Japan

In today’s briefing:

Suzuki Motor (7269 JP): The Current Playbook
Creek & River (4763 JP): Full-year FY02/25 flash update
Usen-Next Holdings Co Ltd (9418 JP): 1H FY08/25 flash update
Aeon Fantasy (4343 JP): Full-year FY02/25 flash update
Fast Retailing (9983 JP) Profit Targets After Q2 Results
Yoshinoya Holdings (9861 JP): Full-year FY02/25 flash update

Suzuki Motor (7269 JP): The Current Playbook

Since the announcement of the US$1.1 billion secondary offering, Suzuki Motor (7269 JP)’s shares have remained broadly unchanged at the undisturbed price of JPY1570.5 per share (7 April).
It is instructive to look at recent large Japanese placements to understand the potential trading pattern. Suzuki’s share performance is the joint best among recent large placements.
However, the shares have underperformed the Nikkei 225 index (up 7.9%). The offering will likely be priced on 14 April. The average large Japanese placement tends to generate positive returns.

Creek & River (4763 JP): Full-year FY02/25 flash update

Sales increased by JPY476mn (+1.0% YoY), driven by growth in the Creative (Japan) segment, while operating profit decreased by JPY489mn (-11.9% YoY).
The company forecasts FY02/26 consolidated sales of JPY60.0bn (+19.3% YoY) and operating profit of JPY5.0bn (+38.3% YoY).
Year-end dividend forecast for FY02/26 is JPY45.0 per share, with a payout ratio of 38.9%.

Usen-Next Holdings Co Ltd (9418 JP): 1H FY08/25 flash update

1H FY08/25 revenue increased 22.7% YoY to JPY186.8bn, with progress toward full-year forecast at 51.9%.
Operating profit rose 5.0% YoY to JPY16.6bn, with all segments showing growth except Communications & Energy.
Subscriber count for U-NEXT increased by 150,000, while former Paravi subscribers declined by 20,000 in 1H FY08/25.

Aeon Fantasy (4343 JP): Full-year FY02/25 flash update

FY02/25 sales increased by 6.7% YoY, with operating profit up 21.2% YoY, but recurring profit declined 23.4% YoY.
FY02/26 forecasts sales of JPY92.2bn (+5.7% YoY), operating profit of JPY7.3bn (+68.0% YoY), and net income of JPY2.5bn.
The company plans to open new facility formats and expand in regional cities, focusing on profitability and efficiency.

Fast Retailing (9983 JP) Profit Targets After Q2 Results

By Nico Rosti

Mark Chadwick highlighted Fast Retailing (9983 JP) ‘s outlook in 2 recent insights, before and after Q2 earnings: his DCF model for this stock suggests roughly a +13% upside.
This week the stock rallied from the crash at the start of the week, closing a bit higher than the previous week (it had closed 1 week down, CC=-1).
Assuming the stock may rally further from here, pushed by good Q2 results, let’s have a look to our model to analyze some profit targets.

Yoshinoya Holdings (9861 JP): Full-year FY02/25 flash update

Consolidated sales reached JPY205.0bn (+9.3% YoY), with operating profit at JPY7.3bn (-8.4% YoY) and net income JPY3.8bn (-32.1% YoY).
The company forecasts FY02/26 sales at JPY225.0bn (+9.8% YoY), with operating profit expected to rise 1.3% YoY.
The company achieved JPY187.5bn sales in FY02/24, surpassing its JPY180.0bn target, due to agile menu price revisions.

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Apr 11

Daily Brief Japan: Shibaura Electronics, Fast Retailing, Suzuki Motor, SGX Rubber Future TSR20, Nakamoto Packs, WingArc1st Inc, Koshidaka Holdings, Shift Inc, TSE Tokyo Price Index TOPIX and more

In today’s briefing:

Minebea Mitsumi Overbids Yageo for Shibaura Electronics (6957)
Shibaura Electronics (6957 JP): Minebea Mitsumi’s (6479 JP) White Knight Tender Offer at JPY4,500
Fast Retailing (9983) | Japan Delivers as Tariffs Start to Impact
Suzuki Motor Placement Updates – Relative Correction Has Been Decent so Far. But Lacks Buyback
Tariff Part II: Canada-Mexico Web Ensnares US; USTMA Projects Higher Volume
Nakamoto Packs (7811 JP): Full-year FY02/25 flash update
WingArc1st Inc (4432 JP): Full-year FY02/25 flash update
Koshidaka Holdings (2157 JP): 1H FY08/25 flash update
Shift Inc (3697 JP): 1H FY08/25 flash update
Can Growth Market Reform Succeed in a Structure of Interdependence of IPO Ecosystem Stakeholders?

Minebea Mitsumi Overbids Yageo for Shibaura Electronics (6957)

In early February, Yageo Corporation (2327 TT) made an unsolicited bid for Shibaura Electronics (6957 JP) at ¥4,300/share. They had approached in October 2024, and continued approaches through end-January.
Shibaura’s bankers approached Minebea Mitsumi (6479 JP) in January. Due diligence, then bids. They bid ¥4,600. Not enough said the SC. Then Trump. Then ¥4,400. Now ¥4,500 accepted 9 April.
But Trump tariffs relief came 9 April US time. And the Offer Price is below the mid-point of ALL three different financial advisors. I think this is not done yet.

Shibaura Electronics (6957 JP): Minebea Mitsumi’s (6479 JP) White Knight Tender Offer at JPY4,500

Shibaura Electronics (6957 JP) announced a preconditional tender offer from Minebea Mitsumi (6479 JP) at JPY4,500 per share, a 4.7% premium to Yageo Corporation (2327 TT)’s JPY4,300 hostile offer.
The offer is scheduled to start on 23 April, ahead of Yageo’s 7 May start. The Board intends to recommend the Minebea offer and oppose the Yageo offer.
Due to its low premium to the Yageo offer, at least another bidding round is highly probable, and the Minebea offer is below the midpoint of the IFA DCF valuation.

Fast Retailing (9983) | Japan Delivers as Tariffs Start to Impact

Strong Q2 beat: Revenue rose 14% YoY and OP jumped 33%, driven by Japan strength and solid winter sales, offsetting China’s continued weakness.
Guidance tweak: FY business profit raised to ¥540bn, though H2 expectations effectively lowered due to anticipated US tariff impact.
US expansion continues: 69 stores now open; North America accounts for 7.5% of sales, with future margin mitigation via supply chain shifts and EU/Asia growth.

Suzuki Motor Placement Updates – Relative Correction Has Been Decent so Far. But Lacks Buyback

By Sumeet Singh

Tokio Marine Holdings (8766 JP) and Sompo Holdings (8630 JP) aim to raise around US1.15bn (including over-allotment) via selling around 5% of Suzuki Motor (7269 JP).
While Suzuki doesn’t have much direct exposure to the US markets, its shares had corrected in line with other auto players going into the deal launch.
In this note, we compare the deal to some of the past deals and talk about the updates since our last note.

Tariff Part II: Canada-Mexico Web Ensnares US; USTMA Projects Higher Volume

By Vinod Nedumudy

Components crossing US–Mexico–Canada corridor face disruption
Reshoring production to US would involve multi-year lead times
USTMA expects U.S. tire shipments of 340.4 million units in 2025

Nakamoto Packs (7811 JP): Full-year FY02/25 flash update

FY02/25 results: Revenue JPY49.1bn (+10.8% YoY), operating profit JPY2.9bn (+58.2% YoY), net income JPY2.0bn (+90.1% YoY).
FY02/26 forecast: Revenue JPY52.0bn (+5.8% YoY), operating profit JPY3.0bn (+5.4% YoY), net income JPY2.0bn (flat YoY).
Dividend projections: FY02/25 JPY66.0 per share, FY02/26 JPY68.0 per share, payout ratio 30.2% (FY02/25: 29.3%).

WingArc1st Inc (4432 JP): Full-year FY02/25 flash update

In FY02/25, revenue was JPY28.7bn (+11.5% YoY), operating profit JPY8.2bn (+12.4% YoY), and EBITDA JPY9.7bn (+12.2% YoY).
BDS sales revenue rose 13.7% YoY to JPY18.8bn, with cloud services revenue growing 18.8% YoY.
For FY02/26, the company forecasts revenue of JPY30.3bn (+5.5% YoY) and operating profit of JPY8.9bn (+8.3% YoY).

Koshidaka Holdings (2157 JP): 1H FY08/25 flash update

In 1H FY08/25, Koshidaka Holdings posted revenue of JPY34.0bn (+11.2% YoY) and operating profit of JPY5.1bn (+5.8% YoY).
The company opened 23 facilities, closed five, totaling 682 facilities, with an average of 26.8 rooms per facility.
Personnel expenses rose by 12.8% YoY, rent by 12.7% YoY, and SG&A expenses to JPY3.5bn (+7.0% YoY).

Shift Inc (3697 JP): 1H FY08/25 flash update

In 1H FY08/25, the company reported sales of JPY61.7bn, operating profit of JPY8.1bn, and net income of JPY4.5bn.
Software Testing Related Services segment recorded JPY39.6bn in sales, JPY14.6bn gross profit, and JPY10.5bn operating profit.
Software Development Related Services segment achieved JPY19.7bn sales, JPY5.1bn gross profit, and JPY1.6bn operating profit.

Can Growth Market Reform Succeed in a Structure of Interdependence of IPO Ecosystem Stakeholders?

TSE seems reluctant to raise the market capitalization criteria for listing on Growth Market, but wants to encourage management to grow after IPO by raising the criteria for maintaining listing.
The reason why companies don’t grow after IPO is that IPOs are often conducted for tax savings for founders and for other reasons without any intention to grow.
It is questionable whether the new listing maintenance criteria will help these companies grow and whether the verbal intervention in the listing review process will be successful.

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Apr 10

Daily Brief Japan: Seven & I Holdings, Daihatsu Diesel Mfg, Shimano Inc, Daiseki Co Ltd, Trial Holdings, Ohba Co Ltd, Amvis Holdings Inc and more

In today’s briefing:

7&I (3382) – FY24 Better, FY25 OK, Surprisingly Large Buyback
USTR Hearings on Section 301 China Maritime Dominance – Fees on Chinese Ships
Shimano (7309) | Gears Grinding
Daiseki Co Ltd (9793 JP): Full-year FY02/25 flash update
Trial Purchase of Seiyu Creates New Japanese Retail Power
Ohba (9765 Jp) – Announced FY2025/5 Dividend Forecast Increase and Expanded Shareholder Benefits
Amvis Holdings Inc (7071 JP): Deteriorating Margin to Limit Near-Term Upside Potential

7&I (3382) – FY24 Better, FY25 OK, Surprisingly Large Buyback

Today, Seven & I Holdings (3382 JP) reported full-year earnings. The FY2025 guidance looks OK. Not overly exciting. Optically, it falls short, but 7&i guidance includes York only for H1.
The basic outlines of strategy in the Presentation are unchanged from the 6 March strategy report. The company seems convinced an IPO of SEI is a good thing. I’m underwhelmed.
The company also announced that it would bring forward ¥600bn of its planned 6-year ¥2trln buyback program, and execute it this year. That’s good.

USTR Hearings on Section 301 China Maritime Dominance – Fees on Chinese Ships

The original issues were discussed in depth in The USTR’s New “Proposed Actions” For Section 301 Investigation on China’s Maritime/Shipping Sectors (now unpaywalled). Hearings took place 24-26 March 2025.
The hearings were long, and comments were predictable. Those supporting the measures offered evidence which was simply incorrect. Those against tried. Post-hearing comments were due 2 April.
We don’t yet know what will happen, but if they stay in place, starting 17 April, US exports of grain/pulses, coal, etc will suffer. Imports will see higher costs too.

Shimano (7309) | Gears Grinding

US tariffs could sharply cut Shimano’s H2 operating profit by up to 57%, despite limited direct exposure, due to opaque supply chains via China and Taiwan.
Valuation would look stretched at 25x EV/EBIT versus historical 20x, if earnings fall short of current guidance.
Shimano’s ¥530bn net cash pile offers room to boost shareholder returns through buybacks or dividends.

Daiseki Co Ltd (9793 JP): Full-year FY02/25 flash update

Daiseki’s FY02/25 sales declined 2.8% YoY to JPY67.3bn, exceeding the forecast of JPY66.0bn.
Operating profit fell 3.3% YoY to JPY14.3bn, impacted by TOB-related expenses and heavy snowfall.
FY02/26 forecast: Sales JPY70.0bn (+4.0% YoY), operating profit JPY15.7bn (+9.7% YoY), OPM 22.4% (+1.1pp YoY).

Trial Purchase of Seiyu Creates New Japanese Retail Power

By Michael Causton

Until last year, Trial was a Kyushu-based discount FMCG retailer, that had just completed its IPO.
Today, it is one of the largest FMCG retailers in the country having won the bidding to acquire Seiyu from foster care under KKR.
This is a massive development that will pressure other rivals to step up in order to compete.

Ohba (9765 Jp) – Announced FY2025/5 Dividend Forecast Increase and Expanded Shareholder Benefits

Dividend Increase | On March 13, 2025, OHBA (hereafter, the Company) announced an increase to its FY2025/5 dividend forecast.
Prior to the announcement, the Company had planned to pay dividends of JPY 20.00 in H1 and JPY 20.00 in H2, for a total of JPY 40.00.
However, OHBA decided to increase its H2 dividend by JPY 2.00 to JPY 22.00 (for a full-year dividend of JPY 42.00).

Amvis Holdings Inc (7071 JP): Deteriorating Margin to Limit Near-Term Upside Potential

By Tina Banerjee

While Amvis Holdings Inc (7071 JP) expects decelerating revenue growth of 26% for FY25 (FY24: 33%), EBITDA, operating, and net profits are likely to decline 9–22%.
Personnel expenses as % of sales surged to 49.3% in Q1FY25 from 44.6% in Q1FY24. The trend is expected to continue with the increase in staff and training cost.
Decelerating revenue growth, margin erosion, aggressive business expansion, and overhang related to improperly claimed medical service fee will limit the near-term upside potential for Amvis.

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Apr 09

Daily Brief Japan: Tokyo Metro, Nikkei 225, TSE Tokyo Price Index TOPIX and more

In today’s briefing:

TOPIX Index Upweights: Great Hit Rate; Strong Trade Performance; A Rare Win!
Nikkei 225 Bounce: Setting Up for Tactical Shorts
Companies May Worked on Raising OP Margin in Minor Ways Without Working on Raising Gross Margins

TOPIX Index Upweights: Great Hit Rate; Strong Trade Performance; A Rare Win!

By Janaghan Jeyakumar, CFA

In the TOPIX Index, some “low liquidity” names carry a liquidity factor of 0.75x resulting in their actual index weights being smaller than their default weights.
These names are reviewed every April and if the liquidity factor of a stock gets removed, the stock will see index inflows from passive trackers of TOPIX.
The results for April 2025 liquidity factor removal have been confirmed and we achieved very high hit rates for our High and Medium conviction baskets.

Nikkei 225 Bounce: Setting Up for Tactical Shorts

By Nico Rosti

From Monday’s gloom to Tuesday’s euphoria, the Nikkei 225 (NKY INDEX) staged one of the strongest rebounds — but tariff risks haven’t gone away. Still there.
Here are some tactical analysis and ideas specific for the Nikkei 225 Index to prepare for the key risk ahead: another brutal sell-off.
The targets highlighted by our models (below) come with low reversal probabilities — ranging from just 25% to 50% — this is consistent with weak market rebound dynamics.

Companies May Worked on Raising OP Margin in Minor Ways Without Working on Raising Gross Margins

Japan’s declining % global GDP and the number of top companies in market capitalization shows that simply boosting profits through yen depreciation left behind the growth speed of global competitors.
While many Japanese companies tried to improve profit margins by reducing labor costs and other expenses, few have managed to improve gross profit margins, which relate to their business models.
The fact that few companies have taken steps to shift to higher value-added products and services is why the yen rate remains a key factor in stock valuations.

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Apr 08

Daily Brief Japan: Suzuki Motor, Mitsubishi Corp, Nintendo, Tosei Corp, SBI RHEOS HIFUMI, Create Sd Holdings Co and more

In today’s briefing:

Suzuki Motor Placement – Not the Best Time for a US$1.15bn Deal. It Will Be a Long Week.
Suzuki Motor (7269 JP): A US$1.1 Billion Secondary Offering
MitCorp (8058) BIG Buyback – Share Demand Will Help Weather The Storm
Suzuki Motor (7269 JP) Placement: Limited Index Buying & Weak Markets Could Pressure Stock
Nintendo (7974) | Next-Gen Switch 2 Meets Next-Level Margin Risk
Tosei Corp (8923 JP): Q1 FY11/25 flash update
SBI RHEOS HIFUMI (165A JP): Coverage Initiation
Create Sd Holdings Co (3148 JP): Q3 FY05/25 flash update

Suzuki Motor Placement – Not the Best Time for a US$1.15bn Deal. It Will Be a Long Week.

By Sumeet Singh

Tokio Marine Holdings (8766 JP) and Sompo Holdings (8630 JP) aim to raise around US1.15bn (including over-allotment) via selling around 5% of Suzuki Motor (7269 JP).
While Suzuki doesn’t have much direct exposure to the US markets, its shares have still corrected in line with other auto players.
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

Suzuki Motor (7269 JP): A US$1.1 Billion Secondary Offering

Suzuki Motor (7269 JP) has announced a secondary offering of up to 95.7 million shares (110.1 million including overallotment), worth around US$1.1 billion (US$1.3 billion including overallotment).
Suzuki’s goal with the secondary offering is (i) to reduce cross-shareholdings and (ii) to expand and diversify the shareholder base, which should further enhance liquidity.
Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 21 and 23 April (likely 21 April).

MitCorp (8058) BIG Buyback – Share Demand Will Help Weather The Storm

On 3 April mid-day, Mitsubishi Corp (8058 JP) announced its FY25 earnings guidance and new “Shareholder Return Strategy”, a ¥1 trillion buyback, and its “Corporate Strategy 2027” Mid-Term Management Plan.
The FY25 forecast is for a third consecutive decline in underlying operating cashflow, but a hike in dividend from ¥100 to ¥110 and a ¥1trln share buyback, including ¥230bn tender.
The combination of dividend and buyback should be 15% of market cap over the next 12mos. And I expect Warren Buffett will consider buying dips.

Suzuki Motor (7269 JP) Placement: Limited Index Buying & Weak Markets Could Pressure Stock

By Brian Freitas

Tokio Marine & Nichido Fire Insurance and Sompo Japan Insurance are looking to offload their entire stakes in Suzuki Motor (7269 JP) by way of a secondary offering.
With the size of the secondary offering less than 5% of the number of shares, there could be no index buying in the short-term and that will pressure the stock.
If the overallotment option is exercised and the seller of the shares is currently considered as non-float, there could be small passive buying in the short-term.

Nintendo (7974) | Next-Gen Switch 2 Meets Next-Level Margin Risk

Tariff Headwinds: U.S. import tariffs could wipe out hardware margins, potentially costing Nintendo up to ¥95bn in FY3/26 gross profit.
Guidance Risk: With bullish consensus expecting ¥450bn in FY3/26 operating profit, upcoming guidance on July 5 may significantly disappoint.
Valuation Hinges on Recovery: FY3/27 earnings could rebound to ¥600bn if cycle normalises and tariff risks ease—implying a fair 13x EV/EBIT multiple.

Tosei Corp (8923 JP): Q1 FY11/25 flash update

Revenue increased by 32.1% YoY, reaching JPY46.1bn, with operating profit up 28.5% YoY to JPY12.3bn.
Development business sold eight buildings, including logistics facilities, contributing to overall revenue and profit growth.
Segment profit margins varied, with notable increases in asset management and hotel segments, driven by improved occupancy rates.

SBI RHEOS HIFUMI (165A JP): Coverage Initiation

In FY03/24, AUM was JPY1.4tn (+19.6% YoY), operating revenue JPY10.3bn (+6.7% YoY), operating profit JPY1.8bn (+10.6% YoY), recurring profit JPY1.8bn (+10.6% YoY), and net income attributable to owners of the parent JPY1.3bn (+20.8% YoY).
The company continued to expand its distribution partner network and product lineup.
The Japanese equity market remained strong, and the rise in NAV per share drove up AUM to JPY1.4tn (+19.6% YoY).

Create Sd Holdings Co (3148 JP): Q3 FY05/25 flash update

Revenue increased by 8.4% YoY to JPY339.5bn, with gross profit rising 7.6% YoY to JPY88.1bn.
Operating profit grew 5.4% YoY to JPY16.4bn, supported by revenue growth and cost control measures.
Net income attributable to owners rose 4.4% YoY to JPY11.2bn, despite intensified price competition and market challenges.

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Apr 07

Daily Brief Japan: Seven & I Holdings, Komeri Co Ltd, Maxis Nikkei 225 Index Fund, TSE Tokyo Price Index TOPIX, Zuiko Corp and more

In today’s briefing:

Merger Arb Mondays (07 Apr) – Seven & I, Makino, HKBN, OneConnect, Dada, Insignia, Domain, Dropsuite
Komeri (8218) Rare, Tariff-Proof Domestic Growth Idea at a Steep Discount
Nikkei Index Options Weekly Mar 31 – Apr 04): Volatility Elevated, Put Demand Surges
Political Problems Are Preventing a Solution to the Problem of Declining Birthrates
Zuiko Corp (6279 JP): Full-year FY02/25 flash update

Merger Arb Mondays (07 Apr) – Seven & I, Makino, HKBN, OneConnect, Dada, Insignia, Domain, Dropsuite

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: Seven & I Holdings (3382 JP), Insignia Financial (IFL AU), ENN Energy (2688 HK), OneConnect Financial Technology (OCFT US), Smart Share Global (EM US), Soundwill Holdings (878 HK).
Lowest spreads: Sinarmas Land (SML SP), Makino Milling Machine Co (6135 JP), Millennium & Copthorne Hotels Nz (MCK NZ), Shibaura Electronics (6957 JP), Tonami Holdings (9070 JP).

Komeri (8218) Rare, Tariff-Proof Domestic Growth Idea at a Steep Discount

By Michael Allen

Komeri plans to expand their addressable market by 75% and to double their current market share to 21%.
Same store sales of the company’s Pro Stores rose an average of more than 7% in the past 8 quarters, and selling area is expanding at more than 25% annually.
Yet Komeri trades at just 11x earnings, compared to about 16x for Topix and 18x for the median retail stock.

Nikkei Index Options Weekly Mar 31 – Apr 04): Volatility Elevated, Put Demand Surges

By John Ley

Volatility percentiles are flashing, and we explore what recent price action could signal for the week ahead.
Put activity surged, with especially heavy interest on Thursday and Friday and concentrated in short dates expiries.
We highlight the potential for equity market volatility to spill over into currency markets.

Political Problems Are Preventing a Solution to the Problem of Declining Birthrates

Eliminating income limits on child allowances seems to be the right policy because the wealthier families have more children. However, it lacks viewpoints toward the growing number of unmarried people.
It seems effective to solve the problem of the growing income disparity and the child-rearing/housework being disproportionately placed on women, and taking appropriate measures for those who desire diverse lifestyles.
Policies don’t reach the ever-increasing number of singles. Rather than solutions to declining birthrate, priority is given to policies that distribute money to those who are more certain to vote.

Zuiko Corp (6279 JP): Full-year FY02/25 flash update

FY02/25 revenue was JPY20.0bn (-8.2% YoY), with a net loss of JPY788mn, impacted by declining sales in Japan and China.
FY02/26 revenue is projected at JPY22.0bn (+10.3% YoY), with expected operating profit of JPY1.0bn and EPS of JPY31.0.
ZUIKO’s medium-term plan targets FY02/28 revenue of JPY30bn+, with JPY8.0bn from new businesses, and OPM of 8.1%.

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Apr 06

Daily Brief Japan: Makino Milling Machine Co, Topcon Corp and more

In today’s briefing:

Last Week in Event SPACE: Makino, ENN Energy, Trump Tariffs, HKBN
(Mostly) Asia-Pac M&A: Topcon, Jinke Smart Services, Dropsuite, Domain, Jamco, Shin Kong, Dada Nexus

Last Week in Event SPACE: Makino, ENN Energy, Trump Tariffs, HKBN

By David Blennerhassett

At a zero net debt zero net cash (securities liquidated) Adjusted Price/Earnings Ratio of 11.3x expected Net Income, the multiple offered Makino Milling Machine (6135 JP) is not a knock-out.
ENN Energy (2688 HK) investors hoping for a clean (er) exit, or where the back-end terms were clearly defined, will be disappointed. And minorities are active in this name. Avoid
New Trump Tariffs are not based on any actual tariffs, or non-tariff measures. The simple/explicit assumption is that if you run a trade surplus with the US, you are cheating.

(Mostly) Asia-Pac M&A: Topcon, Jinke Smart Services, Dropsuite, Domain, Jamco, Shin Kong, Dada Nexus

By David Blennerhassett

I tally 54 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma.
Two news new deals discussed this week: Reject Shop (TRS AU) and Topcon Corp (7732 JP). Jinke Smart Services (9666 HK) also suspended pursuant to the Takeovers Code.
Key updates/news took place on Dropsuite (DSE AU), AVJennings Ltd (AVJ AU), Domain Holdings (DHG AU), Jamco (7408 JP), Shin Kong Financial Holding (2888 TT), and Dada Nexus (DADA US).

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Apr 05

Daily Brief Japan: Makino Milling Machine Co, Mitsubishi Logisnext Co., Ltd., Paramount Bed Holdings Co Lt, TSE Tokyo Price Index TOPIX, Carta Holdings, Inc., Onward Holdings and more

In today’s briefing:

Nidec Launches on Makino Milling (6135) – Others Presumably Wait In the Wings
Mitsubishi Logisnext (7105) – Worth Buying The Dip On Likely Sale
Paramount Bed Holdings (7817 JP): Guidance Reaffirmed, But Sluggishness To Stay Amid Falling Margins
It’s Not a Lack of Analyst Coverage that Is Causing the Lack of Trading…..
Carta Holdings (3688 JP) – A Year Focused on Strengthening Organizational Capabilities
Onward Holdings (8016 JP): Full-year FY02/25 flash update

Nidec Launches on Makino Milling (6135) – Others Presumably Wait In the Wings

Nidec Corp (6594 JP) bid ¥11,000 for Makino Milling Machine Co (6135 JP) in December, saying it expected to launch on 4-April. It launched its ¥11,000 bid on 4-April.
A Nikkei article in March suggested Makino had found multiple competing bidders, some who had put in “legally binding bids.” No news on those yet, but we have a month.
Earnings are 9-May. Strategy on timing for Makino differs according to its desired outcome. It has to opine on Nidec’s bid by about 18 April. Be long. Carry 🍿🍿🍿 .

Mitsubishi Logisnext (7105) – Worth Buying The Dip On Likely Sale

There was a Nikkei article in December about the Mitsubishi Heavy Industries (7011 JP) selling its interests in Mitsubishi Logisnext Co., Ltd. (7105 JP).
The stock popped. Then popped some more. It was not expensive yet, but no longer dirt cheap. Now the stock is falling as Trump Tariffs threaten to throttle exports.
The reasons why this takeout price could be “high” are unchanged. Tariffs meant to drive US-manufacturing don’t reduce need for forklifts. Logisnext is not badly placed.

Paramount Bed Holdings (7817 JP): Guidance Reaffirmed, But Sluggishness To Stay Amid Falling Margins

By Tina Banerjee

During 9MFY25, Paramount Bed Holdings Co Lt (7817 JP) reported 3% YoY revenue growth to ¥75B, mainly driven by the nursing care businesses.
Due to higher SG&A expenses, operating profit decreased 15% YoY to ¥7.2B and net profit was down 11% YoY to ¥5.9B.
Paramount Bed has reiterated FY25 guidance, which calls for 2% YoY revenue growth, while higher SG&A is expected to erode operating profit by almost 6% YoY.

It’s Not a Lack of Analyst Coverage that Is Causing the Lack of Trading…..

70% of Tokyo market is traded by overseas investors, so even companies with smaller market capitalization need to catch the attention of overseas investors by increasing their return on capital.
It is possible that the difference in stock valuations over the past few years has been due to a greater difference in return on capital between large-cap and small-cap stocks.
Skillful IR alone is not enough to raise stock price valuations. The IR department must have management who can execute management strategies and personnel who can formulate persuasive plans.

Carta Holdings (3688 JP) – A Year Focused on Strengthening Organizational Capabilities

In FY2024/12, CARTA HOLDINGS reported operating profit of JPY 2,139 mn (+64.4% YoY).
Given the achievement of securing an operating profit of JPY 4,973 mn in FY2021/12, the absolute level remains insufficient.
However, amid a challenging business environment where the transaction volume of high-margin reservation-based ads declined YoY for 11 consecutive quarters up to the April-June 2024 period, the Company achieved a V-shaped recovery as a result of structural reforms, including the withdrawal from unprofitable businesses and the implementation of a voluntary retirement program.

Onward Holdings (8016 JP): Full-year FY02/25 flash update

Onward’s FY02/25 sales reached JPY208.4bn (+9.9% YoY), with a net income of JPY8.5bn (+28.8% YoY).
FY02/26 projections include sales of JPY230bn (+10.4% YoY) and operating profit growth of 13.3% YoY to JPY11.5bn.
The company plans to introduce an interim dividend system, targeting a total annual dividend of JPY30 per share.

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Apr 04

Daily Brief Japan: Makino Milling Machine Co, Nikkei 225, TSE Tokyo Price Index TOPIX, D.Western Therapeutics Institute Inc. and more

In today’s briefing:

Makino Milling Machine (6135 JP): Nidec Launches Its Offer
Nikkei 225 (NKY INDEX) Drops Amid US Tariffs: Implied Volatility Hits Extreme Levels
Now Is the Time to Turn the Slowdown in Profit Growth into an Opportunity
Chart of the Day: Implied Volatility Soars Globally, US and Bitcoin Hit Hardest
D. Western Therapeutics Institute (DWTI) (4576 JP) – Q4 Follow-Up

Makino Milling Machine (6135 JP): Nidec Launches Its Offer

Nidec Corp (6594 JP) has launched its offer for Makino Milling Machine Co (6135 JP) at an unchanged JPY11,000. The offer is open from 4 April to 21 May.
The offer was launched despite securing all regulatory approvals and the Board’s postponement request. The launch could also be an attempt to thwart a competing proposal.
Despite the launch, Nidec’s offer at current terms has a low chance of success, necessitating revised terms. There remains a medium-to-high probability of a competing proposal.

Nikkei 225 (NKY INDEX) Drops Amid US Tariffs: Implied Volatility Hits Extreme Levels

By Gaudenz Schneider

Market Reaction: The announcement of US reciprocal tariffs led to significantly lower market open throughout Asia-Pacific. In the US, S&P 500 futures dropped -3.5%, with the VIX spiking to 23.45.
Impact on Japan: Japan faces a 24% tariff, with specific sectors like automobiles hit with 25%. This led to a 4.5% drop in the Nikkei 225, stabilizing at 34,600 (-3.2%).
Volatility Increase: The Nikkei 225 VIX index jumped from previous levels in the low 20’s to rise above 38 before retreating to 32.8, indicating the 99th percentile of implied volatility.

Now Is the Time to Turn the Slowdown in Profit Growth into an Opportunity

The profit outlook for many Japanese companies may not be good enough for overseas investors, who are selecting the best investments from among stocks around the world.
In FY2025, both sales and recurring profit are expected to slow in the manufacturing sector. This casts a shadow over TSE stock prices, which are dominated by manufacturing companies.
Companies whose corporate performance are at a standstill has good opportunity to show investors how it will use the proceeds from the sale of cross-held shares to expand corporate value.

Chart of the Day: Implied Volatility Soars Globally, US and Bitcoin Hit Hardest

By Gaudenz Schneider

Asia-Pac Performance: The Indian market bucketed the down trend with the Nifty 50 declining only 0.35% with stable implied volatility. The Nikkei 225, on the other hand,dropped 2.8%.
US and European Decline: The US market saw the largest decline, with implied volatility rising by 8%. European indices showed mixed results, with the EuroStoxx 50 reacting strongly.
Gold vs. Bitcoin: Gold (GLD US ETF) proved to be a better store of value, while Bitcoin joined the US indices in higher volatility.

D. Western Therapeutics Institute (DWTI) (4576 JP) – Q4 Follow-Up

SIR believes DWTI has entered an exciting new phase given significant advances in pipeline development achieved over the last 12 months.
Key advances include: publishing favorable topline results of in-house H-1337 PIIb US trials (strong prospects as “first choice as a second-line Glaucoma drug”), commencing jointly developed Japan PII clinical trials of regenerative medicine cell therapy DWR-2206 with ActualEyes, and successfully completing all transplants, completion of dosing to subjects in global Phase III clinical trials of FECD treatment K-321 being developed by licensee Kowa, and obtaining China approval for DW-1002 by licensee DORC, among others.
Potential for earnings to turn profitable over the next several years, transitioning from the growth investment phase to the recovery phase, suggests to us share price risk is likely weighted to the upside going forward.

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Apr 03

Daily Brief Japan: Kokusai Electric , MS&AD Insurance, Sumitomo Mitsui Construction, Tokyo Tsushin Inc, COPRO-HOLDINGS Co Ltd, Morito Co Ltd and more

In today’s briefing:

Nikkei 225 Sep25 Rebal: One ADD, One DELETE Still Probable Unless Kokusai Elec (6525) Offering/Split
Japan CorpGovReports: TSE “Mgmt Conscious Blah Blah” (Apr25), 🚨 AGAIN Read TSE Update Doc 3 🚨
Sumi Mitsui Construction (1821) | Playing Both Sides
Tokyo Communications Group (7359 JP) – Working to Strengthen the Financial Base
Copro-Holdings (7059 JP) – Further Business Growth in FY2026/3…
Morito (9837 JP) – Operating Profit for FY25/11 Is Recording a New High…

Nikkei 225 Sep25 Rebal: One ADD, One DELETE Still Probable Unless Kokusai Elec (6525) Offering/Split

The March 2025 Nikkei 225 review came out with a sparse set of changes. That gives us hints for the September 2025 review.
Kokusai did NOT get added, waiting for a split, an offering, or time to pass. Only one sector change was made. So we see One ADD and One DELETE.
The lack of effort to address sector imbalances within the rules suggests the rules are not as hard as people thought. Intra-review changes could be more interesting in years ahead.

Japan CorpGovReports: TSE “Mgmt Conscious Blah Blah” (Apr25), 🚨 AGAIN Read TSE Update Doc 3 🚨

TSE-Listed companies are asked to file “Management Conscious of Capital Cost/Stock Price” awareness reports/policies. Many have. Some are still working on it. And policies change, and CGR reports are updated.
611 new CGRs filed since 1-Mar-25. Our tools show every report, links to every document, and a diff file tool. Input a name, see the changes in the reports.
The JPX was curiously quiet itself as far as I can tell. No new governance reports, documents, etc, though there is a small consultation this month on the JPXNikkei400.

Sumi Mitsui Construction (1821) | Playing Both Sides

Murakami-Led funds have quietly amassed a 26.97% stake in Sumi Mitsui Construction while also acquiring a 5.01% stake in its subsidiary, Sumiken.
With the Tokyo Stock Exchange clamping down on parent-child listings, Sumiken’s future as a public company looks increasingly uncertain, raising buyout speculation.
City Index’s small stake in Sumiken may serve as a defensive move to block rival bids, reinforcing its influence over SMC’s long-term strategy.

Tokyo Communications Group (7359 JP) – Working to Strengthen the Financial Base

Tokyo Communications Group’s (hereinafter “the Company”) core businesses currently include its Media business, where it plans and develops free game apps for smartphones and uses a portion of the app’s screen space to generate advertising revenue, and its Platform business, where it operates a consultation service based on a pay- as-you-go model
The Platform business is generally stable, while the Media business is inherently highly profitable thanks to its low cost, but prone to fluctuations depending on the number of hit titles.
Management Decision: After reaching highs in FY2021/12, the Company lowered its earnings forecasts and suffered operating losses for three consecutive years from FY2022/12 to FY2024/12.

Copro-Holdings (7059 JP) – Further Business Growth in FY2026/3…

Q3 FY2025/3 Earnings result summary: COPRO-HOLDINGS (hereafter the Company) key consolidated figures increased sharply, including net sales of JPY 22,025 mn (+25.9% YoY), operating profit of JPY 2,148 mn (+52.8% YoY), Non-GAAP operating profit of JPY 2,481 mn (+54.0% YoY), ordinary profit of JPY 2,162 mn (+46.0% YoY), and profit attributable to owners of parent (hereafter, net profit) of JPY 1,374 mn (+46.7% YoY).
Amid continued strong demand for temporary staffing, the Group’s overall technician headcount rose substantially by 26.3% YoY to 4,684, as the Company stepped up its in-house low-cost recruitment program efforts and operations, which in turn boosted sales and profits significantly.
FY2025/3 Earnings Forecast: The Company’s full-year consolidated earnings forecasts for FY2025/3 are as follows: net sales of JPY30,000 mn(+24.5% YoY), operating profit of JPY 2,700 mn (+26.1% YoY), Non-GAAP operating profit of JPY 3,162 mn(+29.7%YoY), ordinary profit of JPY 2,714 mn (+22.7% YoY), and net profit of JPY 1,755 mn (+19.9% YoY).

Morito (9837 JP) – Operating Profit for FY25/11 Is Recording a New High…