Japan

• Yesterday, Kakaku agreed to dissolve its Capital Alliance with KDDI. That was expected. KDDI agreed to sell everything. I expect it is accounting-driven. 
• Today, EQT’s ¥3,680 TOB was set to expire so they raised it to ¥3,681 and extended 10 days. Interestingly, their Bidder Announcement document changed content significantly. 
• The reference to negotiating with Oasis is gone. Instead, a diatribe against Bain for not being serious about things, bringing a non-feasible bid. There is vaguely threatening language.

• On 28 Sep 2026, aircon instrumentation servicer/installer Nihon Dengi (1723 JP) announced five shareholders would sell 3.852mm shares in a secondary offering, with a 577,800 share greenshoe.
• That was about ¥11bn and not quite 20 days of ADV. Today, shares are 13% lower.  
• On an adjusted capital allocation basis, this company is cheap, the niche growth profile is still good, margins are high, position is strong, and there is One Big Thing coming.

• EQT/Digital Garage (4819 JP) raised its Kakaku.com Inc (2371 JP) offer by JPY1 to JPY3,681, extending the closing to 14 October. EQT/DG argue that Bain/LY’s JPY3,597 offer cannot launch.
• EQT/DG’s criticism is only partly valid. Its primary argument is circular, and the market-manipulation claim looks overstated. Still, Bain/LY’s pricing below the thresholds and its unclear launch are real weaknesses.
• Bain/LY’s most credible path is a substantive bump above JPY3,755, ideally towards the high end of the IFA DCF range (JPY3,923). Anything else risks EQT/DG winning.

• Flashlight Capital (Singapore based activist firm) is going activist on Secom Co Ltd (9735 JP), especially demanding Secom’s management team to overhaul the company’s overseas strategy.  
• Flashlight Capital has urged SECOM to increase its stakes in S-1 and Taiwan SECOM to at least 50% for under JPY 156 billion to raise overseas revenue to approximately 28%.
• All in all, despite Flashlight Capital’s attempt at overhauling Secom Co’s overseas business, I think realistically any major change could take a long period of time (several years).

• FY26 is largely de-risked: 9M operating profit reached ¥614bn (+36%); we expect another 4Q beat, led by strong International performance.
• FY27 guidance is the key test: International margins, weak Japan traffic, China growth and especially yen strength will determine whether our ¥851bn OP forecast is achievable.
• Valuation leaves limited upside at current levels: Our ¥69,000 target is close to the current share price; we remain Neutral, awaiting stronger Japan trends and supportive guidance.

• Organo Corp (6368 JP) has a strong pricing power and high customer retention ratio, as most fabs makers cannot run without Organo’s ultrapure water solution. 
• With an impending stock split of 5 to 1 on September 29th, 2026, the stock is about to get a lot of retail inflows as the nominal price is cheaper. 
• The company posts a 29% ROE, yet it trades at a 17-18% P/E, 1.5x PEG, and is cheaper than most semiconductor players, as it temporarily lost some business. 

• Nihon Dengi Co., Ltd. (1723 JP) is Japan’s premier specialized engineering contractor for automated central HVAC and industrial control instrumentation, operating as the principal authorized distributor and engineering partner of Azbil Corporation (~70% domestic market share).
• The company is undergoing a highly lucrative structural shift toward existing facility renovations and maintenance (~65-70% of HVAC revenue), which has propelled gross margin from 36.5% in FY24 to 46.5% in FY26 and net margin to 18.2%, insulating earnings from broad construction cyclicality.
• Financial execution remains outstanding, characterized by a 3-year EPS CAGR of 38.91%, a debt-free fortress balance sheet generating JPY 8.6bn in Free Cash Flow, an industry-leading ROE of 18.4%, and aggressive dividend compounding (3-year CAGR of 35.56%).

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• Short sellers made decisive moves this week ending September 26.
• Energy refining ETF CRAK saw SI hit 36.8% of float – up 38% in seven days.
• Mortgage REIT RWT saw the sharpest build, with SI surging 215% to 22.1% of float as borrow dried up.

• Companies planning IPO on Growth Market now have no choice but to aim for market capitalization of 10 billion yen. Companies with lower market capitalization will list on Standard Market.
• The issue of declining quality in Standard Market—as companies with low growth and small market capitalizations list, and companies with small market capitalizations migrate from Growth Market—will come into focus.
• Can a company that IPOs 15 years after its founding be considered a growth company? This highlights the seriousness of the problem that there are few growth companies in Japan.

• Byron Gill is Managing Partner of Indus Capital, a roughly $6 billion investment firm founded in 2000 by six alumni of Soros’s Asian equity team, and an independent director of Fujitsu.
• Hedge Fund Alpha spoke to him ahead of the inaugural October 16th Sohn Tokyo Conference , and asked him about a quarter-century of investing across Asia, sitting on a Japanese board from the inside, and why he thinks the birth of a real market for corporate control in Japan changes the calculus for engagement investors like Indus.
• Born in Tokyo, raised in Texas Gill was born in Tokyo, where his father worked for Gillette, and relocated to Texas at age seven, a move his Brooklyn-born mother found a bigger culture shock than Japan itself had been.

• The ¥1tn impairment remains unconfirmed, but the market has already lost ¥500bn — pricing roughly half the reported accounting damage.
• EV motors delivered <40% of target revenue, China share has effectively disappeared, and the CEO exit leaves a governance vacuum.
• AVOID / REDUCE: ¥2,000 target; wait for audit resolution as ¥2,405 still offers little margin of safety and downside remains asymmetric.

• Take profit ahead of 3Q: at ¥6,020, Money Forward has effectively reached our ¥6,030 DCF value. 
• Strong results largely anticipated: HIRAC boosts headline EBITDA, while a guidance raise is increasingly priced into ~5x FY26E sales. 
• Risk/Reward has shifted: limited valuation cushion makes protecting gains ahead of a potentially noisy 3Q print prudent.

• Q1 profitability was impacted by higher depreciation from the newly operational Chita Mill and cost inflation, exacerbated by the ongoing Middle East tensions, that outpaced pricing, but we believe the weakness is transitory rather than a change in the Company’s operating performance.
• Flour Milling continued to show underlying operating improvement and is tracking ahead of its full-year plan, while price revisions in the Food segment should drive a profitability recovery in H2. Importantly, SG&A growth decelerated versus FY3/26 as NIPPN executes on cost reduction measures, a sign of the efficiency discipline that drives medium- to long-term profitability improvements.
• Furthermore, NIPPN’s capital structure optimization continues to progress steadily, with further cross-shareholding disposals planned through the remainder of FY3/27.

Key points (machine generated)

• Kaizen Platform expects a revenue decline and operating loss for the interim period of fiscal year 2026 but aims for profitability by year-end.
• The company integrates AI technology with a specialized personnel network to enhance customer experience and facilitate digital transformation for large enterprises.
• Kaizen Platform focuses on increasing average revenue per user and recurring revenue through cross-selling and upselling strategies, particularly with its ‘Magical UX’ application.

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Key points (machine generated)

• NS Group, Inc. operates in the rent guarantee sector, providing services for residential and commercial properties through its subsidiary, Nihon Safety Co., Ltd.
• The company reported a 12.2% year-on-year revenue increase in the first half of FY12/26, with a projected full-year growth of 10.9% driven by new contracts and effective bad debt management.
• NS Group aims for ¥36.5 billion in revenue by FY12/27, focusing on market expansion in metropolitan areas and enhancing commercial rent guarantees, supported by the acquisition of Alpha agency network.

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Key points (machine generated)

• Axis <4012> is expected to achieve record-high performance by December 2026, focusing on high value-added services and AI.
• The company has maintained profitability for 35 periods and operates debt-free, with a strong emphasis on finance and public infrastructure sectors.
• Axis’s new management plan, ‘Go Beyond,’ aims to transition it into a value co-creation partner, leveraging AI and cloud solutions.

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Key points (machine generated)

• Segue Group is a Tokyo Stock Exchange-listed holding company specializing in cybersecurity and IT infrastructure.
• The company operates four main businesses: Value Added Distribution, system integration, in-house security product development, and overseas expansion.
• Segue Group has shifted focus to developing its own software, particularly the ‘RevoWorks*’ series, leading to an upward revision of profit forecasts for fiscal year 2026.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only.

• On August 25, 2026, Daiichi Kigenso Kagaku Kogyo Co., Ltd. (hereafter, the Company), the leading manufacturer of zirconium (chemical symbol: Zr; atomic number 40) compounds, announced in a press release that it had established domestic manufacturing technology for hafnium (chemical symbol: Hf; atomic number 72), one of the critical rare metals.
• The Company plans to begin supplying samples by the end of 2026 and aims to start mass production in 2028.
• Like zirconium, hafnium is a Group 4 element in the titanium group. It is found naturally in zirconium ores in trace amounts (1–2%).

Key points (machine generated)

• FCE Ltd. specializes in digital transformation and education, offering RPA software ‘RoboPat AI’ and the AI platform ‘AI OMNI AGENT.’
• The company provides a subscription-based online training system ‘Smart Boarding’ and educational tools for junior high and high school students.
• FCE focuses on high-margin recurring revenue and customer support, aiming to enhance human capital and prepare for a future listing on the Prime Market.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only.

• Murakami’s City Index Fifth has launched a JPY125,000-per-unit tender (a 16.6% premium to the last close) for Sankei Real Estate (2972 JP). That matches Tosei/GIC’s failed offer, which Murakami blocked.
• Murakami’s terms are weaker than Tosei/GIC: 1.10x P/NAV versus 1.15x, no price negotiation, a neutral board, no majority-of-minority condition and a vaguer commitment on rival bids.
• The squeeze-out vote relies on low turnout and passives. However, the 25.42% minimum looks reachable (24.66% tendered last time, plus 10.32% irrevocables). 

• Margins are the near-term catalyst: Hiring drops sharply, supporting guided adjusted operating-margin expansion from 11% in FY6/27 to 15.5% in FY6/28.
• Corporate Mid drives growth: ARR grew 27.2%, supported by accounting-firm distribution, while AI and embedded finance provide additional potential upside.
• Cash conversion is the key risk: Adjusted profit masks SBC, capitalised software and card funding; weak FCF could undermine valuation if AI pressures margins.

• I summarise the latest spreads and newsflow for the merger arb situations covered across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, the Philippines, Thailand, and Chinese ADRs.
• Highest spreads: Skyworth (751 HK), OFX Group (OFX AU), Goodbaby International (1086 HK), Z Fin (1168 HK), Peet Ltd (PPC AU), Atlantic Lithium (A11 AU), Cleanaway Waste Management (CWY AU). 
• Lowest spreads: Kadoya Sesame Mills (2612 JP), Leopalace21 Corp (8848 JP), Kakaku.com Inc (2371 JP), Accent Group (AX1 AU), Taiyo Holdings (4626 JP), Vault Minerals Ltd (VAU AU). 

• Context: This Insight follows up on previously highlighted relative value opportunities, using a statistical methodology based on mean-reversion to identify opportunities in paired securities.
• Highlights: In Japan, currently three pair trade opportunities persist across three sectors.
• Why read: Statistical analysis offers a unique perspective on relative value. Gain insights into actionable statistical pair trade opportunities and monitor performance of previously highlighted pairs.

• Market Leadership in Specialty Compounding & Functional Films: RIKEN TECHNOS CORPORATION (4220 JP) holds an entrenched global niche position in synthetic resin compounding (polyvinyl chloride and thermoplastic elastomers) and specialty extruded/calendered films, serving high-specification transportation, healthcare, electronics, and construction end-markets with manufacturing operations across Japan, the United States, Thailand, and Indonesia.
• Operational Mix Shift Driving Superior Cash Conversion: Despite moderate top-line volume growth (3-year revenue CAGR of 2.08%), product mix optimization toward high-margin elastomer compounds and precision films has expanded gross margins to 22.43% and EBITDA margins to 15.09% in recent quarters, underpinning a 3-year EPS CAGR of 28.70% and Free Cash Flow of ¥8.56B in FY2026.
• Proactive Capital Allocation and Accelerating Shareholder Returns: Management’s focused asset rationalization (such as consolidating film production from Gunma to Saitama) combined with aggressive capital return policies—reflected in a 5-year dividend CAGR of 31.40% (3.5% yield), a surge to ¥76.0/share in FY2026, and active multi-billion yen share repurchases—provides strong downside support and structural ROE expansion.

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• Established B2B Route-Based Services Platform: Daiohs Corp (4653 JP) is a prominent workplace solutions provider in Japan and North America, operating a direct-distribution route model across Office Coffee Services (OCS), pure water systems, and clean-care environmental hygiene, serving over 200,000 corporate client accounts.
• Cash Generation Amid Structural Workplace Headwinds: While the pandemic and subsequent adoption of hybrid work pressured top-line volume (3-year revenue CAGR of -4.55% and net income CAGR of -23.34%), Daiohs sustained robust cash flow conversion, delivering a 3-year Free Cash Flow CAGR of 37.60% through disciplined working capital and capital expenditure management.
• Private Equity Transformation and Cross-Selling Strategy: Supported by its management buyout (MBO) in partnership with Integral Corporation, the company is actively optimizing route density, upgrading to IoT-enabled bean-to-cup brewing hardware, and expanding high-margin environmental and indoor air quality services to drive customer lifetime value.

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• Sankei Real Estate’s (2972 JP) new ¥125,000 per unit tender offer by Murakami-backed City Index Fifth is a face-saving restructuring exit after Murakami blocked the identical Tosei/GIC bid in May 2026. The transaction represents a negotiated compromise where the asset manager agreed to liquidate the problematic Fukuoka Green Building for ¥5.5 billion to clear the path for privatization.
• The board’s support of the tender offer, while maintaining a neutral recommendation to unitholders, is a defensive posture under METI’s Fair M&A Guidelines. Because the asset manager, Sankei Building Asset Management, remains deeply aligned with the sponsor, Fuji Media Holdings (FMH), the board could not actively recommend tendering without facing potential lawsuits over the underlying value of the sponsor’s concurrent ¥1 trillion restructuring sale process.
• Retail broker non-participation and administrative friction present a major technical risk to the transaction’s completion. Since the tender offer is managed strictly through a designated lead broker, minority retail unitholders face significant friction in transferring units across non-cooperating brokerages, which historic data shows can lead to a 5% to 10% non-response rate that threatens the 45% minimum threshold.

• Cash flow is of the utmost importance for companies operated under the going-concern assumption. Therefore, companies and businesses are valued by discounting their cash flows at the cost of capital.
• To determine whether there have been improvements in each item this year compared to the previous one, it seems that using an accounting measure such as ROIC is convenient approach.
• The reason Japanese companies have low operating margins is that many have low gross profit margins. Management strategy—including allocation of resources to develop products with high gross profit margins—is necessary.

• In January, Tosei Corp (8923 JP) and GIC launched a TOB on Sankei Real Estate (2972 JP), the REIT of sponsor Sankei Building, a subsidiary of targeted/beleaguered Fuji Media (4676). 
• Murakami-San bought a large stake in the REIT, first sending the price up, then blocking the deal. A Fukuoka-based building was written down hard, a dividend promised was revoked.
• Post deal-fail, REITs fell as interest rates rose. Murakami-san negotiated with the REIT and its Special Committee. The Fukuoka Green Building is sold.

• Resonac Holdings (4004 JP) is worth more than ¥200/share over the medium-term. But expect this Crasus Chemical (646A JP) spinoff to create trading and accumulation opportunities in the near future.
• Tokio Marine (8766 JP) reportedly identified Suncorp (SUN AU). It’s a clean play after selling Suncorp Bank to ANZ. IAG (IAG AU) is now cleaner after settling the Greensill litigation.
• Legend Holdings (3396 HK) remains deeply valued. It is now seeking to offload its 90% stake in Banque Internationale à Luxembourg for ~HK$23bn. 

• I tally 36 – mostly firm, mostly Asia-Pac – arb transactions currently being discussed and analysed on Smartkarma. Those arbs metrics and upcoming events are detailed below.
• Three new deals were discussed on Smartkarma this week: Global Lithium Resources Ltd (GL1 AU), IDP Education (IEL AU), and Kobayashi Pharmaceutical Co (4967 JP).
• Key updates/news also took place on: OFX Group (OFX AU),Changhong Jiahua (3991 HK), Ajinomoto Malaysia (AJI MK), Carnaby Resources (CNB AU), and Reliance Worldwide Corp (RWC AU).

• Context: This Insight follows up on previously highlighted relative value opportunities, using a statistical methodology based on mean-reversion to identify opportunities in paired securities.
• Highlights: Currently eight pairtrade opportunities persist across three markets and five sectors.
• Why read: Statistical analysis offers a unique perspective on relative value. Gain insights into actionable statistical pair trade opportunities and monitor performance of previously highlighted pairs.

• For companies that view the measures to reduce administrative burden of AGM as part of compensation for filing annual securities reports before AGM, only a few days’ earlier submission is possible.
• Meanwhile, with returns on capital still insufficient, there is growing discussion about increasing the number of individual investors as a way to prepare for attacks from foreign investors.
• With many companies still failing to improve stock valuations and return on equity, it makes no sense to increase the number of individual shareholders simply to get corporate proposals approved.

• On August 25, 2026, Daiichi Kigenso Kagaku Kogyo Co., Ltd. (hereafter, the Company), the leading manufacturer of zirconium (chemical symbol: Zr; atomic number 40) compounds, announced in a press release that it had established domestic manufacturing technology for hafnium (chemical symbol: Hf; atomic number 72), one of the critical rare metals.
• The Company plans to begin supplying samples by the end of 2026 and aims to start mass production in 2028.
• Following basic research conducted with the technical cooperation of its joint research partner Emulsion Flow Technologies Ltd., the Company has established domestic technologies for hafnium production and sample prototyping.

• Context: The Sojitz (2768 JP) vs. Idemitsu Kosan (5019 JP) price ratio has deviated more than two standard deviations from its one-year average, presenting a potential relative value opportunity.
• Highlight: Going long Sojitz (2768 JP) and short Idemitsu Kosan (5019 JP) targets a 10% return.
• Why Read: Essential for quantitative traders seeking mean-reversion opportunities, with detailed execution framework, risk management protocols, and historical simulation showing the statistical basis for this relative value play.

• CVC and NSSK are reportedly proposing a buyout of Kobayashi Pharmaceutical Co (4967 JP) worth over JPY500bn, possibly with the founding family. That implies JPY6,406 a share, a 9% premium.
• While the offer appears attractive relative to precedent and peer multiples, Oasis, the largest shareholder, is unlikely to back it.
• At the rumoured offer, Oasis will get a 17% return on its average cost, which is modest. The Taisho privatisation precedent suggests Oasis will push for a higher offer. 

• Last night, news came out that Kobayashi Pharmaceutical Co (4967 JP) had received a ~¥500bn buyout proposal from a PE Fund consortium of CVC, NSSK, and the founding family.
• Kobayashi was at the center of a beni koji (red rice yeast) supplements contamination scandal revealed in 2024. The Chairman and CEO from the family resigned.
• Activist Oasis Management built a stake 2+yrs ago and have steadily increased it to 14%. They want the founding family influence out. This isn’t as easy as one likes.

• Context: The Idemitsu Kosan (5019 JP) vs. ENEOS Holdings (5020 JP) price ratio has deviated more than two standard deviations from its one-year average, presenting a potential relative value opportunity.
• Highlight: Going long ENEOS Holdings (5020 JP) and short Idemitsu Kosan (5019 JP) targets a 5% return.
• Why Read: Essential for quantitative traders seeking mean-reversion opportunities, with detailed execution framework, risk management protocols, and historical simulation showing the statistical basis for this relative value play.

• In Q1 FY2027/3, Nitto Kogyo Corporation (hereafter, the Company) reported net sales of JPY 45,536 mn (+8.8% YoY), supported by corporate capital investment demand amid expanding investment in artificial intelligence (AI) and semiconductors.
• Profit also increased sharply, with operating profit rising 60.7% YoY to JPY 2,979 mn, ordinary profit increasing 56.3% YoY to JPY 3,178 mn, and profit attributable to owners of parent (hereafter, net profit) rising 67.2% YoY to JPY 1,554 mn.
• Despite a strong start in Q1, the Company maintained its full-year FY2027/3 forecast (see the table below for forecast figures).

• In Q1 FY2027/3, Nitto Kogyo Corporation (hereafter, the Company) reported net sales of JPY 45,536 mn (+8.8% YoY), supported by corporate capital investment demand amid expanding investment in artificial intelligence (AI) and semiconductors.
• Profit also increased sharply, with operating profit rising 60.7% YoY to JPY 2,979 mn, ordinary profit increasing 56.3% YoY to JPY 3,178 mn, and profit attributable to owners of parent (hereafter, net profit) rising 67.2% YoY to JPY 1,554 mn.
• Despite a strong start in Q1, the Company maintained its full-year FY2027/3 forecast (see the table below for forecast figures). It expects higher sales and profit, with net sales, operating profit, and ordinary profit set to reach new record highs following FY2026/3.

• Global Market Leadership in Industrial Welding & Wafer Planarization: Obara Group Inc (6877 JP) holds an entrenched global market position as a premier Tier-1 supplier of resistance spot welding guns, controllers, and transformers to automotive OEMs, while operating a high-margin semiconductor wafer planarization and polishing equipment business via its subsidiary Speedfam.
• Robust Profitability and Improving Operating Leverage: Consolidated FY25 revenue reached JPY 61,682m (+9.4% YoY) with an EBITDA margin of 19.14% and net income of JPY 6,762m, while recent quarterly execution has accelerated, reaching an EBITDA margin of 21.36% and net margin of 12.88% in Q3 FY26 (ended June 2026).
• Attractive Valuation Backstopped by Fortress Balance Sheet: At JPY 5,310, Obara trades at an undemanding valuation multiple of ~11.0x P/E and ~1.0x P/B, underpinned by a 2.82% dividend yield (JPY 150/share annual dividend), a net-cash balance sheet with zero debt overhang, and strong capital allocation discipline.

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

Key points (machine generated)

• IID is transitioning from a specialized media company to an ‘AI Media Company’ to enhance growth and capital efficiency.
• As of June 2026, IID manages 86 web media outlets across 21 genres, with 1 million registered members and 25 million monthly unique users.
• The company employs a ‘media portfolio strategy’ to diversify revenue streams and is leveraging AI technology for growth.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only.

Key points (machine generated)

• Koashoji Holdings achieved record sales of 24,678 million yen and operating profits of 5,476 million yen for the fiscal year ending June 2026.
• Sales increased by 6.1% and operating profit rose by 2.3% compared to the previous year.
• For the fiscal year ending June 2027, the company expects sales growth but a slight decline in profits, focusing on pharmaceutical imports, sales, and contract manufacturing.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only.

Key points (machine generated)

• Mental Health Technologies is a BPaaS provider listed on the Tokyo Stock Exchange Growth Market.
• The company operates two main segments: Mental Health Solutions (MHS) and Medical Work Shift (MWS), focusing on worker well-being and operational efficiency in healthcare.
• In the first half of the fiscal year ending December 2026, the company reported an increase in sales.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only.

Key points (machine generated)

• Daytona’s interim report shows consolidated revenue of 7,866 million yen, a 6.9% increase year-on-year.
• The company reported an operating profit of 1,007 million yen (up 18.3%) and an interim net profit of 712 million yen (up 21.4%).
• Daytona is expanding its motorcycle business while also exploring new markets, including outdoor products and reuse initiatives.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only.

• We continue to be bullish about Workman’s back-to-basics strategy which has delivered a second straight year of record sales and profit, with same-store sales up 9%. 
• New president Koji Ouchi has just revamped the business under five core functional categories, as well as moving towards more mass-scale manufacturing and corporate franchising.
• The new strategy is part of a drive toward 1,300 stores by 2030.

• Earnings up, multiple down: FY26 guidance and Energy orders are rising while Fuji’s EV/EBIT has compressed to ~13x.
• Energy is mispriced: High-margin Energy has strong backlog and capacity expansion, yet trades below global electrification peers.
• Catalyst-Rich asymmetry: Results, backlog conversion and data-center growth could drive re-rating; High/Low valuation implies ~2.9x reward-to-risk.

• We review the mid-cap banks’ equity shareholdings at year-end March 2026 in greater detail, focusing on how realizable these equity holdings may be; we compare these holdings to market capitalization
• We find that Iyogin has a meaningful share of its total equity shareholdings in hard-to-realize holdings; we downgrade Iyogin, along with Nishi-Nippon, from buy to neutral
• Hachijuni, our sole buy, leads on easy-to-realize shareholdings to market capitalisation and will enhance its interest rate gearing given the high level of fixed rate credit maturing by March-end 2027

• Eisai Co Ltd (4523 JP) shares advanced ~30% from June lows. Stronger-than-expected Q1FY27 financial result and value maximization initiatives of Leqembi are mainly driving the shares. 
• Eisai has reported better-than-anticipated Q1FY27 result, with revenue and operating profit reaching 27% and 35% of FY27 full-year forecast, driven by the strong performance 3L major products and favorable Fx.
• In near-term, Eisai’s growth will be Leqembi centered. For FY27, Eisai has guided for Leqembi revenue of ¥144B (up 64% YoY), supported by Leqembi Iqlik and blood-based biomarker (BBM).

• Companies should consider that things may not go according to the assumption that showering individual shareholders with shareholder benefits will lead them to vote in favor of the company’s proposals.
• Discussions of trading one share at a time based on trading conditions in other countries or comparative competitiveness fail to address the fundamental issue of inequality in shareholder rights.
• Unless the fundamental issues are addressed, these measures will be ineffective, and—just as with TSE’s market reforms—it will take a long time to reach a fundamental solution.

• Japanese equities have posted strong, broad-based gains in 2026. The BOJ’s moderate-growth outlook supports a cautiously bullish view for the remainder of the year.
• Combined with elevated implied volatility, this outlook favours out-of-the-money call overwriting as a means of generating premium income while retaining some upside participation.
• Five illustrative November examples show how call overwriting balances premium income against retained upside.

• Crops Corporation (9428) is a Nagoya-based conglomerate best known as KDDI’s largest au/UQ Mobile retail agency in the Chubu region, but the segment that actually drives profit is a restaurant-property sub-leasing arbitrage business (Innovation Holdings/Tempo Innovation), generating 43% of operating profit from just 26% of revenue.

• KDDI itself holds a 20.32% equity-method stake with board representation, alongside staffing, building-maintenance, and overseas BPO units.

• The company seems to steadily compound revenues and profits and once you strip out the asset write-off from a small Vietnamese subsidiary, it seems to trade very cheaply on just over 7x earnings.

• “The fact that Japanese companies hold vast cash reserves” is one aspect of the issue, but it’s not root cause. Focusing solely on the means won’t actually solve the problem.
• While increasing growth investments and improving board practices are not wrong as strategies, few companies truly understand why they should pursue these initiatives or are able to implement them effectively.
• Both investment and improvements in board practices are necessary measures for achieving the management goal of sustainably increasing shareholder interest. It is the responsibility of management to achieve this goal.

• A few years ago, Resonac Holdings (4004 JP) announced it would consider spinning off its petrochemicals business.
• This summer it announced it would happen, and on 7 September it got TSE approval for a spinoff 1 October 2026. Shares start trading on 29 September. 
• On Friday, the reference price for listing was announced at ¥200/share. Day 1 will mean significant index flows, and thoughts of what is to come.

• I summarise the latest spreads and newsflow for the merger arb situations covered across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, the Philippines, Thailand, and Chinese ADRs.
• Highest spreads: Skyworth (751 HK), OFX Group (OFX AU), Z Fin (1168 HK), Peet Ltd (PPC AU), Atlantic Lithium (A11 AU), Tourism Holdings (THL NZ), Cleanaway Waste Management (CWY AU).  
• Lowest spreads: Kadoya Sesame Mills (2612 JP), Leopalace21 Corp (8848 JP), Carnaby Resources (CNB AU), Kakaku.com Inc (2371 JP), Accent Group (AX1 AU), FleetPartners Group (FPR AU). 

• Context: This Insight follows up on previously highlighted relative value opportunities, using a statistical methodology based on mean-reversion to identify opportunities in paired securities.
• Highlights: Currently seven pair trade opportunities persist across three markets and four sectors.
• Why read: Statistical analysis offers a unique perspective on relative value. Gain insights into actionable statistical pair trade opportunities and monitor performance of previously highlighted pairs.

• If you are (still) bullish on data centers and AI, Murata Manufacturing (6981 JP)  is the one you should go long. 
• Murata Manufacturing (6981 JP) grew its OPM more than TDK Corp (6762 JP) while its revenue growth is smaller than the latter, a sign of effective operating leverage. 
• For investors who prefer earnings quality and margin expansion over top line revenue growth, Murata is your answer. 

• Shipping is cyclical, and earnings volatility has long been the sector’s biggest weakness for investors.
• IINO Lines has successfully reduced the volatility of its earnings by combining its real estate business with shipping.
• The Company was profitable through all seven years of the FY3/15–FY3/21 shipping market downcycle and grew BVPS +26.9%, while the major domestic peers recorded multiple years of losses and saw BVPS decline meaningfully