Japan

• Q3 arrived slightly soft, but currency-neutral EBIT narrows the miss; Q4 needs a steep ramp, though much of the downside risk already appears priced in.
• Longer-Term trajectory remains solid: sustained ~25% growth and a credible path to mid-teens operating margins by FY27 as AI adoption and enterprise penetration deepen.
• Cash flow softness reflects slower conversion and continued intangible investment, but growing pains not structural issue; valuation still shows 25%+ upside on DCF.

• In cumulative Q3 FY12/25, revenue was JPY92.6bn, with an operating loss of JPY280mn and a recurring loss of JPY17.1bn.
• Amusement Equipment business revenue was JPY41.4bn, with a 29.6% YoY increase in units sold to 83,877 units.
• Integrated Resort business revenue was JPY50.6bn, with an operating loss of JPY3.0bn and adjusted EBITDA of JPY9.9bn.

• For 1H FY03/26, revenue decreased 7.7% YoY to JPY154.5bn, with operating profit down 16.6% YoY to JPY4.5bn.
• The company revised FY03/26 forecast, lowering revenue by JPY19.0bn and operating profit by JPY2.1bn due to external disruptions.
• Full-year dividend forecast remains JPY90.0 per share, with a projected payout ratio of 38.5%.

• In 1H FY03/26, revenue rose 12.9% YoY to JPY632mn, with gross profit increasing 73.3% YoY to JPY270mn.
• Laser Device business revenue grew 10.8% YoY to JPY579mn, with operating profit rising 34.9% YoY to JPY98mn.
• Visual Information Device business revenue increased 43.2% YoY to JPY52mn, reducing operating loss to JPY100mn from JPY223mn.

• Ichiken’s 1H FY03/26 consolidated revenue reached JPY54.6bn, with operating profit at JPY3.7bn, exceeding initial forecasts.
• The Construction business, accounting for 99.8% of revenue, saw orders rise 4.9% YoY to JPY54.6bn.
• FY03/26 forecast revised upwards: revenue JPY101.0bn, operating profit JPY6.7bn, reflecting cost pass-throughs and project profitability.

• The company’s adjusted EBITDA rose to JPY5.5bn (+68.1% YoY) due to improved profitability and reduced expenses.
• Segment sales in the Healthcare segment reached JPY34.6bn (+5.0% YoY), with segment profit at JPY4.4bn (+95.4% YoY).
• The company revised its full-year forecast, expecting sales of JPY50.0bn and adjusted EBITDA of JPY7.0bn (+61.7% YoY).

• 1H FY03/26 sales were JPY29.6bn (-8.9% YoY), operating profit JPY2.4bn (-0.5% YoY), net income JPY1.8bn (-66.3% YoY).
• Media segment sales JPY19.1bn (-8.6% YoY), operating profit JPY1.9bn (-18.4% YoY); Agent segment sales JPY5.3bn (+4.4% YoY).
• Global segment sales JPY3.1bn (-37.9% YoY), operating profit JPY668mn (+80.9% YoY) due to revenue recognition changes.

• Digital Information Technology is a well-established Japanese IT services firm demonstrating a consistent and impressive track record of double-digit growth in revenue, net income, and dividends, capitalizing on Japan’s digital transformation trend.
• The company operates through two primary segments: a comprehensive Software Development arm, which includes business solutions, embedded systems, and cybersecurity products, and a System Sales segment focused on SMEs, providing a diversified revenue stream.
• Supported by a robust domestic IT market projected to grow at a CAGR of approximately 10-11%, the company is well-positioned to benefit from strong government initiatives and increasing corporate investment in digitalization, cloud adoption, and cybersecurity.

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• Sales increased by 16.5% YoY to JPY196.4bn, with growth across all business segments, and operating profit rose by 33.5% YoY.
• Toys segment sales reached JPY86.0bn (+10.2% YoY), with operating profit at JPY5.0bn (+12.0% YoY), driven by lottery products.
• Dividend policy revised to JPY60.0 per share for FY03/26, with a target payout ratio of 40%.

• Sales reached JPY58.8bn (+3.9% YoY), with growth in power supplies, I/O devices, and beauty appliances.
• Operating profit increased to JPY6.2bn (+13.5% YoY), driven by higher gross profit despite rising SG&A expenses.
• B2C sales totaled JPY39.3bn (+2.7% YoY), while B2B sales reached JPY19.5bn (+6.5% YoY), with strong e-commerce growth.

• Today, logistics company SENKO Group Holdings Co., Ltd. (9069 JP) announced a bid for logistics company Maruwn Corp (9067 JP) with help from 35% holder JX Advanced Metals (5016 JP). 
• The TOB only needs 11+% to get to 50.1%. There are three holders who Senko clearly regard as not necessarily agreeable to the deal. They hold 28.0% between them. 
• If someone wanted to thwart this deal, there are a number of ways to do it. This could get interesting. 

• Maruwn Corp (9067 JP) has recommended a preconditional tender offer from SENKO Group Holdings Co., Ltd. (9069 JP) at JPY949, a 34.6% premium to the last close price.
• The offer is attractive as it is above the midpoint of the IFA DCF valuation range, represents an all-time high and implies a P/B of 1.08x.
• The key pushback is that Senko has not set the lower limit to achieve two-thirds voting rights. However, tendering by the second-largest shareholder will meet the lower limit. 

• 12mos ago the FT had an article suggesting PE might launch a bid foe Fujitec Co Ltd (6406 JP). 9mos later, EQT did at the same price as 9mos earlier. 
• There were some suggestions the deal would see an overbid. That was quashed early. It never traded through terms early on.
• This looks like a done deal to me. I think this sails through by year-end.

• Human Made (456A JP) aims to raise around US$116m in its Japan IPO.
• Human Made Inc. is a Japan-based apparel and lifestyle company. Its business model centers on producing high-value, limited-supply apparel and goods.
• In our previous note, we looked at its past performance. In this note, we will talk about valuations.

• Towa holds a dominant global market share in semiconductor molding equipment, a critical step in the chip manufacturing process. Its technological leadership, particularly in compression molding for high-end chips, positions it to capitalize on long-term growth trends.
• The company is a key beneficiary of the secular growth in artificial intelligence (AI), high-performance computing (HPC), and electric vehicles (EVs). These applications require advanced semiconductor packaging, driving demand for Towa’s specialized equipment.
• Financial performance has been robust, with significant revenue and operating profit growth. The company has a long-term vision, “TOWA Vision 2032,”targeting substantial sales growth and improved profitability, supported by strategic investments in R&D and production capacity.

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• ASICS is demonstrating exceptional growth, driven by market share gains in its core Performance Running segment and the rapid expansion of its high-margin Lifestyle brands, Onitsuka Tiger and SportStyle.
• The company’s financial performance is robust, characterized by seven consecutive quarters of double-digit revenue growth, significant margin expansion, and upward revisions to profit guidance.
• Future growth is contingent on successful penetration of the large but historically underdeveloped North American and Asian markets, alongside continued product innovation and expansion of its digital, direct-to-consumer channels.

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• Star Mica is a specialized real estate company in Japan with a unique business model focused on acquiring, renovating, and reselling used condominiums, a niche market with significant growth potential due to Japan’s maturing housing market.
• The company has demonstrated a solid track record of revenue growth and profitability, supported by a strong position in the pre-owned condominium market and a focus on value-added renovations.
• Future growth is expected to be driven by the increasing demand for affordable and renovated housing, favorable demographic shifts towards urban living, and the company’s strategic initiatives to expand its portfolio and enhance operational efficiency.

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• Freee reported 1QFY06/2026 results today. 1Q revenues increased 32.1% YoY to ¥9.7bn with an Adj. OPM of ¥690m (vs ¥480m in 1QFY0/2025). Both revenue and GAAP OP beat consensus.
• Freee KK (4478 JP) ’s shares had a sell-off following its 4QFY06/2025 earnings announcement which saw the company breaking away from its recent trend of consecutive quarterly operating profits.
• As we highlighted in our previous insight, 4Q decline was only a temporary setback as the company’s profitability has bounced back and we expect earnings momentum to continue.

• In Q3 FY12/25, revenue reached JPY4.5bn, with Bitcoin-related business contributing JPY4.2bn and Hotel business JPY203mn.
• Operating profit was JPY2.7bn, driven by JPY3.3bn from Bitcoin-related business and JPY104mn from Hotel business.
• Recurring profit was JPY23.2bn, significantly improved from a JPY312mn loss in cumulative Q3 FY12/24.

• Sales reached JPY26.2bn (+0.2% YoY), with operating profit at JPY1.4bn (+16.0% YoY), and net income JPY844mn (+18.2% YoY).
• Domestic sales were stable, with increased average eyeglass prices, but unit sales declined due to cost-conscious consumer behavior.
• Overseas sales were affected by the China subsidiary’s decline, despite improved profitability from closing unprofitable stores.

• Today after the close, Paris Miki Holdings (7455 JP) announced the Tane family Holdco would buy out the company in an “MBO” at ¥581, or 4.8x current year EBITDA. 
• World famous eyeglass/sunglass manufacturer Luxottica bought 13.8% of the company in the low ¥300s almost stopping about a year ago. They might complain, but Paris Miki is a big outlet.
• This looks like it gets done. The family+crossholders+ESOP+warrants have 65% of the expanded share count. Those who would complain would need to do so soon, and loudly.

• Paris Miki Holdings (7455 JP) has recommended a Chairman-led MBO at JPY581, a 48.6% premium to the last close price.
• While the offer is arguably light as it is marginally below book value (P/B of 0.99x), it is above the midpoint of the IFA DCF valuation range. 
• The offer represents a 10-year high. Luxottica Group (LUX IM), the second-largest shareholder, has not signalled whether it will tender, but it would struggle to derail the offer.

• Human Made (456A JP) aims to raise around US$116m in its Japan IPO.
• Human Made Inc. is a Japan-based apparel and lifestyle company. Its business model centers on producing high-value, limited-supply apparel and goods.
• In this note, we look at the company’s past performance.

• Star Micronics (7718 JP) has recommended a tender offer from Taiyo Pacific Partners at JPY2,210, a 29.1% premium to the last close price.
• The offer is arguably light as it is marginally above book value (P/B of 1.09x) and 16% below the midpoint of the target IFA DCF valuation range. 
• However, the offer is attractive as it represents an all-time high and is 42.4% above Taiyo’s placement price in May 2025. Unless an activist emerges, this is likely done.  

• Today after the close, well-known Japan engagement fund Taiyo Pacific Partners announced a deal to buy Star Micronics (7718 JP) for ¥2,210/share. They’ve been involved small-big-small for 20yrs.
• The company launched a new capital plan and MTMP in February. Cash-rich, it needed no money to grow aggressively. So TPP proposed buying a third of the company. Board agreed.
• Despite ActionsToImplementManagementConsciousOfSharePriceAndCostOfCapital announced February, in April-November the Board decided to sell the entire company to TPP at <1x book. This is borderline outrageous. It deserves notice and complaint.

• Revenue was JPY3,736.8bn (+7.7% YoY), with net income attributable to owners at JPY2,924.1bn (+190.9% YoY).
• Investment gain was JPY3,926.7bn, including JPY2,156.7bn from OpenAI, with SVF business gaining JPY3,415.5bn.
• Arm segment revenue reached JPY320.3bn (+17.0% YoY), with segment profit increasing 518.4% YoY to JPY23.6bn.

• Softbank Group (9984 JP) is swinging wildly. On Nov 11, the stock sank -13% after it said it had sold its entire stake in NVIDIA (NVDA US)  for $5.83 billion.
• The stock also posted record Q2 earnings on Nov 12, but closed the day down -3.46% (after a strong rally from the 21k bottom). Most gains come from OpenAI investment.
• For sure it’s not easy to hold this stock at the moment, this insight will analyze the next 2-3 weeks’ outlook, support and resistance, according to our quantitative model.

• JX Advanced Metals (5016 JP) — Second Guidance Upgrade; Margin Expansion Accelerates, Momentum Builds
• Focus businesses now contribute nearly half of operating profit, reinforcing structural earnings quality.
• JX Advanced Metals trades at ~22× FY26E P/E and ~13× EV/EBITDA, reflecting premium growth exposure but still below Japanese specialty materials peers (Tokyo Ohka ~26×, Entegris ~45×).

• Revenue increased by 15.9% YoY to JPY74.2bn, with all segments showing revenue growth and operating profit up 35.1% YoY.
• Extraordinary loss of JPY5.9bn related to the Antimonopoly Act led to a net loss of JPY1.5bn.
• Domestic demand remained firm, with revenue and profit rising YoY due to product price revisions and improved productivity.

• 7th straight quarter of double-digit growth; 3Q revenue +21% y/y to ¥222bn, led by strong EU and Japan performance and steady global expansion.
• Gross margin +110bps to 56.1%, operating margin +320bps to 20.9%; FY OP guidance raised to ¥140bn, share buyback of ¥30bn announced.
• Near-Term share impact limited, but long-term growth underpinned by SportStyle and Onitsuka Tiger; OP could double to ~¥260bn though next MTP cycle.

• Softbank Group (9984 JP)  reported a record H1 net income of ¥2.9 trillion, driven principally by a USD 14.6 billion fair-value gain from its OpenAI investment and Rights to invest.
• The Group fully exited its USD 2.9 billion NVIDIA Corp (NVDA US) stake in October, realizing gross gains of USD 2.9 billion on sale proceeds of USD 5.8 billion.
• It also sold partial stakes in T-Mobile for USD 9.2 billion and Deutsche Telekom for USD 2.4 billion even as it raised its investment target in OpenAI to USD34.7 Bn.

• 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.
• Japan Business Systems (5036 JP) and Orion Breweries (409A JP) were included in the TOPIX index at the end of October 2025. 
• Japan Eyewear Holdings (5889 JP), FIT EASY (212A JP), and Tekscend Photomask (429A JP) will be included in the TOPIX index at the end of November 2025.

• Takamiya (hereafter, the Company) is a leading manufacturer of temporary equipment used at construction sites, with its business centered on the next-generation scaffolding system Iq System, launched in 2014.
• Its vision is to become the industry’s first scaffolding platform company, shifting from a flow-based to a stock-based business centered on the Takamiya Platform, with the aim of establishing a new profit structure and strengthening the balance sheet.
• Construction investment continues to trend upward, and construction volume among the Company’s customers remains resilient.

• The company reported record highs for 1H with revenue of JPY361.7bn and profit attributable to owners of JPY70.3bn.
• Effective Q1 FY03/25, the company adopted a new segmentation, now reporting seven segments, including Electricity and Gas.
• Dividend forecasts for FY03/26 were raised to JPY736 per share, reflecting solid earnings and outlook adjustments.

• Trial is moving quickly to integrate Seiyu following its ¥380 billion acquisition in July. 
• It will open the first Trial Seiyu combined store and also the first Trial Go (a convenience store competitor) store in Kanto, both this month.
• Already, more than 600 stores in the group are stocking private brands from each banner. 

• Ce Holdings is a specialized provider of medical information systems, primarily Electronic Medical Record (EMR) systems, strategically positioned to capitalize on Japan’s healthcare digitalization trend.
• The company exhibits a strong growth profile, evidenced by a 3-year net income CAGR of 38.4% and a consistently increasing dividend, supported by favorable demographic tailwinds from Japan’s aging population.
• Valuation appears attractive, with a P/E ratio of 7.8x, trading at a significant discount to healthcare IT peers, suggesting a potential mispricing given its solid financial performance and market position.

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• NGK Spark Plug, now operating as Niterra, is the global leader in spark plugs and automotive sensors, commanding a dominant market share. However, the company faces a significant long-term structural headwind from the global transition to electric vehicles (EVs), which do not utilize its core products.
• Management is actively pursuing a diversification strategy to mitigate EV risk, leveraging its core competency in ceramics to expand into higher-growth areas. Key focus areas include components for semiconductor manufacturing equipment, medical products, and next-generation technologies like solid-state batteries.
• The company exhibits strong financial performance with consistent revenue growth, robust profitability, and significant cash flow generation. Valuation appears attractive relative to peers, but the market is pricing in the long-term uncertainty associated with the decline of the internal combustion engine (ICE).

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• Consolidated ordinary income increased to JPY33.0bn (+15.7% YoY), with ordinary profit at JPY6.9bn (+16.0% YoY).
• Non-consolidated core operating profit slightly declined to JPY6.0bn (-0.3% YoY), while ordinary profit rose to JPY6.8bn (+9.0% YoY).
• The bank revised its FY03/26 forecast, projecting consolidated ordinary profit of JPY11.3bn (+5.8% YoY) and maintaining dividends.

• Sanyo Trading’s FY09/25 sales rose 2.7% YoY to JPY132.7bn, driven by strong Sustainability segment sales.
• Operating profit fell 9.1% YoY to JPY6.4bn due to higher SG&A expenses and investment valuation losses.
• FY09/26 forecasts project a 2.0% YoY sales decline to JPY130.0bn, with profit decreases at all levels.

• In 1H FY03/26, revenue was JPY40.3bn (+3.7% YoY), with operating profit at JPY6.7bn (+12.3% YoY).
• Revenue growth was driven by higher shipment volumes and subscriber growth, offsetting increased variable costs and sales investments.
• Gross profit margin rose 0.9pp to 85.9%, with operating profit margin improving 1.3pp to 16.7% YoY.

• Today after the close, KKR announced a deal whereby they and founder OKUBO Izumi-san would take Forum Engineering Inc (7088 JP) private in an LBO. 
• The process of this deal ticks most all of the “bad process” boxes but the price is pretty good.
• 52% is locked in. Insiders and cross-holders appear to own another 15-18%. This looks like a done deal to me. Money comes 30 December.

• Shiseido’s Q3 revenue rose 4.6% YoY to ¥224bn, marking its first growth in three quarters, though full-year sales guidance was cut 3%.
• Profitability remained pressured by tariffs and Drunk Elephant weakness; product margins fell 340bps YoY, but SG&A improvements limited overall margin decline to 80bps.
• Management maintained core OP profit guidance and continued executing structural reforms, achieving ¥21bn cost savings YTD, with deeper efficiency cuts planned through 2026.

• Forum Engineering Inc (7088 JP) has recommended a tender offer from KKR & Co (KKR US) at JPY1,710, a 32.6% premium to the last close price.
• The offer is arguably light due to a lack of an auction and is below the midpoint of the target IFA DCF valuation range. 
• However, the offer is attractive compared to precedent transactions, peer multiples and represents an all-time high. The large number of cross-holders will help meet the required tendering rate.

• Mitsui Chemicals is slashing exposure to commodity chemicals and ramping up high-margin specialty films and resins—setting the stage for its RoE to soar from 5% to over 13%.
• Restructuring is unlocking massive cost savings while driving growth from cutting-edge segments that are poised for double-digit growth and global dominance.
• The stock trades at a deep discount, but could easily command a premium with solid execution, driving the share price to more than double or even treble within 3 years.

• Trough valuations: JFE trades at only US$525/t EV/t and 0.5× P/B, despite stable guidance and improving high-value steel mix.
• Hidden value: 15% JSW Steel stake (~¥500 bn) equals ~45% of JFE’s market cap—cheap India exposure with re-rating potential.
• Upside case: SOTP implies +50–60% equity upside, supported by 4–5% dividend yield and H2 margin recovery.

• Announced last Friday, FY Sep-25 sales and net profit were in line with guidance, but operating profit fell short. On Monday, the shares dropped 4.5%, wiping out a month’s gains.
• Looking ahead, management expects three years of sales and profit growth as capex declines, depreciation and R&D level off, and the NKT Photonics acquisition approaches breakeven.
• In this scenario, semiconductor, bio-medical, defense and quantum computing applications should drive 3-year sales growth of 24% and a 71% increase in net profit, bringing the P/E down to 20X.

• Olympus Corp (7733 JP) registered 20% QoQ rise in revenue to ¥247.8B in Q2FY26 while the adjusted operating profit witnessed 183% QoQ growth to ¥37.4B (margin expanded 870bps to 15.1%).
• The company reiterated full-year forecasts for FY26. The company expects revenue to be ¥998B, flat YoY (+3% after FX adjustment).
• Sequential improvement offers early green shoots. Moreover, decreasing “Elevate” program cost, product launches and venturing into endoluminal surgical robotics segment will slowly help propel growth in the near to midterm.

• Operating revenue increased by 9.9% YoY to JPY11.8bn, driven by growth in recurring and asset-related revenue.
• Operating expenses rose 13.3% YoY to JPY10.6bn, mainly due to higher finance and personnel costs.
• Pre-tax profit decreased 12.2% YoY to JPY1.2bn, despite revenue growth, due to increased operating expenses.

• Mitsuboshi’s revenue rose 0.9% YoY, with Belts segments offsetting lower Building & Construction Materials revenue.
• The company plans to pay an annual dividend of JPY186 per share in FY03/26, unchanged from FY03/25.
• Mitsuboshi announced a resolution to repurchase 350,000 shares, valued at JPY1.0bn, via market purchases on the Tokyo Stock Exchange.

• In 1H FY03/26, revenue increased by 69.4% YoY to JPY59.0bn, with operating profit rising 185.0% YoY.
• Built-for-sale condo business saw revenue of JPY40.5bn (+93.6% YoY) and 620 units delivered (+230 units YoY).
• Purchase and resale business revenue reached JPY9.4bn (+81.8% YoY), while brokerage revenue fell 3.3% YoY.

• Saint-Care Holding (2374 JP) has recommended an MBO from the founding family at JPY1,220, a 48.8% premium to the last close price.
• The offer is attractive compared to historical trading ranges and is above the midpoint of the target IFA DCF valuation range. 
• Due to the irrevocables, it is not onerous to meet the minimum acceptance condition. This is a done deal.  

• 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), Saint-Care Holding (2374 JP), Smart Share Global (EM US), ENN Energy (2688 HK), Dongfeng Motor (489 HK), Digital Holdings Inc (2389 JP). 
• Lowest spreads: Bright Smart Securities (1428 HK), Mandom Corp (4917 JP), Pacific Industrial (7250 JP), Toyota Industries (6201 JP), Seven West Media (SWM AU), Jinke Smart Services (9666 HK). 

• 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: CNGR Advanced Material (300919 CH) is seeking to raise US$507 million through a H Share listing.
• Event-Driven developments: Toyota Industries (6201 JP), Japan Infrastructure Fund Investment Corporation (9287 JP), Mandom Corp (4917 JP), Pacific Industrial (7250 JP), Saint-Care Holding (2374 JP), ANE Cayman Inc (9956 HK). 

• Mitsubishi Electric is successfully executing a multi-year pivot toward becoming a high-margin digital solutions provider, anchored by its DX strategy and acquisition of OT security leader Nozomi Networks.
• H1 FY26 financial results confirm clear operating strength, showing a strong 60% year-over-year surge in net profit and strong revenue growth, especially within the Infrastructure and Life segments.
• Management’s shift to higher-margin software and services, along with disciplined capital management, is materializing value and helps justify a positive long-term view.

• This four-day week saw 10 new guidance revisions (+61% on average), and 21 H1 earnings results (13 which hadn’t guided, averaging +41%, 8 which had, averaging 5.7% uplift vs guidance)
• It was a Good Week, though banks fell 0.4% as TOPIX fell 1% on the week. 
• Once again, lower credit costs, higher net interest income, and some equity sales dominated. H2 implied guidance lower in many cases, some because of expected portfolio rebalancing (loss-taking).

• In response to calls from overseas investors to eliminate parent-subsidiary dual listings, the number of listed subsidiaries has decreased, while the number of equity-method affiliates has increased.
• Some companies that found themselves with no wayout resorted to selling off part of their holdings to transition to equity method affiliates, for the time being, driven by herd mentality.
• When considering investment strategies focused on parent-subsidiary listings, in the highly liquid Prime Market, equity method affiliates are more promising investment targets than the limited number of listed subsidiaries.

• Advantest’s updated guidance and MTP3 targets confirm its dominant, long-term growth trajectory as a key supplier for the high-performance computing and AI semiconductor supply chain.
• Despite a strong structural growth story, the stock faces near-term headwinds from a sequential decline in Q2 operating income and an elevated valuation that reflects peak market optimism.
• We suggest a tactical adjustment to vega exposure due to market dynamics, recommending a strategy to monetize the heightened implied and realized volatility following the strong earnings report.

• 1H FY03/26 sales reached JPY63.9bn (+6.9% YoY), operating profit JPY1.3bn (+25.2% YoY), net income JPY452mn (+118.4% YoY).
• Community Pharmacy Network segment sales JPY120.1bn forecasted, with segment profit JPY6.0bn, driven by network expansion and digital services.
• FY03/26 forecast includes sales JPY125.5bn (+2.5% YoY), EBITDA JPY6.9bn (+4.9% YoY), net income JPY1.3bn (+3.0% YoY).

• NEC and Siemens plan to develop an automated robot teaching system for faster set-up and more efficient operation of production lines incorporating multiple robots.
• NEC’s FY Mar-26 guidance raised on strong 1H results. BluStellar, which includes digital twins for robot teaching, grew faster than expected.  
• Aerospace/Defense led sales growth and followed BluStellar in operating profit. Improving product mix and rising Japanese defense budget point to growing long-term potential.

• 1H FY26 results resilient: LNG and FX offset metals softness; FY26 NI raised 6% to ¥820 bn, ROE ~13%.
• Valuation gap to Itochu closed; Mitsui now trades ~1.4× P/B with superior copper and LNG leverage.
• Sustained buybacks (~5% p.a.) and ≥10% Berkshire anchor ensure 6–9% TSR CAGR, with 10%+ if copper >US$10k/t.

• Macnica is a leading Japanese technology distributor specializing in semiconductors and network equipment, well-positioned to capitalize on long-term growth in AI, IoT, and automotive sectors.
• The company is strategically shifting towards a higher-margin ‘Services & Solutions’ model, expanding beyond traditional distribution to include proprietary products and cybersecurity services.
• While facing near-term headwinds from semiconductor market cyclicality and margin pressure, Macnica maintains a strong balance sheet, attractive dividend yield, and a valuation that appears reasonable compared to global peers.

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• Glosel is an established Japanese electronics distributor with strong ties to key suppliers like Renesas, positioned to benefit from positive industry tailwinds in automotive and industrial sectors.
• The company exhibits a high-risk financial profile, characterized by strong three-year earnings growth but severely negative operating and free cash flow, leading to the elimination of its dividend in FY24.
• While valuation appears reasonable on a Price-to-Book basis, the persistent cash burn, volatile profitability, and intense competitive landscape present significant uncertainty for investors.

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• I tally 37 – mostly firm, mostly Asia-Pac – arb transactions currently being discussed and analysed on Smartkarma. Those arbs metrcis and upcoming events are detailed below.
• Surprisingly, no new deals were discussed on Smartkarma this week. 
• Key updates/news also took place on: Mayne Pharma (MYX AU), Hainan Meilan International Airport (357 HK), ReNew Energy Global (RNW US), Mandom Corp (4917 JP), and Restaurant Brands (RBD NZ).

• Sparx Group is an independent asset management firm with a distinct focus on active, bottom-up research, particularly in Japanese equities, and has successfully diversified into high-growth areas like renewable energy and private equity.
• The firm demonstrates robust financial health with consistent revenue growth, strong profitability margins, and a commitment to shareholder returns through a growing dividend, supported by a hybrid model of stable management fees and performance-based income.
• Future growth is strategically targeted towards increasing Assets Under Management (AUM) to ¥3 trillion, driven by its four pillars: Japanese Equity, OneAsia, Real Assets, and Private Equity, with a particular emphasis on ESG and technology-related opportunities.

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• A Bathing Ape was a major success in the eyes of customers, but behind the scenes, founder Nigo became a victim of this very success. 
• Human Made is a different story, structured to give the designer full rein creatively but with experts in operations and marketing making the whole project more sustainable.
• Sales have risen 10-fold since 2020 and the brand will IPO this month, representative of the huge potential for Japan’s creative talent.

• Corporate Governance Code seems to be revised in ‘verifying and disclosing cash allocation’ in addition to ‘requests for disclosure in annual securities reports to enhance items related to human capital.’
• This time, the disclosure request concerns cash allocation. Previously, disclosure regarding policy shareholdings was requested, but the elimination of cross-shareholdings did not progress smoothly.
• The government plans to encourage growth investment in accumulated cash reserves without business plans for growth by strengthening disclosure rules and offering tax incentives.

• Revenue reached JPY19.1bn (+1.1% YoY), with domestic revenue up 4.5% and overseas revenue down 1.2% YoY.
• Operating profit decreased 7.5% YoY to JPY2.8bn, while net income attributable to owners increased 9.9% YoY to JPY2.6bn.
• Dental business revenue rose 1.5% YoY; Nail Care business saw a 5.3% YoY decline in revenue.

• Revenue increased YoY by 2.1%, driven by hotpot seasonings and expanded product lineup, despite operating profit decline.
• Ebara revised FY03/26 forecast, raising revenue by JPY400mn and operating profit by JPY700mn due to higher sales.
• Consumer product revenue grew 3.1% YoY, with notable increases in hotpot and vegetable seasonings, despite high meat prices.

• Sales decreased 2.1% YoY to JPY412.9bn, while operating profit increased 1.3% YoY to JPY14.0bn.
• The company repurchased and cancelled 1,000,000 shares, reducing retained earnings and treasury shares by JPY3.21bn.
• Gains on the sale of investment securities were JPY2.2bn, a 16.0% YoY decrease, as part of asset efficiency strategy.

• Revenue increased 1.4% YoY to JPY7.9bn, with growth in Global Telecommunications and Medical & Healthcare, but decline in Domestic Telecommunications.
• Operating profit rose 0.5% YoY to JPY2.4bn, with increased profit in all segments; recurring profit surged 45.7% YoY.
• Global Telecommunications revenue grew 8.1% YoY, but profit decreased; Domestic Telecommunications revenue fell 22.9% YoY, profit increased 11.1% YoY.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: Nissan Motor
• UST yields declined sharply yesterday, following the release of soft labour market data from alternative sources Challenger and Revelio Labs. The UST curve bull steepened, with the yield on the 2Y and 10Y UST falling 8 bps to 3.56% and 4.08%, respectively.
• Equities were sold off for the second time in three days, led by declines in AI-related stocks. The S&P 500 retreated 1.1% to 6,720, while the Nasdaq slumped 1.9% to 23,054.

• Nagase revised its cost classification method at Prinova Group, impacting SG&A and cost of sales figures retrospectively.
• The company raised its FY03/26 earnings forecast, citing strong performance in Prinova Group’s nutrition business.
• Nagase plans to repurchase up to 3,500,000 shares, totaling JPY8.0bn, from December 2025 to January 2026.

• Operating revenue increased to JPY97.1bn (+1.4% YoY), while operating profit and recurring profit decreased by 17.4% and 18.6% YoY, respectively.
• Domestic transaction volume rose 2.6% YoY to JPY2.90tn, with operating revenue at JPY85.8bn (+4.1% YoY).
• Overseas transaction volume fell 26.5% YoY to JPY30.4bn, with operating revenue at JPY11.2bn (-14.6% YoY).

• GEO Holdings’ revenue increased by 8.6% YoY to JPY216.9bn, with net income rising 14.2% YoY.
• The company expanded 2nd STREET stores domestically and internationally, with overseas store count increasing in the US, Taiwan, Malaysia, Singapore, and Hong Kong.
• Sales of secondhand media products rose 3.2% YoY, driven by used mobile devices and new gaming consoles.

• A major global index provider announced its quarterly review on 5th November 2025. The rebalance will take place on 24th November 2025.
• There were 133 changes announced. We got 115 of these 133 changes – around 86%.
• In this insight, we have presented our final flow expectations for the confirmed index changes and provide a few comments on specific situations.

• On 23 October, the MBO price for Pacific Industrial (7250 JP) was increased by 42.4% to JPY2,919 per share. The offer closes on 7 November. 
• Today, Effissimo further increased its stake to 8.6 million shares, representing 13.97% of outstanding shares and a 14.82% ownership ratio. The implication is that Effissimo remains unsupportive.  
• The shares trade above terms, and the close is likely to be extended. Another bump is possible, but likely, the Ogawas will first try to lower the minimum acceptance condition. 

• Japan Infrastructure Fund Investment Corporation (9287 JP) has recommended a tender offer from Mizuho Leasing (8425 JP) at JPY65,000, a 21.5% premium to the last close price.
• The offer is light, as it is below book value (implying a P/NAV of 0.82x) and is below the midpoint of the IFA-adjusted book valuation range.
• However, a dispersed shareholder register with no substantial shareholders suggests that it is an uphill struggle for an activist to agitate for a bump. This is likely a done deal. 

• Northsand (446A JP) aims to raise around US$121m in its Japan IPO.
• Northsand is a consulting firm that provides both IT and business consulting services. Established in 2015, it helps organizations improve efficiency, modernize operations, and achieve sustainable growth.
• In our previous note, we looked at its past performance. In this note, we will talk about valuations.

• Guidance cut (Business Profit ¥500 bn → ¥450 bn) as U.S. Steel delivers no profit contribution, overseas spreads weaken, and one-off losses weigh on earnings; domestic operations remain resilient.
• Integration drag : $11 bn U.S. Steel modernization plan and rigid U.S. labor terms keep margins diluted and free cash flow negative; deleveraging and ROCE recovery deferred to FY27+.
• Valuation rich, patience warranted: Trading at ~19× EV/EBITDA (vs peer median ~10×) with ROCE < 8%; maintain Hold / Underweight until synergy visibility and free-cash-flow inflection emerge post-FY26.

• oRo is a specialized provider of cloud-based ERP and digital marketing solutions, well-positioned to capitalize on Japan’s accelerated digital transformation.
• The company operates through two core segments: a high-growth, high-margin Cloud Solutions business centered on its proprietary ‘ZAC’ ERP for knowledge-based industries, and a Marketing Communication business offering digital strategy services.
• Sustained double-digit revenue and net income growth, coupled with a strong balance sheet, is balanced by intense competition in the IT services sector and recent performance headwinds in the marketing segment.

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• Revenue reached JPY656.8bn (+27.0% YoY), with IT Infrastructure Distribution segment revenue at JPY649.7bn (+27.1% YoY).
• Operating profit was JPY22.4bn (+65.9% YoY), with IT Infrastructure Distribution segment profit at JPY21.8bn (+65.9% YoY).
• Industrial Machinery segment revenue increased 12.8% YoY to JPY7.1bn, with operating profit at JPY585mn (+68.1% YoY).

• Kohnan Shoji is a leading home improvement retailer in Japan, demonstrating resilient growth through strategic store network expansion, particularly its successful ‘KOHNAN PRO’ format catering to professional customers.
• The company’s focus on developing high-margin Private Brand (PB) products is a key pillar of its strategy to enhance profitability and differentiate itself in a competitive market.
• While facing challenges from a mature domestic market and intense competition, Kohnan’s active M&A strategy and consistent dividend growth present a compelling case for long-term value creation.

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• Cumulative Q3 FY12/25 revenue was JPY57.9bn (+2.5% YoY), with operating profit at JPY3.2bn (-13.6% YoY).
• Domestic Ferroalloys business saw a JPY400mn YoY decline in underlying recurring profit, reaching JPY500mn in cumulative Q3.
• Functional Materials business reported a JPY200mn YoY increase in underlying recurring profit, reaching JPY1.2bn in cumulative Q3.

• For 1H FY03/26, the company reported sales of JPY3.7bn (+30.2% YoY) and net income of JPY735mn.
• Business Production segment sales reached JPY2.9bn (+31.0% YoY), with operating profit of JPY310mn, showing smooth progress toward forecasts.
• Venture Capital segment sales were JPY795mn (+27.6% YoY), with operating profit of JPY459mn, including capital gains and valuation losses.

• Last month, nearly two dozen global asset managers, through ACGA, submitted a joint letter to the boards of Toyota Industries (6201 JP) and Toyota Motor regarding the tender offer.
• The letter outlined five issues, which distilled down to concerns about a low-balled offer. Their cause is increasingly supported by market movements, which support the case for the bump.
• Recent activism against several low-balled tenders signals that TICO, despite its size, is not immune. My SoTP valuation is JPY19,607, which is 20.3% above the offer price.

• For a change of pace, this insight briefly canvasses a clutch of Holdco’s trading at extreme levels, in both “set-up” and “unwind” territory.
• Preceding the chart/table-heavy insight 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%.

• Mandom Corp (4917 JP) yesterday decided to launch a question-response effort for the Murakami-san Group ownership of Mandom shares up to and above 20%. This is a Poison Pill precursor.
• There’s a drawn out set of questions, answers, etc, at the end of which, the Independent Committee will decide that Murakami is a Bad Person and the Poison Pill proceeds.
• Murakami Group is apparently now over 20%. That’s a little tricky. But this looks like a Good Poison Pill. 

• DWTI announced after the close on 11/4 that 84.6% of the Series 13 Share Acquisition Rights (with exercise price adjustment clause) issued on July 31, 2025, have already been exercised in just three months since the issue (see table below). In other words, this leaves only 1.5mn shares, or 3.37% dilution remaining.
• This marks a significant decline in selling pressure going forward, ahead of multiple expected share price catalysts, including 1) China launch of DW-1002 (Brilliant Blue G) for indication ILM staining as an aid for ophthalmic surgeries
• 2) expected H1 2026 US launch of DW-5LBT (lidocaine patch, trade name Bondlido), as a treatment for neuropathic pain after shingles (post-herpetic neuralgia) in adults, and 3) announcement of details of the Japan development plan for new pipeline candidate H-1129 as a treatment for corneal and conjunctival diseases caused by immune disorders.

• Net sales increased 4.2% YoY to JPY102.7bn, driven by strong semiconductor demand and space and defense equipment sales.
• Operating income declined 37.5% YoY to JPY2.7bn due to lower gross profit from decreased agent transactions.
• The company revised its FY03/26 forecast upward, with net sales projected at JPY210.0bn and operating income at JPY7.0bn.

• Orders were JPY3.7bn (-34.3% YoY), order backlog JPY20.2bn (+8.6% YoY), sales JPY3.7bn (+5.7% YoY).
• Operating profit was JPY206mn (-32.4% YoY), recurring profit JPY205mn (-32.7% YoY), net income JPY140mn (-32.9% YoY).
• Sales increased 4.7% YoY in settlement domain, 22.8% in security domain, declined 13.2% in data communication.

Key points (machine generated)

• Lib Work is a HOUSE TECH COMPANY listed on the Fukuoka Stock Exchange Q-Board and Tokyo Stock Exchange Growth Market.
• The company focuses on single-family homes, targeting first-time homebuyers in the Kyushu region and Tokyo through digital marketing.
• Lib Work aims to innovate living with sustainability and technology, with a mission to change lives and create a sustainable future.

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• Otsuka Holdings (4578 JP) witnessed 5% revenue growth in 9M25, despite negative Fx impact. Mainstay pharmaceutical business (+6.5% YoY) drove revenue. Rexulti and Abilify remained strong.
• Otsuka has revised 2025 guidance upwards on the back of steady progress in Pharma and Nutraceutical business. Overall, 2025 revenue is now expected to be ¥2420B (previous guidance ~ ¥2380B).
• Otsuka’s two top selling drugs are steadily gaining traction, mainly in the U.S. Going ahead, the company is banking on new drugs like sibeprenlimab to further drive growth.

Key points (machine generated)

• Solvvy Inc. projects a 22.3% increase in net sales to ¥8,200 million and a 29.6% rise in operating profit to ¥2,100 million for FY6/26.
• The company, which focuses on recurring revenue business consulting, has improved operational metrics despite a temporary net loss in FY6/25.
• Solvvy plans to implement a progressive dividend policy, raising its dividend to ¥20.0 for FY6/26 to enhance shareholder returns.

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

Key points (machine generated)

• Solvvy Inc. is expected to experience significant growth in sales and profits in FY6/26, with plans for substantial dividend increases.
• The company rebranded after acquiring MEDIA SEEK Inc. and now operates as a consulting firm addressing complex business issues.
• Solvvy’s recurring revenue model includes three segments: Homeworth Tech (HWT) for housing services, ExtendTech (EXT) for renewable energy, and LifeTech (LFT) for system integration projects.

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