Daily Brief Industrials: Makino Milling Machine Co, Luxvisions Innovation Technology, Unitree Robotics, Fanuc Corp, Togami Electric Mfg, Keyence Corp, Kokuyo Co Ltd, Urban-Gro and more

• Makino Milling Machine Co (6135 JP) ended its consideration of the NSSK offer due to concerns about whether NSSK could secure FEFTA approval, given its reliance on foreign investors for financing.
• This event sets a precedent, as a Japanese PE-led bid is not a credible shield against FEFTA rejection. Japanese regulators are looking through to ultimate ownership/control.
• Due to a significant re-rating of peers/index and Makino’s upgraded FY2029 targets since the undisturbed date, the share price fall on a deal break should be around 10%. 

• Luxvisions Innovation Technology is a globally leading provider of precision optical solutions for consumer electronics, automotive, smart office, and emerging sectors. It ranked second globally in consumer electronics camera modules.
• Luxvisions is a globally leading precision optical solutions provider, ranked first in laptop and tablet camera modules. Revenue CAGR was 51.0% from RMB15.2 billion (2023) to RMB34.8 billion (2025).
• For the five months ended May 31, 2026, revenue was 13,623,763 RMB’000, with a net profit margin of 5.7% and return on equity of 15.9%.

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• Unitree Robotics (688836 CH) will finally go ahead with its A-share IPO, with price consultation starting on 5 Aug and fixing on 6 Aug.
• Recent U.S. FCC regulation has added uncertainties, as historically, it derived 13-19% revenue from the country. Nonetheless, we project a 3-year earnings CAGR of 72.4%.
• On our forecasts and Rmb42bn market cap, it sits on 54.5x PER and 14.6x P/S for FY26. Such multiples are not expensive relative to peers, considering its high margin.

• Q1 results in line; full-year OP guidance ¥218bn, ~3.5% below street consensus
• Order intake surging +37% YoY signals demand recovery, but is priced in at 22x EV/EBITDA vs. 10-year average 17x
• Balance sheet remains overcapitalised; no new announcement on capital returns

• Togami Electric is a long-established Japanese manufacturer of electrical power distribution and control equipment, poised to benefit from domestic grid modernization and the global push for electrification.
• The company has demonstrated a strong growth track record, with a 3-year net income CAGR of 23.13% and a consistently growing dividend, reflecting solid operational execution and shareholder-friendly policies.
• While the company exhibits strong fundamentals and operates in a market with favorable tailwinds, its valuation appears moderate. Key risks include dependency on the Japanese domestic market and potential for increased competition from larger, global players.

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• A rebound in demand from China and the weak yen supported June quarter sales and profit growth. But further yen weakness seems cannot be assumed.
• AI contributes to factory automation, but cannot replace the granular knowledge of the company’s sales-engineers. 
• The shares have rebounded to within 4% of their early May high.  At 35X our EPS estimate for FY Mar-28, they look reasonably valued. 

• The NSSK offer rejection on July 31, 2026, was driven by fatal regulatory and leverage risks. While the JPY 16,000 revised proposal represented a massive premium over the JPY 7,750 unaffected price, the board’s special committee identified that NSSK’s heavy reliance on foreign co-investors, some deemed high risk, made clearing Japan’s Foreign Exchange and Foreign Trade Act (FEFTA) highly improbable. Furthermore, the debt-heavy funding structure threatened Makino’s pristine balance sheet.
• The Ministry of Economy, Trade and Industry (METI) has drawn a hard line under FEFTA regarding five-axis machining technology. Following the historic block of South Korea-based MBK Partners’ bid on April 22, 2026—only the second stop recommendation in 18 years—it is clear that five-axis high-precision machines are classified as core national security assets due to military diversion risks (e.g., missile guidance and aerospace parts). Foreign ownership is practically impossible without total operational and technology ring-fencing.
• Capital allocation is undergoing a forced, defensive evolution. Pressed by unsolicited interest from Nidec in late 2024 and subsequent PE bids, management is using the newly announced JPY 6 billion share buyback and upgraded FY2029 targets (JPY 310 billion revenue, 13.5% operating margin) to prove to the Tokyo Stock Exchange (TSE) and activists that they can maximize shareholder value as a standalone public entity, shifting away from their legacy cash-hoarding tendencies.

• KOKUYO’s revenue increased 9.1% YoY, driven by Furniture business projects, Benri Net expansion, and overseas Stationery growth.
• Operating profit rose 7.6% YoY despite a 0.1pp OPM decline, affected by a Business Supply Distribution sales campaign.
• Overseas revenue surged 64.9% YoY, aided by Kokuyo Workplace India consolidation and increased office demand in India.

• The Company is a diversified sports, media, and experiential marketing platform focused on live events, content, and fan experiences. Its subsidiary, IPG, manages exclusive commercial and media rights for professional.
• IPG generated approximately $12.04 million in revenue for 2024 and produced over 5,000 hours of live broadcasts. LPL Season 5 (2024) reached 380 million TV and 293 million digital viewers.
• The company has a going concern qualification and a history of net losses. Flash had an accumulated deficit of $500,000 and never generated revenue as of December 31, 2024.

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• Benchmark Public Valuation: Unitree’s STAR Market IPO targeting a 42 billion yuan ($6.2 billion USD) valuation represents the first transparent, daily-priced public market benchmark for the embodied AI sector, contrasting with highly subjective private valuations of Western peers like Figure AI.
• Geopolitical Headwinds: The US FCC’s July 28, 2026 Covered List expansion poses an immediate systemic hurdle to Unitree’s international expansion, threatening a US revenue stream that historically stood at 13.30% of total sales in 2025.
• The Profitability Dilemma: Unitree is a rare profitable player, boasting a 60.27% gross margin and 591 million yuan in adjusted net profit for 2025. However, a rapid shift to a high-volume, low-ASP model (dropping average selling prices from 590,000 yuan to 166,400 yuan per humanoid) coupled with exploding R&D costs has already begun to compress Q1 2026 net profits by 52%.