Daily Brief Japan: Makino Milling Machine Co, JX Advanced Metals, Mitsui & Co Ltd, Sony Corp, Honda Motor Co Ltd (Adr), TSE Tokyo Price Index TOPIX and more

• Nidec Corp (6594 JP) released a multi-page document regarding its bid for Makino Milling Machine Co (6135 JP) yesterday. 
• It talked a bit about the back-and-forth with Makino, and gave Nidec’s side of the story. Makino has been making their side public too. A meeting is due early March.
• In the document, there was a line suggesting Nidec won’t raise price even against a counteroffer. They didn’t need to say that. The question is what Makino will do.

• JX Advanced Metals (5016 JP) is a global leader in the semiconductor and ICT materials sector. It is seeking to raise up to US$2.6 billion.
• We previously discussed the IPO in JX Advanced Metals (5016 JP) IPO: The Bull Case and JX Advanced Metals (5016 JP) IPO: The Bear Case. 
• In this note, we discuss valuation. My analysis suggests that JXAM is attractively valued at the IPO price compared to peer multiples.

• Huge deal with Mitsui purchasing a 40% stake in Roads Ridge for billions of dollars
• Decades-long negotiation process with owners of the asset culminating in the sale
• Roads Ridge is a massive iron ore deposit with potential for long-term production, standing out for its high quality iron content and low phosphorus levels in comparison to other mines in the region

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• JX Advanced Metals (5016 JP)’s parent,  ENEOS Holdings (5020 JP), is looking to raise around US$2.6bn via selling more than half of its stake in JXAM in its Japan IPO.
• JXAM engages in business activities primarily focused on the development, manufacture and sale of materials made from copper and rare metals, which are used in the semiconductor and ICT fields.
• We looked at the company’s past performance and undertook a peer comparison in our previous note. In this note, we talk about valuations.

• Sony Group Corporation’s recent earnings highlighted its financial performance for the third quarter of fiscal year 2025 and provided insights into future strategic direction amid a transitional leadership period.
• The company’s revenue and profit saw substantial growth, yet certain challenges remain, reflecting the complexities within its diverse business segments.
• Positive aspects of Sony’s financial performance include a 7% year-on-year increase in consolidated sales, excluding its Financial Services segment, reaching JPY 3,695.7 billion for the quarter.

• Honda Motor Co., Ltd.’s financial performance in the first quarter of FY 2025 presented a complex picture with both strengths and challenges noted.
• On the positive side, Honda achieved its highest ever quarterly operating profit of JPY 484.7 billion, up JPY 90.2 billion year-over-year, translating into a robust operating profit margin of 9%.
• The growth was largely driven by an increase in unit sales in the Motorcycle Business, particularly in India and Brazil, and a strong performance in the Automobile Business, especially with hybrid models in Japan and the U.S. Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• 42 companies submitted their annual securities reports by the business day before AGM date, and most of them submitted their reports immediately before AGM, such as the day before AGM.
• If the record date is moved forward from fiscal year-end, the problem of administrative burden will be solved. English-disclosure in annual securities reports will increase, and engagement will be positive.
• For companies with a record date in their articles of incorporation, changing the record date would require general shareholders’ meeting, but only a few shareholders would oppose the change.