Daily Brief Japan: Lasertec Corp, Kenedix Office Investment Co, Toshiba Corp, Fancl Corp, Shofu Inc, Tokyo Stock Exchange Tokyo Price Index Topix, Agile Property Holdings and more

• The Tenth Annual JPX Nikkei 400 Index Review was announced on Monday 7 August. There are 38 Inclusions, 36 Deletions. They are mostly in line with Janaghan Jeyakumar, CFA‘s predictions.
• The BIG SELL is T&D Holdings (8795 JP), which surprised me. The top BUY is ROHM Co Ltd (6963 JP) which was not on the Quiddity Leaderboard.
• Otherwise, the ADDs and DELETEs are 1.8-2.0 days of ADV, there are several NEW CAPs and some RECAPS among LARGE CAPS

• The shareholders of Kenedix Office Investment (8972 JP), Kenedix Residential Investment (3278 JP) and Kenedix Retail REIT (3453 JP) meet in a couple of weeks to vote on the merger.
• The stocks are trading in line with the merger ratio and the initial spike following merger announcement has been followed by some selling.
• The market cap of the combined entity should now be large enough for migration to indices with larger tracking assets bringing in large passive flows on merger completion.

• Yesterday, JIP finally announced its Tender Offer for Toshiba Corp (6502 JP) as discussed in JIP Tender Offer for Toshiba (6502) Finally Here 
• I got a few questions this morning on the earnings call comments from Chairman Watanabe regarding what might happen if a Kioxia Transaction were announced mid-JIP Tender.
• My assumption before, during, and after, is that the Board wants this deal done. And doesn’t really want to take any responsibility for pushing any more.

• Fancl released 1QFY24 results last week. While revenue was broadly in line with consensus at ¥27.2bn (consensus ¥26.9bn), OP beat consensus by around 27% to generate an OP of ¥3.2bn.
• While there were certain performance improvements in the flagship brands “FANCL” and “ATTENIR” during FQ1, there are no definitive signs that they are completely out of trouble.
• Meanwhile, it looks like competition has affected Fancl Corp (4921 JP)’s plan to cut advertising costs. Thus, FY24 OP guidance could be under pressure.

• From a niche player to a global high-flyer – Shofu is a domestic market leader in developing and manufacturing dental materials and equipment.

• With its proprietary technology and expertise, it is aiming to become a global top 10 player with a strategic focus on overseas expansion.

• With an addressable market estimated to become up to 20 times larger than Japan, growth prospects are high and the company is gaining solid traction with FY3/2023 results set to reach record highs.

• To narrow the gender wage gap for all workers, reducing non-regular female workers, who make up the majority, is a possible solution, but changing this structure will not be easy.
• Many companies recognize that the low ratio of female managers (about 10% among listed companies) is behind the gender wage gap among regular workers.
• However, many companies aren’t taking immediate actions because they believe that % of female managers will increase as the age of newly hired female full-time hires in recent years increases.

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