Japan

• We continue to be bullish about Workman’s back-to-basics strategy which has delivered a second straight year of record sales and profit, with same-store sales up 9%. 
• New president Koji Ouchi has just revamped the business under five core functional categories, as well as moving towards more mass-scale manufacturing and corporate franchising.
• The new strategy is part of a drive toward 1,300 stores by 2030.

• Earnings up, multiple down: FY26 guidance and Energy orders are rising while Fuji’s EV/EBIT has compressed to ~13x.
• Energy is mispriced: High-margin Energy has strong backlog and capacity expansion, yet trades below global electrification peers.
• Catalyst-Rich asymmetry: Results, backlog conversion and data-center growth could drive re-rating; High/Low valuation implies ~2.9x reward-to-risk.

• We review the mid-cap banks’ equity shareholdings at year-end March 2026 in greater detail, focusing on how realizable these equity holdings may be; we compare these holdings to market capitalization
• We find that Iyogin has a meaningful share of its total equity shareholdings in hard-to-realize holdings; we downgrade Iyogin, along with Nishi-Nippon, from buy to neutral
• Hachijuni, our sole buy, leads on easy-to-realize shareholdings to market capitalisation and will enhance its interest rate gearing given the high level of fixed rate credit maturing by March-end 2027

• Eisai Co Ltd (4523 JP) shares advanced ~30% from June lows. Stronger-than-expected Q1FY27 financial result and value maximization initiatives of Leqembi are mainly driving the shares. 
• Eisai has reported better-than-anticipated Q1FY27 result, with revenue and operating profit reaching 27% and 35% of FY27 full-year forecast, driven by the strong performance 3L major products and favorable Fx.
• In near-term, Eisai’s growth will be Leqembi centered. For FY27, Eisai has guided for Leqembi revenue of ¥144B (up 64% YoY), supported by Leqembi Iqlik and blood-based biomarker (BBM).

• Companies should consider that things may not go according to the assumption that showering individual shareholders with shareholder benefits will lead them to vote in favor of the company’s proposals.
• Discussions of trading one share at a time based on trading conditions in other countries or comparative competitiveness fail to address the fundamental issue of inequality in shareholder rights.
• Unless the fundamental issues are addressed, these measures will be ineffective, and—just as with TSE’s market reforms—it will take a long time to reach a fundamental solution.

• Japanese equities have posted strong, broad-based gains in 2026. The BOJ’s moderate-growth outlook supports a cautiously bullish view for the remainder of the year.
• Combined with elevated implied volatility, this outlook favours out-of-the-money call overwriting as a means of generating premium income while retaining some upside participation.
• Five illustrative November examples show how call overwriting balances premium income against retained upside.

• Crops Corporation (9428) is a Nagoya-based conglomerate best known as KDDI’s largest au/UQ Mobile retail agency in the Chubu region, but the segment that actually drives profit is a restaurant-property sub-leasing arbitrage business (Innovation Holdings/Tempo Innovation), generating 43% of operating profit from just 26% of revenue.

• KDDI itself holds a 20.32% equity-method stake with board representation, alongside staffing, building-maintenance, and overseas BPO units.

• The company seems to steadily compound revenues and profits and once you strip out the asset write-off from a small Vietnamese subsidiary, it seems to trade very cheaply on just over 7x earnings.

• “The fact that Japanese companies hold vast cash reserves” is one aspect of the issue, but it’s not root cause. Focusing solely on the means won’t actually solve the problem.
• While increasing growth investments and improving board practices are not wrong as strategies, few companies truly understand why they should pursue these initiatives or are able to implement them effectively.
• Both investment and improvements in board practices are necessary measures for achieving the management goal of sustainably increasing shareholder interest. It is the responsibility of management to achieve this goal.

• A few years ago, Resonac Holdings (4004 JP) announced it would consider spinning off its petrochemicals business.
• This summer it announced it would happen, and on 7 September it got TSE approval for a spinoff 1 October 2026. Shares start trading on 29 September. 
• On Friday, the reference price for listing was announced at ¥200/share. Day 1 will mean significant index flows, and thoughts of what is to come.

• I summarise the latest spreads and newsflow for the merger arb situations covered across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, the Philippines, Thailand, and Chinese ADRs.
• Highest spreads: Skyworth (751 HK), OFX Group (OFX AU), Z Fin (1168 HK), Peet Ltd (PPC AU), Atlantic Lithium (A11 AU), Tourism Holdings (THL NZ), Cleanaway Waste Management (CWY AU).  
• Lowest spreads: Kadoya Sesame Mills (2612 JP), Leopalace21 Corp (8848 JP), Carnaby Resources (CNB AU), Kakaku.com Inc (2371 JP), Accent Group (AX1 AU), FleetPartners Group (FPR AU). 

• Context: This Insight follows up on previously highlighted relative value opportunities, using a statistical methodology based on mean-reversion to identify opportunities in paired securities.
• Highlights: Currently seven pair trade opportunities persist across three markets and four sectors.
• Why read: Statistical analysis offers a unique perspective on relative value. Gain insights into actionable statistical pair trade opportunities and monitor performance of previously highlighted pairs.

• If you are (still) bullish on data centers and AI, Murata Manufacturing (6981 JP)  is the one you should go long. 
• Murata Manufacturing (6981 JP) grew its OPM more than TDK Corp (6762 JP) while its revenue growth is smaller than the latter, a sign of effective operating leverage. 
• For investors who prefer earnings quality and margin expansion over top line revenue growth, Murata is your answer. 

• Shipping is cyclical, and earnings volatility has long been the sector’s biggest weakness for investors.
• IINO Lines has successfully reduced the volatility of its earnings by combining its real estate business with shipping.
• The Company was profitable through all seven years of the FY3/15–FY3/21 shipping market downcycle and grew BVPS +26.9%, while the major domestic peers recorded multiple years of losses and saw BVPS decline meaningfully

• You probably have downside to ¥3,720 if EQT’s bid lapses. Downside may be limited to ¥3,760 if Kakaku.com (2371 JP) convinces Bain to bid up to negotiate with KDDI.
• Northern Star Resources (NST AU) extends an olive branch to Elliott, (temporarily?) avoiding a proxy fight.
• If one wants SBI to raise the price for (4477 JP), it behooves the market to trade at ¥345 again. Get long, or get longer.

• A weekly summary of key developments in ECM and Event-Driven names that I track in Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India, and Chinese ADRs.
• ECM developments: National Stock Exchange (NSEIN IN), Ligent Technologies (9856 HK) and GCash (Mynt) (GCASH PM) IPOs.
• Event-Driven developments: Kakaku.com Inc (2371 JP), Leopalace21 Corp (8848 JP), Kadoya Sesame Mills (2612 JP), Skyworth (751 HK), European Lithium (EUR AU), Reliance Worldwide Corp (RWC AU). 

• I tally 37- mostly firm, mostly Asia-Pac – arb transactions currently being discussed and analysed on Smartkarma. Those arbs metrics and upcoming events are detailed below.
• Two new deal was discussed on Smartkarma this week: Tender Offers for Leopalace21 Corp (8848 JP) and Kadoya Sesame Mills (2612 JP).
• Key updates/news also took place on: Cleanaway Waste Management (CWY AU), European Lithium (EUR AU), Gabia Inc (079940 KS), Refine Co Ltd (377450 KS), and FleetPartners Group (FPR AU).

• Only 10% in Prime/Standard market were identified by investors as “showing progress in initiatives.” Unless managers return to management facing shareholders head-on, initiatives addressing specific, individual challenges will remain superficial.
• Investors should have voiced their opinions regarding the disclosure in  annual securities report prior to AGM, change in the record date, and postponement of the AGM by approximately one month.
• Rather than focusing on resolving specific individual issues, the TSE should educate companies on the fact that management has fiduciary duties and must fulfill them.

• On 10 September, just before Bain/LY completed clearance processes, EQT bumped its Kakaku.com Inc (2371 JP) bid from ¥3,571 to ¥3,680. Kakaku responded the 11th. Markets traded ¥3,800+ next day.
• On the 16th, LY Corp announced it would bid ¥3,720 if KDDI agreed. New best bid. Shares traded lower early the 17th. Markets expected a bigger bump. Kakaku responded post-close.
• I did too but there is a process here, and it pays to remember you see what Bidders want you to see. 

• Since companies that have listed on NYSE through ADR etc have been reporting their financial results under US-GAAP, it is expected that more companies will transition to IFRS as needed.
• If IFRS is promoted on the assumption that “eliminating the periodic amortization of goodwill under Japanese-GAAP will likely lead to increased M&A,” the discussion risks heading in the wrong direction.
• Needless to say, successfully implementing PMI to increase future profits and cash flow is both more difficult and more important.

Key points (machine generated)

• Meiho Holdings achieved record highs in sales, operating profit, ordinary profit, and EBITDA as of June 2026.
• The company operates a corporate support platform to enhance growth for small and medium-sized enterprises through mergers and acquisitions.
• Meiho Holdings provides support in management efficiency, human resources, and business collaboration across 25 companies, offering services in construction consulting, public works, and care services.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only.

• Fujitsu’s core services business becomes structurally more profitable through AI delivery and pricing changes
• The new sovereign-AI bets turn from near-zero into a material business over the back half of the decade
• And the resulting cash gets deployed with discipline. The market remains sceptical. 

• Toppan Printing (7911 JP) is accelerating its strategic transformation from a conventional domestic printing house into a global high-value technology and packaging leader, driven by its high-margin Electronics segment (semiconductor photomasks and FC-BGA packaging materials) and proprietary GL Barrier sustainable packaging solutions.
• Financial performance over the past three years highlights steady top-line growth, with net sales reaching JPY 1,805.0B in FY2026 (a 3.27% 3-year CAGR), though ongoing aggressive capital expenditures in next-generation semiconductor lithography and overseas barrier capacity have temporarily suppressed Free Cash Flow (-JPY 42.7B in FY2026).
• Enhanced corporate governance reforms and Tokyo Stock Exchange capital efficiency mandates provide a powerful re-rating catalyst, as management actively divests strategic cross-shareholdings, enhances dividend distributions (JPY 58-60/share range), and optimizes ROE toward double-digit targets.

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

• In Q3 FY2026/9, Japan Business Systems, Inc. (hereafter, JBS or the Company) reported net sales of JPY 167,867 mn (+27.1% YoY) and operating profit of JPY 6,892 mn (+15.3% YoY).
• The Company maintained the upwardly revised FY2026/9 forecast announced in H1.
• SIR believes the Company’s share price tends to rise as EPS moves higher, making market expectations for profit growth an important factor in share price performance.

• In Q3 FY2026/9, Japan Business Systems, Inc. (hereafter, JBS or the Company) reported net sales of JPY 167,867 mn (+27.1% YoY) and operating profit of JPY 6,892 mn (+15.3% YoY).
• Operating profit increased as the Company secured more AI- and data-utilization projects in the CI business*, primarily from existing customers, while highly profitable hybrid services  expanded in the CS business*.
• Supported by growing demand for data platforms and IT infrastructure for generative AI adoption, profitability also improved, particularly in the CS business. 

• Jcr Pharmaceuticals (4552 JP) revenue increased 13% to ¥9.7B in Q1FY27, mainly driven by Izcargo and contractual payments, marred to an extent by NHI price revision impact on Growject.
• Company reiterated FY27 guidance, expects revenue to be ¥45.7B (+13% YoY). Operating income expected to be ¥1.1B (up 98%) and net income ¥200M, down YoY.
• With no near-term robust incremental revenue visibility, nor any significant approvals pending the downside potential for the stock remains strong.

Key points (machine generated)

• Kuriya Holdings Co., Ltd. specializes in manufacturing industrial hoses, rubber and resin products, and flooring materials.
• The company has experienced significant growth, with sales doubling and operating profit quadrupling over 22 years despite economic challenges.
• As of Q2 FY 2026, Kuriya reported an 18.5% increase in sales, aiming to become a ‘100-year company’ after 58 years in the U.S. market.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only.

• In cumulative Q3 FY2026/9, LIFULL Co., Ltd. (hereinafter, the Company) reported higher revenue and profits, with revenue of JPY 21,983 mn (+4.4% YoY) and operating profit of JPY 3,239 mn (+7.9% YoY).
• Profit attributable to owners of the parent (net profit) came in at JPY 2,126 mn, representing a solid 41.8% YoY increase on an underlying basis (adjusting for prior-year one-off factors).
• The core HOME’S Services segment drove overall performance, with revenue of JPY 20,041 mn (+4.5% YoY).

• In cumulative Q3 FY2026/9, LIFULL Co., Ltd. (hereinafter, the Company) reported higher revenue and profits, with revenue of JPY 21,983 mn (+4.4% YoY) and operating profit of JPY 3,239 mn (+7.9% YoY).
• For FY2026/9, the Company trimmed its revenue forecast to JPY 29,300 mn due to delays in the regional revitalization business while raising its forecast for operating profit to JPY 3,900 mn and net profit to JPY 2,500 mn.
• The Company’s share price has recently rebounded following a period of fluctuations, supported by the significant upward revision announced with Q3 FY2026/9 results.

Key points (machine generated)

• Movin Strategic Career, listed on the Tokyo Stock Exchange, is rapidly growing in high-end recruitment, especially in consulting.
• Strong demand for recruitment in strategy, IT, M&A, and private equity, driven by the rising need for AI consulting.
• The company has a successful business model linking career advisor growth to revenue, supported by a proprietary database and concierge services.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only.

Key points (machine generated)

• SBS Holdings has achieved significant revenue and profit growth through aggressive M&A and profit enhancement strategies.
• The acquisition of Ricoh Logistics in 2018 led to a threefold increase in sales and operating profit from FY 2017 to FY 2025.
• In the first half of FY 2026, SBS Holdings reported consolidated sales of 294,258 million yen, a 28.8% increase.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only.

• When SBI launched its partial tender for 20% of BASE Inc (4477 JP) at the end of last month, they wanted to buy ~42.5% of the Max Real World Float.
• That was at ¥340, a small premium to where the stock was trading, and a 17% discount to where another partial tender last year got only 7-8% of MRWF.
• I think the dynamic here favours being long. Pro-ration expectations are misplaced I think.

• Bain/LY revised their Kakaku.com Inc (2371 JP) offer to JPY3,597 (JPY3,720 for KDDI share buyback), 2.2% premium to the previous JPY3,520 offer but a 2.3% discount to EQT/DG’s JPY3,680 offer.
• Bain/LY (4689 JP)’s latest offer underwhelms and could backfire if KDDI Corp (9433 JP) and possibly Oasis decide to end this long-running saga by accepting the marginally lower EQT/DG offer.
• While there remain arguments for continued escalation, the “winning” offer is unlikely to exceed the last close (JPY3,820). It’s time to head for the exit. 

• We are upgrading our existing facilities and any discussions with customers at this point are based on the capacity that we believe is possible as a result of such upgrades.
• Demand is likely to exceed supply for more than three years, because of such supply constraints. In terms of the price level,  prices would need to be dramatically higher.
• We have no plans whatsoever to restart the Yoshinogari project. At current price levels, it is not viable. All costs are rising now, with Japan potentially headed for more inflation

• Market expectations are for a 25bps rate hike to 1.25% at the BoJ monetary policy meeting this week; we expect BoJ to follow the US Federal Reserve’s 25bp hike today
• We take profits on Yokohama removing it from the buy list among our bigger caps universe; we keep Resona Holdings on the buy list along with Kyoto Financial
• Resona is best geared to rising rates, and we expect it to deliver higher returns going forward; Kyoto stands out with its high equity holdings relative to its market capitalisation

Key points (machine generated)

• Intellex Holdings focuses on renovating and selling used condominiums and has seen significant revenue growth.
• The company was established in December 2025 and is listed on the Tokyo Stock Exchange’s Standard Market.
• For the fiscal year ending May 2026, Intellex reported consolidated sales of 58,471 million yen, a 30.5% increase, with an ordinary profit of 2,346 million yen.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only.

• ABC Mart aims to have 50 Oshman’s stores by 2031. 
• The plan is to build out Run & Fitness, a new, smaller concept designed for shopping malls and to appeal to more female customers through yoga and Pilates.
• The investment is part of wider plans to broaden ABC Mart’s business beyond footwear and firmly into the still growing sports market, both in Japan and around Asia.

Key points (machine generated)

• Movin Strategic Career is rapidly growing in high-end recruitment, especially in consulting sectors like IT, M&A, and private equity.
• The company benefits from a favorable market with high demand for hiring and an increase in AI consulting roles.
• Its unique business model focuses on expanding career advisors and using proprietary systems, leading to significant revenue growth.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only.

Key points (machine generated)

• FISCO Ltd. projects a positive outlook for Project Holdings (TSE: 9246) for the fiscal year ending December 2026, with stronger performance expected in the second half.
• Project Holdings focuses on Digital Transformation (DX) and supports clients from planning to execution of their DX strategies.
• Interim results show a significant revenue increase, with sales reaching 3,180 million yen, reflecting a 20.0% growth.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only.

• The revised Sunrise Capital tender offer at ¥2,270 is a highly structured compromise that utilizes a post-transaction treasury share buyback of Hikari Tsushin’s 8.69% stake, effectively lowering the upfront funding burden for Sunrise while offering public minorities a modest premium and higher deal certainty.
• JPMC’s asset-light master-lease model relies on a network of over 1,400 local construction partners, which makes it uniquely resilient to direct corporate takeovers (which would dissolve this partner ecosystem due to competitive conflicts) but highly sensitive to localized, relationship-based landlord acquisition bottlenecks.
• Regulatory constraints under the Rental Housing Management Business Act of 2020 have severely restricted JPMC’s ability to unilaterally reduce guaranteed rents under Article 32 of the Land and Building Leases Act, shifting the operational reality of rent renegotiations from a straightforward contractual right to a highly litigious, reputationally risky process monitored by the MLIT.

Key points (machine generated)

• AnGes, founded in 1999 from Osaka University, focuses on gene medicine for diseases with limited treatments.
• The company plans to apply for approval and contracts for its HGF gene therapy product by September 2026, aiming for a U.S. market launch in early 2027.
• AnGes has acquired EmendoBio Inc. for genome editing technology and established a clinical research lab for newborn screening in Japan.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only.

• VERY late last night Tokyo time, Kadoya Sesame Mills (2612 JP) announced a Supported/Recommended Deal whereby local PE form Integral would buy out the company at ¥2,514-2,760 pending shareholder agreements. 
• The base case is ¥2,514. ¥2,760 comes when major shareholders agree to sell at a discount, passive their tax benefits to the whole shareholder base.
• But there’s competition. A started things off last year. Integral/family joined in. Major shareholders MitCorp and Mitsui got B and C to join. A and C are still in it.

• Ahead of the first close, Sunrise Capital increased its Japan Property Management Center (3276 JP) offer by 0.9% from JPY2,250 to JPY2,270. The closing date is 5 October.
• The price increase was funded by Hikari Tsushin (9435 JP) agreeing to a share buyback. It also has the added benefit of locking in additional support for the offer.
• Overall, the revised terms do not reflect an offer struggling to complete but good governance in securing better (even if modest) terms for minorities. 

• Oliver Corporation (619A JP) raised US$142m in its Japan IPO.
• Established in 1967, Oliver Corporation was initially a furniture manufacturing company known as Fuji Steel and sold steel furniture. 
• In our previous note, we looked at its past performance and valuations. In this note, we will talk about the trading dynamics.

• NAND Cycle Peak and Hyperscale Demand Bottlenecks: Kioxia is enjoying record-breaking near-term profitability, with Q1 FY2026 operating margins hitting 75% driven by enterprise SSD (eSSD) demand from AI infrastructure. However, the market is misinterpreting the cyclical tailwinds. Hyperscaler pre-booking has locked in 100% of 2026 capacity, but the cooling of retail/client channels and rising capital constraints at key hyperscalers indicate a cyclical peak in late 2026, making the proposed 2027 U.S. ADR listing a race against a cooling market.
• BiCS10 Ramping vs. Korean Peers: The transition to the 332-layer BiCS10 node at the newly opened Kitakami K2 fab represents a massive leap in areal density (greater than 29 Gb/mm² for TLC and 37 Gb/mm² for QLC). While Kioxia’s CMOS directly Bonded to Array (CBA) architecture keeps it cost-competitive with Samsung and SK Hynix despite lower layer counts, the co-development joint venture structure with SanDisk (now independent post-spin from Western Digital) severely hinders technology transition speed and capital flexibility.
• The Liquidity and Governance Gameboard: With Bain Capital having fully exited its direct fund-level stake in July 2026, and SK Hynix-backed SPC BCPE Pangea Cayman2 becoming Kioxia’s largest shareholder in August 2026 at 14.19%, the strategic path is fraught. The planned $10 billion U.S. ADR listing on Nasdaq is not an expansion play—it is a critical necessity to address Kioxia’s ¥447.5 billion in unsecured bank loans, fund the massive capex required for Kitakami K2, and provide a clear exit for SK Hynix’s indirect convertible bond exposure before the next structural down-cycle.

• Japan’s 30-year yields 4.16%, 236 basis points over the Bank of Japan’s neutral midpoint. Part is fiscal premium; the rest is the price of a domestic bid returning at 4%
• Post-Covid inflation was supply-driven, imported through the yen, oil and food. Inflation excluding food and energy never exceeded 2.7%. Real wages are rising, consumption grows 1%: neutral, not above it.
• The buyers’ strike is ending. Life insurers sold ¥2.1 trillion of super-longs in FY2025 and are buying again; Meiji Yasuda doubled its plan; GPIF is pressed to add domestic assets.

Key points (machine generated)

• Axis Consulting is listed on the Tokyo Stock Exchange Growth Market and is advancing its medium-term management plan.
• The company specializes in recruitment services for high-end talent and skill-sharing to tackle complex management challenges.
• Through its brands ‘AXIS Agent’, ‘AXIS Solutions’, and ‘AXIS Advisors’, it offers flexible consulting services for clients.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only.

• Since FY2022, the NP Margin and Equity Ratio have moved in parallel, indicating that the improvement in non-operating income and expenses has directly contributed to the increase in equity.
• Over the past few years, while sales growth driven by passing on inflationary costs has gradually boosted operating profit, the improvement in the operating profit margin has been negligible.
• To raise profit margins to a level that can stand up to comparisons with companies in other countries, create products with high gross profit margins to increase cash flow.

• Curves sells adherence, not gym access: coaching and community help exercise-inexperienced older women sustain a habit they may struggle to maintain alone.
• The existing network remains underutilized: most recent member growth came from mature clubs, while company-operated locations still materially outperform franchisees.
• The thesis: transferring those economics across the franchise estate could sustain capital-light growth; labor intensity, technology-enabled self-service and execution in new formats are the key tests.

Key points (machine generated)

• Densan System Holdings reported revenue growth for the 19th consecutive term, largely due to strong performance linked to Google.
• The company operates in two main sectors: Information Services (system integration and software development) and Payment Collection Services (payment solutions at convenience stores).
• Densan is focusing on developing next-generation services using Web3 and blockchain technology to create innovative partnerships and services.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only.

Key points (machine generated)

• Scalar is projected to achieve double-digit revenue and profit growth for the fiscal year ending June 2027, driven by M&A and operational expansion.
• The company emphasizes ethical values, social responsibility, and sustainable prosperity, focusing on Digital Transformation, human resources, and Trading Card Games.
• For the fiscal year ending June 2026, Scalar reported a revenue increase of 4.3% to 8,533 million yen, but experienced a 30.5% decline in operating profit to 522 million yen.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only.

• Today after the close, Hikari Tsushin (9435 JP) announced a deal to buy out Leopalace21 Corp (8848 JP) partnering with MBK and NEC Capital, taking out Fortress’ last 15%. 
• Hikari Tsushin bought its large stake very low in 2022, post-scandal. Fortress did too. Murakami tried earlier, failed. Others made money on it. 
• This deal offers near zero basic transparency, and comes at a sharp discount to the midpoint of the fair value DCF ranges. Very not a good look. But it’s vulnerable.

• I overlooked one detail in the Sep26 rebal announcement which, when discovered, changed my outlook on the March 2027 Nikkei 225 rebalance. 
• Unfortunately, the implied changes cannot be confirmed yet. It may be possible to get some greater confirmation in October. 
• But the implied changes signal a different pattern of ADDs and DELETEs. And a few stocks stand out. 

• Kadoya Sesame Mills (2612 JP) announced a tender offer from Integral (5842 JP) at JPY2,514, a 3.9% premium to the last close and a 40.2% premium to the undisturbed price.
• The offer could increase to JPY2,760 if both Mitsubishi Corp (8058 JP) and Mitsui & Co Ltd (8031 JP) agree to share buybacks. Two competing bidders remain in the background.
• Mitsubishi and Mitsui’s deliberately deferred, non-committal stance facilitates a potentially higher competing bid, particularly as the offer is below the midpoint of the IFA DCF valuation range.

• Bloomberg’s $10bn Kioxia US ADR report is anonymously sourced with no filing or term sheet — a placed leak. The underlying transaction is real, CFO-guided, and realistically prices Q2 CY2027.  
• Primary issuance dilutes 5.7%; a secondary clears c.28% of the register at no cost. Treasury stock covers only $5.3bn. Structure decides the trade, not size.  
• BULLISH maintained, fair value ¥72,000 pre-split / ¥24,000 post-split on 12x FY2027E EPS ¥6,000; ¥90,000 ADR scenario at 15x requires confirmation, non-dilutive structure and index entry.  

• Leopalace21 Corp (8848 JP) announced a tender offer from a Hikari Tsushin (9435 JP)-led consortium at JPY1,000, a 44.7% premium to the last close.  
• While the offer represents a 10-year high, it is materially below the midpoint of the IFA’s DCF valuation range and light compared to precedents. 
• The process is marred by poor governance, including the absence of an auction and an agreement on a share buyback price with unequal after-tax benefits. 

• A year after Couche-Tard withdrew its bid, Seven & I is still searching for new growth, leading to some speculation of closer ties with Familymart. 
• Over the summer, it pulled out of an attempt to expand in Europe, and watched franchisee profits fall for a second year.
• Having sold 6.6% of itself to SoftBank, PayPay and Sumitomo Mitsui Card, it is now hoping to buy a retail media future. It won’t be enough.

• Seven & i bought back ¥400bn of stock on 3 August, then sold ¥300bn of treasury shares to SoftBank, PayPay and SMCC. Net share reduction: 1.9%, not 8.19%.
• Q1’s +654% overseas profit surge came before Brent moved from $84 to $105. Q2 (Jun-Aug) is the retail fuel-margin compression quarter; guidance risk is to the downside.
• Downgrade BUY to NEUTRAL, fair value cut to ¥2,180 from ¥2,350 — two of three re-rating drivers are impaired, leaving only 8.2% upside into a binary 8 October result release.

• Take-Rate Defense through Multi-Layered Pricing: GMO Payment Gateway (GMO-PG) successfully mitigates the commoditization of payment processing by utilizing a four-tiered revenue model (setup, monthly fixed, transaction, and volume fees) rather than a pure percentage-of-GMV take-rate. This creates structural margin stability, keeping operating margins in the high-30s range.
• Embedded Finance Credit Risk Managed via Joint Ventures: In B2C and B2B lending offerings (such as atokara and transaction lending), credit risk is mitigated through strategic partnerships—primarily with Sumitomo Mitsui Card Company (SMCC)—and proprietary AI credit-scoring systems. This structured risk-sharing model maintains B2C buy now, pay later (BNPL) non-performing loan (NPL) ratios below a strict 2.0% threshold.
• Independence from GMO Internet Ecosystem is Commercially Viable: While GMO-PG benefits from the GMO Internet Group’s infrastructure and cross-selling ecosystem, the company operates with high commercial autonomy. If forced to become entirely independent, a minor 100-to-200 basis point margin drag from higher IT and branding overhead would be offset by newfound flexibility to partner with competing conglomerates like SoftBank or Rakuten.

• Softbank Group (9984 JP) was rallying strong until last Friday, then dropped -11% on Monday. Various factors contributed to this event.
• Heavy unwinding of previous speculative gains triggered a sharp risk-off repricing of the group’s NAV discount and leverage risk profile. Our model flagged the stock as ‘oversold’.
• Industry commentary from Anthropic, OpenAI, and tech leaders calling for caution/slowing in frontier AI development could temporarily favor a continuation of the sell-off, but we see a buy opportunity.

• Nippon Avionics Co., Ltd. (6946 JP) is experiencing strong fundamental momentum driven by the structural expansion of Japan’s national defense budget, resulting in FY2026 revenue surging 45.1% YoY to JPY 29,194M and net income rising 94.5% YoY to JPY 3,820M.
• The company’s core Information Systems segment benefits from high barriers to entry in mission-critical defense electronics, tactical display systems, and specialized hybrid ICs, while its Electronic Equipment division maintains high margins in precision micro-joining and infrared thermography.
• While profitability and operating margins have expanded significantly (EBITDA margin reaching 20.54% in FY2026), elevated working capital requirements and procurement cycles led to negative operating cash flow (-JPY 3,621M) and free cash flow (-JPY 4,350M), warranting disciplined monitoring of cash conversion.

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