In today’s briefing:
- StubWorld: Japan Post Holdings (6178 JP) Is “Cheap”
- TSI Holdings (3608) – YET ANOTHER Big Buyback, Still Good, Still Cheap, But B/S Restructuring Slow
- GNI Placement: Easy to Digest but Not Without Small Cap Pharma Risks
- [7732 JP] KKR–JIC Take-Private of Topcon: Strategic Bet on Digital Eye Care
- Q4 Follow-Up – SHIMOJIMA (7482 JP) – July 22, 2025
StubWorld: Japan Post Holdings (6178 JP) Is “Cheap”
- As short-term rates rise, Japan Post Bank (7182 JP)‘s perceived superior fundamentals may be leading to a short squeeze on the stock versus Japan Post Holdings (6178 JP).
- Preceding my comments on Japan Post – and Silicon Integrated Systems (2363 TT) – are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
TSI Holdings (3608) – YET ANOTHER Big Buyback, Still Good, Still Cheap, But B/S Restructuring Slow
- A bit over three years ago I re-wrote on Tsi Holdings (3608 JP). Then? EV/Revenue and EV/EBITDA of 0.03x and 0.5x respectively. I pounded the table.
- My recommended trade: “Buy the stock (preferably from cross-holders interested in selling). Buy with both hands. Buy a lot. Buy more later. Pressure the company to go private.”
- Since then, total return has been +295%. Today they announced another buyback. Tomorrow morning it gets done. Details details details!
GNI Placement: Easy to Digest but Not Without Small Cap Pharma Risks
- GNI Group (2160 JP) is looking to raise around US$100m from a primary placement (after upsize).
- The deal is a small one, representing 2.4 days of the stock’s three month ADV, despite being 9.0% of total shares outstanding.
- In this note, we will talk about the placement and run the deal through our ECM framework.
[7732 JP] KKR–JIC Take-Private of Topcon: Strategic Bet on Digital Eye Care
- KKR and JIC Capital launched a ¥348B (~$2.3B) MBO for Topcon (7732 JP) at ¥3,300/share, offering an ~88% premium.
- The deal implies ~78x FY25 P/E and ~37x FY26E P/E—pricing in Eye Care’s high-margin growth while Positioning remains a cyclical drag.
- Long term, Eye Care is well-positioned to scale globally as AI diagnostics and SaaS platforms unlock sustained double-digit growth.
Q4 Follow-Up – SHIMOJIMA (7482 JP) – July 22, 2025
- Since this is the final year of the current 5-year MTP, focus growth initiatives for FY26/3 are shifting out with a view toward the next MTP.
- Regarding cash allocation for investments and shareholder returns, in addition to FY26/3 capex plans for IT investment in various key systems, as well as renovation work on the Company’s head office, management announced a new 3-year plan to construct a new mother distribution center in Hyogo Prefecture to cover Western Japan at a total estimated cost of JPY 15bn (internal funds plus bank loans, see P6 for details).
- At the same time, it added DOE > 3.0% in addition to targeting a consolidated payout ratio of ≥ 50% to its policy on shareholder returns.
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