Leopard Asset Management Urges Sun Corporation’s Shareholders to Hold Management Accountable for Their Failure to Achieve Their Own Stated Goals of Increasing Shareholder Value

Further information is available http://www.valueforsun.com/agm

TEL AVIV, Israel--(BUSINESS WIRE)--Leopard Asset Management Ltd. (“LAM”) advises various longstanding minority shareholders in Sun Corporation (stock code: 6736 JP). LAM urges Sun’s shareholders to hold management accountable for their failure to achieve their own stated goals of increasing shareholder value. On June 25, vote against Ryusuke Utsumi, CEO and his management team.

Since we raised concerns about the undervaluation of Sun in March 2024 and debunked Sun’s management push-back on our suggestion to distribute the shares of Cellebrite (NASDAQ:CLBT US) as a dividend to shareholders, fellow shareholders have reached out and expressed their frustration with management.

Sun’s value is derived from cash and securities holding, 47% holdings in Cellebrite and its entertainment and IT business. We believe, the fair value for Sun’s shares based on its liquid assets alone is in excess of ¥7,200, after accounting for deferred taxes. This compares to the current market price of ¥3,300. Based on the (lack of) actions of Sun’s management up to now, we believe they are not genuinely interested in closing this gap.

Between the launch of LAM’s campaign in March and management's release of the upcoming AGM agenda, Sun's share price appreciated by 23%, reaching an all-time high of ¥4,250 and adding approximately ¥19 billion to its market capitalization. During this period, the average daily trading volume increased by 160% compared to early 2024, exceeding an average of 80,000 shares per day. This surge reflects investors’ belief that management would address Sun's share price undervaluation. However, after the company published a “no-news” agenda for the June AGM, the share price plummeted by 19%, wiping out approximately ¥17 billion in shareholder value in three days. We believe this decline highlights shareholders’ lack of trust in Sun’s management will to resolve this undervaluation.

Sun’s management stated in November 2021 that it is “considering all possible measures to improve this situation [undervaluation]”. Then again, in reply to our engagement, management wrote in February 2024 ”We are considering various measures to enhance the SUN’s shareholder value (…)”.

We believe management has had ample time to drive change and realize the value of the company’s assets. Shareholders must hold management accountable by exercising their rights and decide:

• has this management been openly communicating its plan for the company and for its holding in Cellebrite, which accounts for more than double the market value of Sun?
• have they made any genuine effort to resolve this undervaluation?
• do they have any actionable plan for the liquid assets which comprise more than 70% of the balance sheet?
• are they the best leadership to grow Sun’s entertainment and IT business?

We call on shareholders to hold the board accountable for their lack of action and entrenchment.