Japanese Turnaround Situations, Short-Ideas, Azabu Research

Michael Allen

Japanese Turnaround Situations, Short-Ideas

Azabu Research

Azabu Research is a publishing and consulting firm focused on distressed equities in the Japanese market. We specialize in turnaround strategies, corporate combinations, divestitures, and restructuring.

Publisher of the Tokyo Turnaround Letter, which conducts the most thorough research possible of publicly available information, including forensic tests for fraudulent overstatement of assets and understatement of liabilities, as well as rigorous market and industry analysis to assess the underlying strengths of the company’s products or services, the appropriateness of the company’s turnaround strategy, and the skill of its current management team. The average length of a report exceeds 25 pages of text and tables, excluding any disclosures or executive summaries.

We have more than 30 years of experience in applying this process to distressed equities in Japan. Additionally, subscribers have free access to detailed, yet easily navigated earnings models for the target company as well as the top five comparable companies, and unlimited access to the analyst for follow-up questions.

Azabu Research also conducts be-spoke research on a project basis, and provides consulting services to companies looking to restructure, divest, make acquisitions, go public, or improve investor sentiment toward their stock.

Independent Research and Consulting Firm

Equity Bottom-Up

<ul>
<li>Dentsu’s problems are fixable, and tiny changes in cost assumptions swing operating profit massively. Consensus seems far too cautious.</li>
<li>The cleanup is real: headcount is down 6%, and 500 weak business lines have been shut or merged. Yen weakness shifts from headwind to profit accelerant.</li>
<li>After 2025’s brutal write-downs and with acquisitions frozen, RoE could surge into the high-teens and then stabilize above 20%, forcing a re-rating of the badly distressed equity.</li>
</ul>


Dentsu’s problems are fixable, and tiny changes in cost assumptions swing operating profit massively. Consensus seems far too cautious.
The cleanup is real: headcount is down 6%, and 500 weak business lines have been shut or merged. Yen weakness shifts from headwind to profit accelerant.
After 2025’s brutal write-downs and with acquisitions frozen, RoE could surge into the high-teens and then stabilize above 20%, forcing a re-rating of the badly distressed equity.


Dentsu (4324): Baby Steps Lead to Giant Improvements

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>The drop in <a href="https://www.smartkarma.com/entities/dentsu-inc" target="_blank" data-smartkarma-citation="entities:12434:1" rel="noopener">Dentsu Inc (4324 JP)</a>'s stock price over the last few months could lead to the deletion of the stock from a global index in August.</li>
<li>
<a href="https://www.smartkarma.com/entities/dentsu-inc" target="_blank" data-smartkarma-citation="entities:12434:1" rel="noopener">Dentsu Inc (4324 JP)</a> has underperformed its peers over the last year and trades cheaper than the average of its Advertising peers.</li>
<li>There is positioning in <a href="https://www.smartkarma.com/entities/dentsu-inc" target="_blank" data-smartkarma-citation="entities:12434:1" rel="noopener">Dentsu Inc (4324 JP)</a>, though it is likely to be smaller than the estimated passive selling. A relative selloff could be used to enter the stock.</li>
</ul>


The drop in Dentsu Inc (4324 JP)'s stock price over the last few months could lead to the deletion of the stock from a global index in August.

Dentsu Inc (4324 JP) has underperformed its peers over the last year and trades cheaper than the average of its Advertising peers.
There is positioning in Dentsu Inc (4324 JP), though it is likely to be smaller than the estimated passive selling. A relative selloff could be used to enter the stock.


Dentsu Group (4324 JP): Global Index Deletion Likely

Asia Real Estate News Tracker, Asia Real Estate Tracker

Asia Real Estate Tracker

Asia Real Estate News Tracker

Tracking developments across Asia's regional real estate markets

Thematic (Sector/Industry)

<ul><li>Brookfield plans to acquire the Dentsu Tokyo headquarters from Hulic for a total of $1.9 billion.</li><li>Gaw and GreenFort are considering the sale of their retirement living platform, Reside Communities.</li><li>Macquarie's UIB REIT has invested $158 million in a stake in the Metro Fund amid market changes.</li></ul>

Brookfield plans to acquire the Dentsu Tokyo headquarters from Hulic for a total of $1.9 billion.Gaw and GreenFort are considering the sale of their retirement living platform, Reside Communities.Macquarie's UIB REIT has invested $158 million in a stake in the Metro Fund amid market changes.

Asia Real Estate Tracker (12-Feb-2026): Brookfield to acquire Dentsu's Tokyo HQ for $1.9B

<ul><li>Brookfield plans to acquire Dentsu's Tokyo headquarters for $1.9 billion, indicating major shifts in the APAC real estate market.</li><li>Macquarie’s UIB REIT has invested $158 million in the Metro Fund, while its UI Boustead REIT has gained approval for a Singapore IPO.</li><li>The APAC real estate sector is evolving due to declining supply, with significant transactions including a stake sale in an Amazon Japan facility.</li></ul>

Brookfield plans to acquire Dentsu's Tokyo headquarters for $1.9 billion, indicating major shifts in the APAC real estate market.Macquarie’s UIB REIT has invested $158 million in the Metro Fund, while its UI Boustead REIT has gained approval for a Singapore IPO.The APAC real estate sector is evolving due to declining supply, with significant transactions including a stake sale in an Amazon Japan facility.

Asia Real Estate Tracker (11-Feb-2026): Brookfield to acquire Dentsu Tokyo HQ for $1.9B.

Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

<ul>
<li>Expectations for Intel's 14A process grows with TSMC leading-node capacity tapped out.</li>
<li>China banning US cybersecurity firm had limited impact, although VMware connection takes Broadcom lower.</li>
<li>Dentsu down -10.5% yesterday after its International sale fell through. Watch for rebound.</li>
</ul>


Expectations for Intel's 14A process grows with TSMC leading-node capacity tapped out.
China banning US cybersecurity firm had limited impact, although VMware connection takes Broadcom lower.
Dentsu down -10.5% yesterday after its International sale fell through. Watch for rebound.


Japan Morning Connection: Mkt Rotation Not Really Hitting Tech and AI but Expect Mild Weakness

Japan

DENTSU INC. mainly provides comprehensive advertising services.  The Company also provides marketing and event planning & promotion services.  Dentsu has associated companies in the US, Europe, and Asia.

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Dentsu Inc (4324 JP)

Dentsu (4324): Baby Steps Lead to Giant Improvements

Dentsu's problems are huge, but fixable. Very minor cost adjustments could lead to a massive surge in RoE to above 20% and lead to re-rating of...

Michael Allen

Dentsu Group (4324 JP): Global Index Deletion Likely

Dentsu has underperformed its peers this year and the stock could be deleted from a global index in August. Positioning appears to be smaller than...

Brian Freitas

Asia Real Estate Tracker (12-Feb-2026): Brookfield to acquire Dentsu's Tokyo HQ for $1.9B

Brookfield will acquire Dentsu's Tokyo HQ for $1.9B, while Gaw and GreenFort consider selling Reside Communities, and Macquarie's UIB REIT buys a...

Asia Real Estate Tracker

Asia Real Estate Tracker (11-Feb-2026): Brookfield to acquire Dentsu Tokyo HQ for $1.9B.

Brookfield will acquire Dentsu's Tokyo HQ for $1.9B, while other notable APAC real estate moves include Macquarie's investments and a $1B data...

Asia Real Estate Tracker

Japan Morning Connection: Mkt Rotation Not Really Hitting Tech and AI but Expect Mild Weakness

Some rotation from mega tech into smaller cap value plays. China retaliates with tech bans for the US. KDDI may suffer after news of "innapropriate...

Andrew Jackson

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Dentsu (4324): Baby Steps Lead to Giant Improvements

​Dentsu's problems are huge, but fixable. Very minor cost adjustments could lead to a massive surge in RoE to above 20% and lead to re-rating of...

Michael Allen

Dentsu Group (4324 JP): Global Index Deletion Likely

Dentsu has underperformed its peers this year and the stock could be deleted from a global index in August. Positioning appears to be smaller than...

Brian Freitas

Asia Real Estate Tracker (12-Feb-2026): Brookfield to acquire Dentsu's Tokyo HQ for $1.9B

Brookfield will acquire Dentsu's Tokyo HQ for $1.9B, while Gaw and GreenFort consider selling Reside Communities, and Macquarie's UIB REIT buys a...

Asia Real Estate Tracker

Asia Real Estate Tracker (11-Feb-2026): Brookfield to acquire Dentsu Tokyo HQ for $1.9B.

Brookfield will acquire Dentsu's Tokyo HQ for $1.9B, while other notable APAC real estate moves include Macquarie's investments and a $1B data...

Asia Real Estate Tracker

Japan Morning Connection: Mkt Rotation Not Really Hitting Tech and AI but Expect Mild Weakness

Some rotation from mega tech into smaller cap value plays. China retaliates with tech bans for the US. KDDI may suffer after news of "innapropriate...

Andrew Jackson

Dentsu's problems are huge, but fixable. Very minor cost adjustments could lead to a massive surge in RoE to above 20% and lead to re-rating of...