Japan

In today’s briefing:

Seven & I Holdings (3382 JP): Uncomfortable Truths
Nikkei 225 Index Rebalance: Positioning With a Few Days to Implementation
7&I (3382) – Clarifications of Clarifications But Progress Is Apparent
Fuji Soft (9749 JP) – KKR Does Deal With the Family To Squeeze Out Minorities – You Can Join Too
This TOB Does Not Question the Fundamental Issue of REIT Governance, but Will the Tactic Succeed?
Golf Digest Online (3319 JP) – FY25/12 Key Initiatives for Japan and Overseas

Seven & I Holdings (3382 JP): Uncomfortable Truths

Seven & I Holdings (3382 JP) has published two documents to respond to misinformation and detail its “constructive engagement” with Alimentation Couche-Tard (ATD CN).
The statements underscore the Board’s serious doubts about securing US antitrust approval. The significant discrepancies in the engagement timeline point to two parties at loggerheads.
While the Board claims it is pursuing a dual-track process to create value, the reality is that the process is designed to hinder Couche-Tard’s offer to facilitate the restructuring plan.

Nikkei 225 Index Rebalance: Positioning With a Few Days to Implementation

By Brian Freitas

BayCurrent Consulting (6532 JP) replaces Mitsubishi Logistics (9301 JP) in the Nikkei 225 (NKY INDEX) at the close of trading on 31 March.
Since announcement, BayCurrent Consulting (6532 JP) stock is up with cumulative excess volume increasing, while Mitsubishi Logistics (9301 JP) is lower on a much bigger increase in cumulative excess volume.
Some of the forecast adds and deletes have moved as one would expect, but positioning for the September rebalance could lead to reversals over the next few weeks and months.

7&I (3382) – Clarifications of Clarifications But Progress Is Apparent

On 10 March, Seven & I Holdings (3382 JP) released a statement about its interactions with Alimentation Couche-Tard (ATD CN). The next day, ATD released its own. They didn’t match.
The 7&i spokesperson admitted one technical point, but investors seemed to believe ATD over 7&i. On 13 March, ATD held a presentation in Tokyo. Materials? Unchanged. Earnings comments? Unchanged.
This morning, 7&i released a document which “corrects the record regarding critical false and misleading claims about 7&i’s engagement with Alimentation Couche-Tard (ACT).” OUCH. The stock fell.

Fuji Soft (9749 JP) – KKR Does Deal With the Family To Squeeze Out Minorities – You Can Join Too

KKR’s Second Tender Offer for Fuji Soft Inc (9749 JP) ended 19 February 2025 and KKR got a whopping 57.9% after Bain bowed out. It was close.
The Nozawa founder said it would not tender. Others family members may have, but now KKR has signed a deal with Nozawa family company YK NFC, to support the squeezeout.
Assuming, Nozawa Hiroshi’s stake and the NFC stake remain unchanged, that cements the result of the 25 April AGM. But there may be games to play.

This TOB Does Not Question the Fundamental Issue of REIT Governance, but Will the Tactic Succeed?

Since important decisions on REIT management are made by the sponsor companies, governance isn’t functioning. That’s why REITs have been very careful to strengthen their compliance systems and information disclosure.
For REITs that rely heavily on properties contributed by their sponsors, it is unlikely that other investors would support an activist fund’s advocacy for a change of asset manager.
The most annoying thing for the sponsor is the change of asset manager. The tactic of this TOB is to extract shareholder returns by addressing what the sponsor company dislike.

Golf Digest Online (3319 JP) – FY25/12 Key Initiatives for Japan and Overseas

While FY24/12 consolidated financial results paint a challenging environment, the solid achievements in GDO’s mainstay Golf Merchandise Sales business, which accounts for 34% of total consolidated net sales, should not be overlooked.
The graph below comparing golf gear sales for one of the largest brick-and-mortar retailers ‘Co. A’ with the largest online retailer GDO highlights the success of GDO’s initiatives, GDO turning in +7.3% YoY growth versus Co. A -0.6% YoY. Co.
A noted in its 1H FY25/6 briefing that for its Golf business (34.8% of consolidated net sales), existing store sales declined YoY, citing weak performance of golf clubs due to differences in new product launches and price reductions.

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Mar 25

Daily Brief Japan: Tokyu Reit Inc, Sun Corp, Torikizoku, Nitto Kogyo and more

In today’s briefing:

Tokyu Corp (9005) To Lift Stake in Tokyu REIT (8957) Again – Bigger Than You Think It Is
StubWorld: Sun Corp (6736 JP) Is Still Inexpensive To Its Cellebrite Stake
Torikizoku (3193 JP): Coverage Initiation,1H FY07/25 flash update
Nitto Kogyo Corporation (6651 JP) – Q3 Follow-Up

Tokyu Corp (9005) To Lift Stake in Tokyu REIT (8957) Again – Bigger Than You Think It Is

Today, Tokyu Corp (9005 JP) announced it would increase its stake its family REIT, buying up to 48,880 units or 5.0% of units out over the next six months.
This comes a couple of days after Hankyu Hanshin announced the same for its REIT, discussed here. Others have done so before. Tokyu has. Others will do so going forward.
The main reason? Squeeze the ‘share’ price higher. Get the REIT to 1.0x PNAV then stuff it with sponsor-held properties. That’s not bad. The goal is a higher price.

StubWorld: Sun Corp (6736 JP) Is Still Inexpensive To Its Cellebrite Stake

By David Blennerhassett

Sun Corp (6736 JP) has declined ~6% in the past month. Its 44.3% stake in Cellebrite DI (CLBT US) is worth ~186% of its market cap.
Preceding my comments on Sun Corp are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

Torikizoku (3193 JP): Coverage Initiation,1H FY07/25 flash update

By Shared Research

Revenue increased by 10.7% YoY to JPY22.2bn, driven by inbound tourism recovery and new restaurant openings.
Operating profit declined 20.5% YoY to JPY1.3bn due to higher SG&A expenses from overseas expansion and wage increases.
Gross profit margin decreased to 69.1%, while SG&A ratio rose to 63.1%, impacting operating profit margin.

Nitto Kogyo Corporation (6651 JP) – Q3 Follow-Up

Q3 2025/3 Earnings Result Summary: Nitto Kogyo Corporation (hereafter, the Company) announced net sales of JPY 133,354 mn (+14.1% YoY), operating profit of JPY 9,298 mn (+3.3% YoY), ordinary profit of JPY 9,503 mn (-0.0% YoY), and profit attributable to owners of parent (hereafter, net profit) of JPY 9,014 mn (+36.3% YoY).
The double-digit increase in net profit was attributed to the recording of extraordinary gains on the acquisition of shares in a subsidiary.
FY2025/3 Earnings Forecast: The forecast calls for net sales of JPY178,000 mn (+10.8% YoY), operating profit of JPY12,000 mn (+0.3% YoY), ordinary profit of JPY12,000 mn (-4.5% YoY), and net profit of JPY10,000 mn (+14.7% YoY).

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Mar 24

Daily Brief Japan: Sun Corp, TSE Tokyo Price Index TOPIX, Nikkei 225, Workman Co Ltd, JX Advanced Metals and more

In today’s briefing:

Sun Corp (6736) – Still Cheap
TSE Growth Market Reforms Also Expected to Be Effective in “Request”
Nikkei Index Options Weekly (Mar 17 – 21): Muted Reaction to BOJ as Volatility Declines
Workman Fixes the Big Problem: Colors Replaces Workman Joshi
ECM Weekly (24th Mar 2025) -JX Advance, DN Solutions, Nanshan Aluminimum, Anthem, EAAA, Judo Capital

Sun Corp (6736) – Still Cheap

Eight months on from the Tender Offer which changed the shape of the shareholder register, Sun Corp (6736 JP) is as cheap to its main asset as it was before.
Sun Corp is cheap to its holding in Cellebrite DI (CLBT US). How cheap depends on the form and structure of its eventual exit.
Understanding what the options are (and the dynamics around hedging/exposure) is worthwhile.

TSE Growth Market Reforms Also Expected to Be Effective in “Request”

A drastic shift by the TSE to focus on quality without increasing the number of listed companies by reducing the number of IPO companies is not very promising.
TSE will raise the hurdle for listing maintenance criteria slightly, but it will ask companies to make a commitment to post-listing growth during the listing examination process.
It’ll take time for quality of market to increase, and we expect that companies that are aware of listing costs with help from investors will naturally move to de-list themselves.

Nikkei Index Options Weekly (Mar 17 – 21): Muted Reaction to BOJ as Volatility Declines

By John Ley

A weekly recap of volatility and price metrics, covering option volumes, volatility trends, the spot/implied relationship, and open interest statistics.
The Bank of Japan held rates steady, with little reaction from the Nikkei or USD/JPY amid lower option volumes.
Implied volatility declined throughout the week, pressured by muted price action and low historic volatility.

Workman Fixes the Big Problem: Colors Replaces Workman Joshi

By Michael Causton

Workman’s slower same-store growth can be blamed on its shift to mass market fashion and the choice of Workman Joshi as a banner, putting off male customers.
The outdoor and workwear retailer has now acknowledged the misstep and will rebrand the chain as Workman Colors while adjusting merchandise back to more apparel basics.
This will take time to implement but could mean a return to form for the apparel retailer.

ECM Weekly (24th Mar 2025) -JX Advance, DN Solutions, Nanshan Aluminimum, Anthem, EAAA, Judo Capital

By Sumeet Singh

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, JX Advanced Metals (5016 JP) managed to hold on to its deal price, riding on the copper price resurgance.
On the placements front, Judo Capital (JDO AU) was the only largish deal over the past week.

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Mar 23

Daily Brief Japan: Beenos Inc, Mitsubishi Heavy Industries, Shinko Electric Industries, Hankyu Hanshin REIT, Inc. and more

In today’s briefing:

LY Corp (4689) Launches Beenos (3328) Tender Offer at ¥4,000
MHI (7011 JP): U.S. Presses Japan to Spend More on Defense
(Mostly) Asia-Pac M&A: Westgold/Spartan, Dropsuite, Shandong Fengxiang, Proto Corp, Shinko Electric
Last Week in Event SPACE: Hankyu Hanshin REIT, ENN Energy, Idemitsu, HKBN, Jardine Matheson

LY Corp (4689) Launches Beenos (3328) Tender Offer at ¥4,000

On Friday 21 March, LY (4689 JP) made an announcement it had received all the required approvals and would launch the Tender Offer on 24 March.
Some were upset about the price originally but unlike other deals, this one traded below terms for three months since original announcement. Three activish funds had pitched in their 30%.
This is now trading tight, and will continue to trade tight. If you own, whether you hold through early May depends on whether you are bullish or bearish the market.

MHI (7011 JP): U.S. Presses Japan to Spend More on Defense

By Scott Foster

Japan’s top defense and aerospace contractor is being rerated to account for the limits on relying on the U.S. for defense in an alarming national security environment.
A reasonably optimistic scenario brings MHI’s P/E ratio down to 22X in FY Mar-28, by which time Japan’s defense spending is scheduled reach 2% of GDP.
The Trump administration wants Japan to spend more, but getting the budget through the national Diet is difficult enough as it is.

(Mostly) Asia-Pac M&A: Westgold/Spartan, Dropsuite, Shandong Fengxiang, Proto Corp, Shinko Electric

By David Blennerhassett

I tally 52 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma.
Three news new deals discussed this week: the Westgold Resources (WGX AU)/Spartan Resources (SPR AU) merger, and EcoNaviSta (5585 JP)‘s Tender Offer.
Key updates/news took place on: Dropsuite Ltd (DSE AU),Shandong Fengxiang (9977 HK), Proto Corp (4298 JP), and Shinko Electric Industries (6967 JP).

Last Week in Event SPACE: Hankyu Hanshin REIT, ENN Energy, Idemitsu, HKBN, Jardine Matheson

By David Blennerhassett

Buy Hankyu Hanshin REIT, Inc. (8977 JP) on any weakness. There will be strength ahead.
With ENN Energy (2688 HK) suspended pursuant to the Takeovers Code, a third party Offer, as opposed to ENN Group, seems more likely.
Be long Idemitsu (5019 JP) vs ENEOS for the next several weeks. Light and easy drift trade based on pressure increasing and pressure ending before new news in May.

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Mar 22

Daily Brief Japan: Hankyu Hanshin REIT, Inc., Intloop , Japan System Techniques Co, Srg Takamiya, TSE Tokyo Price Index TOPIX and more

In today’s briefing:

Hankyu Hanshin REIT (8977) – Good Fundamental News, a Bigly Buyback, and Cascading Flows to Come
Intloop (9556 JP) – Demonstrating Operational Leverage
Q3 Follow-Up: Japan System Techniques (4323 JP) – March 11, 2025
Q3 Follow-Up: Takamiya (2445 JP) – March 10, 2025
“TSE’s Request” Catalyzes and Attracts Activist Investors to Invest

Hankyu Hanshin REIT (8977) – Good Fundamental News, a Bigly Buyback, and Cascading Flows to Come

3D Investment Partners launched a Partial Tender Offer to buy a 10+% stake in Hankyu Hanshin REIT, Inc. (8977 JP). The REIT finally responded with a “Neutral” stance.
But they also upgraded earnings forecasts, bought a building, and announced the Sponsor would buy units in the market over the next year. It’s big.
And that creates flows, which then engender other reactive flows, and cascading flows, and because the sector isn’t rich, there may be a tailwind.

Intloop (9556 JP) – Demonstrating Operational Leverage

By Astris Advisory Japan

We believe the key highlight of Q1-2 FY7/25 results is OPM expansion YoY from 4.7% to 6.6%.
The company aims to secure high-margin projects aligned with its strategic aims while maintaining business investment in new hires to grow.
Business expansion via strategic alliances is bearing fruit with Itochu Corporation (8001), with other initiatives being unveiled in the food and logistics sectors to expand and diversify the solutions portfolio and accelerate growth.

Q3 Follow-Up: Japan System Techniques (4323 JP) – March 11, 2025

Japan System Techniques (hereafter, the Company) announced its Q3(9M)
Key consolidated figures net sales of JPY 20,549 mn (+10.9% YoY), operating profit of JPY 2,041 mn (+26.5% YoY), ordinary profit of JPY 2,116 mn (+28.4% YoY), and profit attributable to owners of parent (hereafter, net profit) of JPY 1,417 mn (+28.9% YoY).
Higher sales and profits in the DX&SI business and Package business contributed in Q3 earnings growth.

Q3 Follow-Up: Takamiya (2445 JP) – March 10, 2025

Q3 FY2025/3 Earnings results summary: Takamiya (hereafter, the Company) reported its Q3(9M) FY2025/3 consolidated earnings results: sales of JPY 32,335 mn (+0.5% YoY), operating profit of JPY 1,316 mn (-45.3% YoY), ordinary profit of JPY 1,209 mn (-52.1% YoY), and profit attributable to owners of parent (hereafter, net profit) of JPY 867 mn (-49.8% YoY).
Due to the postponement of the large-scale projects’ commencements, rental volumes fell short of initial expectations.
Additionally, due to delays in the delivery schedule of sales and OPE-MANE projects, the net sales saw only a slight increase.

“TSE’s Request” Catalyzes and Attracts Activist Investors to Invest

When investing in a larger company, one can expect higher liquidity, higher expectations of endorsement of the activist investor’s views because of the large institutional holdings, and smoother communication.
As cross-shareholding structures are beginning to break down, there’re many opportunities for activist investors to attack such companies because they couldn’t create value and grow due to underutilization of resources.
Activist investors have invested in Japanese companies in the past, but never with such success. This success is largely due to a change in the environment.

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Mar 21

Daily Brief Japan: BASE Inc, Idemitsu Kosan, NVIDIA Corp, TSE Tokyo Price Index TOPIX, Softbank Group and more

In today’s briefing:

Boss Maki Goes Hard on Base (4477) – Interesting Situation
Idemitsu (5019) – Buyback Announced, Executed, To Be Executed Again; Pressure & Timing
NVDA’s ‘Quantum Day’ Fails to Live up to the Hype. Micron Beats, and Softbank Acquires Ampere.
Instilling Expectations Was Positive, but Interest Quickly Shifting from Seriousness to Performance
Lucror Analytics – Morning Views Asia

Boss Maki Goes Hard on Base (4477) – Interesting Situation

Melco Holdings (6676 JP) chairman Hiroyuki MAKI bought up a 14% stake in BASE Inc (4477 JP) in just under two weeks. It was done quite transparently. He announced daily.
He wants to get to 30% in a Tender Offer. The method, approach, lack of transparency, and similarity to previous situations where he invested has the company wary.
This looks like a Poison Pill case in the offing. It WAS a cheap stock. It is not expensive now. But it is not clear what the endgame is here.

Idemitsu (5019) – Buyback Announced, Executed, To Be Executed Again; Pressure & Timing

In February, Idemitsu Kosan (5019 JP) announced a new buyback to start when the then-existing one had not yet been completed. This is a pattern the last few years.
On Tuesday, Idemitsu announced the method. Shareholder structure means there is pressure here, and its major peer sees buyback pressure drop imminently.
Be aware of tilts and timing, and what might come in May.

NVDA’s ‘Quantum Day’ Fails to Live up to the Hype. Micron Beats, and Softbank Acquires Ampere.

By Andrew Jackson

Huang throws cold water on a potential TSMC led deal for INTC fab business, saying he ‘wasn’t invited’ to any discussions.
Micron guidance beats consensus which should be a positive for related names such as Micronics.
CoWoS and advanced packing maker Shibaura Mechtronics raised guidance on Wednesday ahead of street, yet stock still trading around recent lows points to further upside.

Instilling Expectations Was Positive, but Interest Quickly Shifting from Seriousness to Performance

The reorganization of Panasonic Holdings was far from restructuring its business portfolio, as it brought highly profitable subsidiaries and affiliates into the parent company while leaving low-profit businesses alone.
Although Panasonic’s disclosure was successful as IR in instilling “expectations” in investors by showing targets, a possibility cannot be denied that it’s temporary phenomenon that came at market turning point.
Now, 3 years after “TSE’s request,” many investors are looking to improve profitability by restructuring their business portfolios, and will likely demand steady results year after year.

Lucror Analytics – Morning Views Asia

By Trung Nguyen

In today’s Morning Views publication we comment on developments of the following high yield issuers: Softbank Group
In the US, the FOMC has unanimously voted to maintain the Fed Funds target rate unchanged at 4.25-4.50%, in line with market expectations. In its statement, the FOMC noted that “uncertainty around the economic outlook has increased”, removing previous language that the risks to achieving employment and inflation goals are “roughly in balance”.
Meanwhile, the Fed dot plot showed that the US central bank’s officials continue to see a median of two 25-bp rate cuts in 2025, two cuts in 2026 and one in 2027, with the long-run Fed funds rate unchanged at 3.0%.

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Mar 20

Daily Brief Japan: BayCurrent Consulting , Makino Milling Machine Co, SGX Rubber Future TSR20 and more

In today’s briefing:

The Japan March-End Rebal and Dividend Trade
Makino Milling Machine (6135 JP): Proposes Countermeasures
Yokohama Shuts Three Plants In Quick Succession, Relaunches Another In China

The Japan March-End Rebal and Dividend Trade

Every year it’s the same trade. But sometimes it is not. This year it is Thursday and Friday. Or not.
The month-end and quarter-end bring big flows, or not, depending on how things have gone.
Over the past 10 years or so, the two-day return on the March trade is pretty good. This year? Well read on!

Makino Milling Machine (6135 JP): Proposes Countermeasures

The Makino Milling Machine Co (6135 JP) Board has proposed introducing countermeasures to nudge Nidec Corp (6594 JP) to delay the start of the tender to 9 May.
The countermeasure was likely needed to facilitate a competing offer rather than force Nidec to provide the required information and delay the start (Nidec is still evaluating the request).
Nidec’s offer at current terms has a low chance of success, necessitating revised terms. The Board claims that there is a sufficient probability of a competing proposal.

Yokohama Shuts Three Plants In Quick Succession, Relaunches Another In China

By Vinod Nedumudy

Trelleborg plant in the US to shut down in April, 2025
Israel, Prague plants too stop working in 2025
Hangzhou to have car tire plant producing 9 million tires a year

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Mar 19

Daily Brief Japan: Proto Corp, EcoNaviSta , JX Advanced Metals, SanBio Co Ltd and more

In today’s briefing:

[Activism Japan] Proto Corp (4298 JP) – Kaname Capital Files an Injunction? Bold Strategy, Cotton…
EcoNavista (5585 JP) – Takeover By Eisai (4523)
JX Advanced Metals (5016 JP) IPO: Trading Debut
JX Advanced Metals IPO Trading
SanBio Co Ltd (4592 JP): Full-year FY01/25 flash update
SanBio Co Ltd (4592 JP): Losses Narrow; AKUUGO Upbeat on Successful Commercial Runs; FY26 Key

[Activism Japan] Proto Corp (4298 JP) – Kaname Capital Files an Injunction? Bold Strategy, Cotton…

Late on the 17th, Proto Corp (4298 JP) released a filing to the TSE saying activist-ish investor and objector to the current MBO, Kaname Capital, had filed an injunction.
The injunction suit against two directors says procedures were unfair and the decision violated the duty of due care. They ask the Court to rule the directors halt support and…
…that the MBO actor YOKOYAMA Hiroichi not terminate the offer on 21 March 2025. Injunction filings against directors for Tender Offers are rare for a reason.

EcoNavista (5585 JP) – Takeover By Eisai (4523)

EcoNaviSta (5585 JP) has a couple of interesting product lines and platforms. That makes it attractive, and scalable. Synergies to a big buyer are reasonably obvious.
Eisai Co Ltd (4523 JP) is that big buyer, having decided to be interested last summer. I could imagine others could be interested too. The tech has uses.
For the moment, it is a high EV/Revenue bid on an interesting small company. The chairman, cross-holders, directors, and a couple of financial institutions own 66+%. But…

JX Advanced Metals (5016 JP) IPO: Trading Debut

JX Advanced Metals (5016 JP) priced its IPO at JPY820 per share to raise gross proceeds of US$2.5 billion. The shares will start trading on 19 March.
Relevant notes: JX Advanced Metals (5016 JP) IPO: The Bull Case, JX Advanced Metals (5016 JP) IPO: The Bear Case, JX Advanced Metals (5016 JP) IPO: Price Range Is Fair.
Since the price range was announced, the peers have modestly re-rated. My SoTP valuation of JPY859 is slightly above the IPO price, suggesting the price is fair.

JX Advanced Metals IPO Trading

By Douglas Kim

JX Advanced Metals raised 438.6 billion yen (US$3 billion) on its IPO offering after pricing the IPO at 820 yen per share, valuing the company at 761.3 billion yen.
Our base case valuation of JX Advanced Metals is price per share of 863 yen, based on P/E of 9.9x using our estimated net profit of 81 billion yen (2026E).
Therefore, we would sell into strength if the share price of JX Advanced Metals rises to the 863 yen to 1,044 yen per share.

SanBio Co Ltd (4592 JP): Full-year FY01/25 flash update

By Shared Research

SanBio reported no operating revenue for FY01/25, with an operating loss of JPY3.5bn, narrowing from JPY4.5bn.
Non-operating income was JPY628mn, primarily from foreign-exchange gains, while non-operating expenses totaled JPY134mn.
The company expects no operating revenue for FY01/26, forecasting operating expenses of JPY3.5bn, focusing on AKUUGO® approval.

SanBio Co Ltd (4592 JP): Losses Narrow; AKUUGO Upbeat on Successful Commercial Runs; FY26 Key

By Tina Banerjee

During FY25, SanBio Co Ltd (4592 JP) did not generate any revenue and incurred an operating expense of ¥3.5B, down 23% YoY.
The company successfully completed two commercial production runs to accumulate inventories in preparation for launch of Akuugo. The earliest possible timing for shipment is assumed to be Q2FY26.
SanBio has a cash runway through FY26. Further, in March, the company has raised funds of ¥2.1B through third party placement.

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Mar 18

Daily Brief Japan: JX Advanced Metals, Tokyo Electron, Nikkei 225, Macbee Planet , TSE Tokyo Price Index TOPIX, Poletowin Pitcrew Holdings, Koukandekirukun Inc and more

In today’s briefing:

JX Advance Metals IPO Trading – Demand Wasn’t Great
Tokyo Electron (8035 JP): Buy if You’re Not Afraid of Recession
Nikkei 225 Outlook After the Mar25 Rebalance
Macbee Planet (7095 JP) – Focus on Volume-First Growth Strategy
MBOs Will Rise, Even if Companies and Funds Are Sleeping in the Same Bed but Having Different Dreams
Poletowin Pitcrew Holdings (3657 JP): Full-year FY01/25 flash update
Koukandekirukun (7695 JP) – Digital Revolution in Appliance Replacement Services

JX Advance Metals IPO Trading – Demand Wasn’t Great

By Sumeet Singh

JX Advanced Metals (5016 JP)’s parent, ENEOS Holdings (5020 JP), raised around US$2.5bn via selling more than half of its stake in JXAM in its Japan IPO.
JXAM engages in business activities primarily focused on the development, manufacture and sale of materials made from copper and rare metals, which are used in the semiconductor and ICT fields.
We have covered various aspects of the deal in our previous notes. In this note, we will talk about the trading dynamics.

Tokyo Electron (8035 JP): Buy if You’re Not Afraid of Recession

By Scott Foster

After dropping by half, Tokyo Electron’s share price has bounced. But it is still vulnerable to cutbacks in AI-related investments and tariff-induced recession.
A positive scenario has net profit rising by 8% in FY Mar-26. In a negative scenario, it drops by 25%. We take the positive view.
Innovations in manufacturing point toward a big step up in profit margins by the end of the decade. But watch out for a cyclical downturn between now and then.

Nikkei 225 Outlook After the Mar25 Rebalance

By Nico Rosti

The Nikkei 225 (NKY INDEX) has been in a paralyzed trend since August 2024. Then at the end of February 2025 it started to correct.
As explained by Travis Lundy and Brian Freitas the index rebalance on March 5th, 2025 was a bit unexpected and minimal in terms of changes.
The index bottomed 1 week after the March 2025 Nikkei 225 Average Review, and then started a rally, quite modest for now which could be signaling short-term tactical weakness.

Macbee Planet (7095 JP) – Focus on Volume-First Growth Strategy

By Astris Advisory Japan

Emphasizing sales volume expansion – Q1-3 FY4/25 results indicated strong sales volume growth at 32.2% YoY, as the company continued diversifying into market sectors such as medical, recruitment and finance.
Although prioritizing growth has meant a shift in the customer mix away from traditionally high margin brick-and-mortar in-store experiences, we believe this strategic shift is positive given their larger addressable markets.
The company revised its FY4/25 guidance, providing greater clarity over the short term, and highlighted its medium-term expectations for sustained double-digit growth.

MBOs Will Rise, Even if Companies and Funds Are Sleeping in the Same Bed but Having Different Dreams

Even if a company goes private due to listing costs, it is good for investors to shift to a more share price-conscious management in order to maintain the listing.
Many companies want to take over management rights with the founding family, but find it not easy to continue as a publicly traded company and consider going private.
New problems lie ahead in the coming years between founding families who chose MBO to inherit the management control of “family business” and MBO funds who have to Exit.

Poletowin Pitcrew Holdings (3657 JP): Full-year FY01/25 flash update

By Shared Research

Revenue grew 11.8% YoY to JPY52.2bn, driven by Overseas Solutions orders and yen depreciation, despite extraordinary losses.
Operating profit increased 76.4% YoY to JPY787mn, impacted by business liquidation expenses and additional co-development costs.
FY01/26 forecasts sales of JPY55.1bn, operating profit of JPY1.2bn, and net income of JPY310mn, with a JPY16.00 dividend.

Koukandekirukun (7695 JP) – Digital Revolution in Appliance Replacement Services

By Astris Advisory Japan

Striving to dominate a new market – Koukandekirukun is an innovative online platform offering home appliance and sanitaryware replacement services.
With an early-mover advantage, it aims to transform the ¥2.8tn residential equipment replacement market, where just 2% of orders are handled online.
Efficiencies gained from its comprehensive online quote service help undercut traditional rivals by about a third and generate data to continuously improve SEO, driving traffic to its site.

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Mar 17

Daily Brief Japan: Tsuruha Holdings, Seven & I Holdings, Japan Post Bank, Canon Inc, Nikkei 225 and more

In today’s briefing:

Tsuruha (3391) – Welcia (3141) – Tsuruha Earnings In a Week – Still Good To Be Long The Ratio
Merger Arb Mondays (17 Mar) – Seven & I, Tenma, Proto, OneConnect, Vesync, Tam Jai, Insignia
Retail Media Can Help Pay for a ¥2 Trillion Buyback
ECM Weekly (17th Mar 2025) -JPB, Recruit, Austal, BoB, Chifeng, Guarantee, Anjoy, Softcare, AvePoint
Canon (7751) | The Cash Printer
Nikkei Index Options Weekly (Mar 10–14): Assessing Long Vs. Short Vol Strategies & Returns Vs. SPX

Tsuruha (3391) – Welcia (3141) – Tsuruha Earnings In a Week – Still Good To Be Long The Ratio

Tsuruha and Welcia are on the road to a merger, where Tsuruha takes over Welcia but Aeon ends up owning “more than 50% but less than 51%” of Tsuruha.
The Price Ratio is now 4.24x. Trailing EPS ratios is >5. Forward EPS ratios are further above 5. BVPS ratio? Near 5. Welcia grows storecount. Tsuruha makes more money/store.
Tsuruha changed its FY-end to match that of Welcia/Aeon so both will report earnings/guidance in just over 3 weeks. That will likely influence the ratio.

Merger Arb Mondays (17 Mar) – Seven & I, Tenma, Proto, OneConnect, Vesync, Tam Jai, Insignia