Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Kao: Oasis is calling an EGM to protect shareholders following whistle blower allegations over Kao’s supply chain practices</li>
<li>Kadokawa: Activists and strategics are circling a cheap IP-rich asset with underwhelming execution.</li>
<li>Fuji Media: completed a ¥235bn buyback (~30% of shares) under activist pressure, shrinking its equity base. S-Grant rebuilding stake for further action</li>
</ul>


Kao: Oasis is calling an EGM to protect shareholders following whistle blower allegations over Kao’s supply chain practices
Kadokawa: Activists and strategics are circling a cheap IP-rich asset with underwhelming execution.
Fuji Media: completed a ¥235bn buyback (~30% of shares) under activist pressure, shrinking its equity base. S-Grant rebuilding stake for further action


Japan Activist Briefs | Kao, Kadokawa, Fuji Media

<ul>
<li>Kao: Oasis Management increased stake by 1.4%, maintaining pressure on management to improve global marketing, divest non-core brands, and accelerate digital transformation despite losing March 2025 AGM proxy fight.</li>
<li>KH Neochem: Strategic Capital's stake signals potential activism targeting cost efficiencies in struggling Basic Chemicals division, faster internationalization, M&amp;A consolidation, and operational restructuring despite solid stock performance.</li>
<li>Japan Pulp &amp; Paper: Murakami's 5.3% stake targets real estate asset sales and improved capital allocation amid structural paper demand decline, leveraging company's 0.8x P/B undervaluation.</li>
</ul>


Kao: Oasis Management increased stake by 1.4%, maintaining pressure on management to improve global marketing, divest non-core brands, and accelerate digital transformation despite losing March 2025 AGM proxy fight.
KH Neochem: Strategic Capital's stake signals potential activism targeting cost efficiencies in struggling Basic Chemicals division, faster internationalization, M&amp;A consolidation, and operational restructuring despite solid stock performance.
Japan Pulp &amp; Paper: Murakami's 5.3% stake targets real estate asset sales and improved capital allocation amid structural paper demand decline, leveraging company's 0.8x P/B undervaluation.


Japan Activism Briefs | Kao, KH Neocom, Japan Pulp

Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

Thematic (Sector/Industry)

<ul>
<li>Nervous markets overnight with a number of earnings misses adding downside pressure.</li>
<li>Tokyo Metro IPO kicks off today which should see strong demand especially from risk-adverse retail investors.</li>
<li>Tokyo Metro grey market last Y1400 vs Y1200 listing price, although bookrunners are calling higher levels to start.</li>
</ul>


Nervous markets overnight with a number of earnings misses adding downside pressure.
Tokyo Metro IPO kicks off today which should see strong demand especially from risk-adverse retail investors.
Tokyo Metro grey market last Y1400 vs Y1200 listing price, although bookrunners are calling higher levels to start.


Japan Morning Connection: Tokyo Metro IPO Should See Strong Demand

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>Hong Kong dollar is strengthening as demand picks up and the carry trade unwinds quickly.  Put/Call Skew declines for HSTech Index as traders sentiment reverses.</li>
<li>
<a href="https://www.smartkarma.com/entities/hengan-international-group-co-ltd" target="_blank" data-smartkarma-citation="entities:29:1" rel="noopener">Hengan International Group (1044 HK)</a> and <a href="https://www.smartkarma.com/entities/galaxy-entertainment-group-limited" target="_blank" data-smartkarma-citation="entities:806:1" rel="noopener">Galaxy Entertainment Group (27 HK)</a> had breakouts from declining wedge patterns and have now formed new uptrends.
</li>
<li><a href="https://www.smartkarma.com/entities/wuxi-apptec" target="_blank" data-smartkarma-citation="entities:23679:1" rel="noopener">Wuxi Biologics (2269 HK)</a> had a breakout reversal from a U-shaped pattern indicating more upside.  The stock's 200 DMA may provide little resistance to further re-rating.</li>
</ul>


Hong Kong dollar is strengthening as demand picks up and the carry trade unwinds quickly.  Put/Call Skew declines for HSTech Index as traders sentiment reverses.

Hengan International Group (1044 HK) and Galaxy Entertainment Group (27 HK) had breakouts from declining wedge patterns and have now formed new uptrends.

Wuxi Biologics (2269 HK) had a breakout reversal from a U-shaped pattern indicating more upside.  The stock's 200 DMA may provide little resistance to further re-rating.


Technically Speaking, Breakouts and Breakdowns: HONG KONG (SEPTEMBER 30)

Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

<ul>
<li>With nominal GDP growing 6%YoY in the latest 3 quarters, Japanese interest rates will be gradually normalized. The JPY rebound, however, precludes the need for rapid BoJ hikes. </li>
<li>Unwinding of Yen carry-trades should take JPY to ¥125/US$ by end-2024, which will contribute to tightening monetary conditions sufficiently, further slowing inflation (from 2.85%YoY in May-Jun'24). </li>
<li>Appreciating JPY is bad for Japanese equities, so stay Underweight, with a defensive portfolio comprising utilities, pharmaceuticals and consumer staples. </li>
</ul>


With nominal GDP growing 6%YoY in the latest 3 quarters, Japanese interest rates will be gradually normalized. The JPY rebound, however, precludes the need for rapid BoJ hikes. 
Unwinding of Yen carry-trades should take JPY to ¥125/US$ by end-2024, which will contribute to tightening monetary conditions sufficiently, further slowing inflation (from 2.85%YoY in May-Jun'24). 
Appreciating JPY is bad for Japanese equities, so stay Underweight, with a defensive portfolio comprising utilities, pharmaceuticals and consumer staples. 


Japan: Normalizing Interest Rates as Nominal GDP Surges, Ending Deflation Era

Japan

Kao Corporation is a manufacturer of household and chemical products. The company produces cosmetics, laundry and cleaning products, hygiene products, fatty chemicals, edible oils, and specialty chemicals.

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Kao Corp (4452 JP)

Japan Activist Briefs | Kao, Kadokawa, Fuji Media

Kao calls EGM to address supply chain concerns, Kadokawa attracts interest for IP assets, Fuji Media completes buyback under activist pressure.

Mark Chadwick

Japan Activism Briefs | Kao, KH Neocom, Japan Pulp

Investor activism pressures companies to improve marketing, divest non-core brands, target cost efficiencies, and optimize capital allocation...

Mark Chadwick

Japan Morning Connection: Tokyo Metro IPO Should See Strong Demand

Nervous markets overnight due to a number of earnings misses. Tokyo Metro IPO expected to see strong demand, especially from risk-adverse retail...

Andrew Jackson

Technically Speaking, Breakouts and Breakdowns: HONG KONG (SEPTEMBER 30)

Hong Kong dollar strengthens to the strong end of the band. Hengan and Galaxy share prices have both broken out of Falling Wedge patterns. Wuxi...

David Mudd

Japan: Normalizing Interest Rates as Nominal GDP Surges, Ending Deflation Era

Japanese interest rates are set to normalize amid robust nominal GDP. But a rebounding JPY (at ¥125/US$ by end'24) precludes further BoJ hikes,...

Prasenjit K. Basu

Price Gauge

52-week Range

Market Cap (USDm)

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Japan Activist Briefs | Kao, Kadokawa, Fuji Media

​Kao calls EGM to address supply chain concerns, Kadokawa attracts interest for IP assets, Fuji Media completes buyback under activist pressure.

Mark Chadwick

Japan Activism Briefs | Kao, KH Neocom, Japan Pulp

​Investor activism pressures companies to improve marketing, divest non-core brands, target cost efficiencies, and optimize capital allocation...

Mark Chadwick

Japan Morning Connection: Tokyo Metro IPO Should See Strong Demand

​Nervous markets overnight due to a number of earnings misses. Tokyo Metro IPO expected to see strong demand, especially from risk-adverse retail...

Andrew Jackson

Technically Speaking, Breakouts and Breakdowns: HONG KONG (SEPTEMBER 30)

Hong Kong dollar strengthens to the strong end of the band. Hengan and Galaxy share prices have both broken out of Falling Wedge patterns. Wuxi...

David Mudd

Japan: Normalizing Interest Rates as Nominal GDP Surges, Ending Deflation Era

​Japanese interest rates are set to normalize amid robust nominal GDP. But a rebounding JPY (at ¥125/US$ by end'24) precludes further BoJ hikes,...

Prasenjit K. Basu

Kao calls EGM to address supply chain concerns, Kadokawa attracts interest for IP assets, Fuji Media completes buyback under activist pressure.

Investor activism pressures companies to improve marketing, divest non-core brands, target cost efficiencies, and optimize capital allocation...

Nervous markets overnight due to a number of earnings misses. Tokyo Metro IPO expected to see strong demand, especially from risk-adverse retail...

Japanese interest rates are set to normalize amid robust nominal GDP. But a rebounding JPY (at ¥125/US$ by end'24) precludes further BoJ hikes,...