Smartkarma Daily Briefs

• Toshiba Corp (6502 JP) has sold over 5% of shares outstanding in Kioxia Holdings (285A JP) over the last month as the stock has run up.
• The increased market cap and higher float should result in index inclusion and passive buying for Kioxia Holdings (285A JP) in November. Then an upweight in another index in December.
• Toshiba Corp (6502 JP)‘s selling could also lead to Kioxia Holdings (285A JP) meeting JPX’s tradable share ratio and removes an overhang for the stock.

• Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
• On the IPO front, India saw a host of listing, while HK is gearing up a busy year end.
• On the placements front, we had a look at some of the IPO lockups. There weren’t any large placements this week.

• Istyle Inc (3660 JP) is a cosmetics retailer under the name @Cosme, but it is also an exemplar of how to build a true omnichannel business.
• Its effective use of the deep data available from the 10 million users on its core @Cosme platform is its key asset.
• It now targets ¥83 billion in sales this year, using data to expand into supplements and Femtech.

• Mitsubishi Electric is pivoting its strategic focus towards high-growth digital and green technologies, exemplified by its ‘Serendie’ digital innovation platform and the recent acquisition of cybersecurity firm Nozomi Networks. This is intended to build on its established strengths in factory automation and automotive equipment.
• The company is targeting significant revenue growth from these new digital ventures, aiming for ¥1.1 trillion from Serendie-related initiatives by FY2031. This strategy is supported by heavy investment in AI and a planned tripling of its digital innovation workforce.
• While demonstrating strong recent growth and market momentum, the company faces considerable execution risks. These include integrating new acquisitions, competing with established digital platforms from rivals like Siemens and Hitachi, and navigating macroeconomic uncertainties such as currency volatility and potential tariffs.

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• The gradual increase in the proportion of independent directors is partly due to the growing shift from companies with audit committees to companies with audit and supervisory committees.
• Companies with audit committees tend to have more outside directors by design, yet they can delegate operational matters to inside directors. Consequently, companies don’t strongly resist having more outside directors.
• As more companies expand businesses globally, the number of foreign directors hasn’t increased significantly. The reason for this lack of growth is the absence of specific targets set by regulators.