Suzuki remains in JPX Prime 150 Index for fourth consecutive year
Suzuki Motor Corporation has stayed a constituent of the JPX Prime 150 Index for a fourth straight year, keeping its place among Tokyo-listed companies judged to be creating value.
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- 2023
- 1x
What Happened
Suzuki Motor Corporation has remained a constituent of the JPX Prime 150 Index for the fourth consecutive year. The index is calculated and published by JPX Market Innovation & Research, Inc. It was launched in 2023 and is composed of stocks selected from among the top-ranked companies listed on the Tokyo Stock Exchange Prime Market by market capitalization.
- It consists of companies regarded as representative Japanese companies that are estimated to create value.
- Value creation is judged on two measures: capital profitability, based on financial performance, and market valuation, which incorporates future-oriented and non-financial information.
- Capital profitability is measured using the Equity Spread, the difference between ROE (return on equity) and the cost of equity, which represents investors' expected return.
- Market valuation is measured using the Price-to-Book Ratio (PBR), calculated by dividing a company's share price by its BPS (Book Value per Share).
- Equity spread becomes positive when ROE exceeds the cost of equity, the return expected by investors.
- PBR exceeds 1x when the stock price exceeds the BPS.
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The index was launched in 2023, so Suzuki has been included in every year of its existence.
To achieve the goals of its Mid-Term Management Plan "By Your Side," Suzuki says it is promoting initiatives to enhance corporate value through sustainable growth. The company says it will stay close to customers and society and pursue its vision of becoming an infrastructure mobility closely connected with people's lives. It adds that it will continue to grow together with its stakeholders.
Why this matters
The JPX Prime 150 Index is a curated list of companies considered representative of Japan that are estimated to create value, judged on capital profitability and market valuation. A fourth consecutive year of inclusion means Suzuki keeps meeting those criteria, which matters to the investors who track the index and to the company's corporate standing in Japan.
Terms in This Story
- ROE (return on equity)
- A measure of profitability calculated as profit relative to shareholders' equity.
- Equity Spread
- The difference between a company's return on equity and the cost of equity, which is the return investors expect.
- PBR (Price-to-Book Ratio)
- A valuation ratio calculated by dividing a company's share price by its book value per share.
- Market capitalization
- The total market value of a company's shares.
Summarised from the linked release; details can be imperfect — always verify against the original source.