Daily Brief Japan: Dentsu Inc, Jcr Pharmaceuticals, Aoyama Zaisan Networks Co Lt, Polaris Holdings, Startia Holdings, Sumitomo Pharma and more

Dentsu Group’s Q125 figures show 0.2% organic net revenue growth and an improvement in operating margin. Japan performed well, with international operations more challenged. Dentsu’s new management plan aims to drive profitability and competitiveness, particularly ex-Japan. It targets up to ¥50bn of operating cost reductions, returning the group to consistent profit growth from FY27. The ¥50bn cost of reshaping the group weighs on FY25 profits but should result in a simpler organisation. A further ¥45bn will be invested over three years with the aim of no markets being loss-making by FY26. The group will focus on the key Japanese and US markets, with the international business centred on adding value to Dentsu’s existing strengths in media. The goal is to achieve a mid-teens return on equity by the plan’s completion.

• Jcr Pharmaceuticals (4552 JP) revenue dropped 23% to ¥33B in FY25, mainly driven by lower contractual payments and reduced renal segment revenue.
• R&D expenses surged 37% YoY to ¥15B resulting in operating loss of ¥6.65B in FY25.
• FY26 guidance signals back in black after one-time hurdles drag performance in FY25.

• AZN demonstrated continued positive growth momentum in Q1 FY12/25, with sustained strength in the Wealth Consulting business and ADVANTAGE CLUB formations.
• While operating profit was impacted by integration costs and business investments in the form of higher personnel costs and SG&A, we believe these investments will enhance the company’s position to monetize Japan’s demographic and wealth transfer megatrend.
• We think the company remains on track to meet its FY12/25 targets and deliver longer term growth.

• Polaris delivered strong FY3/25 results, outperforming guidance with strong underlying OP growth of 109.0% YoY, driven by both organic growth and the Minacia acquisition.
• Robust inbound tourism helped lift domestic RevPAR by 20.9% YoY, and the company surpassed its 10,000-room target ahead of its initial medium-term plan.
• The company also shifted toward a fixed-plus-variable rent operating model that enables stable earnings over the medium to long term. 

• On May 22, 2025, Startia Holdings, Inc. (hereafter, the Company) announced its new three-year mid-term management plan covering the period from FY2026/3 to FY2028/3.
• In addition, the Company made a surprise announcement of a commemorative dividend per share of JPY 8 at the end of the fiscal year to celebrate its 30th anniversary, bringing the total annual dividend per share for FY2026/3 to JPY 125, combined the previously announced regular dividend (interim of JPY 54 and year-end of JPY 63).
• The management team shares its sense of urgency that there is significant room for improvement in the Company’s P/E ratio, badly undervalued relative to its already high ROE (27%).

• Sumitomo Pharma (4506 JP) reported 27% YoY revenue growth during FY25, driven by North America.
• Restructuring and streamlining efforts help curb expenses and post a core operating profit of ¥43B during FY25.
• Sumitomo focus on future with “Reboot 2027” amid FY26 guidance of revenue drop because of Aptiom and forex. Core operating profit is expected to increase by 30%.