Japan

In today’s briefing:

Nikkei 225 Index Rebalance Sep25: Performance of Potential Adds/Deletes & Positioning
Ibiden Q1 FY25: Strong Beat, Upgraded Outlook, Attractive Valuation
JX Advanced Metals – Q1 FY2025: Strong Beat, Guidance Raised, Valuations Supportive
How Effective Will the Changes in Listing Criteria Be, Amid a Long Grace Period and Secured Listing?

Nikkei 225 Index Rebalance Sep25: Performance of Potential Adds/Deletes & Positioning

By Brian Freitas

The changes to the Nikkei 225 (NKY INDEX) as part of the September rebalance should be announced in just over 2 weeks. We expect 2 changes at the review.
BayCurrent Consulting‘s PAF will double, Fast Retailing‘s CPAF will stay the same, and Sony Financial Group will be deleted from the index following its spinoff from Sony Corp (6758 JP).
Sanrio (8136 JP)‘s improved liquidity increases the probability of index inclusion, and the stock could be added to the index at the next rebalance if it misses in September.

Ibiden Q1 FY25: Strong Beat, Upgraded Outlook, Attractive Valuation

By Rahul Jain

Results: Q1 FY25 sales grew +10.5% YoY with OP surging +56%, led by AI/data-center substrate demand and margin gains.
Earnings Upgrade & Outlook: FY25–27 EPS/EBITDA raised 9–12% on stronger substrates and resilient ceramics, implying ~18–19% CAGR ahead.
Valuations: Trading at 21× FY25E P/E and 5.9× EV/EBITDA, Ibiden offers structural growth at compressed multiples versus AI peers.

JX Advanced Metals – Q1 FY2025: Strong Beat, Guidance Raised, Valuations Supportive

By Rahul Jain

Results: Q1 FY25 revenue rose 12% YoY to ¥191.3bn with operating profit up 22% and net profit up 33%, driven by robust semiconductor and ICT materials growth.
Guidance & Revisions: FY25 guidance lifted to ¥760bn revenue/¥110bn OP; dividend ¥18. Our forecasts rise to PAT ¥70bn (+35%) in FY25, with 30–40% upgrades through FY26–28.
Valuations: At ~13x P/E and ~12x EV/EBITDA, JX trades above domestic miners but below semiconductor materials peers, leaving room for rerating if the advanced materials mix deepens.

How Effective Will the Changes in Listing Criteria Be, Amid a Long Grace Period and Secured Listing?

Companies with market capitalization of under 10 billion yen will be given long grace period. Considering inflation and long grace period, this seems not such a difficult hurdle to overcome.
If it becomes easy to meet the new standards, the growth market may not change much from the current situation, where many companies with limited growth potential remain.
Even though there’re measures to enable companies to move to standard market if things don’t work out, it’s questionable how many companies will seriously pursue measures to increase market capitalization.

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Aug 17

Daily Brief Japan: Carta Holdings, Inc., Sun Corp, Shibaura Electronics, TSE Tokyo Price Index TOPIX and more

In today’s briefing:

[Japan M&A] NTT Docomo and Dentsu Squeeze Out Minorities in Carta (3688 JP) Cheap. Tender Starts Now
Last Week In Event SPACE: Sun Corp/Cellebrite, Swire, Shandong Hi-Speed, PRC Rural Bank Delistings
(Mostly) Asia-Pac M&A: Kangji Medical, Ashimori, Carenet, Rezil, HKBN, Toyo Cons., Shibaura Elect.
Revision of Corporate Governance Code Will Support Dialogue Between Overseas Investors and Companies

[Japan M&A] NTT Docomo and Dentsu Squeeze Out Minorities in Carta (3688 JP) Cheap. Tender Starts Now

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.
The price for minorities is OK, not great. The Board talks up synergies not included in fair value considerations, and Dentsu+Docomo are actually buying it 15% cheaper.
That comes out to a net price below the bottom end of the DCF range. Aaargh. But Dentsu+irrevocables+ large individuals likely gets this over the line cleanly.

Last Week In Event SPACE: Sun Corp/Cellebrite, Swire, Shandong Hi-Speed, PRC Rural Bank Delistings

Sun Corp (6736 JP) is a clear value play. But it’s not as cheap to Cellebrite (CLBT US) as it was last month. The trade is a net long position
As Swire Pacific (A) (19 HK) plumbs new 12-month lows for its NAV discount and implied stub, Swire’s B shares have significantly outperformed the As over the past month.
Shandong Hi-Speed (412 HK) is a bubble. High shareholder concentration is still likely present, and the stock is getting squeezed. SHP is a short. Once it starts to turn.

(Mostly) Asia-Pac M&A: Kangji Medical, Ashimori, Carenet, Rezil, HKBN, Toyo Cons., Shibaura Elect.

I tally 41 – mostly firm, mostly Asia-Pac – arb transactions currently being discussed and analysed on Smartkarma.
Four new deal was discussed on Smartkarma this week: Hangzhou Kangji Medical Instrument Co., Ltd. (9997 HK), Ashimori Industry (3526 JP), Rezil (176A JP), and Carenet Inc (2150 JP).
Key updates/news took place on HKBN Ltd (1310 HK), Toyo Construction (1890 JP), Shibaura Electronics (6957 JP), and Kolon Mobility Group (450140 KS).

Revision of Corporate Governance Code Will Support Dialogue Between Overseas Investors and Companies

At June AGMs held by over 1,700 companies, out of 114 companies that received shareholder proposals, 7 were approved. The fact is that proposals aren’t approved without high foreign ownerships.
At the end of March 2024, institutional investors’ shareholding surpassed the combined shareholding of corporate and financial institutions. Companies are expected to listen to the opinions of their shareholders.
Although technical guidance from FSA and TSE is unlikely to directly lead to management improvements, it’s expected to serve as a basis for supporting dialogue between overseas investors and companies.

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Aug 16

Daily Brief Japan: Fast Fitness Japan Inc, Elecom Co Ltd, Dai Ichi Cutter Kogyo Kk, Ferrotec Corp, KEIWA , MarketEnterprise Co Ltd, Mrt Inc/Jp, Piala, Raqualia Pharma, Rezil and more

In today’s briefing:

Fast Fitness Japan Inc (7092 JP): Q1 FY03/26 flash update
Elecom Co Ltd (6750 JP): Q1 FY03/26 flash update
Dai Ichi Cutter Kogyo Kk (1716 JP): Full-year FY06/25 flash update
Ferrotec Corp (6890 JP): Q1 FY03/26 flash update
KEIWA (4251 JP): 1H FY12/25 flash update
MarketEnterprise Co Ltd (3135 JP): Full-year FY06/25 flash update
Mrt Inc/Jp (6034 JP): 1H FY12/25 flash update
Piala (7044 JP): 1H FY12/25 flash update
Raqualia Pharma (4579 JP): 1H FY12/25 flash update
Rezil (176A JP): Full-year FY06/25 flash update

Fast Fitness Japan Inc (7092 JP): Q1 FY03/26 flash update

Revenue reached JPY4.9bn (+15.9% YoY), with JPY2.9bn from directly operated clubs and JPY1.8bn from franchise revenue.
Operating profit increased 40.8% YoY to JPY877mn, driven by higher revenue and offsetting increased SG&A expenses.
Gross profit was JPY2.2bn (+18.9% YoY) with a GPM of 44.8%, and SG&A expenses totaled JPY1.3bn (+7.7% YoY).

Elecom Co Ltd (6750 JP): Q1 FY03/26 flash update

Sales reached JPY28.6bn, a 3.7% YoY increase, with power supplies and I/O devices showing growth.
Operating profit increased by 18.8% YoY to JPY3.0bn, driven by higher gross profit despite rising SG&A expenses.
B2C sales were JPY19.4bn (+3.2% YoY), while B2B sales amounted to JPY9.2bn (+5.0% YoY).

Dai Ichi Cutter Kogyo Kk (1716 JP): Full-year FY06/25 flash update

Full-year FY06/25 revenue declined 3.3% YoY due to decreased construction volume and exclusion of a subsidiary.
FY06/26 forecast: Revenue JPY20.5bn (+1.3% YoY), Operating profit JPY1.8bn (+9.3% YoY), Net income JPY1.3bn (-2.8% YoY).
Dai-Ichi Cutter’s profit projections are conservative; profitability depends on project difficulty, scale, and demand response investment.

Ferrotec Corp (6890 JP): Q1 FY03/26 flash update

Q1 FY03/26 sales increased by 12.7% YoY to JPY68.9bn, while operating profit decreased by 4.9% YoY to JPY6.7bn.
Semiconductor Equipment-related segment sales rose 3.6% YoY, but segment profit declined 31.5% YoY due to lower quartz crucible sales.
Automotive-related segment sales grew 53.5% YoY to JPY9.0bn, with segment operating profit increasing 79.2% YoY to JPY1.3bn.

KEIWA (4251 JP): 1H FY12/25 flash update

Revenue increased by 2.8% YoY to JPY9.9bn, driven by higher sales of optical products for laptops and tablets.
Operating profit rose 8.9% YoY to JPY2.2bn, aided by improved profitability and segment repositioning efforts.
Recurring profit decreased 23.6% YoY to JPY2.0bn, while net income attributable to owners dropped 56.0% YoY to JPY694mn.

MarketEnterprise Co Ltd (3135 JP): Full-year FY06/25 flash update

Revenue reached JPY24.8bn (+30.3% YoY), with significant growth in Second-hand Online and Mobile & Telecommunications segments.
Operating profit increased to JPY626mn (+109.4% YoY), driven by a 0.9pp rise in the operating profit margin.
The company forecasts JPY30.0bn revenue (+21.1% YoY) and JPY1.1bn operating profit (+75.8% YoY) for FY06/25.

Mrt Inc/Jp (6034 JP): 1H FY12/25 flash update

In Q1 FY12/23, revenue was JPY2.3bn (+4.8% YoY), operating profit JPY132mn (+37.6% YoY), pre-tax profit JPY128mn (+47.0% YoY).
1H revenue reached 51.7% of FY12/25 forecast, with operating profit at 88.0% and recurring profit at 85.0%.
Revenue from Medical Personnel Placement Services was JPY1.7bn (+2.2% YoY), Other Services revenue totaled JPY646mn (+12.3% YoY).

Piala (7044 JP): 1H FY12/25 flash update

Revenue reached JPY8.3bn, a 40.6% YoY increase, with 50% progress against the revised FY12/25 forecast.
Operating profit was JPY39mn, surpassing the initial forecast, with recurring profit and net income revised upward.
FY12/25 revenue forecast increased to JPY16.7bn; recurring profit and net income forecasts revised upward by 30.1%.

Raqualia Pharma (4579 JP): 1H FY12/25 flash update

Operating revenue increased to JPY1.5bn (+8.9% YoY), with a net loss of JPY355mn and R&D expenses at JPY782mn.
Royalty income from four launched products, including tegoprazan, totaled JPY1.1bn (+7.5% YoY), contributing to operating revenue.
HK inno.N’s tegoprazan sales in South Korea reached KRW104.7bn (+14.3% YoY), with global expansion in 54 countries.

Rezil (176A JP): Full-year FY06/25 flash update

FY06/23 revenue was JPY46.6bn (+20.5% YoY); EBITDA was JPY4.4bn (+17.6% YoY); operating profit was JPY3.2bn (+15.1% YoY).
FY06/25 revenue forecast is JPY57.3bn (+22.9% YoY); operating profit forecast is JPY3.8bn (+18.8% YoY).
Rezil Inc. supports Bain Capital’s tender offer; shares are scheduled for delisting; dividend forecast undecided.

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Aug 15

Daily Brief Japan: Shibaura Electronics, Rezil, Sun Corp, Appier Group, Softbank Group, Allegro MicroSystems , Hikari Tsushin, Qb Net Holdings and more

In today’s briefing:

[Japan M&A] Minebea Matches YAGEO for Shibaura Elec (6957) At ¥6,200. Presses on Early Cashout
[Japan M&A] Founder, KEPCO, Try ¥2,750 Bain-Led MBO on Rezil (176A). Light Given Growth – Bumpity?
StubWorld: Stay Long Sun Corp (6736 JP)
Shibaura Electronics (6957 JP): Minebea Changes Tack and Matches Yageo’s JPY6,200 Offer
Rezil (176A JP): Bain’s Tender Offer Is a Done Deal
Appier (4180) | Sustained High-Growth Momentum with Expanding Margins
SoftBank Group (9984 JP): Our Last Review of Quarterly Data
Allegro MicroSystems: Fueling EV & ADAS Growth with Strategic Design Wins!
Hikari Tsushin (9435 JP): Q1 FY03/26 flash update
Qb Net Holdings (6571 JP): Full-year FY06/25 flash update

[Japan M&A] Minebea Matches YAGEO for Shibaura Elec (6957) At ¥6,200. Presses on Early Cashout

After three months of NOT matching YAGEO’s bid for Shibaura Electronics (6957 JP) at ¥6,w00 as YAGEO’s proposal continues its long plod through FEFTA review, Minebea-Mitsumi has now matched ¥6,200.
Key is that their bid closes before the indicative deadline for YAGEO to receive word on FEFTA approval. They are hoping this bid mollifies the irrevocables and everyone else.
But if YAGEO cares, it could bump to ¥6,300 tomorrow and extend its tender offer which closes on Monday. But the put option is now struck higher, which de-risks this.

[Japan M&A] Founder, KEPCO, Try ¥2,750 Bain-Led MBO on Rezil (176A). Light Given Growth – Bumpity?

To my knowledge, this may be the first Tender Offer takeout proposal on a “new ticker.” Rezil (176A JP) was listed just 16mos ago.
This takeout is done on a highish-growth stock at 11.7x 1yr forward EV/EBITDA. It’s not expensive, but they have ~60%. BUT… there’s another Potential Player who may have Big Thoughts.
Slightly long-dated, small-cap, likely to be illiquid. Watch how it trades early for hints.

StubWorld: Stay Long Sun Corp (6736 JP)

Sun Corp (6736 JP) is a clear value play. But not as cheap to 44.3%-held Cellebrite DI (CLBT US) as it was recently. Opt for a net long trade here.
Preceding my comments on Sun Corp – and JG Summit Holdings (JGS PM) / Universal Robina (URC PM) – are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

Shibaura Electronics (6957 JP): Minebea Changes Tack and Matches Yageo’s JPY6,200 Offer

Despite its previous protestations, Minebea Mitsumi (6479 JP) has unexpectedly matched Yageo Corporation (2327 TT)’s JPY6,200 offer for Shibaura Electronics (6957 JP).
Minebea’s actions suggest that Yageo has a good chance of securing regulatory approval. Otherwise, Minebea could have kept its offer unchanged and patiently waited for the Yageo offer to fail.
Given the significant sunk costs, Yageo is likely to bump. Without increasing its offer, shareholders will have a greater inclination to tender and help Minebea meet its minimum tendering condition.

Rezil (176A JP): Bain’s Tender Offer Is a Done Deal

Rezil (176A JP) has recommended a tender offer from Bain Capital at JPY2,750, a 57.1% premium to the undisturbed price of JPY1,750.
The offer is attractive as it aligns with the midpoint of the target IFA DCF valuation range, represents an all-time high and is 129.2% above the IPO price of JPY1,200.
This is a done deal as Hikari Tsushin, a cross-holder, tendering is sufficient to meet the minimum tendering condition. At the last close, the gross spread was 6.8%.

Appier (4180) | Sustained High-Growth Momentum with Expanding Margins

By Mark Chadwick

Revenue: JPY 10.3 billion compared to JPY 8.2 billion a year ago, +27% YoY; FX-neutral revenue of JPY 11.0 billion, +35% YoY – fastest growth in eight quarters.
Gross Margin: 56.1%, up 4.8 percentage points YoY, driven by high-margin products, organic margin improvements, and GenAI-enabled efficiencies.
Stock continues to offer compelling value at 3.2x revenue – a discount to US peer Braze

SoftBank Group (9984 JP): Our Last Review of Quarterly Data

By Victor Galliano

With this report, we terminate coverage of SoftBank group (SBG) shares; going forward, our coverage will be concentrated on financial and fintech stocks, with a bias towards Emerging Markets
SBG shares have rallied hard recently, driven by IPOs of portfolio companies, good IPO prospects for other private companies including PayPay and positive market sentiment towards AI investments
The group NAV’s discount has narrowed sharply to under 30%; we conclude our coverage with a neutral rating, but we stress that high expectations are baked into this narrow discount

Allegro MicroSystems: Fueling EV & ADAS Growth with Strategic Design Wins!

By Baptista Research

When we look at the broader performance of Allegro MicroSystems, the results indicate both positive and challenging aspects of the company’s current situation.
From a financial perspective, Allegro delivered a solid performance in its first quarter of fiscal year 2026.
The company reported sales of $203 million and a non-GAAP earnings per share of $0.09, which was above the midpoint of their guidance range.

Hikari Tsushin (9435 JP): Q1 FY03/26 flash update

The company reported Q1 FY03/26 revenue of JPY167.2bn (+14.4% YoY) and recurring income of JPY43.5bn (+12% YoY).
New segmentation in Q1 FY03/25 includes seven reportable segments; revenue and profit figures adjusted retroactively.
Dividend for Q1 FY03/26 set at JPY181 per share, with total payout of JPY7.9bn, effective September 12, 2025.

Qb Net Holdings (6571 JP): Full-year FY06/25 flash update

Revenue rose JPY786mn YoY, driven by growth in Domestic and Overseas Operations, with a +3.2% full-year increase.
Operating profit declined JPY430mn YoY due to unplanned costs in Domestic Operations and increased talent development investment.
The company opened 43 new salons, increasing the total salon count by 33 YoY to 724.

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Aug 14

Daily Brief Japan: Sun Corp, Carenet Inc, Sumitomo Forestry, Metaplanet, Micronics Japan, Yappli Inc, Data Applications, Mercuria Holdings, Moresco Corp and more

In today’s briefing:

Sun Corp (6736) – CLBT Has Round-Tripped, But Now Better ParentCo and a Buyback so Set-Up Is Better
[Japan M&A] CareNet (2150 JP) MBO-Ish LBO of Medical Platform Biz; Light. SUPER Opaque Process.
CareNet (2150 JP): EQT’s Tender Offer at JPY1,130
Super Dovish Comments From Bessent Fuels Home Builder Strength
Metaplanet (3350 JP): 1H FY12/25 flash update
Micronics Japan (6871 JP): 1H FY12/25 flash update
Yappli Inc (4168 JP): 1H FY12/25 flash update
Data Applications (3848 JP): Q1 FY03/26 flash update
Mercuria Holdings (7347 JP): 1H FY12/25 flash update
Q1 Follow-Up – MORESCO (5018 JP) – July 31, 2025

Sun Corp (6736) – CLBT Has Round-Tripped, But Now Better ParentCo and a Buyback so Set-Up Is Better

12 months on from the Tender Offer which changed the shape of the shareholder register, Sun Corp (6736 JP) is up small and its main asset Cellebrite is -10%.
The value of the rest of Sun Corp has probably increased to cover that 10% through new business earnings, but the main value is still Cellebrite. An exit still awaited.
Now Cellebrite is lower, and SunCorp is lower (but recently rising) and SunCorp has announced a buyback which accounts for a big chunk of Real World Float. Hmmm…

[Japan M&A] CareNet (2150 JP) MBO-Ish LBO of Medical Platform Biz; Light. SUPER Opaque Process.

Todfay after the close, EQT and Carenet Inc (2150 JP) announced an EQT SPC would launch a TOB to buy out the medical platform business.
A growthy business so the multiple looks light. But the founder and his incubation fund is selling. That’s 19%. Insiders/crossholders hold another 25%. One recent seller still has 10%.
This looks like it gets done, but it isn’t at the highs of 4+ years ago. Some retail may be upset.

CareNet (2150 JP): EQT’s Tender Offer at JPY1,130

Carenet Inc (2150 JP) has recommended a tender offer from EQT (EQT SS) at JPY1,130, a 47.3% premium to the last close.
Despite the lack of an auction, the offer is reasonable as it aligns with the midpoint of the IFA DCF valuation range and at a premium to historical ranges.
Irrevocables to accept represent a 17.03% ownership ratio. This is likely a done deal with payment from 7 October.

Super Dovish Comments From Bessent Fuels Home Builder Strength

By Andrew Jackson

Sentiment for Sumitomo Forestry will continues to rise with pressure on US rates increasing.
Coreweave fails to live up to the hype dropping -20% on profit miss, but topline growth remains strong
Cisco Systems reporting their AI infrastructure orders were double initial expectations for 2025

Metaplanet (3350 JP): 1H FY12/25 flash update

Revenue reached JPY2.1bn, with Bitcoin Treasury Operations at JPY1.9bn and Hotel business at JPY212mn (+25.8% YoY).
Operating profit was JPY1.4bn, with Bitcoin Treasury at JPY1.6bn and Hotel business contributing JPY82mn.
Bitcoin holdings increased to 13,350 BTC, with BTC yield at 129.4% in Q2, exceeding the 35% target.

Micronics Japan (6871 JP): 1H FY12/25 flash update

1H FY12/25 sales increased 26.6% YoY to JPY33.1bn, with operating profit rising 31.3% YoY to JPY7.6bn.
The company revised its Q3 earnings forecast, lowering sales to JPY50.0bn and operating profit to JPY11.1bn.
Full-year FY12/25 sales forecast is JPY68.9bn (+23.8% YoY), with capital expenditures planned at JPY17.8bn (+15.3% YoY).

Yappli Inc (4168 JP): 1H FY12/25 flash update

In 1H FY12/25, the company reported revenue of JPY2.9bn, operating profit of JPY449mn, and net income of JPY446mn.
Revenue progress rate was 47.0%, with operating profit at 59.9%, and recurring profit at 61.6% versus full-year forecast.
The company maintained its full-year forecast, with revenue aligning with expectations and profits showing strong performance.

Data Applications (3848 JP): Q1 FY03/26 flash update

In Q1 FY03/26, Data Applications reported revenue of JPY947mn, with an operating loss of JPY37mn and net loss of JPY12mn.
Software Development revenue was JPY546mn with a segment loss of JPY10mn; recurring revenue ratio was 89.4%.
System Integration and AI businesses reported revenues of JPY274mn and JPY127mn, with segment losses of JPY17mn and JPY11mn, respectively.

Mercuria Holdings (7347 JP): 1H FY12/25 flash update

Operating revenue decreased 14.3% YoY to JPY1.9bn, with gross profit declining 24.9% YoY to JPY1.5bn.
The recurring loss was JPY159mn, influenced by a JPY325mn drop in gross profit and foreign exchange losses.
New investments were made in the Buyout and Growth strategies, and a Structured Equity Investment Strategy was launched.

Q1 Follow-Up – MORESCO (5018 JP) – July 31, 2025

By Sessa Investment Research

In Q1 FY2026/2, MORESCO CORPORATION (hereinafter “MORESCO” or “the Company”) reported consolidated net sales of JPY 8,516 mn, up 3.2% YoY, driven by higher sales both in Japan and overseas.
Although demand in the automotive sector, which accounts for approximately 45% of net sales, remained sluggish due to lower vehicle production in Japan and the U.S., the impact was absorbed overall, as the Company’s all-round strategy proved effective in promoting diversification across regions, products, and applications.
Operating profit jumped 174.4% YoY to JPY 520 mn, but ordinary profit declined 1.9% YoY to JPY 441 mn, and net profit fell 4.9% YoY to JPY 237 mn, both weighed down by foreign exchange losses.

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Aug 13

Daily Brief Japan: Kasumigaseki Hotel REIT, Cyberlinks, Riken Vitamin, MARUKA FURUSATO , Medinet Co Ltd, Minato Holdings, Oyo Corp, Rasa Corporation, Tkc Corp, Toyo Kanetsu K K and more

In today’s briefing:

Kasumigaseki Hotel REIT IPO: Books Well Covered; Modest Upside from Here
Cyberlinks (3683 JP): 1H FY12/25 flash update
Riken Vitamin (4526 JP): Q1 FY03/26 flash update
MARUKA FURUSATO (7128 JP): 1H FY12/25 flash update
Medinet Co Ltd (2370 JP): Q3 FY09/25 flash update
Minato Holdings (6862 JP): Q1 FY03/26 flash update
Oyo Corp (9755 JP): 1H FY12/25 flash update
Rasa Corporation (3023 JP): Q1 FY03/26 flash update
Tkc Corp (9746 JP): Q3 FY09/25 flash update
Toyo Kanetsu K K (6369 JP): Q1 FY03/26 flash update

Kasumigaseki Hotel REIT IPO: Books Well Covered; Modest Upside from Here

By Nicholas Tan

Kasumigaseki Hotel REIT (401A JP) raised US$193m in its upcoming Japan IPO.
Kasumigaseki Hotel REIT Investment is a REIT with hotel assets. It is an investment corporation sponsored by affiliated developer, Kasumigaseki Capital.
In this note, we examine the IPO dynamics, and look at the firm’s valuation

Cyberlinks (3683 JP): 1H FY12/25 flash update

Revenue increased by 11.5% YoY to JPY8.8bn, with recurring revenue rising 7.6% YoY to JPY4.3bn.
Operating profit surged 74.6% YoY to JPY990mn, with a cost of revenue ratio decline of 3.0pp YoY.
Revenue growth driven by @rmsV6 deployment, price hikes, and Government Cloud segment’s regional disaster prevention systems.

Riken Vitamin (4526 JP): Q1 FY03/26 flash update

Q1 FY03/26 revenue was JPY23.3bn, a 1.6% YoY decline, with Domestic Chemicals increasing and Overseas business declining.
Operating profit decreased by 6.2% YoY to JPY2.4bn, impacted by FX losses and increased advertising and logistics costs.
Consumer foods revenue increased YoY, while commercial foods decreased; processed food ingredients and chemical products saw YoY growth.

MARUKA FURUSATO (7128 JP): 1H FY12/25 flash update

1H FY12/25 revenue increased YoY, but operating profit and net income attributable to owners decreased YoY.
Revised FY12/25 forecast projects revenue of JPY162.0bn, operating profit of JPY3.5bn, and net income of JPY2.5bn.
FY12/25 annual dividend planned at JPY101.0 per share, with a DOE target of 3.5%.

Medinet Co Ltd (2370 JP): Q3 FY09/25 flash update

Sales decreased by 2.8% YoY to JPY573mn, with operating, recurring, and net losses each amounting to JPY1.1bn.
SG&A expenses rose 9.7% YoY to JPY1.2bn, driven by increased R&D and sales expenses, widening the operating loss.
The Specified Cell Products Manufacturing Business saw a 7.6% YoY sales decline due to absent one-time technology transfer fees.

Minato Holdings (6862 JP): Q1 FY03/26 flash update

Revenue increased by 10.5% YoY to JPY5.2bn, with significant growth in Digital Device, Engineering, and Other segments.
Operating profit rose 159.1% YoY to JPY137mn, driven by higher revenue, reduced depreciation expenses, and improved margins.
Market prices for DIMMs rose, but sluggish demand and lower high-margin projects led to a decline in operating profit margin.

Oyo Corp (9755 JP): 1H FY12/25 flash update

In 1H FY12/25, orders were JPY47.3bn (+4.4% YoY), revenue JPY36.8bn (+6.5% YoY), operating profit JPY2.7bn (+14.5% YoY).
Orders for domestic infrastructure projects rose to JPY19.2bn (+27.7% YoY), revenue JPY13.6bn (+13.4% YoY), operating profit JPY375mn (+120.6% YoY).
Orders for offshore wind projects declined to JPY20.7bn (-5.3% YoY), revenue JPY15.1bn (+18.7% YoY), operating profit JPY2.7bn (+46.1% YoY).

Rasa Corporation (3023 JP): Q1 FY03/26 flash update

Revenue increased by 2.7% YoY to JPY5.8bn, with operating profit rising 36.8% YoY to JPY290mn.
Segment profit for the Environmental Equipment business surged 132.7% YoY, despite a 7.8% YoY revenue decline.
Construction segment posted a JPY30mn loss due to a 27.0% YoY decrease in large-scale project volume.

Tkc Corp (9746 JP): Q3 FY09/25 flash update

TKC’s cumulative Q3 FY09/25 sales rose 8.3% YoY to JPY59.8bn, with operating profit decreasing 4.2% YoY.
Local Government segment operating profit dropped 45.0% YoY due to low-margin hardware sales and software amortization.
Year-end dividend forecast for FY09/25 increased to JPY60.00 per share, totaling JPY110.00 annually.

Toyo Kanetsu K K (6369 JP): Q1 FY03/26 flash update

Revenue decreased by 9.4% YoY, with operating profit down 18.6% YoY, and recurring profit down 18.0% YoY.
Orders and order backlogs increased by 29.5% YoY, with a slight decline of 1.2% from end-FY03/25.
Revenue increased by 8.8% YoY, with operating profit up 135.9% YoY due to profitable project inspections.

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Aug 12

Daily Brief Japan: Ashimori Industry, Lifenet Insurance Company, JX Advanced Metals, Yomeishu Seizo, Softbank Group, CyberAgent Inc, TSE Tokyo Price Index TOPIX, Nipro Corp, J Trust Co Ltd, Forum Engineering Inc and more

In today’s briefing:

[Japan M&A] Toyoda Gosei Buys Out Affiliate Ashimori Industry at 1.000x Mar25 Book
[Quiddity Index] JPX Nikkei 400 Rebal Aug 2025 – Final Results
JX Advanced Metals (5016 JP): Passive Buying in the Next 6 Weeks
Yomeishu Seizo (2540 JP): Evaluating a Potential Privatisation
SoftBank (9984 JP): Earnings Beat and the Missing Volatility Crush
CyberAgent: Newly Released Games Drive Growth with an Upward Revision to Guidance
To Companies that Adopt DOE: It’s Good to Consider ROE, but Are They Falling into Short-Termism?
Nipro Corp (8086 JP): Q1 FY03/26 flash update
J Trust Co Ltd (8508 JP): 1H FY12/25 flash update
Forum Engineering Inc (7088 JP): Q1 FY03/26 flash update

[Japan M&A] Toyoda Gosei Buys Out Affiliate Ashimori Industry at 1.000x Mar25 Book

Toyota Motor (7203 JP) subsidiary Toyoda Gosei (7282 JP) is buying out its own equity affiliate Ashimori Industry (3526 JP) at a near-all-time high price of ¥4,140/share.
It’s not a great price, but it is just over 1x book after writedowns this past quarter. It basically requires cross-holders and half a retail to tender.
But this autoparts business is a strong grower, and has no EV risk. And its non-autoparts business is more interesting. The “fair” multiples are low. But it’ll get done.

[Quiddity Index] JPX Nikkei 400 Rebal Aug 2025 – Final Results

On Thursday 7 August, the TSE/Nikkei announced the changes for the JPX Nikkei 400 28 August rebalance. A few surprises, but given there is a nebulous qualitative overlay, that’s expected.
39 were added. 34 deleted. We got 63 of 73 actual changes correct, achieving hit rates of 96%, 83%, and 44% for our High/Medium/Low Conviction Leaderboard predictions, respectively.
We see US$7.3bn of flows, two way. There should be another $3bn+ of flows on the 26th and 28th.

JX Advanced Metals (5016 JP): Passive Buying in the Next 6 Weeks

By Brian Freitas

JX Advanced Metals (5016 JP) listed in March and did not get Fast Entry to global indices since a large part of the IPO was allotted to domestic retail investors.
JX Advanced Metals (5016 JP) will be added to one global index this month and could be added to the other global index in September.
The stock is trading higher following the better than forecast results announced last week. The index inclusions could take the stock higher in the short-term.

Yomeishu Seizo (2540 JP): Evaluating a Potential Privatisation

By Shifara Samsudeen, FCMA, CGMA

On 7 August, Bloomberg reported that Yomeishu Seizo (2540 JP) is considering going private and has received acquisition proposals from several investment funds.
Privatisation is a neat solution for the Board to get rid of a potentially problematic activist shareholder, Yukihiro Nomura, the son-in-law of Yoshiaki Murakami.
PE interest is underpinned by Yomeishu’s net cash and significant real estate assets. However, the shares are up 63% YTD, which leaves little room for additional upside. Take profits.

SoftBank (9984 JP): Earnings Beat and the Missing Volatility Crush

By Gaudenz Schneider

Context:SoftBank’s (9984 JP) Q1 results on 7 August delivered a return to profitability and earnings beat, fueling one of the stock’s biggest post-results rallies in 15 years.
Highlight: Shares jumped 10.4% on 8 August and nearly 20% week-on-week, with implied volatility staying elevated above 40% despite the surge.
Why Read: Review price action and options market response, showing how SoftBank’s post-earnings volatility pattern echoes past announcements. Serves as a documented reference for the next earnings event.

CyberAgent: Newly Released Games Drive Growth with an Upward Revision to Guidance

CyberAgent Inc (4751 JP) reported 3QFY09/2025 results on Friday aftermarket. Both revenue and OP beat consensus estimates with an upward revision to full-year guidance.
Gaming segment has begun to see recovery driven by the strong performance of newly released game titles which have become a hit. There are several new titles up for release.
Though CA’s share price has moved up with recovery in games and improved profitability of AbemaTV, we think there is further upside.

To Companies that Adopt DOE: It’s Good to Consider ROE, but Are They Falling into Short-Termism?

With many companies unable to increase their ROE, the company also intends to demonstrate its commitment to improving ROE by strengthening shareholder returns through the adoption of DOE.
The increase in the number of companies adopting DOE may be a reflection of the fact that many companies are forecasting lower profits this fiscal year.
Of course, returning excess cash on hand while considering ROE isn’t a bad thing, but it’s also a concern that few companies are taking steps to ensure medium-to-long-term growth.

Nipro Corp (8086 JP): Q1 FY03/26 flash update

Sales increased by 4.5% YoY to JPY159.2bn, with operating profit rising 24.6% YoY, despite a 45.2% decline in recurring profit.
Pharmaceutical-Related business saw a 268.6% YoY surge in segment operating profit, driven by increased shipments and accounting treatment impacts.
The FY03/26 earnings forecast remains unchanged, with sales projected at JPY677.0bn, operating profit at JPY37.0bn, and net income at JPY13.0bn.

J Trust Co Ltd (8508 JP): 1H FY12/25 flash update

Operating revenue declined by JPY4.6bn YoY to JPY60.7bn, with decreases in South Korea, Mongolia, and Real Estate.
Operating profit increased by JPY2.6bn YoY to JPY4.6bn, driven by gains in Financial and Investment Businesses.
Profit attributable to owners of parent fell to JPY1.4bn due to foreign exchange losses from yen appreciation.

Forum Engineering Inc (7088 JP): Q1 FY03/26 flash update

Revenue increased 8.2% YoY to JPY9.2bn; operating profit rose 1.5% YoY to JPY1.3bn.
Cognavi Staffing saw a 5.2% YoY increase in utilized engineers; hourly staffing rate rose 4.6% YoY.
Cognavi India recorded JPY9mn revenue; operating loss was JPY81mn due to upfront investment.

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Aug 11

Daily Brief Japan: Toyo Construction, MS&AD Insurance, Shibaura Electronics, Sony Corp, Terumo Corp and more

In today’s briefing:

[Japan M&A] Taisei Corp To Take Toyo Construction (1890 JP) Private – Governance Torture Ends
[Japan CorpGov] TSE “Mgmt Conscious” Reports (Aug25), Changes to Code of Corporate Conduct
Weekly Deals Digest (10 Aug) – Shibaura, Toyo Construction, Technopro, Ashimori, HKBN, Iress
Weekly Update (LION, MAGN, NLOP, SONY)
Terumo Corp (4543 JP): Record High Profits in Q1FY26; Tariff Impact Lowered; FY Guidance Reiterated

[Japan M&A] Taisei Corp To Take Toyo Construction (1890 JP) Private – Governance Torture Ends

In March 2022, Infroneer bid ¥770. The Board said “too low” but then accepted. A month later, YFO offered ¥1,000. Too high, bad owner, not accepted.
Summer 2023 after a year of palm to the face for YFO, the Board was partly spilled. YFO bid ¥1,255/share and the Board said the premium was too low.
Now, the Board has accepted a bid from Taisei at a roughly similar premium. But the price is ¥1,850/share. Infroneer and YFO have agreed to sell. Minorities win… -ish

[Japan CorpGov] TSE “Mgmt Conscious” Reports (Aug25), Changes to Code of Corporate Conduct

TSE-Listed companies are asked to file “Management Conscious of Capital Cost/Stock Price” awareness reports/policies. Many have. Some are still working on it. And policies change, and CGR reports are updated.
783 new CGRs filed in July 2025 (after 1,389 in June). Our tools show every report, links to every document, and a diff-file tool. Input a name, see the changes.
The JPX Council of Experts met on 9 July. The parent-sub changes are slow to come.

Weekly Deals Digest (10 Aug) – Shibaura, Toyo Construction, Technopro, Ashimori, HKBN, Iress

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: I have not covered anything notable this week.
Event-Driven developments:Shibaura Electronics (6957 JP), Toyo Construction (1890 JP), Technopro Holdings (6028 JP), Ashimori Industry (3526 JP), HKBN Ltd (1310 HK), Iress Ltd (IRE AU), Infomedia Ltd (IFM AU).

Weekly Update (LION, MAGN, NLOP, SONY)

By Richard Howe

Sony Group Corporation (SONY) is planning to partially spin off its financial services division, Sony Financial Group Inc. (SFGI), in what would be Japan’s first major spin‑off with a direct listing in over two decades.
The company will divest 80% of its stake while retaining the remaining 20%, and the spin‑off is scheduled for September 29, 2025.
This looks interesting to me as I see potential for indiscriminate selling. Sony Financial Service Group contributes ~13% of Company Net Income (¥1,067.4B).

Terumo Corp (4543 JP): Record High Profits in Q1FY26; Tariff Impact Lowered; FY Guidance Reiterated

By Tina Banerjee

Terumo Corp (4543 JP) reported strong Q1FY26 result, with better-than-expected profitability. Despite of flat revenue, Q1FY26 operating and net profit increased 20%+, through pricing measures and continuous cost control.
The company lowered FY26 tariff impact to ¥10B from ¥17B. Impact now is primarily expected in the second half (¥4 each for Q3 and Q4).
Terumo reiterated FY26 guidance. Q1FY26 revenue, operating profit, and net profit represent progress rate of 25%, 29%, and 29%, respectively.

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Aug 10

Daily Brief Japan: Toyo Construction, Technopro Holdings, Ashimori Industry, TSE Tokyo Price Index TOPIX, Sanki Engineering, Kringle Pharma Inc, Medical System Network Co and more

In today’s briefing:

Toyo Construction (1890 JP): Taisei (1801 JP)’s Bittersweet Tender Offer
(Mostly) Asia-Pac M&A: Technopro, Infomedia, Kolon Mobility, Iress, HKBN, Furukawa Battery
Ashimori Industry (3526 JP): Toyoda Gosei (7282 JP)’s Tender Offer at JPY4,140
The Ratio of Fixed Compensation in Executive Compensation Has Gradually Declined, but Remains High
Sanki Engineering (1961 JP): Q1 FY03/26 flash update
Kringle Pharma Inc (4884 JP): Q3 FY09/25 flash update
Medical System Network Co (4350 JP): Q1 FY03/26 flash update

Toyo Construction (1890 JP): Taisei (1801 JP)’s Bittersweet Tender Offer

Toyo Construction (1890 JP) has recommended a tender offer from Taisei Corp (1801 JP) at JPY1,750, a 6.4% premium to the last close of JPY1,644.
Unusually, Taisei has set the lower limit of the tender plus irrevocables at a 55.43% ownership ratio, below the two-thirds EGM share consolidation vote threshold.
Despite the low premium, this is a done deal due to irrevocables from the two previous competing bidders (INFRONEER Holdings (5076 JP), YFO), who are also the two largest shareholders.

(Mostly) Asia-Pac M&A: Technopro, Infomedia, Kolon Mobility, Iress, HKBN, Furukawa Battery

I tally 41 – mostly firm, mostly Asia-Pac – arb transactions currently being discussed and analysed on Smartkarma.
Five new deal was discussed on Smartkarma this week: Infomedia Ltd (IFM AU),Ci Medical (3540 JP), Soft99 Corp (4464 JP), Technopro Holdings (6028 JP), and Kolon Mobility (450140 KS).
Key updates/news took place on Iress Ltd (IRE AU), PointsBet Holdings (PBH AU), HKBN Ltd (1310 HK), Tourism Holdings (THL NZ), and Furukawa Battery (6937 JP).

Ashimori Industry (3526 JP): Toyoda Gosei (7282 JP)’s Tender Offer at JPY4,140

Ashimori Industry (3526 JP) has recommended a tender offer from Toyoda Gosei (7282 JP) at JPY4,140, a 43.8% premium to the last close.
The offer is attractive as it represents a ten-year high, implies a P/B of 1.00x and above the mid-point of the target IFA DCF valuation range.
Despite the lack of irrevocables, the shareholder register facilitates deal completion. The tender runs from 12 August to 24 September, with payment from 30 September.

The Ratio of Fixed Compensation in Executive Compensation Has Gradually Declined, but Remains High

As global companies changing to increase the proportion of variable compensation from the perspective of securing human resources, the proportion of fixed compensation is gradually declining, but still high.
Since only executives who receive compensation of 100 million yen or more are required to be disclosed in annual securities reports, few companies disclose the compensation of all directors individually.
In addition to the inability to verify whether the remuneration paid was appropriate,　investors have doubts about the independence of the process by which the Remuneration Committee determines executive remuneration.

Sanki Engineering (1961 JP): Q1 FY03/26 flash update

Q1 FY03/26 orders decreased 2.6% YoY to JPY68.9bn, while order backlogs increased 4.0% YoY to JPY229.9bn.
Consolidated revenue rose 2.5% YoY to JPY49.7bn, driven by a 14.0% increase in Industrial HVAC revenue.
Gross profit surged 23.5% YoY to JPY8.9bn, with a record-high gross profit margin of 17.8%, improving by 3.0pp.

Kringle Pharma Inc (4884 JP): Q3 FY09/25 flash update

Revenue and gross profit for cumulative Q3 FY09/25 were JPY54mn, down 12.4% YoY, with SG&A expenses up 23.6%.
Operating, recurring, and net losses increased YoY, with operating loss at JPY739mn, compared to JPY580mn prior year.
Current assets decreased by JPY672mn due to R&D expenses, while fixed liabilities rose by JPY140mn from end-FY09/24.

Medical System Network Co (4350 JP): Q1 FY03/26 flash update

Q1 FY03/26 sales rose 5.7% YoY to JPY31.1bn, but net income dropped 54.1% YoY to JPY78mn.
Segment sales increased 6.5% YoY to JPY29.9bn, with segment profit rising 0.4% YoY to JPY1.1bn.
Full-year FY03/26 forecast predicts sales of JPY125.5bn and net income of JPY1.3bn, up 3.0% YoY.

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Aug 09

Daily Brief Japan: TSE Tokyo Price Index TOPIX, Lasertec Corp, Tokyo Keiki Inc, Anicom Holdings, Sinanen Holdings, Toyota Motor, Toyo Tanso, Resona Holdings, Pilot Corp, Bando Chemical Industries and more

In today’s briefing:

With Passive Funds Dominating Markets Today, Proxy Voting Tends to Be Limited to Formalities
Lasertec Corp (6920 JP): Full-year FY06/25 flash update
Tokyo Keiki Inc (7721 JP): Q1 FY03/26 flash update
Anicom Holdings (8715 JP): Q1 FY03/26 flash update
Sinanen Holdings (8132 JP): Q1 FY03/26 flash update
Toyota Motor (7203 JP) Tactical Outlook After $10B Profit Cut on Tariff Impact
Toyo Tanso (5310 JP): 1H FY12/25 flash update
Japanese Big Cap Banks – Stick with Our Key Positive Picks
Pilot Corp (7846 JP): 1H FY12/25 flash update
Bando Chemical Industries (5195 JP): Q1 FY03/26 flash update

With Passive Funds Dominating Markets Today, Proxy Voting Tends to Be Limited to Formalities

For asset management companies that mainly use passive funds, it is difficult to have sufficient dialogue with all portfolio companies equally in the environment where AGMs are concentrated in June.
As more companies focus on meeting formal voting guidelines, there is a risk that the goal of improving corporate value through management reforms will be put aside.
Solving individual management issues will lead to increased corporate value. However, due to physical reasons, not many companies engage in dialogue regarding individual management issues.

Lasertec Corp (6920 JP): Full-year FY06/25 flash update

The company reported significant YoY growth in sales, operating profit, recurring profit, and net income, driven by AI semiconductor demand.
FY06/25 orders and backlog decreased sharply YoY, with the company ceasing quarterly order disclosures and forecasting weaker future orders.
The company plans increased R&D spending, reduced capital expenditures, and stable dividends, with a share repurchase program announced.

Tokyo Keiki Inc (7721 JP): Q1 FY03/26 flash update

Q1 FY03/26 revenue rose 21.3% YoY to JPY10.5bn, with an order backlog of JPY58.5bn, up 21.3% YoY.
Defense and Communications Equipment segment showed significant revenue growth, narrowing operating losses despite yen appreciation and higher SG&A expenses.
Operating losses persisted across segments, influenced by increased R&D costs and changes in sales mix by end market.

Anicom Holdings (8715 JP): Q1 FY03/26 flash update

Recurring revenue increased by 10.4% YoY to JPY18.2bn, driven by underwriting, investment, and non-insurance business growth.
Recurring profit decreased by 40.7% YoY to JPY960mn, impacted by increased costs from AXA Direct insurance contract transfers.
The combined ratio based on earned premiums rose 4.0pp YoY to 97.9%, influenced by higher medical costs and policy transfer expenses.

Sinanen Holdings (8132 JP): Q1 FY03/26 flash update

Sales declined 0.6% YoY to JPY63.2bn, while operating profit rose 126.9% YoY to JPY726mn due to higher petroleum sales.
Revenue rose 2.3% YoY to JPY15.5bn, driven by increased kerosene sales volume and lower SG&A expenses.
Revenue and profit increased in bike sharing and systems businesses, but operating profit declined in building maintenance due to costs.

Toyota Motor (7203 JP) Tactical Outlook After $10B Profit Cut on Tariff Impact

By Nico Rosti

Toyota Motor (7203 JP) on Thursday announced it expected a profit hit of nearly $10 billion from US tariffs on cars imported into the USA.
Toyota cut its full-year profit forecast by 16%, citing rising US tariffs on cars, parts, steel, aluminum, uncertainty in market outlook and supplier impacts.
Our model does not see an overbought state at the moment and the stock was rallying on Friday, the forecast is: higher prices next week.

Toyo Tanso (5310 JP): 1H FY12/25 flash update

Sales declined to JPY23.0bn (-12.6% YoY), with operating profit at JPY3.8bn (-33.9% YoY) and net income at JPY2.7bn (-48.0% YoY).
FY12/25 forecast revised to sales of JPY48.0bn (-9.6% YoY) and operating profit of JPY7.5bn (-38.7% YoY).
Dividend forecast maintained at JPY145.0 per share, with a payout ratio of 60.8% based on FY12/25 forecast.

Japanese Big Cap Banks – Stick with Our Key Positive Picks

By Victor Galliano

We update our proprietary scorecard and many of our charts based on the latest data; despite the recent lack of BoJ rate hikes, interest rate spreads are widening
The JGB yield curve has continued to steepen, which is constructive for Japanese banks; in addition, market lending rates to June continue to rise faster than deposit rates
We stick with our focus on two core attributes; gearing to higher interest rates and cross-holdings to market capitalization keeping Resona, Mizuho, Shizuoka and Kyoto on our list of buys

Pilot Corp (7846 JP): 1H FY12/25 flash update

The company forecasts FY12/25 revenue of JPY133.0bn (+5.4% YoY) and operating profit of JPY18.0bn (+1.1% YoY).
Revenue in the Japan segment is expected to increase 2.8% YoY, driven by new product sales and market recovery.
The company plans JPY45.0bn in capital expenditures over three years, focusing on facility updates and technology investments.

Bando Chemical Industries (5195 JP): Q1 FY03/26 flash update