Japan

In today’s briefing:

Merger Arb Mondays (07 Apr) – Seven & I, Makino, HKBN, OneConnect, Dada, Insignia, Domain, Dropsuite
Komeri (8218) Rare, Tariff-Proof Domestic Growth Idea at a Steep Discount
Nikkei Index Options Weekly Mar 31 – Apr 04): Volatility Elevated, Put Demand Surges
Political Problems Are Preventing a Solution to the Problem of Declining Birthrates
Zuiko Corp (6279 JP): Full-year FY02/25 flash update

Merger Arb Mondays (07 Apr) – Seven & I, Makino, HKBN, OneConnect, Dada, Insignia, Domain, Dropsuite

We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads: Seven & I Holdings (3382 JP), Insignia Financial (IFL AU), ENN Energy (2688 HK), OneConnect Financial Technology (OCFT US), Smart Share Global (EM US), Soundwill Holdings (878 HK).
Lowest spreads: Sinarmas Land (SML SP), Makino Milling Machine Co (6135 JP), Millennium & Copthorne Hotels Nz (MCK NZ), Shibaura Electronics (6957 JP), Tonami Holdings (9070 JP).

Komeri (8218) Rare, Tariff-Proof Domestic Growth Idea at a Steep Discount

By Michael Allen

Komeri plans to expand their addressable market by 75% and to double their current market share to 21%.
Same store sales of the company’s Pro Stores rose an average of more than 7% in the past 8 quarters, and selling area is expanding at more than 25% annually.
Yet Komeri trades at just 11x earnings, compared to about 16x for Topix and 18x for the median retail stock.

Nikkei Index Options Weekly Mar 31 – Apr 04): Volatility Elevated, Put Demand Surges

By John Ley

Volatility percentiles are flashing, and we explore what recent price action could signal for the week ahead.
Put activity surged, with especially heavy interest on Thursday and Friday and concentrated in short dates expiries.
We highlight the potential for equity market volatility to spill over into currency markets.

Political Problems Are Preventing a Solution to the Problem of Declining Birthrates

Eliminating income limits on child allowances seems to be the right policy because the wealthier families have more children. However, it lacks viewpoints toward the growing number of unmarried people.
It seems effective to solve the problem of the growing income disparity and the child-rearing/housework being disproportionately placed on women, and taking appropriate measures for those who desire diverse lifestyles.
Policies don’t reach the ever-increasing number of singles. Rather than solutions to declining birthrate, priority is given to policies that distribute money to those who are more certain to vote.

Zuiko Corp (6279 JP): Full-year FY02/25 flash update

FY02/25 revenue was JPY20.0bn (-8.2% YoY), with a net loss of JPY788mn, impacted by declining sales in Japan and China.
FY02/26 revenue is projected at JPY22.0bn (+10.3% YoY), with expected operating profit of JPY1.0bn and EPS of JPY31.0.
ZUIKO’s medium-term plan targets FY02/28 revenue of JPY30bn+, with JPY8.0bn from new businesses, and OPM of 8.1%.

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Apr 06

Daily Brief Japan: Makino Milling Machine Co, Topcon Corp and more

In today’s briefing:

Last Week in Event SPACE: Makino, ENN Energy, Trump Tariffs, HKBN
(Mostly) Asia-Pac M&A: Topcon, Jinke Smart Services, Dropsuite, Domain, Jamco, Shin Kong, Dada Nexus

Last Week in Event SPACE: Makino, ENN Energy, Trump Tariffs, HKBN

At a zero net debt zero net cash (securities liquidated) Adjusted Price/Earnings Ratio of 11.3x expected Net Income, the multiple offered Makino Milling Machine (6135 JP) is not a knock-out.
ENN Energy (2688 HK) investors hoping for a clean (er) exit, or where the back-end terms were clearly defined, will be disappointed. And minorities are active in this name. Avoid
New Trump Tariffs are not based on any actual tariffs, or non-tariff measures. The simple/explicit assumption is that if you run a trade surplus with the US, you are cheating.

(Mostly) Asia-Pac M&A: Topcon, Jinke Smart Services, Dropsuite, Domain, Jamco, Shin Kong, Dada Nexus

I tally 54 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma.
Two news new deals discussed this week: Reject Shop (TRS AU) and Topcon Corp (7732 JP). Jinke Smart Services (9666 HK) also suspended pursuant to the Takeovers Code.
Key updates/news took place on Dropsuite (DSE AU), AVJennings Ltd (AVJ AU), Domain Holdings (DHG AU), Jamco (7408 JP), Shin Kong Financial Holding (2888 TT), and Dada Nexus (DADA US).

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Apr 05

Daily Brief Japan: Makino Milling Machine Co, Mitsubishi Logisnext Co., Ltd., Paramount Bed Holdings Co Lt, TSE Tokyo Price Index TOPIX, Carta Holdings, Inc., Onward Holdings and more

In today’s briefing:

Nidec Launches on Makino Milling (6135) – Others Presumably Wait In the Wings
Mitsubishi Logisnext (7105) – Worth Buying The Dip On Likely Sale
Paramount Bed Holdings (7817 JP): Guidance Reaffirmed, But Sluggishness To Stay Amid Falling Margins
It’s Not a Lack of Analyst Coverage that Is Causing the Lack of Trading…..
Carta Holdings (3688 JP) – A Year Focused on Strengthening Organizational Capabilities
Onward Holdings (8016 JP): Full-year FY02/25 flash update

Nidec Launches on Makino Milling (6135) – Others Presumably Wait In the Wings

Nidec Corp (6594 JP) bid ¥11,000 for Makino Milling Machine Co (6135 JP) in December, saying it expected to launch on 4-April. It launched its ¥11,000 bid on 4-April.
A Nikkei article in March suggested Makino had found multiple competing bidders, some who had put in “legally binding bids.” No news on those yet, but we have a month.
Earnings are 9-May. Strategy on timing for Makino differs according to its desired outcome. It has to opine on Nidec’s bid by about 18 April. Be long. Carry .

Mitsubishi Logisnext (7105) – Worth Buying The Dip On Likely Sale

There was a Nikkei article in December about the Mitsubishi Heavy Industries (7011 JP) selling its interests in Mitsubishi Logisnext Co., Ltd. (7105 JP).
The stock popped. Then popped some more. It was not expensive yet, but no longer dirt cheap. Now the stock is falling as Trump Tariffs threaten to throttle exports.
The reasons why this takeout price could be “high” are unchanged. Tariffs meant to drive US-manufacturing don’t reduce need for forklifts. Logisnext is not badly placed.

Paramount Bed Holdings (7817 JP): Guidance Reaffirmed, But Sluggishness To Stay Amid Falling Margins

By Tina Banerjee

During 9MFY25, Paramount Bed Holdings Co Lt (7817 JP) reported 3% YoY revenue growth to ¥75B, mainly driven by the nursing care businesses.
Due to higher SG&A expenses, operating profit decreased 15% YoY to ¥7.2B and net profit was down 11% YoY to ¥5.9B.
Paramount Bed has reiterated FY25 guidance, which calls for 2% YoY revenue growth, while higher SG&A is expected to erode operating profit by almost 6% YoY.

It’s Not a Lack of Analyst Coverage that Is Causing the Lack of Trading…..

70% of Tokyo market is traded by overseas investors, so even companies with smaller market capitalization need to catch the attention of overseas investors by increasing their return on capital.
It is possible that the difference in stock valuations over the past few years has been due to a greater difference in return on capital between large-cap and small-cap stocks.
Skillful IR alone is not enough to raise stock price valuations. The IR department must have management who can execute management strategies and personnel who can formulate persuasive plans.

Carta Holdings (3688 JP) – A Year Focused on Strengthening Organizational Capabilities

In FY2024/12, CARTA HOLDINGS reported operating profit of JPY 2,139 mn (+64.4% YoY).
Given the achievement of securing an operating profit of JPY 4,973 mn in FY2021/12, the absolute level remains insufficient.
However, amid a challenging business environment where the transaction volume of high-margin reservation-based ads declined YoY for 11 consecutive quarters up to the April-June 2024 period, the Company achieved a V-shaped recovery as a result of structural reforms, including the withdrawal from unprofitable businesses and the implementation of a voluntary retirement program.

Onward Holdings (8016 JP): Full-year FY02/25 flash update

Onward’s FY02/25 sales reached JPY208.4bn (+9.9% YoY), with a net income of JPY8.5bn (+28.8% YoY).
FY02/26 projections include sales of JPY230bn (+10.4% YoY) and operating profit growth of 13.3% YoY to JPY11.5bn.
The company plans to introduce an interim dividend system, targeting a total annual dividend of JPY30 per share.

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Apr 04

Daily Brief Japan: Makino Milling Machine Co, Nikkei 225, TSE Tokyo Price Index TOPIX, D.Western Therapeutics Institute Inc. and more

In today’s briefing:

Makino Milling Machine (6135 JP): Nidec Launches Its Offer
Nikkei 225 (NKY INDEX) Drops Amid US Tariffs: Implied Volatility Hits Extreme Levels
Now Is the Time to Turn the Slowdown in Profit Growth into an Opportunity
Chart of the Day: Implied Volatility Soars Globally, US and Bitcoin Hit Hardest
D. Western Therapeutics Institute (DWTI) (4576 JP) – Q4 Follow-Up

Makino Milling Machine (6135 JP): Nidec Launches Its Offer

Nidec Corp (6594 JP) has launched its offer for Makino Milling Machine Co (6135 JP) at an unchanged JPY11,000. The offer is open from 4 April to 21 May.
The offer was launched despite securing all regulatory approvals and the Board’s postponement request. The launch could also be an attempt to thwart a competing proposal.
Despite the launch, Nidec’s offer at current terms has a low chance of success, necessitating revised terms. There remains a medium-to-high probability of a competing proposal.

Nikkei 225 (NKY INDEX) Drops Amid US Tariffs: Implied Volatility Hits Extreme Levels

By Gaudenz Schneider

Market Reaction: The announcement of US reciprocal tariffs led to significantly lower market open throughout Asia-Pacific. In the US, S&P 500 futures dropped -3.5%, with the VIX spiking to 23.45.
Impact on Japan: Japan faces a 24% tariff, with specific sectors like automobiles hit with 25%. This led to a 4.5% drop in the Nikkei 225, stabilizing at 34,600 (-3.2%).
Volatility Increase: The Nikkei 225 VIX index jumped from previous levels in the low 20’s to rise above 38 before retreating to 32.8, indicating the 99th percentile of implied volatility.

Now Is the Time to Turn the Slowdown in Profit Growth into an Opportunity

The profit outlook for many Japanese companies may not be good enough for overseas investors, who are selecting the best investments from among stocks around the world.
In FY2025, both sales and recurring profit are expected to slow in the manufacturing sector. This casts a shadow over TSE stock prices, which are dominated by manufacturing companies.
Companies whose corporate performance are at a standstill has good opportunity to show investors how it will use the proceeds from the sale of cross-held shares to expand corporate value.

Chart of the Day: Implied Volatility Soars Globally, US and Bitcoin Hit Hardest

By Gaudenz Schneider

Asia-Pac Performance: The Indian market bucketed the down trend with the Nifty 50 declining only 0.35% with stable implied volatility. The Nikkei 225, on the other hand,dropped 2.8%.
US and European Decline: The US market saw the largest decline, with implied volatility rising by 8%. European indices showed mixed results, with the EuroStoxx 50 reacting strongly.
Gold vs. Bitcoin: Gold (GLD US ETF) proved to be a better store of value, while Bitcoin joined the US indices in higher volatility.

D. Western Therapeutics Institute (DWTI) (4576 JP) – Q4 Follow-Up

SIR believes DWTI has entered an exciting new phase given significant advances in pipeline development achieved over the last 12 months.
Key advances include: publishing favorable topline results of in-house H-1337 PIIb US trials (strong prospects as “first choice as a second-line Glaucoma drug”), commencing jointly developed Japan PII clinical trials of regenerative medicine cell therapy DWR-2206 with ActualEyes, and successfully completing all transplants, completion of dosing to subjects in global Phase III clinical trials of FECD treatment K-321 being developed by licensee Kowa, and obtaining China approval for DW-1002 by licensee DORC, among others.
Potential for earnings to turn profitable over the next several years, transitioning from the growth investment phase to the recovery phase, suggests to us share price risk is likely weighted to the upside going forward.

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Apr 03

Daily Brief Japan: Kokusai Electric , MS&AD Insurance, Sumitomo Mitsui Construction, Tokyo Tsushin Inc, COPRO-HOLDINGS Co Ltd, Morito Co Ltd and more

In today’s briefing:

Nikkei 225 Sep25 Rebal: One ADD, One DELETE Still Probable Unless Kokusai Elec (6525) Offering/Split
Japan CorpGovReports: TSE “Mgmt Conscious Blah Blah” (Apr25), AGAIN Read TSE Update Doc 3
Sumi Mitsui Construction (1821) | Playing Both Sides
Tokyo Communications Group (7359 JP) – Working to Strengthen the Financial Base
Copro-Holdings (7059 JP) – Further Business Growth in FY2026/3…
Morito (9837 JP) – Operating Profit for FY25/11 Is Recording a New High…

Nikkei 225 Sep25 Rebal: One ADD, One DELETE Still Probable Unless Kokusai Elec (6525) Offering/Split

The March 2025 Nikkei 225 review came out with a sparse set of changes. That gives us hints for the September 2025 review.
Kokusai did NOT get added, waiting for a split, an offering, or time to pass. Only one sector change was made. So we see One ADD and One DELETE.
The lack of effort to address sector imbalances within the rules suggests the rules are not as hard as people thought. Intra-review changes could be more interesting in years ahead.

Japan CorpGovReports: TSE “Mgmt Conscious Blah Blah” (Apr25), AGAIN Read TSE Update Doc 3

TSE-Listed companies are asked to file “Management Conscious of Capital Cost/Stock Price” awareness reports/policies. Many have. Some are still working on it. And policies change, and CGR reports are updated.
611 new CGRs filed since 1-Mar-25. Our tools show every report, links to every document, and a diff file tool. Input a name, see the changes in the reports.
The JPX was curiously quiet itself as far as I can tell. No new governance reports, documents, etc, though there is a small consultation this month on the JPXNikkei400.

Sumi Mitsui Construction (1821) | Playing Both Sides

By Mark Chadwick

Murakami-Led funds have quietly amassed a 26.97% stake in Sumi Mitsui Construction while also acquiring a 5.01% stake in its subsidiary, Sumiken.
With the Tokyo Stock Exchange clamping down on parent-child listings, Sumiken’s future as a public company looks increasingly uncertain, raising buyout speculation.
City Index’s small stake in Sumiken may serve as a defensive move to block rival bids, reinforcing its influence over SMC’s long-term strategy.

Tokyo Communications Group (7359 JP) – Working to Strengthen the Financial Base

Tokyo Communications Group’s (hereinafter “the Company”) core businesses currently include its Media business, where it plans and develops free game apps for smartphones and uses a portion of the app’s screen space to generate advertising revenue, and its Platform business, where it operates a consultation service based on a pay- as-you-go model
The Platform business is generally stable, while the Media business is inherently highly profitable thanks to its low cost, but prone to fluctuations depending on the number of hit titles.
Management Decision: After reaching highs in FY2021/12, the Company lowered its earnings forecasts and suffered operating losses for three consecutive years from FY2022/12 to FY2024/12.

Copro-Holdings (7059 JP) – Further Business Growth in FY2026/3…

Q3 FY2025/3 Earnings result summary: COPRO-HOLDINGS (hereafter the Company) key consolidated figures increased sharply, including net sales of JPY 22,025 mn (+25.9% YoY), operating profit of JPY 2,148 mn (+52.8% YoY), Non-GAAP operating profit of JPY 2,481 mn (+54.0% YoY), ordinary profit of JPY 2,162 mn (+46.0% YoY), and profit attributable to owners of parent (hereafter, net profit) of JPY 1,374 mn (+46.7% YoY).
Amid continued strong demand for temporary staffing, the Group’s overall technician headcount rose substantially by 26.3% YoY to 4,684, as the Company stepped up its in-house low-cost recruitment program efforts and operations, which in turn boosted sales and profits significantly.
FY2025/3 Earnings Forecast: The Company’s full-year consolidated earnings forecasts for FY2025/3 are as follows: net sales of JPY30,000 mn(+24.5% YoY), operating profit of JPY 2,700 mn (+26.1% YoY), Non-GAAP operating profit of JPY 3,162 mn(+29.7%YoY), ordinary profit of JPY 2,714 mn (+22.7% YoY), and net profit of JPY 1,755 mn (+19.9% YoY).

Morito (9837 JP) – Operating Profit for FY25/11 Is Recording a New High…

For FY2024/11, MORITO (hereafter, the Company) reported net sales of JPY 48,537 mn (+0.0% YoY), operating profit of JPY 2,868 mn (+16.4% YoY), ordinary profit of JPY 3,003 mn (+8.4% YoY), and profit attributable to owners of parent (hereafter, net profit) of JPY 2,572 mn (+16.0% YoY).
Net sales rose slightly, but gross profit margin grew to 29.1%, marking record highs for net sales, operating profit, and ordinary profit.
For FY2025/11, Morito projects net sales of JPY 53,000 mn (+9.2% YoY), operating profit of JPY 3,100 mn (+8.1% YoY), ordinary profit of JPY 3,200 mn (+6.5% YoY), and net profit of JPY 2,700 mn (+5.0% YoY).

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Apr 02

Daily Brief Japan: T&D Holdings, Oisix ra daichi and more

In today’s briefing:

T&D Holdings (8795) – A Really Good Look (Divs Up, Big Buyback, Good Historical Stats)
Oisix ra daichi (3182 JP): Q3 FY03/25 flash update

T&D Holdings (8795) – A Really Good Look (Divs Up, Big Buyback, Good Historical Stats)

Yesterday, post-close, T&D Holdings (8795 JP) announced ¥40 for 31-Mar-25 FY-end dividend (¥80/yr) and ¥120/share/year in the year to March 2026 on a higher planned payout ratio.
The company also announced guidance for Adjusted Profit for 2025 at ¥130bn (up), and guidance for March 2026 at ¥140bn (lower growth than this past year).
They announced the current ¥50bn buyback was 87.5% complete (they have until 13 May to complete) and a new buyback starting 19 May to spend up to ¥100bn over 10.5mos.

Oisix ra daichi (3182 JP): Q3 FY03/25 flash update

In January 2024, SHiDAX Corporation was consolidated as a subsidiary, boosting sales and EBITDA in Q4 FY03/24.
Cumulative Q3 FY03/25 progress rates: 75.9% sales, 93.7% EBITDA, 84.4% operating profit, 110.5% net income.
B2C Subscription sales decreased YoY, but segment profit increased due to higher ARPU and cost-efficient acquisitions.

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Apr 01

Daily Brief Japan: Fast Retailing, Toyota Motor, Mixi Inc, Topcon Corp, Asahi Intecc and more

In today’s briefing:

Fast Retailing (9983) | Buying Opportunity Ahead of Q2 Results
The Toyota Way Is Not to Rush, but to Gain a Foothold and Proceed with Caution
MIXI Inc. (2121 JP) – A Potentially Game-Changing Deal
(Mostly) Asia M&A, Mar 2025 Wrap: ENN Energy, Gold Road, Spartan, Aeon Delight, Sinarmas, Topcon
Asahi Intecc (7747 JP): Softer H2 Expected; Positive Long-Term Outlook Amid Tariff Noises

Fast Retailing (9983) | Buying Opportunity Ahead of Q2 Results

By Mark Chadwick

Fast Retailing (9983 JP) is set to report its second-quarter results on April 10, and we see an opportunity to buy ahead of a strong earnings release
We expect Fast Retailing to post Q2 sales of ¥905bn (+15% YoY), above consensus estimates of ¥881bn. EBIT projected at ¥133bn (+21% YoY), ahead of street expectations of ¥125bn.
Domestic Uniqlo monthly sales and quarterly results from global peers suggest strong sales momentum.

The Toyota Way Is Not to Rush, but to Gain a Foothold and Proceed with Caution

It’s unlikely that the transition to ‘company with audit committee’ will enhance the supervisory function, but it’s likely to speed up the decision-making process by delegating authority to executive directors.
Instead of achieving 30% female board member and moving to Company with US-type 3 Committees at once, Toyota will implement Toyota’s way firmly with BOD that is half independent directors.
The only way for Toyota, which faces several governance challenges, to uphold tradition of Toyoda family being at the top of management is to make the returns expected by investors.

MIXI Inc. (2121 JP) – A Potentially Game-Changing Deal

By Astris Advisory Japan

MIXI has announced an all-cash deal worth ¥35.2bn for PointsBet Holdings (PBH), an Australian sports and racing online betting company operating in Australia and Canada.
The deal is due to close in mid-June 2025. We view this transaction as aligned with MIXI’s strategies of business diversification and overseas expansion, leveraging the expertise gained from TIPSTAR in Japan’s keirin and auto-race betting businesses to enter the Australian market, thereby accelerating the growth of both TIPSTAR and PointsBet.
MIXI is demonstrating a positive and active allocation of its capital, with a high intent to accelerate the development of its Sports business and make it a key earnings pillar.

(Mostly) Asia M&A, Mar 2025 Wrap: ENN Energy, Gold Road, Spartan, Aeon Delight, Sinarmas, Topcon

For the month of March 2025, 13 new transactions (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$14bn.
The average premium for the new transactions announced (or first discussed) in March was ~53%, with a year-to-date average also of 55%.
The average premiums for transactions in 2024 (129 transactions), (2023 (117), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) were 43%, 39%, 41%, 33%, 31%, and 31% .

Asahi Intecc (7747 JP): Softer H2 Expected; Positive Long-Term Outlook Amid Tariff Noises

By Tina Banerjee

Asahi Intecc (7747 JP) announced double-digit growth across all the key parameters in H1FY25. Market share expansion of medical division and favorable Fx drove growth.
Reiteration of FY25 guidance implies a softer H2 performance. In H2FY25, revenue is expected to increase 4% YoY, while both operating and net profit are likely to decline.
The U.S. contributes ~20% of medical division’s revenue of Asahi Intecc, which is lower than other large Japanese medtech companies. This should limit tariff exposure.

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Mar 31

Daily Brief Japan: Topcon Corp, BayCurrent Consulting , Seven & I Holdings, Nikkei 225, J Front Retailing and more

In today’s briefing:

[Japan Activism] – KKR and JIC Buy Out Topcon (7732 JP) At ¥3,300/Share
Nikkei 225 Mar25 Rebal – A Big Buy With Buying Shadow, A Bigger Sell, And $2bn of Funding Flows
Weekly Deals Digest (30 Mar) – Seven & I, Topcon, ENN Energy, Jinke Smart, Sinarmas Land, Gold Road
Nikkei Index Options Weekly (Mar 24 – 28): Weak Finish Despite USD/JPY Strength
J Front Diversifies to Generate More Income

[Japan Activism] – KKR and JIC Buy Out Topcon (7732 JP) At ¥3,300/Share

The difference between an LBO (Leveraged Buy Out) and an MBO (Management Buy Out) is that an MBO is usually just an LBO where the buyers don’t replace the CEO.
After 4+mos of speculation/noise since a Bloomberg article said Topcon was weighing takeover bids, we have a deal. KKR and JIC will buy out Topcon in an “MBO” at ¥3,300/share.
Unusually, the lower limit is 50.1%. This is an OK exit for the “Bad Cops” but not a great one. It should be higher. Start delayed for 4 months.

Nikkei 225 Mar25 Rebal – A Big Buy With Buying Shadow, A Bigger Sell, And $2bn of Funding Flows

The Nikkei 225 March 2025 rebalance is today. The ADD is big, with more to buy later. The SELL is a really big sell in terms of float.
The Sell, Mitsubishi Logistics (9301 JP), means Max Real World Float doubles. It’s like a huge offering, with warning.
There’s a big cap trade on Fast Retailing (9983 JP) where timing is not on its side, leaving US$2bn to buy in funding. 25 names at 0.4x ADV to buy.

Weekly Deals Digest (30 Mar) – Seven & I, Topcon, ENN Energy, Jinke Smart, Sinarmas Land, Gold Road

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: DN Solutions (298440 KS) seeks to raise US$1.1 billion in a KRX IPO.
Event-Driven developments: Seven & I Holdings (3382 JP), Topcon Corp (7732 JP), ENN Energy (2688 HK), Jinke Smart Services (9666 HK), Sinarmas Land (SML SP), Gold Road Resources (GOR AU).

Nikkei Index Options Weekly (Mar 24 – 28): Weak Finish Despite USD/JPY Strength

By John Ley

A weekly recap of volatility and price metrics, covering option volumes, volatility trends, the spot/implied relationship, and open interest statistics.
USD/JPY and Nikkei moved in opposite directions, with the index underperforming its historical relationship to FX.
Options volume increased throughout the week, peaking on Friday’s move lower.

J Front Diversifies to Generate More Income

By Michael Causton

J Front has been pushing ahead with new ways to get younger (and richer) customers into its stores.
It recently opened a high end art floor at Matsuzakaya Nagoya, continues to expand its fashion subscription business, and will shortly open the first joint store with Komehyo.
It is also investing heavily in real estate in key cities as a third major platform to its business.

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Mar 30

Daily Brief Japan: Topcon Corp, Shinko Electric Industries, Seven & I Holdings, Kawasaki Heavy Industries, TSE Tokyo Price Index TOPIX and more

In today’s briefing:

Topcon (7732 JP): KKR/JICC-Sponsored Preconditional MBO, with Caveats
(Mostly) Asia-Pac M&A: Gold Fields, Sinarmas Land, Shinko Electric, Domain, Japfa, Tsuruha/Welcia
Last Week in Event SPACE: Seven & I, ENN Energy, Sun Corp, Great Eastern Holdings
Quiddity JPX-Nikkei 400 Rebal 2025: End-Mar 2025 Ranks
Aiming for REITs with Lower Downside Risk and Expectations of Higher Shareholder Returns?

Topcon (7732 JP): KKR/JICC-Sponsored Preconditional MBO, with Caveats

Topcon Corp (7732 JP) recommended a KKR/JICC-sponsored preconditional MBO at JPY3,300, representing an 87.9% premium to the undisturbed price and a 5.4% premium to the last close.
The offer is preconditional on regulatory approvals and is scheduled to start at the end of July. The offer is attractive and represents an all-time high.
The offer comes with caveats: the Board recommendation is not unanimous, the lower limit is set below the two-thirds threshold, and KKR offered a higher price during the discussions.

(Mostly) Asia-Pac M&A: Gold Fields, Sinarmas Land, Shinko Electric, Domain, Japfa, Tsuruha/Welcia

I tally 55 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma.
Three news new deals discussed this week: Gold Road Resources (GOR AU),ENN Energy (2688 HK), and Sinarmas Land (SML SP).
Key updates/news took place on: Shinko Electric Industries (6967 JP), Domain Holdings (DHG AU),Japfa Ltd (JAP SP), Paragon REIT (PGNREIT SP), and Tsuruha Holdings (3391 JP)/Welcia Holdings (3141 JP).

Last Week in Event SPACE: Seven & I, ENN Energy, Sun Corp, Great Eastern Holdings

If you don’t think Seven & I (3382 JP)‘s Standalone Plan has legs to go north of here, or ACT gets its act together, then you should sell into strength.
ENN Energy (2688 HK)‘s cash and scrip (into a unlisted H-share-equivalent entity) Offer was not what the doctor ordered.
Sun Corp (6736 JP) is cheap to its holding in Cellebrite DI (CLBT US). How cheap depends on the form and structure of its eventual exit.

Quiddity JPX-Nikkei 400 Rebal 2025: End-Mar 2025 Ranks

By Janaghan Jeyakumar, CFA

JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted capped index composed of 400 constituents.
The annual index review takes place in August every year. We look at the latest rankings of potential ADDs/DELs every month.
Below is a look at the rankings of potential ADDs/DELs for the JPX-Nikkei 400 August 2025 rebalance based on trading data as of end-March 2025.

Aiming for REITs with Lower Downside Risk and Expectations of Higher Shareholder Returns?

REITs, whose main players are regional banks that invest as a bond alternative, tend to stop their market decline when the spread with JGB yields approaches 400 basis points.
While there is certainly room for REITs to strengthen shareholder returns, the possibility that domestic investors may want stable dividends cannot be denied.
Other activist investors are watching with interest to see if the shareholder activism approach works in REITs as well, but the main battleground is still listed equities.

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Mar 29

Daily Brief Japan: Daihatsu Diesel Mfg, Cyberdyne Inc, Pia Corp and more

In today’s briefing:

Daihatsu Diesel (6023) – Is Not Directly Auto-Tariff-Related
Cyberdyne (7779 JP) – Renewed Efforts to Drive Profitability
Pia Corp (4337 JP): Coverage Initiation

Daihatsu Diesel (6023) – Is Not Directly Auto-Tariff-Related

Daihatsu Diesel Mfg (6023 JP) is down sharply today – much more than indices – as autos/tech fall on US auto tariffs. There may be some GPIF unwinds as well.
A reminder: Despite the name, Daihatsu Diesel is not an auto name, is growing, has a big order book, and minimal direct exposure to the US.
The Tender settles today. The 8% overhang from Tendered-But-Unsold Shares is an opportunity, not a burden, at 7.2x ex-cash PER.

Cyberdyne (7779 JP) – Renewed Efforts to Drive Profitability

By Astris Advisory Japan

Cost-saving initiatives and divestment – Q1-3 FY3/25 results indicated continued traction for Treatment service in the Americas with 8.6% sales growth, but Product rental sales grew 0.6% YoY (-2.4% YoY under constant currency).
Operating losses are narrowing YoY, with the positive impact from cost reduction initiatives at Head Office costs as well as R&D.
We view the announcement to divest the 63.6%-owned subsidiary LeyLine GmbH as a positive surprise, as this will assist in narrowing operating losses further YoY into FY3/26.

Pia Corp (4337 JP): Coverage Initiation