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>The market is pricing Ricoh as a terminal print asset, but the company has demonstrated an ability to harvest this asset and grow its cash flows.</li>
<li>Bears confuse managed IT's commodity perimeter with Ricoh's real core. Japanese enterprise document workflows are contractually and culturally sticky, resisting platform automation.</li>
<li>Activist Investors own shares of Ricoh equal to 57 days ADV, and they've increased their position as the stock under-performed. They were too early, but the consensus is late.</li>
</ul>


The market is pricing Ricoh as a terminal print asset, but the company has demonstrated an ability to harvest this asset and grow its cash flows.
Bears confuse managed IT's commodity perimeter with Ricoh's real core. Japanese enterprise document workflows are contractually and culturally sticky, resisting platform automation.
Activist Investors own shares of Ricoh equal to 57 days ADV, and they've increased their position as the stock under-performed. They were too early, but the consensus is late.


Ricoh (7752):  Activists Were Early, the Consensus Is Late

Japan Specialist

Mark Chadwick

<ul>
<li>Ricoh: Patient activist Effissimo is backing Ricoh’s shift from printers to digital services, betting operational discipline can lift returns from a structurally declining hardware base.</li>
<li>KH Neochem: Strategic Capital’s growing stake in KH Neochem targets sharper capital allocation and governance, as cyclical weakness masks valuable semiconductor-linked specialty chemical franchises.</li>
<li>OPTEX: GMO’s quiet engagement at OPTEX spotlights surplus cash and discounted valuation, raising the prospect of improved shareholder returns at the sensing-technology mid-cap.</li>
</ul>


Ricoh: Patient activist Effissimo is backing Ricoh’s shift from printers to digital services, betting operational discipline can lift returns from a structurally declining hardware base.
KH Neochem: Strategic Capital’s growing stake in KH Neochem targets sharper capital allocation and governance, as cyclical weakness masks valuable semiconductor-linked specialty chemical franchises.
OPTEX: GMO’s quiet engagement at OPTEX spotlights surplus cash and discounted valuation, raising the prospect of improved shareholder returns at the sensing-technology mid-cap.


Japan Activism Briefs | OPTEX, KH Neochem, Ricoh

Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

Thematic (Sector/Industry)

<ul>
<li>Pure Storage surging 32% showcasing the growth potential for NAND as a viable and cost effective storage medium for AI/enterprise use. Watch Kioxia.</li>
<li>HP up but its printing business not so good -however this could be a 'bad is good' scenario for Japan's desperately in need of consolidation printer industry.</li>
<li>Marvell getting hit hard after-hours may see ASIC related Socionext trade lower.</li>
</ul>


Pure Storage surging 32% showcasing the growth potential for NAND as a viable and cost effective storage medium for AI/enterprise use. Watch Kioxia.
HP up but its printing business not so good -however this could be a 'bad is good' scenario for Japan's desperately in need of consolidation printer industry.
Marvell getting hit hard after-hours may see ASIC related Socionext trade lower.


Japan Morning Connection: Tech Shakes off Initial Weakness with Talks of Blackwell Sales to China

<ul>
<li>
Shiseido: Weak sales in China and Travel Retail hurt performance, but cost-cutting and deep-value appeal raise potential for turnaround or takeover.  </li>
<li>
Ricoh: Effissimo bets on Ricoh's slow pivot to digital services; low valuation offers downside protection despite unclear timeline for ROE recovery.</li>
<li>
Orico: Strategic Capital targets Mizuho affiliate for underperformance and insider-led governance, pushing for reform and better capital discipline.</li>
</ul>



Shiseido: Weak sales in China and Travel Retail hurt performance, but cost-cutting and deep-value appeal raise potential for turnaround or takeover.  

Ricoh: Effissimo bets on Ricoh's slow pivot to digital services; low valuation offers downside protection despite unclear timeline for ROE recovery.

Orico: Strategic Capital targets Mizuho affiliate for underperformance and insider-led governance, pushing for reform and better capital discipline.


Japan Activist Watch | Shiseido, Ricoh, Orico, Anicom

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>Our bullish outlook on global equities (MSCI ACWI) remains intact with ACWI-US and the S&amp;P 500 firmly trending higher. Our recommendation since mid-October to use any pre-election pullback in..</li>
<li>... the ACWI or the SPX as an opportunity to add exposure continues to pay off, and there is not much left to do except ride the trend higher.</li>
<li>Additionally, we still see a high probability of significant upside going into year-end and the early part of 2025 -- and likely beyond</li>
</ul>


Our bullish outlook on global equities (MSCI ACWI) remains intact with ACWI-US and the S&amp;P 500 firmly trending higher. Our recommendation since mid-October to use any pre-election pullback in..
... the ACWI or the SPX as an opportunity to add exposure continues to pay off, and there is not much left to do except ride the trend higher.
Additionally, we still see a high probability of significant upside going into year-end and the early part of 2025 -- and likely beyond


Ride the Trend Higher in MSCI ACWI and S&P 500; Buy/Stay Long Global Discretionary, Services, Tech

Japan

RICOH COMPANY, LTD. manufactures and markets office automation equipment, electronic devices, and photographic instruments.  The Company's diverse product line includes facsimiles, image scanners, printers, digital cameras, and personal computers, as well as a full range of analog, digital, and color copiers. Ricoh operates with a network of sales offices and tie-ups worldwide.

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Ricoh Company Ltd (7752 JP)

Ricoh (7752): Activists Were Early, the Consensus Is Late

Market undervaluing Ricoh as print asset, but company showing ability to grow cash flows. Bears misunderstanding core business. Activist investors...

Michael Allen

Japan Activism Briefs | OPTEX, KH Neochem, Ricoh

Activist investors are pushing for strategic changes at Ricoh, KH Neochem, and OPTEX to improve returns and unlock shareholder value.

Mark Chadwick

Japan Morning Connection: Tech Shakes off Initial Weakness with Talks of Blackwell Sales to China

Memory plays continue to trade well with strong growth outlook for NAND memory, watch Kioxia as a squeeze candidate. Dell down with numbers showing...

Andrew Jackson

Japan Activist Watch | Shiseido, Ricoh, Orico, Anicom

Shiseido is either a turnaround or takeover target. Ricoh's slow move to digital services attracts interest, while Orico is targeted for reform by...

Mark Chadwick

Ride the Trend Higher in MSCI ACWI and S&P 500; Buy/Stay Long Global Discretionary, Services, Tech

Ride the Trend Higher in MSCI $ACWI and $SPX; We are still bullish as Risk-On Signals Dominate. Ideas to buy/stay long in global Discretionary,...

Vermilion Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Ricoh (7752): Activists Were Early, the Consensus Is Late

​Market undervaluing Ricoh as print asset, but company showing ability to grow cash flows. Bears misunderstanding core business. Activist investors...

Michael Allen

Japan Activism Briefs | OPTEX, KH Neochem, Ricoh

​Activist investors are pushing for strategic changes at Ricoh, KH Neochem, and OPTEX to improve returns and unlock shareholder value.

Mark Chadwick

Japan Morning Connection: Tech Shakes off Initial Weakness with Talks of Blackwell Sales to China

Memory plays continue to trade well with strong growth outlook for NAND memory, watch Kioxia as a squeeze candidate. Dell down with numbers showing...

Andrew Jackson

Japan Activist Watch | Shiseido, Ricoh, Orico, Anicom

​Shiseido is either a turnaround or takeover target. Ricoh's slow move to digital services attracts interest, while Orico is targeted for reform by...

Mark Chadwick

Ride the Trend Higher in MSCI ACWI and S&P 500; Buy/Stay Long Global Discretionary, Services, Tech

Ride the Trend Higher in MSCI $ACWI and $SPX; We are still bullish as Risk-On Signals Dominate. Ideas to buy/stay long in global Discretionary,...

Vermilion Research

Market undervaluing Ricoh as print asset, but company showing ability to grow cash flows. Bears misunderstanding core business. Activist investors...

Activist investors are pushing for strategic changes at Ricoh, KH Neochem, and OPTEX to improve returns and unlock shareholder value.

Shiseido is either a turnaround or takeover target. Ricoh's slow move to digital services attracts interest, while Orico is targeted for reform by...