In today’s briefing:
- Mandom (4917 JP): Welcome Activism as Hibiki Takes Issue with the Price
- ‘Toppish’ Nikkei 225’s Outlook: Where to Cover, Where to Buy
- Shibaura Electronics – Yageo Tender Offer Defines the Endgame
- As Role of Outside Directors Becomes More Important, Is Effectiveness of BODs Improving Accordingly?
- Q2 Follow-Up – Nippon Aqua (1429 JP)
- Sojitz – Non-Resource Pivot in Motion, Valuation Discount Persists
Mandom (4917 JP): Welcome Activism as Hibiki Takes Issue with the Price
- On 15 September, Hibiki Path Advisors issued an open letter questioning the rationale for the Mandom Corp (4917 JP) Board to recommend a CVC-sponsored preconditional MBO at JPY1,960 per share.
- Hibiki opines that the MBO is being done at the wrong price (Hibiki’s value is JPY3,050). Some of Hibiki’s criticisms are valid, while others are not.
- CVC’s initial approach will wait for precondition satisfaction and secure additional irrevocables. However, this is a stopgap measure, and a bump is likely to occur.
‘Toppish’ Nikkei 225’s Outlook: Where to Cover, Where to Buy
- The Nikkei 225 (NKY INDEX) reached 44790 on Wednesday, this is the 3rd week up in a row for the index, this market is OVERBOUGHT.
- The outlook remains bullish, the forecast is for a pullback, followed by another leg up.
- This insight’s goal is to help you figure out where to cover your LONG Nikkei 225 positions, and where to add more LONG positions during the pullback.
Shibaura Electronics – Yageo Tender Offer Defines the Endgame
- With Minebea out, Yageo’s ¥7,130/share bid (55% premium, ~18× FY25E P/E) is the sole path forward; board support makes completion highly probable.
- Japanese takeover rules ensure eventual squeeze-out (>90%) or illiquidity (50–90%); past bumps without rivals have been modest (+1–5%).
- Clear Timeline: Tender closes mid-Oct 2025, results late Oct, squeeze-out Nov–Dec, delisting by Jan 2026 — shareholders should tender to lock in value.
As Role of Outside Directors Becomes More Important, Is Effectiveness of BODs Improving Accordingly?
- Corporate Governance Code, which makes the appointment of outside directors mandatory, was introduced in the hope of restructuring corporate governance and restoring profitability.
- We must explore why, as the role of outside directors expands and dependence on them grows, the challenges of profitability and rising stock prices remain far from being resolved.
- It’s a good idea to have half of directors be independent outside directors. Companies with fewer than that should improve the skills of the entire BOD to increase their effectiveness.
Q2 Follow-Up – Nippon Aqua (1429 JP)
- Japan’s leading on-site urethane foam insulation installer with strong growth Nippon Aqua Co., Ltd. (hereinafter, “the Company”) is a high-growth enterprise listed on the Prime Market of the Tokyo Stock Exchange.
- Guided by its management philosophy— “Contribution to society through the creation of living environments that are friendly to people and the earth”—the Company leverages insulation and waterproofing technologies to drive energy efficiency and support a sustainable society.
- It holds the leading domestic share in on-site urethane foam insulation installation and operates its business through three key divisions: Single-family homes , Buildings, and Waterproofing.
Sojitz – Non-Resource Pivot in Motion, Valuation Discount Persists
- Sojitz is a mid-tier sōgō shōsha with, shifting its earnings base from coal and resources toward Chemicals, Energy Solutions, and Healthcare.
- FY25 profit is guided flat at ¥115bn, with Metals weakness offset by non-resource growth; by FY27, ~80% of profits are expected from non-resource segments.
- Shares trade at 7.8x P/E (30–40% discount to peers) with a 4.2% yield, but cash flow volatility, coal exposure, and smaller scale remain key overhangs.
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