Japan

• The five year data period for the September 2025 Nikkei 225 rebalance is now over (as of 31 July). First obvious news? No Fast Retailing (9983 JP) capping.
• That was obvious a couple months ago, and the BayCurrent Consulting (6532 JP) buying to come has been known for five months.
• The Kokusai Electric (6525 JP) Offering last month makes it more likely an ADD than it was in June (when it didn’t replace NTT Data), but not a done deal.

• SoftBank Group (9984 JP) reports Q1 FY2025 earnings on 7 August at 15:30 JST, with a conference call at 16:30 JST.
• Highlights: SoftBank’s post-earnings moves are often sharp and unpredictable — with outliers above ±12%. Options markets flag the results day as a high-volatility event to watch.
• Why Read: Essential for investors or options traders focused on Japan: Understand how timing, historic patterns and current volatility pricing shape both opportunity and risk around SoftBank earnings.

• Hoshizaki Corporation (6465 JP)‘s stock price has dropped over the last 3 months, and the lower market cap could result in global index deletion in August. 
• An early cutoff in the review period could result in the stock staying on in the index but that puts it at risk of deletion in November.
• There has been an increase in short interest and cumulative excess volume over the last couple of months and that indicates positioning in the stock.

• Taiyo Yuden underperformed its peers in electronic components by 29% over the past year, but its change in operating profit margin should outperform peers by 68% in the current year.
• Exposure to the U.S. is less than 7% of direct sales, but probably 25% including indirect exposure. Still, based on supply/demand analysis, we think Yuden is probably tariff proof.  
• While rivals have prioritized high-margin device modules to offset component sales declines, Yuden doubled down on its core capacitor and inductor strengths and appears to be coming out ahead.

• Revenue increased 3.5% YoY to JPY54.5bn, with major subsidiaries in the US, China, and Malaysia contributing growth.
• Operating profit decreased 3.3% YoY to JPY7.2bn due to higher SG&A expenses, despite revenue growth and improved cost ratio.
• Flavor Division revenue rose 4.4% YoY to JPY48.7bn, while Fragrance Division revenue declined 3.3% YoY to JPY5.8bn.

• Revenue reached JPY8.0bn (+32.3% YoY), with HENNGE One contributing JPY7.5bn (+34.3% YoY) and Professional Service JPY506mn (+8.1% YoY).
• Operating profit was JPY1.6bn (+72.3% YoY), with a margin of 19.7% (+4.6pp YoY); gross profit was JPY6.9bn (+35.7% YoY).
• SG&A expenses rose to JPY5.3bn (+27.6% YoY), including JPY618mn in advertising (+34.1% YoY) and JPY2.0bn in personnel (+21.9% YoY).

• Cellebrite is a quality business in digital forensics, a market leader in the industry
• Cellebrite has strong financials, including high margins, free cash flow conversion, and a bootstrap structure

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Revenue was JPY131.8bn (+18.9% YoY), operating profit JPY5.0bn (+111.0% YoY), and net income JPY2.7bn (+259.6% YoY).
• Products HR business revenue was JPY58.4bn (+9.9% YoY), segment profit JPY1.7bn (+46.0% YoY), driven by semiconductor demand.
• Real Estate business revenue was JPY24.8bn (+81.9% YoY), segment profit JPY2.1bn (+578.2% YoY), despite delayed property handovers.

• Operating revenue in Q1 FY03/26 was JPY5.5bn, a decrease of JPY9mn YoY, with origination-related revenue down 9.5%.
• Operating expenses increased by JPY362mn YoY to JPY5.0bn, driven by higher finance and personnel costs.
• Pre-tax profit declined by 45.0% YoY to JPY437mn, with profit attributable to owners down 43.5% YoY.

• Kyowa Kirin Co Ltd (4151 JP) revenue declined 1% YoY to ¥230.7B, impacted by APAC business restructuring, reduced drug prices in Japan, despite the growth in North America and EMEA.
• The company remains heavily dependent on Crysvita generating almost 43% of the total revenue of the company. Crysvita sales rose 10% YoY to ¥99.8B in 1H25.
• The next big trigger to the stock price would be the FDA decision on approval of ziftomenib, due in November.

• Tokyo Electron’s share price dropped 18% on Friday following the announcement of weak Q1 results and a huge downward revision to H2 FY Mar-26 guidance. 
• Push-Outs and/or cancellations of orders due to the uncertainty caused by President Trump apparently caught managment by surprise. Costs also rising as management ramps up capex and R&D.
• Impact of Trump’s yet-to-be-announced tariffs on semiconductors is still unknown, but 15% base rate on Japan already a negative. 

• On 30 July, Fujitec Co Ltd (6406 JP) and Swedish PE Firm EQT announced a deal to acquire the company with the Uchiyama family. Two activists signed tender agreements. 
• The deal is not expensive IF you underwrite strong profitability growth and assume the large net receivables position can be better addressed.
• But the stock is trading tight to terms and there are 6+ months until you get your money. 

• On Friday 1 August, Nippon Steel Corporation (5401 JP) and subsidiary Krosaki Harima (5352 JP) announced the parent would buy out the sub at ¥4,200/share. 
• This seems light given the structure of the balance sheet (lots of net receivables – a bunch against the buyer) but it would be awfully tough to see this broken.
• As it is a long-dated deal, I expect it trades too tight early on, then may flatten or fade.

• The drop in Dentsu Inc (4324 JP)‘s stock price over the last few months could lead to the deletion of the stock from a global index in August.
• Dentsu Inc (4324 JP) has underperformed its peers over the last year and trades cheaper than the average of its Advertising peers.
• There is positioning in Dentsu Inc (4324 JP), though it is likely to be smaller than the estimated passive selling. A relative selloff could be used to enter the stock.

• Sumitomo Pharma (4506 JP) reported 19% YoY (negative Fx impact of 7%) revenue growth during Q1FY26 to ¥108B, mainly driven by North America.
• Orgovyx witnessed growth in medicare patients due to reduction in out-of-pocket caps and Gemtesa on the other hand improved market share employing price focussed strategy.
• Sumitomo Pharma is well on track moving ahead of the significant losses suffered in FY23 and FY24, focusing on expanding revenue, reducing costs, and securing future business drivers.

• With nearly half of companies listed on TSE having a P/B ratio of less than 1, many investors are likely to question the appropriateness of executives receiving fixed remuneration.
• Incorporating TSR into the compensation system will likely motivate companies to increase shareholder returns, which is a good thing if it leads to the return of unused cash to shareholders.
• As long as fixed compensation remains high, there won’t be much incentive to put a lot of cash into growth investments that boost corporate value.

• Otsuka Holdings (4578 JP) sees 7% revenue growth in 1H25, despite negative Fx impact. Mainstay pharmaceutical business (+9% YoY) drove revenue. Rexulti and Abilify franchise were strong.
• Otsuka kept 2025 revenue guidance unchanged, the company raised guidance for business, operating, and net profits for 2025 mainly due to lower than anticipated operating expenses due to Fx impact.
• Otsuka stated that pharmaceutical business has no impact by additional US tariffs. Two top selling drugs are steadily gaining traction. Going ahead, new launches should further drive growth.

• Revenue increased by 8.9% YoY to JPY82.4bn, while operating profit decreased by 3.4% YoY to JPY4.9bn.
• SG&A expenses rose 17.5% YoY to JPY7.3bn, influenced by investments in human resources and IT infrastructure.
• Total operating assets increased 8.6% YoY to JPY1.24tn, driven by growth in finance and operating leases.

• Krosaki Harima (5352 JP) has recommended a preconditional tender offer from Nippon Steel Corporation (5401 JP), the parent, at JPY4,200, a 21.7% premium to the last close price of JPY3,450.
• The offer is attractive as it represents an all-time high and is above the mid-point of the special committee IFA DCF valuation range.
• The precondition relates to regulatory approvals in Japan and India. The tender offer is expected to start in early February 2026. This is a done deal.

• I tally 40 – mostly firm, mostly Asia-Pac – arb transactions currently being discussed and analysed on Smartkarma.
• Three new deal was discussed on Smartkarma this week: Joy City Property (207 HK), Hogy Medical (3593 JP), and Nihon Chouzai (3341 JP).
• Key updates/news took place on MAC Copper (MAC AU), PointsBet (PBH AU), Ainsworth Game Technology (AGI AU), Piedmont Lithium (PLL AU),Pacific Industrial (7250 JP), and Topcon (7732 JP) .

• Some of my favorite situations are international spin-offs because they fly under the radar. Hamee has not been written up on VIC, Seeking Alpha or Twitter (I found one writeup on Substack).
• The company is 3 months away from breaking up into two separate companies which both look attractive. It is currently classified as a Specialty Retail company but will spin off a high growth, high margin, SaaS company in November that I estimate is worth more than the entire company’s market cap today.
• The stock looks compelling on an absolute basis (5.1x NTM EBITDA) and SOTP basis. I see 31% to 117% upside over the next 6 months as the break up is completed.

• In Q1 FY03/26, the company reported revenue of JPY549.6bn, operating profit of JPY144.7bn, and net income of JPY117.8bn.
• The revised FY03/26 forecast projects revenue of JPY2.35tn, operating profit of JPY570.0bn, and net income of JPY444.0bn.
• The company plans aggressive R&D investments, increasing from JPY250.0bn in FY03/25 to JPY295.0bn in FY03/26.

• Revenue increased by 14.0% YoY to JPY30.6bn, with operating profit up 16.1% YoY to JPY1.1bn.
• Core product revenue grew: food product containers by 19.8% YoY, films and laminates by 11.4% YoY.
• Gross profit reached JPY6.1bn (+15.9% YoY), with SG&A expenses totaling JPY5.0bn (+15.9% YoY).

• In Q1 FY03/26, sales increased by 12.1% YoY, driven by marine and industrial paints, despite container paint declines.
• Operating profit rose 16.5% YoY to JPY3.9bn, aided by optimized selling prices and high-value-added product sales.
• Net income fell 48.9% YoY due to absence of prior extraordinary gains, despite improved gross profit margin.

• Orders increased by 2.5% YoY to JPY74.3bn, while revenue rose by 0.4% YoY to JPY57.7bn.
• The Special Purpose Truck business saw a 26.2% YoY rise in orders to JPY42.9bn, with revenue up 4.2%.
• The company revised its FY03/26 forecast, expecting orders of JPY320.0bn and revenue of JPY285.0bn, despite weaker EV demand.

• Companywide revenue remained flat YoY at JPY251.1bn, while operating profit decreased by 9.6% YoY to JPY10.6bn.
• ICT Solution segment revenue rose 23.7% YoY, with operating profit increasing 64.0% YoY to JPY2.3bn.
• Aerospace and motor vehicles business saw revenue decline by 16.6% YoY, with a 21.2% YoY drop in operating profit.

• Since the government hasn’t taken any actions, the birth rate has dropped much lower than expected, and the population is shrinking much faster than predicted.
• There are various reasons why more people are choosing not to marry. It is necessary to implement policies that meet the needs of people with diverse views.
• With the decline in working-age population, it is necessary to incorporate as many diverse people as possible into human capital to maximize the abilities of as many people as possible.

• In Q1 FY03/26, Department Store business operating profit fell 56.6% YoY due to lower gross profit and higher SG&A expenses.
• Supermarket business operating profit increased 35.7% YoY, driven by higher gross profit from sales growth and new store formats.
• Shopping Center business sales fell 8.5% YoY, impacted by subsidiary divestitures and ongoing guest room renovations at Ours Inn Hankyu.

• Revenues reached JPY90.6bn (+11.5% YoY), driven by record-high sales in Domestic Real Estate Fund Business.
• Operating profit was JPY19.2bn (-16.5% YoY), with a gross profit margin of 30.0% (-7.5pp YoY).
• Non-operating income increased to JPY2.6bn (+17.2% YoY), while non-operating expenses decreased to JPY1.7bn (-7.3% YoY).

• Jcr Pharmaceuticals (4552 JP) revenue increased 5% to ¥8.6B in Q1FY26, mainly driven by Izcargo, marred to an extent by NHI price revision impact on Growject.
• Higher SG&A expenses (up 9%) on increased commission payments and increased R&D expenses (up 5% as clinical development activities progressed) resulted in operating loss of ¥606M.
• JCR’s two pipeline drugs are under Phase III trials: pabinafusp alfa (JR-141) for Hunter syndrome and JR-142, for growth hormone deficiency. Approvals not expected before late FY27 or FY28.

• This family-owned dispensing pharmacy business saw the founding family decide to bail a year ago. So the company decided to set up a sales process.
• This process was a model for how this kind of sale process should be conducted. Multiple parties. Easy accommodation. Getting experts in.
• This should be a done deal because the family and cross-holders/insiders get them to the minimum.

• Nihon Chouzai (3341 JP) has recommended a tender offer from Advantage Partners and LYFE Capital at JPY3,927, a 163.6% premium to the undisturbed price of JPY1,490.
• The offer, which resulted from an auction, represents an all-time high and is above the mid-point of the IFA DCF valuation range. 
• The significant irrevocables and low required tendering rate suggests a done deal. At the last close, the gross spread was 11.7%. 

• The slide in Ricoh Company Ltd (7752 JP)‘s stock price over the last few months could lead to the deletion of the stock from a global index in August. 
• Ricoh Company Ltd (7752 JP) has underperformed its peers over the last couple of months and trades cheaper than the average of its peers.
• There are indications of positioning in the stock. However, positioning is likely smaller than the estimated passive selling and there could be more downside for the stock near-term.

• For July 2025, just six new transactions (firm and non-binding) were discussed on Smartkarma (by the Quiddity team) with an overall announced deal size of only ~US$4bn.
• The average premium for the new transactions announced (or first discussed) in July was 45%, with a year-to-date average of 47%.
• The average premiums for transactions in 2024 (129 transactions), (2023 (117), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) were 43%, 39%, 41%, 33%, 31%, and 31%

• Takeda Pharmaceutical (4502 JP) reported 1QFY26 revenue of ¥1,107B, down 8%, primarily attributable to unfavorable foreign exchange and lower sales of Vyvanse.
• Takeda reiterated its FY26 guidance of lower sales and higher margins, reflecting near term headwinds amid cost control.
• Positive Phase 3 data read outs for rusfertide (for Polycythemia Vera) and oveporexton (for narcolepsy type 1) is a step ahead towards filing in FY26 and likely approval thereafter.

• In Q1 FY03/26, Yellow Hat’s sales increased 16.2% YoY to JPY40.3bn, with operating profit up 12.4% YoY.
• The company opened four new Yellow Hat stores, resulting in a total of 919 domestic stores by end-Q1 FY03/26.
• Sales for a segment decreased by 0.5% YoY to JPY1.4bn, with operating profit declining by 6.3% YoY.

• Q1 FY03/26 sales were JPY71.6bn, a 7.0% YoY decrease, representing 21.7% of the full-year forecast.
• Operating profit declined 9.1% YoY to JPY3.3bn, with a 1.2pp YoY improvement in gross profit margin.
• Pre-tax profit fell 42.5% YoY to JPY3.2bn, impacted by the absence of prior one-off gains.

• Revenue increased to JPY137.1bn, a 48.6% YoY growth, driven by higher recovery volumes and improved profitability.
• Operating profit rose to JPY5.9bn, a 63.9% YoY increase, with significant gains in electronics and dental sectors.
• Precious Metals business saw substantial YoY operating profit growth, despite declines in catalyst area recovery volume and profit.

• Q1 FY03/26 results showed a 4.8% YoY sales decrease, with operating profit dropping 49.9% YoY to JPY869mn.
• Sales in the Electronic Devices and Components segment fell 9.9% YoY, while Electronic and Electric Equipment sales grew 14.4% YoY.
• The full-year forecast for FY03/26 predicts a 1.6% YoY sales increase, with a 24.2% YoY decline in operating profit.

• In Q1 FY03/26, sales were JPY55.6bn (+112.2% YoY), operating profit JPY7.8bn (+210.0% YoY), net income JPY5.6bn (+228.7% YoY).
• Tsuburaya Fields Holdings reported JPY3.5bn sales (-1.6% YoY) and JPY443mn operating profit (-57.7% YoY) in Content and Digital business.
• Amusement Equipment business posted JPY51.7bn sales (+132.0% YoY), JPY8.2bn operating profit (+297.5% YoY), selling 95,240 machines (+225.2% YoY).

• Today after the close, a Nikkei article said Denso Corp (6902 JP) had recently lifted its stake in ROHM Co Ltd (6963 JP) from “about 0.3%” to “just under 5%.”
• Given the recent buy of 28mm shares of Rohm into the Nikkei 225, that means ~11.5% or perhaps more has been taken out of the public’s hands. 
• Some may have come from cross-holders, but it’s not clear there are that many. This renders the stock more squeeze-able going forward. Rohm reports next week.

• Fujitec Co Ltd (6406 JP) has recommended a preconditional tender offer from EQT (EQT SS) at JPY5,700, an 8.1% discount to the last close price of JPY6,205.
• The precondition relates to regulatory approvals in several countries. The tender offer is expected to commence in late January 2026.
• Although the offer is light, it is likely to succeed, as it resulted from an auction process and was supported by irrevocables from the two prominent activists on the register.

• GMO Internet Group (9449 JP) needs to sell shares in GMO Internet (4784 JP) to achieve a “float” of 35% by 31 December 2026. Recent filings show they are selling. 
• Preceding my comments on the GMO group – and Haw Par Corp (HPAR SP)/ UOB (UOB SP) – 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%.

• Don Quijote announced a slew of initiatives over the past two months targeting tourists, a move to capitalise on the burgeoning fitness boom, and new social media use.
• The initiatives reflect the continued dynamism in the business both in the discount format and as city centre tourist meccas.
• While the company has closed some overseas stores, the outlook in Asia remains very strong. 

• Oisix was originally known for its food subscription boxes but then expanded into meal kits which brought in a new type of customer looking to save time.
• But with more busy and stressed customers no longer wanting to even spend 20 minutes cooking its meal kits, Oisix has launched 5-minute deli meals.
• Oisix remains the leading independent online food retailer and the most innovative. While subscriber numbers fell recently, sales per user are up.

• Revenue increased to JPY14.4bn (+8.8% YoY) with operating profit at JPY4.1bn (-17.6% YoY) and net income JPY2.9bn (-13.8% YoY).
• Strike closed 192 M&A deals (+4.9% YoY) with revenue per deal at JPY75.2mn (+3.7% YoY).
• SG&A expenses rose 19.7% YoY to JPY4.3bn, increasing the SG&A ratio to 29.7% (+2.7pp YoY).

• KOKUYO’s revenue increased by 3.5% YoY, driven by strong demand in the Furniture business for office relocations and renovations.
• Operating profit rose by 11.1% YoY due to price revisions, while recurring profit declined by 3.0% YoY from foreign exchange losses.
• The full-year forecast for FY12/25 was revised, projecting revenue of JPY357.0bn and operating profit of JPY25.0bn.

• In Q1 FY03/26, the company reported YoY declines in revenue and profit, with revenue at JPY22.3bn (-3.8% YoY).
• The company achieved 19.7% of its full-year FY03/26 revenue target, maintaining its initial forecast despite Q1 shortfall.
• Domestic revenue was JPY20.5bn (-1.8% YoY), while overseas revenue was JPY1.7bn (-23.2% YoY).

• Companies that previously paid lower dividends compared to their cash on hand often adopt DOE or progressive dividends. In other words, they have too much cash on hand.
• Both DOE and progressive dividends would suggest that management of free cash flow solely lies with the company, and that only cash exceeding a certain level is returned to shareholders.
• Setting a predetermined limit on the allocation of free cash flow may hinder more dynamic cash flow allocation and risk-taking, resulting in limited shareholder returns.

• Astellas Pharma (4503 JP) reported 7% revenue growth in Q1FY26. Strategic brands grew 49% and contributed 22% of revenue. Driven by cost optimization, core operating profit increased 61%.
• Astellas reiterated FY26 guidance of 1% revenue growth and 5% core operating profit increase. Q1FY26 progress enhance conviction on comfortably meet FY26 guidance.
• With no near-term new launches anticipated for Astellas, performance of the strategic brands in existing markets as well as their indication and geography expansions should be the key drivers.

• Hogy Medical (3593 JP)‘s founder passed and there was a re-arranging of Hoki family deckchairs in 2021. In 2022 there was a BIG buyback from the family at ¥3,130/share.
• I discussed it here. I suggested that meant accretion, a family willing to sell, and an open register for a cheap company always heavily owned by value investors.
• The stock went nowhere for 18mos as activists dallied. In 2024 it ran from ¥3,500 to ¥5,000 as Dalton bought 20%. Then they got a board seat. Now takeover noise.

• I have harped on the fact that GMO Internet Group (9449 JP) has to sell GMO Internet (4784 JP) shares with the goal to get 35% tradable shares by end-2025.
• I have written about it here, here, here, and here. The price needs to be lower so the parent can launch a HUGE block. The stock must be less squeeze-able.
• It turns out the parent started selling in the market the day after the Offering was cancelled. The setup is delicious now.

• On 28 July, it was announced that Affirma Capital will conduct a tender offer of JTC Inc/Fukuoka (950170 KS) which is a Japanese duty free operator listed on KOSDAQ. 
• This follows the exercise of a call option on all shares held by former JTC Chairman Gu Cheol-mo. 
• Despite some recent concerns about travelling to Japan due to Manga driven fears about earthquakes, there are some clear longer term signs that the global travelers visiting Japan are increasing.

• Kasumigaseki Hotel REIT (401A JP)  is looking to raise up to US$192m in its upcoming Japan IPO.
• It is a REIT with hotel assets sponsored by affiliated developer, Kasumigaseki Capital (3498 JP).
• In this note, we examine the IPO dynamics, and look at the firm’s valuation.

• 2Q is inline, revenue and margins look like a beat but that’s weaker JPY and higher utilization as the firm is increasing inventory, expecting a better 2H25. 
• 3Q guide is flat QoQ, the YoY recovery continues (2Q -9%, 3Q -4%). For 4Q, management expects a “modest” flattish or slight increase QoQ, which implies at least +13% YoY
• The stock is cheap, but “overall demand for automotive, we still have no clue as to how that will unfold” and short-term, Auto growth depends on China

• We update our views on ten Japanese midcap banks focusing on those with large strategic shareholdings relative to market value, as well as beneficiaries of the improving interest rate outlook
• Our top-rated pick is Iyogin Holdings (5830 JP), with its constructive mix of large strategic holdings, attractive valuations including PTBV ratio and healthy gearing to higher interest rates
• We also retain Hokuhoku Financial and Hachijuni Bank as buys; Hokuhoku has yet to realize its large strategic holdings whilst Hachijuni has reached its target level for cross-holdings reduction

• Sales increased by 7.2% YoY to JPY18.7bn, with operating profit up 20.5% YoY to JPY3.6bn.
• Kaipoke platform service sales grew 14.1% YoY, driven by increased member locations and expanded optional services usage.
• Global Career business sales fell 10.4% YoY, impacted by high prior-year comparison and geopolitical instability.

• Net operating revenue increased to JPY10.7bn (+13.4% YoY; +21.6% QoQ), with operating profit at JPY4.7bn (+10.2% YoY; +47.7% QoQ).
• Total commissions rose to JPY5.2bn (+0.5% YoY; +9.9% QoQ), with brokerage commissions at JPY5.0bn (+1.1% YoY; +10.9% QoQ).
• SG&A expenses increased to JPY6.0bn (+16.0% YoY; +7.0% QoQ), with personnel expenses up 25.7% YoY and 25.3% QoQ.

• Revenue increased 15.9% YoY to JPY2.9bn, driven by growth in rent guarantee services, despite Solution business decline.
• Operating profit rose 22.0% YoY to JPY660mn, with an OPM increase of 1.1pp YoY to 22.9%.
• Total contracts in force reached 482,000, with Guarantee business contracts up 19.9% YoY, Solution business contracts down 23.8% YoY.

• GEECHS Inc. (hereafter, “the Company”) ’s core business is the IT Human Resources Matching Business, Japan (hereafter, “Japan IT HRM Biz”), that matches companies that want to outsource work to outside workers with IT freelancers who want to do that work, and the Company receives a matching fee.
• By leveraging the expertise of experienced professional career advisors, highly precise coordination using visualization tools, and next-generation talent development through Seed Tech, the Company provides end-to-end support for client DX and AI projects.

• The Company completed its acquisition of Alive Inc. and streamlined its business portfolio, transforming itself into a company focused exclusively on the IT human resources business starting in FY2026/3. 

• In December-2024, this deal was mooted and it came out as expected. But the implied growth in management forecasts was higher than expected so the price came in quite light.
• In March when the deal was announced, it seemed like a tough call, but three weeks later Value Act decided they would tender, but would reinvest in the back end.
• The deal is now approved, and launches tomorrow. It gets done, I expect, but it is not a model deal other than being one showing the loopholes available to buyers.

• A quick synoptic look at the tactical models for the key indices, stocks, commodities and bonds we cover, for the week July 28 – August 1.
• OVERSOLD: China Mobile (941 HK) , Commonwealth Bank of Australia (CBA AU) are just mildly oversold, NIFTY Index (NIFTY INDEX) is oversold.
• OVERBOUGHT: Amazon (AMZN US) , Alphabet (GOOG US) , NVIDIA (NVDA US) , Toyota Motor (7203 JP) , Softbank Group (9984 JP) , Hang Seng Index , Nikkei 225 INDEX 

• Shionogi & Co (4507 JP) achieved YoY improvement in all key parameters. Moreover, Q1FY26 result shows a significant improvement compared to Q1FY25, when all key parameters recorded double-digit YoY decline.
• During Q1FY26, revenue increased 2% YoY to ¥100B, driven by HIV franchise. Q1FY26 revenue records 19% progress, while operating and net profit advanced more than 20% of full-year target.
• Shionogi has maintained H1FY26 and FY26 guidance. This indicates Q2FY26 revenue expectation of ¥133B, up 14% YoY. Acquisition of JT Group’s pharmaceutical business and Torii Pharmaceutical is progressing.

• Revenue increased by 10.7% YoY to JPY3.4bn, while operating profit decreased by 37.8% YoY to JPY93mn.
• Sales for AI servers and data centers remained strong, but consumer product demand stalled due to US-China tensions.
• Revenue from semiconductor packages grew 24.1% YoY, while automotive-related sales declined slightly due to inventory adjustments.

• Shin-Etsu Chemical’s fiscal Q1/26 results were inline with expectations, with EBIT down -12.6% yoy as margins declined yoy for all of its divisions 
• However, FY26E guidance disappointed markets, with a -14.4% decline in operating income, well below consensus’ already weak 0.6% forecast, and the stock fell -9.5%
• Shin-Etsu has trades at a P/B premium to the Japan chemical sector even with a lower ROE, providing limited valuation support especially given a weak operating outlook 

• Orders increased by 4.4% YoY to JPY7.4bn, with Measuring Equipment orders at JPY2.2bn and Custom Order Test Equipment at JPY5.2bn.
• Sales rose 24.8% YoY to JPY6.3bn, despite project postponements, with a gross profit margin decline of 1.1pp to 43.0%.
• Operating loss narrowed by JPY398mn YoY, while net loss expanded by JPY1.0bn due to absence of extraordinary gains.

• It is obvious to everyone that digitization reduces costs. However, if few companies adopt digitization, trust banks that undertake shareholder management tasks will not make temporary investments for digitization.
• With many companies wanting to distance themselves from shareholders, digitization and online services will unlikely accelerate even if legislation is enacted, at least until manual work reaches its limits.
• The solution is to create an environment (setting the trading unit to one share) where it is burdensome to send AGM documents manually and count voting rights manually.

• I summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
• Highest spreads: Mayne Pharma (MYX AU), Yichang HEC Changjiang Pharma (1558 HK), ENN Energy (2688 HK), Pacific Industrial (7250 JP), Santos Ltd (STO AU), Smart Share Global (EM US). 
• Lowest spreads: Bright Smart Securities (1428 HK), Hainan Meilan International Airport (357 HK), Humm Group (HUM AU), New World Resources (NWC AU), Nippon Concept (9386 JP).

• The MBO for Pacific Industrial (7250 JP) starts with the father+son Chairman and CEO, – combined stake 2.92% – putting nothing in to buy this, with help from banks.
• The Takeover Price is priced at 0.7x book, and a Net Debt to EBITDA of 2x (when adjusted for securities+pension assets+DTLs) and 5-6x average 2026-2030 FCF.
• This is being done too cheap: Toyota is the main customer, one third of revenues comes from Japan, and the company is set for a transition to EVs.

• Ahead of the Bank of Japan’s 31 July 2025 policy meeting, markets broadly expect rates to remain on hold at 0.5%.
• The new US–Japan trade deal may influence the tone of the upcoming quarterly outlook—if not the rate decision itself.
• With limited precedent for rate changes but a high rate of surprises when they do occur, this Insight combines historical data with option-implied volatility to help investors assess tail risks.

• It seems unlikely that there’ll be an increase in formal criteria for corporate governance, like in the previous revision. It looks like there’ll be more demand for human capital disclosure.
• Many companies don’t fully understand human capital, and there’s concern that achieving disclosure criteria will become the goal, rather than original objective of investing in human capital to create value.
• The revised Corporate Governance Code requires verification that management resources are being appropriately allocated to investment and shareholder returns. It seems that simpler questions are better than difficult “technical terms.”

• Earlier this month, Substack writer Gezzogero mentioned AeroEdge (7409 JP) (7409 JP — US$88 million) on his blog.
• I thought it was a fantastic write-up and wanted to dig into it myself.
• The company is a supplier of aircraft components. It manufactures low-pressure turbine blades for the well-regarded LEAP jet engine, which is used in narrow-body aircraft such as the Airbus (AIR FP) A320neo and Boeing (BA US) 737 MAX.

• Chugai Pharmaceutical (4519 JP) reported 5% YoY rise in core revenue in 1H25, as overseas sales grew 7% YoY and domestic market revenue was up 3%.
• Actemra witnessed growth in both overseas and domestic market. Hemlibra overseas sales stood at ¥151B (30% of total sales), down 6% YoY.
• In 1H25, two significant developments that happened are successful P3 trial of orforglipron and positive results from phase I/II study of NXT007.

• Capacity utilization at Sumco’s largest customer, TSMC, jumped 10% in Q2, with another core customer, Renesas, showing consecutive improvements.
• Surging AI chip demand and geopolitical shifts favoring non-Chinese suppliers are set to boost demand for high-end silicon wafers.
• The stock trades at 0.7x book and 4.9x EV/EBITDA. These are levels we think the stock can make a meaningful upward advance from if the improvement in customer inventories broadens.

• Although Taiyo Kagaku is not a household name among consumers in Japan, it has a strong reputation in Japan and internationally among F&B companies for functional, health-enhancing ingredients.
• Three main reasons we like the stock include strong loyal customers in the F&B segment in Japan/internationally, solid growth of sales and profits, and attractive valuations. 
• Taiyo Kagaku currently has a SmartScore of 4.6 out of 5 which is among the top ranking stocks in the Japanese stock market. 

• Revenue increased by 40.9% YoY to JPY7.2bn, with operating profit up 67.6% YoY to JPY2.7bn.
• Capital gains reached JPY3.2bn (+29.7% YoY), primarily from listed shares, with an investment multiple of 2.1x.
• Total investment executed was JPY6.8bn, with JPY3.2bn in domestic VC investments, averaging 20.4% equity stakes.

• Pacific Industrial (7250 JP) has recommended an MBO at JPY2,050, a 16.4% premium to the last close price and a 40.3% premium to the undisturbed price.
• While the offer is below book value (P/B of 0.71x), it represents an all-time high and is above the mid-point of the IFA DCF valuation range. 
• Pacific Industrial has no history of activism. Therefore, the offer will succeed at current terms unless there is vocal opposition or an activist becomes a substantial shareholder. 

• We believe that the Japanese-US trade deal helps to decrease uncertainty on monetary policy, with a potential rate rise in the near term improving the outlook for Japanese banks
• We remove our short on Rakuten Bank, as it is one of the beneficiaries of a near term potential rise in benchmark rates going forward
• In terms of PBV ratio, Seven Bank still trades at a 70%+ discount to Rakuten Bank’s PBV but the latter is impacted by the near-term interest rate outlook change

• Tsubakimoto Kogyo Co., Ltd., (hereafter, the Company) is an industrial equipment–related trading company founded in 1916 with a history that goes back more than a century.
• Its strength lies in technological expertise developed through years of collaboration between the Engineering and Construction Management Departments, which gives the company a strong competitive advantage.
• The company also leverages co- development and strategic alliances starting from the research stage for products with leading market share, such as power transmission chains and platform screen doors.