In today’s briefing:
- [Japan M&A] Toyoda Gosei Buys Out Affiliate Ashimori Industry at 1.000x Mar25 Book
- [Quiddity Index] JPX Nikkei 400 Rebal Aug 2025 – Final Results
- JX Advanced Metals (5016 JP): Passive Buying in the Next 6 Weeks
- Yomeishu Seizo (2540 JP): Evaluating a Potential Privatisation
- SoftBank (9984 JP): Earnings Beat and the Missing Volatility Crush
- CyberAgent: Newly Released Games Drive Growth with an Upward Revision to Guidance
- To Companies that Adopt DOE: It’s Good to Consider ROE, but Are They Falling into Short-Termism?
- Nipro Corp (8086 JP): Q1 FY03/26 flash update
- J Trust Co Ltd (8508 JP): 1H FY12/25 flash update
- Forum Engineering Inc (7088 JP): Q1 FY03/26 flash update
[Japan M&A] Toyoda Gosei Buys Out Affiliate Ashimori Industry at 1.000x Mar25 Book
- Toyota Motor (7203 JP) subsidiary Toyoda Gosei (7282 JP) is buying out its own equity affiliate Ashimori Industry (3526 JP) at a near-all-time high price of ¥4,140/share.
- It’s not a great price, but it is just over 1x book after writedowns this past quarter. It basically requires cross-holders and half a retail to tender.
- But this autoparts business is a strong grower, and has no EV risk. And its non-autoparts business is more interesting. The “fair” multiples are low. But it’ll get done.
[Quiddity Index] JPX Nikkei 400 Rebal Aug 2025 – Final Results
- On Thursday 7 August, the TSE/Nikkei announced the changes for the JPX Nikkei 400 28 August rebalance. A few surprises, but given there is a nebulous qualitative overlay, that’s expected.
- 39 were added. 34 deleted. We got 63 of 73 actual changes correct, achieving hit rates of 96%, 83%, and 44% for our High/Medium/Low Conviction Leaderboard predictions, respectively.
- We see US$7.3bn of flows, two way. There should be another $3bn+ of flows on the 26th and 28th.
JX Advanced Metals (5016 JP): Passive Buying in the Next 6 Weeks
- JX Advanced Metals (5016 JP) listed in March and did not get Fast Entry to global indices since a large part of the IPO was allotted to domestic retail investors.
- JX Advanced Metals (5016 JP) will be added to one global index this month and could be added to the other global index in September.
- The stock is trading higher following the better than forecast results announced last week. The index inclusions could take the stock higher in the short-term.
Yomeishu Seizo (2540 JP): Evaluating a Potential Privatisation
- On 7 August, Bloomberg reported that Yomeishu Seizo (2540 JP) is considering going private and has received acquisition proposals from several investment funds.
- Privatisation is a neat solution for the Board to get rid of a potentially problematic activist shareholder, Yukihiro Nomura, the son-in-law of Yoshiaki Murakami.
- PE interest is underpinned by Yomeishu’s net cash and significant real estate assets. However, the shares are up 63% YTD, which leaves little room for additional upside. Take profits.
SoftBank (9984 JP): Earnings Beat and the Missing Volatility Crush
- Context:SoftBank’s (9984 JP) Q1 results on 7 August delivered a return to profitability and earnings beat, fueling one of the stock’s biggest post-results rallies in 15 years.
- Highlight: Shares jumped 10.4% on 8 August and nearly 20% week-on-week, with implied volatility staying elevated above 40% despite the surge.
- Why Read: Review price action and options market response, showing how SoftBank’s post-earnings volatility pattern echoes past announcements. Serves as a documented reference for the next earnings event.
CyberAgent: Newly Released Games Drive Growth with an Upward Revision to Guidance
- CyberAgent Inc (4751 JP) reported 3QFY09/2025 results on Friday aftermarket. Both revenue and OP beat consensus estimates with an upward revision to full-year guidance.
- Gaming segment has begun to see recovery driven by the strong performance of newly released game titles which have become a hit. There are several new titles up for release.
- Though CA’s share price has moved up with recovery in games and improved profitability of AbemaTV, we think there is further upside.
To Companies that Adopt DOE: It’s Good to Consider ROE, but Are They Falling into Short-Termism?
- With many companies unable to increase their ROE, the company also intends to demonstrate its commitment to improving ROE by strengthening shareholder returns through the adoption of DOE.
- The increase in the number of companies adopting DOE may be a reflection of the fact that many companies are forecasting lower profits this fiscal year.
- Of course, returning excess cash on hand while considering ROE isn’t a bad thing, but it’s also a concern that few companies are taking steps to ensure medium-to-long-term growth.
Nipro Corp (8086 JP): Q1 FY03/26 flash update
- Sales increased by 4.5% YoY to JPY159.2bn, with operating profit rising 24.6% YoY, despite a 45.2% decline in recurring profit.
- Pharmaceutical-Related business saw a 268.6% YoY surge in segment operating profit, driven by increased shipments and accounting treatment impacts.
- The FY03/26 earnings forecast remains unchanged, with sales projected at JPY677.0bn, operating profit at JPY37.0bn, and net income at JPY13.0bn.
J Trust Co Ltd (8508 JP): 1H FY12/25 flash update
- Operating revenue declined by JPY4.6bn YoY to JPY60.7bn, with decreases in South Korea, Mongolia, and Real Estate.
- Operating profit increased by JPY2.6bn YoY to JPY4.6bn, driven by gains in Financial and Investment Businesses.
- Profit attributable to owners of parent fell to JPY1.4bn due to foreign exchange losses from yen appreciation.
Forum Engineering Inc (7088 JP): Q1 FY03/26 flash update
- Revenue increased 8.2% YoY to JPY9.2bn; operating profit rose 1.5% YoY to JPY1.3bn.
- Cognavi Staffing saw a 5.2% YoY increase in utilized engineers; hourly staffing rate rose 4.6% YoY.
- Cognavi India recorded JPY9mn revenue; operating loss was JPY81mn due to upfront investment.
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