Japan

• On 28 August, SBI Holdings (8473 JP) announced a Tender Offer to buy 20% of BASE Inc (4477 JP) by Tender Offer at ¥340/share. That was a very small premium. 
• My comments were in [Japan Partial Tender] SBI Launches Partial Offer for 20% of BASE (4477 JP) At ¥340 – Needs More. SBI has quite often underpaid on partials.  
• Top shareholder Maki-san was released from his confidentiality agreement the same day. Last night he released an updated Large Shareholder Filing Amendment. It tells you something. 

• Bloomberg reported that Bain and Lone Star have advanced to the second round of bidding for Nikkon Holdings (9072 JP), which will commence in early September.
• Bloomberg also noted that a takeunder is possible. At first glance, the argument for a takeunder looks compelling, particularly as Nikkon shares have materially outperformed peers YTD. 
• However, a takeunder is unlikely for several reasons and is largely a ruse to dampen expectations. An offer around JPY6,000 remains justifiable.  

• Mergermarket and Nikkei reported that Kadoya Sesame Mills (2612 JP) is considering taking its shares private to enhance its corporate value in the medium- to long-term.
• The likely offer structure is a Mitsubishi Corp (8058 JP)-led TOB to gain strategic control (distribution exclusivity, supply-chain integration). Mitsui & Co Ltd (8031 JP) is likely to exit. 
• Kadoya has materially outperformed its peers over the past 12 months, thereby capping the takeover premium. I estimate an offer of JPY1,950 to JPY2,510.

• The disclosure rules begin as a compromise in response to concerns regarding the burden on listed companies and investor needs. However, it remains unclear what impact these rules will have.
• Since there are so many companies with major shareholders,this means that while there are challenges regarding trading liquidity, there are also many investment opportunities.
• Institutional investors are expected to discuss with the company the future direction of its listing in a way that promotes the sustainable growth of minority shareholders’ interests.

• Toyobo delivered a solid Q1 FY3/27, consistently buoyed by Industrial Films, with particular strength in MLCC mold-release films and SRF.
• Concurrently, OP in the Resins & Chemicals segment (within Environmental & Functional Materials) surged 90.2% YoY.
• While elevated naphtha prices stemming from Middle East tensions have led management to guide for a 17.6% YoY decline in FY OP, robust underlying fundamentals and strategic price pass- throughs should keep operating cash flow resilient.

• ANYCOLOR is becoming a capital-light character-IP platform: monetisation per VTuber has compounded far faster than roster growth, while commerce now dominates revenue.
• NIJISANJI has a narrow but valuable moat in brand, fan relationships and monetisation capabilities, despite low switching costs and limited structural barriers to competition.
• Founder alignment, exceptional cash generation and planned shareholder returns support the thesis; at roughly 13–15x guided FY04/2027 earnings, expectations already look restrained.

• By the end of this week we should know the changes for the Nikkei 225 (NKY INDEX) rebalance. We already know that Advantest Corp (6857 JP) will be capped.
• As we know from Brian Freitas research since Advantest’s weighting must drop from roughly 12.2% down toward the 10% threshold, the required scale of supply hitting the market is significan.
• Advantest’s core business is experiencing a massive fundamental surge due to high-performance AI semiconductor testing demand, so the structural “passive selloff” is battling strong “fundamental buying” from active institutional investors.

• House Foods Group’s (2810 JP) potential divestment of its 51% stake in Ichibanya (7630 JP) is structurally viable but highly complex. A full privatization via a private equity sponsor is the most likely route to eliminate the parent-child listing conflict, though Ichibanya’s steep valuation multiples (trailing EV/EBITDA over 15x and P/E over 30x) will severely test traditional leverage buyout (LBO) debt structures in Japan’s rising interest rate environment.
• The company’s unique “Bloom System” apprenticeship franchise model faces severe structural threats from tightening Japanese labor regulations. The Work Style Reform Act’s strict caps on overtime and the surge in prefectural minimum wages (weighted national average of ¥1,121 per hour as of late 2025, with Tokyo at ¥1,226) make the traditional 2-to-5-year store manager training path legally and financially unsustainable for independent franchisees.
• Extreme rice price volatility (“Reiwa rice turmoil”) is crushing near-term profitability despite top-line resilience. In Q1 FY2027 (ended May 31, 2026), consolidated sales rose 7.8% year-on-year to ¥16.97 billion, but operating profit dropped 14.3% to ¥1.08 billion due to lag-effects in raw material contracts, proving that Ichibanya is struggling to pass escalating ingredient costs fully onto value-conscious domestic consumers.

• Japan System Techniques (hereafter, the Company) announced its Q1 FY2027/3 results after the market close on Thursday, August 13, 2026.
• Consolidated net sales increased to JPY 7,437 mn (+5.6% YoY), while operating profit declined to JPY 390 mn (-21.0% YoY), ordinary profit to JPY 402 mn (-21.0% YoY), and profit attributable to owners of parent (hereafter, net profit) to JPY 113 mn (-64.8% YoY).
• Profit was weighed down by higher costs associated with the relocation of the Tokyo headquarters and growth investments in the Package and Medical Big Data businesses under the medium-term management plan, as well as margin deterioration on specific projects in the DX&SI business.

• Pharmarise Holdings Corporation (hereafter, the Company) operates a community healthcare platform centered on its Dispensing pharmacy business, complemented by its Drug/convenience store business, Storage and management of medical documents business, and Medical mall business.
• The Company has expanded its store network nationwide, with its footprint reaching 446 locations as of end-FY2026/5, consisting of 406 dispensing pharmacies and 40 drug/convenience and other stores.
• Leveraging its strengths in addressing regulatory changes and standardizing operations, including through post-merger integration (PMI), the Company is working to build pharmacies preferred by local communities.

• In FY2026/5, operating profit increased 233.5% YoY, while net profit returned to the black.
• The core Dispensing pharmacy business also posted a sharp increase in profit, indicating that the benefits of post-merger integration (PMI) and improvements at existing stores are beginning to translate into earnings alongside the scale expansion achieved through M&A.
• Going forward, SIR believes there is substantial room for valuation to normalize provided the Company continues to deliver profit growth and the earnings recovery proves sustainable.

• On August 6, TEKKEN CORPORATION (hereinafter, the Company) announced its Q1 FY2027/3 consolidated financial results.
• Net sales decreased 8.9% YoY to JPY 40,429 mn, and operating profit declined 20.7% YoY to JPY 1,358 mn, which were broadly in line with the Company’s plan.
• The more notable aspect of the Q1 results was that the previously swelling balance of accounts receivable from completed construction contracts began to decline; this reversal provided the funding basis for reducing interest-bearing debt and led to disclosure of an upward revision to the year-end dividend in line with the new shareholder-return policy targeting DOE of at least 4%.

• On August 6, TEKKEN CORPORATION (hereinafter, the Company) announced its Q1 FY2027/3 consolidated financial results.
• The Company implements rapid risk-management measures to address rising materials, equipment and logistics costs and supply constraints.
• SIR believes that improving fundamentals, together with a supportive dividend yield, offer medium- to long-term investors an attractive risk-reward profile.

• Hirano Tecseed (hereinafter HT) reported FY26 Q1 OP of ¥147mil (-82.0% YoY) on sales of ¥6,083mil (-43.3% YoY), generating an OPM of 2.4% (-5.2ppt YoY / +4.6ppt QoQ).
• The weak sales performance was mostly triggered by the dip in sales in the Coating and Laminating Machinery [C&LM] segment reflecting (1) the cautious investment sentiment among the firm’s customers and (2) a deterioration in the sales mix on the back of a decline in EV secondary LiB-related production equipment sales as well as associated installation works.
• At the same time, given low level of production volumes, the gross profit margin [GPM] declined -2.4ppt YoY to 15.7%.

• Japan System Techniques (hereafter, the Company) announced its Q1 FY2027/3 results after the market close on Thursday, August 13, 2026.
• The Company maintained its initial full-year FY2027/3 earnings forecast and expects higher sales and profits for the full year.
• SIR believes the market is gradually shifting toward viewing the Company as one that can leverage AI to strengthen its competitiveness, as concerns that its business could be displaced by AI begin to ease.

• Kokusai Electric (6525 JP) saw large selldowns by PE funds and pre-IPO investors such as Applied Materials (AMAT US) from last year to this year. Last selldowns in Q2.
• There are index events upcoming which will substantially change the shape of the float. There could be another index event, depending on whether the TSE adapts ad hoc.
• These events – starting today – have a low flow/ADV count, but that is deceptive. A look at shareholder structure is instructive.

• The Nikkei reported that House Foods Group (2810 JP) is considering selling its 51% stake in Ichibanya (7630 JP) by selecting a suitable bidder to privatise the Company.
• The rumoured strong interest from several investment funds despite Ichibanya’s high multiples and downgraded forecasts signals deep underlying value.
• My analysis suggests that an offer price range of JPY1,170 to JPY1,317 per share, a 7.2% to 20.8% premium to the last close.

• The review period for the Nikkei 225 (NKY INDEX) September rebalance ended on 31 July. Nikkei has also confirmed Advantest Corp (6857 JP)‘s capping at the rebalance.
• The newly created Information & Communication sector is the most underweight while the Technology sector remains the most overweight. We could see some changes from these sectors.
• The changes at the September rebalance will set the tone for future rebalances and sector balance is likely to play a large role moving forward.

• MS-Japan rebalance one ADD, Kokusai Electric, and two DELETEs, JFE Holdings and Seibu Holdings, on 1 Sep 2026. We review the completed bridge against nine prior cycles.
• Kokusai Electric added +2.8% alpha over the bridge on top of its +13.5% pre-announcement run. Both DELETEs were near flat over the bridge after negative announcement days.
• Historically, positive-bridge ADDs gave back in the first implementation week. The historical DELETE first-week record after a positive bridge is flat.

• Oliver Corporation (619A JP) aims to raise around US$132m 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. In this note, we will talk about valuations.

• TOREX SEMICONDUCTOR LTD. (hereafter, the Company) announced consolidated results for Q1 FY2027/3 showing substantial growth in both sales and profit, with net sales of JPY 6,564 mn (+11.9% YoY) and operating profit of JPY 885 mn (+436.3% YoY).
• Ordinary profit was JPY 1,113 mn, while profit attributable to owners of parent (hereafter, net profit) was JPY 911 mn. Profit was boosted by higher sales, a weaker-than-expected yen (average exchange rate of JPY 160.5/USD), a temporary reduction in cost of sales resulting from a revision to the inventory valuation method, and dividend income recorded as non-operating income.
• By business, TOREX recorded net sales of JPY 2,761 mn (+11.6% YoY). Growth in industrial and automotive applications offset adjustments in wearable applications, while the weaker yen and the impact of the inventory valuation revision contributed to higher profit.

• What are the reasons Japanese companies cannot overcome the drawbacks of traditional management?
• In Japan, the concept of fiduciary duty is generally not widely understood, but institutional investors must fulfill their accountability to beneficiaries just as much as management does.
• Consequently, AGMs remained concentrated at late June, making it physically difficult to attend, and since annual securities reports couldn’t be used as a basis for decision-making, virtually nothing has changed.

• Twinbird Corp (6897 JP) is undergoing an operational restructuring following multi-year revenue contraction (-6.28% 3-year CAGR to ¥8,998.87M in FY2026), driven by post-pandemic normalization in consumer appliance demand, intense competition in generic white goods, and broader domestic consumption pressures.
• Financial results for FY2026 reflected substantial bottom-line pressure with a net loss of ¥1,218.30M and gross margin compression to 23.73%, driven by inventory adjustments and cost inflation; however, operational discipline supported positive Free Cash Flow generation of ¥457.10M and an operating turnaround in Q1 FY2027 (ended May 2026) with ¥65.40M in net profit.
• The medium-term investment thesis hinges on the commercial scaling of proprietary, eco-friendly Free-Piston Stirling Cooler (FPSC) technology for biopharma cold chain and semiconductor applications, alongside premiumization of its core kitchen and lifestyle appliance portfolio, while offering a stable 1.91% dividend yield (¥13.00 DPS).

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• SBI Holdings’ ¥340 partial tender offer is fundamentally a defensive, board-supported “white knight” transaction designed to cap the influence of Buffalo’s president, Hiroyuki Maki, who has hovered over the register with a 17.5% stake since his failed ¥407 hostile bid in May 2025.
• The June 1, 2026, Payment Services Act amendments impose significant structural compliance burdens on payment processors, particularly regarding cross-border merchant settlement agent registration. While this drives up fixed operational costs, it also acts as a steep regulatory barrier to entry that shields PAY.JP.
• Management’s path to its 2026 profitability targets is heavily reliant on monetization adjustments and SG&A cost controls, such as the newly introduced PAY.ID consumer fees, which artificially boosted Q2 gross margins to 51.7% even as organic GMV growth in core fashion categories shows signs of stagnation.

• Takamiya (hereafter, the Company) reported consolidated FY2027/3 Q1 results of net sales of JPY 10,229 mn (+3.3% YoY), operating profit of JPY 477 mn (+133.1% YoY), ordinary profit of JPY 416 mn (+307.3% YoY), and profit attributable to owners of parent (hereafter, net profit) of JPY 239 mn (26.5x YoY).
• In FY2026/3 Q1, profit at and below the ordinary profit line declined significantly due to the recording of foreign exchange losses and other factors.
• In contrast, FY2027/3 Q1 saw substantial increases in profit at and below the ordinary profit line, reflecting foreign exchange gains accompanying yen depreciation as well as the rebound effect from the prior-year period. 

• On Friday quite late, BASE Inc (4477 JP) and SBI Holdings (8473 JP) announced a Business and Capital Alliance whereby SBI would buy 20% in a partial offer at ¥340/share.
• I think that’s too low given the history of the shares, the fact that Activist-ish-y Wealthy Guy Hiroyuki MAKI offered ¥407/share a year ago and got far fewer shares. 
• Since then, revenues and earnings were revised upwards, and guidance this year is for strong growth. I would not be surprised to see…. um…. interference.

• Deal details are much as the Nikkei and Dentsu Soken reported. ¥2,880 for the 38.2% not owned by Dentsu. Dentsu and Itochu will be partners with Dentsu consolidating. 
• The price is not very high considering the growth, especially when synergies are not included. The price is below the TargetCo FA’s DCF range midpoint w/o synergies.
• But there was a rival bidder in the selection process and they had a lower bid. So it isn’t clear who or what overbidder might come out. This gets done.

• Canon Inc (7751 JP) has been one of the most prolific executors of corporate buybacks in the past 20yrs. Up there with Toyota. 
• Historically, its buybacks were finished very early in the buyback period, and were a big percentage of volume while being executed. The current one is different. Slower. Lower impact. 
• This piece is a study. Our data shows Canon has underperformed during the buyback as EPS expectations have suffered vs Peers. The study shows post-buyback-end underperformance isn’t a thing.

• We compile our selection of companies across Japan,China &India based on bottom-up triggers in each company post their recent quarterly/half yearly results and their guidance for remaining of the year.
• In Japan its ROHM Co Ltd (6963 JP),Suzuki Motor (7269 JP) & Mazda Motor (7261 JP). In China its Chow Tai Fook Jewellery (1929 HK) & Midea Group (300 HK).
• In India its a mix of recently listed – Milky Mist Dairy Food (1231D IN), Lalithaa Jewellery (LALITHAA IN) , Holdco – TVS (TVSHLTD IN) and select Auto OEs

• Since the announcement of the US$0.7 billion secondary offering, Lintec Corp (7966 JP)’s shares have declined 3.7% to the undisturbed price of JPY5,730 per share (20 August).
• It is instructive to look at recent large Japanese placements to understand the potential trading pattern. Lintec’s share decline is lower than the median of recent large placements.
• The offering will likely be priced on 1 September. Since 2021, the average large Japanese placement has tended to generate positive returns.

• 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), Changhong Jiahua (3991 HK), EQT Holdings (EQT AU), Tourism Holdings (THL NZ), Cleanaway Waste Management (CWY AU), Atlantic Lithium (A11 AU), OFX Group (OFX AU). 
• Lowest spreads: Accent Group (AX1 AU), FleetPartners Group (FPR AU), Ausgold Ltd (AUC AU), Kakaku.com Inc (2371 JP), Dentsu Soken (4812 JP), Future Corporation (4722 JP). 

• Parent-Child Delisting Hurdles: While the Tokyo Stock Exchange is pressuring companies to eliminate double listings, Canon Inc. is highly unlikely to take its 50.15%-owned subsidiary, Canon Marketing Japan, private anytime soon. The tax and capital hurdles, combined with the subsidiary’s transition into a high-margin IT solutions provider, make full integration financially inefficient for the parent.
• Regulatory Tailwinds and Hidden Risks: Canon’s newly deployed nanoimprint lithography (NIL) system, the FPA-1200NZ2C, presents a different architectural path than ASML’s extreme ultraviolet (EUV) systems. However, it still faces Ministry of Economy, Trade and Industry (METI) export control risks under Japan’s Foreign Exchange and Foreign Trade Act (FEFTA). Meanwhile, proposed EU REACH bans on per- and polyfluoroalkyl substances (PFAS) threaten the core laser printing margin engine by targeting critical toner additives and fuser roller coatings.
• Accounting Alterations Masking Organic Growth: Canon’s apparent 35.2% year-on-year operating profit surge in Q2 2026 to 159.2 billion Yen was heavily distorted by two transient factors: a 58 billion Yen tariff refund and an accounting shift on January 1, 2026, from declining-balance to straight-line depreciation, which artificially inflated near-term operating margins and masked flat underlying organic demand.

• Dentsu Soken (4812 JP) announced a preconditional tender offer from Itochu Corp (8001 JP) at JPY2,880, a 35.0% premium to the undisturbed price but below Nikkei’s rumoured JPY250 billion valuation.
• The precondition concerns approvals from Japan, China, and the EU. The offer is expected to commence in early November.
• While the offer represents a pre-announcement all-time high, it is below the midpoint of the target IFA valuation range. However, activists face a formidable task to force a bump. 

• 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 six pair trade opportunities persist across four 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.

• 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: SHEIN Global Holdings (625 HK) and GCash (Mynt) (GCASH PM) IPOs; Lintec Corp (7966 JP) secondary offering.
• Event-Driven developments: Kakaku.com Inc (2371 JP), Dentsu Soken (4812 JP), Seed Co Ltd/Tokyo (7743 JP), Carnaby Resources (CNB AU), Peet Ltd (PPC AU), Suncorp (SUN 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: In Japan, currently two pair trade opportunities persist across two 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.

• I tally 34 – mostly firm, mostly Asia-Pac – arb transactions currently being discussed and analysed on Smartkarma. Those arbs metrics and upcoming events are detailed below.
• Three new deals were discussed on Smartkarma this week: Peet Ltd (PPC AU), Carnaby Resources (CNB AU), and OUE Healthcare (OUEHC SP).
• Key updates/news also took place on: Reliance Worldwide Corp (RWC AU), Ausgold Ltd (AUC AU), Dentsu Soken (4812 JP), and Golfzon Holdings (121440 KS).

• The market now realise that EQT’s playing the long game for Kakaku.com (2371 JP). Not optimal unless EQT thinks that they have a chance at a runoff. 
• Reportedly, Tokio Marine Holdings (8766 JP) has identified Suncorp (SUN AU) as its preferred takeover target
• Changhong Jiahua (3991 HK) is a busted deal. Did the Offeror sound out all the necessary officials AND regulatory bodies before even launching the Offer.

• In early July, there was a Nikkei article suggesting Dentsu Inc (4324 JP) had settled on possible partners to buy out the minority stakes in Dentsu Soken (4812 JP). 
• This would give it more scale, and a better future, and would rid Dentsu of a “dual listing” problem. There was a delay. Now 8 weeks later we have news.
• Itochu Corp (8001 JP) has apparently decided it will buy it. The structure suits everyone. Oasis has since reported a 5% stake, but I think this gets done.

• Japan’s stocks are notable for low trading liquidity due to relatively small market capitalization and skewed investor-base. Many companies have major shareholders, and BoJ’s ETF further limit the free-floating shares.
• Trends in derivative positions—such as the “gamma squeeze” strategy—that utilize the Nikkei 225, which includes stocks with low trading liquidity, are further amplifying the magnitude of market volatility.
• The BoJ’s ETF holdings pose a major problem in corporate governance, perspective and it should now accelerate the sale of ETFs to ensure trading liquidity and “avoid impacting the market.”

• Takamiya (hereafter, the Company) reported consolidated FY2027/3 Q1 results of net sales of JPY 10,229 mn (+3.3% YoY), operating profit of JPY 477 mn (+133.1% YoY), ordinary profit of JPY 416 mn (+307.3% YoY), and profit attributable to owners of parent (hereafter, net profit) of JPY 239 mn (26.5x YoY).
• FY2027/3 is the final year of the current medium-term management plan.
• Going forward, the key point to watch will be whether the platform strategy centered on OPE-MANE can lead to improvements in capital efficiency through continued growth in KPIs and an expanding profit contribution.

• The TOPIX Index will see a sea change in methodology implemented in October 2026. The data cutoff for price is 31 August 2026. 
• That means there are two days and change left before the prices decide whether a stock gets in, stays in, gets deleted, or sees its Liquidity Factor removed. 
• At the borderlines, a move of a few percent either way in these last days may (assuming FFWs) swing the buy/sell by dozens of days of ADV.

• Nikkei reported that Dentsu Inc (4324 JP) and Itochu Corp (8001 JP) will privatise Dentsu Soken (4812 JP) at a total cost of around JPY250 billion.
• The rumoured JPY250 billion valuation for the 38.12% stake not owned by Dentsu suggests an offer of JPY3,360 per share, a 22.7% premium to the last close.
• Oasis’s emergence as a substantial shareholder ensured a generous offer. The rumoured offer represents an all-time high and is attractive compared to precedent transactions and peer multiples.

• EQT is the incumbent underbidder while Bain’s bid is just under 2% higher than EQT’s ¥3,570 at ¥3,640. Bain refused to overbid for now. It is still waiting for approvals. 
• EQT’s ¥3,570 bid wasn’t enough when it closed today. They weren’t going to get it. So they extended for 10 days. And raised. By ¥1/share. 
• A couple of weeks ago, EQT was adamant delay was the enemy so Bain’s 1%/month overbid was not enough. So now EQT is overbidding with time value of 0.06%/month. Hmmmm.

• Halfords’ FY27 upgrade offers a supportive, if incomplete, UK read-through on bicycle sell-through, reinforcing early signs of channel stabilisation.
• Shimano’s normalising inventory-to-sales ratio suggests 2H restocking is increasingly likely, positioning consensus (¥51bn OP) to converge toward our ¥57bn estimate.
• Buyback pace is running ahead of schedule, and Dalton’s activist presence should keep capital discipline intact despite March’s rejected ¥200bn proposal.

• Since the last insight to now, Nippon Yusen Kk (9101 JP) delivered a strong performance, especially in July when AI stocks sold off. 
• The share price is currently in the overbought territory (RSI 83) while PER and PBR are still within the sensible level. 
• If the management is able to allocate capital more efficiently through retirement of shares and buybacks, then it is a good sign to enter again. 

• Context: The Mitsubishi Motors (7211 JP) vs. Nissan Motor (7201 JP) price ratio has deviated more than two standard deviations from its one-year average, presenting a potential relative value opportunity.
• Highlight: Going long Nissan Motor (7201 JP) and short Mitsubishi Motors (7211 JP) targets an 8% return.
• Why Read: Essential for quantitative traders seeking mean-reversion opportunities, with detailed execution framework, risk management protocols, and historical simulation showing the statistical basis for this relative value play.

• Asset-Light Margin expansion has structural trade-offs: While Oliver Corporation’s transition to a “Digital Interior Solution Provider” expanded its operating margins to 10.1% in FY2025 by shifting capital-intensive manufacturing to subcontracted partners, it caps gross margins at 27.2% (TTM)—below vertically integrated peers like Okamura at 33.12%—and shifts the operational risk to subcontractor execution and logistics bottlenecks.
• PE Exit Dynamics leave zero dry powder: The upcoming re-listing on September 16, 2026, under ticker 619A, is a 100% secondary offering of 69,320,100 shares by PE sponsor Integral, bringing zero primary capital to Oliver’s balance sheet. This creates severe structural tension with the aggressive 70% dividend payout target for FY2026 (18.33 yen per share), leaving the company with limited cash for M&A and regional consolidation.
• Bifurcated Sector Cycle requires office layout structural growth to offset hotel decline: 1H 2026 revenue rose 9% YoY to 18.65 billion yen on strong office and education demand. However, hospitality and lodging have entered a cyclical consolidation phase post-2025 Osaka Expo preparations, making Oliver’s growth highly dependent on central Tokyo’s corporate workplace transitions to activity-based layouts.

• Strategic Regulatory Bypass via Asset Carve-outs: The simultaneous sale of Seed’s newly spun-off smart contact lens unit, OcuDevices (85.10% stake), and its Taiwan subsidiary (100% stake) to founder Ryuji Arai’s private asset manager, La Holdings, is a highly calculated structure. This move is explicitly designed to bypass rigorous Foreign Exchange and Foreign Trade Act (FEFTA) reviews by Japan’s Ministry of Economy, Trade and Industry (METI) regarding Chinese ownership of sensitive biological/smart medical IP, as well as Taiwan’s strict regulatory blocks on mainland Chinese investments.
• Asymmetric Founder-Led Joint Venture Mechanics: The ¥795 per share tender offer by Luxshare Precision Cayman is not an open market exit, but a structured transition to a private joint venture. By maintaining a 51.00% voting control post-transaction, while Luxshare takes 49.00%, founder Ryuji Arai secures manufacturing scale and capital while keeping the “Japan Quality” brand domestic. This structure explains the lack of a competitive auction process; any outside bidder would be blocked by Arai’s existing 48.80% trust-held block.
• Minority Shareholder Disadvantage and Governance Gaps: While the 48.60% premium over the pre-announcement price of ¥535 looks attractive on paper, minority shareholders are effectively being squeezed out just as the company begins to commercialize high-growth silicone hydrogel and smart lens technology. The parallel related-party transactions and transfer pricing of OcuDevices and the Taiwan business to the founder’s private vehicle represent major corporate governance red flags that deserve intense scrutiny regarding fair value allocation.

Key points (machine generated)

• IDOM Inc. is implementing a Medium-Term Business Plan (2023-2027) focused on growth through large store establishment and improved gross profit per unit.
• The company anticipates challenges with operating profits due to inflation but aims for a 10% market share by FY2/33 and double-digit growth in net sales and operating profit by FY2/27.
• Despite potential risks, IDOM’s share price is considered attractive due to its dividend yield and prospects for market capitalization growth.

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Key points (machine generated)

• TMS-007 is in a Phase 2/3 global clinical trial called ORION, expected to complete its first part by the end of 2026.
• Top-line results for TMS-007 are anticipated in early 2027.
• TMS-008 is finalizing its Phase 2a trial design in 2026, with plans for patient enrollment later that year.

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• Seed Co Ltd/Tokyo (7743 JP) announced a tender offer from Luxshare Precision Industry (2475 HK) at JPY795, a 48.6% premium to the last close of JPY535.  
• Despite the lack of an auction, the offer is above the midpoint of the IFA’s DCF valuation range and is attractive compared to historical trading ranges.
• The required minority acceptance rate to meet the lower limit is not onerous. This is a done deal. The offer closes on 13 October.  

• Oliver Corporation (619A JP) aims to raise around US$130m in its Japan IPO.
• Oliver Corporation was a furniture manufacturing company known as Fuji Steel and sold steel furniture. As it started to expand into wooden furniture, it eventually renamed itself as Oliver Co.
• In this note, we look at its past performance and other deal dynamics that might impact the listing.

• Honda Motor Company Limited reported record operating profit of JPY 530.7 billion for the first quarter of fiscal year ending March 31, 2027, driven largely by strong performance in the motorcycle business and North American automobile sales.
• The motorcycle segment achieved its highest-ever quarterly operating profit, fueled by robust sales in India and Brazil.
• Despite challenges in the Chinese automobile market, unit sales increased overall, mainly supported by North America, delivering an automobile operating profit of JPY 192.1 billion with an operating margin of 5.0%.

• D. Western Therapeutics Institute, Inc. (DWTI, hereafter the Company) announced its H1 FY2026/12 results after market close on August 13, 2026.
• For TissueBlue , the Company and licensee DORC are currently discussing detailed terms and conditions for extending their agreement in the US, where the patent remains in force.
• SIR believes that if the planned product launches proceed on schedule, expectations for the Company will rise further and be reflected in its share price.

Key points (machine generated)

• Globe-ing reported record sales of 11,512 million yen, a 39.4% year-on-year increase.
• Operating profit reached 4,142 million yen, marking a 47.9% rise.
• The company announced its first dividend implementation, with a net profit of 3,051 million yen, up 72.6%.

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• JINS is spending heavily to turn itself from a Japan-centred value eyewear chain into a more tightly controlled global SPA retailer.
• Sales growth remains impressive and overseas earnings are finally becoming meaningful.
• But investment is rising faster than profit, and there has been a drop in domestic same-store momentum over the summer.

• Expansion plans on track – Q1 FY3/27 results were softer than expected; despite sales growth driven by new hotel openings, profitability declined YoY reflecting higher variable rents, softer revenue at some existing hotels, and rising operating and new- opening costs.
• FY guidance was maintained, indicating expectations of stable inbound demand going forward.
• The key takeaway was that management remains focused on reaching its Medium-Term Management Plan of 150 hotels and 20,000 rooms in FY3/31; the company has contracted to open eight new hotels in Q1 FY3/27 (versus two in Q1 FY3/26), bringing the running total to 126 hotels with 17,869 rooms.

• Trend to remain positive – Registering OP growth of 487% YoY, Q1 FY3/27 results were significantly ahead of expectations, with Restar strongly positioned to benefit from AI-driven data center investment demand and rising prices for key products.
• Taking these factors into account, the company has revised FY guidance and DPS upward.
• We believe the earnings outlook remains strong, with continued high order visibility, rather than scenarios where demand is driven by a temporary supply shock or customer pre-buying. 

• Order and revenue pipeline filling up – Rigaku disclosed that Q2 orders at Semiconductor Process Control Instruments reached more than 3x the year-ago level on strong demand from Memory customers, driven by HBM and DRAM capacity expansion.
• Although Q2 results already benefitted from strong Memory demand, Rigaku expects further acceleration going into H2 and beyond.
• The Company’s next-gen semiconductor metrology equipment has also received positive feedback from customers, which we expect should gradually translate to improved margins as they are delivered. 

• Regulators have established a legal framework for listed companies based on the belief that improving corporate governance practices leads to improved return on capital and better stock price performance.
• Even regulators have recently begun requiring companies to take Key Actions to improve capital profitability and stock valuations, through “TSE’s request” and this year’s revision of Corporate Governance Code.
• A company should be evaluated based on the results of its value creation, such as capital profitability and stock performance. The board practice is one factor that should be analyzed.

• Three weeks ago, I published my “final expected list” for the Nikkei 225 Sep26 Rebal. This used the new Industry/Sector created, following the Guidebook. 
• I had looked at the language of the consultation and the language and made an assumption. 
• Developments since then warrant a second look, and an exploration into what MIGHT BE possible. 

• Physical capacity at Haneda Airport is structurally capped at approximately 490,000 slots per year, forcing Japan Airport Terminal (JAT) to pivot from volume-driven expansion to a qualitative growth model under its FY2026–FY2030 Medium-Term Management Plan.
• The $350 million secondary offering announced on August 24, 2026, marks a massive cross-shareholding unwind by commercial banks and minor corporate partners; JAT’s simultaneous 15 billion Yen share buyback (scheduled for October 2026–March 2027) is a defensive mechanism to absorb the resulting supply shock, only covering roughly 35% of the offered shares.
• While JAT captures high margins on wholesale domestic products and souvenirs, its bargaining power with global luxury conglomerates remains structurally constrained; luxury houses dictate low concession commission rates (typically around 20-30%) and control product allocation, leveraging the threat of shifting demand to downtown tax-free districts or neighboring regional hubs like Incheon or Singapore.

• Terra Drone has invested in its two Ukrainian partners, turning them into consolidated subsidiaries. It can now be regarded as an active participant in the Ukraine war.
• The company remains in the red, but the bonds with warrants issue made in July should cover capital spending through January 2030. By then, it should break even. 
• At ¥14,050, the shares are approaching their May high. As a result of the financing, the PBR has dropped from 29X to 7X,

• As cross-shareholding structure begins to break down and concerns grow over the influence of activist investors, an increasing number of companies are introducing shareholder benefits to win over individual shareholders.
• Some believe that having more individual investors not only helps limit declines—particularly during market downturns—but also lowers the cost of capital. However, it’s unclear whether shareholder benefits are effective.
• Retail investors aren’t the only diverse investors. Institutional investors also engage in a variety of investment strategies, and repurchasing treasury stock is an effective way to reduce stock price volatility.

Key points (machine generated)

• Hori Food Service reported significant revenue and profit growth for the interim period of the fiscal year ending November 2026.
• The company, established in 1983 and operating 79 stores, was acquired by City Creation Holdings in September 2024, prompting management reforms.
• Hori Food Service’s management model emphasizes optimizing store formats and locations, with a focus on targeted marketing and stabilizing revenue through its flagship format ‘Kakurean Shinobuya.’

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)

• Punch Industry, established in 1975, is a leading manufacturer of mold components specializing in ejector pins, sprue bushes, punches, dies, and die set guides.
• The company holds the top market share for custom mold components in Japan and China, supported by a robust production system with over 2,000 pieces of equipment.
• Punch Industry serves around 6,000 customers in Japan and approximately 8,000 in China, demonstrating extensive reach and technical expertise.

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)

• First Corporation, a contractor in Tokyo, saw revenue decline but achieved record profits for FY ending May 2026.
• The company uses the ‘Zou-chuu method’ for efficient operations and strong safety and quality management, leading to repeat business.
• Their long-term vision, ‘First VISION 2031,’ has two phases: the first focuses on solidifying foundations from May 2026 to May 2028.

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)

• Umenoyado Sake Brewery, established in 1893, is a major sake producer listed on the Tokyo Stock Exchange, focusing on sake-based liqueurs.
• For the fiscal year ending June 2026, the company reported a 15.1% sales increase to 3.091 billion yen and a 33.6% growth in net profit to 322 million yen.
• Umenoyado holds a 16.7% share of the domestic liqueur market, benefiting from strong domestic and international demand, with overseas sales making up 25% of total revenue.

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)

• GameWith returned to profitability for the fiscal year ending May 2026 and plans to enter an investment phase next year.
• The company has been expanding internationally since 2018, targeting English and traditional Chinese-speaking markets.
• GameWith operates in four segments: Media, Esports & Entertainment, ISP, and Other (New) Business, including NFT game operations.

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)

• Grems, Inc. is a Tokyo Stock Exchange-listed company specializing in energy-related products and services.
• In FY3/26, Grems reported a 1.8% increase in net sales and a 10% rise in operating profit, leading to a raised annual dividend of ¥85 per share.
• For FY3/27, the company projects a 9.5% increase in net sales and a 10.5% increase in operating profit, with plans to raise the dividend to ¥93 per share.

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

• A group of shareholders are looking to raise ~US$350m in a secondary sale of Japan Airport Terminal Co (9706 JP).
• The deal is another cross-shareholding unwind, which has been an ongoing narrative in Japan over the past 1-2 years.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• F&M Co., Ltd. is a 35-year-old Osaka-based back-office outsourcer for Japan’s sole proprietors and small/mid-size companies
• Selling bookkeeping (Accounting Service), a membership and subsidy-application consulting service branded “F&M Club” (Consulting), and cloud HR/labor-administration software branded “Office Station” (Business Solutions)
• Distributed almost entirely through regional banks and tax/labor-consultant firms rather than direct sales.

• Asahi Holdings (5857 JP) share price rose 30% in a month after our last insight. Nothing was wrong with the company and result was great. 
• The stock will go ex-dividend next month, but the share price appreciation has beaten the dividend amount of 3.5%. Worth protecting the capital gain. 
• It generates one of the highest ROIC at 10% against the peers and trades at the lower end of the spectrum. 

• Broadening growth across both core businesses – With 79% OP growth YoY, Q1 FY3/27 results were a positive surprise, with a turnaround in profitability at the Direct Selling Group, and the Food Group demonstrating sustained growth YoY.
• The company’s two core businesses are now contributing to solid earnings growth and serving as pillars of earnings.
• The quality of growth remains stronger in the Food Group, as the ‘Mister Donut’ restaurants conduct new store openings and experience higher customer footfall and higher customer spend. 

• Front-loading investment – Q1-2 FY12/26 results were below expectations, reflecting continued weakness in high-margin Product Service sales and rising AI-related investment costs.
• With revised FY guidance indicating further front-loaded investment and head office relocation costs, we view FY12/27 as an important recovery year.
• We believe the key factor increasingly comes down to management execution; LaKeel must demonstrate that accelerated AI investment can translate into stronger revenue growth, improved competitiveness and ultimately a recovery in profitability.

• Although the 68.4% YoY decline in Q1 FY3/27 OP may appear soft on the surface, this dip was anticipated and primarily driven by the planned concentration of regular biomass facility maintenance.
• Looking past this temporary noise, execution against core growth pillars remains robust.
• Recent milestones include securing ¥7.2bn in project finance for the 100MW Fukuroi Ugari Battery Energy Storage System (BESS), marking the successful rollout of its second large-scale merchant facility. 

Key points (machine generated)

• TENOX CORPORATION is a leader in foundation construction in Japan, known for its technological capabilities and reliability.
• In FY3/26, net sales decreased by 11.1% to ¥21,093 million, but operating profit increased by 15.6% to ¥1,289 million due to improved efficiency.
• Projected net sales for FY3/27 are expected to rise by 9.0% to ¥23,000 million, driven by growth in the domestic construction sector and a new alliance with Japan Home Shield Corporation.

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