Japan

In today’s briefing:

GMO Internet (4784) DropDown Holdco Gone Ballistic – Squeezed on Truly Tiny Float
Sanrio (8136 JP): Global Index Inclusion in May
Adastria: Cautious on the Platform Narrative, But Optimistic on Margins and Valuation Rebound
Chugai Pharmaceutical (4519 JP): Positive Phase 3 Results Of Orforglipron Augurs Well
Nikkei Index Options Weekly (Apr 14 – 18): Vol Unwinds, Nikkei Rebounds and USD Cracks
ECM Weekly (22 Apr 2025) – Suzuki, Zenergy, Chagee, Duality, Manycore, Horizon, Giant Bio, TV Asahi
D. Western Therapeutics Institute (DWTI) 4576 JP – Full Report
The Bigger Issue than the Lack of Higher Compensation for Outside Board Directors Is…

GMO Internet (4784) DropDown Holdco Gone Ballistic – Squeezed on Truly Tiny Float

Gmo Ad Partners (4784 JP) has become GMO Internet as of 1 January 2025. On that day, it merged with the “internet infrastructure business” of GMO Internet (9449 JP).
It was a kind of reverse takeover – a backdoor listing – and it on 24-Dec-2024, it was announced GMO Internet would move from TSE Standard to TSE Prime end-Jan2025.
The stock is +300% since then. Why? A squeeze. Share count increase? 15x. Float share increase? Zero. Resulting Real World Float? 1.24% of shares out and about to shrink.

Sanrio (8136 JP): Global Index Inclusion in May

By Brian Freitas

Sanrio (8136 JP)‘s stock price dropped following the placement announcement in November. Then there was a rally in the stock amid increased volatility.
The placement resulted in an increase in free float and the move higher in the stock could lead to Sanrio (8136 JP) being added to a global index in May.
There is positioning in the stock but a lot of that appears to have been taken off in the last month. The stock could move higher depending on global cues.

Adastria: Cautious on the Platform Narrative, But Optimistic on Margins and Valuation Rebound

By Oshadhi Kumarasiri

Adastria’s “5th CHANGE” outlines a strategic pivot from specialty retail to a platform model aimed at scaling across brands, categories, and geographies while navigating domestic headwinds and evolving consumer behaviors.
While Adastria Co Ltd (2685 JP)’s narrative emphasizes transformation, actual targets for user growth and GMV expansion appear modest, suggesting limited operational changes.
Despite mixed views on the mid-term plan, we remain optimistic on Adastria. Gross margin normalization could drive meaningful OP upside, potentially surpassing mid-term plan targets.

Chugai Pharmaceutical (4519 JP): Positive Phase 3 Results Of Orforglipron Augurs Well

By Tina Banerjee

Eli Lilly & Co (LLY US) has recently announced positive topline Phase 3 results for orforglipron, the GLP 1 RA drug candidate they licensed from Chugai Pharma in 2018.
At the top dose, patients lost 7.3 kg of the 90.2 kg they weighed at the start of the trial, bettering Ozempic’s trial results.
Once approved and commercialized, orforglipron should provide a long-term revenue visibility for Chugai Pharmaceutical (4519 JP) through milestone and royalty receipts from Lilly.

Nikkei Index Options Weekly (Apr 14 – 18): Vol Unwinds, Nikkei Rebounds and USD Cracks

By John Ley

Nikkei rebounded and volatility eased meaningfully – implied vol giving back much of last week’s spike.
USD/JPY softened alongside a broader break in DXY, raising questions about the depth of demand for USD assets.
Option volumes dropped, and Put activity held steady with no clear directional tilt in flow.

ECM Weekly (22 Apr 2025) – Suzuki, Zenergy, Chagee, Duality, Manycore, Horizon, Giant Bio, TV Asahi

By Sumeet Singh

Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
On the IPO front, Duality Biotherapeutics delivered a strong listing, while Jiangsu Zenergy Battery Technologies was still holding on to its deal price.
On the placements front, we looked at number of upcoming lockup expiries.

D. Western Therapeutics Institute (DWTI) 4576 JP – Full Report

By Sessa Investment Research

SIR believes DWTI has entered an exciting new phase given significant advances in pipeline development achieved over the last 12 months.
Key advances include: 1) publishing favorable topline results of in-house H-1337 PIIb US trials (strong prospects as “first choice as a second-line Glaucoma drug”),
2) commencing jointly developed Japan PII clinical trials of regenerative medicine cell therapy DWR-2206 with ActualEyes, and successfully completing all transplants

The Bigger Issue than the Lack of Higher Compensation for Outside Board Directors Is…

It’s not desirable for shareholders to have outside directors who are comfortable and remain in office for a long period of time while they are expected to fulfill their duties.
The high demand for outside directors of the same senior generation as inside directors has led to a situation in which senior outside directors hold positions at several companies.
There are few competent young talents to take on the job of outside director among the senior, all-male, internal board directors who are under strong peer pressure.

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Apr 21

Daily Brief Japan: Daihatsu Diesel Mfg, Shibaura Electronics, DISCO Corp, Aeon Co Ltd and more

In today’s briefing:

*NEW* USTR Section 301 Proposed Actions on China Maritime Dominance
Weekly Deals Digest (20 Apr) – Shibaura Electronics, Topcon, Jamco, TRYT, Canvest, ENN, Insignia
DISCO: Growth Is Slowing Down, the Stock Is Still Expensive
Aeon’s Plans to Absorb Aeon Mall and Aeon Delight Will Help Margin Growth

NEW USTR Section 301 Proposed Actions on China Maritime Dominance

Biden’s USTR came out with a flawed Section 301 report on Chinese maritime “dominance” in January. It is not that China shipbuilding is not dominant, but the report was flawed.
In February/March (flawed) measures were proposed. Then mostly minimally-insightful hearings were held. Then Trump came out with an Executive Order “Restoring America’s Maritime Dominance” (that requires looking back 80yrs).
Now we have new USTR Proposed Measures which water down the old ones quite considerably.

Weekly Deals Digest (20 Apr) – Shibaura Electronics, Topcon, Jamco, TRYT, Canvest, ENN, Insignia

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: China Resources Beverage (2460 HK) lock-up expiry; DN Solutions (298440 KS) and LG Electronics India (123D IN) IPOS.
Event-Driven developments: Shibaura Electronics (6957 JP), Topcon Corp (7732 JP), Jamco Corp (7408 JP), TRYT (9164 JP), Canvest Environmental Protection Group (1381 HK), ENN Energy (2688 HK).

DISCO: Growth Is Slowing Down, the Stock Is Still Expensive

By Nicolas Baratte

DISCO Mar-25 results beat Consensus by ~12%. Jun-25 guidance is very weak but DISCO always under-guides egregiously. But it’s weak.
Consensus has revised down its Jun-25 revenue forecast from 12% YoY growth to 6% but left Sept-Dec-25 unchanged at ~10% YoY growth. The odds are that Consensus is too high.
The stock is down -39% since end Dec-24 but still trading at 20x EPS in the face of downside risks to Consensus. Not appealing.

Aeon’s Plans to Absorb Aeon Mall and Aeon Delight Will Help Margin Growth

Aeon will turn Aeon Mall and its facilities management business, Aeon Delight, into subsidiaries.
The move is part of plans to rationalise and inject new momentum into its shopping building business, including new types of neighbourhood mall.
It will also use Aeon Mall’s overseas network to scout for promising tenants for its malls and GMS stores.

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Apr 20

Daily Brief Japan: TRYT , Shibaura Electronics, Topcon Corp and more

In today’s briefing:

Tryt (9164 JP): Take Profits as Takeover Speculation Swirls
(Mostly) Asia-Pac M&A: Fengxiang, De Grey Mining, Canvest, Tsuruha/Welcia, Shibaura Electronics
Last Week in Event SPACE: Topcon, Heavy Rare Earth Elements, Wakita, Swire/Cathay, Horizon Robotics

Tryt (9164 JP): Take Profits as Takeover Speculation Swirls

TRYT (9164 JP) shares were up 38.5% over the last two days based on a report that EQT, the controlling shareholder, had made progress in identifying bidders for its stake.
The exploration of the privatisation process is unsurprising, as Tryt was pre-rumour trading 69% below its JPY1,200 IPO price.
The upside is limited, as the last close already reflects a significant takeover premium, and a binding proposal that satisfies EQT’s price aspirations will be challenging.

(Mostly) Asia-Pac M&A: Fengxiang, De Grey Mining, Canvest, Tsuruha/Welcia, Shibaura Electronics

By David Blennerhassett

I tally 51 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma.
One new deal discussed this week: Shandong Fengxiang (9977 HK)‘s Merger by Absorption.
Key updates/news took place on De Grey Mining (DEG AU), Canvest Environmental Protection Group (1381 HK),Tsuruha (3391 JP)/Welcia (3141 JP), Shibaura Electronics (6957 JP), and PEC Ltd. (PEC SP).

Last Week in Event SPACE: Topcon, Heavy Rare Earth Elements, Wakita, Swire/Cathay, Horizon Robotics

By David Blennerhassett

Value Act, as activist, believes the KKR’s Topcon Corp (7732 JP) is not being done at the right price. But Value Act will now tender shares and invest in Bidco.
Lynas Corp Ltd (LYC AU)and Iluka Resources (ILU AU) are the only Australian companies with confirmed (or near-term) refining specific heavy rare earth elements as China restricts exports.
StraCap has been tilting at the Wakita (8125 JP) for years. It hasn’t made headway. The only way StraCap will get its measures over the line is by soliciting retail.

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Apr 19

Daily Brief Japan: TSE Tokyo Price Index TOPIX, Mani Inc and more

In today’s briefing:

The Key to Japanese Equity Outperformance Is a Step Beyond Shareholder Returns
Mani (7730 JP): Guidance Reiterated; Dental Loosing Shine And Dented Margins Remain Concerns

The Key to Japanese Equity Outperformance Is a Step Beyond Shareholder Returns

A benefit of inflation was expected to shift from management that accumulates cash to management that proactively uses cash. However, it’s been used for shareholder returns but less for apex.
Hitachi is one of few companies that manage business in disciplined manner and execute the necessary growth investments. This is more result of overseas investor engagement than corporate governance reform.
The key to Japanese equities outperformance is whether management can change to mindset that investors want to see “positive investment and the ability to implement measures to expand corporate value.”

Mani (7730 JP): Guidance Reiterated; Dental Loosing Shine And Dented Margins Remain Concerns

By Tina Banerjee

Mani Inc (7730 JP) H1FY25 revenue rose 6.5% YoY, mainly driven by surgical segment, eyeless needles segment, while margins remained under pressure.
Despite the underperformance of dental segment, management reiterated FY25 guidance. Expecting Yen appreciation against the USD, the company expects just mid-single-digit sales and operating income growth for FY25.
Mani shares plunged 5% since it published its H1 results. Investors should avoid Mani due to its uncertain revenue outlook and deteriorating profitability in short-term.

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Apr 18

Daily Brief Japan: Shibaura Electronics, Topcon Corp, TRYT , Ryobi Ltd and more

In today’s briefing:

Yageo Bigly Overbids Minebea (+20%) For Shibaura Elec (6957) At ¥5400
[Japan Activism] – ValueAct Agrees to Tender to KKR Topcon (7732) Tender and Join As Buyer
Shibaura Electronics (6957 JP): No Messing Around as Yageo (2327 TT) Returns with a JPY5,400 Offer
TRYT (9164) – Limit Up On Report of Round 2 Bidding; A Growth Multiple Gets You a High Price
Ryobi (5851 JP) – OP Recovery Expected in FY12/25

Yageo Bigly Overbids Minebea (+20%) For Shibaura Elec (6957) At ¥5400

In February Yageo Corporation (2327 TT) made an unsolicited bid for Shibaura Electronics (6957 JP) at ¥4,300/share after getting the cold shoulder for months.
Minebea Mitsumi (6479 JP) was asked to bid, and they did a week ago, bidding ¥4,500/share. Yesterday the Shibaura CEO was in an article saying an overbid would be considered.
Mid-Day, I boomeranged my piece, saying I thought Yageo would overbid. Today after the close, Yageo has overbid with a whopping ¥5,400/share bid, with unchanged start date of 7 May.

[Japan Activism] – ValueAct Agrees to Tender to KKR Topcon (7732) Tender and Join As Buyer

Last night, Topcon Corp (7732 JP) announced that KKR had agreed a deal with ValueAct Capital who owns 14.62% of Topcon to have VAC tender shares and invest in Bidco.
Topcon’s Special Committee saw nothing wrong with this in terms of fairness. I think that argument needs to be investigated at a broader level.
If Bidder wants 50.1% control and expects passive to agree, and Bidder gets 50.1% to join Bidco at terms, obviously, majority of minority disappears. This is an unintended loophole.

Shibaura Electronics (6957 JP): No Messing Around as Yageo (2327 TT) Returns with a JPY5,400 Offer

Yageo Corporation (2327 TT) has revised its hostile preconditional tender offer for Shibaura Electronics (6957 JP) to JPY5,400, representing a 20.0% premium to Minebea Mitsumi (6479 JP)’s JPY4,500 offer.
All the other terms remain unchanged. In response to the revised Yageo offer, the Board will commence a sincere review to determine if the Yageo offer will enhance corporate value.
There is a 50/50 chance that Minebea walks or revises its offer. Yageo’s revised offer is marginally above the midpoint of Minebea IFA’s DCF range, potentially justifying a higher offer.

TRYT (9164) – Limit Up On Report of Round 2 Bidding; A Growth Multiple Gets You a High Price

TRYT (9164 JP) was bought by EQT years ago and IPOed on TSE Growth in July 2023 at ¥1,200/share. The shares tanked on Day 1, almost reached ¥1,000 days later.
Then they fell, and fell some more, reaching the ¥370s early in Q1, then again post Trump tariff announcement. EQT still holds ~60%. Shares closed at ¥374 on 16 April.
In February, there were noises about EQT putting the business up for sale, reportedly seeking an offer close to ¥1,200/share. Now there are noises of a Second Round.

Ryobi (5851 JP) – OP Recovery Expected in FY12/25

By Astris Advisory Japan

FY12/24 sales rose 3.8% YoY to ¥293.31bn while operating profit dropped -22.3% to ¥9.49bn, surpassing previously revised down forecasts.
Sales growth was boosted by the weak yen. However, the rise was limited by slowing auto production by Japanese, US and European carmakers in China and the impact from new model certification irregularities discovered at domestic automakers in Japan.
OP was hit by rising costs, especially labor. However, the company is expecting a sharp rebound in OP growth in FY12/25 thanks to starting production of new products in Japan, a recovery in customers’ China output and starting to pass on rises in labor and energy costs, rather than only aluminum price fluctuations.

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Apr 17

Daily Brief Japan: Rigaku Holdings, Wakita & Co Ltd, Money Forward , Tokyu Corp, TSE Tokyo Price Index TOPIX and more

In today’s briefing:

Rigaku IPO Lockup – Large PE Investors Can Still Break Even
[Japan Activism] – Strategic Capital Shareholder Proposals to WAKITA (8125) And Their Response
Money Forward: Business Model Begins to Breakdown
Tokyu Revamps Retail Business
Activist Investors Will Focus Their Approach More on Whole Assets that Aren’t Being Used Effectively

Rigaku IPO Lockup – Large PE Investors Can Still Break Even

By Sumeet Singh

Rigaku Holdings (268A JP) raised around US$750m in its Japan IPO in October 2024. The lockup on its pre-IPO investors is set to expire soon.
Rigaku engages in developing, manufacturing, sales and servicing scientific instruments specializing in X-ray technologies.
In this note, we will talk about the lockup dynamics and possible placement.

[Japan Activism] – Strategic Capital Shareholder Proposals to WAKITA (8125) And Their Response

By Shifara Samsudeen, FCMA, CGMA

Tsuyoshi Maruki’s Strategic Capital has gone after a number of cash-rich companies in the past. This is Year 5 going after Wakita & Co Ltd (8125 JP).
Wakita is cash-rich, and has been for years, but it is also asset-rich. The former CEO, after he retired, decided he wanted to play in real estate.
At the end of last month, Strategic Capital made proposals (English, Japanese) to Wakita. Again. Today, the company responded (only in Japanese). Time for more.

Money Forward: Business Model Begins to Breakdown

Money Forward (3994 JP) MF’s recent earnings was no surprise to us as we continued to highlight that the company’s business model is far inferior to its counterpart freee.
The last 2-3 quarterly results have made that discrepancy clear and MF’s non-BO SaaS businesses are only dead weight and have helped conceal weaknesses of its business model.
MF’s share price is down 19.3% YTD and think the market has finally come to terms that MF is losing ground whereas freee has managed to turn around its profitability.

Tokyu Revamps Retail Business

Tokyu may have just sold off its Tokyu Plaza building in Ginza but it is continuing to invest in retail.
In particular, it will focus on newand upgraded retail facilities along the main Tokyu railway lines over the next decade,
To make this happen and improve efficiency, it will merge its retail businesses into a more efficient, centralised core this summer.

Activist Investors Will Focus Their Approach More on Whole Assets that Aren’t Being Used Effectively

It’ll be interesting on whether shareholder proposals will be passed in companies with larger market capitalization and larger institutional investor ownership, which will be the main battleground for activist investors.
There are so many companies that are not creating the value they should be, it is no wonder that any company becomes a target for activist investors.
As activist funds’ AUM grows, their approach is likely to focus more on overall assets that are not being used effectively, such as cash, real estate, equities, and non-core businesses.

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Apr 16

Daily Brief Japan: Tsuruha Holdings, JX Advanced Metals, Fast Retailing, Takashimaya, Demae-Can Co., Ltd., Serverworks, Vector Inc, FP Partner, LIFULL, San Holdings and more

In today’s briefing:

The Skew in the Tsuruha-Welcia-Aeon Combination
The End-April TOPIX Rebalance – US$2.1bn a Side
Fast Retailing (9983 JP): More Capping-Led Selling in September (And Maybe More in March)
Takashimaya (8233 JP): Full-year FY02/25 flash update
Demae-Can Co., Ltd. (2484 JP): 1H FY08/25 flash update
Serverworks (4434 JP): Full-year FY02/25 flash update
Vector Inc (6058 JP): Full-year FY02/25 flash update
FP Partner (7388 JP): Q1 FY11/25 flash update
Lifull (2120 JP) – HOME’S Services Segment Delivers Steady Performance…
San Holdings (9628 JP) – Century-Strong Enterprise Focused on Growth

The Skew in the Tsuruha-Welcia-Aeon Combination

Tsuruha Holdings (3391 JP), Welcia Holdings (3141 JP), and Aeon Co Ltd (8267 JP) announced their deal whereby Tsuruha merges with Welcia in December, and Aeon gains control of MERGECO.
Orbis Investments – owner of 9.7% of shares out – complained. I think with good reason. Tsuruha is trading a little expensive to the ratio, but there’s 7.5mos to go.
Interestingly, there’s real skew on this trade. It’s not overly complicated, and it is worthwhile thinking about it.

The End-April TOPIX Rebalance – US$2.1bn a Side

This year there are 10 Free Float Weight Changes for April. There are 20 Liquidity Factor Changes, 2 Inclusions, and 3 M&A-related downweights. There are 90+ Share Count Change Downweights.
This is a bigger Big April Basket than normally comes around. And there are some big flows. All trades are 28 April at the close.
Total flow is ~US$2.1bn a side. 64 trades of >2 days of ADV, and of those, 27 with >US$10mm to trade (7 of US$50mm+). Top 20 in USD average 5dADV.

Fast Retailing (9983 JP): More Capping-Led Selling in September (And Maybe More in March)

By Brian Freitas

Fast Retailing (9983 JP)‘s weight in the Nikkei 225 (NKY INDEX) has increased to 10.81% which will lead to another reduction in the CPAF in September.
Even after the reduction in CPAF and an increase in BayCurrent Consulting‘s PAF in September, there is a possibility of Fast Retailing being capped again in March 2026.
The continued passive selling sets up interesting trading opportunities after periods of Fast Retailing (9983 JP) outperformance versus the other index constituents.

Takashimaya (8233 JP): Full-year FY02/25 flash update

Total operating revenue for FY02/25 was JPY1.03tn, up 8.5% YoY, with operating profit at JPY57.5bn, up 25.2%.
Domestic and Overseas Department Stores, along with Finance and Contract and Design segments, drove YoY revenue and profit growth.
FY02/26 forecast anticipates revenue and profit growth, led by Domestic and Overseas Department Store segments, despite some segment challenges.

Demae-Can Co., Ltd. (2484 JP): 1H FY08/25 flash update

Revenue was JPY20.9bn, a decrease of 18.3% YoY, with operating and recurring losses both at JPY1.3bn.
Gross merchandise value was JPY84.8bn, down 13.1% YoY, with 30.4mn orders and 4.92mn active users.
GPM improved to 20.3% for 1H, with operating expenses totaling JPY12.3bn, reflecting cost optimization efforts.

Serverworks (4434 JP): Full-year FY02/25 flash update

Serverworks’ FY02/25 revenue was JPY35.7bn (+29.8% YoY), exceeding forecasts with a 100.4% achievement rate.
Cloud Integration revenue reached JPY2.3bn (+23.7% YoY), driven by demand for cloud transitions and hybrid strategies.
Resale services revenue was JPY23.3bn (+34.0% YoY), supported by increased AWS usage and new customer acquisitions.

Vector Inc (6058 JP): Full-year FY02/25 flash update

Revenue reached JPY59.3bn (+0.1% YoY), with operating profit at JPY8.0bn (+15.7% YoY), and net income at JPY4.2bn (-10.4% YoY).
PR and Advertising segment saw significant profit increase due to reversal of doubtful accounts provisions, despite flat revenue.
Direct Marketing business impacted by food safety concerns, resulting in lower revenue and profit, despite record high sales recovery.

FP Partner (7388 JP): Q1 FY11/25 flash update

Revenue for Q1 FY11/25 was JPY8.3bn, flat YoY, with operating profit at JPY798mn, down 41.5% YoY.
The number of sales representatives increased to 2,546, while policy transfer agreements decreased to 4,981, down 27,362 YoY.
New policies totaled 56,931, down 1.1% YoY, with new customers at 35,339, up 0.7% YoY.

Lifull (2120 JP) – HOME’S Services Segment Delivers Steady Performance…

By Sessa Investment Research

FY2025/9 Q1 Results Review: In Q1 FY2025/9, LIFULL Co., Ltd. (hereafter, the Company) reported net sales of JPY 8,367 mn, up 2.2% YoY, driven by growth in the HOME’S Services segment.
Operating profit turned positive at JPY 652 mn, thanks to higher sales in the HOME’S Services segment as well as cost-cutting efforts, particularly in the Overseas segment.
In the HOME’S Services segment, sales rose 7.7% YoY and operating profit grew 24.2% YoY, due to growth in the Company’s client network and average revenue per agent (ARPA) driven by a stronger sales efforts and improved user interface (UI) and experience (UX).

San Holdings (9628 JP) – Century-Strong Enterprise Focused on Growth

By Astris Advisory Japan

SAN HOLDINGS is the largest domestic pure-play End-of-Life service provider, with a network of 262 funeral halls spanning 15 prefectures in Japan.
Despite the unmistakable demographic tailwind, intensifying competition has resulted in the company accelerating its strategic growth priorities with the landmark acquisition of peer Kizuna Holdings in September 2024.
Approaching its centenary in FY3/32, the company plans to build a nationwide operation fuelled by M&A and to expand its service offering.

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Apr 15

Daily Brief Japan: TKP Corporation , Money Forward , TV Asahi Holdings, Neos Corp, J Frontier Co Ltd, Toumei , TSE Tokyo Price Index TOPIX and more

In today’s briefing:

TKP Corp (3479) – A Second Big Buyback In Short Order
Money Forward (3994) | SaaS Is Slowing, But So Is the Price
TV Asahi Placement – Mini Share Buyback Should Buffer Deal
Neos Corp (3627 JP): Full-year FY02/25 flash update
J Frontier Co Ltd (2934 JP): Q3 FY03/25 Flash update
Toumei (4439 JP): 1H FY08/25 flash update
Attention Should Be Paid to Whether the Pseudo Cross-Shareholdings Will Hinder Management Reform

TKP Corp (3479) – A Second Big Buyback In Short Order

TKP Corporation (3479 JP) is a fascinating little company. It rents space. From people. To people. Then adds on services. Meeting, recruiting, training, seminar, banquet, party, etc rooms.
Last year they bought control of two small businesses to add features. Revenues are up. The new FY suggests revenue growth, OP growth, and now a buyback.
The buyback is the interesting bit. They did one last FY with interesting parameters, and Quiddity has a new tool we are trying out, so we showcase an example here.

Money Forward (3994) | SaaS Is Slowing, But So Is the Price

By Mark Chadwick

Q1 revenue and EBITDA missed expectations, with slowing growth in key business segment and corporate customer adds.
Macroeconomic risks, including US tariffs, may be weighing on business confidence and new customer acquisition.
Valuation now looks attractive, trading at a steep discount to global peers despite similar fundamentals.

TV Asahi Placement – Mini Share Buyback Should Buffer Deal

By Nicholas Tan

A group of shareholders are looking to raise US$133m from selling their respective stakes in TV Asahi Holdings (9409 JP) .
While the deal shouldn’t come as a surprise, given the ongoing cross-shareholding unwind narrative in Japan, the timing of such a selldown isn’t always certain.
In this note, we will talk about the placement and run the deal through our ECM framework.

Neos Corp (3627 JP): Full-year FY02/25 flash update

In FY02/25, TECMIRA’s revenue increased by 27.8% YoY to JPY11.2bn, with all segments achieving growth.
The company recorded an operating profit of JPY91mn, recovering from a JPY123mn loss in FY02/24, despite a net loss.
For FY02/26, TECMIRA forecasts revenue of JPY11.5bn, adjusted EBITDA of JPY680mn, and net income of JPY100mn.

J Frontier Co Ltd (2934 JP): Q3 FY03/25 Flash update

The company reported revenue of JPY16.4bn (+32.1% YoY) and net income of JPY121mn, reversing previous losses.
Medical Care Sales segment saw strong growth from D2C sales, driven by flagship products and enhanced advertising efficiency.
Healthcare Marketing business achieved significant EBITDA boost from a profitable corporate project completed in Q3 FY05/25.

Toumei (4439 JP): 1H FY08/25 flash update

In 1H FY08/25, Toumei reported revenue of JPY14.5bn, operating profit of JPY1.7bn, and net income of JPY1.2bn.
Revenue grew 31.4% YoY, with significant increases in Office Denki 119 (56.5% YoY) and Office Solutions (84.3% YoY).
Operating profit rose 86.4% YoY, driven by higher revenue and improved SG&A ratio, despite increased procurement costs.

Attention Should Be Paid to Whether the Pseudo Cross-Shareholdings Will Hinder Management Reform

An increasing number of companies had eliminated shareholder benefit plans, but reducing cross-shareholdings and caution toward activist investors may have been the motivating factors in the reversal of this trend.
If managers distract from management reform by gaining the support of individual investors through shareholder benefits, the stock benefit program will become a pseudo cross-shareholding.
Shareholder benefit programs and shareholder returns cannot be compared in the same manner. Companies shouldn’t underestimate the fact that the problem with this lies in “principle of equality of shareholders.”

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Apr 14

Daily Brief Japan: Tsuruha Holdings, AEON Mall, Suzuki Motor, Nippon Parking Development, Adastria Co Ltd, Nikkei 225 and more

In today’s briefing:

Tsuruha (3391), Welcia (3141), and Aeon (8267) Do a Deal, Short-Changing Tsuruha Minorities
“Tiny Win for Guess The Ratio” Aeon (8267) Pays a SMALL Premium for Aeon Mall (8905)
Suzuki Motor (7269 JP) Placement: Likely to Price Today; 7-8% Underperformance Vs Peers/TOPIX
Aeon Mall (8905 JP): Aeon (8267 JP)’s Share Exchange Ratio Is Set
Weekly Deals Digest (13 Apr) – Suzuki, Canvest, Fengxiang, HKBN, Goldlion, Tsuruha/Welcia, Shibaura
Nippon Parking Development (2353 JP): Irreplaceable Assets with +12% Historical EPS CAGR at 13x P/E
Adastria: ¥500 Billion Through New Brands – Signs UK’s Karrimor
Nikkei Index Options Weekly (Apr 07 – 11): Vol Spikes, Skew Steepens, Macro Shifts Unfold

Tsuruha (3391), Welcia (3141), and Aeon (8267) Do a Deal, Short-Changing Tsuruha Minorities

On Friday, Tsuruha Holdings (3391 JP), Welcia Holdings (3141 JP), and Aeon Co Ltd (8267 JP) announced the Tsuruha/Welcia merger and Partial Tender to get Aeon to 50+% of NEWCO.
The scrip ratio short-changes Tsuruha shareholders. The subsequent partial offer to raise Aeon’s stake above 50% is low too. 9.7% shareholder Orbis is already out with a complaint.
But… all is not lost. There are some interesting angles here to complain.

“Tiny Win for Guess The Ratio” Aeon (8267) Pays a SMALL Premium for Aeon Mall (8905)

In an announcement after the close Friday 11 April, Aeon Co Ltd (8267 JP) and AEON Mall (8905 JP) announced their merger ratio, and timing.
The ratio is 0.65 to 1.0, meaning Aeon Mall shareholders don’t get a lot of credit for their real estate. The timing is short-dated. The AGM is end-May. Merger July1.
This may be a tad light, but it is a done deal. Active shareholder base is almost all retail and crossholders+dom passive gets Aeon to 70%.

Suzuki Motor (7269 JP) Placement: Likely to Price Today; 7-8% Underperformance Vs Peers/TOPIX

By Brian Freitas

Tokio Marine & Nichido Fire Insurance and Sompo Japan Insurance are looking to raise US$1.2bn by offloading their entire stakes in Suzuki Motor by way of a secondary offering.
Suzuki Motor (7269 JP) stock is flat since the announcement of the placement but has underperformed its peers and the TSE Tokyo Price Index TOPIX (TPX INDEX).
With the placement being less than 5% of the number of shares outstanding, there is unlikely to be any immediate passive inflow which could pressure the stock.

Aeon Mall (8905 JP): Aeon (8267 JP)’s Share Exchange Ratio Is Set

AEON Mall (8905 JP) announced a share exchange offer by Aeon Co Ltd (8267 JP) at 0.65 Aeon shares per Aeon Mall share, a 30.9% premium to the undisturbed price.
The share exchange ratio is reasonable compared to historical price ratios and IFA valuation ranges. The implied offer multiple is attractive compared to peer multiples.
Aeon’s 58.16% shareholding ensures that Aeon Mall’s vote on 22 May is low-risk. The share exchange’s effective date is 1 July.

Weekly Deals Digest (13 Apr) – Suzuki, Canvest, Fengxiang, HKBN, Goldlion, Tsuruha/Welcia, Shibaura

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: Suzuki Motor (7269 JP) secondary offering; DN Solutions (298440 KS), Chagee Holdings (CHA US) and LG Electronics India (123D IN) IPOs.
Event-Driven developments: Canvest, Shandong Fengxiang (9977 HK), HKBN Ltd (1310 HK), Goldlion Holdings (533 HK), Tsuruha Holdings (3391 JP), Shibaura Electronics (6957 JP), Abacus Storage King (ASK AU).

Nippon Parking Development (2353 JP): Irreplaceable Assets with +12% Historical EPS CAGR at 13x P/E

By Michael Fritzell

Nippon Parking Development (2353 JP — US$477 million) — also known as “NPD” — is a Japanese lessor of parking spaces and an operator of ski resorts and theme parks.
It’s the brainchild of lifelong entrepreneur Kazuhisa Tatsumi, who literally built the company in his garage in the early 1990s.
In Japan, developers are generally required to build 1/3 parking space per 100 square meters of floor area for any large building. This is known as “legally mandated parking space”.

Adastria: ¥500 Billion Through New Brands – Signs UK’s Karrimor

Adastria (soon to be And ST) is Japan’s biggest multi-chain clothing retailer and fourth largest overall.
As well as investing in core brands like Global Work, the former wholesaler is now expanding through new segments – including Forever 21 despite its US bankruptcy
In a sign of further diversification, it will now move into the very buoyant outdoor market having just acquired the Asian rights to UK outdoor brand, Karrimor.

Nikkei Index Options Weekly (Apr 07 – 11): Vol Spikes, Skew Steepens, Macro Shifts Unfold

By John Ley

Both Nikkei and USD/JPY re-tested levels last seen in early August, with Nikkei implied vols surging.
Beyond tariffs, we explore what may become the dominant driver of market movements in the weeks ahead.
Skew steepened materially; we examine how open interest at current spot levels could shape the spot-vol relationship going forward.

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Apr 13

Daily Brief Japan: Tsuruha Holdings, Shibaura Electronics, JX Advanced Metals, Meitetsu Transport, Hisamitsu Pharmaceutical Co, TSE Tokyo Price Index TOPIX and more

In today’s briefing:

Tsuruha (3391 JP): Welcia (3141 JP) Share Exchange and Aeon (8267 JP) Partial Offer Unattractive
(Mostly) Asia-Pac M&A: Abacus Storage, Gold Road, Mayne Pharma, Canvest, ESR, Shibaura Electronics
TOPIX Inclusions: Who Is Ready (Apr 2025)
Meitetsu Transport (9077JP) Confirms Closure of Last Department Store
Hisamitsu Pharmaceutical (4530 JP): Salonpas Holds Fort; New Products Ramp-Up; Stable FY26 Expected
Effectiveness of MBO Special Committee Is Linked to Effectiveness of Independent Directors

Tsuruha (3391 JP): Welcia (3141 JP) Share Exchange and Aeon (8267 JP) Partial Offer Unattractive

Tsuruha Holdings (3391 JP) and Welcia Holdings (3141 JP) announced a merger through a share exchange followed by a partial tender offer by Aeon for a 50.90% stake of the merged entity.
The share exchange terms favour Welcia over Tsuruha shareholders. The Tsuruha shareholder vote is high risk as Orbis, the second-largest shareholder, intends to vote NO.
Aeon Co Ltd (8267 JP)’s follow-up partial offer for Tsuruha is unattractive compared to its previous offer for the Oasis stake, peer multiples and premium to the undisturbed price.

(Mostly) Asia-Pac M&A: Abacus Storage, Gold Road, Mayne Pharma, Canvest, ESR, Shibaura Electronics

By David Blennerhassett

I tally 52 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma.
One new deal discussed this week: Public Storage (PSA US)‘s NBIO, by way of a Scheme, for Abacus Storage King (ASK AU).
Key updates/news took place on Gold Road Resources (GOR AU), Mayne Pharma (MYX AU), Canvest Environmental (1381 HK), ESR Group (1821 HK), Goldlion Holdings (533 HK), Shibaura Electronics (6957 JP).

TOPIX Inclusions: Who Is Ready (Apr 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.
The TOPIX Inclusions of Baudroie (4413 JP) and JX Advanced Metals (5016 JP) are expected to take place at the end of April 2025.
Separately, the 0.75x TOPIX Liquidity Factor removal event will also take place at the same time. We expect one-way flows of US$514mn for this event.

Meitetsu Transport (9077JP) Confirms Closure of Last Department Store

Until quite recently, Nagoya had seven department stores but will soon have just four.
This follows Meitetsu’s decision to close its flagship store to clear the way for a major redevelopment of the station area.
The new development will include retail and so bring some competition to Takashimaya, which now dominates department store retailing in the city, but not before 2033.

Hisamitsu Pharmaceutical (4530 JP): Salonpas Holds Fort; New Products Ramp-Up; Stable FY26 Expected

By Tina Banerjee

Hisamitsu Pharmaceutical Co (4530 JP) reported double digit revenue growth in FY25 on the back of 16% YoY growth in Salonpas focused OTC pharmaceutical products.
Rx business revenues grew 5% YoY as Zicthoru, Apohide, Combipatch, Vivelle-Dot etc clocked healthy numbers excepting Mohrus product line.
Hisamitsu expects FY26 revenue to be ¥165B, up 6% YoY, driven by new products, with net profit growth to decelerate on higher cost.

Effectiveness of MBO Special Committee Is Linked to Effectiveness of Independent Directors