In the Toyo Keizai article on July 4th, our “Proposal to Enhance Corporate Value” for Mandom Corporation (“Mandom” or “the Company”) — submitted this past March — was featured, along with some bold comments from our CIO, Yuya Shimizu.
The Company moved into overseas markets ahead of its peers and built an exceptionally strong presence in Southeast Asia — with Gatsby boasting nearly 100% brand recognition in Jakarta, Indonesia. That said, as the article points out, the Indonesian business has been running at a loss since 2021 and is now right in the middle of major structural reforms to turn things around.
Even with all the challenges, we’re confident the Company’s structural reforms are moving forward steadily. With President Nishimura leading the way, we’re absolutely confident that the drive to complete these reforms will accelerate sharply from here.
However, from our perspective, simply completing the structural reforms won’t be enough to truly enhance the Company’s corporate value. It’s crucial that they start deploying their excess cash more strategically and significantly improve their communication with investors. The article clearly highlights these points as follows.
・“Hibiki is pointing out that Mandom holds way too much cash. Mr. Shimizu said, “The Company has gone into full defense mode, and their dividends are pretty modest. We’re not saying they should distribute all their cash right now, but there was a time when their PBR was 3x. They really need to rethink their approach.”
・“On top of that, they need to seriously improve the quality of their IR materials. (redacted) Mr. Shimizu acknowledged this progress, saying, “The clarity of the IR materials is definitely getting better and easier for investors to understand.”
Regarding our proposal, the Company has communicated that they’ve “shared it in management meetings with all directors and have seriously considered it,” as also highlighted in the article. We find this to be very encouraging. As long as they keep taking bold and serious actions to grow value, we plan to continue encourage-type of engagement and support them through constructive dialogue. But if at any point they stop working hard to increase corporate value, we want to be clear: we won’t hesitate to exercise our shareholder rights to protect the common interests of all shareholders.
The article concludes with the following:
“Hibiki Path Advisors is firmly demanding that the Company achieve a challenging ROE target of 10% or higher, along with implementing significant capital reforms. While there is still a considerable gap, the Company’s efforts to increase transparency around financial targets and adopt a more constructive stance toward shareholders are starting to gain recognition from investors. As Mandom approaches its 100th anniversary, the key question now is whether the Company is truly committed to this unprecedented transformation.”
Now is a crucial moment for President Nishimura, in his fifth year leading the company. We sincerely expect him to take bold and decisive steps that will significantly boost Mandom’s corporate value.
We will stay fully engaged—with warmth and rigor—to support the Company in driving meaningful value creation.
We have taken the utmost care to ensure the accuracy of the data and information contained in this document at the time of its preparation. 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.