Japan

In today’s briefing:

Toyota Motor (7203 JP) Tactical Outlook: Uncertainty Persists, But Rebound Likely
Japan Steel Works (5631 JP) – Steady Profit Growth, Nuclear Edge, and Premium Justified
Advantest – High-Performance Chip Boom & Share Buybacks Make This A Stock To Watch!
Both Statutory Nomination Committee and BODs Chaired by Outside Directors Are in the 2% Range

Toyota Motor (7203 JP) Tactical Outlook: Uncertainty Persists, But Rebound Likely

By Nico Rosti

We continue our coverage of Toyota Motor. In our last insight we flagged overbought conditions and a likely pullback—Toyota declined as expected. Our model now flashes an “upcoming rebound” signal.
Toyota Motor (7203 JP) has been falling for 3 weeks. At the end of last week our WEEKLY model flagged the stock as “very oversold“: 83% probability of WEEKLY reversal.
We cannot say if this rebound will become a rally, at the moment: uncertainty around the stock persists, and this particular pattern usually sees more selling, after the bounce.

Japan Steel Works (5631 JP) – Steady Profit Growth, Nuclear Edge, and Premium Justified

Strong earnings momentum with revenue, margins, and EPS consistently improving over FY21–FY25, driven by a shift toward high-margin industrial machinery.
Strategic monopoly in ultra-large nuclear forgings, supported by global SMR tailwinds, capacity expansion plans, and a record order backlog across nuclear and defense.
Valuations remain elevated, but are backed by strong visibility, margin expansion, and structurally advantaged positioning in a tightening global supply chain.

Advantest – High-Performance Chip Boom & Share Buybacks Make This A Stock To Watch!

By Baptista Research

Advantest Corporation delivered a robust performance in FY 2024, with record-high sales, operating income, and net income, primarily driven by sustained demand for AI-related high-performance semiconductor testing.
The company effectively addressed the increased complexity in semiconductors through strategic procurement, supply chain diversification, and long-term agreements.
This allowed Advantest to meet the elevated demand, particularly in SoC and memory tester sales.

Both Statutory Nomination Committee and BODs Chaired by Outside Directors Are in the 2% Range

Since the number of companies transitioning to US Type 3 Committees isn’t increasing, a perverse debate has begun on weakening the authority of nomination committees in US Type 3 Committees.
Despite calls from investors to appoint outside directors as chairpersons of BODs to stimulate discussion and strengthen supervisory functions by separating supervision from execution, these calls have been ignored.
If the board of directors simply approves plans created by each business division based on their budgets, then it is not involved in important company decisions.

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Jun 23

Daily Brief Japan: ROHM Co Ltd, JX Advanced Metals, ASICS Corp and more

In today’s briefing:

[Quiddity Index] Nikkei 225 Sep25 Rebal: One ADD/DEL, Less Certain Than Before
JX Advanced Metals (5714 JP) – Dominant in Sputtering, Recycling Pivot, Valuations Lag Peers
ASICS (7936) | Nike Q4 Preview: Eyes on Margins and Momentum

[Quiddity Index] Nikkei 225 Sep25 Rebal: One ADD/DEL, Less Certain Than Before

I published a Sep25 Nikkei 225 prediction list last Wednesday. By Friday, we had a new paradigm due to an ad hoc change. That new paradigm informs the September selection.
As it is, I expect one (1) ADD (Shift Inc (3697 JP)) and one (1) DELETE (Tokuyama Corp (4043 JP)) – a prediction which change on a corporate announcement.
My confidence on the ADD is a little lower due to the implications of the choice of Rohm. And the interesting ECM trade for September remains Sony Financial.

JX Advanced Metals (5714 JP) – Dominant in Sputtering, Recycling Pivot, Valuations Lag Peers

Listed in March 2025 via Japan’s largest IPO since SoftBank 2018, JX Advanced Metals has since accelerated recycling, governance restructuring, and potential Toho Titanium consolidation.
A global leader in high-purity sputtering targets (35–40% share) and thin film materials, it is scaling capacity and deepening foundry partnerships (TSMC, Samsung) to capture long-term semiconductor growth.
Despite strong positioning, it trades at just ~7x EV/EBITDA FY25E—below peers—offering structural growth at value multiples amid recovering earnings and strategic asset backing.

ASICS (7936) | Nike Q4 Preview: Eyes on Margins and Momentum

By Mark Chadwick

Nike reports Q4 earnings Thursday. Focus for ASICS investors: (1) Sales momentum recovery, (2) Gross margin trends.
Nike’s continued weakness (global footwear sales -8% YoY in MRQ) supports bullish near-term thesis on ASICS.
However, signs of stabilization at Nike could signal increasing competitive pressure in H2/FY26.

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Jun 22

Daily Brief Japan: ROHM Co Ltd, Sysmex Corp, NTT Data Corp, JFE Holdings, TSE Tokyo Price Index TOPIX, Honda Motor Co Ltd (Adr) and more

In today’s briefing:

Nikkei 225 Index Rebalance: Rohm (6963) To Replace NTT Data Group (9613)
[Quiddity Index] Nikkei 225 Boots NTT Data (9613) Early, Rohm (6963) IN 3 July; $3.8bn a Side
Sysmex Corp (6869 JP): Forex to Take Some Sheen Away off Growth in FY26; Japan Still Remains Key
Last Week in Event SPACE: Shin Kong/Taishin, Santos, NTT Data, ENN Energy, Mitsui Matsushima
JFE Holdings (5411 JP) – Stable Core, Strategic JSW Stake, and Deep-Value Opportunity
Governance Issues Have Not Been Resolved as Far as Profiles of TSE-Listed Companies Shows
Honda Motor Co. Ltd. Doubles Down on EV Innovation with ¥126 Billion R&D Surge; Is It Too Late In The EV Game?

Nikkei 225 Index Rebalance: Rohm (6963) To Replace NTT Data Group (9613)

By Brian Freitas

Following the results of NTT (9432 JP)‘s tender offer for NTT Data Corp (9613 JP), NTT Data will be deleted from the Nikkei 225 (NKY INDEX).
ROHM Co Ltd (6963 JP) will be added to the Nikkei 225 (NKY INDEX) at the close on 3 July. The stock is up a fair bit from its lows.
Nearly all the NTT Data Corp shares not tendered will be held by passives and there will be selling in the stock as index providers move the float lower/delete.

[Quiddity Index] Nikkei 225 Boots NTT Data (9613) Early, Rohm (6963) IN 3 July; $3.8bn a Side

Today the results of the NTT Data Corp (9613 JP) Tender Offer came out. NTT has 81.75%. I warned of lack of liquidity at that level yesterday here.
Yesterday I proposed that ROHM Co Ltd (6963 JP) would replace NTT Data in the Nikkei 225 and that the likely timing was the last couple of days of August.
Today, the Nikkei used the June 2020 rule change to announce NTT Data’s near-term deletion. Rohm goes in 3 July. 7.5x ADV to buy. $3.8bn a side to trade.

Sysmex Corp (6869 JP): Forex to Take Some Sheen Away off Growth in FY26; Japan Still Remains Key

By Tina Banerjee

In FY25, Sysmex Corp (6869 JP) revenue rose 10% YoY to ¥509B. Operating profit margin expanded 20bps to 17.2%. Amid rising costs, favorable Fx impact of ¥8.6B drove the margin.
Sales grew across regions as instrument installed increased and use of reagents multiplied. America’s volatile margin is a concern, amid the fact that Japan remains the major margin contributor.
For FY26, Sysmex has guided for revenue of ¥535B (+5% YoY). The company has factored in the impact of tariff estimating annual cost of sales impact of approximately ¥3B-4B.

Last Week in Event SPACE: Shin Kong/Taishin, Santos, NTT Data, ENN Energy, Mitsui Matsushima

By David Blennerhassett

Taishin Financial (2887 TT) is cheap to peers. Shin Kong Financial (2888 TT) is cheap vs Taishin. Long Shin Kong. Long Taishin vs Peers. Long Shin Kong vs Taishin Peers.
Abu Dhabi makes a big, bold bet on Santos Ltd (STO AU). However FIRB will have the last word on whether the deal goes through.
If the results show NTT owns >80% of NTT Data (9613 JP), buy a lot for a potential squeeze. If the results show NTT owns 68-70%, you can probably ignore.

JFE Holdings (5411 JP) – Stable Core, Strategic JSW Stake, and Deep-Value Opportunity

JFE Holdings rebounded from COVID-era losses to deliver peak earnings in FY22, followed by a gradual normalization through FY25, with stable steel volumes but declining margins amid weak domestic demand.
The group is investing ¥970B (~$6.5B) through FY2030 across decarbonization, product upgrades (e.g., electrical steel, galvanizing), and overseas downstream expansion to sustain competitiveness.
Adjusting for its ₹910B (~¥1.7T) JSW stake, ~30% of EV, JFE trades at just 2.7x EV/EBITDA—deeply discounted vs peers like Nippon Steel and POSCO.

Governance Issues Have Not Been Resolved as Far as Profiles of TSE-Listed Companies Shows

The fact that 59.2% of companies have March fiscal year-end and concentrate AGMs in the last week of June, preventing shareholders from attending AGMs, is a fundamental corporate governance issue.
Companies with foreign shareholdings of over 30% represent 17.4% of prime market. Most companies continue to run without a sense of urgency and without much influence from overseas investors.
While the number of listed subsidiaries has decreased over the past decade, the number of equity method affiliates has increased significantly. The business portfolio has not yet been fundamentally restructured.

Honda Motor Co. Ltd. Doubles Down on EV Innovation with ¥126 Billion R&D Surge; Is It Too Late In The EV Game?

By Baptista Research

Honda Motor Co., Ltd. (Honda) recently conducted a financial review of its performance for the fiscal year ending March 2025, along with projections for 2026.
Several key factors from its operations and outlook are noteworthy for investors, highlighting both strengths and challenges.
Honda’s motorcycle segment saw robust performance, reporting record highs in unit sales, operating profit, and margins.

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Jun 21

Daily Brief Japan: Septeni Holdings, Kobe Steel Ltd, Japan Hotel Reit Investment, Resona Holdings, AS ONE Corporation, Towa Corp, Japan Business Systems , TSE Tokyo Price Index TOPIX, Nippon Aqua, Polaris Holdings and more

In today’s briefing:

Asian Dividend Gems: Septeni Holdings
Kobelco (5406.T) – Diversified Industrial at Deep Value
The Yen’s Volatility & Japanese Hotel REITs: A Tourism-Driven Comeback Story
Japanese Big Cap Banks – Key Fundamental Tailwinds Drive Our Positive Picks
AS ONE (7476 JP) – A Royalty on Japan’s Scientific Advancement
Towa (6315): Buy for Orders Rebound
Japan Business System (5036 JP) – Cloud Integration Profitability Recovering Sharply
A Dialogue with a Skilled Outside Director Will Create Value. This Premise Is Important
Nippon Aqua (1429 JP) – Innovator in Living Environments
Polaris Holdings (3010 JP) – Scaling New Heights Through Strategic M&A and Surging Inbound Demand

Asian Dividend Gems: Septeni Holdings

By Douglas Kim

Septeni Holdings is one of the leaders in Japan in the digital marketing business which mainly includes digital advertising, marketing support, data & AI-driven solutions.
The company has also aggressively raised dividend payouts which is a clear sign of improving corporate governance.
The company is also well positioned to deliver sales growth rate of about 5-7% per year in the next 2-3 years with 20%+ per year growth in operating profit.

Kobelco (5406.T) – Diversified Industrial at Deep Value

Earnings stable over 3 years as machinery and power offset weak steel margins; ROIC gradually improving.
Focus on KOBEMAG®, machinery expansion, and carbon-neutral projects with disciplined capex.
Trades at ~5x P/E due to low ROIC, past governance issues, and misperception as a pure steel cyclical.

The Yen’s Volatility & Japanese Hotel REITs: A Tourism-Driven Comeback Story

By Jacob Cheng

The JPY Yen has depreciated 25% against USD for the last 5 years, this has made Japan an extremely attractive destination for foreigners
The Japan’s hotel sector is known by its low supply, partly due to higher development cost and labour shortage. We think REVPAR and ADR will continue to be strong
We like Japan Hotel REIT and Invincible for their hotel exposure. We think investors should closely monitor the Yen movement as well as BOJ policy

Japanese Big Cap Banks – Key Fundamental Tailwinds Drive Our Positive Picks

By Victor Galliano

The Bank of Japan left the short-term interest rate unchanged, but the governor stated that the tapering of JGB buying will continue, albeit with an eye on market stability
This implies that the JGB yield curve is likely to continue steepening going forward, which is constructive for Japanese banks; in addition, market lending rates to April continue to rise
We reassert buys on Resona, Mizuho, Shizuoka and Kyoto aided by our proprietary scorecard, and based on two core attributes; gearing to higher interest rates and cross-holdings to market capitalization

AS ONE (7476 JP) – A Royalty on Japan’s Scientific Advancement

By Astris Advisory Japan

As scientific progress increasingly depends on more complex equipment and precision instruments, we believe wholesaler and distributor AS ONE is well-positioned to capture demand through expanding its presence in the high-end segment.
Demand for scientific supplies and lower-end scientific equipment remains stable, providing a resilient, recurring revenue base.
The company’s growth has consistently outpaced and shown limited correlation with national R&D spending.

Towa (6315): Buy for Orders Rebound

By Scott Foster

After nearly two years of decline, TOWA’s new orders appear to have hit bottom this quarter and should start to recover in the three months to September.
Sales and profits should follow a similar trajectory with management expecting nearly 60% of FY Mar-26 sales and more than 80% of operating profit to be recorded in 2H.
Rising demand for AI-related high-bandwidth memory (HBM) and GPU packaging should drive growth for the next 2-3 years, bringing the projected P/E ratio for FY Mar-28 down to 12X.

Japan Business System (5036 JP) – Cloud Integration Profitability Recovering Sharply

In Q2 FY24/9 financial results reported exactly one year ago, profit attributable to owners of parent declined -74.1% due to recording an impairment loss of JPY 1,720mn in the 2Q as an extraordinary loss for the entire unamortized balance of goodwill associated with the acquisition of consolidated subsidiary NEXTSCAPE Inc.
In SIR’s follow-up report, we wrote “management promptly recognizing the impairment and withdrawing the FY25/9 OP MTP target effectively minimizes future down-side risk.
In the meantime, core business performance continues to grow at double-digits. ”

A Dialogue with a Skilled Outside Director Will Create Value. This Premise Is Important

The reason why many companies have previously rejected requests by overseas investors to meet with outside directors is that they’ve prioritized information control over constructive dialogue with shareholders and investors.
The fact that companies begun to provide opportunities for communication with outside directors will hopefully lead to shifts in value-creating management, but it’ll not easy to spread to many companies.
Even if more companies provide opportunities for communication between outside directors and investors in the future, dialogue with unskilled outside directors will not be fruitful.

Nippon Aqua (1429 JP) – Innovator in Living Environments

Nippon Aqua Co., Ltd. (hereinafter, “the Company”) is a high-growth enterprise listed on the Prime Market of the Tokyo Stock Exchange.
Guided by its management philosophy—“Contribution to society through the creation of living environments that are friendly to people and the earth”—the Company leverages insulation and waterproofing technologies to drive energy efficiency and support a sustainable society.
It holds the leading domestic share in on-site urethane foam insulation installation and operates its business through three key divisions: Single-family homes , Buildings, and Waterproofing.

Polaris Holdings (3010 JP) – Scaling New Heights Through Strategic M&A and Surging Inbound Demand

By Astris Advisory Japan

Supported by Star Asia Group, Polaris Holdings now operates six hotel brands and is scaling up with a goal of 100 hotels and 15,000 rooms by FY3/27.
Shifting to a low-risk, fee-based model and a well-balanced fixed and variable lease structure to optimize risk-adjusted returns, its strategic mix of assets is enhancing earnings stability and growth potential.
Backed by strong financial foundations and effective capital deployment, Polaris is also expanding into new hotel types, strengthening its platform, and positioning for sustainable, scalable growth amid rising inbound demand.

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Jun 20

Daily Brief Japan: NTT Data Corp, Seven Bank Ltd, Nippon Steel Corporation, Nippon Building Fund, Allegro MicroSystems , Olympus Corp and more

In today’s briefing:

[Japan Event] Potentially Interesting Dynamics of Post-Tender NTT Data (9613) Trading. $8bn+ One Way
[Japan Event] Seven Bank (8410) To Buy Back Up to 17.0% of Shares Out Tomorrow
Nippon Steel (5401 JP) – No Rival, No Discount, Limited Control
Nippon Building Fund Placement – Small Deal but Lacks Accretion
Allegro MicroSystems: China-for-China Strategy to Harness Growth In One Of The World’s Largest Semiconductor Markets!
Olympus Corp (7733 JP): Forex Holds FY25 Together; FY26 Guidance Does Not Offer Much Respite

[Japan Event] Potentially Interesting Dynamics of Post-Tender NTT Data (9613) Trading. $8bn+ One Way

The NTT Data Corp (9613 JP) Tender Offer closed today. Results will come out tomorrow. I expect it will have been successful.
That will mean some US$8bn+ of passive tracking flows to sell and $8bn+ to buy related to this event alone in the next 3 months.
And there are some very interesting dynamics to consider in the meantime.

[Japan Event] Seven Bank (8410) To Buy Back Up to 17.0% of Shares Out Tomorrow

Today after the close, Seven Bank Ltd (8410 JP) announced a MASSIVE ToSTNeT-3 transaction to buy back up to 200,000,000 shares (17.0% of shares out) for ¥52.4bn. Tomorrow AM.
There is a complex iterative calculation on the part of Seven Eleven Japan to figure out how many shares they should put into the buyback.
I see a minimum buyback of 10.8%. 17% would be great. But there is a potential issue on the back end of which investors should be aware.

Nippon Steel (5401 JP) – No Rival, No Discount, Limited Control

Nippon paid full price despite governance restrictions; with no credible rival, rejecting the golden share risked collapsing the deal.
Historical golden share precedents imply 10–20% valuation discounts, yet Nippon accepted late-stage constraints without renegotiation.
Funding mix includes bridge loans, hybrids, and asset sales, but proposed equity issuance near 40% below book risks EPS dilution and undermines capital discipline messaging.

Nippon Building Fund Placement – Small Deal but Lacks Accretion

By Sumeet Singh

Nippon Building Fund (8951 JP) is looking to raise around US$122m in its Primary Offering, to fund the acquisition of Frontier Musashikosugi N Building and S Building.
Unusually for Japan, the acquisition was announced at the end of last month, while the raising has only been announced today.
In this note, we talk about the deal dynamics and run the deal through our ECM framework.

Allegro MicroSystems: China-for-China Strategy to Harness Growth In One Of The World’s Largest Semiconductor Markets!

By Baptista Research

Allegro MicroSystems has reported its financial results for the fourth quarter and the full fiscal year 2025.
The company is focused on strengthening its market position through innovation and operational efficiencies.
President and CEO Mike Doogue, who ascended from being the company’s first Chief Technology Officer, emphasized a strategic focus on expanding product capabilities and extending Allegro’s footprint in lucrative markets such as automotive, industrial, and emerging sectors like medical and robotics.

Olympus Corp (7733 JP): Forex Holds FY25 Together; FY26 Guidance Does Not Offer Much Respite

By Tina Banerjee

Olympus Corp (7733 JP) witnessed revenue grow 8% YoY to ¥997B (3% on Fx neutral basis) in FY25, driven by both the Endoscopic Solutions and Therapeutic Solutions divisions.
North America sales growth continues to be favorable in warding off the decline faced in China. GI Endoscopy (55% of ESD revenue) witnessed its revenue grow 8% to ¥350B.
Olympus guided FY26 revenue to be flat YoY at ¥999B. R&D expenses are expected to rise, scarring the margins. Adjusted operating profit margin is expected to be 17.5% (FY25: 18.9%).

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Jun 19

Daily Brief Japan: BayCurrent Consulting , Mitsui Matsushima, Nikkei 225, Nippon Steel Corporation and more

In today’s briefing:

[Quiddity Index] Nikkei 225 Sep25 Rebal: One ADD/DEL? Kokusai a Question, but 2 Ad Hoc Events Coming
[Japan Activism] Mitsui Matsushima (1518) Ups Buyback Tender to 35.8%, Murakami-San Group To Sell
Nikkei 225 Outlook And Profit Targets Amid Uncertainty Over Japan-US Tariff Negotiations
Nippon Steel (5401) – $14.2B U.S. Steel Bet Targets Growth, Faces U.S. Market Maturity Risks

[Quiddity Index] Nikkei 225 Sep25 Rebal: One ADD/DEL? Kokusai a Question, but 2 Ad Hoc Events Coming

The March 2025 Nikkei 225 review came out with a sparse set of changes. That gives us hints for the September 2025 review.
For the moment, that leads me to believe we get ONE ADD and ONE DELETE though up to three of each is possible.
For now, Fast Retailing (9983 JP) capping is off, but there’s an ad hoc coming in late Q3 or early Q4 and the Sony Financial spinoff to look forward to.

[Japan Activism] Mitsui Matsushima (1518) Ups Buyback Tender to 35.8%, Murakami-San Group To Sell

Today after the close, Mitsui Matsushima (1518 JP) announced it would increase its buyback from 3.5mm shares to 4.0mm shares (31.3% to 35.8%). It also announced a Tender Offer Buyback.
The tender offer starts tomorrow and goes til mid-July, paid 8 August. Murakami Group will tender a minimum of 3.3mm shares (more likely 4.2mm).
This is not a huge immediate win, but it’s OK. And it changes the structure of the company’s balance sheet, ROE, effective ROE, and possibly its dividend.

Nikkei 225 Outlook And Profit Targets Amid Uncertainty Over Japan-US Tariff Negotiations

By Nico Rosti

Japan PM Ishiba says disagreements remain with US on tariff talk. This is probably the main catalyst that could slow down the current Nikkei 225 (NKY INDEX) rally.
Our WEEKLY Nikkei 225 model signals a mildly overbought status, the index could go higher, but will face harder resistance in 1-2 weeks from now.
We don’t see the Nikkei pulling back this week, we think it will close this week up.

Nippon Steel (5401) – $14.2B U.S. Steel Bet Targets Growth, Faces U.S. Market Maturity Risks

Nippon Steel has acquired U.S. Steel for $14.2 billion in cash, adding 23 Mt of crude steel capacity and a full U.S. and EU footprint.
The acquisition marks a bold step toward NS’s “100 MT Vision,” diversifying earnings beyond Japan and strengthening presence in a geopolitically stable market.
U.S. Steel remains heavily BF–based and tied to a structurally flat demand market; long-term steel consumption in the U.S. has declined, making returns dependent on aggressive modernization & macro tailwinds.

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Jun 18

Daily Brief Japan: Mitsubishi Heavy Industries, Shiseido Company, TSE Tokyo Price Index TOPIX, Intloop , Geechs Inc, LIFULL, Kansai Super Market, Ohba Co Ltd, COPRO-HOLDINGS Co Ltd and more

In today’s briefing:

Mitsubishi Heavy (7011) – Strong Earnings, ¥10.2T Backlog, Macro Tailwinds Remain Supportive
Shiseido (4911) | Beauty in the Bargain Bin
MHI (7011 JP): Take Profits
Thanks to TSE’s Guidance, Parent-Subsidiary Listings Remain a Long-Lasting Investment Opportunity
INTLOOP (9556 JP) – Delivering Solid Margin Expansion
Q4 Follow-Up – Geechs (7060 JP) – New Initiatives Aimed at Achieving Operating Profit…
Q2 Follow-Up – Lifull (2120 JP) – HOME’S Services Segment Delivers Steady Performance
OK Super: Disrupting Kansai Supermarket Sector
Q3 Follow-Up – Ohba (9765 JP) – Favorable External Conditions Likely to Continue in FY2026
Q4 Follow-Up – Copro-Holdings (7059 JP) – An Increase in Dividend Payment…

Mitsubishi Heavy (7011) – Strong Earnings, ¥10.2T Backlog, Macro Tailwinds Remain Supportive

MHI has delivered a strong turnaround over the past four years, with revenue up 26% and business profit expanding nearly 10x from FY22 to FY25
The consolidated order backlog crossed ¥10.2 trillion in FY25, up ~22% YoY, offering ~2 years of forward revenue visibility and skewed toward high-margin Energy and Defense segments.
While the stock has rallied sharply, management’s solid FY25–30 guidance, along with structural tailwinds from energy transition and defense spending, continue to underpin the long-term thesis.

Shiseido (4911) | Beauty in the Bargain Bin

By Mark Chadwick

Shiseido’s core brand remains strong, but years of weak growth, high costs, and tariff risks have pushed valuations to deeply discounted, near-decade lows.
Early signs from Japan show margin recovery is possible; aggressive cost-cutting could double core operating margins and unlock significant upside if execution holds.
If management fails to deliver, Shiseido’s global brand equity, strategic footprint, and low valuation make it an obvious acquisition target for PE or industry buyers.

MHI (7011 JP): Take Profits

By Scott Foster

MHI is up nearly 60% year-to-date to 46x management’s EPS guidance for FY Mar-26 and 27x our EPS estimate for FY Mar-30.
By then, we expect Air, Defense & Space revenues to double and the division’s operating margin to rise from 10% to 15%, which is the likely cap on profitability.
Given Japan’s uncertain finances and the long time horizon that should already be discounted, we recommend profit taking.

Thanks to TSE’s Guidance, Parent-Subsidiary Listings Remain a Long-Lasting Investment Opportunity

From the standpoint of endorsing parent-subsidiary listings, TSE intends to provide better disclosure guidance to ensure that the interests of minority shareholders of listed subsidiaries are adequately secured.
While investors expect early resolution, parent-subsidiary listings continue to be a long-lived theme and investment opportunity, thanks to the TSE giving them time to dissolve their parent-subsidiary listings.
As for the parent-subsidiary listings, the key is the percentage of foreign holdings, with some companies initiating restructuring of their business portfolios and many others not.

INTLOOP (9556 JP) – Delivering Solid Margin Expansion

By Astris Advisory Japan

Unlocking improved earnings potential – By prioritizing high-quality business opportunities, INTLOOP continues to improve OPM YoY, reflecting stronger operating efficiency.
Q1-3 FY7/25 results were ahead of unchanged FY guidance, with the company continuing to invest in scaling capacity with new senior mid-career hires as well as graduates.
Management believes there is further upside to margin expansion through profit-focused sales activities and price revisions.

Q4 Follow-Up – Geechs (7060 JP) – New Initiatives Aimed at Achieving Operating Profit…

On May 14, 2025, Geechs Inc. (hereafter, “the Company”) announced its full-year FY2025/3 earnings results.
Net sales rose 6% YoY to JPY 25,162 mn, EBITDA rose 73% YoY to JPY 625 mn, and operating profit rose 445% YoY to JPY 495 mn.
The IT Human Resources Matching Business, Overseas (hereafter, “Overseas IT HRM Biz”) continued to face challenges owing to local market conditions, but the core IT Human Resources Matching Business, Japan (hereafter, “Japan IT HRM Biz”) expanded steadily and profitability continued to improve in the Seed Tech business.

Q2 Follow-Up – Lifull (2120 JP) – HOME’S Services Segment Delivers Steady Performance

In H1 FY2025/9, LIFULL Co., Ltd. (hereafter, the Company) reported net sales of JPY 14,291 mn, up 7.6% YoY and operating profit of JPY 1,824 mn, up 6.2% YoY .
Operating profit effectively rose 2.2x YoY, adjusting for the gain on the sale of LIFULL SPACE recorded in FY2024/9.
In the core HOME’S Services segment, the Company’s client network increased 2.0% YoY as a result of stronger sales efforts.

OK Super: Disrupting Kansai Supermarket Sector

By Michael Causton

Deep discounter OK Super’s entry into the Kansai market is causing local competitors real headaches –one estimate says it has taken 10% share around its first store already.
OK has exposed just how derivative most existing chains have become and, with the introduction of genuine price competition at a time when consumers are increasingly price sensitive
While OK Super is a private company, some of the competitors are listed like Kansai Food Market who, without new ideas, will suffer in the next three years.

Q3 Follow-Up – Ohba (9765 JP) – Favorable External Conditions Likely to Continue in FY2026

FY2025/5 Q3 Results｜On April 10, 2025, OHBA (hereafter, the Company) announced its Q3 FY2025/5 results.
Due to the seasonal nature of its business, which tends to concentrate earnings in Q4, progress rates toward the full-year plan appear low at first glance, with net sales at 68.6% and operating profit at 62.3%.
However, SIR believes the Company is steadily progressing toward achieving its full-year targets of 6.1% YoY sales growth and 5.8% YoY operating profit growth.

Q4 Follow-Up – Copro-Holdings (7059 JP) – An Increase in Dividend Payment…

COPRO-HOLDINGS. Co., Ltd., (hereafter, the Company) announced the full year results for FY2025/3 after the market close on Thursday, May 15, 2025.
The key consolidated figures are net sales of JPY 30,015 mn (+24.6% YoY), gross profit of JPY 8,308 mn (+22.6% YoY), operating profit of JPY 2,763 mn (+29.1% YoY), and profit attributable to owners of parent (hereafter, net profit) of JPY 1,820 mn (+24.4% YoY).
COPRO Construction. Co., Ltd. (hereafter, COPRO CN), which operates the Company‘s core business of construction technician dispatching contributed significantly to results of strong growth due to record recruiting.

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Jun 17

Daily Brief Japan: Nakano Refrigerators, Ascentech KK, Carta Holdings, Inc., Yamada Denki, TSE Tokyo Price Index TOPIX, Timee Inc and more

In today’s briefing:

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

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

By Arun George

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

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

By Arun George

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

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

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

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

By Michael Allen

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

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

By Arun George

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

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

By Shifara Samsudeen, FCMA, CGMA

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

Timee 2Q Results: Revenue Decline Is Only Temporary

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

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Jun 16

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

In today’s briefing:

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

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

By Michael Causton

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

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

By Dimitris Ioannidis

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

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

By Sumeet Singh

Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
On the IPO front, Foshan Haitian Flavouring & Food (603288 CH) launched its IPO, while Zhejiang Sanhua Intellignt Controls Co., Ltd. (002050 CH) has been pre-marketing.
On the placements front, there were a number of large deals acros the region, along with some large lockup expiries.

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Jun 15

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

In today’s briefing:

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

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