Daily Brief Japan: Keisei Electric Railway Co, Oriental Land, JSR Corp, Shinko Electric Industries, Ryohin Keikaku, Nikkei 225, Alphapolis, TSE Tokyo Price Index TOPIX and more

• Over two decades, Keisei Electric Railway Co (9009 JP) has been the subject of softer and harder activist efforts to have Keisei monetise its stake in affiliate Oriental Land (4661).
• The most recent efforts were by Palliser last fall, briefly discussed here two weeks ago when Keisei announced a buyback. 
• Today, Keisei announced (Japanese only) an Accelerated Block Offering of 1% of Oriental Land shares. The accompanying announcement is worth reading. It’s pretty clear.

• Keisei Electric Railway Co (9009 JP) is looking to raise up to US$553m from selling a 1% stake in Oriental Land (4661 JP).
• Palliser Capital, has been pushing Keisei Electric Railway to reduce its stake in OLC to unlock shareholder value owing to the wide discrepancy between carrying/market value of the former’s investment.
• Selling just 1% of shares outstanding, the deal wouldn’t be a very large one to digest, representing 4.7 days of OLC’s three month ADV. 

• JSR Corp (4185 JP) saw its stock pop Monday when an article in a Japanese paper said the Tender Offer would start “within the month.” 
• Investors went from “concerned about delay or worse” to “anticipating resolution.” Then Wednesday just before the close the stock popped as media outlets reportedly reported no SAMR approval was required.
• There has been no comment from either JIC or JSR but the discount to terms has gone from 6.9% last Friday to a 1.7% discount now.  

• Seven weeks ago I wrote about Shinko Electric Industries (6967 JP)‘s changing Break/Gap Risk as comps had gained. Shinko was cheap to its main comp and peers vs Announcement Date. 
• Since then, Shinko is +4.1% and direct peer Ibiden Co Ltd (4062 JP) is -14.5%. This has erased Shinko’s underperformance since announcement, and shrunk a 9% spread to 3.3% yesterday. 
• With the spread tighter and tech showing some weakness, I’d be happy unwinding at yesterday’s closing spread (3.3%). 

• JSR Corp (4185 JP) has filed a solid response to SUNY RF’s lawsuit. SUNY RF will counter with a response by 13 March. 
• The response suggests that SUNY RF’s lawsuit will not be harmed if JIC proceeds with TOB, which is the strongest indication that JIC is comfortable taking on the litigation risk. 
• A media article stating that SAMR has allowed JIC to withdraw its merger control filing helps explain the current tight spread. However, the article needs to be treated with caution. 

• Ryohin Keikaku (7453 JP) offers products covering all aspects of daily life.
• For FY08/23, Ryohin Keikaku reported consolidated operating revenue of JPY581.4bn , operating profit of JPY33.1bn, recurring profit of JPY36.2bn, and net income attributable to owners of the parent of JPY22.1bn.
• The company’s full-year FY08/24 forecast calls for operating revenue of JPY640.0bn, operating profit of JPY48.0bn, recurring profit of JPY46.0bn and net income attributable to shareholders of the parent of JPY33.3bn.

• The Nikkei 225 INDEX is initiating a pullback that should be a buy-the-dip opportunity.
• The first buyable area for a LONG trade, this week, is 39600 and 39300 (this week) and down to 38100 (next week).
• The index should restart its rally after the pullback, and there is a good chance the pullback won’t last for more than 1-2 weeks.

• Alphapolis is a high-margin publisher of novels and manga, leveraging user-generated content to create salable products
• The company is expanding into anime, opening up new potential revenue streams
• Despite trading at a 5-year low, Alphapolis stands out with impressive sales and profit growth, offering good growth prospects and potential for a 2-3x return on investment on a 5-year horizon

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.

• TSE has published a proposal to require simultaneous disclosure of financial statements and timely disclosure information in both Japanese and English from April 2025 (for March fiscal year end companies).
• The elimination of time gap between disclosure of financial statements in Japanese and English and the expansion of English-language disclosure of timely disclosure information are advances resulting from this revision.
• As TSE continues to consider expanding the range of documents covered, the focus is on when English-language disclosure of annual securities reports, which cover all important information, will become mandatory.