Daily Brief Japan: Taiyo Holdings, Pharma Foods International, SBI Shinsei Bank, Toyota Motor, Prodelight , TSE Tokyo Price Index TOPIX and more

• On 19 December, Bloomberg reported that KKR has emerged as a frontrunner to privatise Taiyo Holdings (4626 JP), but “the tender offer price may be lower than the current price.”
• Since the first Bloomberg article on 27 May, Taiyo’s shares are up 84% vs. the median peers’ shares, which are up 62%. Therefore, the shares reflect some takeover premium.   
• Based on the medium-term management plan, which is likely KKR’s base case, I estimate a tender offer of around JPY4,624, 1.2% below the last close.

• After dropping to a 52-week low on operating and net 1Q losses, the share price has recovered to 20x EPS guidance for FY July 2026. 
• The gross margin remains near 80%, but a large increase in advertising expenses put the company into the red. It also boosted sales as planned. 
• Management plans to cut back on advertising, aiming for break-even in 2Q and profits in 2H. The dividend yield is now 3.6%. The long-term investment story remains intact. 

• Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
• On the IPO front, HK IPOs continue to be launched into the year end.
• On the placements front, there are a number of lockup expiries coming up over the next few weeks.

• A tactical WEEKLY snapshot of the Asian indices and stocks we cover.
• Many Asian stocks we track are flashing very oversold signals—creating tactical long setups worth considering.
• Toyota Motor (7203 JP) is the only Asian stock overbought.

Key points (machine generated)

• Prodelight, listed on the Tokyo Stock Exchange under ticker 5580, expects significant profit growth by August 2026.
• The company offers voice solution services, including the cloud PBX system ‘INNOVERA’ and IP line services.
• Prodelight aims to support telework and digital transformation in telephony, with new mobile communication equipment launching in fiscal year 2025.

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• Dividend yield has remained flat as share prices have risen while shareholder returns have increased. JGB yields, being fixed rates, have seen bond prices fall, leading to rising bond yields.
• Bond yields represent the required rate of return for bond investors, while for equity investors, it is the total return combining dividend yield and capital appreciation.
• Stocks whose dividend yields became significantly lower than JGB yields likely appeared to investors as having future cash flows underlying their corporate value that would grow.