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.