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

Keisei Electric Railway Co / Equity Bottom-Up

<ul>
<li>Activist investors, confusing market price with intrinsic value, have shot themselves in the foot by offering terrible advice to Keisei Railway’s management. </li>
<li>When Keisei followed advice from the activist, selling just 1% of the shares of Oriental Land, Keisei's share price collapsed, proving market price has nothing to do with intrinsic value. </li>
<li>Keisei’s revenue growth and return on investment are stronger than most of its peers, and the crash in its stock price caused by activists might create an opportunity for others.</li>
</ul>


Activist investors, confusing market price with intrinsic value, have shot themselves in the foot by offering terrible advice to Keisei Railway’s management. 
When Keisei followed advice from the activist, selling just 1% of the shares of Oriental Land, Keisei's share price collapsed, proving market price has nothing to do with intrinsic value. 
Keisei’s revenue growth and return on investment are stronger than most of its peers, and the crash in its stock price caused by activists might create an opportunity for others.


Keisei Railway (9009) Gets Bad Advice from Activists, Which Is Good for The Rest of US

Index Rebal/Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal/Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Index Rebalance

<ul>
<li>JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted capped index composed of 400 constituents.</li>
<li>The annual index review takes place in August every year. We look at the latest rankings of potential ADDs/DELs every month.</li>
<li>Below is a look at the rankings of potential ADDs/DELs for the JPX-Nikkei 400 August 2025 rebalance based on trading data as of end-January 2025.</li>
</ul>


JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted capped index composed of 400 constituents.
The annual index review takes place in August every year. We look at the latest rankings of potential ADDs/DELs every month.
Below is a look at the rankings of potential ADDs/DELs for the JPX-Nikkei 400 August 2025 rebalance based on trading data as of end-January 2025.


Quiddity JPX-Nikkei 400 Rebal 2025: End-Jan 2025 Ranks

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Event-Driven

Keisei Electric Railway Co / Event-Driven

<ul>
<li>Remain BULLISH <a href="https://www.smartkarma.com/entities/keisei-electric-railway-co" target="_blank" data-smartkarma-citation="entities:10876:1" rel="noopener">Keisei Electric Railway Co (9009 JP) </a> with low conviction. This is buying on narrative rather than fundamentals but there is no need to not get involved.</li>
<li>
<a href="https://www.smartkarma.com/entities/vitasoy-intl-holdings-ltd" target="_blank" data-smartkarma-citation="entities:2807:1" rel="noopener">Vitasoy Intl Holdings (345 HK)</a>'s share price run up is excessive as Philip Ng and<a href="https://www.smartkarma.com/entities/yeo-hiap-seng-ltd" target="_blank" data-smartkarma-citation="entities:9051:1" rel="noopener">Yeo Hiap Seng (YHS SP)</a> over-extend their hand.</li>
<li>
<a href="https://www.smartkarma.com/entities/nec-networks-system-integr" target="_blank" data-smartkarma-citation="entities:16396:1" rel="noopener">Nec Networks (1973 JP)</a> has yet to trade below terms. The premium is small, perhaps reflecting the risk NEC will lower the minimum threshold. But there is still a fight here.</li>
</ul>


Remain BULLISH Keisei Electric Railway Co (9009 JP)  with low conviction. This is buying on narrative rather than fundamentals but there is no need to not get involved.

Vitasoy Intl Holdings (345 HK)'s share price run up is excessive as Philip Ng andYeo Hiap Seng (YHS SP) over-extend their hand.

Nec Networks (1973 JP) has yet to trade below terms. The premium is small, perhaps reflecting the risk NEC will lower the minimum threshold. But there is still a fight here.


Last Week in Event SPACE: Keisei Electric Railway, Vitasoy, NEC Network, ESR Group

<ul>
<li>
<a href="https://www.smartkarma.com/entities/keisei-electric-railway-co" target="_blank" data-smartkarma-citation="entities:10876:1" rel="noopener">Keisei Electric Railway Co (9009 JP)</a> gained 13.8% yesterday on news that activist investor Murakami-san had acquired a stake.</li>
<li>Preceding my comments on Keisei Electric are the current setup/unwind tables for Asia-Pacific Holdcos.</li>
<li>These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.</li>
</ul>



Keisei Electric Railway Co (9009 JP) gained 13.8% yesterday on news that activist investor Murakami-san had acquired a stake.
Preceding my comments on Keisei Electric are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.


StubWorld: Keisei Electric's Big Gain On Activist Stake News

Travis Lundy

<ul>
<li>13mos ago, activist investor Palliser Capital spoke at a conference about the value offered by <a href="https://www.smartkarma.com/entities/keisei-electric-railway-co" target="_blank" data-smartkarma-citation="entities:10876:1" rel="noopener">Keisei Electric Railway Co (9009 JP)</a> due to its large stake in Oriental Land (4661). </li>
<li>Keisei outperformed OLC by 30% over 3.5mos. Then it fell all the way back, and more, over the next five months. Asset sale, buyback, AGM proposals. Meh. </li>
<li>Nov 25th, Toyo Keizai <a href="https://toyokeizai.net/articles/-/842158" target="_blank" rel="noopener">wrote</a> activist Murakami-san had acquired stakes of &lt;5% in <a href="https://www.smartkarma.com/entities/keikyu-corp" target="_blank" data-smartkarma-citation="entities:3371:1" rel="noopener">Keikyu Corp (9006 JP)</a> and &lt;1% in <a href="https://www.smartkarma.com/entities/keisei-electric-railway-co" target="_blank" data-smartkarma-citation="entities:10876:1" rel="noopener">Keisei Electric Railway Co (9009 JP)</a>. Shares in both jumped.</li>
</ul>


13mos ago, activist investor Palliser Capital spoke at a conference about the value offered by Keisei Electric Railway Co (9009 JP) due to its large stake in Oriental Land (4661). 
Keisei outperformed OLC by 30% over 3.5mos. Then it fell all the way back, and more, over the next five months. Asset sale, buyback, AGM proposals. Meh. 
Nov 25th, Toyo Keizai wrote activist Murakami-san had acquired stakes of &lt;5% in Keikyu Corp (9006 JP) and &lt;1% in Keisei Electric Railway Co (9009 JP). Shares in both jumped.


[JAPAN ACTIVISM] Keisei Elec (9009) - Murakami Stake Causes Pop But the Oppty Is Still Unconvincing

Japan

Keisei Electric Railway Co., Ltd. provides passenger rail and bus transportation services in the Metropolitan Tokyo and Chiba prefecture areas.  The Company operates department and supermarket stores, hotels, travel agents, movie theater and restaurants, and sells, leases, and maintains real estate.  Keisei Electric is a shareholder of Oriental Land Co., Ltd. which operates Tokyo Disneyland.

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Keisei Electric Railway Co (9009 JP)

Keisei Railway (9009) Gets Bad Advice from Activists, Which Is Good for The Rest of US

Activist investors' bad advice to Keisei Railway led to a stock price collapse, highlighting the disconnect between market price and intrinsic...

Michael Allen

Quiddity JPX-Nikkei 400 Rebal 2025: End-Jan 2025 Ranks

There are 42 Potential ADDs and 45 Potential DELs (unique names) presented in the current Quiddity Leaderboard. I expect the HIGH & MED Potential...

Janaghan Jeyakumar, CFA

Last Week in Event SPACE: Keisei Electric Railway, Vitasoy, NEC Network, ESR Group

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett

StubWorld: Keisei Electric's Big Gain On Activist Stake News

Oriental Land (4661 JP) has announced a ToSTNeT-3 buyback of 18mm shares (0.99% of shares out),. Keisei will sell, yet will keep OLC as an equity...

David Blennerhassett

[JAPAN ACTIVISM] Keisei Elec (9009) - Murakami Stake Causes Pop But the Oppty Is Still Unconvincing

Toyo Keizai put out an article on Keisei based on a quote from a "market insider". Keisei shares popped 16% in 2 days. There's value, but less than...

Travis Lundy

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Keisei Railway (9009) Gets Bad Advice from Activists, Which Is Good for The Rest of US

​Activist investors' bad advice to Keisei Railway led to a stock price collapse, highlighting the disconnect between market price and intrinsic...

Michael Allen

Quiddity JPX-Nikkei 400 Rebal 2025: End-Jan 2025 Ranks

There are 42 Potential ADDs and 45 Potential DELs (unique names) presented in the current Quiddity Leaderboard. I expect the HIGH & MED Potential...

Janaghan Jeyakumar, CFA

Last Week in Event SPACE: Keisei Electric Railway, Vitasoy, NEC Network, ESR Group

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett

StubWorld: Keisei Electric's Big Gain On Activist Stake News

Oriental Land (4661 JP) has announced a ToSTNeT-3 buyback of 18mm shares (0.99% of shares out),. Keisei will sell, yet will keep OLC as an equity...

David Blennerhassett

[JAPAN ACTIVISM] Keisei Elec (9009) - Murakami Stake Causes Pop But the Oppty Is Still Unconvincing

Toyo Keizai put out an article on Keisei based on a quote from a "market insider". Keisei shares popped 16% in 2 days. There's value, but less than...

Travis Lundy

Activist investors' bad advice to Keisei Railway led to a stock price collapse, highlighting the disconnect between market price and intrinsic...