A new midterm plan and a turn in capital policy (2025)

Winning the power to earn, and having that power valued

At the centre of this decision is the question of how a general trading house that has raised its power to earn ties that power to the stock market’s valuation. Through twenty years of investment — Kasho, Tomen, CFAO, Eurus — Toyota Tsusho won earnings no longer swayed by Toyota’s new-car volume. What the leadership set as its next goal was to return those profits to shareholders through dividends and share buybacks, and to become a company measured by the capital market’s yardsticks of ROE and market value. Winning the power to earn and connecting that earned power to a valuation present themselves as separate tasks.

A turn in capital policy brings with it a review of the relationship with the Toyota group. Since reaching 15% ROE presupposes unwinding policy-held shares — including its stake in Toyota Industries — this is also a turn in which Toyota Tsusho puts its own hand to the cross-holdings long maintained inside the group. How far can a company that took shape as a group trader carry its independence at the level of its capital structure? As this is written the plan is three years from its close, and neither the reaching of its stated targets nor how far the cross-holdings will be unwound can yet be seen. Whether building shareholder value into a management goal bears fruit will, it seems, be answered by the execution still to come.