In today’s briefing:
- Mitsubishi Heavy (7011) – Strong Earnings, ¥10.2T Backlog, Macro Tailwinds Remain Supportive
- Shiseido (4911) | Beauty in the Bargain Bin
- MHI (7011 JP): Take Profits
- Thanks to TSE’s Guidance, Parent-Subsidiary Listings Remain a Long-Lasting Investment Opportunity
- INTLOOP (9556 JP) – Delivering Solid Margin Expansion
- Q4 Follow-Up – Geechs (7060 JP) – New Initiatives Aimed at Achieving Operating Profit…
- Q2 Follow-Up – Lifull (2120 JP) – HOME’S Services Segment Delivers Steady Performance
- OK Super: Disrupting Kansai Supermarket Sector
- Q3 Follow-Up – Ohba (9765 JP) – Favorable External Conditions Likely to Continue in FY2026
- Q4 Follow-Up – Copro-Holdings (7059 JP) – An Increase in Dividend Payment…
Mitsubishi Heavy (7011) – Strong Earnings, ¥10.2T Backlog, Macro Tailwinds Remain Supportive
- MHI has delivered a strong turnaround over the past four years, with revenue up 26% and business profit expanding nearly 10x from FY22 to FY25
- The consolidated order backlog crossed ¥10.2 trillion in FY25, up ~22% YoY, offering ~2 years of forward revenue visibility and skewed toward high-margin Energy and Defense segments.
- While the stock has rallied sharply, management’s solid FY25–30 guidance, along with structural tailwinds from energy transition and defense spending, continue to underpin the long-term thesis.
Shiseido (4911) | Beauty in the Bargain Bin
- Shiseido’s core brand remains strong, but years of weak growth, high costs, and tariff risks have pushed valuations to deeply discounted, near-decade lows.
- Early signs from Japan show margin recovery is possible; aggressive cost-cutting could double core operating margins and unlock significant upside if execution holds.
- If management fails to deliver, Shiseido’s global brand equity, strategic footprint, and low valuation make it an obvious acquisition target for PE or industry buyers.
MHI (7011 JP): Take Profits
- MHI is up nearly 60% year-to-date to 46x management’s EPS guidance for FY Mar-26 and 27x our EPS estimate for FY Mar-30.
- By then, we expect Air, Defense & Space revenues to double and the division’s operating margin to rise from 10% to 15%, which is the likely cap on profitability.
- Given Japan’s uncertain finances and the long time horizon that should already be discounted, we recommend profit taking.
Thanks to TSE’s Guidance, Parent-Subsidiary Listings Remain a Long-Lasting Investment Opportunity
- From the standpoint of endorsing parent-subsidiary listings, TSE intends to provide better disclosure guidance to ensure that the interests of minority shareholders of listed subsidiaries are adequately secured.
- While investors expect early resolution, parent-subsidiary listings continue to be a long-lived theme and investment opportunity, thanks to the TSE giving them time to dissolve their parent-subsidiary listings.
- As for the parent-subsidiary listings, the key is the percentage of foreign holdings, with some companies initiating restructuring of their business portfolios and many others not.
INTLOOP (9556 JP) – Delivering Solid Margin Expansion
- Unlocking improved earnings potential – By prioritizing high-quality business opportunities, INTLOOP continues to improve OPM YoY, reflecting stronger operating efficiency.
- Q1-3 FY7/25 results were ahead of unchanged FY guidance, with the company continuing to invest in scaling capacity with new senior mid-career hires as well as graduates.
- Management believes there is further upside to margin expansion through profit-focused sales activities and price revisions.
Q4 Follow-Up – Geechs (7060 JP) – New Initiatives Aimed at Achieving Operating Profit…
- On May 14, 2025, Geechs Inc. (hereafter, “the Company”) announced its full-year FY2025/3 earnings results.
- Net sales rose 6% YoY to JPY 25,162 mn, EBITDA rose 73% YoY to JPY 625 mn, and operating profit rose 445% YoY to JPY 495 mn.
- The IT Human Resources Matching Business, Overseas (hereafter, “Overseas IT HRM Biz”) continued to face challenges owing to local market conditions, but the core IT Human Resources Matching Business, Japan (hereafter, “Japan IT HRM Biz”) expanded steadily and profitability continued to improve in the Seed Tech business.
Q2 Follow-Up – Lifull (2120 JP) – HOME’S Services Segment Delivers Steady Performance
- In H1 FY2025/9, LIFULL Co., Ltd. (hereafter, the Company) reported net sales of JPY 14,291 mn, up 7.6% YoY and operating profit of JPY 1,824 mn, up 6.2% YoY .
- Operating profit effectively rose 2.2x YoY, adjusting for the gain on the sale of LIFULL SPACE recorded in FY2024/9.
- In the core HOME’S Services segment, the Company’s client network increased 2.0% YoY as a result of stronger sales efforts.
OK Super: Disrupting Kansai Supermarket Sector
- Deep discounter OK Super’s entry into the Kansai market is causing local competitors real headaches –one estimate says it has taken 10% share around its first store already.
- OK has exposed just how derivative most existing chains have become and, with the introduction of genuine price competition at a time when consumers are increasingly price sensitive
- While OK Super is a private company, some of the competitors are listed like Kansai Food Market who, without new ideas, will suffer in the next three years.
Q3 Follow-Up – Ohba (9765 JP) – Favorable External Conditions Likely to Continue in FY2026
- FY2025/5 Q3 Results｜On April 10, 2025, OHBA (hereafter, the Company) announced its Q3 FY2025/5 results.
- Due to the seasonal nature of its business, which tends to concentrate earnings in Q4, progress rates toward the full-year plan appear low at first glance, with net sales at 68.6% and operating profit at 62.3%.
- However, SIR believes the Company is steadily progressing toward achieving its full-year targets of 6.1% YoY sales growth and 5.8% YoY operating profit growth.
Q4 Follow-Up – Copro-Holdings (7059 JP) – An Increase in Dividend Payment…
- COPRO-HOLDINGS. Co., Ltd., (hereafter, the Company) announced the full year results for FY2025/3 after the market close on Thursday, May 15, 2025.
- The key consolidated figures are net sales of JPY 30,015 mn (+24.6% YoY), gross profit of JPY 8,308 mn (+22.6% YoY), operating profit of JPY 2,763 mn (+29.1% YoY), and profit attributable to owners of parent (hereafter, net profit) of JPY 1,820 mn (+24.4% YoY).
- COPRO Construction. Co., Ltd. (hereafter, COPRO CN), which operates the Company‘s core business of construction technician dispatching contributed significantly to results of strong growth due to record recruiting.
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