Japan

• Taiyo Holdings (4626 JP) has an interesting background, embroiled in a separate activist event via its equity affiliate sponsor Dic Corp (4631 JP), and recently an activist target itself. 
• Today a Bloomberg article said KKR and one other PE fund had made acquisition proposals via TOB. Taiyo confirmed, establishing a Special Committee. A deal is months away, at earliest.
• Shares shot up to limit up, opened briefly, then resumed at limit up. The question here and now is valuation. 

• Taiyo Holdings (4626 JP) shares were up 19.1% based on a Bloomberg report that it received privatisation proposals from KKR and Nippon Sangyo Suishin Kiko. 
• Taiyo confirmed that it has received privatisation offers. The Board would view privatisation as a solution to rid itself of Oasis, which has recently waged an activist campaign. 
• At the last close price of JPY6,230, Oasis would be up 45.9% on its highest price of JPY4,720. My analysis suggests that an offer around JPY7,000 can be justified.

• Metaplanet, the Tokyo-listed firm modelling itself after MicroStrategy, continues to rapidly expand its Bitcoin holdings.
• For now, equity markets are playing along. Metaplanet’s share price has surged 30% in the past week
• But with the firm trading at nearly 6x its net asset value, market enthusiasm looks stretched

• For dialogue with shareholders, annual securities reports should be disclosed in English for overseas investors, who are eager to request the pre-AGM submission and have high demand for this information.
• To change a company to a mindset of dialogue with shareholders rather than controlling AGM, it needs to have a successful experience in converting management to create value through dialogue.
• It’ll be interesting to see if the traditional values of companies, which has been accustomed to management that does not face shareholders, can be changed in the coming years.

• In December, Nidec Corp (6594 JP) made an unsolicited bid for Makino Milling Machine Co (6135 JP). Makino wanted more time. Nidec wanted to squeeze.  Makino proposed a poison pill.
• Makino appeared to act slowly but white knight bidders were mooted in the media. Nidec launched, but apparently approvals may have been hard. They withdrew. Makino cancelled the poison pill. 
• Shares fell sharply. Yesterday, they rose because it appears Effissimo owns 3%. Today, we got news post-close that MBK may be close to making an ¥11,000+ bid.

• In response to a Nikkei article, Makino Milling Machine Co (6135 JP) confirmed it had received a legally binding acquisition proposal from MBK Partners. 
• The price is expected to exceed Nidec Corp (6594 JP) JPY11,000 hostile offer. On 8 May, Nidec withdrew its offer due to the Board’s proposed countermeasures. 
• My analysis suggests that MBK’s white knight bid could be JPY11,677 per share, 13.7% higher than the last close price of JPY10,270.

• It has been a sport of the J-REITs the past 18-24mos to buy back their units at well under PNAV 1.0x and to have sponsor entities up their stakes. 
• The goal? Get valuation to PNAV1+ so they can, in good faith, get the REIT to buy assets with an equity raise. Below PNAV1 would work with a rights offering.
• Now the Orix JREIT Inc (8954 JP) has announced it will triple its small holding. Meaningful portion of ADV, more meaningful portion of MRWF.

• The Seven & I Holdings (3382 JP) AGM was a vote of confidence in the Board’s strategy of pursuing two parallel paths to generate value.  
• The Board’s management initiatives are steadily being implemented, but have yet to deliver shareholder value. Since they were announced, the share price has modestly outperformed the Nikkei 225.
• 7&I and Couche Tard signed an NDA but a viable divestiture plan to gain US regulatory approval remains in doubt, particularly as PE has emerged as the likely bidder. 

• The four largest convenience stores all had varying results last year, two setting records for high profits, and the other two seeing worrying shortfalls. 
• The biggest differentiating factor was how each handled the problem of inflation, either through lower prices or by offering added value.
• Unfortunately, Seven Eleven was the worst performer of the big three, still suffering from a price perception problem and lower levels of innovation compared to Lawson and Familymart.

• Shionogi & Co (4507 JP) revenue up 1% YoY in FY25 as royalty income from HIV franchise compensates for lower sales from infectious disease drugs.
• Torii pharma and JT’s pharma division acquisition augurs well in terms of products category diversification.
• NDA for zuranolone, a treatment in development for major depressive disorder (MDD) submitted. JTE-061 (tapinarof) and TO-208 from Torii opens up opportunities in Japan market.

• H1 Results Overview: On April 14, 2025, Paycloud Holdings Inc. (hereafter, the Company) announced its H1 FY2025/8 results.
• The Company reported net sales of JPY 4,838 mn (+143% YoY), adjusted EBITDA of JPY 679 mn (+200% YoY), and operating profit of JPY 404 mn (+370% YoY).
• While it was substantially attributable to having consolidated Cloudpoint, a digital signage business integrated in March 2024, it was also contributed by its upward momentum of business fundamentals reflecting the fact that the Company’s ongoing cashless service and IT solutions businesses posted nearly 30% operating profit growth with improved margins.

• Earnings mark 13th straight year of sales and profit growth – Q1-4 FY3/25 earnings outperformed revised company forecasts, with sales increasing +8.1% YoY to ¥84.31bn and operating profit rising +4.4% YoY to ¥17.76bn.
• Strong handset sales and Solutions business projects outperformed, aiding a particularly strong Q4- only performance of a +20.6% YoY increase in OP and +12% YoY in sales.
• For FY3/26, the company forecasts sales growth of +0.8% YoY and OP growth of +2.5% YoY thanks to mobile contract price hikes. 

• Japan Lifeline [hereinafter JLL] produced record earnings in FY24 with full-year OP of ¥12,326mil (+13.2% YoY) on sales of ¥56,610mil (+10.2% YoY), landing largely in line with the full-year guidance for OP of ¥12,600mil (+15.7% YoY) on sales of ¥56,800mil (+10.5% YoY), and is aiming for record earnings again in FY25, with 1H OP of ¥6,300mil (+0.6% YoY) on sales of ¥29,300mil (4.7% YoY), and full-year OP of ¥12,900mil (+4.7% YoY) on sales of ¥59,300mil (+4.8% YoY).
• The firm revised up its medium-term targets with the release of its FY25 earnings, and is now guiding for FY27 sales of ¥70,000mil, up from ¥63,000mil.
• JLL’s base shareholders’ return is the higher of a base dividend of 40% of net income or a DOE 5%, plus extra dividends or share buybacks, depending on circumstances.

• In Q1 FY01/26, revenue was JPY53.0bn (-0.4% YoY) with an operating loss of JPY1.4bn and recurring loss of JPY2.3bn.
• Domestic Beverage business revenue fell 4.6% YoY to JPY32.4bn, with an operating loss of JPY2.4bn due to price hikes.
• International Beverage business revenue increased 12.5% YoY to JPY12.9bn, achieving an operating profit of JPY972mn (+40.5% YoY).

• This morning the Nikkei reported shareholders of Welcia Holdings (3141 JP) and Tsuruha Holdings (3391 JP) approved their Merger. Activists opposed but it was going to be close at best.
• As expected, Welcia shares popped, and the spread converged to 2% with Tsuruha falling back to just below ¥11,400. Some of this is unwind of speculative interest in Tsuruha.  
• The new yuhos are out, which shows roughly where we stand (as of end-Feb, and some updates). Now the trade is NEWCO vs Aeon’s interest and NEWCO vs World.

• Fuji Media Holdings (4676 JP) has for years been “undervalued” and owned by value-oriented actively-managed fund managers. Under-used real estate and IP assets. Lack of governance regarding capital. 
• A Shukan Bunshun article in Dec-2024 reported a former boy band SMAP member and Fuji TV regular made a big payment to an unidentified woman after a June 2023 “incident.”
• Fuji TV hemmed and hawed about its involvement. Advertisers bolted. Activists activisted. The chairman resigned. Now Major Activist Dalton has a director slate for the AGM. What Next?

• It is good to see that affirmative action has increased the number of women managerial positions in ITOCHU. This is presumably due to the increase in foreign ownership.
• The non-statutory executive officers are not in a legally responsible position and are not involved in management decisions. 2 female independent non-executive directors do not have a management background.
• Looking at the board compositions, one notices many issues, but AGMs of many companies are concentrated in June, making it difficult to take the time to scrutinize the convocation notices.

• Solid execution despite macro volatility impact – FY3/25 results were positive, driven by strong performance at the GCL business, a direct result of Lifenet’s partnership strategy.
• Despite solid execution in FY3/25, the Comprehensive Equity Per Share growth of +4.5% YoY was well below the Company’s FY3/29 target of +10.0% annual growth due to macroeconomic volatility, highlighting the need for investors to focus on the longer term.
• Looking beyond the FY3/26 guidance, we think Lifenet is well-positioned to deliver longer-term growth with a new technology-oriented CEO, a renewed commitment to accelerating growth at the individual life business, and upside from its partnership-focused growth strategy.

• Q1-4 FY3/25 results were in line with guidance, with progress made YoY to transform both Sports and Lifestyle segments into material earnings pillars.
• Company guidance for FY3/26 appears conservative.
• The core theme is a significant investment in growing the TIPSTAR (domestic keirin, or cycle team sports) betting service, achieving high user retention, and strong sales growth YoY. 

• Nitto Kogyo Corporation (hereafter, the Company) is a leading manufacturer of distribution boards and panel boards for electrical and telecommunications infrastructure, as well as enclosures that house telecommunications and precision equipment.
• The company has 42 sales offices and eight factories in Japan.
• The Company is working to expand its business in ASEAN countries, with overseas production and sales bases in China, Thailand, and Singapore. 

• Strong opening quarter – Q1 FY12/25 results were a positive surprise  in our view, with solid sales volume recovery YoY and OPM at 6.8%, marking an 11-quarter high.
• Key drivers included continued demand recovery in the key Machine Tool business, driven by demand from China, as well as structural demand for MT connectors.
• Additionally, there was significant growth in Food Machinery, stemming from both domestic and overseas demand. 

• Leading proxies recommend that Tsuruha Holdings (3391 JP) shareholders vote against the Tsuruha/Welcia Holdings (3141 JP) merger on 26 May.
• The share exchange terms favour Welcia over Tsuruha shareholders. The Tsuruha vote will be close but likely to be approved. Long Tsuruha is the trade, irrespective of the vote.  
• For a vote pass, you are long synergies and a likely partial offer bump. For a fail, you are long an undemanding multiple and the optionality of a new bid.      

• 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: GMO Internet (4784 JP) secondary offering of 91.7 million shares, worth around US$1.9 billion.
• Event-Driven developments: Toyota Industries (6201 JP), Shibaura Electronics (6957 JP), ESR Group (1821 HK), Soundwill Holdings (878 HK), Mayne Pharma (MYX AU), Gold Road Resources (GOR AU). 

• Jade Group (3558 JP) made some wild promises about its potential to grow its online fashion mall business last year when it acquired Magaseek. 
• But recent results suggest what many feared: building scale without due regard for the quality of the assets acquired does not an empire make.
• With Magaseek contracting and e-commerce overall showing muted growth, Jade Group´s capacity to escape the shadow of the big three looks limited.

• I tally  46 – mostly firm, mostly Asia-Pac – arb transactions currently being discussed and analysed on Smartkarma.
• Just one new deal was discussed on Smartkarma this week: Bastion’s off-market Offer for Xanadu Mines (XAM AU).
• Key updates/news took place on: Reject Shop (TRS AU),ESR Group (1821 HK), Shibaura Electronics (6957 JP),Jamco Corp (7408 JP), and Tsuruha Holdings (3391 JP)/Welcia Holdings (3141 JP).

• Winner winner chicken dinner.  A Nikke article suggests a bid higher than ¥6tn for Toyota Industries (6201 JP). In addition, people  thinking about ¥18,400/share are going about this incorrectly. 
• Contemporary Amperex Technology (CATL) (3750 HK) pops on its IPO debut. The HKEx has issued a high concentration warning
• Mitsubishi Logisnext Co., Ltd. (7105 JP) is still ragingly cheap given the move to delist dual parent/sub listings and having a global footprint. Own it here and now.

• The biggest difference between founder family companies and others is the shareholding, and the presence of certain percentage of founder family’s equity would have positive impact on management and performance.
• When the founding family is a major shareholder, they can manage the company from the same perspective as shareholders, sharing the same goal of maximizing corporate value with them.
• A company with shareholders with equity interests that exceed a certain level of influence cannot manage without regard to its shareholders. MBOs are also expected for founder family companies.

Dentsu Group’s Q125 figures show 0.2% organic net revenue growth and an improvement in operating margin. Japan performed well, with international operations more challenged. Dentsu’s new management plan aims to drive profitability and competitiveness, particularly ex-Japan. It targets up to ¥50bn of operating cost reductions, returning the group to consistent profit growth from FY27. The ¥50bn cost of reshaping the group weighs on FY25 profits but should result in a simpler organisation. A further ¥45bn will be invested over three years with the aim of no markets being loss-making by FY26. The group will focus on the key Japanese and US markets, with the international business centred on adding value to Dentsu’s existing strengths in media. The goal is to achieve a mid-teens return on equity by the plan’s completion.

• Jcr Pharmaceuticals (4552 JP) revenue dropped 23% to ¥33B in FY25, mainly driven by lower contractual payments and reduced renal segment revenue.
• R&D expenses surged 37% YoY to ¥15B resulting in operating loss of ¥6.65B in FY25.
• FY26 guidance signals back in black after one-time hurdles drag performance in FY25.

• AZN demonstrated continued positive growth momentum in Q1 FY12/25, with sustained strength in the Wealth Consulting business and ADVANTAGE CLUB formations.
• While operating profit was impacted by integration costs and business investments in the form of higher personnel costs and SG&A, we believe these investments will enhance the company’s position to monetize Japan’s demographic and wealth transfer megatrend.
• We think the company remains on track to meet its FY12/25 targets and deliver longer term growth.

• Polaris delivered strong FY3/25 results, outperforming guidance with strong underlying OP growth of 109.0% YoY, driven by both organic growth and the Minacia acquisition.
• Robust inbound tourism helped lift domestic RevPAR by 20.9% YoY, and the company surpassed its 10,000-room target ahead of its initial medium-term plan.
• The company also shifted toward a fixed-plus-variable rent operating model that enables stable earnings over the medium to long term. 

• On May 22, 2025, Startia Holdings, Inc. (hereafter, the Company) announced its new three-year mid-term management plan covering the period from FY2026/3 to FY2028/3.
• In addition, the Company made a surprise announcement of a commemorative dividend per share of JPY 8 at the end of the fiscal year to celebrate its 30th anniversary, bringing the total annual dividend per share for FY2026/3 to JPY 125, combined the previously announced regular dividend (interim of JPY 54 and year-end of JPY 63).
• The management team shares its sense of urgency that there is significant room for improvement in the Company’s P/E ratio, badly undervalued relative to its already high ROE (27%).

• Sumitomo Pharma (4506 JP) reported 27% YoY revenue growth during FY25, driven by North America.
• Restructuring and streamlining efforts help curb expenses and post a core operating profit of ¥43B during FY25.
• Sumitomo focus on future with “Reboot 2027” amid FY26 guidance of revenue drop because of Aptiom and forex. Core operating profit is expected to increase by 30%.

• GMO Internet (4784 JP) was created by the reverse takeover of a listed cad/media company by its parent company’s “internet infrastructure” business. GMO Internet Group ended up with ~98%.
• In the process, the stock rose 500%. Now, as part of its promise to the TSE allowing TSE Prime membership for the extraordinarily low-float target, the parent is offering shares.
• The squeeze has it at 180x Dec25e EPS, 111x EBIT, 70x book. The offering likely gets pulled and the stock isn’t shortable… so what next? Pain, and an ECLWO.

• The Tsuruha Holdings (3391 JP) and Welcia Holdings (3141 JP) AGMs to elect directors and approve the share exchange agreement to merge the two. 
• 10% Tsuruha shareholder Orbis objects to the merger ratio AND the later tender whereby Aeon goes to 51%, saying everything is underpriced. ISS/GlassLewis recommend voting against the merger.
• I haven’t seen the proxy reports but I’ve done the math. Investors/arbs should look at the possibilities/probabilities and understand what dependencies exist. Shareholders are not helpless, no matter the outcome.

• Does the underperformance since the recent results announcement provide an opportunity?
• While the company strategy is moving in the right direction, the pace of change is slow.
• With ownership of Japan Post Bank reduced to below 50%, there is potential change afoot there

• Q1-2 FY9/25 results met expectations, with the company’s diversified operations helping offset softness in Industrial Products and Life Science.
• A key positive was the acceleration of growth in Sustainability, driven by green technology and energy solutions, which reinforces its potential as a core earnings driver.
• Fine Chemicals remained resilient, backed by domestic demand for industrial rubber. 

• As confirmed last month, Trial will acquire Seiyu later this year, giving it access to 240 more stores to add to almost 350 already in operation.
• The prospect of combining Trial’s undeniable knowhow in retail tech and its laser-focused concern with reducing costs could cause rivals serious problems.
• Despite the obvious benefits, Trial’s share price has fallen to around the same it was a year ago largely due to concerns over OPM but profitability will improve fast.

• Since most Japanese companies at this point have more cash on hand than they need, it is only natural that they will step up shareholder returns, including share buybacks.
• The reason why many companies have more cash on hand than necessary due to lack of investment for growth is because they do not have a disciplined cash allocation.
• If the company does not have a disciplined cash allocation, share repurchases that lead to allocations to the most effective investments at the investor’s discretion are welcome to the investor.

• Seven Bank Ltd (8410 JP) has been the ugly duckling of Japan e-banks since it got competition in the form of Rakuten Bank (5838) and SBI Sumishin (7163).
• Last year, it was posited, and then confirmed, that Seven & I Holdings (3382 JP) wanted to sell down to de-consolidate. NTT Docomo wanted to buy a bank. 
• I thought it a good match but no deal has been done. So now we get a different deal – it’s weird for Itochu, but bodes well for Seven Bank

• Yageo Corporation (2327 TT) approached Shibaura Electronics (6957 JP) for a takeover at ¥4300. Shibaura dismissed them and asked Minebea Mitsumi (6479 JP) to overbid. They did at ¥4500. 
• Then Yageo overbid Minebea at ¥5400, who then overbid Yageo at ¥5500, who then re-overbid at ¥6200. Despite not having its FEFTA Approval in place, YAGEO overbid and launched. 
• The Minebea CEO objected. We don’t know status. Now the Shibaura Special Committee has paused, supporting but not recommending the Minebea bid and Neutral on Yageo. We are in limbo.

• The Shibaura Electronics (6957 JP) Board supports Minebea Mitsumi (6479 JP) JPY5,500 offer, but has shifted its recommendation from tendering to a neutral stance. 
• The Board maintains that it is not yet in a position to provide an opinion on Yageo’s JPY6,200 offer due to concerns on feasibility and synergies. 
• Minebea hopes Yageo will withdraw due to its failure to secure regulatory approvals. If Yageo secures the required approvals, Minebea will actively consider measures.

• Metaplanet’s secret weapon? Moving-strike warrants that raise equity into strength—fueling BTC buys while sidestepping the deep discounts typical of Japan’s small-cap raises.
• Forget buybacks. Metaplanet is redefining shareholder value by issuing stock, not retiring it—turning dilution into accretion via Bitcoin per-share growth.
• A 4.6x mNAV premium gives Metaplanet unmatched BTC buying power—creating a capital flywheel that most traditional treasuries can only envy.

• Fast Retailing (9983 JP) presents a mixed outlook characterized by strong earnings momentum tempered by some geopolitical and macroeconomic challenges. Analyst opinions are mixed but consensus is mostly = “Hold”.
• The stock started a pullback this week and is reaching a support zone that offers the possibility of entering LONG positions at a discounted price.
• This is a short-term tactical setup but the stock can be hold for the long run if the rally continues in the coming weeks.

• Ichiken’s FY03/25 revenue was JPY99.0bn, with operating profit at JPY6.9bn, and net income at JPY4.7bn.
• Construction business FY03/25 revenue reached JPY98.7bn, with operating profit at JPY8.7bn, orders rose 3.6% YoY.
• FY03/26 forecast: revenue JPY99.0bn, operating profit JPY5.4bn, net income JPY3.5bn, with a dividend of JPY140/share.

• Q1 FY12/25 results were ahead of expectations with +57.1% OP growth YoY.
• The core marriage agency business experienced steady growth, with both the Affiliate Business and the Directly Managed Lounge Business driving new membership growth with optimized marketing spend.
• IBJ is leveraging its core competencies in operating a leading matchmaking franchise model to expand into adjacent businesses and develop new earnings pillars, primarily the newly disclosed K Village Business segment and ‘NAYUTAS’, its Korean voice training and dance school operation. 

• Late April, Shin Etsu Chemical (4063 JP) announced a huge ¥500bn 200mm shares (10.2%) buyback. That was never ever going to happen. That needed a ¥2500 share price, not ¥4300+.
• But it was big, and started in late May. Today, they announced how. It is a “Japan ASR”, the Nomura version, this time with an interesting twist.
• In response to a couple of reader questions today, I provide a brief overview of how these things work. 

• Given the rapid aging of Japan’s population, if the current composition of the board of directors continues, the number of directors will further age in the future.
• A board that embraces diverse age range is likely to embrace people with diverse backgrounds and skillsets, and a diverse board composition is likely to have positive impact on management.
• In Japan, with strong peer pressure, CEOs controlling human resources, % independent directors and female board members in 40% and 15%, many companies are hesitant to hire talent they need.

• In FY2025/2, MORESCO Corporation (hereinafter referred to as “MORESCO” or “the Company”) reported net sales of JPY 34,374 mn (+7.8% YoY), driven by increased sales volumes in Japan and overseas, as well as revision to selling prices.
• Operating profit rose by only 13.6% YoY due to higher R&D expenses, while ordinary profit remained flat, weighed down by a decrease in foreign exchange gains and profits from equity-method investments.
• Profit attributable to owners of parent (hereinafter, net profit) fell by 21.1% YoY owing to a deterioration in extraordinary gains and losses. 

• Asahi Intecc (7747 JP) announced 9MFY25 result, with double-digit growth across all key parameters. Revenue increased 14% YoY to ¥91.8B, driven by 16% growth in medical division.
• The company has raised guidance for FY25 revenue and operating profit and reduced net profit guidance to reflect better-than-expected performance of medical division and booking of impairment loss.
• Asahi will buy back up to 8.8M shares (representing 3.2% of issued shares) for ¥15B. Buyback will be conducted from May 16, 2025 to October 31, 2025.

• Consolidated OP declined in Q4 FY3/25 (-40.7% QoQ), reflecting weakness in Semiconductors due to continued sluggishness in Industrial Equipment and higher SG&A triggered by the consolidation of a subsidiary.
• The segment OP for Semiconductors declined sharply (-68.6% QoQ), lowering the OP margin (Q3 FY3/25 3.4%, Q4 FY3/25 1.1%).
• As a result, the consolidated OP margin also declined (Q3 FY3/25 4.1%, Q4 FY3/25 2.5%).

• Friday 25 April, Toyota Industries (6201 JP) released earnings for last year, guidance for this year and a Bloomberg scoop suggested Toyota Motors chairman Akio TOYODA would launch an MBO.
• In some ways surprising, but activists/”noisy shareholders” and TSE guidance on dual listings caused pressure, and Toyota Motors was trying to walk the good governance walk.
• I discussed the situation here on Day 1, and here a few days later. Long-only shareholders sold. Today, Kyodo had a follow-up article. Then Nikkei. Looks more solid now. 

• Kyodo news agency reported that Toyota Industries (6201 JP) plans to accept a tender offer by Toyota Motor (7203 JP) and Toyota Chairman Akio Toyoda, potentially in May or June.
• The Nikkei reported that Toyota plans to borrow JPY3 trillion to fund the acquisition. These articles provide more clarity on price, composition of the offeror, financing structure, and timeline. 
• These articles increase the probability of a tender offer around JPY18,515 (JPY6 trillion market cap). At the last close, the gross spread was 12.1%.

• On 9 May Mitsubishi Logisnext Co., Ltd. (7105 JP) delayed earnings by 30 minutes. Shares popped. Then earnings were released, no deal, and shares crashed. Now they are rebounding.
• But they remain volatile and subject to dips like the one this AM -5% at one point. Fears may be due to the idea that first smoke here was Dec-2024.
• 5 months later, no deal yet. Bids were due pre-earnings but with tariffs and writedowns, one wonders if bidders were waiting for results.

• Since April 28th we traced a path for Toyota Motor (7203 JP)‘s stock price, first here (forecast: going down) and then here (forecast: potential 2-week pullback to 2578).
• Last week Toyota Motor (7203 JP)pulled back to 2598 (pretty close to our 2578 target). The stocks closed down for 2 weeks, as predicted. A rally may be starting.
• Rumors of an acceleratingof privatization bid for Toyota Industries (6201 JP)could act as a fresh catalyst for the stock—aligning with our model’s forecast from May 8th.

• TSE plans to mandate the development of IR system, but since most companies disclosed that they have already taken action, fewer companies will move to do something from now on.
• Analysis of IR disclosure and stock valuations showed that IR disclosure scores did not differ among the five groups of companies by percentage change in Tobin’s Q. 
• The fact that many companies haven’t been able to provide capital profitability and management strategies that investors seek has led to reluctance to hold briefings to communicate with overseas investors.

• Given recent – and ongoing developments – with Toyota Industries (6201 JP) and GMO Internet (4784 JP), I’m revisiting my NAVs.
• Preceding my comments on the Toyota Group and GMO, 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%.

• Matsuya Co Ltd (8237 JP) had a terrific FY2024, posting a new sales record at its Ginza store, the first since 1992. 
• There are worries that this year or next will be the peak given the ongoing decline in sales to locals, and if a strengthening Yen puts paid to tourist largesse.
• The same headwinds are hitting all the major department store firms, including Isetan Mitsukoshi Holdings Ltd (3099 JP),Takashimaya (8233 JP) and J Front Retailing (3086 JP).

• Kaken Pharmaceutical (4521 JP) witnessed 31% YoY revenue growth in FY25 to ¥94 billion on the back of flurry of one-time upfront payments, resulting in surge in profits too.
• Kaken’s major drug Clenafin saw revenue drop of 2% YoY to ¥17 billion on patent cliff, while Artz revenue grew 6% YoY to ¥19 billion.
• For FY26, Kaken expects revenue to fall 6% to ¥88 billion. No respite from immediate pangs of revenue loss from NHI drug price revision and generic competition for top-selling products.