Reference News Network June 24 report, according to the Taiwan Yahoo奇摩 news network on June 23, the topic of board elections at department store leader Shin Kong Mitsukoshi has been continuously discussed. The Japanese major shareholder, Mitsui & Co., decided to divest half of its shares, and in March, the Japanese major shareholder of Taipei 101, Itochu Corporation, also handled most of its shares. Two major Japanese investors have successively chosen to withdraw from the department store sector, retaining only partial equity. Although the surface reasons differ, they are all considered to reflect a reduced expectation for the Taiwan market, akin to an alternative form of "voting with their feet."

The report said that Itochu originally held 37.2% of the equity in the Taipei 101 building, making it the largest single private shareholder. In early 2024, it transferred about 5% of its shares to its subsidiary Nishimatsu Taiwan Company, and this year it further disposed of half of its shares. Although it was interpreted as a lack of confidence in the future of Taipei 101 by Japanese investors, the released shares were taken over by public sector banks. Taipei 101 also emphasized that it will continue to leverage its brand influence, demonstrating stable profitability and operational capabilities.

Compared to Itochu acquiring the shares of Taipei 101 from the Din Tai Fung Group in 2018, Mitsui & Co. had been a partner of Shin Kong Mitsukoshi since its establishment, holding as high as 43% of the shares. This time, the share disposal to Xin Xin Capital, composed of members of the Shin Kong Wu family, is considered more indicative, showing that it does not want to get involved in the disputes within the Shin Kong Wu family anymore. This indicates that the internal conflict within the Shin Kong Wu family has caused more damage to Mitsui & Co. than the stable profits Shin Kong Mitsukoshi generates each year. In some ways, it also reflects an unfriendly investment environment.

The report said that, however, department store industry experts analyzed that Japan's economic trend has been weak in recent years, and post-pandemic recovery has been slow. Many large companies have felt pressure in their operations. Under this background, companies prefer to quickly "exit" overseas investments that have already generated returns, keeping more cash to cope with domestic economic changes.

In addition to investment profits, when Itochu sold its shares, the yen had depreciated significantly, with a depreciation of 30% compared to when it entered in 2018, resulting in considerable exchange gains. Meanwhile, the New Taiwan Dollar has appreciated significantly since May, and for Mitsui & Co., which sold its shares in mid-May, the exchange gains were even more impressive.

The report said that additionally, the uncertainty brought by tariff wars and exchange rates has made people hesitant to spend, and the consumption boom after the pandemic has ended. This year, physical department stores indeed face great challenges in operations.

Department store operators also said that now there is again talk about the tension between the two sides of the Taiwan Strait. For Japanese companies that focus on risk control, these factors combined should be the reasons leading Japanese investors to decide to exit at the right time.

Original: https://www.toutiao.com/article/7519378942726357519/

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