Japan

In today’s briefing:

[Japan M&A] Private Co Takeout of Fuji Corp (7605 JP) – A Done Deal
Fuji Corp (7605 JP): Usami Koyu’s JPY2,830 Tender Offer Is Light but Done
Weekly Deals Digest (08 Jun) – Toyota Industries, Makino, Fuji Corp, Tam Jai, PointsBet, Mayne
A Reluctance to Confront Shareholders Is at the Root of Many Problems

[Japan M&A] Private Co Takeout of Fuji Corp (7605 JP) – A Done Deal

The long-term major owner now chairman is getting out. The company was shopped. And bought. And this is the deal. ¥2,830 which is about 5.7x this year’s EBITDA.
It could have been done a bit better, but irrevocables are 48.5% out of the 50.01% minimum and other directors get this past the minimum hurdle.
Transparency is lacking but it is an all-time high and you can’t do much about it.

Fuji Corp (7605 JP): Usami Koyu’s JPY2,830 Tender Offer Is Light but Done

Fuji Corp (7605 JP) has recommended a tender offer from Usami Koyu at JPY2,830, a 32.2% premium to the last close price.
Unusually for a Board recommended offer, the lower limit will not achieve a 66.67% ownership ratio. Based on past EGM voting ratios, it is set at a 50.01% ownership ratio.
While the offer represents an all-time high, it is below the midpoint of the IFA DCF valuation range. However, due to irrevocables, this is a done deal.

Weekly Deals Digest (08 Jun) – Toyota Industries, Makino, Fuji Corp, Tam Jai, PointsBet, Mayne

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: Foshan Haitian Flavouring & Food (603288 CH) has filed its PHIP for an H Share listing to raise US$1 billion.
Event-Driven developments: Toyota Industries (6201 JP), Makino Milling Machine Co (6135 JP), Fuji Corp (7605 JP), Tam Jai International (2217 HK), PointsBet Holdings (PBH AU), Mayne Pharma (MYX AU).

A Reluctance to Confront Shareholders Is at the Root of Many Problems

Until now, listed companies have been reluctant to even lower the minimum shareholder purchase amount for reasons of economic rationality and administrative costs.
The same issues underlie reluctance of companies in lowering amount to purchase shares, online AGMs, electronic delivery of text in notice of convocations, and pre-AGM disclosure of annual securities reports.
Companies have been focused on controlling AGM rather than facing shareholders to increase their interests. This practice is problem that can lead to slower ROE and excessive cash on hand.

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Jun 08

Daily Brief Japan: Toyota Industries and more

In today’s briefing:

Last Week in Event SPACE: Toyota Indust. Great Eastern, Mayne Pharma, Shibaura Elect., New World

Last Week in Event SPACE: Toyota Indust. Great Eastern, Mayne Pharma, Shibaura Elect., New World

The value realisation of selling cross-holdings should not be contingent on selling your shares to someone else too cheaply but that is exactly what Toyota is proposing here.
OCBC is doing the right thing. Although a 17.8% bump in terms for Great Eastern Holdings (GE SP)‘s minorities is probably not enough to dislodge Palliser.
Cosette has lodged a termination notice, which Mayne Pharma (MYX AU) rejects. It’s anyone’s guess whether this saga concludes with a price cut; or Cosette walking.

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Jun 07

Daily Brief Japan: Metaplanet and more

In today’s briefing:

Metaplanet (3350) | Metaplanet’s Treasury Ambition Grows

Metaplanet (3350) | Metaplanet’s Treasury Ambition Grows

By Mark Chadwick

Metaplanet aims to raise ¥745B via a 555M share issuance to expand its Bitcoin holdings, targeting 100,000 BTC by end-2026.
The raise implies significant dilution, but rising share prices and strong NISA retail demand could make the capital goal achievable within 12–18 months.
Early investors benefit structurally from raises above NAV, as Metaplanet evolves into a long-term institutional vehicle for Bitcoin exposure and monetary debasement hedging.

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Jun 06

Daily Brief Japan: Makino Milling Machine Co, Keisei Electric Railway Co, Medical Data Vision, yutori , TSE Tokyo Price Index TOPIX and more

By Nippon Investment Bespoke Research UK

In today’s briefing:

MBK Partners Plans to Launch a Tender Offer for Makino Milling Machine
Keisei Electric (9009) | Neither Hidden nor Structurally Mispriced
Medical Data Vision Co., Ltd. (3902 JP): Research Update
Yutori Doubles Sales Again
What the Tokyo Market Needs Is a Metabolism and Replacement with Motivated Managers

MBK Partners Plans to Launch a Tender Offer for Makino Milling Machine

By Douglas Kim

MBK Partners plans to launch a tender offer for Makino Milling Machine (6135 JP) at 11,751 yen per share by early December to take over the controlling ownership.
The key long-term investment case for Makino is that it is one of the best companies in the world for making advanced machine tools that are increasingly becoming more sophisticated.
One could make the argument that this may not the final offer and some investors may require slightly higher prices in order to make the deal final.

Keisei Electric (9009) | Neither Hidden nor Structurally Mispriced

By Mark Chadwick

Keisei’s OLC stake distorts valuation optics, but is already transparently priced by the market.
Activist criticism over “true” ROE reflects accounting semantics, not hidden inefficiency.
Core business plus OLC stake offers modest returns; upside exists, but hardly suggestive of chronic long-term underperformance

Medical Data Vision Co., Ltd. (3902 JP): Research Update

Medical Data Vision [MDV] reported FY25 Q1 (Dec year-end) results with sales coming in largely in line with the firm’s guidance while operating profit [OP] was higher than expected.
The firm produced Q1 gross profit [GP] of1,085mil (+3.8% YoY) and OP of ¥17mil (-67.6% YoY) on sales of ¥1,532mil (+10.4% YoY).
Ther firm’s profit targets remain unchanged, guiding for FY25 OP of ¥2,600mil and RP of ¥2,500mil.

Yutori Doubles Sales Again

By Michael Causton

Yutori is still a small business but is sometimes dubbed the Zozo of youth fashion, which is probably why Zozo bought a share in the online mall.
And it’s proving a good bet, with sales doubling last year and a lot more expansion to come.
Thanks in part to investment in retail stores but also its uncanny ability to spot youth trends.

What the Tokyo Market Needs Is a Metabolism and Replacement with Motivated Managers

The background for raising the maintaining listing criteria was that the current criteria are loose and that many companies aren’t motivated to grow because they consider IPO to be goal.
Too long time horizons and previous listing maintenance criteria that might have been manageable did not create a sense of urgency for the company to grow.
There’s concern that quality of standard market, to which companies that fail the criteria migrate, will deteriorate, and the entire market will need metabolism and replacement of management through M&A.

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Jun 05

Daily Brief Japan: Toyota Motor, Japan Post Bank, TSE Tokyo Price Index TOPIX, AViC and more

In today’s briefing:

Toyota Motor (7203 JP) Outlook Amid Uncertainty Over Toyota Industries Privatization Bid
Japan Post Bank: From Stagnation to Opportunity
Success Experiences Will Be Necessary for IR to Function
AVIC (9554 JP) – System in Place for Rapid In-House Launch of Live Commerce Business

Toyota Motor (7203 JP) Outlook Amid Uncertainty Over Toyota Industries Privatization Bid

By Nico Rosti

Travis Lundy and Arun George have recently written extensively about Toyota Industries (6201 JP) proposed takeover. Read the details in their insights.
Toyota Motor (7203 JP) is involved: 2 weeks ago we predicted a rally, and the rally did happen and went past our suggested profit target – time for an update.
Toyota Motor (7203 JP) at the end of last week was overbought, according to our model. Any catalyst could trigger a sell off from here but let’s analyze the models….

Japan Post Bank: From Stagnation to Opportunity

By Rikki Malik

Non-Controversial changes in asset allocation will provide a big boost to earnings.
Demand problems brewing in the JGB market may provide the catalyst
The path is clear to enter new businesses after parent lowers stake below 50%

Success Experiences Will Be Necessary for IR to Function

While TSE will require companies to have IR staff, but most companies disclose that they have IR staff, there is gap with investors who believe that IR is not functioning.
The issue is the substance issue, as most companies have disclosed that they have already conducted the information meetings included in the implementation of specific IR activities expected by TSE.
The reason why many companies still do not make IR function may be because they do not realize the effect of IR in terms of higher stock valuations.

AVIC (9554 JP) – System in Place for Rapid In-House Launch of Live Commerce Business

By Sessa Investment Research

Over the past six months, AViC’s share price has undergone a major re-rate.
Its closing price on May 16, 2025, the day after Q2 FY2025/9 results announcement, stood at JPY 1,825, up 67.6% from the closing price of JPY 1,089 on November 14, 2024, when it announced FY2024/9 results.
Based on the projected EPS of JPY 73.59 for FY2025/9, the Company’s share looks to be trading at a premium with a forward P/E ratio of 24.8x.

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Jun 04

Daily Brief Japan: Toyota Industries, Makino Milling Machine Co, Primo Global, Hearts United Group, D.Western Therapeutics Institute Inc., Wacom Co Ltd, Geo Holdings, Koukandekirukun Inc, LaKeel and more

In today’s briefing:

Toyota Industries (6201 JP): After a High, Comes the Low of a Takeunder
[Japan M&A] Toyota Inds (6201) Proposed Takeover – It Looks Bad, and It’s Worse Than It Looks
Makino Milling Machine (6135 JP): MBK’s Preconditional Offer Is Not the Likely Endgame
Primo Global Holdings: A Bridal Business with Long Presence, Short on Performance
Digital Hearts Holdings (3676 JP) – Poised to Enjoy Higher Profitability
D. Western Therapeutics Institute (DWTI) (4576 JP) – Q1 Follow-Up – June 3, 2025
Wacom (6727 JP) – New Foundations Laid for Growth, Now for Execution
GEO HOLDINGS (2681 JP) – FY3/25 Earnings Miss Forecasts
Koukandekirukun (7695 JP) – Operating Profit Falls on Higher Costs
LaKeel (4074 JP) – At a Positive Inflection Point

Toyota Industries (6201 JP): After a High, Comes the Low of a Takeunder

Toyota Industries (6201 JP) disclosed a preconditional tender offer from Toyota Fudosan at JPY16,300, a 23.3% premium to the undisturbed price but a 11.4% discount to last close.
While representing a pre-rumour all-time high, the offer is below the midpoint of the special committee IFA DCF valuation range. The Board has a neutral recommendation.
The offer undermines minorities as it lacks split pricing for the Toyota Motor (7203 JP) and its affiliates’ shareholding and likely undervalues the significant real estate holdings.

[Japan M&A] Toyota Inds (6201) Proposed Takeover – It Looks Bad, and It’s Worse Than It Looks

2wks ago I said “a deal could be announced near-term.” 2wks later we have a deal. But it is a bad deal for TICO minorities. Low price. Minimal transparency. Awful.
But if you dig through deal structure and economics, it is worse than it looks. It takes digging to understand how bad, and they could tell you, but they won’t.
The deal will take time. Things will be in limbo til then. And Toyota Group governance and capital allocation is conditional on this deal getting done, which is also bad.

Makino Milling Machine (6135 JP): MBK’s Preconditional Offer Is Not the Likely Endgame

Makino Milling Machine Co (6135 JP) announced a preconditional tender offer from MBK Partners at JPY11,751, a 4.8% premium to last close and a 6.8% premium to Nidec’s withdrawn JPY11,000 offer.
The offer is broadly in line with the midpoint of the IFA DCF valuation range. The tender offer is expected to commence in early December.
Despite the offer resulting from an auction, there remains a medium probability that Nidec Corp (6594 JP) or a spurned white knight bidder (Candidate A) emerges with a higher offer.

Primo Global Holdings: A Bridal Business with Long Presence, Short on Performance

By Oshadhi Kumarasiri

Primo Global (367A JP) will debut on the Tokyo Stock Exchange’s Standard Market on June 24, offering 6.5m shares, with pricing set after the June 9–13 book-building period.
Despite decades in operation, Primo has shown slow domestic growth and limited international traction, raising doubts about its ability to scale meaningfully in the bridal jewelry market.
With net debt at 50% of assets and over half its balance sheet in goodwill and intangibles, Primo faces material financial risk, especially in a rising interest rate environment.

Digital Hearts Holdings (3676 JP) – Poised to Enjoy Higher Profitability

Q4 FY3/25 results showed OP margin improvement YoY (Q4 FY3/24 6.1%, Q4 FY3/25 6.3%) as both DH Group (formerly Entertainment) and AGEST Group (formerly Enterprise) improved margins, although consolidated OP saw a small decline (-4.1% YoY).
DH Group’s segment OP declined (-9.9% YoY), but the segment OP margin improved (Q4 FY3/24 7.1%, Q4 FY3/25 7.3%), reflecting the sale of a low-margin subsidiary.
AGEST Group’s segment OP increased (+8.4% YoY) with the improved segment OP margin (Q4 FY3/24 4.5%, Q4 FY3/25 5.1%) on the back of better profitability in overseas QA Solutions than Q4 FY3/24.

D. Western Therapeutics Institute (DWTI) (4576 JP) – Q1 Follow-Up – June 3, 2025

By Sessa Investment Research

SIR believes DWTI has entered an exciting new phase given significant advances in pipeline development achieved over the last year.
Key advances included: 1) publishing favorable topline results of in-house H-1337 PIIb US trials (strong prospects as “first choice as a second-line Glaucoma drug”)
2) commenced jointly developed Japan PII clinical trials of regenerative medicine cell therapy DWR-2206 with ActualEyes, and successfully completing all transplants

Wacom (6727 JP) – New Foundations Laid for Growth, Now for Execution

FY3/25 results were in line with revised guidance (issued April 23, 2025), with stable performance in the Technology Solutions Business, and narrowing losses YoY at the Branded Business.
After completing business transformation efforts, the newly unveiled ‘Wacom Chapter 4’ medium-term plan covering FY3/26 to FY3/29 presents positive developments with a more defined roadmap of future earnings drivers, and outlines a gradual growth trajectory as the business diversifies into new market domains and use-cases.
For capital allocation, planned investments in new business initiatives suggest that Wacom is considering the balance between shareholder returns and sustainable, long-term growth.

GEO HOLDINGS (2681 JP) – FY3/25 Earnings Miss Forecasts

Q1-4 FY3/25 sales and operating profit missed forecasts, as new store openings fell behind schedule, while personnel costs and merchant fees for cashless payments rose more than expected.
Sales fell -1.4% YoY while OP dropped -33.1% YoY. On the plus side, sales of used Smartphones & Tablets accelerated sharply, while annual gross profit and GPM improved.
Costs are expected to weigh on earnings again in FY3/26, as the company continues to execute its global expansion strategy.

Koukandekirukun (7695 JP) – Operating Profit Falls on Higher Costs

Q1-4 FY3/25 +36.1% YoY sales outperformed. However, although operating profit beat revised guidance, it fell 50.3% YoY, a stark contrast to the company’s initial forecast for an increase of +0.6% YoY.
This was due to higher-than- expected costs related to M&A, internal transactions with a new subsidiary and investments to reaccelerate order growth.
The company is forecasting FY3/26 sales growth to slow to +18.5% YoY, as it faces difficult comps from the previous year’s acquisition boost.

LaKeel (4074 JP) – At a Positive Inflection Point

Q1 FY12/25 results were a positive surprise with OP growth of 45.5% YoY, primarily driven by LaKeel HR license sales, a stark contrast to FY12/24 results, which saw the company experience margin decline YoY and limited earnings visibility.
With evidence indicating that the company’s technology is gaining market penetration, we believe the company is embarking on a growth trajectory.
Despite the strong start and high run-rate, FY12/25 guidance has been left unchanged.

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Jun 03

Daily Brief Japan: Pasona Group, Primo Global, Kitazato, Frontier Management Inc and more

In today’s briefing:

[Japan Activism] Pasona Group (2168 JP) – Three New Things Of Mixed Importance
Primo Global Pre-IPO: Driven by Domestic Demand as International Ops Falter
Kitazato Pre-IPO – Past Sales Have Been Steady but Slowing
Frontier Management Inc. (7038 JP) – Q1 FY2025/12 Results Mark the Start of Recovery

[Japan Activism] Pasona Group (2168 JP) – Three New Things Of Mixed Importance

Pasona Group (2168 JP) is a “value stock.” It has loads of cash (but less than you think) and significant ongoing governance issues, but they are doing a TINY buyback.
Several weeks ago we got an announcement which was odd. Not completely odd, just odd. Now in the past week we have market activity/announcements which make one wonder.
This piece attempts to interpret some of the recent data/info points. One is odd. Another is odd but meaningful (but different than people think). A third is just technical.

Primo Global Pre-IPO: Driven by Domestic Demand as International Ops Falter

By Nicholas Tan

Primo Global (367A JP) is looking to raise at least US$104m in its upcoming Japan IPO.
Primo Global specializes in merchandising bridal jewellery, namely engagement rings and wedding rings.
In this note, we look at the firm’s past performance.

Kitazato Pre-IPO – Past Sales Have Been Steady but Slowing

By Sumeet Singh

Kitazato (368A JP) manufactures and sells medical devices and products for fertility treatment. It aims to raise around US$120m in its Japan IPO.
Kitazato specializes in artificial insemination, in vitro fertilization, cell cryopreservation and reproductive engineering technologies in regenerative medicine.
In this note, we look at its past performance and other deal dynamics that might impact the listing.

Frontier Management Inc. (7038 JP) – Q1 FY2025/12 Results Mark the Start of Recovery

By Sessa Investment Research

Frontier Management announced its Q1 FY2025/12 results after market close on May 14, 2025.
Net sales rose 12.7% YoY to JPY 2,434 mn, rebounding from the YoY drop in FY2024/12, but operating profit fell 12.3% YoY to JPY 55 mn.
Fund-related expenses in the Investment Business weighed on ordinary profit, resulting in an ordinary loss of JPY 74 mn.

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Jun 02

Daily Brief Japan: Leopalace21 Corp, Isuzu Motors, Seven & I Holdings, NTT Data Corp, TSE Tokyo Price Index TOPIX, ZOZO Inc and more

In today’s briefing:

[Japan Buyback] Leopalace (8848 JP) – A Giant Buyback To Get Fortress Partially Out
[Japan Buybacks] – Buybacks Announced 26-30 May 2025 And Company Buyback History
Merger Arb Mondays (02 June) – Seven & I, SBI Sumishin, Shibaura, Mayne, ENN Energy, HKBN, Zeekr
(Mostly) Asia M&A, May 2025 Wrap: NTT Data, ZEEKR, MAC Copper, Torii, Mitsu. Shokuhin, SBI Sumishin
Governance Issues Were Not Highlighted and the Win-Win by REIT Sponsors and Investors Continues
Zozo Purchase of Lyst Is Timely

[Japan Buyback] Leopalace (8848 JP) – A Giant Buyback To Get Fortress Partially Out

Leopalace21 Corp (8848 JP) had a giant oopsie in 2018-2021 where they lost ¥180bn over three years because of defective construction requiring repairs.
Murakami and others got involved. Leopalace got financing from FIG (shares/SARs/loan), Murakami bailed. Eventually Hikari Tsushin got in. Leopalace got FIG out of their loan, doing a refi through Mizuho.
Cash was up, cashflow is strong. Business is changed/revived. Now Leopalace is buying back SARs it sold to FIG. FIG will still own 26%. The future is potentially interesting. Still.

[Japan Buybacks] – Buybacks Announced 26-30 May 2025 And Company Buyback History

Buybacks in Japan are becoming a much greater driver of shareholder return than in previous years. The total amount of buybacks announced just during the March-end earnings season cleared ¥7trln.
Quiddity has developed a buyback tool which tracks Japanese buybacks and the buyback history for any given company. Isuzu Motors (7202 JP) announced a big post-Offering buyback this week.
Want to see how Isuzu has executed buybacks the past decade? Daily data? % volume? You can check here for any of the 21 companies which announced buybacks this week.

Merger Arb Mondays (02 June) – Seven & I, SBI Sumishin, Shibaura, Mayne, ENN Energy, HKBN, Zeekr

We 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), Insignia Financial (IFL AU), ENN Energy (2688 HK), Seven & I Holdings (3382 JP), Smartpay Holdings (SPY NZ), Smart Share Global (EM US).
Lowest spreads: Bright Smart Securities And (1428 HK), Dada Nexus (DADA US), Spartan Resources (SPR AU), Nissin Corp (9066 JP), Torii Pharmaceutical (4551 JP), Nippon Road (1884 JP).

(Mostly) Asia M&A, May 2025 Wrap: NTT Data, ZEEKR, MAC Copper, Torii, Mitsu. Shokuhin, SBI Sumishin

For May 2025, 13 new transactions (firm and non-binding) were discussed on Smartkarma (by the Quiddity team) with an overall announced deal size of ~US$27bn.
The average premium for the new transactions announced (or first discussed) in May was ~28%, with a year-to-date average of 49%.
The average premiums for transactions in 2024 (129 transactions), (2023 (117), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) were 43%, 39%, 41%, 33%, 31%, and 31%.

Governance Issues Were Not Highlighted and the Win-Win by REIT Sponsors and Investors Continues

While offering non-serious TOB prices, knowing that the likelihood of TOBs by the activist fund is low, the aim to extract concessions from the REIT and sponsor companies was successful.
The governance problem is the composition of the company, which continues to manage off-balance sheet real estate through its subsidiary REIT asset management company.
So far, however, governance issues have not received much attention, only confirming the sponsor companies’ willingness to continue REIT control and investors’ benefit from higher REIT stock prices by TOBs.

Zozo Purchase of Lyst Is Timely

By Michael Causton

Zozo’s purchase of UK mall Lyst will create significant synergies, allowing Zozo to build a strong base in Europe and the US.
The move will allow brands from Japan to sell overseas easily, while also potentially making it simple for European and US brands to sell into Japan.
The deal comes just in time given slowing e-commerce sales in Japan.

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Jun 01

Daily Brief Japan: MS&AD Insurance, SBI Sumishin Net Bank , Makino Milling Machine Co, Nikkei 225 and more

In today’s briefing:

[Japan CorpGov] TSE “Mgmt Conscious” Reports (Jun25), Minor Updates
(Mostly) Asia-Pac M&A: MAC Copper, SBI Sumishin Net Bank, Taiyo, HKBN, Welcia/Tsuruha, Amara
Last Week in Event SPACE: Makino Milling Machine, Nufarm, Dic Corp, HKBN
Weekly Deals Digest (01 Jun) – Makino, SBI Sumishin, Taiyo, ENN Energy, HKBN, Meilan, Foshan Haitian
Nikkei Index Options Weekly (May 26 – 30): Back to Pre-Tariff Levels, But Uncertainty Still Looms

[Japan CorpGov] TSE “Mgmt Conscious” Reports (Jun25), Minor Updates

TSE-Listed companies are asked to file “Management Conscious of Capital Cost/Stock Price” awareness reports/policies. Many have. Some are still working on it. And policies change, and CGR reports are updated.
286 new CGRs filed since 1-May-25. Our tools show every report, links to every document, and a diff file tool. Input a name, see the changes in the reports.
The JPX Council of Experts met on 22 April. Mgmt Conscious updates came this month. Parent-sub follow-ups in Fall/Winter 2025. Slow. ‘Going Private’ policy is under public comment now.

(Mostly) Asia-Pac M&A: MAC Copper, SBI Sumishin Net Bank, Taiyo, HKBN, Welcia/Tsuruha, Amara

I tally 44 – mostly firm, mostly Asia-Pac – arb transactions currently being discussed and analysed on Smartkarma.
Two new deal were discussed on Smartkarma this week: Offers for MAC Copper (MAC AU)and SBI Sumishin Net Bank (7163 JP). Taiyo Holdings (4626 JP) possibly in the crosshairs.
Key updates/news took place on: HKBN Ltd (1310 HK), Makino Milling Machine Co (6135 JP), Welcia Holdings (3141 JP)/Tsuruha Holdings (3391 JP), and Amara Holdings (AMA SP).

Last Week in Event SPACE: Makino Milling Machine, Nufarm, Dic Corp, HKBN

MBK has made a legally binding bid for Makino Milling Machine Co (6135 JP). Stay long if you still hold or buy the dip. Buy at under ¥11,200.
Given the share price decline, Nufarm (NUF AU)‘s board is under pressure to do “something”. Nufarm would be better off selling its entire operations, as opposed to offloading divisions.
Dic Corp (4631 JP) is (also) under pressure from activist Oasis Management. Buy large dips rather than chase another day of a big gain.

Weekly Deals Digest (01 Jun) – Makino, SBI Sumishin, Taiyo, ENN Energy, HKBN, Meilan, Foshan Haitian

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: Foshan Haitian Flavouring & Food (603288 CH) has filed its PHIP for an H Share listing to raise US$1 billion.
Event-Driven developments: Makino Milling Machine Co (6135 JP), SBI Sumishin Net Bank (7163 JP), Taiyo Holdings (4626 JP), ENN Energy (2688 HK), HKBN Ltd (1310 HK).

Nikkei Index Options Weekly (May 26 – 30): Back to Pre-Tariff Levels, But Uncertainty Still Looms

By John Ley

Historic volatility has collapsed on the Nikkei, normalizing at a far quicker pace than the volatility episode last August.
Global uncertainty remains unresolved, casting a shadow over recent equity strength.
This week’s rally came without FX tailwinds, underscoring a potentially fragile move.

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May 31

Daily Brief Japan: Metaplanet, Rakuten Bank, Daido Steel, Mec Co Ltd, TSE Tokyo Price Index TOPIX, Valor Holdings and more

By Nippon Investment Bespoke Research UK

In today’s briefing:

Quiddity JPX-Nikkei 400 Rebal 2025: End-May 2025 Ranks
Japanese Neobanks: Time to Short Rakuten Bank (TSE: 5838)
Daido Steel Co., Ltd (5471 JP): Research Update
MEC Co., Ltd (4971 JP): Research Update
Could It Be that the Unit Share System Has Helped to Turn Away from Growing Shareholder Interests?
Valor Responds to Trial-Seiyu Threat

Quiddity JPX-Nikkei 400 Rebal 2025: End-May 2025 Ranks

By Janaghan Jeyakumar, CFA

JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted capped index composed of 400 constituents.
The annual index review takes place in August every year. We look at the latest rankings of potential ADDs/DELs every month.
Below is a look at the rankings of potential ADDs/DELs for the JPX-Nikkei 400 August 2025 rebalance based on trading data as of end-May 2025.

Japanese Neobanks: Time to Short Rakuten Bank (TSE: 5838)

By Victor Galliano

We believe that the recently announced offer by NTT Docomo for SBI Sumishin Netbank is attractive for Netbank shareholders; this brings the Japanese neobanks into the valuation spotlight
There is a modest long arbitrage opportunity in SBI Sumishin Netbank based on its 30th May closing price, but the bigger opportunity, in our view, is shorting Rakuten Bank
Seven Bank is of potential M&A interest, according to the Japanese financial press; despite the speculative boost to Seven shares and its PBV, Rakuten Bank valuations look relatively very stretched

Daido Steel Co., Ltd (5471 JP): Research Update

Daido Steel (5471 JP) produced FY24 (March year-end) results full-year OP [IFRS basis] of ¥39,408mil (-6.7% YoY) on sales of ¥574,945mil (-0.6% YoY).
Due to multiple unknown factors surrounding the business environment such as impact from the US trade tariff policy and volatile FOREX, Daido Steel only released FY25 1H guidance.
The firm is guiding for 1H OP of ¥12,500mil (-31.5% YoY / -40.9% HoH) on sales of ¥275,000mil (-3.0% YoY / -5.7% HoH).

MEC Co., Ltd (4971 JP): Research Update

By Nippon Investment Bespoke Research UK

MEC’s (4971 JP) FY25 (Dec year-end) Q1 results were largely in line with guidance for OP to rise +3.8% YoY / +19.8% QoQ to ¥1,093mil on sales of ¥4,423mil (+1.6% YoY / -2.8% QoQ).
Chemical segment sales rose +8.0% YoY / -4.5% QoQ to ¥4,237mil, thanks to 1) a steady increase in demand for chemicals used in high-end packages related to generative AI, and 2) a gradual recovery in demand associated with PCs, smartphones and general servers.
MEC is guiding for FY25 1H OP of ¥2,250mil (-4.8% YoY) on sales of ¥9,600mil (+8.1% YoY), and full-year OP of ¥5,000mil (+9.6% YoY) on sales of ¥20,000mil (+9.7% YoY).

Could It Be that the Unit Share System Has Helped to Turn Away from Growing Shareholder Interests?