Foster Electric, the Tokyo-listed maker of automotive speakers, is scrapping the mid-term plan it published in November 2024 and starting over under pressure from a shareholder that now sits on its board. Axium Capital Pte. Ltd, a Singapore-based activist fund manager, holds about 25% of Foster Electric's voting rights. Its CEO and chief investment officer, Yasuto Kadota, joined Foster Electric's board as an outside director after shareholders approved the appointment at the June 25 annual meeting. A project team code-named "North Star" has been meeting since July 1 and is due to publish the replacement plan around November 2026.
The numbers explain the pressure. Foster Electric's operating margin was 5.7% in the year to March 2025, and return on equity was 7.7%, short of the 8% target the existing plan had already set. The company has also been sitting on ¥11.7bn of net cash, a position Axium wants it to unwind through investment or bigger payouts. Shareholder returns currently run at a 50% payout ratio and a 4% dividend-on-equity ratio; Foster Electric says both are now under review for expansion.
Foster Electric holds the top position in automotive speakers worldwide, with 25% to 30% of unit volume by its own estimate, in a market it says is growing roughly 10% a year. That scale is the leverage point: the case for change is that a supplier this dominant should not be posting sub-target returns while holding idle cash.
Foster Electric has not disclosed specific numerical targets for the new plan, and it says the effect on results for the year ending March 2027 is still under review. When North Star lands in November, it will be the first mid-term plan Foster Electric has written with an activist investor's own representative already on the board.