Japan

In today’s briefing:

StubWorld: Absent Borrow, GMO Internet (4784) Is An Avoid
Shibaura Electronics (6957 JP): Drawing Nearer to a Conclusion
Nikkei 225 Index Outlook: Bullish, Possibly Directed Past 41k
Keisei Electric Railway: Oversold on Caution, Not on Fundamentals
Money Forward (3994) | Mid-Sized Bets Start Paying Off
Toumei (4439 JP): Q3 FY08/25 flash update
EJ Holdings Inc (2153 JP): Full-year FY05/25 flash update
Sumitomo Corp (8053 JP): £7.5B UK Clean Energy Pivot to Boost Infra Exposure and Earnings Quality
Vector Inc (6058 JP): Q1 FY02/26 flash update
J Com Holdings (2462 JP): Full-year FY05/25 flash update

StubWorld: Absent Borrow, GMO Internet (4784) Is An Avoid

By David Blennerhassett

GMO Internet (4784 JP) stays listed if/when GMO Internet Group (9449 JP) sells (a lot of) shares. Yet 4784 remains stubbornly – manipulated (?) – at nosebleed valuations.
Preceding my comments on the GMO group – and Dah Sing Financial (440 HK) and Axiata Group (AXIATA MK) – are the current setup/unwind tables for Asia-Pacific Holdcos
Hese relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

Shibaura Electronics (6957 JP): Drawing Nearer to a Conclusion

Yageo Corporation (2327 TT) has extended the close of its offer for Shibaura Electronics (6957 JP) from July 15 to August 1, the end of the waiting period for FEFTA approval.
Yageo remains confident of securing FEFTA approval. Blocking an acquisition of a Type 1 (non-designated business sector) company by a Taiwanese company would set a bad precedent.
There is a medium to high probability that Yageo secures FEFTA approval. Minebea Mitsumi (6479 JP) is likely to walk as it signalled a limited appetite to match Yageo’s offer.

Nikkei 225 Index Outlook: Bullish, Possibly Directed Past 41k

By Nico Rosti

The Nikkei 225 (NKY INDEX) bounced this week, after 2 weeks down, after previously reaching a peak at 40852, the area above 41k has been a strong barrier since 2024.
Our model says the current Nikkei 225 trend could rise to 41k, or even above 41k.
The index’s latest 2-week pullback was shallow and did not even reach our model’s Q2 support level, this is a bullish behavior (buy the dip).

Keisei Electric Railway: Oversold on Caution, Not on Fundamentals

By Oshadhi Kumarasiri

Keisei Electric Railway Co (9009 JP) shares fell 52% from February 2024 peak, with losses deepening after its conservative mid-term plan and the failed activist board proposal in June 2025.
However, we believe the company’s mid-term guidance is overly conservative and underestimates the company’s underlying earnings potential
With depressed valuation, fare-driven revenue growth, and volume recovery potential, we see limited downside and an appealing opportunity for medium-term price appreciation.

Money Forward (3994) | Mid-Sized Bets Start Paying Off

Core Business acceleration: Business segment sales +28% YoY, driven by Mid-sized corporate strength; ARR +32% YoY to ¥29.6bn.
Non-Core drag explains topline miss: Total sales +11.7% YoY to ¥11.5bn vs est. ¥12.1bn; ex-Hirac Fund, sales +18% YoY.
Margin strength: Record-high EBITDA of ¥0.8bn (7% margin), achieved without one-off gains; signals improving core profitability.

Toumei (4439 JP): Q3 FY08/25 flash update

Toumei’s Q3 FY08/25 revenue reached JPY21.2bn, a 25.8% YoY increase, with record highs in all profit categories.
Office Denki 119 revenue rose 44.9% YoY to JPY9.3bn, with segment profit up 104.8% YoY to JPY1.5bn.
Office Solutions segment revenue grew 64.9% YoY to JPY2.5bn, with profit increasing 47.5% YoY to JPY276mn.

EJ Holdings Inc (2153 JP): Full-year FY05/25 flash update

In FY05/25, E-J Holdings reported revenue of JPY42.7bn, operating profit of JPY4.5bn, and net income of JPY3.2bn.
For FY05/26, E-J Holdings forecasts revenue of JPY47.0bn, operating profit of JPY5.0bn, and net income of JPY3.4bn.
E-J Holdings formulated E-J-Vision2030 and E-J-Plan2027 to enhance business foundation and corporate value.

Sumitomo Corp (8053 JP): £7.5B UK Clean Energy Pivot to Boost Infra Exposure and Earnings Quality

By Rahul Jain

Sumitomo’s £7.5B (~¥1.46T) UK clean energy investment marks a pivot from trading and resource-linked businesses to long-duration, regulated infrastructure—anchoring its Energy Transformation strategy.
Annual deployment (~¥146B) is ~24% of operating cash flow; funded via SPVs, project finance, and equity partners. Majority of spend is front-weighted through FY2031, earnings back-loaded.
Currently trading at ~5.7x EV/EBITDA, a successful infra scale-up could justify a multiple closer to 6.5–7.0x—in line with peers like Marubeni or Mitsui. ROE uplift is likely beyond FY2028.

Vector Inc (6058 JP): Q1 FY02/26 flash update

Revenue for Q1 FY02/26 was JPY14.8bn, a 6.7% YoY increase, with operating profit rising 22.9% YoY.
PR and Advertising revenue declined 5.0% YoY, while Press Release Distribution saw a 19.7% YoY revenue increase.
Direct Marketing revenue grew 36.7% YoY, but recorded an operating loss of JPY224mn due to increased ad spending.

J Com Holdings (2462 JP): Full-year FY05/25 flash update

Revenue increased by 3.1% YoY to JPY62.3bn, while operating profit decreased by 11.5% YoY to JPY3.0bn.
Child-Rearing Support Service revenue rose 8.6% YoY to JPY33.0bn, but operating profit fell 11.3% YoY.
Comprehensive Human Resources Service revenue declined 5.6% YoY to JPY20.6bn, yet operating profit increased by 1.0% YoY.

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Jul 15

Daily Brief Japan: GMO Internet, DD Group, Azoom, Hikari Tsushin, Astellas Pharma, Ryohin Keikaku, Kasumigaseki Hotel REIT, Goldwin Inc, Shin Pro Maint and more

In today’s briefing:

GMO Internet (4784) – Shares Appear Manipulated/Squeezed (Again), but ParentCo MUST SELL
[Japan M&A] Polaris MBO for DD Group (3073) – Too Light But Probably a Done Deal
TOPIX Inclusions: Who Is Ready (Jul 2025)
DD Group (3073 JP): Polaris Capital-Sponsored MBO Is Light
Hikari Tsushin’s Portfolio
Astellas Pharma (4503 JP): Izervay on Strong Footing, Strategic Brands Key for Future
Ryohin Keikaku (7453 JP): Q3 FY08/25 flash update
Kasumigaseki Hotel REIT Pre-IPO: Young Hotel Assets and Improving Economics
Goldwin’s The North Face License Surpasses ¥100 Billion but Faces Headwinds
Shin Pro Maint (6086 JP): Q1 FY02/26 flash update

GMO Internet (4784) – Shares Appear Manipulated/Squeezed (Again), but ParentCo MUST SELL

GMO Internet (4784 JP) was squeezed after a merger which was a Reverse Takeover followed by a ridiculous TOPIX inclusion. Then the parent tried an offering, which failed.
The clearing price demanded was WAAAY lower so the offering was pulled. Shares fell 70%, then bounced 65%. Now 48x book and 66x EBITDA for an ISP. Super expensive. Manipulated.
ParentCo needs to sell 90mm shares ASAP. The only clean way is through a liquidation trust to get shares lower before a larger offering.

[Japan M&A] Polaris MBO for DD Group (3073) – Too Light But Probably a Done Deal

Diamond Dining (3073 JP) (DD Group) head Matsumura-san appears to be getting out in this Polaris MBO for the dining group.
The premium is low, and the the price is probably light, but there are a couple of small things which mean it isn’t quite as light as it might look.
But the company prints cash, so yeah, it’s light. This should probably be a bit better, but F&B is a fickle business.

TOPIX Inclusions: Who Is Ready (Jul 2025)

By Janaghan Jeyakumar, CFA

Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
At the end of July 2025, GMO Financial Gate (4051 JP) and Azoom (3496 JP) will be included in the TOPIX Index.
Newly-Listed company Kitazato (368A JP) will also be included in the TOPIX index at the end of this month.

DD Group (3073 JP): Polaris Capital-Sponsored MBO Is Light

Diamond Dining (3073 JP) has recommended a Polaris Capital-sponsored MBO at JPY1,700, a 17.8% premium to the last close price.
The offer is light and is 16% below the midpoint of the IFA DCF valuation range. The process was lacking as there was no auction.
DD has no recent history of activism. Therefore, the likelihood of a bump is low unless there is vocal opposition or an activist becomes a substantial shareholder.

Hikari Tsushin’s Portfolio

By Michael Fritzell

This write-up is about Hikari Tsushin — a Japanese sales organization run by a visionary founder called Yasumitsu Shigeta
It’s been much talked about on Twitter and Substack, but few of the write-ups discuss Hikari Tsushin’s portfolio of publicly listed equities
I am personally not particularly interested in Hikari Tsushin itself, as it is primarily a sales organization helping other businesses find customers

Astellas Pharma (4503 JP): Izervay on Strong Footing, Strategic Brands Key for Future

By Tina Banerjee

Astellas Pharma (4503 JP) announced that in Q1FY26 the sales of their drug Izervay (avacincaptad pegol intravitreal solution) in the U.S. market will be ¥15.9B (~$110M, up 25% YoY).
Strategic brands (Padcev, Izervay, Veozah, Vyloy, and Xospata) revenue expanded to ¥336B (+¥176B or +110% YoY) in FY25, representing 18% of the total revenue.
Astellas agreement with Evopoint Biosciences for a novel investigational clinical-stage antibody-drug conjugate (ADC) targeting CLDN18.2, will help expand its pipeline and augurs well given its expertise in similar therapies (Vyloy).

Ryohin Keikaku (7453 JP): Q3 FY08/25 flash update

Operating revenue increased by 19.2% YoY to JPY591.1bn, driven by new store openings and solid sales performance.
The company revised its FY08/25 forecast, projecting operating revenue of JPY776.0bn and operating profit of JPY70.0bn.
Comparable-store sales in Japan rose 15.1% YoY, with customer traffic up 8.4% and average sales per customer up 6.2%.

Kasumigaseki Hotel REIT Pre-IPO: Young Hotel Assets and Improving Economics

By Nicholas Tan

Kasumigaseki Hotel REIT (401A JP) is looking to raise up to US$195m in its upcoming Japan IPO.
It is a REIT with hotel assets, sponsored by Kasumigaseki Capital (3498 JP) .
In this note, we look at the firm’s past performance.

Goldwin’s The North Face License Surpasses ¥100 Billion but Faces Headwinds

By Michael Causton

Goldwin had a solid year last year thanks to its license for The North Face, but there are now headwinds.
Inbound tourist support is falling away, and the push into footwear has not offset weakness elsewhere, while domestic consumer confidence remains patchy.
But Goldwin’s long-term prospects remain positive as its own brand is beginning to gain traction, establishing strong foundations in China.

Shin Pro Maint (6086 JP): Q1 FY02/26 flash update

Revenue increased 17.0% YoY to JPY6.7bn, driven by strong performance in Emergency and Preventive Maintenance Services.
Operating profit rose 30.6% YoY to JPY446mn, with an operating profit margin up 0.7pp YoY to 6.6%.
Shin Maint Holdings expanded market share by winning projects from competitors and forming a specialized air conditioning team.

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Jul 14

Daily Brief Japan: Shibaura Electronics, Casio Computer, Toyota Industries, Hisamitsu Pharmaceutical Co, Mani Inc and more

In today’s briefing:

Merger Arb Mondays (14 Jul) – Shibaura, Topcon, Nissin, OneConnect, Insignia, PointsBet, ENN Energy
Japan Activism Briefs | Casio, Nittoku
Weekly Deals Digest (13 Jul) – Toyota Industries, OneConnect, Great Eastern, Johns Lyng, NTT DC REIT
Hisamitsu Pharmaceutical (4530 JP): Guidance Reiterated Amid Seemingly Temporary Hiccup in Q1FY26
Mani Inc (7730 JP): Dental Recalls Still a Pain Point, Guidance Revised Downwards

Merger Arb Mondays (14 Jul) – Shibaura, Topcon, Nissin, OneConnect, Insignia, PointsBet, ENN Energy

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), Insignia Financial (IFL AU), Seven & I Holdings (3382 JP), Santos Ltd (STO AU).
Lowest spreads: Bright Smart Securities (1428 HK), New World Resources (NWC AU), Humm Group (HUM AU), Hainan Meilan International Airport (357 HK), Avjennings Ltd (AVJ AU).

Japan Activism Briefs | Casio, Nittoku

Oasis Management disclosed a 5.2% stake, increasing pressure on Casio to improve capital efficiency and strategic clarity.
City Index disclosed a 5.1% stake, signalling intent to drive value at Nittoku via capital return and improved governance.
3D Investment continue to add to Square Enix position. 3D and Dalton likely to target weak margins, bloated cash, and capital inefficiency – lots to work with.

Weekly Deals Digest (13 Jul) – Toyota Industries, OneConnect, Great Eastern, Johns Lyng, NTT DC REIT

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: NTT DC REIT (NTTDCR SP) and NSDL (NSDL IN) IPOs.
Event-Driven developments: Toyota Industries (6201 JP), OneConnect Financial Technology (OCFT US), Great Eastern Holdings (GE SP), Johns Lyng (JLG AU), New World Resources (NWC AU).

Hisamitsu Pharmaceutical (4530 JP): Guidance Reiterated Amid Seemingly Temporary Hiccup in Q1FY26

By Tina Banerjee

Hisamitsu Pharmaceutical Co (4530 JP) Q1FY26 revenue of ¥34.7B down 3% YoY, mainly driven by subdued performance in Salonpas focused OTC pharmaceutical products.
Rx business revenues grew 7% as Zicthoru, Apohide, Combipatch,Vivelle-Dot etc clocked healthy numbers excepting Mohrus product line.
Hisamitsu reiterated FY26 guidance expecting revenue to be ¥165B with profits growth expected to decelerate on higher cost.

Mani Inc (7730 JP): Dental Recalls Still a Pain Point, Guidance Revised Downwards

By Tina Banerjee

Mani Inc (7730 JP) 9MFY25 revenue increased 3% YoY to ¥22.3B mainly due to strong sales of Surgical products and Eyeless Needle products, while Dental segment sales dipped on recall.
Operating margin deteriorated to 27.5% in 9MFY25, down 260bps. Segment wise, dental segment reported the worst operating margin decline from 19.6% to 10.4%.
Management revised FY25 guidance downwards, now expecting revenue to be ¥29.6B (previous guidance ¥30.2B), up 3.8% YoY. Profits and margins also witnessed a downward revision.

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Jul 13

Daily Brief Japan: Marumae Co Ltd, TSE Tokyo Price Index TOPIX and more

In today’s briefing:

Marumae Co Ltd (6264 JP): Q3 FY08/25 flash update
Does Introducing Incentive into Remuneration of Independent Directors Compromise Their Independence?

Marumae Co Ltd (6264 JP): Q3 FY08/25 flash update

The company reported sales of JPY7.3bn, operating profit of JPY1.5bn, and net income of JPY940mn, with no YoY data.
Transitioned to consolidated financial reporting in Q3 FY08/25, adding a Functional Materials segment, primarily operated by KMAC.
Announced consolidated earnings forecast for FY08/25: sales JPY11.3bn, operating profit JPY1.9bn, and net income JPY1.3bn.

Does Introducing Incentive into Remuneration of Independent Directors Compromise Their Independence?

Some companies adopt policy of not granting performance-based compensation to outside directors to ensure independence. Given this, outside directors may have little incentive to leverage skills and knowledge in value-creation.
Most independent board members also serve as board members of other companies, but very few companies have set clear standards for the number of concurrent positions that may be held.
Although few companies disclose the criteria for the tenure of independent directors, the longest term was 12 years. ISS has set this as the standard in its voting guidelines.

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Jul 12

Daily Brief Japan: Creek & River, Kurotani Corp, Neos Corp, Usen-Next Holdings Co Ltd and more

In today’s briefing:

Creek & River (4763 JP): Q1 FY02/26 flash update
Kurotani Corp (3168 JP): Q3 FY08/25 flash update
Neos Corp (3627 JP): Q1 FY02/26 flash update
Usen-Next Holdings Co Ltd (9418 JP): Q3 FY08/25 flash update

Creek & River (4763 JP): Q1 FY02/26 flash update

Sales increased by JPY985mn (+7.7% YoY) with growth in Creative (Japan), Medical, and CRES segments; operating profit rose by JPY159mn (+12.7% YoY).
Progress toward FY02/26 forecast: 23.1% for sales, 28.4% for operating profit, 28.1% for recurring profit, 28.6% for net income.
CRES segment sales rose 205.0% YoY to JPY23mn, but recorded an operating loss of JPY41mn.

Kurotani Corp (3168 JP): Q3 FY08/25 flash update

In cumulative Q3 FY08/25, the company reported revenue of JPY62.0bn, operating loss of JPY376mn, and net loss of JPY388mn.
Sales volume for ingots increased 15.9% YoY, while recycled materials sales volume decreased 10.2% YoY.
The company forecasts FY08/25 operating loss of JPY197mn and net loss of JPY412mn, maintaining its revised forecast.

Neos Corp (3627 JP): Q1 FY02/26 flash update

In Q1 FY02/26, TECMIRA recorded revenue of JPY2.7bn (-4.3% YoY) and operating profit of JPY86mn.
IoT & Devices segment revenue increased 30.1% YoY, while Life Design segment revenue declined 43.6% YoY.
Adjusted EBITDA declined 76.4% YoY to JPY60mn, largely due to the absence of new game releases.

Usen-Next Holdings Co Ltd (9418 JP): Q3 FY08/25 flash update

Cumulative Q3 FY08/25 revenue rose 20.3% YoY, with operating profit up 2.9% YoY; no full-year forecast revision.
Segment revenue progress rates: Content Distribution 77.8%, Store & Facility Solutions 78.6%, Communications & Energy 79.4%, Finance 92.0%.
Full-year FY08/25 forecast: Revenue JPY360.0bn (+10.2% YoY), operating profit JPY31.0bn (+6.5% YoY), dividend JPY14.0/share.

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Jul 11

Daily Brief Japan: Fast Retailing, Nidec Corp, Shift Inc, WingArc1st Inc, Koshidaka Holdings, TSE Tokyo Price Index TOPIX and more

In today’s briefing:

Fast Retailing(9983) | Q3 Miss But FY Guide Intact – Execution Solid, China Still Weak
Nidec (6594 JP): New Factory in China
Shift Inc (3697 JP): Q3 FY08/25 flash update
WingArc1st Inc (4432 JP): Q1 FY02/26 flash update
Koshidaka Holdings (2157 JP): Q3 FY08/25 flash update
The Gap with Investors’ Perspective Stems from Managers Trying to Distance Themselves from Investors

Fast Retailing(9983) | Q3 Miss But FY Guide Intact – Execution Solid, China Still Weak

Q3 revenue/OP miss vs. our est. on weaker-than-expected Uniqlo International – FX and China weakness key drivers.
Japan and Western markets continue to outperform; U.S. and Europe now rival China in size.
FY company guidance unchanged but rising risks to next FY from tariffs and persistent China underperformance.

Nidec (6594 JP): New Factory in China

By Scott Foster

Nidec has opened a new motor factory in China to meet an anticipated increase in demand for home appliances.
Sensing an opportunity for growth, management is already considering the construction of a second factory.
This fits with the Chinese government’s efforts to promote domestic demand and with Nidec’s need for a new growth driver in China.

Shift Inc (3697 JP): Q3 FY08/25 flash update

In cumulative Q3 FY08/25, the company reported sales of JPY95.4bn, gross profit of JPY33.0bn, and operating profit of JPY11.9bn.
Software Testing Related Services segment sales reached JPY61.9bn, with gross profit at JPY22.8bn and operating profit at JPY16.2bn.
The revised full-year forecast for FY08/25 anticipates sales of JPY130.0bn and operating profit of JPY15.0bn.

WingArc1st Inc (4432 JP): Q1 FY02/26 flash update

FY02/26 revenue was JPY7.3bn (+2.7% YoY), with operating profit at JPY2.1bn (-13.1% YoY) and EBITDA JPY2.5bn (-10.6% YoY).
Q1 FY02/26 BDS sales revenue rose 3.1% YoY to JPY4.8bn, while DE business revenue increased 2.1% YoY to JPY2.5bn.
WingArc1st revised FY02/26 forecast projects revenue of JPY31.2bn (+8.7% YoY) and operating profit of JPY9.0bn (+8.9% YoY).

Koshidaka Holdings (2157 JP): Q3 FY08/25 flash update

In cumulative Q3 FY08/25, revenue was JPY51.4bn (+10.7% YoY), with operating profit at JPY8.4bn (+19.1% YoY).
The company opened 31 facilities and closed seven, totaling 688 facilities and 18,574 rooms by end-Q3 FY08/25.
Personnel expenses rose 9.2% YoY, rent increased 11.8% YoY, and SG&A expenses rose to JPY5.1bn (+0.7% YoY).

The Gap with Investors’ Perspective Stems from Managers Trying to Distance Themselves from Investors

The trend of AGMs being concentrated in the last week of June remains unchanged, and this’s seen as attempt to divert shareholder attention and reluctant attitude toward dialogue with shareholders.
The rise in share proposals has made some managers wary, and we are not optimistic about pushing AGM later dates and disclosing annual securities reports well in advance of AGM.
There are gap between what is stated and what actually happens in “the reasons for not introducing anti-takeover measures,” “compliance with constructive dialogue with shareholders,” and disclosure of “TSE’s requests.”

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Jul 10

Daily Brief Japan: Kokusai Electric , Toyota Industries and more

In today’s briefing:

[Japan ECM] Kokusai Elec (6525) Offering – Expect It Very Well Bid, and the Back End Squeezy
Toyota Industries (6201 JP): Vocal Activism Gathering Pace
Kokusai Electric (6525 JP): Small Index Impact for Now, but Could Lead to Something Bigger
Kokusai Electric Placement – Well Flagged but past Deal Didn’t Do Well
Kokusai Electric (TSE: 6525) – KKR’s Secondary Sale Marks Typical PE Exit

[Japan ECM] Kokusai Elec (6525) Offering – Expect It Very Well Bid, and the Back End Squeezy

After the close today, Kokusai Electric (6525 JP) announced that large holder (and original PE owner) KKR HKE Investment LP would sell down 30mm shares or 12.88% of shares out.
This is not expected, but also not unexpected – it’s exactly a year since the first selldown. There is a decent-sized short position, and it isn’t a huge offering.
This changes two aspects of the future supply/demand balance. Both are important for how this trades in coming months.

Toyota Industries (6201 JP): Vocal Activism Gathering Pace

Toyota Industries (6201 JP)’s preconditional tender offer from Toyota Fudosan is susceptible to a bump if there is enough vocal opposition from minorities.
In July, two public pieces have sharply criticised the offer – the Asian Corporate Governance Association (ACGA) on 2 July and Sloane Robinson Investment Management on 8 July.
Some of the criticism has merit, while others do not. Nevertheless, these letters are the first and right step to agitate for terms that are closer to TICO’s intrinsic value.

Kokusai Electric (6525 JP): Small Index Impact for Now, but Could Lead to Something Bigger

By Brian Freitas

KKR HKE Investment is offering 30m shares (12.86% of shares out) of Kokusai Electric (6525 JP) in a secondary offering that could raise up to JPY 91bn (US$620m).
Applied Materials (AMAT US) will become the largest shareholder in Kokusai Electric (6525 JP) after the placement.
There will not be a lot of buying from passive trackers following the placement, but it could ease the way for inclusion of the stock in the Nikkei 225 Index.

Kokusai Electric Placement – Well Flagged but past Deal Didn’t Do Well

By Sumeet Singh

KKR is looking to raise approximately US$620m through an accelerated secondary offering for around 13% of Kokusai Electric (6525 JP)‘s (KE) stock.
KKR had sold in the IPO and undertaken an extended selldown in July 2024 as well. Hence, this deal is somewhat well flagged.
In this note, we will talk about the placement and run the deal through our ECM framework.

Kokusai Electric (TSE: 6525) – KKR’s Secondary Sale Marks Typical PE Exit

By Rahul Jain

On July 9, 2025, KKR announced it would reduce its stake in Kokusai Electric from ~23.5% to ~10.6% through a ¥90 billion overnight secondary offering.
KKR’s move reflects a classic private equity monetization strategy following operational improvements and a successful IPO.
While the sale caused a modest short-term share reaction (~2% dip), such liquidity events rarely impact long-term value—fundamentals remain the key driver for patient investors.

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Jul 09

Daily Brief Japan: Hokkoku Financial Holdings, Renesas Electronics, Ikuyo Co Ltd, Kokusai Electric , Tosei Corp, Pci Holdings Inc/Jp, TSE Tokyo Price Index TOPIX and more

In today’s briefing:

[Japan Buybacks] – Japan Bank Metrics, Cross-Holdings and Banks Part 1
[Quiddity Index] TOPIX July 2025 FFW Rebalance – $3bn+ a Side to Trade
[Japan LolWut?] Ikuyo (7273) Says “Iku Yo!” – Bitcoin, M&A, Weirdness, More
Kokusai Electric (TSE: 6525): Niche Leader in Batch Deposition Tools
Tosei Corp (8923 JP): 1H FY11/25 flash update
Full Report – PCI Holdings (3918 JP) – 2025.6.25
The Change in Record Date Is Difficult, and Most AGMs Next Year Will Be Held in June

[Japan Buybacks] – Japan Bank Metrics, Cross-Holdings and Banks Part 1

Japanese banks have been in a relative sweetspot for a couple of years. Higher rates, higher inflation, more FX volatility, better earnings, stronger buybacks. Cross-holding sales up but not spectacular.
The BOJ may raise rates but Trump Tariff retaliation/mitigation is a question. Elections the next two weeks and earnings the 2-3 weeks after that may keep things a question.
But buybacks should pick up. Lots announced in spring end at or before Q1 earnings. And I expect substantial new buybacks to be announced throughout the from Q1 results on.

[Quiddity Index] TOPIX July 2025 FFW Rebalance – $3bn+ a Side to Trade

Four times a year, the TSE reassesses free float weights for listed stocks. Indices run by the TSE adjust their index shares (shares out x FFW x coefficient) in Jan/Apr/Jul/October.
Yesterday, the TSE announced its changes for this quarter. Combined with other adjustments on 30 July at the close, we expect 190+ events.
For now, we expect the trade is about US$3.3bn a side. At the top of the buy side, 16 names with more than $30mm to buy, averaging 5x ADV.

[Japan LolWut?] Ikuyo (7273) Says “Iku Yo!” – Bitcoin, M&A, Weirdness, More

Several Japanese companies jumped onto the OBaaBM/TABaaBM (Own/Talk-About-Bitcoin-as-a-Business Model) last fall to this spring as Microstrategy Inc Cl A (MSTR US) shares went up and bitcoin did too.
Yesterday, resin coating/injection molding product maker Ikuyo Co Ltd (7273 JP) announced an M&A Policy, and a Shareholder Benefits Program where shareholders will “win” amounts of bitcoin by lottery.
Ikuyo expects revenues +955% this year. Details are sparse. The shareholder structure has red flags. The CEO sold himself half the company in Feb for peanuts. Forewarned. But it’s interesting.

Kokusai Electric (TSE: 6525): Niche Leader in Batch Deposition Tools

By Rahul Jain

Kokusai has delivered steady growth, with revenue rising from ¥181.8B in FY2021 to ¥238.9B in FY2025 and a strong rebound in profitability.
It plans to expand capacity, grow service revenue beyond 35%, and launch next-gen tools for GAA logic and 3D memory.
At ~22x P/E and 12.5x EV/EBITDA, valuations appear fair given its scale, but upside exists if GAA traction and service leverage play out.

Tosei Corp (8923 JP): 1H FY11/25 flash update

Revenue increased by 14.6% YoY to JPY66.1bn, with operating profit rising 18.1% YoY to JPY17.6bn.
The company revised its full-year forecast, lowering revenue by 3.9% but raising operating profit by 4.7%.
Assets under management reached JPY2.67tn, exceeding fiscal year-end targets, driven by new asset management contracts.

Full Report – PCI Holdings (3918 JP) – 2025.6.25

By Sessa Investment Research

PCI Holdings, Inc. (hereafter, the Company) is an IT provider of IT-related services and hardware, mainly focusing on embedded system technology such as embedded software, embedded computers.
Though it is a relatively young company, born in 2005, it has grown up to be large enough to have net sales of JPY 25.1 bn for FY2024/9 with approximately 1,600 employees, along with organic growth and the acquisition of many companies.
Going forward, it will change the corporate structure and make it more profitable by investing its cashflow from its core businesses, the Engineering Business and the Product/Device Business, into the ICT Solutions Business, which has considerable potential growth fields such as solution development using AI, IoT platform and the like.

The Change in Record Date Is Difficult, and Most AGMs Next Year Will Be Held in June

T&D Holdings and HOYA, two March fiscal year-end companies that filed their annual securities reports more than 2 weeks ago this year, have previously filed their reports 2-3 weeks earlier.
Only two companies will revise articles of incorporation this year and postpone the record date. Most companies will hold AGM in June next year and file reports just before AGM.
Since institutional investors decide their votes based on various aspects of the company as a whole, companies should disclose their annual securities reports well in advance of AGM.

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Jul 08

Daily Brief Japan: Marui Group, Fast Retailing, Toyo Engineering, United Arrows and more

In today’s briefing:

Marui Group Placement: Clean up by Toho; Improving Fundamentals
FAST RETAILING (9983 JP) | Q3 Preview: Upside Risk into Print, But Tariff Narrative Still Overhangs
Toyo Engineering (6330 JP): Coverage Initiation
United Arrows Finds New Growth Path Through Korean Brand

Marui Group Placement: Clean up by Toho; Improving Fundamentals

By Nicholas Tan

A group of shareholders are looking to raise US$184m from selling their respective stakes in Marui Group (8252 JP) .
While the deal shouldn’t come as a surprise, given the ongoing cross-shareholding unwind narrative in Japan, the timing of such a selldown isn’t always certain.
In this note, we will talk about the placement and run the deal through our ECM framework.

FAST RETAILING (9983 JP) | Q3 Preview: Upside Risk into Print, But Tariff Narrative Still Overhangs

Q3 earnings risk skewed to upside: we forecast sales/OP of ¥857b/¥171b vs. Street’s ¥826b/¥152b.
Domestic Uniqlo trends strong; international segment likely resilient despite Inditex’s headline miss.
Tariff impact likely reiterated but remains a FY26 issue, not a near-term earnings swing factor.

Toyo Engineering (6330 JP): Coverage Initiation

In FY03/25, orders stood at JPY244.2bn (-47.2% YoY), including those received by equity-method affiliates.
Revenue from completed construction contracts was JPY278.1bn (+6.6% YoY), operating profit JPY2.6bn (-61.4% YoY), recurring profit JPY6.5bn (-7.7% YoY), and net income attributable to owners of the parent JPY2.0bn (-79.4% YoY). Major contracts won during the year included a domestic plant for lithium-ion battery electrolyte production, several geothermal power plants in Indonesia, and an LNG-related facility in India. Despite higher revenue from completed construction contracts, operating profit declined YoY due to a drop in GPM caused by project delays. The company booked JPY4.1bn in equity in earnings of affiliates, narrowing the YoY decline in recurring profit relative to operating profit. Extraordinary losses included JPY1.4bn in impairment losses on fixed assets and roughly JPY3.0bn in tax-related expenses at subsidiaries.
As a result, net income attributable to owners of the parent dropped 79.4% YoY.

United Arrows Finds New Growth Path Through Korean Brand

By Michael Causton

United Arrows is best known for building its own chains but has had a choppy few years spent fixing merchandising, supply chains and a poor e-commerce unit.
It now believes it can take a leaf from the playbook of Mash Holdings by signing promising overseas brands as a way to accelerate growth.
The first of these is the Korean brand, Nice Weather, a sort of lifestyle convenience store beloved by Gen Z.

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Jul 07

Daily Brief Japan: Seven & I Holdings, TSE Tokyo Price Index TOPIX and more

In today’s briefing:

Merger Arb Mondays (07 Jul) – Seven & I, Shibaura, Insignia, New World, ENN Energy, HKBN, Fengxiang
Higher Foreign Shareholdings, Which Led to Fewer Takeover Defense, Push Companies To Further Reforms

Merger Arb Mondays (07 Jul) – Seven & I, Shibaura, Insignia, New World, ENN Energy, HKBN, Fengxiang

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), Insignia Financial (IFL AU), ENN Energy (2688 HK), Seven & I Holdings (3382 JP), Santos Ltd (STO AU).
Lowest spreads: Bright Smart Securities And (1428 HK), Hainan Meilan International Airport (357 HK), New World Resources (NWC AU), Humm Group (HUM AU), Avjennings Ltd (AVJ AU).

Higher Foreign Shareholdings, Which Led to Fewer Takeover Defense, Push Companies To Further Reforms