Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Index Rebalance

<ul>
<li>
<a href="https://www.smartkarma.com/entities/harmonic-drive-systems-inc" target="_blank" data-smartkarma-citation="entities:10238:1" rel="noopener">Harmonic Drive Systems (6324 JP)</a> shares popped 14.7% Friday on a Nikkan Kogyo story the company would increase reducer/actuator production in the US by 50% by June or July.</li>
<li>Harmonic Drive has long been eligible for TOPIX inclusion. It has just never asked to move to TSE1 or TSE Prime. Now it has. </li>
<li>As announced after the close Friday 20 February, Harmonic Drive will move to TSE Prime on 27 February which will mean a TOPIX Inclusion in end-March. That's big too.</li>
</ul>



Harmonic Drive Systems (6324 JP) shares popped 14.7% Friday on a Nikkan Kogyo story the company would increase reducer/actuator production in the US by 50% by June or July.
Harmonic Drive has long been eligible for TOPIX inclusion. It has just never asked to move to TSE1 or TSE Prime. Now it has. 
As announced after the close Friday 20 February, Harmonic Drive will move to TSE Prime on 27 February which will mean a TOPIX Inclusion in end-March. That's big too.


[Quiddity Index] Harmonic Drive Systems (6324 JP) Moving to TSE Prime

Senior Technology Analyst, Japanese Equities, LightStream Research

Scott Foster

Senior Technology Analyst, Japanese Equities

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<ul>
<li>Sales are up but profits are lagging, with the gross, operating and net margins all declining in the first nine months of FY Mar-26.</li>
<li>Overseas sales have risen to two-thirds of total sales, with growth led by Asia and America. This trend seems likely to continue.</li>
<li>Keyence continues to pile up cash, but for what purpose? With no obvious gearing to AI, its stock price has been underperforming.</li>
</ul>


Sales are up but profits are lagging, with the gross, operating and net margins all declining in the first nine months of FY Mar-26.
Overseas sales have risen to two-thirds of total sales, with growth led by Asia and America. This trend seems likely to continue.
Keyence continues to pile up cash, but for what purpose? With no obvious gearing to AI, its stock price has been underperforming.


Keyence (6861 JP): Sliding Down a Mountain of Cash

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/makino-milling-machine-co" target="_blank" data-smartkarma-citation="entities:5200:1" rel="noopener">Makino Milling Machine Co (6135 JP)</a> has announced that MBK has secured the two highest risk approvals (US CFIUS and China SAMR). </li>
<li>The remaining approval (Japan) should be obtained by mid-February. However, the offer must now contend with twin headwinds of a bull market and upgraded guidance. </li>
<li>While MBK’s improving deal economics support a bump, several mitigating factors (such as deal fatigue and no competing bid) suggest a low probability of a bump.   </li>
</ul>



Makino Milling Machine Co (6135 JP) has announced that MBK has secured the two highest risk approvals (US CFIUS and China SAMR). 
The remaining approval (Japan) should be obtained by mid-February. However, the offer must now contend with twin headwinds of a bull market and upgraded guidance. 
While MBK’s improving deal economics support a bump, several mitigating factors (such as deal fatigue and no competing bid) suggest a low probability of a bump.   


Makino Milling Machine (6135 JP): Twin Headwinds as Chinese and US Approvals Secured

<ul>
<li>On Friday, after market close, <a href="https://www.smartkarma.com/entities/makino-milling-machine-co" target="_blank" data-smartkarma-citation="entities:5200:1" rel="noopener">Makino Milling Machine Co (6135 JP)</a> finally issued a progress update on the MBK preconditional tender offer. The update, while mixed, should calm nerves. </li>
<li>The positive read-across is a pathway to regulatory approvals, the Homeplus saga has not derailed the offer, and the likely breach of the long-stop date is not a termination event.</li>
<li>The negative read-across is the lack of a revised tender start timeline, an unexplained delay in securing most regulatory approvals and ongoing uncertainty on the long-stop date.</li>
</ul>


On Friday, after market close, Makino Milling Machine Co (6135 JP) finally issued a progress update on the MBK preconditional tender offer. The update, while mixed, should calm nerves. 
The positive read-across is a pathway to regulatory approvals, the Homeplus saga has not derailed the offer, and the likely breach of the long-stop date is not a termination event.
The negative read-across is the lack of a revised tender start timeline, an unexplained delay in securing most regulatory approvals and ongoing uncertainty on the long-stop date.


Makino Milling Machine (6135 JP): Progress Update While Mixed, Should Calm Nerves

<ul>
<li>
<a href="https://www.smartkarma.com/entities/makino-milling-machine-co" target="_blank" data-smartkarma-citation="entities:5200:1" rel="noopener">Makino Milling Machine Co (6135 JP)</a>’s pre-conditional tender offer from MBK Partners is at JPY11,751 per share. The gross spread has increased to 9.9% due to several concerns.</li>
<li>The wide gross spread reflects the risk in satisfying the precondition, the fallout from the Homeplus saga and breaching the long stop date (16 January 2026).</li>
<li>While these concerns have merit, there are mitigating factors. The risk/reward is favourable as the upside (9.9% spread) exceeds the downside (6.3% to my estimated deal break price). </li>
</ul>



Makino Milling Machine Co (6135 JP)’s pre-conditional tender offer from MBK Partners is at JPY11,751 per share. The gross spread has increased to 9.9% due to several concerns.
The wide gross spread reflects the risk in satisfying the precondition, the fallout from the Homeplus saga and breaching the long stop date (16 January 2026).
While these concerns have merit, there are mitigating factors. The risk/reward is favourable as the upside (9.9% spread) exceeds the downside (6.3% to my estimated deal break price). 


Makino Milling Machine (6135 JP): Tender Offer Risk/Reward

Japan

YASKAWA Electric Corporation manufactures and markets servomotors, controllers, inverters, and industrial robots.  The Company's products include spindle controllers, computerized numerical control (CNC) systems, and system engineering.

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Yaskawa Electric (6506 JP)

[Quiddity Index] Harmonic Drive Systems (6324 JP) Moving to TSE Prime

Harmonic Drive Systems has long sat unbothered in TSE2 then Standard. Now it is moving to TSE Prime, which means a TOPIX inclusion at end-March....

Travis Lundy

Keyence (6861 JP): Sliding Down a Mountain of Cash

Keyence may bounce off the bottom of its trading range, but has been underperforming other FA stocks due to lack of gearing to DX, slipping margins...

Scott Foster

Makino Milling Machine (6135 JP): Twin Headwinds as Chinese and US Approvals Secured

The precondition should be satisfied soon. While the re-rating of peers and upgraded guidance have improved MBK’s deal economics, several...

Arun George

Makino Milling Machine (6135 JP): Progress Update While Mixed, Should Calm Nerves

While the update is arguably mixed as it lends support to both the bulls and bears, it is positively skewed, which should calm nerves and narrow...

Arun George

Makino Milling Machine (6135 JP): Tender Offer Risk/Reward

The wide gross spread reflects three concerns. While these concerns have merit, there are mitigating factors. The risk/reward is favourable.

Arun George

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