Japan

In today’s briefing:

Shin-Etsu Chemical (4063) – OK Earnings, OK Forecast, But Ground-Breaking Buyback
Renesas 1Q25: Cheap Stock That’s Bottoming Out
Fujitsu General (6755 JP): Done Deal as Precondition Satisfied
(Mostly) Asia-Pac M&A: Mayne Pharma, Piedmont/Sayona, Jamco, Makino Milling, Sinarmas, Dada Nexus
Expect Gradual Improvement in the Quality of Listed Companies as More Companies Go Private
Last Week in Event SPACE: GMO Internet, Hongkong Land, Shibaura Electronics, Millennium & Copthorne

Shin-Etsu Chemical (4063) – OK Earnings, OK Forecast, But Ground-Breaking Buyback

Shin Etsu Chemical (4063 JP) reported FY earnings to beat January guidance for all four major measures, just slightly. They only guide 1 quarter out, and Q1 is up year-on-year…
…in revenues, but down in OP and NP. Note: OP and NP guidance is nearly identical to what they guided for Q1 last year on ¥585bn revenues (vs ¥610bn now)
The BIG news here is a Very Large Buyback. The company has long has huge piles of cash. This buyback (~90% of annual profit) starts to make use of it.

Renesas 1Q25: Cheap Stock That’s Bottoming Out

By Nicolas Baratte

Revenues are still declining by ~teens% YoY but margins shows signs of improvements as end-demand improves and utilization is low.
Renesas doesn’t have an inventory problem and increasing revenues will lead to higher utilization and higher margins.
As Renesas is showing signs of a bottom, the stock is very cheap, trading at -2 standard deviations or 11x 2025 EPS, 9x 2026 EPS.

Fujitsu General (6755 JP): Done Deal as Precondition Satisfied

The precondition for Paloma Rheem Holdings’ tender offer for Fujitsu General (6755 JP) is satisfied. The offer is from 28 April to 28 May.
Despite an arguably light offer and less than ideal process, this is a done deal due to a lack of opposition and no competing offer.
At the last close and for a 5 June payment, the gross and annualised spreads are 1.3% and 14.1%, respectively.

(Mostly) Asia-Pac M&A: Mayne Pharma, Piedmont/Sayona, Jamco, Makino Milling, Sinarmas, Dada Nexus

I tally 49 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma.
No new deals discussed on Smartkarma this week. Although Dickson Concepts (113 HK), Bright Smart (1428 HK), and Jilin Jiutai Bank (6122 HK) are suspended pursuant to the Takeovers Code.
Key updates/news took place on Mayne Pharma (MYX AU), Piedmont (PLL AU)/Sayona (SYA AU), Jamco (7408 JP), Makino Milling (6135 JP), Sinarmas Land (SML SP), and Dada Nexus (DADA US).

Expect Gradual Improvement in the Quality of Listed Companies as More Companies Go Private

Although it’ll take some time for quality of existing listed companies to improve, a gradual improvement in quality of companies is likely for the time being as more companies delist.
The TSE’s “request” was not only for activist investors, but also for other investors who shared the view that the stock market should not be left in the doldrums.
A certain number of companies that fail to meet TSE listing criteria will move to the regional stock exchanges, leading to a gradual improvement in the quality of the TSE.

Last Week in Event SPACE: GMO Internet, Hongkong Land, Shibaura Electronics, Millennium & Copthorne

Negligible float, highly manipulatable, 150x+ forward earnings – yes, investors can afford NOT to have GMO Internet (4784 JP) in their portfolio.
Hongkong Land (HKL SP) stamps its “recycling capital” motto and sells nine floors of One Exchange Square to HKEX (388 HK) for HK$6.3bn (US$810mn).
Shibaura Electronics (6957 JP)asks Minebea Mitsumi (6479 JP) whether they intend to change the consideration terms. Minebea says it is “proceeding with its consideration“.

Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Apr 26

Daily Brief Japan: Shibaura Electronics, Kyoto Financial Group , Daiichi Sankyo, Chugai Pharmaceutical, Istyle Inc and more

In today’s briefing:

YAGEO and Shibaura Still Fighting, Minebea Likely to Bid Up, The Question Is Another YAGEO Overbid
Kyoto Financial Group (TSE:5844) – Positive Shift in C-Suite Outlook
Daiichi Sankyo (4568 JP): Strong FY25 Result; Guidance Initiated for FY26; ¥200B Buyback Announced
Chugai Pharmaceutical (4519 JP): Hemlibra, Actemra, And Alecensa Shine In 1Q25; Guidance Reiterated
IStyle (3660 JP) Ups Investment in Retail

YAGEO and Shibaura Still Fighting, Minebea Likely to Bid Up, The Question Is Another YAGEO Overbid

Yageo Corporation (2327 TT) bid ¥4,300 for Shibaura Electronics (6957 JP). Minebea Mitsumi (6479 JP) overbid at ¥4,500. YAGEO overbid Minebea at ¥5,400 on 17 April (expected to start 7-May)
Apparently, YAGEO was a bit upset by the public comments by Shibaura regarding custom/mass-market/online different ways of doing business. YAGEO responded with receipts. Shibaura will respond later.
On the 22nd, Minebea noted they would delay their intended 23rd start date. Now they have more irrevocables. In the end, I expect YAGEO’s, not Minebea’s, top price defines this.

Kyoto Financial Group (TSE:5844) – Positive Shift in C-Suite Outlook

By Victor Galliano

Kyoto Financial’s president has hinted at increasing disposals in strategic equity holdings; the prior target was a JPY100bn reduction in holdings by March 2029, now there is talk of JPY200-300bn
We estimate Kyoto Financial’s equity holdings relative to market cap at 140%+, well above its peer banks; yet, until very recently, the president had been against meaningfully reducing equity holdings
The president’s change of view leads us to upgrade Kyoto Financial to a buy; the change in outlook means that there is real potential to extract value for shareholders

Daiichi Sankyo (4568 JP): Strong FY25 Result; Guidance Initiated for FY26; ¥200B Buyback Announced

Daiichi Sankyo (4568 JP) reported strong FY25 results, with revenue and operating profit increasing 18% and 57%, YoY, to ¥1,886B and ¥332B, respectively. Performance was mainly driven by Enhertu (+45%).
The company expects FY26 revenue to increase 6% YoY to ¥2,000B. Core operating profit and operating profit are expected to increase 12% and 5%, YoY, respectively to ¥350B.
The company has announced a ¥200B buyback plan to acquire a maximum of 80M shares from May 1, 2025 to March 24, 2026.

Chugai Pharmaceutical (4519 JP): Hemlibra, Actemra, And Alecensa Shine In 1Q25; Guidance Reiterated

Chugai Pharmaceutical (4519 JP) reported 22% YoY rise in core revenue in 1Q25, as overseas sales grew 55% YoY while domestic market remain subdued.
Hemlibra drove overseas sales. Actemra and Alecensa witnessed growth in both overseas and domestic markets.
Chugai reiterated 2025 guidance of revenue and net profit growth of 2% and 3%. The progress has been satisfactory with major line items achieving 24–25% of the full-year guidance numbers.

IStyle (3660 JP) Ups Investment in Retail

By Michael Causton

IStyle continues to benefit from its focus on omnichannel retailing.
Customers who use both its online and physical stores spend 1.5 times more than those only shopping online,
To further cement its hold in key areas, it has just unveiled an updated flagship store with target sales of ¥10 billion.

Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Apr 25

Daily Brief Japan: Fujitsu Ltd, Gunma Bank, Nidec Corp, Jafco Co Ltd, Ono Sokki, TSE Tokyo Price Index TOPIX and more

In today’s briefing:

Fujitsu (6702) – Earnings/Guidance OK, Margins Better, But New Quiddity Buyback Data Tool
Gunma Bank (8334 JP): Daishi Hokuetsu (7327 JP) Share Exchange to Establish a Top Regional Bank
Nidec (6594) | Chasing Trends to Fiscal Discipline
Jafco Co Ltd (8595 JP): Full-year FY03/25 flash update
Ono Sokki (6858 JP): Q1 FY12/25 flash update
It Is Not a Question of Whether Investment in Growth or Shareholder Return Is Better

Fujitsu (6702) – Earnings/Guidance OK, Margins Better, But New Quiddity Buyback Data Tool

Fujitsu Earnings. Revenues +2.1%, OP +77.5%, Pretax +65.1%, Net -13.0% (basis effect from FY23 one-offs). Forecast? Revs -2.8%, OP/adj +35.8%/+17.2%, Net/adj +77.4%/+3.7%. All guided measures shy vs the Street consensus.
The company presented a progress update on its Medium-Term Management Plan. Core profits are better. Things are improving.
The company also announced a big 11-month ¥170bn buyback. Last year’s was ¥180bn (completed 24 March). Worth checking out the details (and our brand-new buyback tool)

Gunma Bank (8334 JP): Daishi Hokuetsu (7327 JP) Share Exchange to Establish a Top Regional Bank

Gunma Bank (8334 JP) and Daishi Hokuetsu Financial Group (7327 JP)/DHFG have announced an MoU to establish one of the largest regional banks in Japan by 1 April 2027.
The transaction involves delisting Gunma through a share exchange with DHFG. A definitive agreement is expected around March 2026.
The plan is long-dated. The lack of a controlling shareholder necessitates a “fair” exchange ratio. My estimated Gunma/DHFG exchange ratio range is 0.38-0.39x.

Nidec (6594) | Chasing Trends to Fiscal Discipline

By Mark Chadwick

Nidec beat Q4 expectations but offered muted FY3/26 guidance, with flat sales and modest profit growth amid macro and tariff uncertainty.
New CEO Kishida shifts focus from top-line ambition to margin discipline, targeting ¥150bn in cost cuts over three years.
Once a high-growth play, Nidec now trades at value multiples — 1.5x book — offering a more grounded path to shareholder returns.

Jafco Co Ltd (8595 JP): Full-year FY03/25 flash update

By Shared Research

Revenue increased by 21.4% YoY to JPY29.7bn, with operating profit rising 53.1% YoY to JPY12.5bn.
Capital gains reached JPY12.7bn, a 60.0% YoY increase, driven by IPO-related share sales and unlisted shares.
Total assets under management stood at JPY458.4bn, with JPY198.5bn subject to management fees as of end-March 2025.

Ono Sokki (6858 JP): Q1 FY12/25 flash update

By Shared Research

Ono Sokki’s FY12/24 sales rose 23.2% YoY, with operating profit up 266.7% YoY, despite a 12.0% YoY order decline.
Measuring Equipment segment’s operating profit dropped 74.4% YoY due to increased personnel expenses for overseas sales expansion.
Custom Order Test Equipment and Service segment’s operating profit surged 555.1% YoY, driven by increased sales and fixed cost absorption.

It Is Not a Question of Whether Investment in Growth or Shareholder Return Is Better

While the absolute amount of share repurchases has increased, many companies face challenges in using cash, given the slow growth in ROE and depth of equity capital over a decade.
While growth investment should increase corporate value, it’s important for managers to manage to earn returns commensurate with investment risk, and to return cash to shareholders without taking unnecessary risks.
The question is not whether investment in growth or shareholder return is better, but whether the company was managing its business in a shareholder-friendly manner.

Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Apr 24

Daily Brief Japan: GMO Internet, Jafco Co Ltd, Panasonic Corp, Fanuc Corp, Shimano Inc, FUJIFILM Holdings, Timee Inc, Canon Marketing Japan and more

In today’s briefing:

StubWorld: GMO Internet (4784) Will Be Squeezy. Until It’s Not.
JAFCO (8595) Good Results, Higher Div, Buyback, More Plans; Not Quite There, But Maybe Will Be Later
Solactive Global Lithium Index Rebalance: Passive Flows Next Week
Fanuc (6954) | Growth Flickers, Visibility Dims
Jafco (8595.T) Announces a Big Buyback and a Change in Business Strategy- The Market Likes It!
Shimano (7309) | Coasting, Not Sprinting
Fujifilm: Bio CDMO – A Success in the Making
Timee: Recent Setback in Share Price Offers an Attractive Entry Point
Canon Marketing Japan (8060 JP): Q1 FY12/25 flash update

StubWorld: GMO Internet (4784) Will Be Squeezy. Until It’s Not.

Negligible float, 150x+ forward earnings – yes, investors can afford NOT to have GMO Internet (4784 JP) in their portfolio.
Preceding my comments on the GMO group 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%.

JAFCO (8595) Good Results, Higher Div, Buyback, More Plans; Not Quite There, But Maybe Will Be Later

By Shifara Samsudeen, FCMA, CGMA

At noon today, Jafco Co Ltd (8595 JP) announced full year (to March 2025) results. Revenues were up 21.4% this year, OP +49.7%, and Net Income +27.8%.
The company announced a ¥5bn buyback, and also announced a new dividend policy of 6% DOE or 50% payout ratio. As it is a markets business, there is no guidance.
The stock popped significantly in the PM session, but the market zeitgeist is a tailwind. And there is supportive new news.

Solactive Global Lithium Index Rebalance: Passive Flows Next Week

By Brian Freitas

Solactive has announced the review results for the Global Lithium Index. There are no constituent changes for the index but there will be capping changes for a few stocks.
Estimated one-way turnover is 10.8% and will result in a round-trip trade of US$208m. There are some stocks with over 0.5x ADV to trade.
The index has been in a secular downtrend over the last few years and there have been big redemptions from ETFs tracking the index.

Fanuc (6954) | Growth Flickers, Visibility Dims

By Mark Chadwick

Fanuc returns to revenue growth, driven by robomachine demand in Asia, but core robot sales remain weak after last year’s EV-driven surge.
Management offered no guidance for FY3/26, citing tariff and FX uncertainty; we cut forecasts, with downside risk still looming large.
A ¥50bn buyback provides limited support, but shares may stay stuck until global capex trends and trade policy clarify.

Jafco (8595.T) Announces a Big Buyback and a Change in Business Strategy- The Market Likes It!

By Rikki Malik

Jafco divests overseas operations to focus on domestic capital markets
The company continues to focus on shareholder returns in a meaningful way
Domestic venture capital returns exceed overseas returns historically and the future looks bright

Shimano (7309) | Coasting, Not Sprinting

By Mark Chadwick

Shimano beat Q1 profit expectations but stuck to cautious full-year guidance, signalling stabilisation in bike markets rather than a real recovery.
Margins improved, inventories stabilised — but Shimano’s profitability remains well below historic highs, with recovery likely to stay slow and steady.
Strong balance sheet, resilient pricing, limited US exposure: Shimano looks a defensive bet, even if management’s guidance ends up on the optimistic side.

Fujifilm: Bio CDMO – A Success in the Making

Fujifilm announced today that the company has entered into a 10-year manufacturing supply agreement valued over US$3bn with Regeneron Pharma to provide US-based production to Regeneron’s biologic medicines.
Fujifilm’s Bio CDMO business, operating through FUJIFILM Diosynth Biotechnologies, has achieved significant success and growth, driven by a combination of strategic investments/acquisitions, with a focus on expanding its capabilities.
Bio CDMO business has achieved rapid expansion over the years, and aims to generate revenues of ¥200bn for FY03/2025 and reach ¥500bn by FY03/2028E which seems attainable to us.

Timee: Recent Setback in Share Price Offers an Attractive Entry Point

By Shifara Samsudeen, FCMA, CGMA

Timee Inc (215A JP) ’s share price has been volatile during the last few months despite the company reporting a strong set of results for 1QFY10/2025.
Timee is the market leader in Japan while Mercari Hallo is still attempting to build its business. Our analysis shows that there is further room for Timee’s earnings to expand.
Some of Japanese high-growth companies (incl. Monotaro, GMO Payment and Shift) have traded at exorbitant multiples during their high growth phase and we think Timee’s valuation multiples are justified.

Canon Marketing Japan (8060 JP): Q1 FY12/25 flash update

By Shared Research

Sales increased by 6.4% YoY, driven by strong performance in IT solutions and maintenance/operations services.
Operating profit decreased by 4.6% YoY due to increased SG&A expenses, including goodwill amortization from Primagest Inc.
FY12/25 earnings forecast projects sales of JPY680.0bn (+4.0% YoY) and operating profit of JPY56.0bn (+5.4% YoY).

Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Apr 23

Daily Brief Japan: Shibaura Electronics, IHI Corp, Sysmex Corp, TSE Tokyo Price Index TOPIX, Furukawa Co Ltd and more

In today’s briefing:

Shibaura Electronics (6957 JP): Minebea Secures Further Irrevocables as It Ponders a Revised Offer
IHI Corp (7013 JP): Global Index Inclusion in May
Sysmex Corp (6869 JP): The US Tariff Wound Would Not Be Deep Enough
The Key Is to Solve the Root Problem of Women Leaving Their Jobs Due to the Bias of Family Work
Furukawa (5715 JP) – Course-Correcting for Growth

Shibaura Electronics (6957 JP): Minebea Secures Further Irrevocables as It Ponders a Revised Offer

In response to Yageo Corporation (2327 TT)’s revised JPY5,400 offer, Shibaura Electronics (6957 JP) has asked Minebea Mitsumi (6479 JP) if it intends to revise its terms.
Minebea is reviewing its offer and has disclosed additional irrevocables from the founder’s family and MUFG. Total irrevocables represent a 15.83% ownership ratio.
On April 22, Yageo issued a public letter to change the narrative regarding the Board’s concerns. There is an increasing likelihood that Minebea will return with a revised offer.

IHI Corp (7013 JP): Global Index Inclusion in May

By Brian Freitas

IHI Corp (7013 JP) has had a monster rally over the last year with the stock price tripling over the period. That could now result in a global index inclusion.
IHI Corp (7013 JP) has outperformed its peers over the last year but still trades cheaper than the average and median of its peers on quite a few valuation metrics.
The appears to be a lot of positioning in the stock, but we see a similar pattern in its peers too. There could be some upside over the near term.

Sysmex Corp (6869 JP): The US Tariff Wound Would Not Be Deep Enough

Sysmex Corp (6869 JP) earns 26% of total revenue from Americas. During 9MFY25, revenue from Americas increased 13% YoY to ¥96B.
The U.S. President Trump has proposed 10% baseline import tariffs on medical devices. Although Trump announced a 90-day pause on most reciprocal tariffs, the respite seems to be temporary.
Sysmex is exposed to tariff for instruments only as reagents are produced locally. Instrument sales in the Americas account for 5–6% of revenue, so tariff impact would be negligible.

The Key Is to Solve the Root Problem of Women Leaving Their Jobs Due to the Bias of Family Work

In many cases, women are promoted as non-statutory executive officers, and there’re very few women in positions where they can be involved in making decisions about the company’s management policies.
The bias toward women in family work, such as childbirth and child rearing, leads to women leaving workforce, and their shorter tenure has resulted in fewer women in managerial positions.
Female executives who have been appointed after overcoming various difficulties and gaining “experience” are loss to the company, as they face the wall of homogeneity of the senior male community.

Furukawa (5715 JP) – Course-Correcting for Growth

By Astris Advisory Japan

With a 150-year track record, Furukawa operates in Machinery and Materials production.
Machinery focuses on heavy equipment for infrastructure, mining, and crushed stone, while electrolytic copper and byproducts have traditionally led Materials.
The company is undergoing a strategic shift, prioritizing higher-margin Machinery growth while significantly reducing unprofitable electrolytic copper exports.

Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Apr 22

Daily Brief Japan: GMO Internet, Sanrio, Adastria Co Ltd, Chugai Pharmaceutical, Nikkei 225, Suzuki Motor, D.Western Therapeutics Institute Inc., TSE Tokyo Price Index TOPIX and more

In today’s briefing:

GMO Internet (4784) DropDown Holdco Gone Ballistic – Squeezed on Truly Tiny Float
Sanrio (8136 JP): Global Index Inclusion in May
Adastria: Cautious on the Platform Narrative, But Optimistic on Margins and Valuation Rebound
Chugai Pharmaceutical (4519 JP): Positive Phase 3 Results Of Orforglipron Augurs Well
Nikkei Index Options Weekly (Apr 14 – 18): Vol Unwinds, Nikkei Rebounds and USD Cracks
ECM Weekly (22 Apr 2025) – Suzuki, Zenergy, Chagee, Duality, Manycore, Horizon, Giant Bio, TV Asahi
D. Western Therapeutics Institute (DWTI) 4576 JP – Full Report
The Bigger Issue than the Lack of Higher Compensation for Outside Board Directors Is…

GMO Internet (4784) DropDown Holdco Gone Ballistic – Squeezed on Truly Tiny Float

Gmo Ad Partners (4784 JP) has become GMO Internet as of 1 January 2025. On that day, it merged with the “internet infrastructure business” of GMO Internet (9449 JP).
It was a kind of reverse takeover – a backdoor listing – and it on 24-Dec-2024, it was announced GMO Internet would move from TSE Standard to TSE Prime end-Jan2025.
The stock is +300% since then. Why? A squeeze. Share count increase? 15x. Float share increase? Zero. Resulting Real World Float? 1.24% of shares out and about to shrink.

Sanrio (8136 JP): Global Index Inclusion in May

By Brian Freitas

Sanrio (8136 JP)‘s stock price dropped following the placement announcement in November. Then there was a rally in the stock amid increased volatility.
The placement resulted in an increase in free float and the move higher in the stock could lead to Sanrio (8136 JP) being added to a global index in May.
There is positioning in the stock but a lot of that appears to have been taken off in the last month. The stock could move higher depending on global cues.

Adastria: Cautious on the Platform Narrative, But Optimistic on Margins and Valuation Rebound

By Oshadhi Kumarasiri

Adastria’s “5th CHANGE” outlines a strategic pivot from specialty retail to a platform model aimed at scaling across brands, categories, and geographies while navigating domestic headwinds and evolving consumer behaviors.
While Adastria Co Ltd (2685 JP)’s narrative emphasizes transformation, actual targets for user growth and GMV expansion appear modest, suggesting limited operational changes.
Despite mixed views on the mid-term plan, we remain optimistic on Adastria. Gross margin normalization could drive meaningful OP upside, potentially surpassing mid-term plan targets.

Chugai Pharmaceutical (4519 JP): Positive Phase 3 Results Of Orforglipron Augurs Well

Eli Lilly & Co (LLY US) has recently announced positive topline Phase 3 results for orforglipron, the GLP 1 RA drug candidate they licensed from Chugai Pharma in 2018.
At the top dose, patients lost 7.3 kg of the 90.2 kg they weighed at the start of the trial, bettering Ozempic’s trial results.
Once approved and commercialized, orforglipron should provide a long-term revenue visibility for Chugai Pharmaceutical (4519 JP) through milestone and royalty receipts from Lilly.

Nikkei Index Options Weekly (Apr 14 – 18): Vol Unwinds, Nikkei Rebounds and USD Cracks

By John Ley

Nikkei rebounded and volatility eased meaningfully – implied vol giving back much of last week’s spike.
USD/JPY softened alongside a broader break in DXY, raising questions about the depth of demand for USD assets.
Option volumes dropped, and Put activity held steady with no clear directional tilt in flow.

ECM Weekly (22 Apr 2025) – Suzuki, Zenergy, Chagee, Duality, Manycore, Horizon, Giant Bio, TV Asahi

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, Duality Biotherapeutics delivered a strong listing, while Jiangsu Zenergy Battery Technologies was still holding on to its deal price.
On the placements front, we looked at number of upcoming lockup expiries.

D. Western Therapeutics Institute (DWTI) 4576 JP – Full Report

By Sessa Investment Research

SIR believes DWTI has entered an exciting new phase given significant advances in pipeline development achieved over the last 12 months.
Key advances include: 1) publishing favorable topline results of in-house H-1337 PIIb US trials (strong prospects as “first choice as a second-line Glaucoma drug”),
2) commencing jointly developed Japan PII clinical trials of regenerative medicine cell therapy DWR-2206 with ActualEyes, and successfully completing all transplants

The Bigger Issue than the Lack of Higher Compensation for Outside Board Directors Is…

It’s not desirable for shareholders to have outside directors who are comfortable and remain in office for a long period of time while they are expected to fulfill their duties.
The high demand for outside directors of the same senior generation as inside directors has led to a situation in which senior outside directors hold positions at several companies.
There are few competent young talents to take on the job of outside director among the senior, all-male, internal board directors who are under strong peer pressure.

Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Apr 21

Daily Brief Japan: Daihatsu Diesel Mfg, Shibaura Electronics, DISCO Corp, Aeon Co Ltd and more

In today’s briefing:

*NEW* USTR Section 301 Proposed Actions on China Maritime Dominance
Weekly Deals Digest (20 Apr) – Shibaura Electronics, Topcon, Jamco, TRYT, Canvest, ENN, Insignia
DISCO: Growth Is Slowing Down, the Stock Is Still Expensive
Aeon’s Plans to Absorb Aeon Mall and Aeon Delight Will Help Margin Growth

NEW USTR Section 301 Proposed Actions on China Maritime Dominance

Biden’s USTR came out with a flawed Section 301 report on Chinese maritime “dominance” in January. It is not that China shipbuilding is not dominant, but the report was flawed.
In February/March (flawed) measures were proposed. Then mostly minimally-insightful hearings were held. Then Trump came out with an Executive Order “Restoring America’s Maritime Dominance” (that requires looking back 80yrs).
Now we have new USTR Proposed Measures which water down the old ones quite considerably.

Weekly Deals Digest (20 Apr) – Shibaura Electronics, Topcon, Jamco, TRYT, Canvest, ENN, Insignia

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: China Resources Beverage (2460 HK) lock-up expiry; DN Solutions (298440 KS) and LG Electronics India (123D IN) IPOS.
Event-Driven developments: Shibaura Electronics (6957 JP), Topcon Corp (7732 JP), Jamco Corp (7408 JP), TRYT (9164 JP), Canvest Environmental Protection Group (1381 HK), ENN Energy (2688 HK).

DISCO: Growth Is Slowing Down, the Stock Is Still Expensive

By Nicolas Baratte

DISCO Mar-25 results beat Consensus by ~12%. Jun-25 guidance is very weak but DISCO always under-guides egregiously. But it’s weak.
Consensus has revised down its Jun-25 revenue forecast from 12% YoY growth to 6% but left Sept-Dec-25 unchanged at ~10% YoY growth. The odds are that Consensus is too high.
The stock is down -39% since end Dec-24 but still trading at 20x EPS in the face of downside risks to Consensus. Not appealing.

Aeon’s Plans to Absorb Aeon Mall and Aeon Delight Will Help Margin Growth

By Michael Causton

Aeon will turn Aeon Mall and its facilities management business, Aeon Delight, into subsidiaries.
The move is part of plans to rationalise and inject new momentum into its shopping building business, including new types of neighbourhood mall.
It will also use Aeon Mall’s overseas network to scout for promising tenants for its malls and GMS stores.

Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Apr 20

Daily Brief Japan: TRYT , Shibaura Electronics, Topcon Corp and more

In today’s briefing:

Tryt (9164 JP): Take Profits as Takeover Speculation Swirls
(Mostly) Asia-Pac M&A: Fengxiang, De Grey Mining, Canvest, Tsuruha/Welcia, Shibaura Electronics
Last Week in Event SPACE: Topcon, Heavy Rare Earth Elements, Wakita, Swire/Cathay, Horizon Robotics

Tryt (9164 JP): Take Profits as Takeover Speculation Swirls

TRYT (9164 JP) shares were up 38.5% over the last two days based on a report that EQT, the controlling shareholder, had made progress in identifying bidders for its stake.
The exploration of the privatisation process is unsurprising, as Tryt was pre-rumour trading 69% below its JPY1,200 IPO price.
The upside is limited, as the last close already reflects a significant takeover premium, and a binding proposal that satisfies EQT’s price aspirations will be challenging.

(Mostly) Asia-Pac M&A: Fengxiang, De Grey Mining, Canvest, Tsuruha/Welcia, Shibaura Electronics

I tally 51 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma.
One new deal discussed this week: Shandong Fengxiang (9977 HK)‘s Merger by Absorption.
Key updates/news took place on De Grey Mining (DEG AU), Canvest Environmental Protection Group (1381 HK),Tsuruha (3391 JP)/Welcia (3141 JP), Shibaura Electronics (6957 JP), and PEC Ltd. (PEC SP).

Last Week in Event SPACE: Topcon, Heavy Rare Earth Elements, Wakita, Swire/Cathay, Horizon Robotics

Value Act, as activist, believes the KKR’s Topcon Corp (7732 JP) is not being done at the right price. But Value Act will now tender shares and invest in Bidco.
Lynas Corp Ltd (LYC AU)and Iluka Resources (ILU AU) are the only Australian companies with confirmed (or near-term) refining specific heavy rare earth elements as China restricts exports.
StraCap has been tilting at the Wakita (8125 JP) for years. It hasn’t made headway. The only way StraCap will get its measures over the line is by soliciting retail.

Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Apr 19

Daily Brief Japan: TSE Tokyo Price Index TOPIX, Mani Inc and more

In today’s briefing:

The Key to Japanese Equity Outperformance Is a Step Beyond Shareholder Returns
Mani (7730 JP): Guidance Reiterated; Dental Loosing Shine And Dented Margins Remain Concerns

The Key to Japanese Equity Outperformance Is a Step Beyond Shareholder Returns

A benefit of inflation was expected to shift from management that accumulates cash to management that proactively uses cash. However, it’s been used for shareholder returns but less for apex.
Hitachi is one of few companies that manage business in disciplined manner and execute the necessary growth investments. This is more result of overseas investor engagement than corporate governance reform.
The key to Japanese equities outperformance is whether management can change to mindset that investors want to see “positive investment and the ability to implement measures to expand corporate value.”

Mani (7730 JP): Guidance Reiterated; Dental Loosing Shine And Dented Margins Remain Concerns

Mani Inc (7730 JP) H1FY25 revenue rose 6.5% YoY, mainly driven by surgical segment, eyeless needles segment, while margins remained under pressure.
Despite the underperformance of dental segment, management reiterated FY25 guidance. Expecting Yen appreciation against the USD, the company expects just mid-single-digit sales and operating income growth for FY25.
Mani shares plunged 5% since it published its H1 results. Investors should avoid Mani due to its uncertain revenue outlook and deteriorating profitability in short-term.

Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Apr 18

Daily Brief Japan: Shibaura Electronics, Topcon Corp, TRYT , Ryobi Ltd and more

In today’s briefing:

Yageo Bigly Overbids Minebea (+20%) For Shibaura Elec (6957) At ¥5400
[Japan Activism] – ValueAct Agrees to Tender to KKR Topcon (7732) Tender and Join As Buyer
Shibaura Electronics (6957 JP): No Messing Around as Yageo (2327 TT) Returns with a JPY5,400 Offer
TRYT (9164) – Limit Up On Report of Round 2 Bidding; A Growth Multiple Gets You a High Price
Ryobi (5851 JP) – OP Recovery Expected in FY12/25

Yageo Bigly Overbids Minebea (+20%) For Shibaura Elec (6957) At ¥5400

In February Yageo Corporation (2327 TT) made an unsolicited bid for Shibaura Electronics (6957 JP) at ¥4,300/share after getting the cold shoulder for months.
Minebea Mitsumi (6479 JP) was asked to bid, and they did a week ago, bidding ¥4,500/share. Yesterday the Shibaura CEO was in an article saying an overbid would be considered.
Mid-Day, I boomeranged my piece, saying I thought Yageo would overbid. Today after the close, Yageo has overbid with a whopping ¥5,400/share bid, with unchanged start date of 7 May.

[Japan Activism] – ValueAct Agrees to Tender to KKR Topcon (7732) Tender and Join As Buyer

Last night, Topcon Corp (7732 JP) announced that KKR had agreed a deal with ValueAct Capital who owns 14.62% of Topcon to have VAC tender shares and invest in Bidco.
Topcon’s Special Committee saw nothing wrong with this in terms of fairness. I think that argument needs to be investigated at a broader level.
If Bidder wants 50.1% control and expects passive to agree, and Bidder gets 50.1% to join Bidco at terms, obviously, majority of minority disappears. This is an unintended loophole.

Shibaura Electronics (6957 JP): No Messing Around as Yageo (2327 TT) Returns with a JPY5,400 Offer

Yageo Corporation (2327 TT) has revised its hostile preconditional tender offer for Shibaura Electronics (6957 JP) to JPY5,400, representing a 20.0% premium to Minebea Mitsumi (6479 JP)’s JPY4,500 offer.
All the other terms remain unchanged. In response to the revised Yageo offer, the Board will commence a sincere review to determine if the Yageo offer will enhance corporate value.
There is a 50/50 chance that Minebea walks or revises its offer. Yageo’s revised offer is marginally above the midpoint of Minebea IFA’s DCF range, potentially justifying a higher offer.

TRYT (9164) – Limit Up On Report of Round 2 Bidding; A Growth Multiple Gets You a High Price