Japan

In today’s briefing:

Nakano Refrigerators (6411 JP): Marunouchi Capital’s JPY7,900 Tender Offer
Ascentech (3565 JP): Orix (8591 JP)’s JPY1,680 Tender Offer
[Japan M&A] NTT Docomo Buys Out Carta Holdings (3688) Minorities – Done Deal
When Giants Clash: Yamada (9831) Vs. Nitori (9843)
Carta Holdings (3688 JP): NTT DoCoMo’s JPY2,100 Preconditional Tender Offer Is a Done Deal
Many Companies Are in Stage of Setting Caps to Ensure that Cash on Hand Grows No More than Necessary
Timee 2Q Results: Revenue Decline Is Only Temporary

Nakano Refrigerators (6411 JP): Marunouchi Capital’s JPY7,900 Tender Offer

Nakano Refrigerators (6411 JP) has recommended a tender offer from Marunouchi Capital at JPY7,900, a 35.0% premium to the last close price.
The offer is attractive as it represents an all-time high and is above the midpoint of the IFA DCF valuation range.
An attractive offer and irrevocables (33.19% ownership ratio) pave the way for deal completion. The tender runs from 17 June to 29 July.

Ascentech (3565 JP): Orix (8591 JP)’s JPY1,680 Tender Offer

Ascentech KK (3565 JP) has recommended a tender offer from Orix Corp (8591 JP) at JPY1,680, a 14.6% premium to the last close price.
Despite the lack of an auction, the offer is reasonable compared to historical trading ranges and aligns with the midpoint of the IFA DCF valuation range.
Minimum tendering is set at a 66.67% ownership ratio, with irrevocables representing a 27.81% ownership ratio. Management’s significant stakes aid in deal completion.

[Japan M&A] NTT Docomo Buys Out Carta Holdings (3688) Minorities – Done Deal

On 16 June 2025, NTT (Nippon Telegraph & Telephone) (9432 JP) sub NTT Docomo and Dentsu Inc (4324 JP) announced Docomo would buy out minorities in Dentsu sub Carta Holdings.
It’s an OK price, not a great price. But while they are not calculated by advisors, at least the Target Board talks about the value of synergies to minorities.
The price is light, but the combined irrevocables and large individual shareholders not brought over the wall get this over the line.

When Giants Clash: Yamada (9831) Vs. Nitori (9843)

By Michael Allen

Yamada, Japan’s leading home appliance retailer, trade at a PER of less than 9x. Nitori, the leading furniture retailer trades at about 17x.
Both companies, having saturated their core market, are diversifying into the other’s territory.
Key Takeaway: Nitori is diversifying into a business with inherently lower margins, while Yamada moves into one with inherently higher margins.

Carta Holdings (3688 JP): NTT DoCoMo’s JPY2,100 Preconditional Tender Offer Is a Done Deal

Carta Holdings, Inc. (3688 JP) has recommended a preconditional tender offer from NTT (Nippon Telegraph & Telephone) (9432 JP) at JPY2,100, a 37.2% premium to the last close price.
The offer is preconditional on several regulatory approvals, expected to commence in late August, and aligns with the midpoint of the IFA DCF valuation range.
Due to irrevocables from the controlling shareholder and key management, the required minority tendering rate is 11.2%. This low rate points to a done deal.

Many Companies Are in Stage of Setting Caps to Ensure that Cash on Hand Grows No More than Necessary

By Shifara Samsudeen, FCMA, CGMA

Improvements in OP margin and Sales/Total Assets have been slow to improve ROE. More companies are including DOE in their dividend policy against the backdrop of increasing cash on hand.
With costs expected to increase amid rising prices, sales and gross margins need to be raised, and therefore the component costs of investment and high-margin operations need to be raised.
Restructuring the business portfolio later to determine cash allocation will not result in effective investment and must result in limited improvement in profit margins on sales.

Timee 2Q Results: Revenue Decline Is Only Temporary

Timee Inc (215A JP) reported 2QFY10/2025 results on Thursday, 12th June. Revenues fell below consensus while OP beat consensus by a huge margin despite 2Q being a seasonally weak quarter.
Top line was hit by unauthorized use of services which forced Timee to strengthen counter measures. End of client fiscal year in food industry also contributed to the decline.
There are signs of recovery and the company’s share price moved up 7% on Friday on the back of strengthening profitability.

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Jun 16

Daily Brief Japan: Abc Mart Inc, Kitazato, Kioxia Holdings and more

In today’s briefing:

ABC Mart Extends Lead in Japan’s Footwear Market as Competitors Contract
Kitazato (368A JP): Greenshoe Nudges It Closer to Global Index Inclusion, but Shortfall Remains
ECM Weekly (16 June 2025) – Haitian, Sanhua, Kitazato, Primo, Kioxia, Xtalpi, Horizon, Keymed, Wuxi

ABC Mart Extends Lead in Japan’s Footwear Market as Competitors Contract

By Michael Causton

The footwear retail sector is a one horse race, with that horse being ABC Mart.
It continues to grow at a respectable rate while increasingly diminutive rivals contract.
ABC Mart is expanding further into the apparel category too, providing more room for future growth.

Kitazato (368A JP): Greenshoe Nudges It Closer to Global Index Inclusion, but Shortfall Remains

By Dimitris Ioannidis

Kitazato (368A JP) is forecasted to fail the market cap and float cap threshold of Global-F SmallCap even with the full exercise of the greenshoe.
Kitazato (368A JP) is expected to come close but miss the float cap threshold of Global-M SmallCap.
The full exercise of the greenshoe increases the probability of inclusion in Global-M SmallCap at the November 2025 review.

ECM Weekly (16 June 2025) – Haitian, Sanhua, Kitazato, Primo, Kioxia, Xtalpi, Horizon, Keymed, Wuxi

By Sumeet Singh

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, Foshan Haitian Flavouring & Food (603288 CH) launched its IPO, while Zhejiang Sanhua Intellignt Controls Co., Ltd. (002050 CH) has been pre-marketing.
On the placements front, there were a number of large deals acros the region, along with some large lockup expiries.

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Jun 15

Daily Brief Japan: TSE Tokyo Price Index TOPIX, Azoom, Hino Motors Ltd, Mitsubishi Shokuhin and more

In today’s briefing:

One of the Clues to Know How Serious a Company Is About Shifting to Management that Creates Value
TOPIX Inclusions: Who Is Ready (Jun 2025)
Last Week in Event SPACE: Hino Motors, Hong Kong’s Peg, Zijin Mining, MINISO
(Mostly) Asia-Pac M&A: New World Res., Fuji Corp, TRYT, Shinsung Tongsang, Austal, Mitsu. Shokuhin

One of the Clues to Know How Serious a Company Is About Shifting to Management that Creates Value

The driver of higher stock valuations is overseas investors, and engagement by overseas investors is likely to have a positive effect on return on capital and stock valuations.
In many aspects, companies seem to be unwilling to face shareholders. If they don’t confront shareholders and proceed with management reforms, they will not be able to implement serious initiatives.
It can be hypothesized that the behavior of prioritizing control over the AGM over engaging with shareholders provides a clue as to the seriousness of a company’s efforts.

TOPIX Inclusions: Who Is Ready (Jun 2025)

By Janaghan Jeyakumar, CFA

Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
GMO Financial Gate (4051 JP) and Azoom (3496 JP) have confirmed their moves to the Prime Market which would trigger TOPIX Inclusions for these names at the end of July.
Kitazato (368A JP) is expected to get listed in the Prime market in late-June and that name would also have a TOPIX Inclusion at the end of July.

Last Week in Event SPACE: Hino Motors, Hong Kong’s Peg, Zijin Mining, MINISO

By David Blennerhassett

Is Hino (7205 JP) a short or a long at ¥366/share? Suggest short, but also selling more as the stock goes up, and buying back the short on big dips.
A Bloomberg op-ed piece concludes it is time to move on from “from an archaic currency regime“. That conclusion on the Hong Kong peg appears presumptuous. And uninformed.
A spin-off makes sense as Zijin (2899 HK) capitalises on the upward cycle in gold prices. However, Zijin is trading at a single-digit NAV discount. Before any holding company discount.

(Mostly) Asia-Pac M&A: New World Res., Fuji Corp, TRYT, Shinsung Tongsang, Austal, Mitsu. Shokuhin

By David Blennerhassett

I tally 47 – mostly firm, mostly Asia-Pac – arb transactions currently being discussed and analysed on Smartkarma.
Three new deal were discussed on Smartkarma this week: New World Resources (NWC AU)‘s Scheme, and Tender Offers for Fuji Corp (7605 JP), TRYT (9164 JP), and Shinsung Tongsang (005390 KS).
Fer.Key updates/news took place on: Austal Ltd (ASB AU), HKBN Ltd (1310 HK), Shandong Fengxiang (9977 HK), and Mitsubishi Shokuhin (7451 JP).

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Jun 14

Daily Brief Japan: Nexon, Kitazato, 3 D Matrix Ltd, Cyberdyne Inc, Raccoon Holdings, Inc. and more

By Shifara Samsudeen, FCMA, CGMA

In today’s briefing:

Tencent To Acquire Nexon? Time and Price Lining Up for a Final Deal?
Kitazato IPO: Domestic Market Challenged by Structural Changes; Limited Prospect in Overseas Market
3 D Matrix Ltd (7777 JP): Full-year FY04/25 flash update
Cyberdyne (7779 JP) – Ongoing Improvement in Reducing Operating Loss
Raccoon Holdings, Inc. (3031 JP): Full-year FY04/25 flash update

Tencent To Acquire Nexon? Time and Price Lining Up for a Final Deal?

By Douglas Kim

Tencent has been interested in acquiring Nexon for more than six years. However, the timing and price were not right for such a deal to take place in the past.
The higher probability scenario is for Kim’s family members to sell when the timing and price is right. This time around, a $15 billion could be the right price.
Late founder Kim’s family members own a 44.4% stake in Nexon through NXC Corp and its affiliate NXMB BV. Kim’s wife and daughters own a 67.6% stake in NXC Corp.

Kitazato IPO: Domestic Market Challenged by Structural Changes; Limited Prospect in Overseas Market

Kitazato (368A JP) will debut on the Tokyo Stock Exchange’s Prime market on June 25th, with existing shareholders offering 14m shares at an indicative price range of ¥1,300-1,340 per share.
Given a structurally challenging domestic market, Kitazato has expanded its operations globally, however, its overseas operations have seen very limited traction over the years.
With growth rates expected to plateau, dividends are the only enticing thing and we think the IPO should be priced at a discount to compensate for the concerns.

3 D Matrix Ltd (7777 JP): Full-year FY04/25 flash update

Operating revenue increased 51.1% YoY to JPY6.9bn, driven by strong sales of absorbable local hemostat TDM-621.
The company reported an operating loss of JPY1.2bn, narrowing by JPY961mn YoY, with a recurring loss of JPY2.5bn.
FY04/26 forecast anticipates JPY9.3bn operating revenue, JPY400mn operating profit, and JPY301mn net income attributable to owners.

Cyberdyne (7779 JP) – Ongoing Improvement in Reducing Operating Loss

By Astris Advisory Japan

Cleared two major hurdles, accelerating the path to profitability – Management executed a large-scale restructuring of the U.S. subsidiary RISE Healthcare Group (RHG) and completed the divestiture of the underperforming LeyLine business.
These actions have materially contributed to narrowing operating losses and advancing the group’s overall turnaround.
Overseas drove the growth of the Product Rental business – FY results showed strong overseas performance in the Product Rental segment, led by demand from Ukraine and Malaysia.

Raccoon Holdings, Inc. (3031 JP): Full-year FY04/25 flash update

Raccoon Holdings achieved 5.0% YoY revenue growth in FY04/25, with EC and Financial businesses rising 6.9% and 2.4% respectively.
Operating profit increased 121.3% YoY, driven by reduced advertising expenses and increased personnel costs, resulting in a 20.6% OPM.
Revenue for FY04/26 is projected at JPY6.7bn (+10.5% YoY), with EC and Financial businesses growing 10.1% and 11.1% respectively.

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Jun 13

Daily Brief Japan: Hino Motors Ltd, Nexon, Denso Corp, Sumitomo Pharma, i-mobile Co Ltd, GiG Works, CellSource , Nippo Ltd and more

In today’s briefing:

[Japan M&A] Hino & Mitsubishi-Fuso Truck to Join; Bagholding Ugly for Minorities, and a Re-IPO
More Accurate Context Behind Tencent’s Nexon Moves Reported by Bloomberg
Denso Corp(6902 JP)–Value Zone, Upgraded Growth Outlook, Sooner Resolution of Cross-Holding Overhang
Sumitomo Pharma (4506 JP): Positive Momentum Persists, New Agreements Adds Steam
i-mobile Co Ltd (6535 JP): Q3 FY07/25 flash update
GiG Works (2375 JP): 1H FY10/25 flash update
CellSource (4880 JP): 1H FY10/25 flash update
Nippo Ltd. (9913 JP): Research Update

[Japan M&A] Hino & Mitsubishi-Fuso Truck to Join; Bagholding Ugly for Minorities, and a Re-IPO

On the 10th of June, Toyota Motor (7203 JP) subsidiary Hino Motors Ltd (7205 JP) and Mitsubishi-Fuso Truck & Bus Company announced their long-awaited integration plans. We have a deal.
An agreement was signed in 2023, but Hino got in big trouble for falsifying testing data on gasoline engine emissions/efficiency. Hino took a hit in 2023, then 2025. Talks advanced.
The deal announced suggests Toyota has thrown itself and Hino minorities under the proverbial Fuso bus. It’s VERY odd. But… it deserves a look because 2026 will see a re-IPO.

More Accurate Context Behind Tencent’s Nexon Moves Reported by Bloomberg

By Sanghyun Park

Government aims to sell 30.6% NXC stake by 2027 for ₩4T tax revenue, offering NXC a buyback or selling with management control to attract bidders.
The family won’t buy back the 30.6% stake but may allow partial management rights, with Tencent eyeing that stake—not a full $15B Nexon buyout as Bloomberg suggested.
Tencent’s targeting that stake chunk only, no control shift, so no mandatory tender offer triggered—at least for now.

Denso Corp(6902 JP)–Value Zone, Upgraded Growth Outlook, Sooner Resolution of Cross-Holding Overhang

By Sreemant Dudhoria,CFA

Cross-Holding Overhang Easing:Denso Corp (6902 JP) accelerates exit from Toyota Industries stake via tender offer, unlocking capital and aligning with capital efficiency and governance reforms.
Profitability Set to Improve: FY2026 profit outlook strong, driven by reduced quality-related costs, better operating leverage, and ongoing cost controls post fuel pump recall.
Valuation Comfort with Growth Drivers: Stock trades below historical average P/E; SDV, electrification, and semiconductor focus positions Denso well for re-rating amid sector tailwinds.

Sumitomo Pharma (4506 JP): Positive Momentum Persists, New Agreements Adds Steam

By Tina Banerjee

Sumitomo Pharma (4506 JP) and Knight Therapeutics (GUD CN) entered into exclusive license and supply agreements to commercialize Myfembree, Orgovyx, and vibegron in Canada.
Sumitomo Pharma and Novo Nordisk A/S (NOVOB DC) have entered into a co-promotion agreement in Japan for Ozempic subcutaneous injection.
Streamlining efforts and scouting for new revenue streams augurs well. Sumitomo stock remains in contention, up 27% in last 5 days.

i-mobile Co Ltd (6535 JP): Q3 FY07/25 flash update

Cumulative Q3 FY07/25 revenue was JPY18.7bn (+14.2% YoY), operating profit JPY4.0bn (+6.5% YoY), net income JPY2.9bn (+11.5% YoY).
Consumer Service segment revenue reached JPY16.8bn (+18.2% YoY), with a segment profit of JPY3.9bn (+11.3% YoY).
Online Advertising segment revenue was JPY1.8bn (-13.3% YoY), segment profit JPY121mn (-61.7% YoY), with promotion costs JPY319mn (-14.7% YoY).

GiG Works (2375 JP): 1H FY10/25 flash update

GiG Works reported a recurring loss due to decreased revenue and JPY115mn crypto asset valuation losses, despite higher net income from share sales gains.
The On-demand Economy business saw a decline in revenue and profit, while the Sharing Economy business experienced growth in both.
The FY10/25 forecast anticipates revenue growth in System Solutions and Sharing Economy, with a dividend of JPY2 per share.

CellSource (4880 JP): 1H FY10/25 flash update

By Nippon Investment Bespoke Research UK

Revenue decreased by 18.3% YoY, with operating profit down 93.9% YoY, and net income down 96.3% YoY.
Contract processing orders totaled 10,303, declining 8.5% YoY, impacting revenue from contract processing services by 10.6% YoY.
SG&A expenses decreased by 12.2% YoY, with a gross profit margin decline of 7.9pp to 56.1%, raising the SG&A-to-revenue ratio.

Nippo Ltd. (9913 JP): Research Update

Nippo produced record earnings in FY24, with OP of ¥1,970mil (+2.7% YoY) on sales of ¥44,890mil (+7.1% YoY).
Thanks primarily to solid growth in order for print circuit boards [PCBs] used in generative AI servers and wafer polishing jigs manufactured in Nippo’s Okinawa factory, sales landed above the firm’s guidance of ¥42,000mil.
FY25 is the final year of Nippo’s medium-term plan [MTP] which calls for an OP target of ¥2,000mil.

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Jun 12

Daily Brief Japan: Toyota Industries, Isetan Mitsukoshi Holdings Ltd, Tabio Corp, Sinfonia Technology, Nippo Ltd, TSE Tokyo Price Index TOPIX, SanBio Co Ltd, Tekken Corp and more

In today’s briefing:

Toyota Industries (6201 JP): Thoughts on Intrinsic Value
Isetan Shinjuku Takes 24% of Tokyo Market but Worries for Future
Tabio: Licensing and Overseas Expansion Should Boost Sock Retailer
Sinfonia (6507) | A Moment to Take Stock
Nippo Ltd. (9913 JP): Research Update
The Reality of the Concentration of AGM Dates Has Not Changed
SanBio Co Ltd (4592 JP): Akuugo Shipments Expected To Commence In 2QFY26, New Credit Line In Place
Tekken Corporation (1815 JP) – Responding to Social Infrastructure Demands…

Toyota Industries (6201 JP): Thoughts on Intrinsic Value

By Nippon Investment Bespoke Research UK

Several investors have sharply criticised Toyota Industries (6201 JP)’s preconditional tender offer from Toyota Fudosan. Oasis is pushing for a higher offer.
The offer has several issues that are detrimental to minorities’ interests. The key grievance is that it is below TICO’s intrinsic value.
Due to TICO’s varied business units, SoTP valuation is the most appropriate methodology. My analysis suggests a base case intrinsic value of around JPY19,000.

Isetan Shinjuku Takes 24% of Tokyo Market but Worries for Future

By Michael Causton

Department stores had a terrific year in FY2024, especially some of the more iconic stores like Isetan Shinjuku and Hankyu Umeda.
Declining custom from tourists is beginning to be a worry but the emphasis on capturing data on core local customers has, and will, pay big dividends for the best stores.
The rest of the sector however, will continue to contract but the polarisation will help highlight the luxury positioning of the best stores.

Tabio: Licensing and Overseas Expansion Should Boost Sock Retailer

By Michael Causton

Tabio is the biggest retailer of hosiery in Japan but has suffered a decade of stagnant growth.
It now has plans to grow e-commerce, men’s sports lines through licenses such as with FC Barcelona.
It will also speed up overseas expansion, especially in China.

Sinfonia (6507) | A Moment to Take Stock

By Mark Chadwick

Strong fundamentals priced in: Sinfonia’s sharp share price rally reflects robust FY3/25 results, but modest FY3/26 guidance limits near-term upside potential.
Conservative outlook despite tailwinds: Management’s cautious projections for semiconductor and defense segments appear understated given ongoing structural growth in both industries.
Valuation fair at current levels: Updated DCF suggests shares are reasonably valued; premium to peers justified by dual exposure to secular growth in aerospace and semiconductors.

Nippo Ltd. (9913 JP): Research Update

Nippo produced record earnings in FY24, with OP of ¥1,970mil (+2.7% YoY) on sales of ¥44,890mil (+7.1% YoY).
Thanks primarily to solid growth in order for print circuit boards [PCBs] used in generative AI servers and wafer polishing jigs manufactured in Nippo’s Okinawa factory, sales landed above the firm’s guidance of ¥42,000mil.
FY25 is the final year of Nippo’s medium-term plan [MTP] which calls for an OP target of ¥2,000mil.

The Reality of the Concentration of AGM Dates Has Not Changed

In 2024, 69.7% of AGMs concentrated on the last three days of June, but in 2025, 79.9% of companies will hold AGMs on the last four days of June.
Most companies have established that they provide electronic convocation notices up to three weeks in advance. Meanwhile, only 1/3 of Prime companies provide English translations of all convocation notices.
Over 80% of companies hold AGMs in formats that require attendance at the venue to have a say. Only 1.6% hold AGMs where a shareholder can attend and speak online.

SanBio Co Ltd (4592 JP): Akuugo Shipments Expected To Commence In 2QFY26, New Credit Line In Place

By Tina Banerjee

SanBio Co Ltd (4592 JP) successfully completed three commercial production runs to accumulate inventories in preparation for launch. The earliest possible timing for shipment is expected to be 2QFY26.
During FY25, SanBio did not generate any revenue. The successful launch and shipments are likely to have only a minimal impact on the financial performance of the company in FY26.
SanBio has a cash runway through FY26. Further, in, company entered into a new committed credit line agreement (¥1B) with Mizuho Bank.

Tekken Corporation (1815 JP) – Responding to Social Infrastructure Demands…

By Sessa Investment Research

TEKKEN CORPORATION (hereafter, “the Company”) is a construction firm centered on railroad construction, with operations spanning civil engineering, architectural construction, and real estate.
As an equity-method affiliate of JR East, which holds a 19.6% stake, the Company secures stable, long-term orders for key projects such as the improvement work of major stations and the new Haneda Airport access line.
Railroad construction accounts for approximately 40% of consolidated net sales.

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Jun 11

Daily Brief Japan: Sony Corp, TRYT , Nikkei 225, Kitazato, Poletowin Pitcrew Holdings, Kioxia Holdings and more

In today’s briefing:

Nikkei 225 Proposal for Dealing With Sony’s (6758) Sony Finl Spinoff – A Non-Event but TOPIX Isn’t
[Japan M&A] Carlyle Deal for TRYT (9164) – Great Exit for Speculators as HR Co Targets Are Desirable
Tryt (9164 JP): Carlyle’s JPY880 Tender Offer Is a Done Deal
Nikkei 225 Tactical Outlook Amidst Sony Corp’s Financial Group Spin-Off Talks
Kitazato IPO – Isn’t Particularly Enticing Apart from the Dividend Yield
Poletowin Pitcrew Holdings (3657 JP): Q1 FY01/26 flash update
Kioxia IPO Lockup Expiry – US$6.7bn Release, with Shareholders Eager to Sell

Nikkei 225 Proposal for Dealing With Sony’s (6758) Sony Finl Spinoff – A Non-Event but TOPIX Isn’t

A couple of years ago, Sony Corp (6758 JP) announced they would spin off Sony Financial Holdings (8729 JP) (called Sony Financial Group Inc). That spinoff is due in Sep-2025.
The extra capital required for a tech/industrial to hold the financial business is significant, but some of the other reasons Sony has offered are just management-speak hogwash.
The problem? It creates a new event in the Nikkei 225 paradigm for which there was no rule. Now the Nikkei has proposed a rule. It isn’t perfect.

[Japan M&A] Carlyle Deal for TRYT (9164) – Great Exit for Speculators as HR Co Targets Are Desirable

In early February, articles suggesting the PE owner of TRYT (9164 JP) wanted to cash out. Performance post-IPO had been bad. Catching up to the IPO price would be tough.
But a second round of bidding came about, so the stock went limit up. Then it settled in the ¥480 range for three weeks. Then started to climb.
Now the company and its PE firm owner have announced a sale to a new PE Firm at ¥880/share. This is below IPO Price but it will get done.

Tryt (9164 JP): Carlyle’s JPY880 Tender Offer Is a Done Deal

TRYT (9164 JP) has recommended a tender offer from Carlyle Group / (CG US) at JPY880, a 34.6% premium to last close and a 135.3% premium to the undisturbed price.
Despite 26.7% below the IPO price, the offer is attractive compared to peer multiples and is above the mid-point of the IFA DCF valuation range.
The chance of a competing proposal is low, as Carlyle’s offer was the highest in the auction. EQT has provided an irrevocable (60.00% ownership ratio), which ensures a done deal.

Nikkei 225 Tactical Outlook Amidst Sony Corp’s Financial Group Spin-Off Talks

By Nico Rosti

The Nikkei 225 (NKY INDEX) is currently rallying after a modest pullback last week.
The index went above our model resistance level at 38347 (50% prob. of reversal). It’s modestly overbought and could go higher.
News can perturbate the trajectory of the index but at the moment the Nikkei seems directed towards higher prices: 39216 is our profit target for this rally, before Jun 27th.

Kitazato IPO – Isn’t Particularly Enticing Apart from the Dividend Yield

By Sumeet Singh

Kitazato (368A JP) manufactures and sells medical devices and products for fertility treatment. It aims to raise around US$130m in its Japan IPO.
Kitazato specializes in artificial insemination, in vitro fertilization, cell cryopreservation and reproductive engineering technologies in regenerative medicine.
In our previous note, we looked at its past performance and other deal dynamics that might impact the listing. In this note, look at the firm’s valuation.

Poletowin Pitcrew Holdings (3657 JP): Q1 FY01/26 flash update

Revenue increased by 6.7% YoY to JPY12.8bn, with all business segments posting profit growth despite some challenges.
The company posted an operating loss of JPY22mn, significantly better than the forecasted JPY236mn loss for 1H.
Recurring profit was JPY481mn, with a foreign exchange loss of JPY434mn due to yen appreciation against the USD.

Kioxia IPO Lockup Expiry – US$6.7bn Release, with Shareholders Eager to Sell

By Sumeet Singh

Kioxia Holdings (285A JP) raised around US$800m (including over-allocation) in its Japan IPO, after pricing its IPO in the middle of its range. Its IPO linked lockup will expire soon.
Kioxia is a manufacturer and a global leader in flash memory and solid state drives for smartphones, PCs, enterprise servers and data centers.
In this note, we will talk about the lock-up dynamics and updates since our last note.

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Jun 10

Daily Brief Japan: With Us Corp, Azoom, Sony Corp, Nikkei 225, Restar Holdings Corporation, TSE Tokyo Price Index TOPIX, Primo Global and more

In today’s briefing:

With Us (9696 JP): NSSK’s JPY3,237 Tender Offer
[Japan ECM/Index] Azoom (3496) Offering to Enable Move to TOPIX
Index Treatment of Sony (6758 JP)’s Spinoff of the Financial Services Business
Bank of Japan’s June Policy Decision: A Non-Event for Markets?
Restar (3156 JP) – Progress Required to Unlock Full Potential
Declining Number of Shares Has Just Begun, but Valuations Need to Rise for Market Cap to Grow
Primo Global Pre-IPO: Fairly Valued, Controlling Shareholders Rushing for Exit

With Us (9696 JP): NSSK’s JPY3,237 Tender Offer

With Us Corp (9696 JP) has recommended a tender offer from Nippon Sangyo Suishin Kiko (NSSK) at JPY3,237, an 18.0% premium to the last close price.
The offer represents an all-time high and concludes SwissAsia’s activist campaign to spill the Board at the AGM on 26 June.
SwissAsia and the founding family have provided irrevocables (39.81% ownership ratio), paving the way for deal completion.

[Japan ECM/Index] Azoom (3496) Offering to Enable Move to TOPIX

On Friday 6 June, Azoom (3496 JP) announced it would conduct an offering (small issuance of new shares, some Treasury shares, larger selldown by the main shareholder).
That comes in conjunction with a transfer to TSE Prime from TSE Growth, which itself leads to a TOPIX Inclusion trade next month.
The company has decided to tack on a special dividend for this year, on top of growth and more liquidity. None of this is especially bad.

Index Treatment of Sony (6758 JP)’s Spinoff of the Financial Services Business

By Brian Freitas

For each share of Sony Corp (6758 JP), shareholders will receive 1 share of Sony Financial Group. Ex-date for the dividend in-kind is 29 September.
The Nikkei has started a market consultation on treatment of the spinoff in the Nikkei225 and that means the dividend in-kind will not be included in the Dividend Point Index.
There will be some selling in SFGI from passive trackers and the company will buy back some stock following listing. Details of the buyback have not been announced yet.

Bank of Japan’s June Policy Decision: A Non-Event for Markets?

By Gaudenz Schneider

With Japan’s policy rate at 0.5% and the last hike in January 2025, markets are closely watching the BoJ’s next move on June 17.
Historical data shows limited market impact from anticipated rate decisions—but rare surprises, like the July 2025 hike, have triggered outsized index reactions.
While historical data and current option pricing suggest the June BoJ decision is unlikely to move markets significantly, investors should be aware of low-probability tail risk when positioning.

Restar (3156 JP) – Progress Required to Unlock Full Potential

By Astris Advisory Japan

Business scaling and transforming – Q1-4 FY3/25 results were in line with our expectations, with a relatively resilient underlying earnings trend YoY despite FX headwinds and difficult macro conditions.
Restar’s roll-up strategy contributed to a 9.5% YoY sales growth. Profitability declined due to a deteriorating sales mix in the Device business and intensifying competition in the power supply-demand adjustment market in Eco solutions.
Progress is evident for business transformation efforts to introduce high-value-added services, with the consolidated PCI Group rebranded as the IT & SIer BU (business unit). F

Declining Number of Shares Has Just Begun, but Valuations Need to Rise for Market Cap to Grow

That’s good news when considering that the number of listed shares is declining, which means that the understanding of the cost of capital has spread to some extent among companies.
With many companies having excess cash on hand and being able to generate cash from restructuring their business portfolios, the number of listed shares is expected to continue to decline.
Since there are only a few companies that global investors can invest in, there is a need to strengthen profitability to increase corporate value to increase market capitalization per company.

Primo Global Pre-IPO: Fairly Valued, Controlling Shareholders Rushing for Exit

By Nicholas Tan

Primo Global (367A JP) is looking to raise up to $96m in its upcoming Japan IPO
It specializes in merchandising bridal jewellery, namely engagement rings and wedding rings.
In this note, we examine the IPO dynamics, and look at the firm’s valuation.

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Jun 09

Daily Brief Japan: Fuji Corp, Toyota Industries, TSE Tokyo Price Index TOPIX and more

In today’s briefing:

[Japan M&A] Private Co Takeout of Fuji Corp (7605 JP) – A Done Deal
Fuji Corp (7605 JP): Usami Koyu’s JPY2,830 Tender Offer Is Light but Done
Weekly Deals Digest (08 Jun) – Toyota Industries, Makino, Fuji Corp, Tam Jai, PointsBet, Mayne
A Reluctance to Confront Shareholders Is at the Root of Many Problems

[Japan M&A] Private Co Takeout of Fuji Corp (7605 JP) – A Done Deal

The long-term major owner now chairman is getting out. The company was shopped. And bought. And this is the deal. ¥2,830 which is about 5.7x this year’s EBITDA.
It could have been done a bit better, but irrevocables are 48.5% out of the 50.01% minimum and other directors get this past the minimum hurdle.
Transparency is lacking but it is an all-time high and you can’t do much about it.

Fuji Corp (7605 JP): Usami Koyu’s JPY2,830 Tender Offer Is Light but Done

Fuji Corp (7605 JP) has recommended a tender offer from Usami Koyu at JPY2,830, a 32.2% premium to the last close price.
Unusually for a Board recommended offer, the lower limit will not achieve a 66.67% ownership ratio. Based on past EGM voting ratios, it is set at a 50.01% ownership ratio.
While the offer represents an all-time high, it is below the midpoint of the IFA DCF valuation range. However, due to irrevocables, this is a done deal.

Weekly Deals Digest (08 Jun) – Toyota Industries, Makino, Fuji Corp, Tam Jai, PointsBet, Mayne

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments: Foshan Haitian Flavouring & Food (603288 CH) has filed its PHIP for an H Share listing to raise US$1 billion.
Event-Driven developments: Toyota Industries (6201 JP), Makino Milling Machine Co (6135 JP), Fuji Corp (7605 JP), Tam Jai International (2217 HK), PointsBet Holdings (PBH AU), Mayne Pharma (MYX AU).

A Reluctance to Confront Shareholders Is at the Root of Many Problems

Until now, listed companies have been reluctant to even lower the minimum shareholder purchase amount for reasons of economic rationality and administrative costs.
The same issues underlie reluctance of companies in lowering amount to purchase shares, online AGMs, electronic delivery of text in notice of convocations, and pre-AGM disclosure of annual securities reports.
Companies have been focused on controlling AGM rather than facing shareholders to increase their interests. This practice is problem that can lead to slower ROE and excessive cash on hand.

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Jun 08

Daily Brief Japan: Toyota Industries and more