In today’s briefing:
- [Quiddity Index] Index Consultation on Digital Asset Treasury Cos. The ‘Tutes Are Leaving?
- Can Nisshinbo (3105) Become a Superstock?
- Resonac Holdings – Strategic Transition and Re-Rating Potential
- Kobelco (5406.T) – Diversified Japanese Industrial with Stable Steel and Engineering Exposure
- Many Companies that Have Seen Their Founding Family’s Stake Decline but Retain CEO Have Challenges
[Quiddity Index] Index Consultation on Digital Asset Treasury Cos. The ‘Tutes Are Leaving?
- On 27 August, Metaplanet (3350 JP) announced a large overseas offering in line with a pause in the 20th Warrant Issuance program it had outstanding. The goal? Buy more bitcoin.
- Shares had been ¥890 on the 27th, trading higher through the 29th. The offering priced at ¥553. Down 38%. Ouch. But it meant index upweight due to higher share count.
- Friday post-close, global index provider M _ _ _ announced a consultation on digital asset treasury companies, suspending the upweight for Metaplanet. Watch out MSTR!
Can Nisshinbo (3105) Become a Superstock?
- Nisshinbo is aiming for a radical transformation from old-fashioned textile business to high-tech, aiming for 80% revenue from defense and high-end tech within 3-5 years
- New President Yasuji Ishii promises swift decision-making and a comprehensive restructuring plan by February 2026, targeting 10% RoE, up from a 8% deficit at the trough.
- Nisshinbo trades at 70% of book value but should easily trade up to 1.5x if it achieves its Roe target.
Resonac Holdings – Strategic Transition and Re-Rating Potential
- Resonac continues to reshape its portfolio, scaling growth materials while rationalising legacy chemicals and electrodes.
- FY2025 guidance appears conservative, particularly on profit, leaving room for upside if current momentum is sustained.
- Valuation & risk: Shares trade at a discount to global peers, with re-rating potential contingent on execution and balance sheet discipline.
Kobelco (5406.T) – Diversified Japanese Industrial with Stable Steel and Engineering Exposure
- Kobelco has delivered ~20–25% returns over the past three months, reflecting investor interest in stable domestic steel demand and growing overseas engineering orders.
- Q1–Q2 FY2025 showed steady operational performance with stable steel margins and moderate growth in engineering and construction segments, supporting management’s guidance for the full year.
- Stock trades at a modest forward P/E of ~7× with an attractive dividend yield (~4%), though risks include steel margin volatility, global semi-cycle fluctuations, and potential project execution delays.
Many Companies that Have Seen Their Founding Family’s Stake Decline but Retain CEO Have Challenges
- Companies competing in global market are often compared in profitability and practices with global competitors, so they would have moved to reduce cross-shareholdings earlier than companies focused on domestic market.
- There is little improvement in capital profitability, but lower number of cross-held shares will reduce the number of companies whose proxy votings are influenced by cross-shareholdings, which will improve governance.
- Companies that maintain top management despite decline in the founding family’s stake tend to be targets of activist investors because they have problems with both corporate governance and capital profitability.
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