Daily Brief Japan: Tsuruha Holdings, Ashimori Industry, Daiichi Co Ltd, Unicharm Corp, Serverworks, Toumei , TSE Tokyo Price Index TOPIX, FP Partner, Baroque Japan, Demae-Can Co., Ltd. and more

• The merger between Tsuruha Holdings (3391 JP) and Welcia Holdings (3141 JP) will go through in about 6 weeks. In the interim, there are interesting events. 
• After, there is a Partial Tender Offer. I expect Aeon Co Ltd (8267 JP) will have to pay up. 
• Furthermore, the stock is not overly expensive vs Peers AND there are synergies to come from the merger, making it relatively cheaper. It’s not squeezy, but it’s skewed.

• Toyoda Gosei (7282 JP) has lowered its minimum tendering condition but kept its Ashimori Industry (3526 JP) tender offer unchanged at JPY4,140.
• The lowered minimum tendering condition, which would be met based on acceptances as of 24 September, would also enable the share consolidation vote to pass based on AGM voting trends. 
• Takateru Murakami has been left high and dry and will likely pursue appraisal rights. At the last close, the gross/annualised spread is 0.6%/10.8%.

• Ito-Yokado’s withdrawal from the Hokkaido market has proven a windfall for affiliated chain, Daiichi. 
• The Hokkaido supermarket has already opened new stores in sites vacated by Ito-Yokado – the only difficulty has been finding ways to fill the larger spaces.
• Now Arcs is waiting in the wings in case Daiichi becomes available for takeover – Arcs’ chairman owns 1% of Daiichi personally.

• Unicharm is a dominant player in the Asian personal care market, particularly in diapers and feminine hygiene, with a growing pet care segment. Its strong brand recognition and extensive distribution network provide a solid foundation for growth.
• The company’s growth strategy is centered on capitalizing on favorable demographic trends, such as aging populations in developed markets (driving adult incontinence product demand) and rising disposable incomes in emerging economies.
• Key challenges include intense competition from global and local players, volatility in raw material costs (pulp and polymers), and foreign exchange fluctuations, given that approximately two-thirds of its sales are generated overseas.

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• Revenue increased to JPY18.7bn (+8.4% YoY), with Cloud Integration at JPY1.1bn and Resale at JPY16.8bn.
• Operating profit decreased to JPY90mn (-85.0% YoY), impacted by a 91.5% cost of revenue ratio and goodwill amortization.
• Resale revenue growth driven by increased AWS usage, with accounts reaching 6,364 (+29.8% YoY) and high ARPU.

• Toumei reported FY08/25 revenue of JPY29.1bn (+21.5% YoY) and net income of JPY2.4bn (+56.6% YoY).
• For FY08/26, Toumei forecasts revenue of JPY34.8bn (+19.7% YoY) and net income of JPY2.6bn (+6.2% YoY).
• Toumei plans to pay an annual dividend of JPY11 per share for FY08/26 (JPY19 for FY08/25).

• Although Net Profit Margin has been the most highly correlated of 3 components of ROE, improvements in Asset Turnover and Equity Ratio driven by share buybacks are now drawing attention.
• In FY2026, once the temporary impact of U.S. tariffs has run its course, companies engaged in global business are expected to more aggressively repurchase their own shares alongside recovering profits.
• The ROE derived from the aggregate profits and net assets of all companies differs by over 1% from the average ROE of individual companies, and this gap won’t be narrow.

• Cumulative Q3 FY11/25 revenue was JPY24.4bn (-9.7% YoY), with operating profit at JPY2.2bn (-49.8% YoY).
• Full-year forecast revised: revenue JPY32.0bn (-2.0%), operating profit JPY2.5bn (+19.8%), net income JPY1.7bn (+25.0%).
• Dividend forecast unchanged at JPY94 per share, with a year-end dividend of JPY47 per share.

• In 1H FY02/26, Baroque Japan reported revenue of JPY24.8bn, an operating loss of JPY77mn, and net income of JPY11mn.
• Termination of the joint venture with Belle led to a YoY revenue decline but increased recurring profit and net income.
• Baroque Japan established a joint venture with JD.com, focusing on selling Japanese goods in the Chinese market.

• Revenue for the company was JPY39.7bn, a 21.2% YoY decline, achieving 100.6% of the forecast.
• Gross merchandise value (GMV) was JPY167.2bn, with 60.7mn orders and 4.6mn active users, all declining YoY.
• For FY08/26, the company forecasts JPY44.1bn revenue, with operating and recurring losses of JPY4.0bn each.