In today’s briefing:
- [Japan Activism/M&A] – Shareholders Approve Tsuruha/Welcia Merger – Now It’s Partial Offer+Synergies
- [Japan Activism] The Upcoming Fuji Media AGM Stoush – Foreigners Vs Voting Right Limits
- Is Now Time to Move Forward with Efforts to Raise % Female Board Directors, Even Matching Numbers?
- LIFENET INSURANCE COMPANY (7157 JP) – Charting the Course for Long-Term Growth
- MIXI Inc. (2121 JP) – Investing in Scale to Unlock Sustainable Returns
- Nitto Kogyo Corporation (6651 JP) – Full Report – May 2, 2025
- Sodick (6143 JP) – Building Recovery Momentum
[Japan Activism/M&A] – Shareholders Approve Tsuruha/Welcia Merger – Now It’s Partial Offer+Synergies
- This morning the Nikkei reported shareholders of Welcia Holdings (3141 JP) and Tsuruha Holdings (3391 JP) approved their Merger. Activists opposed but it was going to be close at best.
- As expected, Welcia shares popped, and the spread converged to 2% with Tsuruha falling back to just below ¥11,400. Some of this is unwind of speculative interest in Tsuruha.
- The new yuhos are out, which shows roughly where we stand (as of end-Feb, and some updates). Now the trade is NEWCO vs Aeon’s interest and NEWCO vs World.
[Japan Activism] The Upcoming Fuji Media AGM Stoush – Foreigners Vs Voting Right Limits
- Fuji Media Holdings (4676 JP) has for years been “undervalued” and owned by value-oriented actively-managed fund managers. Under-used real estate and IP assets. Lack of governance regarding capital.
- A Shukan Bunshun article in Dec-2024 reported a former boy band SMAP member and Fuji TV regular made a big payment to an unidentified woman after a June 2023 “incident.”
- Fuji TV hemmed and hawed about its involvement. Advertisers bolted. Activists activisted. The chairman resigned. Now Major Activist Dalton has a director slate for the AGM. What Next?
Is Now Time to Move Forward with Efforts to Raise % Female Board Directors, Even Matching Numbers?
- It is good to see that affirmative action has increased the number of women managerial positions in ITOCHU. This is presumably due to the increase in foreign ownership.
- The non-statutory executive officers are not in a legally responsible position and are not involved in management decisions. 2 female independent non-executive directors do not have a management background.
- Looking at the board compositions, one notices many issues, but AGMs of many companies are concentrated in June, making it difficult to take the time to scrutinize the convocation notices.
LIFENET INSURANCE COMPANY (7157 JP) – Charting the Course for Long-Term Growth
- Solid execution despite macro volatility impact – FY3/25 results were positive, driven by strong performance at the GCL business, a direct result of Lifenet’s partnership strategy.
- Despite solid execution in FY3/25, the Comprehensive Equity Per Share growth of +4.5% YoY was well below the Company’s FY3/29 target of +10.0% annual growth due to macroeconomic volatility, highlighting the need for investors to focus on the longer term.
- Looking beyond the FY3/26 guidance, we think Lifenet is well-positioned to deliver longer-term growth with a new technology-oriented CEO, a renewed commitment to accelerating growth at the individual life business, and upside from its partnership-focused growth strategy.
MIXI Inc. (2121 JP) – Investing in Scale to Unlock Sustainable Returns
- Q1-4 FY3/25 results were in line with guidance, with progress made YoY to transform both Sports and Lifestyle segments into material earnings pillars.
- Company guidance for FY3/26 appears conservative.
- The core theme is a significant investment in growing the TIPSTAR (domestic keirin, or cycle team sports) betting service, achieving high user retention, and strong sales growth YoY.
Nitto Kogyo Corporation (6651 JP) – Full Report – May 2, 2025
- Nitto Kogyo Corporation (hereafter, the Company) is a leading manufacturer of distribution boards and panel boards for electrical and telecommunications infrastructure, as well as enclosures that house telecommunications and precision equipment.
- The company has 42 sales offices and eight factories in Japan.
- The Company is working to expand its business in ASEAN countries, with overseas production and sales bases in China, Thailand, and Singapore.
Sodick (6143 JP) – Building Recovery Momentum
- Strong opening quarter – Q1 FY12/25 results were a positive surprise in our view, with solid sales volume recovery YoY and OPM at 6.8%, marking an 11-quarter high.
- Key drivers included continued demand recovery in the key Machine Tool business, driven by demand from China, as well as structural demand for MT connectors.
- Additionally, there was significant growth in Food Machinery, stemming from both domestic and overseas demand.
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