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>LY Corp’s new Agent AI is the first step in a path to total domination of Japan’s underdeveloped but rapidly expanding digital payments industry.</li>
<li>By replicating Tencent’s business model, LY aims to cement its place as Japan’s core digital infrastructure, spanning communication, payments, commerce, media, and enterprise services.</li>
<li>Despite the vision, shares lag sharply due to a comedy of one-off calamities, but even with modest execution, we think there is meaningful upside, limited downside.</li>
</ul>


LY Corp’s new Agent AI is the first step in a path to total domination of Japan’s underdeveloped but rapidly expanding digital payments industry.
By replicating Tencent’s business model, LY aims to cement its place as Japan’s core digital infrastructure, spanning communication, payments, commerce, media, and enterprise services.
Despite the vision, shares lag sharply due to a comedy of one-off calamities, but even with modest execution, we think there is meaningful upside, limited downside.


LY Corp's (4689) Plan to Dominate Practically Everything

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>Japan's markets have again failed to break to new highs creating a potential for a double-top pattern.</li>
<li>Trump's policies which target lower interest rates and a weaker dollar will put pressure on Japan's markets as can be seen from the high correlation between the JPY and TPX.</li>
<li>Sectors such as trading companies, autos and semiconductors could see the most pressure under a Trump presidency.</li>
</ul>


Japan's markets have again failed to break to new highs creating a potential for a double-top pattern.
Trump's policies which target lower interest rates and a weaker dollar will put pressure on Japan's markets as can be seen from the high correlation between the JPY and TPX.
Sectors such as trading companies, autos and semiconductors could see the most pressure under a Trump presidency.


Trump Trades and the JAPAN Market Are Like Oil and Vinegar

Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>The Nikkei and Topix indexes advanced 1.36% and 2.11%, respectively, for the week.</li>
<li>Fujikura (5803): +18% - The Nikkei's reported $2.9bn Microsoft data center investment in Japan fuels optimism for fiber optic cable companies like Fujikura</li>
<li>Japan Steel Works (5631): +14% - JSW's shares continue their upward trend, fueled by optimism surrounding nuclear power and defense spending</li>
</ul>


The Nikkei and Topix indexes advanced 1.36% and 2.11%, respectively, for the week.
Fujikura (5803): +18% - The Nikkei's reported $2.9bn Microsoft data center investment in Japan fuels optimism for fiber optic cable companies like Fujikura
Japan Steel Works (5631): +14% - JSW's shares continue their upward trend, fueled by optimism surrounding nuclear power and defense spending


Japan Weekly | Fujikura, Monotaro, Japan Steel Works

<ul>
<li>Market Watch: This week, the Topix Index gained 44pts (2%) to close at 2,309, influenced by Wall Street's response to US inflation data and expectations of extended elevated interest rates.</li>
<li>Major Movers: Lasertec (6920) surged +17%, Fast Retailing (9983) rose +12%, and Monotaro (3064) declined -18%</li>
<li>Activist Watch: ValueAct lifted its stake in Topcon. I like the LT fundamentals for the company and look forward to positive dialogue with the activist</li>
</ul>


Market Watch: This week, the Topix Index gained 44pts (2%) to close at 2,309, influenced by Wall Street's response to US inflation data and expectations of extended elevated interest rates.
Major Movers: Lasertec (6920) surged +17%, Fast Retailing (9983) rose +12%, and Monotaro (3064) declined -18%
Activist Watch: ValueAct lifted its stake in Topcon. I like the LT fundamentals for the company and look forward to positive dialogue with the activist


Japan Weekly | Lasertec, Fast Retailing, Monotaro, Topcon

<ul>
<li>Japanese stocks headed lower this weak on concerns about rising global interest rates and a looming recession</li>
<li>Euglena, a small cap Japanese bio-tech, has found itself as a key part of the future for biofuels and SAF. </li>
<li>Japanese Heavies are so diverse that they now fit into many thematic portfolios. KHI looks well placed in the hydrogen supply chain and carbon capture. Exciting times</li>
</ul>


Japanese stocks headed lower this weak on concerns about rising global interest rates and a looming recession
Euglena, a small cap Japanese bio-tech, has found itself as a key part of the future for biofuels and SAF. 
Japanese Heavies are so diverse that they now fit into many thematic portfolios. KHI looks well placed in the hydrogen supply chain and carbon capture. Exciting times


Japan Weekly | Euglena, Kawasaki Heavy, Monotaro

Japan

MonotaRO Co., Ltd. mainly sells machine tools, engine parts, and factory consumable goods on the web site.

Price Gauge
52-week Range	0.00 - 0.00
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MonotaRO Co Ltd (3064 JP)

LY Corp's (4689) Plan to Dominate Practically Everything

LY Corp's Agent AI aims to dominate Japan's digital payments industry by replicating Tencent's business model. Stock lags due to one-off...

Michael Allen

Trump Trades and the JAPAN Market Are Like Oil and Vinegar

We pointed out that Japan's semi industry may be at risk as part of the "Trump Trade" sentiment. It turns out that Biden has already thrown...

David Mudd

Japan Weekly | Fujikura, Monotaro, Japan Steel Works

Japanese stock indexes rose last week, with Fujikura and Japan Steel Works seeing significant gains on positive news in tech and defense sectors.

Mark Chadwick

Japan Weekly | Lasertec, Fast Retailing, Monotaro, Topcon

Topix Index rises despite US inflation data and expectations for higher interest rates. Lasertec and Fast Retailing see gains, while Monotaro...

Mark Chadwick

Japan Weekly | Euglena, Kawasaki Heavy, Monotaro

It's nearly Christmas, so Japanese equities should be rallying, but they are not. Maybe next week when everyone is on holiday. KHI, Monotaro,...

Mark Chadwick

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

LY Corp's (4689) Plan to Dominate Practically Everything

​LY Corp's Agent AI aims to dominate Japan's digital payments industry by replicating Tencent's business model. Stock lags due to one-off...

Michael Allen

Trump Trades and the JAPAN Market Are Like Oil and Vinegar

We pointed out that Japan's semi industry may be at risk as part of the "Trump Trade" sentiment. It turns out that Biden has already thrown...

David Mudd

Japan Weekly | Fujikura, Monotaro, Japan Steel Works

​Japanese stock indexes rose last week, with Fujikura and Japan Steel Works seeing significant gains on positive news in tech and defense sectors.

Mark Chadwick

Japan Weekly | Lasertec, Fast Retailing, Monotaro, Topcon

​Topix Index rises despite US inflation data and expectations for higher interest rates. Lasertec and Fast Retailing see gains, while Monotaro...

Mark Chadwick

Japan Weekly | Euglena, Kawasaki Heavy, Monotaro

It's nearly Christmas, so Japanese equities should be rallying, but they are not. Maybe next week when everyone is on holiday. KHI, Monotaro,...

Mark Chadwick

LY Corp's Agent AI aims to dominate Japan's digital payments industry by replicating Tencent's business model. Stock lags due to one-off...

Japanese stock indexes rose last week, with Fujikura and Japan Steel Works seeing significant gains on positive news in tech and defense sectors.

Topix Index rises despite US inflation data and expectations for higher interest rates. Lasertec and Fast Retailing see gains, while Monotaro...