Technology
TD trades at levels implying investors value its operating business at near zero, reflecting deep scepticism about growth and profitability amid dependence on Samsung and exposure to memory price volatility. While these risks are real, Yuka Marosek argues they are already priced in and TD’s close ties to Samsung Japan and Toyota Tsusho provide stability and long-term relevance. Expansion into automotive and server / storage markets, supported by rising AI-driven demand for memory, offers potential for improved margins and diversification. Toyota Tsusho owns 50.1% of TD and Yuka wonders if Tsusho might eventually absorb the entire company - if Samsung allows it.
Edition: 222
- 17 October, 2025
Japan’s space capabilities are rapidly expanding
Investor enthusiasm in the country’s space sector is accelerating, underpinned by several IPOs expected in the next couple of years. At SPEXA 2025, this enthusiasm was on full display, led by Toyota’s backing of Interstellar Technologies, which plans a listing and aims to capture the growing low-Earth-orbit launch market. Japan is also positioning itself at the forefront of space-debris removal working with Astroscale and JSAT, targeting an international regulatory framework by 2026. Meanwhile, government ambitions include doubling the space industry to ¥8trn, achieving 30 annual rocket launches by the early 2030s and deepening NASA collaboration, including a Toyota-built lunar rover. Neil Newman sees Japan’s space industry as an increasingly attractive investment theme.
Edition: 218
- 22 August, 2025
Profiting from Japan’s parent-subsidiary delisting wave
Yuka Marosek discusses the structural shift in Japan’s corporate landscape following the Tokyo Stock Exchange’s statement earlier this year discouraging parent-subsidiary listings. These structures have come under increased scrutiny due to governance concerns - subsidiaries often prioritise parent interests, limiting minority shareholder influence and strategic independence. The recent backlash to Toyota’s undervalued tender offer for Toyota Industries underscores investor frustration. Yuka presents a curated list of potential delisting candidates and notes that over 80% of such delistings in the past five years have resulted in share price gains.
Edition: 216
- 25 July, 2025
Trump to give Japan’s new liquid biofuel business a boost
Energy
Neil Newman’s latest Japan Strategy note outlines how US auto tariffs may unexpectedly catalyse growth in Japan’s biofuel sector. While Japan remains firm on protecting its auto industry, it plans to appease US trade demands by boosting corn imports - not for food, but for ethanol production - aligning with its national energy goals. Japan aims to blend 10% ethanol into gasoline by 2030, rising to 20% by 2040, offering US corn exporters long-term demand stability amid uncertain markets like China. Though Japan’s biofuel sector remains small, it is poised for significant growth thanks to renewed political support, trade-driven incentives and infrastructure investment. Companies in Japan involved in liquid biofuel manufacturing include Mitsui & Co, Toyota Tsusho Corp and Idemitsu Kosan Co.
Edition: 212
- 30 May, 2025
Consumer Discretionary
While Ashimori primarily manufactures automobile safety parts such as seat belts and airbags, they also have the technology for pipe rehabilitation materials. PALTEM can strengthen existing sewer pipes by coating their surfaces without replacing them. Such technology is expected to play a crucial role in reinforcing essential infrastructure as sewer pipes continue to age. Ashimori’s shares have risen 30%+ over the last 6 months but still trade at a single-digit P/E and P/B of 0.8x. This low valuation has a chance of being corrected once the company’s volatile earnings are stabilised under the new Toyota-trained CEO.
Edition: 206
- 07 March, 2025
Consumer Discretionary
Amid the world’s transition to clean energy vehicles, BYD’s middle-of-the-road positioning, strong engineering background in both ICE and battery technology, and long brand track record will allow it to assume the role of Volkswagen or Toyota in the EV era. The US-led protectionism and the rise of Huawei-affiliated EV brands will uniquely help BYD to compete at home with the best and transfer the learnings outwards as a trusted bridge to the world. Both BYD and BYD Electronic International trade near their historical lows in terms of PE band. Blue Lotus initiates coverage with a Buy rating and a TP of HK$350 (65% upside).
Edition: 177
- 12 January, 2024
Consumer Discretionary
Mio Kato provides his take on the crossholdings sell-down - the trend of governance reform in Japan continues with Toyota, Toyota Industries and Aisin selling shares of Denso. Denso is buffering some of the flow impact by repurchasing roughly half of the shares to be sold. While the size of these moves is relatively large, Mio believes their impact could be disproportionately large for the market as a whole. He considers this to be further confirmation of the relatively positive backdrop for asset allocation away from China and into Japan, especially in the long-term.
Edition: 175
- 08 December, 2023
Consumer Discretionary
Trading at 2x EV/EBITDA, at book and with tons of cash, Amir Anvarzadeh thinks Subaru remains highly attractive, especially as he sees significant upside to consensus forecasts of ¥330bn OP. As supply issues disappear, strong customer loyalty, low incentives and rising N.American sales can take OP closer to ¥500bn. Subaru's small size also leaves it with better hopes of retaining its customers as we migrate towards EVs. It will have 3 new models by 2025/26 joining the Solterra, adding a dedicated line in Oizumi by 2027 for 200k units to add to another 200k at Yajima by 2026 - unlike Solterra, whilst it will source the batteries from Toyota with 900 mile range, it will build the new models itself.
Edition: 164
- 07 July, 2023
Consumer Discretionary
Revving up the hydrogen engine - in keeping with its penchant for developing every type of technology imaginable, Toyota has been working on not just fuel cells but also hydrogen engines. Now it is partnering with Mazda, Subaru, Yamaha and KHI to further expand on this concept and add synthetic carbon neutral fuels to the mix. These efforts could provide alternative zero carbon transition paths and are worth understanding, especially since EVs and renewables are nowhere near as mature for mass adoption as is generally portrayed.
Edition: 124
- 26 November, 2021