Daily Brief Japan: Hitachi Construction Machinery, DeNA, Mandom Corp, Nintendo, Sosei Group, Global X Japan Semiconductor ETF, Softcreate Holdings, Almedio Inc, Takeda Pharmaceutical, B Lot Co Ltd and more

• Hitachi Ltd (6501 JP) aims to raise around US$452m via a 6.97% stake sale in Hitachi Construction Machinery Co. Post the selldown, Hitachi’s stake will reduce to 18.4%.
• Hitachi Construction Machinery Co (HCMC) is a Japanese company that designs, manufactures, sells, and services construction and mining equipment.
• In this note we talk about the deal dynamics and run the deal through our ECM framework.

• Last week, “Murakami Group” (a group of investors who jointly file large shareholder filings) announced a 5+% stake in DeNA (2432 JP). The stock popped. Then they filed again.
• This was not surprising. It has long been known as a “value” name (and has the requisite short balance to prove it). The question is how much value IS there
• The question is how much value IS there. And to whom? It’s an interesting question which deserves a look, so we take a look.  

• Mandom Corp (4917 JP) has proposed countermeasures in response to Murakami’s 18.87% voting stake and to ostensibly secure time for an alternative, viable (higher) offer.
• The read-across from the proposal is that CVC’s offer at current terms will fail, CVC is unwilling to match Murakami/Hibiki’s expectations, and there could be genuine interest from third-party bidders. 
• Nevertheless, countermeasures are unnecessary as the share price and presence of activists provide the time needed for the Board’s purported aim to secure a higher offer.       

• Cycle Execution: Switch 2 launch momentum is strong, with disciplined guidance and improving margins, suggesting Nintendo’s hardware transition is proceeding smoothly and could drive further upward revisions. 
• Earnings Quality: Conservative assumptions, resilient legacy software, and early signs of operating leverage provide visibility into sustainable mid-cycle profitability beyond initial launch dynamics. 
• Valuation & Positioning: Despite a 60% rally and premium multiples, Nintendo remains the purest global gaming IP play, justifying elevated valuation through enduring creative and structural advantages.

• Revenue decreased by JPY135mn to JPY21.8bn due to smaller milestone payments, partially offset by Quviviq sales.
• R&D expenses rose 31.5% YoY to JPY11.2bn, driven by increased investment and a weaker yen, mainly in the UK.
• Core operating loss was JPY986mn, compared to a JPY4.4bn profit in cumulative Q3 FY12/24, reflecting non-cash expenses.

• The Global X Japan Semiconductor ETF (2644 JP) offers targeted exposure to the Japanese semiconductor industry, a critical sector poised for growth due to strong government support and increasing global demand.
• The ETF provides diversification across various segments of the semiconductor value chain, including manufacturing, materials, and equipment, tracking the performance of the FactSet Japan Semiconductor Index.
• Key drivers for the underlying industry include the expansion of 5G, AI, IoT, and automotive applications, though the sector faces risks from geopolitical tensions, supply chain disruptions, and intense global competition.

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

• Revenue reached JPY16.5bn (+8.8% YoY), with operating profit at JPY2.7bn (+4.7% YoY) and net income JPY1.9bn (+5.7% YoY).
• EC Solutions business saw revenue growth to JPY8.8bn (+7.6% YoY) and recurring profit increase to JPY2.3bn (+16.9% YoY).
• IT Solutions business revenue rose to JPY7.7bn (+10.2% YoY), while recurring profit decreased to JPY1.4bn (-4.1% YoY).

• Almedio reported a revenue of JPY1.2bn (-64.7% YoY) and a net loss of JPY294mn in 1H FY03/25.
• The company revised its FY03/26 forecast to a revenue of JPY2.6bn and a net loss of JPY622mn.
• Almedio’s 2025 medium-term management plan targets JPY7.4bn revenue and JPY831mn operating profit by FY03/28.

• Takeda Pharmaceutical (4502 JP) reported H1FY26 revenue of ¥2,220B, down 7%, primarily attributable to unfavorable foreign exchange and lower sales of Vyvanse.
• Takeda revised its FY26 guidance downwards expecting lower sales and margins, reflecting near term headwinds amid cost control.
• Six of these late-stage programs are estimated to have the potential to generate peak revenues ranging from $10B to $20B in total and contribute to long-term growth.

• In FY12/24, the company reported revenue of JPY30.9bn (+31.6% YoY), operating profit of JPY6.3bn (+15.3% YoY), recurring profit of JPY5.8bn (+17.5% YoY), and net income attributable to owners of the parent of JPY3.9bn (+19.5% YoY).
• All three businesses posted higher revenue and profit YoY.
• In particular, higher-than-expected selling prices in the core Real Estate Investment and Development business lifted recurring profit to JPY5.8bn, 14.8% above the initial forecast of JPY5.1bn.