Daily Brief Japan: Kokusai Electric , Ichibanya, Capcom Co Ltd, Oliver Corporation, Torex Semiconductor, TSE Tokyo Price Index TOPIX, Twinbird Corp, BASE Inc, Srg Takamiya and more

• Kokusai Electric (6525 JP) saw large selldowns by PE funds and pre-IPO investors such as Applied Materials (AMAT US) from last year to this year. Last selldowns in Q2.
• There are index events upcoming which will substantially change the shape of the float. There could be another index event, depending on whether the TSE adapts ad hoc.
• These events – starting today – have a low flow/ADV count, but that is deceptive. A look at shareholder structure is instructive.

• The Nikkei reported that House Foods Group (2810 JP) is considering selling its 51% stake in Ichibanya (7630 JP) by selecting a suitable bidder to privatise the Company.
• The rumoured strong interest from several investment funds despite Ichibanya’s high multiples and downgraded forecasts signals deep underlying value.
• My analysis suggests that an offer price range of JPY1,170 to JPY1,317 per share, a 7.2% to 20.8% premium to the last close.

• The review period for the Nikkei 225 (NKY INDEX) September rebalance ended on 31 July. Nikkei has also confirmed Advantest Corp (6857 JP)‘s capping at the rebalance.
• The newly created Information & Communication sector is the most underweight while the Technology sector remains the most overweight. We could see some changes from these sectors.
• The changes at the September rebalance will set the tone for future rebalances and sector balance is likely to play a large role moving forward.

• MS-Japan rebalance one ADD, Kokusai Electric, and two DELETEs, JFE Holdings and Seibu Holdings, on 1 Sep 2026. We review the completed bridge against nine prior cycles.
• Kokusai Electric added +2.8% alpha over the bridge on top of its +13.5% pre-announcement run. Both DELETEs were near flat over the bridge after negative announcement days.
• Historically, positive-bridge ADDs gave back in the first implementation week. The historical DELETE first-week record after a positive bridge is flat.

• Oliver Corporation (619A JP) aims to raise around US$132m in its Japan IPO.
• Established in 1967, Oliver Corporation was initially a furniture manufacturing company known as Fuji Steel and sold steel furniture.
• In our previous note, we looked at its past performance. In this note, we will talk about valuations.

• TOREX SEMICONDUCTOR LTD. (hereafter, the Company) announced consolidated results for Q1 FY2027/3 showing substantial growth in both sales and profit, with net sales of JPY 6,564 mn (+11.9% YoY) and operating profit of JPY 885 mn (+436.3% YoY).
• Ordinary profit was JPY 1,113 mn, while profit attributable to owners of parent (hereafter, net profit) was JPY 911 mn. Profit was boosted by higher sales, a weaker-than-expected yen (average exchange rate of JPY 160.5/USD), a temporary reduction in cost of sales resulting from a revision to the inventory valuation method, and dividend income recorded as non-operating income.
• By business, TOREX recorded net sales of JPY 2,761 mn (+11.6% YoY). Growth in industrial and automotive applications offset adjustments in wearable applications, while the weaker yen and the impact of the inventory valuation revision contributed to higher profit.

• What are the reasons Japanese companies cannot overcome the drawbacks of traditional management?
• In Japan, the concept of fiduciary duty is generally not widely understood, but institutional investors must fulfill their accountability to beneficiaries just as much as management does.
• Consequently, AGMs remained concentrated at late June, making it physically difficult to attend, and since annual securities reports couldn’t be used as a basis for decision-making, virtually nothing has changed.

• Twinbird Corp (6897 JP) is undergoing an operational restructuring following multi-year revenue contraction (-6.28% 3-year CAGR to ¥8,998.87M in FY2026), driven by post-pandemic normalization in consumer appliance demand, intense competition in generic white goods, and broader domestic consumption pressures.
• Financial results for FY2026 reflected substantial bottom-line pressure with a net loss of ¥1,218.30M and gross margin compression to 23.73%, driven by inventory adjustments and cost inflation; however, operational discipline supported positive Free Cash Flow generation of ¥457.10M and an operating turnaround in Q1 FY2027 (ended May 2026) with ¥65.40M in net profit.
• The medium-term investment thesis hinges on the commercial scaling of proprietary, eco-friendly Free-Piston Stirling Cooler (FPSC) technology for biopharma cold chain and semiconductor applications, alongside premiumization of its core kitchen and lifestyle appliance portfolio, while offering a stable 1.91% dividend yield (¥13.00 DPS).

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• SBI Holdings’ ¥340 partial tender offer is fundamentally a defensive, board-supported “white knight” transaction designed to cap the influence of Buffalo’s president, Hiroyuki Maki, who has hovered over the register with a 17.5% stake since his failed ¥407 hostile bid in May 2025.
• The June 1, 2026, Payment Services Act amendments impose significant structural compliance burdens on payment processors, particularly regarding cross-border merchant settlement agent registration. While this drives up fixed operational costs, it also acts as a steep regulatory barrier to entry that shields PAY.JP.
• Management’s path to its 2026 profitability targets is heavily reliant on monetization adjustments and SG&A cost controls, such as the newly introduced PAY.ID consumer fees, which artificially boosted Q2 gross margins to 51.7% even as organic GMV growth in core fashion categories shows signs of stagnation.

• Takamiya (hereafter, the Company) reported consolidated FY2027/3 Q1 results of net sales of JPY 10,229 mn (+3.3% YoY), operating profit of JPY 477 mn (+133.1% YoY), ordinary profit of JPY 416 mn (+307.3% YoY), and profit attributable to owners of parent (hereafter, net profit) of JPY 239 mn (26.5x YoY).
• In FY2026/3 Q1, profit at and below the ordinary profit line declined significantly due to the recording of foreign exchange losses and other factors.
• In contrast, FY2027/3 Q1 saw substantial increases in profit at and below the ordinary profit line, reflecting foreign exchange gains accompanying yen depreciation as well as the rebound effect from the prior-year period.