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

Thematic (Sector/Industry)

<ul>
<li>Buying the worst-performing stocks of the previous 12 months has outperformed Japan’s Topix index by an average of 7% annually for 9 straight years</li>
<li>For most of 2024, the strategy didn’t work, but an uptick in TOBs, MBOs, and merger talks is suddenly making it unsafe to short low-PBR companies indiscriminately.</li>
<li>Suddenly, dozens of previously complacent companies have the fear of God and are taking action to up their profitability and the market is taking notice. </li>
</ul>


Buying the worst-performing stocks of the previous 12 months has outperformed Japan’s Topix index by an average of 7% annually for 9 straight years
For most of 2024, the strategy didn’t work, but an uptick in TOBs, MBOs, and merger talks is suddenly making it unsafe to short low-PBR companies indiscriminately.
Suddenly, dozens of previously complacent companies have the fear of God and are taking action to up their profitability and the market is taking notice. 


2024 Was Ugly for Turnarounds, 2025 Should Be Awesome!

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>BOJ sows confusion with hawkish and dovish statements regarding its tightening policy. On a USD-basis the Japan market failed again to break its long-term resistance indicating a "Dead Cat Bounce".</li>
<li>Auto and Semiconductor sectors pressured by US trade policies and Trading Companies are affected by JPY strength.  US rejection of <a href="https://www.smartkarma.com/entities/nippon-steel-corporation" target="_blank" data-smartkarma-citation="entities:961:1" rel="noopener">Nippon Steel Corporation (5401 JP)</a>merger affects Japan steel sector.</li>
<li>Higher domestic yields is a catalyst to reverse the large money flows from Japan during the Kuroda years.</li>
</ul>


BOJ sows confusion with hawkish and dovish statements regarding its tightening policy. On a USD-basis the Japan market failed again to break its long-term resistance indicating a "Dead Cat Bounce".
Auto and Semiconductor sectors pressured by US trade policies and Trading Companies are affected by JPY strength.  US rejection of Nippon Steel Corporation (5401 JP)merger affects Japan steel sector.
Higher domestic yields is a catalyst to reverse the large money flows from Japan during the Kuroda years.


JAPAN:  No Lifeguard on Duty, Swim at Your Own Risk

Derivatives and Quantitative Strategist

Gaudenz Schneider

Equity Bottom-Up

<ul>
<li>
Context: This Insight follows up on previously highlighted relative value opportunities, using a statistical methodology based on mean-reversion to identify opportunities in paired securities.</li>
<li>
Highlights: Currently eight pair trade opportunities persist across four markets and three sectors.
</li>
<li>
Why read: Statistical analysis offers a unique perspective on relative value. Gain insights into actionable statistical pair trade opportunities and monitor performance of previously highlighted pairs.</li>
</ul>



Context: This Insight follows up on previously highlighted relative value opportunities, using a statistical methodology based on mean-reversion to identify opportunities in paired securities.

Highlights: Currently eight pair trade opportunities persist across four markets and three sectors.


Why read: Statistical analysis offers a unique perspective on relative value. Gain insights into actionable statistical pair trade opportunities and monitor performance of previously highlighted pairs.


Relative Value Opportunities in Asia-Pac, Pair Trade Roundup (7 Sep 2026)

Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

Shenton Research

Shenton Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analysed the earning revision of component stocks of MS-Japan in the past month.</li>
<li>We tabulated stocks with the top impact on index's EPS, stocks' EPS revision, and revenue revision.</li>
<li>We highlighted EPS revision on Yamaha Motor, Orix, Advantest, Kioxia, Rakuten, Kawasaki Kisen Kaisha, Panasonic, JFE.</li>
</ul>


We analysed the earning revision of component stocks of MS-Japan in the past month.
We tabulated stocks with the top impact on index's EPS, stocks' EPS revision, and revenue revision.
We highlighted EPS revision on Yamaha Motor, Orix, Advantest, Kioxia, Rakuten, Kawasaki Kisen Kaisha, Panasonic, JFE.


MS-Japan Index Earning Revision (Aug): Yamaha Motor, Orix, Advantest, Kioxia, Rakuten, Panasonic

Index Rebalance

<ul>
<li>MS-Japan rebalance one ADD, Kokusai Electric, and two DELETEs, JFE Holdings and Seibu Holdings, on 1 Sep 2026. We review the completed bridge against nine prior cycles.</li>
<li>Kokusai Electric added +2.8% alpha over the bridge on top of its +13.5% pre-announcement run. Both DELETEs were near flat over the bridge after negative announcement days.</li>
<li>Historically, positive-bridge ADDs gave back in the first implementation week. The historical DELETE first-week record after a positive bridge is flat.</li>
</ul>


MS-Japan rebalance one ADD, Kokusai Electric, and two DELETEs, JFE Holdings and Seibu Holdings, on 1 Sep 2026. We review the completed bridge against nine prior cycles.
Kokusai Electric added +2.8% alpha over the bridge on top of its +13.5% pre-announcement run. Both DELETEs were near flat over the bridge after negative announcement days.
Historically, positive-bridge ADDs gave back in the first implementation week. The historical DELETE first-week record after a positive bridge is flat.


MS-Japan Sep 2026 Index Rebalance: Pre-Implementation Update

Japan

JFE Holdings, Inc. is a holding company which was established through the merger of NKK Corp and Kawasaki Steel Corp.  The Company manages and conducts its subsidiaries' business, which is steel production and integrated engineering services.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

JFE Holdings (5411 JP)

2024 Was Ugly for Turnarounds, 2025 Should Be Awesome!

2025 could be a banner year for turnarounds and value stocks as a spate of recent TOBs, MBOs and merger discussions have suddenly made it unsafe to...

Michael Allen

JAPAN: No Lifeguard on Duty, Swim at Your Own Risk

BOJ sends mixed signals on its pace of tightening as the JPY strengthens. Auto, semi and trading company sectors continue to be under pressure. A...

David Mudd

Relative Value Opportunities in Asia-Pac, Pair Trade Roundup (7 Sep 2026)

Discover eight pair trade opportunities across four markets and three sectors using statistical mean-reversion methodology for actionable insights.

Gaudenz Schneider

MS-Japan Index Earning Revision (Aug): Yamaha Motor, Orix, Advantest, Kioxia, Rakuten, Panasonic

We analyzed MS-Japan's consensus for Aug 2026 and highlighted changes of EPS in Yamaha Motor, Orix, Advantest, Kioxia, Rakuten, Kawasaki Kisen...

Ke Yan, CFA, FRM

MS-Japan Sep 2026 Index Rebalance: Pre-Implementation Update

MS-Japan enters implementation on 1 Sep with one ADD and two DELETEs. We update post-announcement stock performance and discuss implementation trades.

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

2024 Was Ugly for Turnarounds, 2025 Should Be Awesome!

2025 could be a banner year for turnarounds and value stocks as a spate of recent TOBs, MBOs and merger discussions have suddenly made it unsafe to...

Michael Allen

JAPAN: No Lifeguard on Duty, Swim at Your Own Risk

BOJ sends mixed signals on its pace of tightening as the JPY strengthens. Auto, semi and trading company sectors continue to be under pressure. A...

David Mudd

Relative Value Opportunities in Asia-Pac, Pair Trade Roundup (7 Sep 2026)

​Discover eight pair trade opportunities across four markets and three sectors using statistical mean-reversion methodology for actionable insights.

Gaudenz Schneider

MS-Japan Index Earning Revision (Aug): Yamaha Motor, Orix, Advantest, Kioxia, Rakuten, Panasonic

We analyzed MS-Japan's consensus for Aug 2026 and highlighted changes of EPS in Yamaha Motor, Orix, Advantest, Kioxia, Rakuten, Kawasaki Kisen...

Ke Yan, CFA, FRM

MS-Japan Sep 2026 Index Rebalance: Pre-Implementation Update

MS-Japan enters implementation on 1 Sep with one ADD and two DELETEs. We update post-announcement stock performance and discuss implementation trades.

Ke Yan, CFA, FRM

Discover eight pair trade opportunities across four markets and three sectors using statistical mean-reversion methodology for actionable insights.