Our recent proposals made to Kyokuto | 極東貿易株式会社 2020
極東貿易
If our proposals are approved and Kyokuto continues 100% payout ratio, the estimated share price is;
>JPY 3,000(*)
*Calculation based on dividend yield. Please find the detail of calculation in “our shareholder proposals”.

Our recent proposals made to Kyokuto

A reason for the low valuation is that Kyokuto does not utilize leverage and the equity ratio is high due to the accumulation of equity capital.
Kyokuto’s capital-to-asset ratio is higher than other companies in the wholesale trade sector which utilize more leverage in their business. Kyokuto needs to increase its low financial leverage.

Comparison of capital-to-asset ratio with sector average

(Date Source:QUICK ASTRA MANAGER)

In our dialogues with Kyokuto, we proposed to increase financial leverage and enhance shareholders’ return. Specifically, Kyokuto can borrow debt to increase its financial leverage as well as undertake share buybacks and/or a large increase in dividends to decrease excessive equity and improve valuations.

The below is an excerpt from the proposal made to Kyokuto before the establishment of the special shareholder incentive. Considering the purpose of the incentive is to maintain the number of shareholders (≒ number of shares in the market), we are now proposing a “100% payout ratio” instead of a “total return ratio of 100%” .

(Source :Strategic Capital presentation to Kyokuto )

  • 株式会社ストラテジックキャピタル
 

This website is for AGM in 2020. Please find our latest proposal in 2021 here.

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