In today’s briefing:
- Japan Activist Watch | Square Enix, DaitoTrust, Iriso & INES
- Seibu Holdings (TSE: 9024) – Asset-Rich Platform With Significant Upside from Monetization
- Successful US-China Trade Deal and Risk-On Mood Remains
- Asian Dividend Gems: Takasago International Corporation
- NTT Corp (9432): IT Growth Shines, Full Data Buyout, But Buybacks Over Debt Raise Concerns
- Q4 Follow-Up – Startia Holdings (3393 JP) – June 16, 2025
- Ain’s Purchase of Kraft a Sign of More Drugstore M&A to Come
- Daiichi Sankyo (4568 JP): FDA Goes Datroway, Daiichi in Contention for the Next “Enhertu” Moment
Japan Activist Watch | Square Enix, DaitoTrust, Iriso & INES
- Activist investors 3D Investment Partners and Dalton Investments have both taken meaningful stakes in Square Enix – highlights capital inefficiency and poor margin profile
- Daito Trust sits on over ¥100bn in net cash, an arguably excessive cushion for a mature operator with steady cash flows. Silchester have taken note
- Iriso Electronic and INES both trade below book value. Attractive value plays for small cap funds.
Seibu Holdings (TSE: 9024) – Asset-Rich Platform With Significant Upside from Monetization
- Seibu’s FY25 results were buoyed by a ¥350 bn real estate securitization, driving operating profit to ¥263 bn and showcasing the deep value embedded in its property portfolio.
- Management plans to monetize ~¥1.35 trillion of urban assets over the next 3–5 years, shift to a capital-light hotel model, and revitalize transport margins via fare revisions.
- Even at the current price of ¥4,868, Seibu trades at a ~45% discount to its fully adjusted SoTP value (~¥8,873/share)—implying substantial re-rating potential if monetization proceeds as planned.
Successful US-China Trade Deal and Risk-On Mood Remains
- Micron gave up earlier gains despite solid numbers as NAND sluggishness overshadowed DRAM strength
- This was reflected in Kioxia and Kokusai Electric yesterday, but this may be short lived as scramble for QTR-end gains drives laggards
- Renesas -12% after management changes direction – negative for the share price yesterday but ultimately the right call.
Asian Dividend Gems: Takasago International Corporation
- Takasago International (4914 JP) is the number one player in Japan/Asia in the Flavor and Fragrance business.
- The company’s dividend yield also increased sharply from 2.2% in FY24 to 3.8% in FY25, on the back of strong growth in earnings and solid dividend payout (35% in FY25).
- Core customers of the company (Nestlé, Procter & Gamble, Coca-Cola, L’Oréal, Unilever, Kao, and Suntory) are very careful and cautious in terms of what companies they buy these products from.
NTT Corp (9432): IT Growth Shines, Full Data Buyout, But Buybacks Over Debt Raise Concerns
- Revenue rose from ¥11.7T to ¥13.7T in 5 years, but profit growth was sluggish, with FY24 profit down 21.8% YoY.
- IT services profit grew at 20.2% CAGR, now ~49% of group EBITDA, driving full buyout of NTT DATA at 20x earnings.
- Buybacks totaled ¥1.8T despite rising debt, suggesting capital prioritization favors EPS optics over long-term balance sheet strength.
Q4 Follow-Up – Startia Holdings (3393 JP) – June 16, 2025
- Startia Holdings, Inc. (hereafter, the Company) announced its full-year FY2025/3 results on May 14.
- The Company reported net sales of JPY 22,211 mn (+13.5% YoY), operating profit of JPY 2,737 mn (+19.9% YoY), ordinary profit of JPY 2,784 mn (+23.6% YoY), and net profit of JPY 1,960 mn (+26.8% YoY).
- This surpassed the revised full-year forecast announced at its H1 results announcement.
Ain’s Purchase of Kraft a Sign of More Drugstore M&A to Come
- The merger of Tsuruha and Welcia got the green light in May and will further galvanise the sector to consolidate, especially in prescriptions due to the shortage of qualified staff.
- Which is why Ain has confirmed the acquisition of Kanto-based prescription drug chains operated by Kraft.
- The move will help maintain Ain’s dominance in the dispensing pharmacy sector and encourage further M&A.
Daiichi Sankyo (4568 JP): FDA Goes Datroway, Daiichi in Contention for the Next “Enhertu” Moment
- Daiichi Sankyo (4568 JP) has received FDA approval for Datroway for the treatment of adult patients with locally advanced or metastatic EGFR-mutated non-small cell lung cancer.
- Following the approval, Daiichi Sankyo is eligible for milestone payment of $45M from partner AstraZeneca.
- For FY26, Daiichi Sankyo sees Datroway revenue of ¥3.8B, mainly driven by the U.S. (¥3.3B, up 197% YoY).
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