Page 31 - Kirin Holdings Teaching Note

CSV and Maximisation of Corporate Value

In every sense Kirin Holdings is far from a stereotypical

company. It has displayed a desire to be the world leader in

CSV and is well on the road to achieving this through its

product development, marketing, branding and distributor

support and internal restructuring and staff engagement.

But, in order to prosecute CSV, it must maintain and grow its

corporate value.

The strategy Isozaki is following for maintaining corporate

value is first, developing profit growth from existing
businesses which leads to Operating Cash Flow which

allows investment for the creation of intangible value

(brand, R&D, digitisation, HR, and organisation) along with

investment for new products.

Second, balanced Investment Cash Flow based on asset

efficiency (including the reduction of cross shareholding).

This is founded on investment in the creation of intangible

value. Also, investment in the strengthening of supply

chains, facilities, etc.

Third, maintaining capital structure from Financing Cash

Flow meant achieving a stable dividend - 16MTBP 30% plus

of normalised EPS 40% rising to 40% plus of normalised EPS

by 2021. Also, growth investment will be based on

disciplined investments founded on the cost of capital.