In today’s briefing:
- Nikkei 225 Index Rebalance: Rohm (6963) To Replace NTT Data Group (9613)
- [Quiddity Index] Nikkei 225 Boots NTT Data (9613) Early, Rohm (6963) IN 3 July; $3.8bn a Side
- Sysmex Corp (6869 JP): Forex to Take Some Sheen Away off Growth in FY26; Japan Still Remains Key
- Last Week in Event SPACE: Shin Kong/Taishin, Santos, NTT Data, ENN Energy, Mitsui Matsushima
- JFE Holdings (5411 JP) – Stable Core, Strategic JSW Stake, and Deep-Value Opportunity
- Governance Issues Have Not Been Resolved as Far as Profiles of TSE-Listed Companies Shows
- Honda Motor Co. Ltd. Doubles Down on EV Innovation with ¥126 Billion R&D Surge; Is It Too Late In The EV Game?
Nikkei 225 Index Rebalance: Rohm (6963) To Replace NTT Data Group (9613)
- Following the results of NTT (9432 JP)‘s tender offer for NTT Data Corp (9613 JP), NTT Data will be deleted from the Nikkei 225 (NKY INDEX).
- ROHM Co Ltd (6963 JP) will be added to the Nikkei 225 (NKY INDEX) at the close on 3 July. The stock is up a fair bit from its lows.
- Nearly all the NTT Data Corp shares not tendered will be held by passives and there will be selling in the stock as index providers move the float lower/delete.
[Quiddity Index] Nikkei 225 Boots NTT Data (9613) Early, Rohm (6963) IN 3 July; $3.8bn a Side
- Today the results of the NTT Data Corp (9613 JP) Tender Offer came out. NTT has 81.75%. I warned of lack of liquidity at that level yesterday here.
- Yesterday I proposed that ROHM Co Ltd (6963 JP) would replace NTT Data in the Nikkei 225 and that the likely timing was the last couple of days of August.
- Today, the Nikkei used the June 2020 rule change to announce NTT Data’s near-term deletion. Rohm goes in 3 July. 7.5x ADV to buy. $3.8bn a side to trade.
Sysmex Corp (6869 JP): Forex to Take Some Sheen Away off Growth in FY26; Japan Still Remains Key
- In FY25, Sysmex Corp (6869 JP) revenue rose 10% YoY to ¥509B. Operating profit margin expanded 20bps to 17.2%. Amid rising costs, favorable Fx impact of ¥8.6B drove the margin.
- Sales grew across regions as instrument installed increased and use of reagents multiplied. America’s volatile margin is a concern, amid the fact that Japan remains the major margin contributor.
- For FY26, Sysmex has guided for revenue of ¥535B (+5% YoY). The company has factored in the impact of tariff estimating annual cost of sales impact of approximately ¥3B-4B.
Last Week in Event SPACE: Shin Kong/Taishin, Santos, NTT Data, ENN Energy, Mitsui Matsushima
- Taishin Financial (2887 TT) is cheap to peers. Shin Kong Financial (2888 TT) is cheap vs Taishin. Long Shin Kong. Long Taishin vs Peers. Long Shin Kong vs Taishin Peers.
- Abu Dhabi makes a big, bold bet on Santos Ltd (STO AU). However FIRB will have the last word on whether the deal goes through.
- If the results show NTT owns >80% of NTT Data (9613 JP), buy a lot for a potential squeeze. If the results show NTT owns 68-70%, you can probably ignore.
JFE Holdings (5411 JP) – Stable Core, Strategic JSW Stake, and Deep-Value Opportunity
- JFE Holdings rebounded from COVID-era losses to deliver peak earnings in FY22, followed by a gradual normalization through FY25, with stable steel volumes but declining margins amid weak domestic demand.
- The group is investing ¥970B (~$6.5B) through FY2030 across decarbonization, product upgrades (e.g., electrical steel, galvanizing), and overseas downstream expansion to sustain competitiveness.
- Adjusting for its ₹910B (~¥1.7T) JSW stake, ~30% of EV, JFE trades at just 2.7x EV/EBITDA—deeply discounted vs peers like Nippon Steel and POSCO.
Governance Issues Have Not Been Resolved as Far as Profiles of TSE-Listed Companies Shows
- The fact that 59.2% of companies have March fiscal year-end and concentrate AGMs in the last week of June, preventing shareholders from attending AGMs, is a fundamental corporate governance issue.
- Companies with foreign shareholdings of over 30% represent 17.4% of prime market. Most companies continue to run without a sense of urgency and without much influence from overseas investors.
- While the number of listed subsidiaries has decreased over the past decade, the number of equity method affiliates has increased significantly. The business portfolio has not yet been fundamentally restructured.
Honda Motor Co. Ltd. Doubles Down on EV Innovation with ¥126 Billion R&D Surge; Is It Too Late In The EV Game?
- Honda Motor Co., Ltd. (Honda) recently conducted a financial review of its performance for the fiscal year ending March 2025, along with projections for 2026.
- Several key factors from its operations and outlook are noteworthy for investors, highlighting both strengths and challenges.
- Honda’s motorcycle segment saw robust performance, reporting record highs in unit sales, operating profit, and margins.
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