In today’s briefing:
- Marui Group Placement: Clean up by Toho; Improving Fundamentals
- FAST RETAILING (9983 JP) | Q3 Preview: Upside Risk into Print, But Tariff Narrative Still Overhangs
- Toyo Engineering (6330 JP): Coverage Initiation
- United Arrows Finds New Growth Path Through Korean Brand
Marui Group Placement: Clean up by Toho; Improving Fundamentals
- A group of shareholders are looking to raise US$184m from selling their respective stakes in Marui Group (8252 JP) .
- While the deal shouldn’t come as a surprise, given the ongoing cross-shareholding unwind narrative in Japan, the timing of such a selldown isn’t always certain.
- In this note, we will talk about the placement and run the deal through our ECM framework.
FAST RETAILING (9983 JP) | Q3 Preview: Upside Risk into Print, But Tariff Narrative Still Overhangs
- Q3 earnings risk skewed to upside: we forecast sales/OP of ¥857b/¥171b vs. Street’s ¥826b/¥152b.
- Domestic Uniqlo trends strong; international segment likely resilient despite Inditex’s headline miss.
- Tariff impact likely reiterated but remains a FY26 issue, not a near-term earnings swing factor.
Toyo Engineering (6330 JP): Coverage Initiation
- In FY03/25, orders stood at JPY244.2bn (-47.2% YoY), including those received by equity-method affiliates.
- Revenue from completed construction contracts was JPY278.1bn (+6.6% YoY), operating profit JPY2.6bn (-61.4% YoY), recurring profit JPY6.5bn (-7.7% YoY), and net income attributable to owners of the parent JPY2.0bn (-79.4% YoY). Major contracts won during the year included a domestic plant for lithium-ion battery electrolyte production, several geothermal power plants in Indonesia, and an LNG-related facility in India. Despite higher revenue from completed construction contracts, operating profit declined YoY due to a drop in GPM caused by project delays. The company booked JPY4.1bn in equity in earnings of affiliates, narrowing the YoY decline in recurring profit relative to operating profit. Extraordinary losses included JPY1.4bn in impairment losses on fixed assets and roughly JPY3.0bn in tax-related expenses at subsidiaries.
- As a result, net income attributable to owners of the parent dropped 79.4% YoY.
United Arrows Finds New Growth Path Through Korean Brand
- United Arrows is best known for building its own chains but has had a choppy few years spent fixing merchandising, supply chains and a poor e-commerce unit.
- It now believes it can take a leaf from the playbook of Mash Holdings by signing promising overseas brands as a way to accelerate growth.
- The first of these is the Korean brand, Nice Weather, a sort of lifestyle convenience store beloved by Gen Z.
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