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
- 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
- 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
- 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
- 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
- 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
- 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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