Daily Brief Japan: Studio Alice, JX Advanced Metals, JPY, Polaris Holdings, Migalo Holdings, Olympus Corp and more

• Last Thursday, in an announcement which was very odd, photo studio Studio Alice (2305 JP) announced that it was voluntarily leaving TSE Prime. 
• They said they would “demote” themselves to TSE Standard as of 27 February in order to save money by not responding to the requirements of Prime.
• That means a voluntary TOPIX deletion at end-March. The stock has an interesting shareholder structure and this event is 115 days of ADV to sell.

• JX Advance Metals, a unit of Japanese oil giant ENEOS plans to list on the Tokyo Stock Exchange. ENEOS will sell down a part of its stake and raise US$3.0bn.
• Having split from the parent ENEOS, JX Advanced Metals (5016 JP) is still on a business transformation and the company’s earnings show cyclicality.
• The company’s earnings declined in FY03/2024, however, 9MFY03/2025 results show that earnings are on a recovery driven by improving demand coupled with structural reforms undertaken by the company.

• European peace optimism driving continental asset prices, especially equities, while Chinese tech stocks sizzle hot in Asia
• US real yields impacting global risky asset markets, with Fed’s dovish reaction function leading to plummeting real yields
• Dollar likely to stay soggy in short term until potential FOMC hawkishness or tariff-related events reignite Trump trades and boost dollar bullishness, while yen strength may not be sustainable due to BOJ policy and yield spread factors.

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• JX Advanced Metals (5016 JP)’s parent, ENEOS Holdings (5020 JP), is looking to raise around US$2.6bn via selling more than half of its stake in JXAM in its Japan IPO.
• JXAM engages in business activities primarily focused on the development, manufacture and sale of materials made from copper and rare metals, which are used in the semiconductor and ICT fields.
• We looked at the company’s past performance in our previous notes. In this note, we undertake a peer comparison.

• Credible track record of growth – Q1-3 FY3/25 results were in line with revised guidance, demonstrating high double-digit underlying OP growth with hotel operations continuing to experience robust demand.
• With the completion of the acquisition and integration of Minacia in December 2024, the company has transformed into the tenth-largest limited-service hotel operator in Japan, demonstrating an elevated growth trajectory of 25.2% CAGR (2019-25) in hotel room expansion.
• Upwardly revised company targets for FY3/27 aim to have 100 hotels and 15,000 hotel rooms on its operating platform, with the company already close to achieving this with its portfolio of 97 hotels and 14,964 rooms, which include eleven planned new openings.

• Favorable Fx contributed positively in 9MFY25. On a Fx neutral basis, revenue growth is only 3% YoY, while adjusted operating profit growth is flat YoY.
• Quality related expenses mar amidst another round of recall by FDA. China drags the profitability. 
• Olympus revised FY25 revenue guidance from ¥1,009B to ¥997.5B. Downward revision in profits too.