Upbest (335) – 2015, August 21 AGM

Home » Upbest (335) – 2015, August 21 AGM

Disclaimer: These are excerpts from student assignments conducted as part of a Corporate Finance class. The opinions represented do not necessarily agree with mine. I do not vouch for the quality of the recommendations or the accuracy of the numbers. Follow the recommendations on your own risk.

Click here for the proxy filing: http://www.upbest.com/Announcement/englishpdf/2015/LTN20150721409.pdf

Second #AGM for which my @LSEPKUSummerSch #CorpFin #students made voting recommendations: #Upbest #335

Most #students recommend voting for ordinary #managementproposals after stellar year with 82% increase in stock price #Upbest #335 #AGM #CorpFin

#Students are divided on #sharerepurchase proposal: good way to return cash given the extremely low leverage but shares expensive after run-up #Upbest #335 #AGM #CorpFin

#Students also concerned that blanket equity #issuance authorization of 20% too high – potentially too much dilution #Upbest #335 #AGM #CorpFin

#Upbest #335 #AGM all proposals passed, with some votes against the issuance authorization @LSEPKUSummerSch #CorpFin

Ordinary proposals

Proposal Excerpt of Student Recommendations
For Against
Election of Directors
  • Good performance, skilled directors, independent
  • Well-thought out diversity policy of board
  • Compensation policy seems fair, set out by independent committee
Auditor ratification
  • Auditors are reputable and have expertise with this company
  • Auditors are small and not internationally known
Mandate to issue and repurchase shares
  • Firm has very little leverage and strong cash position, can finance repurchase with cash
  • Good opportunity to return cash to shareholders
  • Despite increasing stock price firm seems still to be undervalued; good time to purchase shares
  • Given the low current leverage, there is more potential to return cash and/or replace equity with debt
  • Other students find under different assumptions that the stock may be overvalued now and shares too expensive. The recent stock run-up may be evidence of investor optimism rather than driven by fundamentals
  • The authorization of issuances up to 20% is too generous – 20% dilution is substantial
  • Rather than repurchasing shares, Upbest should invest in acquiring competitors which it can restructure to be as profitable as itself

Results: http://www.upbest.com/Announcement/englishpdf/2015/LTN20150821422.pdf

All resolutions passed

Most with 0% voted against

0.27% voted against the new issuance mandate

Shares up 5.26% after AGM