Daily Brief Japan: Mitsubishi Logisnext Co., Ltd., Pan Pacific International Holdings, Tekscend Photomask, Fast Retailing, KeePer Technical Laboratory, TSE Tokyo Price Index TOPIX, &Do Holdings, Money Forward , F-Code, FunPep Co Ltd and more

• Mitsubishi Logisnext Co., Ltd. (7105 JP) announced a pre-conditional tender offer from Japan Industrial Partners (JIP) at JPY1,537 per share, representing a 15.3% discount to the last close price.
• The offer resulted from an auction process. The offer is light in comparison to peer multiples and is below the midpoint of the target IFA DCF valuation.
• While Mitsubishi Heavy Industries (7011 JP) irrevocable has a competing proposal clause, it is unlikely that a bidding war will transpire. The low required tendering rate suggests a done deal. 

• Today we saw the culmination of the ridiculously wrong-way Nikkei 225 Sep25 rebalance. Shift Inc (3697 JP) looked like a classic deletion, not addition.
• 93.3% of the observation period has now passed, which means we can look at the March 2026 Periodic Review with a fair bit of accuracy.
• It is likely to be the runner-ups in the Sep25 review from the Consumer Goods sector, though the second-runner-up ADD needs a stock split to have any chance. More below.

• Tekscend Photomask (429A JP)‘s listing has been approved by the JPX and the stock is expected to start trading on the Prime Market from 16 October.
• At the top end of the IPO range at JPY 3000/share, Tekscend Photomask (429A JP) will be valued at JPY 298bn (US$2bn).
• The stock should be added to the TOPIX INDEX at the close on 27 November while inclusion in global indices should take place in February and June.

• Exchange holidays: Early October holidays in China (Golden Week) and South Korea (Chuseok) may dampen market activity, while India’s Diwali on 21–22 October brings the traditional Muhurat trading session.
• Earnings season begins in the final third of October across India, Japan, China/Hong Kong, and South Korea, alongside key central bank meetings and the TOPIX rebalance on 30 October.
• Why Read: Plan ahead and take into account known market events when making investment and trading decision.

• Dominant Market Position with Strong Growth Engine: KeePer Technical Laboratory is a market leader in Japan’s car coating industry, demonstrating a robust growth trajectory. This is driven by the continuous expansion of its dual-format network: company-owned ‘KeePer LABO’ stores and franchised ‘KeePer PROSHOP’ locations. The company has a proven track record of double-digit revenue and profit growth, supported by strong same-store sales and new openings.
• Vertically Integrated Business Model Creates Synergies: The company’s integrated model, which spans from the development and manufacturing of proprietary coating chemicals to the direct provision of services, creates significant competitive advantages. This ensures high-quality, standardized service across its network, reinforces its brand, and allows the KeePer LABO (B2C) stores to provide direct market feedback for the Products (B2B) segment.
• Attractive Financial Profile with Shareholder Returns: KeePer exhibits a strong financial profile characterized by high margins, robust cash flow generation, and a solid balance sheet with low leverage. The company has a consistent history of impressive earnings growth, which has translated into a rapidly growing dividend, signaling a commitment to shareholder returns.

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• Even in parent-subsidiary listings, which form the core of business portfolio restructuring, some large companies have begun taking action, raising expectations for further improvements in capital profitability.
• Companies that have businesses with low capital profitability often lack clear criteria for exiting those businesses, or even if they have established exit criteria, they aren’t actually applied in practice.
• Some companies still believe they cannot withdraw because establishing clear criteria would create inconsistencies with their current low-return capital business, forcing someone to clarify where responsibility lies.

Key points (machine generated)

• And Do Holdings announced a five-year management plan to restructure its business and improve profitability.
• For the fiscal year ending June 2025, the company reported a 4.2% decline in revenues to 64.735 billion yen and a 27% drop in operating profit to 2.62 billion yen.
• The declines were mainly due to lower-than-expected transfers to the HLB fund, affected by reduced purchase contracts in the house leaseback business.

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• Shares up 18% since Q2; short-term correction likely as valuation nears fair value (~6x EV/Revenue); ValueAct holds 5.6% stake.
• Q3 sales forecast +24% YoY to ¥12.1bn; adjusted EBITDA margin rising to 7% amid strong ARR growth from mid-sized corporates.
• Money Forward sharpened focus on core business, divesting non-core assets and forming a ¥3bn JV with SMFG to expand digital banking services.

Key points (machine generated)

• F-Code, listed as 9211 on the Tokyo Stock Exchange, has completed 19 M&A transactions since going public.
• The company projects a 15-fold sales growth and a 14-fold increase in operating profit and EBITDA over the next four years.
• F-Code operates as a holding entity for 15 companies, focusing on AI and digitalization in marketing while maintaining a federal system for subsidiary independence.

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Key points (machine generated)

• FunPep, established in 2013, develops pharmaceuticals based on functional peptides as alternatives to antibody drugs.
• The company is conducting a Phase 1 clinical trial for its hay fever vaccine ‘FPP004X’ with 93 subjects, starting in March 2025.
• The trial evaluates safety, tolerability, and immunogenicity, with results expected in the second half of 2026.

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