Our proposal in previous dialogues
The analysis of Asanuma’s EV/EBITDA shows that low financial leverage leads to low EV/EBITDA. Financial leverage is defined as 1 + (interest-bearing debt after deduction of cash equivalent) / market capitalisation.
Comparison between EV/EBITDA & financial leverage
（Source：QUICK ASTRA MANAGER, as of end of March 2019）
(Note：The figure of “Construction industry” is the arithmetic average of 51 companies which NIKKEI NEEDS defines as general contractors）
Our proposal in the dialogue
For the improvement of the valuation of Asanuma, it is required to improve capital efficiency and increase financial leverage. Asanuma should consider options to improve its low financial leverage such as return to shareholders, business investment for capital expenditure and R&D, and/or acquisitions funded by borrowings. If there is no appropriate candidate for acquisitions, it is effective for improvement of EV/EBITDA to increase its financial leverage through return to shareholders such as share buyback.
We have already proposed abovementioned options in our dialogue with Asanuma. Following is a part of our presentation materials regarding our proposals.