voice to represent ALL shareholders, as well as to those who hope for JPC’s true corporate value maximization, and, of course, especially for those precious employees who are investing their future into the Company. Let us NOT ALLOW current management to spoil the value of the company and let us protect our future for JPC. We would love to hear your support and we are excited to work hard to build value for JPC together as the sole largest shareholder. Please stay tuned for our ongoing engagement with JPC!
¹ September 9th, 2024, “Request for Consideration of Privatization”
This post does not constitute a solicitation for an offer to acquire or recommend the purchase or sale of specific securities, or advice on investment, legal, tax, accounting, or any other matters. In the event of any discrepancy or conflict between the English and Japanese versions, unless otherwise noted, the meaning of the Japanese language version shall prevail unless otherwise expressly indicated.