Daily Brief Japan: Toyota Industries, SBI Shinsei Bank, Toyota Motor, TSE Tokyo Price Index TOPIX, Kioxia Holdings , Sumitomo Pharma, Aiphone Co Ltd and more

• In April there was a story suggesting Toyota Group would buy out Toyota Industries (6201 JP). In June, they announced a deal. It was a BAD DEAL.  
• The price was low, but it was BAD governance because it was the WRONG DEAL. TICO’s Board declared a valuation fair for a deal not announced, ignoring the ACTUAL DEAL.
• The valuation? Assumed no changes to the business. Actual deal? Sell 90+% of net assets driving 50% of net income, buy back 24+% of shares at discount. 

• A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
• ECM developments: SBI Shinsei Bank (8303 JP), NS Group (471A JP), JD Industrial Technology (2231713D CH) IPOs, and Toyoda Gosei (7282 JP)‘s US$0.8 billion secondary offering.
• Event-Driven developments: ANE Cayman Inc (9956 HK), Canon Electronics (7739 JP), Digital Holdings Inc (2389 JP), Mandom Corp (4917 JP), National Storage REIT (NSR AU), Qube Holdings (QUB AU). 

• Context: This Insight follows up on previously highlighted relative value opportunities, using a statistical methodology based on mean-reversion to identify opportunities in paired securities.
• Highlights: Currently twelve pair trade opportunities across four markets and five sectors persist.
• Why read: Statistical analysis offers a unique perspective on relative value. Gain insights into actionable statistical pair trade opportunities and monitor performance of previously highlighted pairs.

• Of foreign shareholding in 30% range, 1% is held by activist funds. Meanwhile, the cross-shareholding is around 10%, and ETFs held by BoJ account for 7% of TSE market capitalization.
• Passing shareholder proposals remains difficult, as conditions must align: a company must have fairly high foreign ownership, and its conduct must be bad that domestic institutions can endorse the proposal.
• Claiming that “shareholder proposals from activist investors often target short-term profit-seeking initiatives” merely serves as a comforting excuse for executives who are postponing management challenges.

• 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, busy season remains on in full swing going into the year end.
• On the placements front, there were a few large deals across the region.

• Sumitomo Pharma (4506 JP) will present updated clinical trial data of Enzomenib (for AML) and Nuvisertib (for Meylofibrosis). Both drug candidates hold strong future potential.
• The company revised FY26 revenue guidance upward to ¥429B backed by continued strong sales in North America (+56% to ¥163B). Orgovyx witnessed solid patient growth while Gemtesa improved market share.
• After largely remaining beaten down in the past few years Sumitomo stock has only begun to gain momentum in recent past. We feel it has still got an upside potential.

Key points (machine generated)

• Aiphone Co., Ltd. aims for a 10% or higher return on equity by 2032 through its 8th Medium-Term Management Plan.
• The company projects net sales of ¥65,400 million and operating income of ¥4,500 million for the fiscal year ending March 2026, despite a temporary profit decline.
• Aiphone holds a 61% share of the domestic intercom market and is expanding its product offerings while maintaining a strong financial position and stable dividends.

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