The status quo of stable dividends and sound financial base is not an adequate strategy. The obvious way to reverse value destruction is to sell down/distribute its stake in Hulic and return cash to shareholders.
Underneath Teikoku’s inefficient balance sheet hides a phenomenally high-quality business. Because of the capital light model, Teikoku could achieve a substantially higher ROE. Matching the capital efficiency of the average Japanese company, Teikoku could generate a ROE of 20+%. If conducted through a buyback, Teikoku’s share price could increase by +120%.
Also available in: