Japan

In today’s briefing:

Toyota Industries (6201) – Thinking About How To Value a ¥6trln Bid
Shibaura Elec (6957) – Minebea Overbids Yageo’s Overbid of Minebea’s Overbid of Yageo – ¥5,500
Shibaura Electronics (6957 JP): MinebeaMitsumi Outbids Yageo for a Second Time
SONY (6758) | Going into Earnings
Ebay’s Qoo10 Surges on K-Style Boom
Tokyo Electron (8035 JP): Full-year FY03/25 flash update
Hakuto Co Ltd (7433 JP): Full-year FY03/25 report update
Meiwa Corp (8103 JP): Full-year FY03/25 flash update
Japan Investment Adviser Co (7172 JP): Q1 FY12/25 flash update
Nihon Chouzai (3341 JP): Full-year FY03/25 flash update

Toyota Industries (6201) – Thinking About How To Value a ¥6trln Bid

Toyota Industries is a relatively complicated business. It owns lots of shares of Toyota and other companies. It has a financing business, and runs ¥500+bn of EBITDA.
As of 31 March 2025, the “Enterprise Value” of the Operating and Financing Business together was about ¥2.2trln. The “Asset Ownership Business” was at ¥2.8trln (1yr ago it was ¥4trln).
If you think buying the Operating Business at 6x EBITDA is appropriate, that means the Asset Ownership Business block buy gets done at 31-March-2025 prices. Worth thinking about.

Shibaura Elec (6957) – Minebea Overbids Yageo’s Overbid of Minebea’s Overbid of Yageo – ¥5,500

A Nikkei article today suggested Minebea Mitsumi (6479 JP) would overbid Yageo’s dramatic 20% overbid of Minebea’s early ¥4,500 overbid of Yageo’s initial ¥4,300 bid for Shibaura Electronics (6957 JP).
Now the news is out. MinebeaMitsumi has bid ¥5,500. Shibaura Electronics has endorsed. This is bang-in-line with the expected path. The question is now YAGEO’s overbid, expected 7 May.
If I were YAGEO, I would wait for Shibaura’s earnings a couple of days later, then overbid by ¥100-150 and go for 35 days. There’s optionality there.

Shibaura Electronics (6957 JP): MinebeaMitsumi Outbids Yageo for a Second Time

Minebea Mitsumi (6479 JP) has revised its tender offer for Shibaura Electronics (6957 JP) to JPY 5,500, representing a 1.9% premium over Yageo Corporation (2327 TT)’s JPY 5,400 hostile offer.
There are factors supporting Yageo again outbidding Minebea, and Yageo calling it quits. A revised Yageo could potentially touch JPY6,000, 40% higher than its first offer.
The shares are trading 7.1% above Minebea’s offer, factoring in a fair chunk of the upside from an ongoing bidding war. Take profits as risk/reward looks unattractive.

SONY (6758) | Going into Earnings

Content-Driven growth: Strong performance in music and gaming supports Sony’s shift toward high-margin content, insulating it from trade and macro headwinds.
Upcoming catalysts: Spin-off of Sony Financial and potential restructuring could unlock value and address the long-standing conglomerate discount.
Attractive valuation: Trading at 14x EV/EBIT with defensive sector exposure, Sony remains undervalued relative to global peers despite YTD outperformance.

Ebay’s Qoo10 Surges on K-Style Boom

By Michael Causton

Qoo10 is tiny in comparison to Amazon, Rakuten and Yahoo but it punches well above its weight by specialisation.
The online mall’s focus on Korean cosmetics and lifestyle has given it a depth of loyalty among young women that was once the preserve of Zozo.
Along with its other platform Move, Ebay Japan has built a solid presence in the Japanese market which looks set to continue to expand.

Tokyo Electron (8035 JP): Full-year FY03/25 flash update

In FY03/25, the company achieved revenue of JPY2.43tn, operating profit of JPY697.3bn, and net income of JPY544.1bn.
For FY03/26, the company projects revenue of JPY2.6tn, operating profit of JPY727.0bn, and net income of JPY566.0bn.
The company plans to increase R&D expenses to JPY300.0bn in FY03/26, up from JPY250.0bn in FY03/25.

Hakuto Co Ltd (7433 JP): Full-year FY03/25 report update

FY03/25 results: Sales JPY183.1bn (+0.6% YoY), Operating profit JPY7.9bn (+3.6% YoY), Net income JPY5.1bn (-0.9% YoY).
FY03/25 forecast: Sales JPY186.0bn (+1.6% YoY), Operating profit JPY6.0bn (-24.2% YoY), Net income JPY4.9bn (-4.5% YoY).
Hakuto’s medium-term plan targets sustainable growth by FY03/29, with Vision 2030 and Hakuto 2028 initiatives.

Meiwa Corp (8103 JP): Full-year FY03/25 flash update

FY03/25 revenue was JPY156.7bn (-1.0% YoY), with operating profit JPY3.6bn (+20.1% YoY) and net income JPY3.4bn (+22.6% YoY).
FY03/26 forecast: revenue JPY160.0bn (+2.1% YoY), operating profit JPY3.2bn (-10.3% YoY), net income JPY3.0bn (-11.1% YoY).
Meiwa plans a JPY38.00 per share dividend for FY03/26, down from JPY42.00 in FY03/25.

Japan Investment Adviser Co (7172 JP): Q1 FY12/25 flash update

Q1 revenue increased 22.3% YoY, driven by a 19.5% rise in Operating Lease business revenue, reaching JPY11.0bn.
Operating profit margin rose 9.9pp to 63.3% in Q1, despite foreign exchange losses of JPY448mn.
Total value of operating lease deals arranged in Q1 was JPY79.3bn, with significant growth in vessel arrangements.

Nihon Chouzai (3341 JP): Full-year FY03/25 flash update

Sales increased by 5.9% YoY to JPY360.5bn, but operating profit decreased by 31.8% YoY to JPY6.2bn.
Pharmaceutical Manufacturing faced a JPY630mn operating loss due to NHI drug price revisions and manufacturing deficiencies.
FY03/26 forecasts sales of JPY372.8bn (+3.4% YoY) and net income of JPY3.5bn (+151.6% YoY).

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May 01

Daily Brief Japan: Aisin , Kawasaki Heavy Industries, Toyota Industries, Anicom Holdings, Sumitomo Pharma, Infomart Corp, Naigai Trans Line, TSE Tokyo Price Index TOPIX, Olba Healthcare Holdings, Sms Co Ltd and more

In today’s briefing:

Aisin (7259) – Executing the Capital Policy Side of Its MTMP – Big ¥120bn (8.8%) Buyback
Quiddity JPX-Nikkei 400 Rebal 2025: End Apr 2025 Ranks
(Mostly) Asia M&A, Apr 2025 Wrap: Toyota, Abacus Storage, Bright Smart, Fujitsu General, Topcon
Anicom (8715 JP)
Sumitomo Pharma (4506 JP): Guidance Revised Upward for FY25 Driven by North America
Infomart Corp (2492 JP): Q1 FY12/25 flash update
Naigai Trans Line (9384 JP): Q1 FY12/25 flash update
A Guide May Be Offered to Disclose MTPs that Focus More on Strategy Rather than Matching Numbers
Olba Healthcare Holdings (2689 JP): Q3 FY06/25 flash update
Sms Co Ltd (2175 JP): Full-year FY03/25 flash update

Aisin (7259) – Executing the Capital Policy Side of Its MTMP – Big ¥120bn (8.8%) Buyback

Last Friday during market hours, Toyota Group member Aisin (7259 JP) announced earnings, guidance, its MTMP progress update, and a buyback.
Earnings were OK, all things considered. Guidance was disappointing, but tariff impact is real. The buyback headlines are huge (17%); reality is about half that given the stock price.
If they execute via TN-3 near-term, it just sets up the next one, but they may do 2/3 TN=3 and 1/3 market. There may be Toyota Industries factors involved.

Quiddity JPX-Nikkei 400 Rebal 2025: End Apr 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 ~45 potential ADDs/DELs for the JPX-Nikkei 400 August 2025 rebalance based on trading data as of end-April 2025.

(Mostly) Asia M&A, Apr 2025 Wrap: Toyota, Abacus Storage, Bright Smart, Fujitsu General, Topcon

For April 2025, 9 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$6bn. Not including Toyota Industries (6201 JP)‘s potential Offer.
The average premium for the new transactions announced (or first discussed) in April was ~46%, with a year-to-date average of 53%.
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%.

Anicom (8715 JP)

By Michael Fritzell

Japanese pet insurance company with 40-50% market share thanks to its OTC settlement system and a network of pet shop/veterinary clinic partners
The stock trades at around 13x current-year earnings, a modest multiple given the secular growth that’s ahead of it. The pet/human population ratio is low. Pet insurance is still unusual.
Well-Regarded investor Hikari Tsushin just took a 5.2% position in the company, highlighting the value in the company at the current 1.5x book.

Sumitomo Pharma (4506 JP): Guidance Revised Upward for FY25 Driven by North America

Sumitomo Pharma (4506 JP) revised revenue guidance for FY25 to ¥399B from previous ¥381B. New guidance represents 27% YoY growth.
This comes on the back of higher than expected sales in North American segment, which contributed 61% sales in 9MFY25.
Operating profit guidance have been revised to ¥43.2B from ¥30B on controlled cost and higher sales.

Infomart Corp (2492 JP): Q1 FY12/25 flash update

Sales increased 22.3% YoY to JPY4.3bn, with BtoB Platform Food sales rising 29.5% YoY due to cloud-based management systems.
Operating profit surged 152.6% YoY to JPY581mn, driven by reduced data center costs and software amortization expenses.
BtoB Platform ES segment sales grew 10.8% YoY, with increased system usage fees from digitalization and invoicing service adoption.

Naigai Trans Line (9384 JP): Q1 FY12/25 flash update

Sales increased by JPY1.3bn (+16.4% YoY), but operating profit decreased by JPY17mn (-2.0% YoY) due to higher SG&A expenses.
Non-consolidated sales rose 19.7% YoY, but operating profit declined 7.5% YoY due to tender offer costs.
Overseas subsidiaries’ sales grew 10.4% YoY, with a 5.5% increase in segment profit, driven by ASEAN and China performance.

A Guide May Be Offered to Disclose MTPs that Focus More on Strategy Rather than Matching Numbers

It’s progress that more companies are including ROE and ROIC as KPIs in mid-term management plans. On the other hand, it’s true that many disclosures are misaligned with investors’ perspectives.
As a result of not taking action on problem businesses, it’s often the case that deteriorating environment increases losses of the business, leading to revision of the “medium-term management plan.”
Investors are more likely to portray corporate value if a company provides measures for problem solving and growth, and reliable execution, rather than goals that are uncertain to be achieved.

Olba Healthcare Holdings (2689 JP): Q3 FY06/25 flash update

Sales increased by 3.4% YoY to JPY92.5bn, but operating profit decreased by 23.3% YoY to JPY1.3bn.
Medical Devices and Consumables segment sales rose 6.7% YoY, driven by consumables and new facility acquisitions.
Equipment sales declined 15.3% YoY, while SG&A expenses increased, leading to a 25.8% YoY drop in operating profit.

Sms Co Ltd (2175 JP): Full-year FY03/25 flash update

Sales increased by 12.9% YoY to JPY60.6bn, driven by Career and Kaipoke businesses, despite higher costs.
FY03/26 forecasts sales of JPY67.5bn (+10.8% YoY), operating profit of JPY7.3bn (+15.0% YoY), and net income of JPY7.0bn (+16.1% YoY).
Company plans a share buyback of 3,382,600 shares, valued at JPY4.0bn, from April 30 to July 31, 2025.

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Apr 30

Daily Brief Japan: Fujitsu General, Aeon Co Ltd, Matsui Securities and more

In today’s briefing:

Fujitsu General (6755) – Deal Starts Early, Trades Tight – Done Deal
Asian Equities: Overvalued, Over-Leveraged, Low Growth – a Different Look
Matsui Securities (8628 JP): Full-year FY03/25 flash update

Fujitsu General (6755) – Deal Starts Early, Trades Tight – Done Deal

The Paloma-Rheem Tender Offer for Fujitsu General (6755 JP) was expected to start in early July but is starting 10 weeks earlier. Big win for arbs.
This was going to be a done deal. It didn’t trade rich to terms and it’s tough to see why activists would push when they haven’t pushed for years.
The deal is now trading tight. Long arbs should probably re-allocate. Those hiding their beta here should hide their beta elsewhere.

Asian Equities: Overvalued, Over-Leveraged, Low Growth – a Different Look

By Manishi Raychaudhuri

We identified overvalued, over-leveraged, low growth stocks on EPS growth, high PEG, low ROE, high P/BV, high leverage. Clients opined that EBITDA is more stable earnings parameter for such stocks.
Based on clients’ feedback we now screen the stocks using EBITDA growth as the earnings growth parameter and EV as the corresponding valuation parameter.
Our screen yields 30 stocks – 20 from Japan (largely property/REIT) and 10 from HK/China. 7 stocks are common to the EPS-PE and EBITDA-EV lists – mostly from Japanese property.

Matsui Securities (8628 JP): Full-year FY03/25 flash update

Net operating revenue was JPY8.8bn, a decrease of 11.4% YoY and 1.6% QoQ, with operating profit at JPY3.2bn.
Total commissions were JPY4.8bn, down 23.8% YoY but up 3.6% QoQ; brokerage commissions were JPY4.5bn.
SG&A expenses totaled JPY5.7bn, increasing 1.1% YoY and 5.2% QoQ, with transaction-related expenses at JPY1.9bn.

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Apr 29

Daily Brief Japan: Toyota Industries, Toyota Motor, Astellas Pharma, Sodick Co Ltd, Chori Co Ltd, Financial Products Group Co, TSE Tokyo Price Index TOPIX and more

In today’s briefing:

Toyota Industries (6201 JP): A Rumoured Privatisation with Several Unknowns
Toyota (7203 JP) Tactical Outlook Following Toyota Industries (6201 JP) Privatization Rumors
Astellas Pharma (4503 JP): Strong FY25 Result; Cost Optimization to Boost FY26 Profit on Flat Sales
Sodick (6143) – From Turnaround to Transformation Towards Growth
Chori Co Ltd (8014 JP): Full-year FY03/25 flash update
Financial Products Group Co (7148 JP): 1H FY09/25 flash update
Hurdles to Shareholder Proposal Passage Are Still High, but the Announcement Effect Is Significant

Toyota Industries (6201 JP): A Rumoured Privatisation with Several Unknowns

Toyota Industries (6201 JP) shares were set to hit the daily upper limit of JPY16,225 due to press reports of a privatisation bid valuing it at JPY6 trillion.
Toyota Industries confirmed receiving a going-private proposal from a special purpose company, while Toyota Motor (7203 JP) said it is considering all possibilities, including a partial investment.
There are still several unknowns, including the price, the identity of the offeror, potential irrevocable commitments, the financing structure, and the timeline.

Toyota (7203 JP) Tactical Outlook Following Toyota Industries (6201 JP) Privatization Rumors

By Nico Rosti

Toyota Motor (7203 JP) said in a Tokyo stock exchange filing on Saturday that it is exploring the possibility of investing in a potential buyout of key supplier Toyota Industries.
Bloomberg reported Friday that Toyota Motor (7203 JP) Chairman Akio Toyoda and his family proposed acquiring Toyota Industries (6201 JP) in a possible 6 trillion yen ($42 billion) transaction.
The stocks of both companies were rising on Monday, this insight focus on tactical positioning on Toyota Motor:the stock appears very OVERBOUGHT according to our models.

Astellas Pharma (4503 JP): Strong FY25 Result; Cost Optimization to Boost FY26 Profit on Flat Sales

Astellas Pharma (4503 JP) has announced strong FY25 performance, with all key parameters surpassing guidance, while FY26 guidance is a mix of positives and negatives.
Astellas has guided for FY26 revenue of ¥1,930B, up 1% YoY. While strategic brands are expected to grow by double and triple-digit, Xtandi is expected to report 5% revenue decline.
FY26 core operating profit is guided at ¥410B, up 5% YoY, driven by cost optimization effort. Core net profit for FY26 is expected to increase 3% YoY to ¥304B.

Sodick (6143) – From Turnaround to Transformation Towards Growth

By Astris Advisory Japan

It has been an active 12 months for Sodick as it delivered a strong turnaround in FY12/24 driven by structural reform, appointed new President and CEO Yuji Akutsu, and affirmed growth prospects on both the Food Machinery segment and new products such as laser processing machines, metal 3D printers, and ultra-high-precision machining centers.
Ongoing structural reforms focus on reducing reliance on China, enhancing profitability through business and product selection based on market dynamics, and rebuilding global production and sales systems to adapt to yen depreciation and evolving customer demand.
Overseas expansion and providing “turnkey” solutions remain high priorities to build sustainable growth.

Chori Co Ltd (8014 JP): Full-year FY03/25 flash update

In FY03/25, sales rose 1.3% YoY to JPY311.5bn, with net income reaching a record JPY11.7bn.
Operating profit declined 3.6% YoY due to increased SG&A expenses, while pre-tax profit rose 11.0% YoY.
For FY03/26, sales are projected to increase by JPY18.5bn, with a slight decrease in pre-tax profit expected.

Financial Products Group Co (7148 JP): 1H FY09/25 flash update

In 1H FY09/25, revenues increased by 25.2% YoY, while operating profit decreased by 3.6% YoY.
The Leasing Fund Business saw a 7.1% YoY revenue decline, with a segment profit margin decrease of 5.3pp YoY.
The International Real Estate Fund Business achieved a 134.6% YoY revenue increase, with a gross profit margin rise of 6.5pp YoY.

Hurdles to Shareholder Proposal Passage Are Still High, but the Announcement Effect Is Significant

There’re signs, with domestic institutional investors gradually becoming more willing to consider shareholder proposals. However, the hurdle to passage is still high, as shareholder proposals weren’t approved at March AGMs.
Regarding proposals that are easy for domestic institutional investors to mechanically approve/disapprove, such as the number of independent directors and female directors, companies are expected to raise the level formally.
Since the announcement effect of shareholder proposals is significant, it is expected that companies that did not pass shareholder proposals this time will launch initiatives to strengthen shareholder returns.

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Apr 28

Daily Brief Japan: Toyota Industries, Seven & I Holdings, Shibaura Electronics, Keyence Corp, Japan Pure Chemical, Kokuyo Co Ltd and more

In today’s briefing:

Toyota Industries (6201) – SURPRISE! It’s a TOYODA Takeover Proposal (Good Governance May Not Win)
Merger Arb Mondays (28 Apr) – Seven & I, Shibaura, Makino, Bright Smart, ENN Energy, Tam Jai
Weekly Deals Digest (27 Apr) – Shibaura, Fujitsu General, Gunma/DHFG, Bright Smart, DN Solutions
Keyence (6861 JP): A Beneficiary of Rising Interest Rates
Japan Pure Chemical (4973 JP): Full-year FY03/25 flash update
Kokuyo Co Ltd (7984 JP): Q1 FY12/25 flash update

Toyota Industries (6201) – SURPRISE! It’s a TOYODA Takeover Proposal (Good Governance May Not Win)

On Friday after the close, media reports surfaced that Toyota Motor (7203 JP) Group chairman and founding family member had put forth a take-private proposal to Toyota Industries (6201 JP).
The number quoted was ¥6trln market cap (most) or EV (FT), financed by personal funds, 3 megabanks, and reportedly some group companies.
¥6trln market cap would be +50%. ¥6trln EV +16%. Simultaneously shocking but somehow not surprising. Opportunistic, and surprisingly elegant as a family/group/cultural solution. More below.

Merger Arb Mondays (28 Apr) – Seven & I, Shibaura, Makino, Bright Smart, ENN Energy, Tam Jai

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: Oneconnect Financial Technology (6638 HK), Insignia Financial (IFL AU), ENN Energy (2688 HK), Seven & I Holdings (3382 JP), Smart Share Global (EM US).
Lowest spreads: Shibaura Electronics (6957 JP), Makino Milling Machine Co (6135 JP), Sinarmas Land (SML SP), Millennium & Copthorne Hotels Nz (MCK NZ).

Weekly Deals Digest (27 Apr) – Shibaura, Fujitsu General, Gunma/DHFG, Bright Smart, DN Solutions

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: DN Solutions (298440 KS) seeks to raise US$1.1 billion in a KRX IPO.
Event-Driven developments: Shibaura Electronics (6957 JP), Fujitsu General (6755 JP), Gunma Bank (8334 JP), Bright Smart Securities And (1428 HK), Dickson Concepts Intl (113 HK), Dada Nexus (DADA US).

Keyence (6861 JP): A Beneficiary of Rising Interest Rates

By Scott Foster

Keyence stands to benefit from a rising return on its large holdings of cash and securities, which are also available for investment and higher dividends.
The company’s engineering-service business model should keep gross and operating margins high while it continues to expand overseas.
Projected valuations at the low end of their 5-year ranges. Recession and abrupt appreciation of the yen are the primary risks.

Japan Pure Chemical (4973 JP): Full-year FY03/25 flash update

Revenue in FY03/25 grew 10.4% YoY, with operating profit increasing 41.8% YoY, driven by generative AI demand.
Net income surged 188.1% YoY due to gains on the sale of shares, despite slowing automotive sales.
JPC anticipates steady demand for AI-related applications and expects revenue growth in FY03/26 despite higher expenses.

Kokuyo Co Ltd (7984 JP): Q1 FY12/25 flash update

Revenue increased by 3.5% YoY to JPY99.5bn, driven by demand in the Furniture business for office relocations.
Operating profit rose by 14.4% YoY to JPY13.5bn, with a 1.6pp increase in GPM due to price revisions.
Net income attributable to owners of the parent decreased by 16.4% YoY, despite increases in operating and recurring profits.

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Apr 27

Daily Brief Japan: Shin Etsu Chemical, Renesas Electronics, Fujitsu General, Makino Milling Machine Co, TSE Tokyo Price Index TOPIX, GMO Internet and more

In today’s briefing:

Shin-Etsu Chemical (4063) – OK Earnings, OK Forecast, But Ground-Breaking Buyback
Renesas 1Q25: Cheap Stock That’s Bottoming Out
Fujitsu General (6755 JP): Done Deal as Precondition Satisfied
(Mostly) Asia-Pac M&A: Mayne Pharma, Piedmont/Sayona, Jamco, Makino Milling, Sinarmas, Dada Nexus
Expect Gradual Improvement in the Quality of Listed Companies as More Companies Go Private
Last Week in Event SPACE: GMO Internet, Hongkong Land, Shibaura Electronics, Millennium & Copthorne

Shin-Etsu Chemical (4063) – OK Earnings, OK Forecast, But Ground-Breaking Buyback

Shin Etsu Chemical (4063 JP) reported FY earnings to beat January guidance for all four major measures, just slightly. They only guide 1 quarter out, and Q1 is up year-on-year…
…in revenues, but down in OP and NP. Note: OP and NP guidance is nearly identical to what they guided for Q1 last year on ¥585bn revenues (vs ¥610bn now)
The BIG news here is a Very Large Buyback. The company has long has huge piles of cash. This buyback (~90% of annual profit) starts to make use of it.

Renesas 1Q25: Cheap Stock That’s Bottoming Out

By Nicolas Baratte

Revenues are still declining by ~teens% YoY but margins shows signs of improvements as end-demand improves and utilization is low.
Renesas doesn’t have an inventory problem and increasing revenues will lead to higher utilization and higher margins.
As Renesas is showing signs of a bottom, the stock is very cheap, trading at -2 standard deviations or 11x 2025 EPS, 9x 2026 EPS.

Fujitsu General (6755 JP): Done Deal as Precondition Satisfied

The precondition for Paloma Rheem Holdings’ tender offer for Fujitsu General (6755 JP) is satisfied. The offer is from 28 April to 28 May.
Despite an arguably light offer and less than ideal process, this is a done deal due to a lack of opposition and no competing offer.
At the last close and for a 5 June payment, the gross and annualised spreads are 1.3% and 14.1%, respectively.

(Mostly) Asia-Pac M&A: Mayne Pharma, Piedmont/Sayona, Jamco, Makino Milling, Sinarmas, Dada Nexus

I tally 49 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma.
No new deals discussed on Smartkarma this week. Although Dickson Concepts (113 HK), Bright Smart (1428 HK), and Jilin Jiutai Bank (6122 HK) are suspended pursuant to the Takeovers Code.
Key updates/news took place on Mayne Pharma (MYX AU), Piedmont (PLL AU)/Sayona (SYA AU), Jamco (7408 JP), Makino Milling (6135 JP), Sinarmas Land (SML SP), and Dada Nexus (DADA US).

Expect Gradual Improvement in the Quality of Listed Companies as More Companies Go Private

Although it’ll take some time for quality of existing listed companies to improve, a gradual improvement in quality of companies is likely for the time being as more companies delist.
The TSE’s “request” was not only for activist investors, but also for other investors who shared the view that the stock market should not be left in the doldrums.
A certain number of companies that fail to meet TSE listing criteria will move to the regional stock exchanges, leading to a gradual improvement in the quality of the TSE.

Last Week in Event SPACE: GMO Internet, Hongkong Land, Shibaura Electronics, Millennium & Copthorne

Negligible float, highly manipulatable, 150x+ forward earnings – yes, investors can afford NOT to have GMO Internet (4784 JP) in their portfolio.
Hongkong Land (HKL SP) stamps its “recycling capital” motto and sells nine floors of One Exchange Square to HKEX (388 HK) for HK$6.3bn (US$810mn).
Shibaura Electronics (6957 JP)asks Minebea Mitsumi (6479 JP) whether they intend to change the consideration terms. Minebea says it is “proceeding with its consideration“.

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Apr 26

Daily Brief Japan: Shibaura Electronics, Kyoto Financial Group , Daiichi Sankyo, Chugai Pharmaceutical, Istyle Inc and more

In today’s briefing:

YAGEO and Shibaura Still Fighting, Minebea Likely to Bid Up, The Question Is Another YAGEO Overbid
Kyoto Financial Group (TSE:5844) – Positive Shift in C-Suite Outlook
Daiichi Sankyo (4568 JP): Strong FY25 Result; Guidance Initiated for FY26; ¥200B Buyback Announced
Chugai Pharmaceutical (4519 JP): Hemlibra, Actemra, And Alecensa Shine In 1Q25; Guidance Reiterated
IStyle (3660 JP) Ups Investment in Retail

YAGEO and Shibaura Still Fighting, Minebea Likely to Bid Up, The Question Is Another YAGEO Overbid

Yageo Corporation (2327 TT) bid ¥4,300 for Shibaura Electronics (6957 JP). Minebea Mitsumi (6479 JP) overbid at ¥4,500. YAGEO overbid Minebea at ¥5,400 on 17 April (expected to start 7-May)
Apparently, YAGEO was a bit upset by the public comments by Shibaura regarding custom/mass-market/online different ways of doing business. YAGEO responded with receipts. Shibaura will respond later.
On the 22nd, Minebea noted they would delay their intended 23rd start date. Now they have more irrevocables. In the end, I expect YAGEO’s, not Minebea’s, top price defines this.

Kyoto Financial Group (TSE:5844) – Positive Shift in C-Suite Outlook

By Victor Galliano

Kyoto Financial’s president has hinted at increasing disposals in strategic equity holdings; the prior target was a JPY100bn reduction in holdings by March 2029, now there is talk of JPY200-300bn
We estimate Kyoto Financial’s equity holdings relative to market cap at 140%+, well above its peer banks; yet, until very recently, the president had been against meaningfully reducing equity holdings
The president’s change of view leads us to upgrade Kyoto Financial to a buy; the change in outlook means that there is real potential to extract value for shareholders

Daiichi Sankyo (4568 JP): Strong FY25 Result; Guidance Initiated for FY26; ¥200B Buyback Announced

Daiichi Sankyo (4568 JP) reported strong FY25 results, with revenue and operating profit increasing 18% and 57%, YoY, to ¥1,886B and ¥332B, respectively. Performance was mainly driven by Enhertu (+45%).
The company expects FY26 revenue to increase 6% YoY to ¥2,000B. Core operating profit and operating profit are expected to increase 12% and 5%, YoY, respectively to ¥350B.
The company has announced a ¥200B buyback plan to acquire a maximum of 80M shares from May 1, 2025 to March 24, 2026.

Chugai Pharmaceutical (4519 JP): Hemlibra, Actemra, And Alecensa Shine In 1Q25; Guidance Reiterated

Chugai Pharmaceutical (4519 JP) reported 22% YoY rise in core revenue in 1Q25, as overseas sales grew 55% YoY while domestic market remain subdued.
Hemlibra drove overseas sales. Actemra and Alecensa witnessed growth in both overseas and domestic markets.
Chugai reiterated 2025 guidance of revenue and net profit growth of 2% and 3%. The progress has been satisfactory with major line items achieving 24–25% of the full-year guidance numbers.

IStyle (3660 JP) Ups Investment in Retail

By Michael Causton

IStyle continues to benefit from its focus on omnichannel retailing.
Customers who use both its online and physical stores spend 1.5 times more than those only shopping online,
To further cement its hold in key areas, it has just unveiled an updated flagship store with target sales of ¥10 billion.

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Apr 25

Daily Brief Japan: Fujitsu Ltd, Gunma Bank, Nidec Corp, Jafco Co Ltd, Ono Sokki, TSE Tokyo Price Index TOPIX and more

In today’s briefing:

Fujitsu (6702) – Earnings/Guidance OK, Margins Better, But New Quiddity Buyback Data Tool 🥳
Gunma Bank (8334 JP): Daishi Hokuetsu (7327 JP) Share Exchange to Establish a Top Regional Bank
Nidec (6594) | Chasing Trends to Fiscal Discipline
Jafco Co Ltd (8595 JP): Full-year FY03/25 flash update
Ono Sokki (6858 JP): Q1 FY12/25 flash update
It Is Not a Question of Whether Investment in Growth or Shareholder Return Is Better

Fujitsu (6702) – Earnings/Guidance OK, Margins Better, But New Quiddity Buyback Data Tool 🥳

Fujitsu Earnings. Revenues +2.1%, OP +77.5%, Pretax +65.1%, Net -13.0% (basis effect from FY23 one-offs). Forecast? Revs -2.8%, OP/adj +35.8%/+17.2%, Net/adj +77.4%/+3.7%. All guided measures shy vs the Street consensus.
The company presented a progress update on its Medium-Term Management Plan. Core profits are better. Things are improving.
The company also announced a big 11-month ¥170bn buyback. Last year’s was ¥180bn (completed 24 March). Worth checking out the details (and our brand-new buyback tool)

Gunma Bank (8334 JP): Daishi Hokuetsu (7327 JP) Share Exchange to Establish a Top Regional Bank

Gunma Bank (8334 JP) and Daishi Hokuetsu Financial Group (7327 JP)/DHFG have announced an MoU to establish one of the largest regional banks in Japan by 1 April 2027.
The transaction involves delisting Gunma through a share exchange with DHFG. A definitive agreement is expected around March 2026.
The plan is long-dated. The lack of a controlling shareholder necessitates a “fair” exchange ratio. My estimated Gunma/DHFG exchange ratio range is 0.38-0.39x.

Nidec (6594) | Chasing Trends to Fiscal Discipline

Nidec beat Q4 expectations but offered muted FY3/26 guidance, with flat sales and modest profit growth amid macro and tariff uncertainty.
New CEO Kishida shifts focus from top-line ambition to margin discipline, targeting ¥150bn in cost cuts over three years.
Once a high-growth play, Nidec now trades at value multiples — 1.5x book — offering a more grounded path to shareholder returns.

Jafco Co Ltd (8595 JP): Full-year FY03/25 flash update

Revenue increased by 21.4% YoY to JPY29.7bn, with operating profit rising 53.1% YoY to JPY12.5bn.
Capital gains reached JPY12.7bn, a 60.0% YoY increase, driven by IPO-related share sales and unlisted shares.
Total assets under management stood at JPY458.4bn, with JPY198.5bn subject to management fees as of end-March 2025.

Ono Sokki (6858 JP): Q1 FY12/25 flash update

Ono Sokki’s FY12/24 sales rose 23.2% YoY, with operating profit up 266.7% YoY, despite a 12.0% YoY order decline.
Measuring Equipment segment’s operating profit dropped 74.4% YoY due to increased personnel expenses for overseas sales expansion.
Custom Order Test Equipment and Service segment’s operating profit surged 555.1% YoY, driven by increased sales and fixed cost absorption.

It Is Not a Question of Whether Investment in Growth or Shareholder Return Is Better

While the absolute amount of share repurchases has increased, many companies face challenges in using cash, given the slow growth in ROE and depth of equity capital over a decade.
While growth investment should increase corporate value, it’s important for managers to manage to earn returns commensurate with investment risk, and to return cash to shareholders without taking unnecessary risks.
The question is not whether investment in growth or shareholder return is better, but whether the company was managing its business in a shareholder-friendly manner.

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Apr 24

Daily Brief Japan: GMO Internet, Jafco Co Ltd, Panasonic Corp, Fanuc Corp, Shimano Inc, FUJIFILM Holdings, Timee Inc, Canon Marketing Japan and more

In today’s briefing:

StubWorld: GMO Internet (4784) Will Be Squeezy. Until It’s Not.
JAFCO (8595) Good Results, Higher Div, Buyback, More Plans; Not Quite There, But Maybe Will Be Later
Solactive Global Lithium Index Rebalance: Passive Flows Next Week
Fanuc (6954) | Growth Flickers, Visibility Dims
Jafco (8595.T) Announces a Big Buyback and a Change in Business Strategy- The Market Likes It!
Shimano (7309) | Coasting, Not Sprinting
Fujifilm: Bio CDMO – A Success in the Making
Timee: Recent Setback in Share Price Offers an Attractive Entry Point
Canon Marketing Japan (8060 JP): Q1 FY12/25 flash update

StubWorld: GMO Internet (4784) Will Be Squeezy. Until It’s Not.

Negligible float, 150x+ forward earnings – yes, investors can afford NOT to have GMO Internet (4784 JP) in their portfolio.
Preceding my comments on the GMO 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%.

JAFCO (8595) Good Results, Higher Div, Buyback, More Plans; Not Quite There, But Maybe Will Be Later

At noon today, Jafco Co Ltd (8595 JP) announced full year (to March 2025) results. Revenues were up 21.4% this year, OP +49.7%, and Net Income +27.8%.
The company announced a ¥5bn buyback, and also announced a new dividend policy of 6% DOE or 50% payout ratio. As it is a markets business, there is no guidance.
The stock popped significantly in the PM session, but the market zeitgeist is a tailwind. And there is supportive new news.

Solactive Global Lithium Index Rebalance: Passive Flows Next Week

By Brian Freitas

Solactive has announced the review results for the Global Lithium Index. There are no constituent changes for the index but there will be capping changes for a few stocks.
Estimated one-way turnover is 10.8% and will result in a round-trip trade of US$208m. There are some stocks with over 0.5x ADV to trade.
The index has been in a secular downtrend over the last few years and there have been big redemptions from ETFs tracking the index.

Fanuc (6954) | Growth Flickers, Visibility Dims

Fanuc returns to revenue growth, driven by robomachine demand in Asia, but core robot sales remain weak after last year’s EV-driven surge.
Management offered no guidance for FY3/26, citing tariff and FX uncertainty; we cut forecasts, with downside risk still looming large.
A ¥50bn buyback provides limited support, but shares may stay stuck until global capex trends and trade policy clarify.

Jafco (8595.T) Announces a Big Buyback and a Change in Business Strategy- The Market Likes It!

By Rikki Malik

Jafco divests overseas operations to focus on domestic capital markets
The company continues to focus on shareholder returns in a meaningful way
Domestic venture capital returns exceed overseas returns historically and the future looks bright

Shimano (7309) | Coasting, Not Sprinting

By Shifara Samsudeen, FCMA, CGMA

Shimano beat Q1 profit expectations but stuck to cautious full-year guidance, signalling stabilisation in bike markets rather than a real recovery.
Margins improved, inventories stabilised — but Shimano’s profitability remains well below historic highs, with recovery likely to stay slow and steady.
Strong balance sheet, resilient pricing, limited US exposure: Shimano looks a defensive bet, even if management’s guidance ends up on the optimistic side.

Fujifilm: Bio CDMO – A Success in the Making

Fujifilm announced today that the company has entered into a 10-year manufacturing supply agreement valued over US$3bn with Regeneron Pharma to provide US-based production to Regeneron’s biologic medicines.
Fujifilm’s Bio CDMO business, operating through FUJIFILM Diosynth Biotechnologies, has achieved significant success and growth, driven by a combination of strategic investments/acquisitions, with a focus on expanding its capabilities.
Bio CDMO business has achieved rapid expansion over the years, and aims to generate revenues of ¥200bn for FY03/2025 and reach ¥500bn by FY03/2028E which seems attainable to us.

Timee: Recent Setback in Share Price Offers an Attractive Entry Point

By Shifara Samsudeen, FCMA, CGMA

Timee Inc (215A JP) ’s share price has been volatile during the last few months despite the company reporting a strong set of results for 1QFY10/2025.
Timee is the market leader in Japan while Mercari Hallo is still attempting to build its business. Our analysis shows that there is further room for Timee’s earnings to expand.
Some of Japanese high-growth companies (incl. Monotaro, GMO Payment and Shift) have traded at exorbitant multiples during their high growth phase and we think Timee’s valuation multiples are justified.

Canon Marketing Japan (8060 JP): Q1 FY12/25 flash update

Sales increased by 6.4% YoY, driven by strong performance in IT solutions and maintenance/operations services.
Operating profit decreased by 4.6% YoY due to increased SG&A expenses, including goodwill amortization from Primagest Inc.
FY12/25 earnings forecast projects sales of JPY680.0bn (+4.0% YoY) and operating profit of JPY56.0bn (+5.4% YoY).

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Apr 23

Daily Brief Japan: Shibaura Electronics, IHI Corp, Sysmex Corp, TSE Tokyo Price Index TOPIX, Furukawa Co Ltd and more

In today’s briefing:

Shibaura Electronics (6957 JP): Minebea Secures Further Irrevocables as It Ponders a Revised Offer
IHI Corp (7013 JP): Global Index Inclusion in May
Sysmex Corp (6869 JP): The US Tariff Wound Would Not Be Deep Enough
The Key Is to Solve the Root Problem of Women Leaving Their Jobs Due to the Bias of Family Work
Furukawa (5715 JP) – Course-Correcting for Growth

Shibaura Electronics (6957 JP): Minebea Secures Further Irrevocables as It Ponders a Revised Offer

In response to Yageo Corporation (2327 TT)’s revised JPY5,400 offer, Shibaura Electronics (6957 JP) has asked Minebea Mitsumi (6479 JP) if it intends to revise its terms.
Minebea is reviewing its offer and has disclosed additional irrevocables from the founder’s family and MUFG. Total irrevocables represent a 15.83% ownership ratio.
On April 22, Yageo issued a public letter to change the narrative regarding the Board’s concerns. There is an increasing likelihood that Minebea will return with a revised offer.

IHI Corp (7013 JP): Global Index Inclusion in May

By Brian Freitas

IHI Corp (7013 JP) has had a monster rally over the last year with the stock price tripling over the period. That could now result in a global index inclusion.
IHI Corp (7013 JP) has outperformed its peers over the last year but still trades cheaper than the average and median of its peers on quite a few valuation metrics.
The appears to be a lot of positioning in the stock, but we see a similar pattern in its peers too. There could be some upside over the near term.

Sysmex Corp (6869 JP): The US Tariff Wound Would Not Be Deep Enough

Sysmex Corp (6869 JP) earns 26% of total revenue from Americas. During 9MFY25, revenue from Americas increased 13% YoY to ¥96B.
The U.S. President Trump has proposed 10% baseline import tariffs on medical devices. Although Trump announced a 90-day pause on most reciprocal tariffs, the respite seems to be temporary.
Sysmex is exposed to tariff for instruments only as reagents are produced locally. Instrument sales in the Americas account for 5–6% of revenue, so tariff impact would be negligible.

The Key Is to Solve the Root Problem of Women Leaving Their Jobs Due to the Bias of Family Work