Daily Brief Japan: Kadokawa, Shimano Inc, Beenos Inc, Nextage Co Ltd, TSE Tokyo Price Index TOPIX, Iino Kaiun Kaisha, SGX Rubber Future TSR20, ODK Solutions and more

• Today, Kadokawa (9468 JP) announced it would sell ¥50bn of shares to Sony (6758 JP) in a 3rd Party Allotment to cement a Strategic/Capital Alliance. Sony will own 10% at ¥4,146/share.
• 40% of proceeds is to “create and develop new IP”, 60% is to “enhance global IP distribution”; both over 5yrs. Given ¥108bn of net cash/securities, this is a garbage reason. 
• Kadokawa shares have gained 44% in a month since Reuters carried an “Exclusive” article saying Sony was in talks to acquire Kadokawa. This is defensive entrenchment. The result will disappoint.

• Shimano, the Japanese maker of bicycle components and fishing equipment, is in need of a strategic gear change
• A significant -25% decline in FY23 net sales highlights Shimano’s struggles. Revenues dropped a further -11% in the first nine months of 2024
• For investors seeking opportunity at the bottom of the cycle, Shimano presents a compelling case. The stock is trading at 2.3x book value

• Early today, the Nikkei had an article saying LY (4689 JP) would launch a takeover of Beenos Inc (3328 JP). The stock went limit up. Shorts are many times ADV. 
• Post-Close, we get a deal much as implied by the Nikkei article. It seems light to me but the top three holders have agreed to the deal.
• Regulatory will take a couple of months. This will likely fall tomorrow. If you are a long-only fund holder, think about the alternatives (read the conclusions here).

• Nextage is a prominent player in Japan’s fragmented used car dealer market
• The company is looking to grow through suburban superstores, similar to CarMax in the US
• Despite recent scandal involving competitors, Nextage is positioned for growth with potential for expansion in Japan’s used vehicle market

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• For investors, it is a step forward to lower the hurdles for collaborative engagement, and for institutional investors, it is a step forward to reduce costs. 
• It is hoped that passive funds, which have been reluctant to engage in engagement due to cost, will take a more positive approach.
• Rule amendments to make it easier to identify substantial shareholders are expected to be negotiated in advance with substantial shareholders prior to voting.

• FY24 OP WAS REVISED DOWN GIVEN SURGING VARIOUS COSTS.
• NO CHANGE IN MEDIUM-TERM PLAN TARGETS.
• IINO revised its FY24 guidance from OP of ¥19,200mil (+0.7% YoY) on sales of ¥145,000mil (+5.1% YoY) to OP of ¥17,400mil (-8.7% YoY) on sales of ¥146,000mil (+5.8%YoY).

• FY 2024-25 H1 witnesses 12% YoY growth in tire exports value 
• Motorcycle tire exports volume up by 37%; Columbia largest importer 
• Bridgestone to invest US$85 million for India expansion 

• ODK Solutions Company, Ltd. is an IT services company headquartered in Osaka that provides information processing services in the education, financial, and other general fields.
• Its strength lies in the accurate processing of large volumes of highly sensitive data, and the Company boasts a leading share in Japan’s university entrance exam-related education field.
• The Company was founded in 1963 as Osaka Denshi Keisan K.K., providing computing services for the Osaka Securities Finance (now Japan Securities Finance [8511]) Group.