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>Rapidly shifting technology could cause cable demand to plunge by 50% per unit of data center capacity as 800g becomes standard.</li>
<li>We don’t anticipate any negative surprises in the coming 1-2 quarters, but we think consensus is overestimating post-3/26 EBIT by at least 20%.</li>
<li>Even after a tech-led sell-off, at 25x EV/EBITDA, there is still no room for this kind of error. </li>
</ul>


Rapidly shifting technology could cause cable demand to plunge by 50% per unit of data center capacity as 800g becomes standard.
We don’t anticipate any negative surprises in the coming 1-2 quarters, but we think consensus is overestimating post-3/26 EBIT by at least 20%.
Even after a tech-led sell-off, at 25x EV/EBITDA, there is still no room for this kind of error. 


Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

Thematic (Sector/Industry)

<ul>
<li>Tech laggards bought in the US showing many in the market scrambling to catch the upside after the rapid snapback from last weeks drop.</li>
<li>Server related strength after Cisco numbers may see sentiment for Nidec finally improving with its cooling modules business emerging as an earnings driver.</li>
<li>Strong numbers for Coherent confirm the positive trends for its optical transceiver business which points to continued upside for AI data center plays</li>
</ul>


Tech laggards bought in the US showing many in the market scrambling to catch the upside after the rapid snapback from last weeks drop.
Server related strength after Cisco numbers may see sentiment for Nidec finally improving with its cooling modules business emerging as an earnings driver.
Strong numbers for Coherent confirm the positive trends for its optical transceiver business which points to continued upside for AI data center plays


Japan Morning Connection: Sanken Electric, Nidec, Asahi Intecc

<ul>
<li>Fujikura’s shares dropped 19% following a mid-day announcement of EBIT 8% below consensus and guidance that was 32% below consensus.</li>
<li>Worse, the company warned that its guidance does not account for any potential disruptions resulting from closure of the Strait of Hormuz. In other words, the guidance is not conservative.</li>
<li>The market priced the stock as a pure play on datacenters, but only half of its business relies on data centers, which are slowing down, and the rest is declining.</li>
</ul>


Fujikura’s shares dropped 19% following a mid-day announcement of EBIT 8% below consensus and guidance that was 32% below consensus.
Worse, the company warned that its guidance does not account for any potential disruptions resulting from closure of the Strait of Hormuz. In other words, the guidance is not conservative.
The market priced the stock as a pure play on datacenters, but only half of its business relies on data centers, which are slowing down, and the rest is declining.


Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

<ul>
<li>Global Ex-USA funds have almost eliminated a decade-long Japan underweight, lifting average exposure to 13.64%, just 0.22% below benchmark.</li>
<li>Japan has seen strong rotation in 2026, with an estimated $3.8bn of net inflows and broadening ownership across Industrials, Financials and Materials.</li>
<li>Stock selection is shifting towards semiconductors and industrial technology, led by Kioxia, Advantest and Sumitomo Electric, while established holdings including Nintendo and Sony lose ground.</li>
</ul>


Global Ex-USA funds have almost eliminated a decade-long Japan underweight, lifting average exposure to 13.64%, just 0.22% below benchmark.
Japan has seen strong rotation in 2026, with an estimated $3.8bn of net inflows and broadening ownership across Industrials, Financials and Materials.
Stock selection is shifting towards semiconductors and industrial technology, led by Kioxia, Advantest and Sumitomo Electric, while established holdings including Nintendo and Sony lose ground.


CEO / Founder, Crea8

Kim-Hwa Lim

CEO / Founder

Make an Impact

Crea8

Crea8 blends AI-driven precision, big data scalability, and rigorous quantitative frameworks with seasoned human insight. By extracting actionable intelligence from vast global datasets, we eliminate emotional bias and deliver optimal risk-adjusted returns. Our hybrid approach uncovers hidden market efficiencies and ensures your capital is dynamically positioned across markets.

<ul><li>The strategy seeks to invest in Shariah compliant companies with superior sustainability features / initiatives.</li><li>These Shariah compliant companies may be: 1) screened by avoiding issuers with negative ESG; 2) uplifted due to their commitment to improve ESG</li><li>3) included as their business models may not only benefit from but also may drive long-term sustainability outcomes; and 4) committed to generating positive, measurable and additional sustainability outcomes.</li></ul>

The strategy seeks to invest in Shariah compliant companies with superior sustainability features / initiatives.These Shariah compliant companies may be: 1) screened by avoiding issuers with negative ESG; 2) uplifted due to their commitment to improve ESG3) included as their business models may not only benefit from but also may drive long-term sustainability outcomes; and 4) committed to generating positive, measurable and additional sustainability outcomes.

Global Sustainability (Shariah) Portfolio (18-Aug-2026)

Japan

Fujikura Ltd. manufactures and sells wires and cables such as optical fiber cables and coaxial cables. The Company's products include optical transmission system, electronic materials, and telecommunication cables.

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Fujikura Ltd (5803 JP)

Fujikura (5803): The Math Doesn’t Work

Rapidly advancing technology may lead to a 50% drop in cable demand for data centers as 800g becomes the norm, potentially impacting EBIT...

Michael Allen

Japan Morning Connection: Sanken Electric, Nidec, Asahi Intecc

US tech laggards are now catching up after a rapid rebound, server-related strength boosts Nidec's sentiment, and Coherent's strong numbers...

Andrew Jackson

Fujikura (5803): Elephants Can’t Fly

Fujikura's shares plummeted 19% after disappointing EBIT and guidance below consensus, with added concern over potential disruptions from the...

Michael Allen

Japan: Underweight No More?

Global Ex-USA funds have almost eliminated their decade-long Japan underweight, as rising allocations and strong inflows drive rotation towards...

Steven Holden

Global Sustainability (Shariah) Portfolio (18-Aug-2026)

The strategy seeks to invest in Shariah compliant companies with superior sustainability features / initiatives. These Shariah compliant companies...

Crea8

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Fujikura (5803): The Math Doesn’t Work

​Rapidly advancing technology may lead to a 50% drop in cable demand for data centers as 800g becomes the norm, potentially impacting EBIT...

Michael Allen

Japan Morning Connection: Sanken Electric, Nidec, Asahi Intecc

​US tech laggards are now catching up after a rapid rebound, server-related strength boosts Nidec's sentiment, and Coherent's strong numbers...

Andrew Jackson

Fujikura (5803): Elephants Can’t Fly

​Fujikura's shares plummeted 19% after disappointing EBIT and guidance below consensus, with added concern over potential disruptions from the...

Michael Allen

Japan: Underweight No More?

Global Ex-USA funds have almost eliminated their decade-long Japan underweight, as rising allocations and strong inflows drive rotation towards...

Steven Holden

Global Sustainability (Shariah) Portfolio (18-Aug-2026)

The strategy seeks to invest in Shariah compliant companies with superior sustainability features / initiatives. These Shariah compliant companies...

Crea8

Rapidly advancing technology may lead to a 50% drop in cable demand for data centers as 800g becomes the norm, potentially impacting EBIT...

US tech laggards are now catching up after a rapid rebound, server-related strength boosts Nidec's sentiment, and Coherent's strong numbers...

Fujikura's shares plummeted 19% after disappointing EBIT and guidance below consensus, with added concern over potential disruptions from the...