Net Cash Worth Half Its Market Cap, No Debt, Price-to-Book 0.84x: Testing Chuokeizai-sha's Case Against a Buyback

TOKYO — On November 11, 2026, the board of Chuokeizai-sha Holdings (TSE: 9476), a Tokyo publisher of accounting, business and law books, said it would oppose a shareholder proposal at its December 18 annual meeting. The proposal asks the company to buy back up to 440,000 of its own shares, 11.4% of shares outstanding, for no more than $3.16mn, by September 2027. The board gave four reasons. The company's annual results, released the same day, put a number against each of them.

All amounts in this note are in US dollars, converted from yen at ¥158.18 = US$1, the mid-market rate on November 10, 2026. The share price is the November 10 close of $6.14, the day before the board's opinion.

The proposal comes from one individual shareholder, whose name the company does not disclose. A similar proposal at the December 2024 meeting won 17.47% of the votes cast. This year the board's opinion runs to four paragraphs. It does not dispute any of the figures in the proposal, and it does not mention the company's cost of capital.

The board points to the share price. Price-to-book is still 0.84x

The board says the share price rose faster than the TSE Standard Market index in the year to September 2026. It did rise, by 37.9%. It started from 0.64 times book value.

Price-to-book uses book value per share at each fiscal year end (¥1,124.31 at September 30, 2025; ¥1,163.22 at September 30, 2026).

The board says it needs cash. Net cash is half the market cap

The board cites changes in logistics law and consolidation among publishers, and says it needs to keep a certain amount of cash. At September 30, 2026 the company held $12.27mn in cash, deposits and a money trust. During the year it repaid all $2.72mn of its borrowings, so all of it is net cash. A year earlier, with the borrowings still outstanding, net cash was $10.82mn.

• Net cash of $12.27mn equals 51.5% of the $23.80mn market cap.
• Take the net cash away and the market values the rest of the company at $11.53mn.
• Net cash covers 7.3 months of revenue at the year's run rate of $20.27mn.
• The proposed buyback, at its $3.16mn cap, would use 25.8% of net cash.

The board prefers stable dividends. They take a fifth of profit

The board says a buyback fixed by a shareholder resolution does not fit its policy of stable dividends. For the year to September 2026 it plans a dividend of ¥14 a share, up from ¥13, under a target of 1.3% of shareholders' equity.

• Total dividends: $0.37mn, or 20.8% of net income of $1.77mn.
• Retained earnings rose by $1.43mn in the year.

The board will decide on buybacks itself. It has bought none since the last proposal

The board says it will judge the need for buybacks flexibly, with an eye on the Standard Market listing criteria, the share price and liquidity. The company held 526,088 treasury shares at September 30, 2025 and the same number at September 30, 2026. The cash flow statements show no buyback in the year to September 2026 and a purchase of under $200 the year before.

A 3.5% cost of capital, set when the 10-year yield was 0.44%

On May 25, 2023, the company published its response to the Tokyo Stock Exchange's request for management that is conscious of the cost of capital and the share price. It put its cost of capital at about 3.5% and described its five-year average return on equity of 3.1% as roughly in line with it. The board's November 2026 opinion cites that response. It does not give a new estimate.

Since 2023 the bond yield has risen by 2.4 points. At today's yield, 3.5% would leave a margin of 0.68 points for the risk of owning the shares.

Cost of equity on beluuga.ai as of October 29, 2026: risk-free rate 2.824%, beta 0.69 (Publishing & Newspapers, relevered), equity risk premium 5.07%.

Policies against figures

The board answers the proposal with policies: stable dividends, cash held against an uncertain market, and buybacks at its own discretion. The company's own figures for the same year show half its market value held as net cash, a fifth of profit paid out, no shares bought back and a cost of capital last estimated when the 10-year government bond yielded 0.44%. Shareholders vote on December 18.

Sources: Chuokeizai-sha Holdings' public filings — annual results for the year to September 30, 2026 and the board's opinion on the shareholder proposal (both November 11, 2026), and its statement on cost of capital and price-to-book (May 25, 2023). Government bond yields: Ministry of Finance, Japan. Net cash is cash and deposits plus the money trust, less borrowings; investment securities are excluded. Market cap uses 3,872,376 shares outstanding, net of treasury shares including those held by the employee stock trust.

Prepared for client circulation · Source data: beluuga.ai