Daily Brief Japan: Tsuruha Holdings, IHI Corp, NOF, Digital Holdings Inc, Japan Exchange Group, Robot Payment Inc, JVC KENWOOD, Chugai Pharmaceutical, TSE Tokyo Price Index TOPIX and more

• Tsuruha Holdings (3391 JP) acquires Welcia Holdings (3141 JP) in just over 4 weeks. Aeon Co Ltd (8267 JP)‘s tender offer for Tsuruha Holdings (3391 JP) could commence in December/January.
• The enlarged Tsuruha Holdings (3391 JP) could migrate upward in the MGlobal Index and that will bring in large passive flows. But there is one thing to watch out for.
• Tsuruha Holdings (3391 JP) and Welcia Holdings (3141 JP) have outperformed peers over the last 6 months and now trade at a higher forward PE.

• Welcome to Curator’s Cut — a fortnightly roundup of standout themes from the 1,000+ insights shared on Smartkarma. After a brief one-issue break, we’re back with fresh perspectives.
• In this cut, we explore Japan’s renewed defense ambitions, Asia’s eyewear evolution, and US diagnostics’ next frontiers.
• Want to dig deeper? Comment or message with the themes you’d like to see highlighted next

• Japan’s defense budget may be set to surge by about 50%, making NOF’s ammunition business a hot theme.
• Be careful though. NOF’s munitions segment faces production limits and slow capacity expansion, capping near-term profit growth even with new defense spending.
• We think NOF is overvalued, even as we acknowledge consensus forecasts are probably too low. But shorting now would probably just be fighting the tape. Save this idea for later.

• 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: Sany Heavy Industry (600031 CH), Seres Group (601127 CH) and Pony AI (PONY US) H Share listings.
• Event-Driven developments: Digital Holdings Inc (2389 JP), Pacific Industrial (7250 JP), Soft99 Corp (4464 JP), Joy City Property (207 HK), Minmetals Land (230 HK), Larvotto Resources (LRV AU). 

• New Japanese Prime Minister Sanae Takaichi aims to raise defense spending to 2% of GDP this fiscal year, two years ahead of the original schedule.
• Takaichi also wants to accelerate investment in advanced defense technologies. IHI, which recently signed an agreement with ICEYE to build earth observations satellites, should be among the beneficiaries.
• IHI’s sales and profit comparisons should turn positive during FY Mar-26. A 7-for-1 stock split effective October 1, 2025, makes the shares more attractive to retail investors. 

• A stock that should benefit from the resumption of Japan’s bull market
• Utility type stock poised to rerate  as a growth narrative starts
• The stock has recently broken out of its 18 month downtrend

• Robot Payment is a high-growth fintech company capitalizing on Japan’s digital transformation, specializing in B2B payment automation and subscription management.
• The company exhibits a robust and stable business model, with approximately 98% of its revenue being recurring, driven by its suite of SaaS-based solutions.
• Financial performance is strong, marked by consistent double-digit revenue growth, expanding margins, and a significant turn to positive profitability and operating cash flow in recent years.

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• JVC KENWOOD is successfully executing a strategic shift from consumer electronics to higher-margin B2B segments, primarily in automotive and professional communications systems, driving significant growth in profitability and cash flow.
• The company is well-positioned to capitalize on key industry trends, including the growth of connected and electric vehicles, and the increasing demand for digital, mission-critical communication systems for public safety and enterprise clients.
• Despite a strong growth trajectory and seemingly attractive valuation multiples, the company faces risks from intense competition in the electronics industry, cyclicality in its core markets, and ongoing supply chain vulnerabilities.

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• Chugai Pharmaceutical (4519 JP) reported flat Hemlibra sales in 9M25 overcoming shipment issues. Higher volumes boosted Actemra revenue (up 27% YoY) amid declining in export unit price.
• 2025 guidance reiterated. Satisfactory progress after 9M25 with major line-items achieving 76-81% of full year guidance. Management expects to beat the export forecast in case of both Hemlibra and Actemra.
• Strong progress of out-licensed products (nemluvio and orforglipron) with high sales potential will help drive growth in the short to medium term.

• The increase in stock splits reflects a shift toward meeting the needs of individual shareholders of listed companies, occurring as cross-shareholdings decline and the presence of overseas investors grows.
• Companies unwilling to increase foreign ownership further use stock splits to boost individual shareholders. Companies with low stock prices use it to meet as a tool of TSE’s P/B request.
• It has become clear that increasing the foreign ownership is a higher priority than the increased costs associated with the rise in the number of shareholders resulting from stock split.