Daily Brief Japan: Juroku Financial Group, Fast Retailing, Advantest Corp, Nippo Ltd, Sumitomo Pharma, Hikari Food Service, Relo Group, Simplex Holdings, Excel Co Ltd, TSE Tokyo Price Index TOPIX and more

• In the days approaching H1 results in 2024, Japanese banks raised H1 guidance. Among the top 50 banks outside the top 10, the increase was significant. 
• This year, out of those 50 banks, 12 have either reported (2) or raised guidance (10) for H1 in the past five weeks by an average of 47% (median 43%). 
• Higher loan income, core business profits, and lower credit costs are the main culprits. Expect lots more guidance revisions in the next 10 days.

• 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 ten pair trade opportunities across three markets and three sectors persist.
• 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.

• Nearly every comment on Japanese equities is focused on the half of the market that trades below book, but last week, Advantest, which trades at 18x book, exploded 30%.
• Searches for “AI Bubble” on google are up 90%, but Advantest’s share price exploded because it became clear that investors were underestimating demand for AI related hardware.
• Fear and Hype on both sides proved overdone. When I searched for the truth, I found only 1 red flag, 2 green, and 7 yellow.  

• Nippo Ltd. is a specialized trading company with significant manufacturing capabilities, focusing on high-value-added products in the Mobility, Electronics, and Medical & Precision Devices sectors.
• The company is poised to benefit from growing demand in high-growth areas, particularly components for electric vehicles, generative AI servers, and medical equipment, which are key pillars of its medium-term strategy.
• A revised shareholder return policy, increasing the dividend payout ratio to 50%, coupled with a strong growth track record in dividends and market capitalization, signals a commitment to enhancing shareholder value.

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• Sumitomo Pharma (4506 JP) revised revenue guidance upward by ¥74B to ¥429B on the back of continued strong sales in North America (up 56% YoY to ¥163B).
• Orgovyx (revenue jumped 95% YoY to ¥69B) witnessed solid patient growth in medicare patients while Gemtesa (revenue rose 72% to ¥43B) improved market share.
• The revised profit numbers implies that the company expects the SG&A and R&D cost to be on the rise H2FY26 onwards leading a net loss in the second half.

Key points (machine generated)

• The briefing took place on October 31, 2025, featuring Mitsunori Otani and investor DAIBOUCHOU.
• Hikari Food Service Co., Ltd. is listed on the Tokyo Stock Exchange’s Growth Market in the retail sector.
• The document highlights the significance of reviewing disclaimers and disclosures at the end.

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)

• Relo Group, Inc. aims for an operating profit of ¥50 billion and revenues of ¥200 billion by FY3/29 under its Fourth Olympic Plan.
• The company focuses on non-core business operations, including fringe benefits, outsourcing, property management, and tourism to drive profitability.
• For FY3/26, Relo expects a 5% revenue increase to ¥150 billion and a 3.2% operating profit growth to ¥31.4 billion, despite initial profit declines from investments.

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

• Multiple positives in Simplex’s Q1-2 FY3/26 results highlighted management’s solid growth execution, resulting in high double-digit growth YoY for sales and OP.
• Most notable are continued strength in Strategic/DX Consulting, and a marked increase in the Enterprise DX business area; we believe this illustrates their model of providing upstream consulting and technology services is winning new business, improving the sales mix, and achieving customer diversification to non-financials.
• Record-high quarterly orders and backlog in Q2 FY3/26 underpin a strong demand environment, and this backdrop has also enabled the company to implement positive pricing revisions. 

• Strategic Subsidiary Driving Growth: Excel Co Ltd is no longer a publicly traded entity, but a wholly-owned subsidiary of Kaga Electronics Co., Ltd. (8154 JP) following its acquisition and delisting in April 2020. Its primary value is now derived from its strategic integration into Kaga’s larger network, contributing to the parent company’s goal of becoming Japan’s top electronics distribution group.
• Synergistic Business Model: The acquisition was designed to create significant synergies by combining Excel’s strengths in LCDs and its China-focused customer base with Kaga’s global EMS (Electronics Manufacturing Services) capabilities and broad product portfolio. Post-merger integration is reportedly progressing well, with Excel contributing to profitability and new business growth.
• Embedded in a Favorable Industry: Excel operates within the dynamic Japanese electronic components market, which is poised for growth driven by secular trends in automotive (EVs), industrial automation, 5G, and IoT. As part of the larger Kaga group, it is well-positioned to capitalize on these long-term demand drivers.

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• The number of listed subsidiaries is decreasing, while equity-method affiliates are increasing. If parent-subsidiary listings are dissolved by selling part of equity interests, this doesn’t lead to fundamental management reform.
• While some companies have finally gotten off their backsides after seeing engagement results, the challenge is shifting to the many companies that refuse to seriously confront management reform.
• Investors want confidence in which businesses generate and expand the company’s overall cash flow. A serious business portfolio restructuring to provide that confidence remains only halfway complete.