Daily Brief Japan: JX Advanced Metals, Osaka Gas, Santec Corp, T&D Holdings, Mani Inc, Neos Corp and more

• The sharp rally in JX Advanced Metals (5016 JP) over the last couple of months should result in inclusion in a global index in November.
• The stock is already a member of the TOPIX Index and another global index, and this inclusion will require passive trackers to buy a big chunk of the real float.
• There will be more passive buying in JX Advanced Metals (5016 JP) in April when the liquidity factor in the TOPIX Index increases from 0.75 to 1.

• Falcon Oil & Gas agreed to sell its assets to TBN, distributing TBN shares to shareholders at 0.00687 ratio.
• The merger’s spread fluctuates due to hedging concerns and potential TBN stock decline to pre-announcement levels.
• Lamesa Holdings’ shares are excluded from distribution due to sanctions, affecting the stock exchange ratio calculation.

• Santec is a key enabler of next-generation optical communications and medical imaging, capitalizing on secular growth in data traffic and healthcare diagnostics. Its leadership in tunable lasers and Optical Coherence Tomography (OCT) technology provides a strong foundation for sustained, high-margin growth.
• The company has demonstrated an exceptional growth track record, with revenue and net income CAGRs over the last three years of 39.3% and 45.2%, respectively. This robust performance is underpinned by strong demand from data centers, 5G network deployments, and expanding applications in the medical field.
• While valuation appears moderate relative to its growth profile, potential risks include cyclicality in the telecommunications sector, high dependency on technological innovation, and competitive pressures from larger, more diversified players in the photonics industry.

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• T&D Holdings operates a unique and resilient business model in the mature Japanese life insurance market through three specialized subsidiaries, each targeting a distinct demographic: Daido Life for small and medium-sized enterprises (SMEs), Taiyo Life for the senior market, and T&D Financial Life for the bancassurance channel.
• The company has demonstrated remarkable earnings recovery, swinging from a net loss in FY2023 to significant profitability in FY2024 and FY2025, driven by strategic initiatives and a shifting economic environment. The 3-year net income CAGR of 107.35% is a testament to this turnaround.
• While the company’s focused strategy provides a competitive moat, it faces key risks from Japan’s demographic shifts, interest rate volatility impacting its vast bond portfolio, and intense competition within the broader insurance and financial services sector.

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• Mani Inc (7730 JP) FY25 revenue increased 5% YoY to ¥29.9B while Operating margin deteriorated to 27.3%, down 210bps. Dental segment reported the worst margin decline from 18.7% to 11.7%.
• The company said that the impact voluntary recall of dia-burs in China has subsided in FY25, and expects a full recovery in sales from FY26.
• FY26 guidance expect revenue rise 9% to ¥32.8B with impact of recalls subsiding. Profits and margins are also expected to witness a significant uptick.

• In 1H FY02/26, TECMIRA recorded JPY4.9bn revenue (-12.2% YoY), JPY153mn operating loss, and JPY207mn net loss.
• IoT & Devices segment saw 0.2% revenue increase, while Life Design and AI & Cloud segments experienced revenue declines.
• SaaS business showed YoY growth in revenue and profit, driven by AI chatbot service enhancements and marketing efforts.