Daily Brief Japan: Orion Breweries, Tekscend Photomask, Advantest Corp, Nikkei 225, Suzuki Motor, FineToday Holdings, TSE Tokyo Price Index TOPIX, ABC Mart, Ricoh Company Ltd, Sanyo Shokai and more

• Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
• Section-Transfer name Japan Business Systems (5036 JP) is expected to be included in the TOPIX index at the end of October 2025.
• New listings Orion Breweries (409A JP) and Tekscend Photomask (429A JP) are expected to be included in TOPIX at the end of October 2025 and November 2025 respectively.

• Established in 2022, Tekscend Photomask (429A JP)  (previously Toppan Photomask) is the world’s leading semiconductor photomask supplier, holding a global market share of 38.9%.
• Tekscend provides a diverse portfolio of high-precision photomasks for semiconductors, displays, MEMS, and R&D, including cutting-edge EUV masks, leveraging its expertise in microfabrication.
• The company is planning for a listing on TSE on 16th October and plans to raise proceeds of around US$800m through a combination of existing and new share issues.

• Monday’s huge post-election move in Nikkei 225 and Advantest Corp (6857 JP) caused Advantest to clear 10.00% realtime at day-end. Assuming nothing changes til end-Jan-2026, Advantest gets capped at end-Mar-2026
• As of today, that would be roughly 1.6x ADV and US$2.75bn but it would be 10% of Max Real World Float. 
• This is far off but should stay on the radar. Softbank Group (9984 JP) is close behind at 8.7%. 15+% outperformance would put it in capping territory too.  

• The Nikkei 225 (NKY INDEX) has reached eye-popping valuations, a 20% rally from the end of June into early October (40k to 48k).
• Our forecast is always short-term, 3-5 weeks horizon, so we cannot say if the index will continue to rally in 2026, but right now it’s OVERBOUGHT.
• We expect a pullback soon, you can buy the pullback, we discuss the support areas in the insight.

• Suzuki Motor (7269 JP) had a disappointing Q1FY2025 driven by lower sales in India & Europe and impact of raw material cost and foreign exchange rates.
• However, we expect business performance should revive in H2FY2025 driven by booster shot from India.
• We remain positive on long term prospects of the company driven by its maiden EV launch and long term growth plans though near term valuation appears to be full.

• FineToday Holdings (420A JP) (FT) is planning to raise around US$280m via selling a mix of primary and secondary shares.
• FineToday (FT) is a beauty and personal care company in Asia offering a range of products, including hair care, skin care and body care products.
• In our previous note, we had looked at its past performance. In this note, we will talk about the updates from its most recent filings.

• Standard Market contains many companies with small market capitalizations and low trading liquidity, so there aren’t many companies in the Standard Market that institutional investors can consider as investment targets.
• Standard Market has more companies with P/B below 1x and ROE below 8%, but there’s little difference between Prime Market and Standard Market in their improvements over past two years.
• Whether companies disclosed improvement plans in response to the TSE’s request does not necessarily correlate with improvements in their P/B ratio or ROE.

• ABC Mart holds a dominant position in the Japanese footwear market, leveraging strong relationships with major brands and a successful private label strategy to drive consistent growth.
• The company is pursuing a dual-pronged growth strategy focused on expanding its high-end ‘Grand Stage’ store format in Japan and accelerating its presence in overseas markets, particularly in South Korea and Taiwan.
• Financial performance has been robust, with a strong 3-year CAGR in net income and free cash flow, supported by recovering margins and efficient inventory management. The company maintains a healthy balance sheet and a consistent dividend payout.

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

• Ricoh is navigating a strategic pivot from its legacy office printing business to a growth-oriented digital services company. This transition is driving revenue growth, with a notable contribution from the Digital Services segment.
• The company’s stock is currently trading at a discount compared to its peers, which, combined with a consistent dividend history, presents a potential value opportunity for investors. However, this is contrasted by recent market underperformance.
• A significant near-term risk is the potential deletion from a global index in August, which could lead to substantial passive selling pressure on the stock. This technical factor may overshadow fundamental performance in the short term.

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

• Revenue decreased by 3.1% YoY, resulting in an operating loss of JPY213mn, compared to a profit in 1H FY02/25.
• Full-year FY02/26 forecast: Revenue JPY59.9bn (-1.0% YoY), operating profit JPY2.3bn (-15.3% YoY), net income JPY4.1bn (+2.3% YoY).
• 2H initiatives include new store openings, procurement cost control, and increasing full-price sales to improve GPM.