Daily Brief Japan: Sony Financial Holdings, Honda Motor Co Ltd (Adr), TSE Tokyo Price Index TOPIX and more

In today’s briefing:

[Quiddity Index] The Sony Financial Spinoff – What To Do?
Honda Motor Fights Back in China With EVs & Competitive Pricing Power; Too Little Too Late?
Recent Stock Price Rise May Be Due to Expectation for Greater Shareholder Returns Rather than Growth

[Quiddity Index] The Sony Financial Spinoff – What To Do?

Sony Financial Group (perhaps 8729 JP) will be spun off from SONY on 29 September 2025. The nominal share price will be “low” – likely 4-6% of Sony’s price.
Index treatment is largely known with the exception of a market cap trigger to stay in or get the boot from one major global index provider’s set of large-midcap indices.
There is a buyback to come which will offset global active manager “I don’t want this” overhang. There are technical trades to do here too but overall I am positive.

Honda Motor Company Limited’s recent financial results for the first fiscal quarter of 2025 and forecasts for the entire year reveal various factors influencing the company’s performance.
The operating profit for Q1 was JPY 244.1 billion, a significant decline compared to the same period last year, impacted by several nonrecurring expenses related to electric vehicles (EVs) and tariffs.
Despite challenges, notably in the automobile segment with operating losses, the company revised its full-year forecast upward, anticipating an operating profit of JPY 700 billion — a JPY 200 billion increase from previous projections.

P/B was highly correlated with P/E, so it’ll be effective for individual companies to announce/implement measures to increase EPS or profits in order to attract the attention of overseas investors.
From April 2022 to June 2025, overseas investors have been focusing on companies with significant potential for shareholder returns, as the TOPIX has the highest correlation with BPS.
The recent rise in stock prices may be due to expectations for increased shareholder returns rather than growth expectations, as EPS and BPS have risen while P/B and P/E haven’t.

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