Japan

In today’s briefing:

[Japan M&A] Son of Chairman/55%Owner Taking Imagica (6879) Private at 10x FCF, 4+x EBITDA. CHEAP.
Nissin Corp (9066 JP): A Rumoured Bain-Sponsored MBO?
Daiichi Jitsugyo (8059 JP): Full-year FY03/25 flash update
Gakken Holdings (9470 JP): 1H FY09/25 flash update
Inabata & Co (8098 JP): Full-year FY03/25 flash update
Monex Group Inc (8698 JP): Full-year FY03/25 flash update
Seria Co Ltd (2782 JP): Full-year FY03/25 flash update
Anicom Holdings (8715 JP): Full-year FY03/25 flash update
Yellow Hat Ltd (9882 JP): Full-year FY03/25 flash update
CELSYS (3663 JP): Q1 FY12/25 Flash update

[Japan M&A] Son of Chairman/55%Owner Taking Imagica (6879) Private at 10x FCF, 4+x EBITDA. CHEAP.

This deal should not come as a surprise. Bloomberg has an article out saying tycoons are taking companies private to avoid shareholder activism. It’s not just that.
The stated reasons (competitive environment requiring faster decision-making and significant restructuring) are all kinda hot garbage. This is being done at adjusted EV/EBITDA of 4x and 10x FCF.
And there are no synergies counted, and half of the Adjusted EV is net receivables+inventory equal to about 2mos of revenues. This is being done too cheaply. But…. TIJ baby…

Nissin Corp (9066 JP): A Rumoured Bain-Sponsored MBO?

Nissin Corp (9066 JP) shares were up 10.3% based on a Bloomberg report that it would be privatised through a Bain-sponsored MBO.
The deal is expected to exceed JPY100 billion. Assuming this refers to a market cap, the implied offer price is around JPY6,500 (21.5% premium to last close).
While the rumoured offer represents an all-time high share price, it is light compared to precedent and peer multiples. A long-dated offer makes it susceptible to a counterbid.

Daiichi Jitsugyo (8059 JP): Full-year FY03/25 flash update

FY03/25 results: Orders JPY206.3bn (+1.3% YoY), revenue JPY221.8bn (+18.1% YoY), operating profit JPY13.1bn (+44.1% YoY).
FY03/26 forecast: Orders JPY230.0bn (+11.5% YoY), revenue JPY220.0bn (-0.8% YoY), operating profit JPY12.0bn (-8.4% YoY).
DJK’s “V2030” strategy targets JPY18.0bn operating profit by FY03/31, with ROE of 10% or higher.

Gakken Holdings (9470 JP): 1H FY09/25 flash update

Revenue increased by JPY5.3bn YoY, driven by Kirihara Shoten’s addition and increased study guide sales.
Operating profit declined by JPY600mn due to rising costs in Healthcare and Welfare; Educational segment saw profit growth.
Net income rose by JPY652mn, aided by absence of prior stock sale loss and step acquisition gain.

Inabata & Co (8098 JP): Full-year FY03/25 flash update

FY03/25 saw a 9.4% YoY sales increase, driven by a weaker yen and strong Japan and Southeast Asia performance.
Operating profit rose 21.9% YoY due to higher sales and improved margins, while net income decreased slightly.
FY03/26 forecasts sales growth but profit decline, with concerns over US tariffs, inflation, and geopolitical issues.

Monex Group Inc (8698 JP): Full-year FY03/25 flash update

Consolidated net operating revenue was JPY17.0bn, down 2.4% YoY and 6.3% QoQ, with commissions received at JPY8.2bn.
US segment net operating revenue increased 3.3% YoY and 4.8% QoQ to USD76.0mn, with brokerage commissions at USD26.4mn.
Crypto Asset segment net trading income was JPY3.2bn, down 22.7% YoY and 27.3% QoQ, with SG&A expenses at JPY3.7bn.

Seria Co Ltd (2782 JP): Full-year FY03/25 flash update

Sales reached JPY236.3bn (+5.9% YoY) with operating profit at JPY16.8bn (+11.3% YoY) and net income JPY11.2bn (+14.2% YoY).
For FY03/26, Seria forecasts sales of JPY242.9bn (+2.8% YoY) and net income of JPY10.2bn (-9.1% YoY).
The company plans to open 120 directly managed stores and close 70, totaling 2,122 stores by FY03/26 end.

Anicom Holdings (8715 JP): Full-year FY03/25 flash update

Recurring revenue increased by 12.0% YoY to JPY67.7bn, driven by underwriting, investment, and other revenue growth.
Recurring profit rose 18.8% YoY to JPY4.9bn, aided by cost control, operational efficiency, and decreased expenses.
FY03/26 forecast anticipates record-high revenue but declining profit due to one-time AXA Direct policy transfer fees.

Yellow Hat Ltd (9882 JP): Full-year FY03/25 flash update

FY03/25 sales increased 5.1% YoY to JPY154.1bn, with operating profit up 6.7% YoY to JPY15.5bn.
Yellow Hat expanded sales of expendable auto parts and services, acquiring Y International Inc. for diversification.
FY03/26 projections: sales JPY170.0bn (+10.3% YoY), operating profit JPY15.9bn (+2.9% YoY), net income JPY11.4bn (+1.2% YoY).

CELSYS (3663 JP): Q1 FY12/25 Flash update

Celsys Q1 FY12/25 sales were JPY2.4bn (+19.4% YoY), with operating profit at JPY759mn (+34.2% YoY).
Creator Support segment sales reached JPY2.1bn (+23.0% YoY), driven by CLIP STUDIO PAINT’s global expansion.
Creator Platform segment sales were JPY345mn (+1.5% YoY), with ongoing development of a new platform service for FY12/26.

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May 11

Daily Brief Japan: Nissin Corp, Imagica Robot Holdings, Baudroie, Nihon Denkei, Kissei Pharmaceutical, NTT Data Corp, Torii Pharmaceutical, TSE Tokyo Price Index TOPIX and more

In today’s briefing:

[Japan M&A] Bloomberg Reports Bain MBO on Nissin (9066) May Come Monday – The Implied Price Is Light
Imagica (6879 JP): MBO Tender Offer at JPY795
TOPIX Inclusions: Who Is Ready (May 2025)
Nihon Denkei (9908 JP): Full-year FY03/25 flash update
Kissei Pharmaceutical (4547 JP): Steady FY25, Licensing Fees To Drag FY26, Margins To Stay Strong
Last Week in Event SPACE: NTT Data Corp, Zeekr, Shibaura Electronics, Swire Pacific/ThaiNamthip
(Mostly) Asia-Pac M&A: Torii Pharma, Mitsu. Shokuhin, Domain, Gold Road, Canvest, Shibaura, Tsuruha
With Transitional Measures Ending, Improving the Quality of Existing Listed Companies Will Be Key

[Japan M&A] Bloomberg Reports Bain MBO on Nissin (9066) May Come Monday – The Implied Price Is Light

Last year, Nissin Corp (9066 JP) started race-walking the good governance walk. The day they released earnings they announced crossholding sales and an overnight 23.61% ToSTNeT-3 Buyback (executed successfully).
They also expected 19% Net Income Growth (to go with accretion), and in November, nearly doubled their dividend on new payout policy (minimum 4% DOE).
Now, Bloomberg reports they are considering going private via a Bain MBO at ¥100bn+ (or a 30% premium).

Imagica (6879 JP): MBO Tender Offer at JPY795

Imagica Robot Holdings (6879 JP) has recommended a MBO tender offer from Shunjiro Nagase (President) at JPY795 per share, a 43.0% premium to the undisturbed price.
The offer is reasonable compared to historical trading ranges and is above the midpoint of the IFA DCF valuation range.
Irrevocables (55.40% ownership ratio) pave the way for deal completion. The tender runs from 12 May to 20 June (30 business days).

TOPIX Inclusions: Who Is Ready (May 2025)

By Janaghan Jeyakumar, CFA

Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
TOPIX Inclusions of Baudroie (4413 JP) and JX Advanced Metals (5016 JP) took place at the end of April 2025.
Core Concept Technologies Inc (4371 JP) continues to be in our watchlist as a potential TOPIX Inclusion candidate.

Nihon Denkei (9908 JP): Full-year FY03/25 flash update

Nihon Denkei’s FY03/25 consolidated sales grew 11.7% YoY, with a gross profit of JPY16.9bn and operating profit up 6.9% YoY.
The company announced FY03/26 earnings forecast with sales at JPY124.0bn, operating profit at JPY4.5bn, and EPS of JPY263.21.
INNOVATION2030 Ver.2.0 aims for growth by expanding into growth markets and enhancing global business amid macroeconomic uncertainty.

Kissei Pharmaceutical (4547 JP): Steady FY25, Licensing Fees To Drag FY26, Margins To Stay Strong

Kissei Pharmaceutical (4547 JP) reported 16.9% YoY jump in revenue during FY25 driven by Beova and Tavneos despite price revision pressures and generic competition.
The company has issued FY26 guidance of revenue rising 3.6%, with pharmaceuticals segment remaining flat dragged by lower overseas licensing fees.
The only trigger point at this moment happens to be the recent licensing deals signed by the company with various players gives it an opportunity to expand offerings and market.

Last Week in Event SPACE: NTT Data Corp, Zeekr, Shibaura Electronics, Swire Pacific/ThaiNamthip

We have a deal in NTT Data Corp (9613 JP). It’s big, liquid, and a great place to hide for long-only investors who are bearish the market.
Li Shufu-backed Geely Auto (175 HK) offers an ordinary 13.6% premium for 65.7-held Zeekr (ZK US). Li/Geely have the necessary votes to force a privatisation. But still might bump terms.
Yageo Corporation (2327 TT) has now strongly overbid Minebea’s weak overbid of Yageo’s strong overbid of Minebea’s weak overbid of Yageo’s initial hostile offer for Shibaura Electronics (6957 JP).

(Mostly) Asia-Pac M&A: Torii Pharma, Mitsu. Shokuhin, Domain, Gold Road, Canvest, Shibaura, Tsuruha

I tally 49 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma.
Five new deals discussed on Smartkarma this week: SmartPay Holdings (SMP AU), NTT Data Corp (9613 JP), Zeekr (ZK US), Torii Pharmaceutical (4551 JP), and Mitsubishi Shokuhin (7451 JP).
Key updates/news took place on: Domain Holdings Australia (DHG AU), Gold Road Resources (GOR AU), Canvest Environmental Protection Group (1381 HK), Shibaura Electronics (6957 JP), Tsuruha Holdings (3391 JP).

With Transitional Measures Ending, Improving the Quality of Existing Listed Companies Will Be Key

There are two possible ways to improve the quality of the TSE: one is to exit the market and the other is to improve quality in existing companies.
While few companies are still exiting through de-listing, fewer companies will migrate to other markets going forward, so the quality of existing listed companies must be improved.
Two years after the “TSE’s request,” the number of companies with P/Bs of less than 1x has not yet noticeably decreased, indicating that quality improvement is still a ways off.

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May 10

Daily Brief Japan: Shionogi & Co, Soda Nikka, Beenos Inc, Kanematsu Corp, Digital Arts, Nichiban Co Ltd, Nippon Denko, Okinawa Cellular Telephone, Softcreate Holdings, United Arrows and more

In today’s briefing:

Shionogi & Co (4507 JP): Torii Acquisition to Broaden Portfolio; High R&D to Dent Profitability
Soda Nikka (8158 JP): Full-year FY03/25 flash update
Beenos Inc (3328 JP): 1H FY09/25 flash update
Kanematsu Corp (8020 JP): Full-year FY03/25 flash update
Digital Arts (2326 JP): Full-year FY03/25 flash update
Nichiban Co Ltd (4218 JP): Full-year FY03/25 flash update
Nippon Denko (5563 JP): Q1 FY12/25 flash update
Okinawa Cellular Telephone (9436 JP): FY FY03/25 Flash Update
Softcreate Holdings (3371 JP): Full-year FY03/25 flash update
United Arrows (7606 JP): Full-year FY03/25 flash update

Shionogi & Co (4507 JP): Torii Acquisition to Broaden Portfolio; High R&D to Dent Profitability

Shionogi & Co (4507 JP) is acquiring Torii Pharmaceutical, as well as the pharmaceutical business of Japan Tobacco and U.S. group company Akros Pharma (sub-subsidiary of Japan Tobacco) for ~¥160B.
With minimum overlap in focus areas, Shionogi believes that the transaction will create a leading company that delivers innovative pharmaceuticals. However, R&D expenses of the combined company will remain elevated.
Considering the promising pipeline, we are hopeful on the long-term growth prospect of the combined company. Shionogi is scheduled to announce FY25 result on May 12.

Soda Nikka (8158 JP): Full-year FY03/25 flash update

Revenue increased to JPY65.1bn (+1.6% YoY), with operating profit at JPY2.1bn (-4.7% YoY) and net income at JPY2.2bn (+18.6% YoY).
FY03/26 forecast anticipates revenue of JPY70.5bn (+8.2% YoY) and operating profit of JPY2.3bn (+11.0% YoY).
The company raised FY03/27 financial targets, projecting consolidated net income of JPY2.4bn or more, with ROE at 8%.

Beenos Inc (3328 JP): 1H FY09/25 flash update

Q2 FY09/24 results show a 2.1% YoY GMV decrease to JPY57.6bn and a 40.5% YoY revenue decline.
In Q2 FY09/25, GMV increased due to marketing initiatives and new features, with total membership surpassing 6mn.
BEENOS’s Q2 FY09/25 progress towards full-year targets was 50.1% for GMV and 52.0% for revenue.

Kanematsu Corp (8020 JP): Full-year FY03/25 flash update

Company revenue reached JPY1.1tn, a 6.6% YoY increase, achieving 95.5% of the full-year forecast.
Operating profit decreased 4.1% YoY to JPY42.1bn, with SG&A expenses increasing 8.4% YoY to JPY115.1bn.
Profit attributable to owners rose 18.3% YoY to JPY27.5bn, with ROE at 16.5% and ROIC at 7.6%.

Digital Arts (2326 JP): Full-year FY03/25 flash update

Digital Arts forecasts FY03/26 sales of JPY12.6bn, operating profit of JPY6.2bn, and net income of JPY4.2bn.
The company projects FY03/26 cost of sales at JPY3.3bn, with significant increases in labor and communication costs.
Digital Arts plans a JPY95.0 annual dividend per share, including a JPY5.0 commemorative dividend for its 30th anniversary.

Nichiban Co Ltd (4218 JP): Full-year FY03/25 flash update

For FY03/25, the company reported revenue of JPY49.5bn (+5.5% YoY) and operating profit of JPY2.6bn (+24.7% YoY).
Revenue growth was driven by the healthcare field, price revisions, and increased demand for CARELEAVES™ and ROIHI-TSUBOKO.
The company forecasts FY03/26 revenue of JPY51.5bn (+4.1% YoY) and operating profit of JPY3.0bn (+16.0% YoY).

Nippon Denko (5563 JP): Q1 FY12/25 flash update

Revenue for FY12/25 was JPY19.4bn, a 9.4% YoY increase, with operating profit rising 22.6% YoY to JPY1.0bn.
The Ferroalloy business experienced a YoY profit decline, while Functional Materials and Incineration Ash Recycling saw profit growth.
Nippon Denko forecasts a YoY decrease in revenue and recurring profit for FY12/25, citing manganese ore market downturn.

Okinawa Cellular Telephone (9436 JP): FY FY03/25 Flash Update

For FY03/25, the company reported operating revenue of JPY84.3bn (+8.1% YoY) and net income of JPY12.4bn (+2.3% YoY).
The company revised FY03/25 revenue forecast to JPY83.0bn, citing higher au Denki and handset sales, with increased expenses.
FY03/26 forecasts include operating revenue of JPY85.0bn (+0.8% YoY) and capex investment of JPY6.9bn (+20.3% YoY).

Softcreate Holdings (3371 JP): Full-year FY03/25 flash update

FY03/25 revenue grew 10.9% YoY to JPY31.0bn, with operating profit at JPY5.5bn and net income at JPY3.5bn.
EC Solutions revenue increased 6.9% YoY to JPY16.6bn, driven by e-commerce site development and cloud services.
FY03/26 forecast: revenue JPY33.5bn, operating profit JPY6.0bn, with growth in EC Solutions and IT Solutions segments.

United Arrows (7606 JP): Full-year FY03/25 flash update

FY03/25 revenue grew 12.4% YoY, driven by proactive inventory strategies and expanded product lineup, with GPM at 52.1%.
FY03/26 forecasts include 9.8% YoY revenue growth, 12.2% YoY gross profit increase, and 12.7% YoY operating profit growth.
FY03/25 net income fell 12.2% YoY due to impairment losses, store relocations, and higher corporate tax rate.

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May 09

Daily Brief Japan: NTT Data Corp, Mitsubishi Shokuhin, Shibaura Electronics, Tsuruha Holdings, Toyota Motor, Resona Holdings, TSE Tokyo Price Index TOPIX and more

In today’s briefing:

[Japan M&A] NTT (9432) Overpays To Buy Out NTT Data (9613) Minorities
[Japan M&A] MitCorp (8058) Buys Out Subsidiary Mitsubishi Shokuhin (7451) – Bad Process, Bad Price
[Japan M&A] YAGEO Overbids Minebea’s Overbid of YAGEO’s Overbid of Minebea’s Overbid – The Endgame
NTT DATA (9613 JP): NTT (9432 JP) Tender Offer at JPY4,000
Shibaura Electronics (6957 JP): End Game Nears as Yageo Launches Its Hostile Tender at JPY6,200
Mitsubishi Shokuhin (7451 JP): MitCorp (8058 JP) Light Tender Offer at JPY6,340
[Japan Activism] ISS Comes Out Supporting Orbis Against Tsuruha/Welcia Merger Ratio
Toyota (7203 JP) Post-Earnings Outlook Amid ¥180B Estimated U.S. Tariff Cost
Japanese Big Cap Banks – Focusing on Strategic Equity Holdings as BoJ Likely to Defer Rate Hikes
Common Attitudes Toward IPOs Are Found in Parent-Subsidiary Listings

[Japan M&A] NTT (9432) Overpays To Buy Out NTT Data (9613) Minorities

Pre-Open, we got a Nikkei article which suggested four different prices possible. We got something in the middle. I think NTT is probably overpaying here.
There is a fair bit of transparency in the documents and valuation. That is encouraging. There are no synergies counted in the fair calculations. That is discouraging.
This will not trade like a “normal” Japan risk arb situation. There will be nuances.

[Japan M&A] MitCorp (8058) Buys Out Subsidiary Mitsubishi Shokuhin (7451) – Bad Process, Bad Price

Mitsubishi Shokuhin (7451 JP) was supposed to announce earnings at 2pm JST. They didn’t. Someone (or people) decided that meant there might be a takeover. There was.
The stock popped nearly 15% to ¥6,200, paused, was flat for an hour, then popped again, closing at ¥6,150/share. Post-close, we get a deal at ¥6,340/share.
A disappointing process. At ¥6,240, the Special Committee said it was “far from a standard that takes into account the interests of TargetCo’s minority shareholders.” At ¥6,340, they dealt. Aaaargh.

[Japan M&A] YAGEO Overbids Minebea’s Overbid of YAGEO’s Overbid of Minebea’s Overbid – The Endgame

Yageo Corporation (2327 TT) has now strongly overbid Minebea’s weak overbid of Yageo’s strong overbid of Minebea’s weak overbid of Yageo’s initial hostile offer for Shibaura Electronics (6957 JP).
We are now 40% higher than the initial bid and the best bid is approaching the top end of Valuation Agent’s top-of-DCF-range prices. There may be a bit more. Maybe.
The question now is only whether Minebea responds. If it does, there is a little juice left, but if not, that’s it. It should get done.

NTT DATA (9613 JP): NTT (9432 JP) Tender Offer at JPY4,000

NTT Data Corp (9613 JP) has recommended a tender offer from NTT (Nippon Telegraph & Telephone) (9432 JP) at JPY4,000 per share, a 33.7% premium to the last close.
The Nikkei earlier reported on the offer. The offer represents an all-time high and is attractive compared to historical trading ranges, peer multiples and precedent transactions.
The offer could be considered light as it is below the midpoint of the target IFA’s DCF valuation range. However, the shareholder structure suggests a done deal.

Shibaura Electronics (6957 JP): End Game Nears as Yageo Launches Its Hostile Tender at JPY6,200

Yageo Corporation (2327 TT) has revised its tender offer for Shibaura Electronics (6957 JP) to JPY6,200 per share, a 12.7% premium to Minebea Mitsumi (6479 JP)’s JPY5,500 offer.
There are factors supporting Minebea again outbidding Yageo and Minebea withdrawing its offer. Minebea is in a predicament as Yageo has established that it wants Shibaura at any cost.
The most likely scenario is that Minebea withdraws its tender and the Board switches to a neutral opinion due to its ongoing non-price-related concerns.

Mitsubishi Shokuhin (7451 JP): MitCorp (8058 JP) Light Tender Offer at JPY6,340

Mitsubishi Shokuhin (7451 JP) has recommended a tender offer from Mitsubishi Corp (8058 JP) at JPY6,340 per share, a 17.2% premium to the undisturbed price.
While the offer represents an all-time high, it is materially below the midpoint of the IFA DCF valuation range.
The light offer resulted from an unusually long process, with twelve rounds of proposals. However, the shareholder structure suggests a done deal.

[Japan Activism] ISS Comes Out Supporting Orbis Against Tsuruha/Welcia Merger Ratio

Large Tsuruha Holdings (3391 JP) investor Orbis Investments last month said they were against the Tsuruha/Welcia merger ratio. They wanted a cash takeover above Aeon’s Oasis buy price from 2024.
Influential shareholder proxy advisor ISS has apparently come out recommending shareholders vote against. That’s a start, but the hard work needs to be Orbis talking to domestic passive managers.
Getting 90% of foreign active managers as of end-February would make it a very close-run thing, but Orbis really needs some more to show up against the ratio.

Toyota (7203 JP) Post-Earnings Outlook Amid ¥180B Estimated U.S. Tariff Cost

By Nico Rosti

Toyota Motor (7203 JP) expects U.S. tariffs, material costs and a weak(er) dollar to dent profits. The automaker estimated the levies directly costing it 180 billion yen in April/May.
The stock fell after the company reported its fiscal-fourth-quarter results on Thursday. Guidance for the coming year came in lower than expected, with tariffs taking a bite out of profits.
In a previous insight we flagged the stock as overbought; those model targets remain valid. Here, we analyze updated support to gauge the pullback’s potential depth.

Japanese Big Cap Banks – Focusing on Strategic Equity Holdings as BoJ Likely to Defer Rate Hikes

By Victor Galliano

BoJ’s lower GDP growth forecasts add weight to the rate hike deferral; we focus on big-cap banks that have more in the tank than high gearing to rising benchmark rates
An increasingly important factor, in our view, is the share of strategic equity holdings relative to market capitalization; Kyoto is top on this metric, followed by Shizuoka, Resona and Mizuho
With the lack of the rate hike catalyst in the near term, we remove SMFG from the buy list and would look to lighten holdings selectively in other Japanese banks

Common Attitudes Toward IPOs Are Found in Parent-Subsidiary Listings

The reason for slower reforming Growth Market seems to weigh on consideration for companies undergoing IPO review and coordination with stakeholders in IPO business. The investor’s perspective is missing here.
Growth market listed companies that do not receive overseas investor engagement have more difficulty than prime market companies in raising their market capitalization to meet listing retention criteria.
Behind the failure to grow after IPOs are many managers who view IPO as place to cash in their equity rather than place to obtain the capital needed for growth.

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May 08

Daily Brief Japan: BayCurrent Consulting , Torii Pharmaceutical, NTT Data Corp, Lifenet Insurance Company, Hennge KK, Intelligent Wave, Shinmaywa Industries, Hogy Medical and more

In today’s briefing:

Nikkei 225 Sep25 Rebal: One ADD, One DELETE Still Probable, Kokusai a Question but $3bn+ a Side
[JAPAN M&A] Shionogi (4507) Bids for Torii Pharma (4551) – Split Price Deal on Weak Transparency
NTT (9432) To Overpay To Take Over NTT Data (9613) Subsidiary?
Torii Pharma (4551 JP): Shionogi & Co (4507 JP) JPY6,350 Tender Offer
Lifenet Insurance Company (7157 JP) – Revitalizing Future Growth
Hennge KK (4475 JP): 1H FY09/25 flash update
Intelligent Wave (4847 JP): Q3 FY06/25 flash update
Shinmaywa Industries (7224 JP): Full-year FY03/25 flash update
Hogy Medical (3593 JP): Premium Kits Carry It Through, Recovery in Sight in H2FY26

Nikkei 225 Sep25 Rebal: One ADD, One DELETE Still Probable, Kokusai a Question but $3bn+ a Side

The March 2025 Nikkei 225 review came out with a sparse set of changes. That gives us hints for the September 2025 review.
For the moment, that leads me to believe we get ONE ADD and ONE DELETE though up to three of each is possible.
Even with only one name replacement, there are some big side trades and US$3.2bn a side to trade for now.

[JAPAN M&A] Shionogi (4507) Bids for Torii Pharma (4551) – Split Price Deal on Weak Transparency

Today after the close, Shionogi & Co (4507 JP) and Torii Pharmaceutical (4551 JP) announced an agreed deal whereby Shionogi would launch a Tender Offer to take over Torii.
Torii Pharmaceutical shares rallied sharply after earnings so the actual TOB Price of ¥6,350/share is not a particularly high premium vs undisturbed. Valuation transparency is limited. Synergies are not included.
But the price is an ATH, the company is heavily de-levered (so a 23% premium to undisturbed is decent) and the minimum threshold is not high.

NTT (9432) To Overpay To Take Over NTT Data (9613) Subsidiary?

This morning, the Nikkei says NTT (Nippon Telegraph & Telephone) (9432 JP) has decided, 5 years after taking Docomo private, to buy out minorities in NTT Data Corp (9613 JP).
NTT owns 58%. The article suggests a “30-40% premium” (¥3,900-4,200) “is likely”, with the parent spending ¥2-3trln (¥3,380-5,060) on the deal. The numbers are a bit all over the place.
It will go limit up today to ¥3,492. A deal should be announced today after the close when NTT Data reports earnings. There’s a cool index event too.

Torii Pharma (4551 JP): Shionogi & Co (4507 JP) JPY6,350 Tender Offer

Torii Pharmaceutical (4551 JP) has recommended a tender offer from Shionogi & Co (4507 JP) at JPY6,350 per share, a 13.8% premium to the last close.
Despite the lack of an auction and low takeover premium, the offer is attractive compared to historical trading ranges and peer multiples and represents an all-time high.
Japan Tobacco (2914 JP), the controlling shareholder, has provided an irrevocable. The required minority acceptance rate is achievable as the offer is reasonable.

Lifenet Insurance Company (7157 JP) – Revitalizing Future Growth

By Astris Advisory Japan

LIFENET is a pure-play online life insurance company with a solid track record, revamping its strategy to revitalize growth.
The company has initiated a three-pronged strategy, encompassing tech & services, rebranding, and an ‘embedded’ strategy to integrate life insurance products seamlessly into partner digital ecosystems with engaged customers.
Key partnerships with KDDI Group (9433) and SMBC Group provide a competitive advantage, and the group credit life insurance offered to mortgage customers of au Jibun Bank, KDDI Group’s online banking subsidiary, has the hallmarks of a new earnings pillar.

Hennge KK (4475 JP): 1H FY09/25 flash update

Revenue increased 33.6% YoY to JPY5.2bn, with HENNGE One business revenue at JPY4.9bn (+35.2% YoY).
Operating profit rose 72.6% YoY to JPY1.1bn, with a margin of 21.5% (+4.9pp YoY).
Gross profit was JPY4.5bn (+36.8% YoY), and SG&A expenses increased to JPY3.4bn (+28.0% YoY).

Intelligent Wave (4847 JP): Q3 FY06/25 flash update

Orders increased 17.0% YoY to JPY16.1bn; order backlog rose 51.4% YoY to JPY21.2bn, driven by infrastructure projects.
Cumulative Q3 sales, operating profit, recurring profit, and net income were 72.1%, 64.2%, 63.8%, and 64.4% of FY06/25 forecast.
Cloud services sales grew 39.5% YoY to JPY2.5bn; order backlog at JPY10.9bn, up 48.4% YoY.

Shinmaywa Industries (7224 JP): Full-year FY03/25 flash update

The company achieved YoY revenue and profit growth, with operating profit up 18.7% and net income up 23.1%.
The Special Purpose Truck business anticipates YoY profit growth, driven by selling price hikes and normalized production activity.
The Aircraft business expects increased orders and production volumes for Boeing components, despite a temporary lull in production.

Hogy Medical (3593 JP): Premium Kits Carry It Through, Recovery in Sight in H2FY26

Hogy Medical (3593 JP) reported flat sales of ¥39.1B in FY25. However, sales from Premium kits rose 18%. Surgical kits category contributed 66% of total revenue.
Higher costs dented operating margin by 100 bps while net profit declined 46% YoY to ¥1.5B due to higher tax outgo.
The company guided FY26 sales to grow 7% to ¥41.8B, with profits also expected to witness mid to high single digit growth.

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May 07

Daily Brief Japan: Nihon Parkerizing, TSE Tokyo Price Index TOPIX, Ricoh Leasing and more

In today’s briefing:

Nihon Parkerizing (4095) – 3mos Left on Big Buyback
The Postponement of the Parent-Subsidiary Listing Issue Provides Further Investment Opportunities
Ricoh Leasing (8566 JP): Full-year FY03/25 flash update

Nihon Parkerizing (4095) – 3mos Left on Big Buyback

Last year in August, Nihon Parkerizing (4095 JP) announced a large buyback – up to 12.0mm shares (9.6%) spending up to ¥15.0bn over the next 11.5mos.
So far, they have spent ¥9.1bn buying back 7.3mm shares. That’s ¥5.9 left to spend in 3mos.
It’s worth a look to see how this has evolved and how it might evolve into the end of the buyback. And it’s cheap, though tariff uncertainty exists.

The Postponement of the Parent-Subsidiary Listing Issue Provides Further Investment Opportunities

The dissolution of parent-subsidiary listing was achieved through the sale of a portion of the listed subsidiary’s equity interest. The postponement of this issue is noted as an investment opportunity.
The status change of the listed subsidiary doesn’t address concerns regarding the interests of the subsidiary’s minority shareholders, nor does it implement restructuring of the parent company’s entire business portfolio.
While investors are disappointed that the problem has been postponed, it also means that there are still many investment opportunities remaining, including for listed affiliates.

Ricoh Leasing (8566 JP): Full-year FY03/25 flash update

Revenue increased to JPY312.2bn (+1.2% YoY), with gross profit at JPY48.5bn (+6.5% YoY) and operating profit at JPY21.7bn (+3.4% YoY).
Contract execution volume rose significantly in logistics facilities, with revenue at JPY9.9bn (+65.0% YoY) and operating profit at JPY2.1bn (+84.4% YoY).
For FY03/26, the company forecasts revenue of JPY320.0bn (+2.5% YoY) and a dividend per share increase to JPY185.0.

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May 06

Daily Brief Japan: Simplex Holdings and more

In today’s briefing:

Simplex Holdings (4373 JP) – Disciplined Delivery and Expecting Sales Growth Acceleration

Simplex Holdings (4373 JP) – Disciplined Delivery and Expecting Sales Growth Acceleration

By Astris Advisory Japan

Results in line, demonstrating resilience – FY3/25 results were in line with guidance, as Simplex responded effectively in driving a notable earnings recovery in H2 FY3/25.
Orders and backlog growth were robust, denoting high earnings visibility.
Management provided clarity over the insurance business, which will continue as part of Financial Retail, and FY3/26 guidance points to sustained sales and earnings growth YoY in the high teens.

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May 05

Daily Brief Japan: Toyota Industries, Makino Milling Machine Co, TSE Tokyo Price Index TOPIX and more

In today’s briefing:

Weekly Deals Digest (04 May) – Toyota Industries, Shibaura, Dickson, HKBN, Meilan Airport, Soundwill
Merger Arb Mondays (05 May) – Makino, Shibaura, 7&I, Dickson, Meilan, Soundwill, Smartpay, Pointsbet
Pre AGM Annual Securities Report Disclosure as a Clue to a True Dialogue with Investors

Weekly Deals Digest (04 May) – Toyota Industries, Shibaura, Dickson, HKBN, Meilan Airport, Soundwill

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: Contemporary Amperex Technology (CATL) (300750 CH) is set to launch an H Share listing to raise US$5 billion.
Event-Driven developments: Toyota Industries (6201 JP), Shibaura Electronics (6957 JP), Dickson Concepts Intl (113 HK), HKBN Ltd (1310 HK), Hainan Meilan International Airport (357 HK), Soundwill Holdings (878 HK).

Merger Arb Mondays (05 May) – Makino, Shibaura, 7&I, Dickson, Meilan, Soundwill, Smartpay, Pointsbet

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: Smartpay Holdings (SPY NZ), Insignia Financial (IFL AU), ENN Energy (2688 HK), Oneconnect Financial Technology (6638 HK), Seven & I Holdings (3382 JP), Smart Share Global (EM US).
Lowest spreads: Bright Smart Securities And (1428 HK), Shibaura Electronics (6957 JP), Abacus Storage King (ASK AU), Makino Milling Machine Co (6135 JP), Sinarmas Land (SML SP).

Pre AGM Annual Securities Report Disclosure as a Clue to a True Dialogue with Investors

Based on experience with “TSE’s request,” it’s impossible to request the same level of disclosure from every company. Companies that overseas investors can target should be requested to disclose proactively.
This “FSA’s request” is expected to potentially cause companies to lose the effectiveness of the tactics they have used to control AGMs. Future steps are expected.
The slowdown in profit margin growth may also increase calls for improved corporate governance practices, with more companies reducing cross-shareholdings and launching stronger shareholder returns.

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May 04

Daily Brief Japan: Sankyo Co Ltd, Shibaura Electronics, Toyota Industries, Oisix ra daichi and more

In today’s briefing:

Asian Dividend Gems: Sankyo Co
(Mostly) Asia-Pac M&A: Ainsworth Game, Bright Smart, PointsBet, Dickson Concepts, Canvest, Shibaura
Last Week in Event SPACE: Toyota, Rio Tinto, Hainan Meilan, Fujitsu General
Oisix: Major Growth Expected in Foodtech

Asian Dividend Gems: Sankyo Co

By Douglas Kim

Sankyo is a leading Japanese maker of Pachinko and Pachislot machines. The company has a consistent record of generating positive free cash flow and operating cash flow.
It trades at 6x EV/EBITDA (2025E) and P/E of 9.5x (2025E). Its net margin improved from 9.9% in 2021 to 21.8% in 2022, and 27% in 2024.
Sankyo has also been aggressively buying back its shares in the past five years. We believe Sankyo could continue to outperform the market in the next 1-2 years.

(Mostly) Asia-Pac M&A: Ainsworth Game, Bright Smart, PointsBet, Dickson Concepts, Canvest, Shibaura

I tally 49 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma.
Four new deals discussed on Smartkarma this week: Ainsworth Game (AGI AU), Bright Smart Securities (1428 HK), Hainan Meilan International Airport (357 HK), and of course, Toyota Industries (6201 JP).
Key updates/news took place on: PointsBet Holdings (PBH AU), Gold Road Resources (GOR AU), Dickson Concepts Intl (113 HK), Canvest Environmental Protection Group (1381 HK), and Shibaura Electronics (6957 JP).

Last Week in Event SPACE: Toyota, Rio Tinto, Hainan Meilan, Fujitsu General

Toyota Chair TOYODA made a proposal to take over Toyota Industries (6201 JP), not because he loves forklifts etc; but an opportunistic way to buy a large block of Toyota.
Rio Tinto Ltd (RIO AU) shareholders voted down Palliser’s proposal to review its dual-company structure. That was the right outcome.
Hainan Meilan (357 HK)‘s H-share Offer price of HK$10.62/share is not compelling; but it’s not meant to be, as the SPA Buyer and Seller are ultimately controlled by Hainan SASAC.

Oisix: Major Growth Expected in Foodtech

By Michael Causton

Given Japan’s growing interest in food-based health solutions, multiple players are looking to build businesses in the field across gut health and dietary solutions for the old and infirm.
Oisix, the leading online food retailer has developed an incubator for start ups in this area.
It is hoping to create a mini silicon valley for food tech businesses.

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May 03

Daily Brief Japan: Toyota Industries, Otsuka Holdings, Nidec Corp, Kyowa Kirin Co Ltd, Sosei Group, TSE Tokyo Price Index TOPIX and more

In today’s briefing:

StubWorld: On Valuing Toyota Industries (6201)’s Stub Ops
Otsuka Holdings (4578 JP): Rexulti Drives 1Q25 Result; Label Expansion And Acquisition Augur Well
Nidec (6594 JP): Low Exposure to Trade War
Kyowa Kirin (4151 JP): Muted 1Q25 Result; 2025 Guidance Reaffirmed; Near-Term Pain to Continue
Sosei Group (4565 JP): Q1 FY12/25 flash update
Substantial “pre AGM Filing of Annual Securities Reports” Will Be After 2027

StubWorld: On Valuing Toyota Industries (6201)’s Stub Ops

Yes, I agree with Travis Lundy that the ¥6tn headline price tag for Toyota Industries (6201 JP) backs out a ~6x forward EBITDA for the unlisted stub ops.
Preceding my comments on the Toyota Group 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%.

Otsuka Holdings (4578 JP): Rexulti Drives 1Q25 Result; Label Expansion And Acquisition Augur Well

Otsuka Holdings (4578 JP) reported 12% YoY growth in revenue in 1Q25, as pharmaceuticals sales grew backed by a 35% YoY growth in Rexulti revenue to ¥75.7B.
The company reiterated 2025 guidance. Higher costs to dent margins with subdued sales of Lonsurf, Jynarque.
Indication expansion of Rexulti and Araris acquisition augur well for the company from a mid to long term perspective.

Nidec (6594 JP): Low Exposure to Trade War

By Scott Foster

Geographically diversified production, gearing to growth technologies, and consolidation of operations should support sales and profits in a difficult political and economic environment.
Negatives largely in the price, but uncertainty over tariffs, exchange rates, recession, and the outcome of the takeover bid for Makino Milling also remains to be seen.
The shares have rebounded from their recent sell-off but are still selling at only 15x projected EPS for FY Mar-26, the lowest P/E ratio in more than a decade.

Kyowa Kirin (4151 JP): Muted 1Q25 Result; 2025 Guidance Reaffirmed; Near-Term Pain to Continue

Kyowa Kirin Co Ltd (4151 JP) announced muted 1Q25 performance, with flat revenue and 50%+ drop in operating and net profits. Drug price revision and competition are dragging Japan revenue.
Kyowa Kirin guided for 2025 revenue and operating profit of ¥478B (-4% YoY) and ¥80B (-16% YoY), respectively. The company expects 5% YoY decline in 2025 net profit to ¥57B.
Since our last insight on Kyowa Kirin, shares lost ~15%. We opined “amid gloomy outlook, Kyowa Kirin shares will need time to recover.” Our take on the company remains same.

Sosei Group (4565 JP): Q1 FY12/25 flash update

Revenue increased 44.1% YoY to JPY6.6bn, driven by Quviviq® revenue and milestone payments in Q1 FY12/25.
R&D expenses rose 20.4% YoY to JPY3.8bn, influenced by increased R&D investment and a weaker yen.
Core operating loss was JPY625mn, improved from JPY931mn in Q1 FY12/24, reflecting reduced non-cash and one-time expenses.

Substantial “pre AGM Filing of Annual Securities Reports” Will Be After 2027