Shares in Japanese cosmetics and household products-maker Kao jumped on Thursday after activist investor Oasis Management called on the firm to improve its business, saying the stock has the potential to rise by more than 70% from recent levels.

Kao has ¡°significantly underperformed¡± its competitors in sales growth, margins, return on equity and stock performance, Oasis said in a statement released Thursday. Kao owns an ¡°impressive stable of brands¡± yet the management has failed to unleash the full potential by not prioritizing marketing or distribution to drive growth, it said.

Kao¡¯s management is seeking to increase shareholder value from a long-term perspective, the company said in a statement in response to Oasis¡¯s call, adding that the investor doesn¡¯t fully understand the structural reform that was indicated in its full-year results. Kao welcomes constructive engagement with all investors including Oasis, it said.

Activist investors have been stepping up their campaigns in Japan, as pressure from the government and institutional investors support their push. Shareholder proposals, which hit a peak last year, will probably reach a record when annual meetings pick up in the coming months.

If Kao focused on its cosmetics and health and beauty segments, and improved marketing, the stock price would exceed ?10,000, Oasis said. That would represent a 72% increase from Wednesday¡¯s close. Oasis is a long-term shareholder of Kao, it said, without providing the amount it owns.

Kao shares jumped as much as 7.3% to ?6,224 in Tokyo on Thursday, the most since Nov. 9.

¡°This will lead to an expectation that Kao will speed up in making changes,¡± said Naoki Fujiwara, chief fund manager at Shinkin Asset Management. ¡°Kao has always been an excellent company, focusing on profitability,¡± but its business in China and other factors have had an impact on its performance, he said. Oasis¡¯s move will likely push the company to move toward improving profitability, he said.

Kao shares have risen about 10% over the past year through Wednesday, compared with a 34% gain by the Topix index.

In February, Kao gave a full-year operating income outlook that missed analyst estimates. Its cosmetics business suffered in China following local reaction to the release of treated radioactive water from the troubled Fukushima No. 1 Nuclear Plant.