Japan Special Sits
Growth Samurai is dedicated to special situations in the Japanese stock market. Currently, there are two main themes that we are following:
The TOPIX reorganisation
Japanese Owner Operators
The Activist List
Made in Japan | Akio Morita and the Sony Corporation
Made in Japan is a book about Akio Morita one of the cofounders of the well-known Sony Corporation. The book was written by Akio Morita himself with the help of Mitsuko Shimomura and Edwin M. Reingold. It is an autobiography but it also narrates the story of the Sony Corporation as well as the aftermath of the Second World War after Japan and Germany were defeated.
It goes a step further to explain the rapid rise of Japan and how it managed to reach new heights even after the heavy defeat. The book also gives an insight of the Japanese culture as well as their way of thinking especially when it comes to business, styles and philosophy.
It goes a step further to explain the rapid rise of Japan and how it managed to reach new heights even after the heavy defeat. The book also gives an insight into the Japanese culture as well as their way of thinking especially when it comes to business, styles and philosophy.
He explains Japanese behaviour based on the ancient history of the country as well as recent history. Morita explains the origin of his family and also explains clearly how Sony came to be. He talks about the international market and gives details of the invention of the Walkman.
The autobiography was originally published in English in the year 1986 and from there it has been translated into 12 different languages.
Sections of Made in Japan
Made in Japan by Akio Morita is divided into 9 sections which include the following:
War, in this section the book talks about World War 2 and how it affected Japan as a country, peace explains the aftermath of the war and how Japan started having peace, selling word where he speaks about his learning curve, on management where he talks all about his family, he further goes ahead and compares the Americans and the Japanese styles in the fifth section of the book, in the 6th section of the book Akio talks about competition and what fueled Japan to rise, in the 7th section, he talks about technology, while in the 8th speaks about Japan and the world before discussing the World Trade in the 9th section.
Having said that, Made in Japan is a book I can recommend to anyone. Whatever page you choose to start with you can be sure of being teleported to the life of Akio Morita’s life and the history of the legendary Sony Corporation. His conversational way of writing is just amazing there is much to learn about business management and you will get to know more about the Japanese.
Quotes from Made in Japan
Here are some nice tidbits from the book:
“I cannot understand why there is anything good at laying off people,” what Akio was explaining here was why do managements really have to fire their employers? They take a risk hiring them right? Why cannot they take the risk of keeping them on the job too? Truly even if it is a recession, the employee does not have the prime responsibility this decision so why should he or she have of suffer because of it? When the business is booming the employees will make you good profits, why can’t they sacrifice their profits to keep them in job too?
You should not try to show your employees that you are the type of boss who can do everything all alone, show them that you are attempting to attract more people to follow you out of their own will and with the enthusiasm to contribute to the success of your business. If you do that the bottom will take care of itself.
The enemy of innovation in a company can be your very own sales organization when they have too much power because they often discourage the innovations. So when you come up with new products you must educate your sales team again so that can educate their salesmen and then sell to the public. Yes, it is expensive but it will be more profitable since it will be easier for the salesmen to sell.
The core function of the management is decision making and so the manager should have professional knowledge of technology as well as trends of technology and a wide range of knowledge of the business field.
Lawyers are great and can be useful at times but according to Akio Morita, they can just be the most overused and misused businessmen. The valuable lawyers can bring about valuable information gathering as well as market analysis but in the US and Japan lawyers have been brought to ridiculous extremes.
The Japanese system of management is advantageous because of its sense of corporate philosophy. Even if a new executive takes over a business in Japan, it cannot change what has already been there. The relationship between the top management and the junior management remains very close to formulate a philosophy that can be used in a company for a long time. And when the company communicate the philosophy to all the employees, it will have flexibility and strength.
No matter how good, clever, crafty or successful you are the future if your business will be in the hands of the people you hire. This is very true, the employers who treats their employers with ultimate respect get to enjoy many benefits. The employees will be self-driven and when a person is working out of love he or she will definitely deliver. You can obviously tell it worked from the fact that Sony has expanded and it is being operated in more than 50 countries across the world.
There is a bright future ahead for mankind and the future holds exciting and amazing technological advances that are going to enrich the lives of all human beings.
Overall, Made in Japan is a fantastic read for anyone interested in business history in general and Japanese business culture in particular. There are so many takeaways and interesting stories in this book, that it comes highly recommended.
The TOPIX Reorg
Japanese authorities and the Tokyo Stock Exchange seem to be intent on making significant reforms to the stock market and listing requirements for Japanese public companies.
Over the last decades, Japanese stocks have traded at deep discounts compared to valuation multiples of their counterparts in the U.S and Europe.
This has prompted Japan to implement higher disclosure standards and to change corporate governance policies.
This has created an interesting situation. Currently, there are a number of Japanese publicly traded companies that are effectively controlled by a bigger publicly listed parent. As part of the reform, the parent companies are being pushed to either take over the smaller entities or dispose of them.
The TOPIX Reorg list aims to identify the stock of daughter companies that are likely to be taken over by their parent.
| Ticker | Name | Market Data | Parent |
|---|---|---|---|
| 5964 | TOYO KNIFE CO LTD | Link | Feltorec Holdings |
| 3280 | STRUST CO LIMITED | Link | Saibu Gas |
| 5753 | NIPPON SHINDO CO | Link | CK San-Etsu |
| 8705 | OKATO NISSAN SECURITIES HLDGS INC | Link | Unicom Group Holdings |
| 7895 | CHUO KAGAKU CO | Link | Mitsubishi |
| 5458 | TAKASAGO TEKKO KK | Link | Nippon Steel and Mitsui |
| 7538 | DAISUI CO LTD | Link | Nippon Suisan Kaisha |
| 5907 | JFE CONTAINER CO LTD | Link | JFE Steel |
| 9967 | SAKAI TRADING CO | Link | Sakai Chemical |
| 7297 | CAR MATE MANUFACTURING CO | Link | M.T. Kosan |
| 5697 | SANYU CO LTD | Link | Nippon Steel |
| 6281 | MAEDA SEISAKUSHO CO | Link | Maeda Corporation |
| 9823 | MAMMY MART CORP | Link | Live Corp and Sumitomo |
| 2777 | CASSINA IXC LTD | Link | Unimat Life co |
| 2195 | AMITA HOLDINGS CO LTD | Link | Yamazaki Holdings |
| 9445 | FORVAL TELECOM | Link | Forval Corporation |
| 7169 | NFC HOLDINGS INC | Taken out | Hikari Tsushin |
| 2152 | YOUJI CORPORATION | Link | Yamazen Corporation |
| 3723 | NIHON FALCOM CORP | Link | Nihon Falcom Holdings Co |
| 4356 | APPLIED TECHNOLOGY CO LTD | Link | Transcosmos |
| 6249 | GAMECARD-JOYCO HLDGS INC | Link | SANKYO Co. |
| 7079 | WDB COCO CO LTD | Link | WDB Holdings |
| 4389 | PROPERTY DATA BANK INC | Link | Shimizu Corp |
| 9423 | FORVAL REALSTRAIGHT INC. | Link | Forval Corp |
| 7036 | EMNET JAPAN CO LTD | Link | Softbank |
| 6239 | NAGAOKA INTERNATIONAL CORPORATION | Link | Hamada Co. |
| 1450 | TANAKEN | Link | Three Hand Red Holdings |
Disclaimer: This is not investment advice. It's just a shortlist of ideas. You should always do your own research or consult a specialist.
Owner Operators in Japan
This is a list of small-cap stocks listed in Japan where the management of the company is also a significant owner.
| Ticker | Name | Industry | # of Employees | # of Shareholders | Float |
|---|---|---|---|---|---|
| 7264 | MURO CORPORATION | Auto Parts: OEM | 1122 | 2047 | 34.44% |
| 9835 | JUNTENDO CO LTD | Home Improvement Chains | 579 | 6505 | 33.72% |
| 6964 | SANKO CO LTD | Electronic Components | 489 | 1639 | 30.84% |
| 3045 | KAWASAKI & CO.LTD. | Consumer Sundries | 43 | 2145 | 18.76% |
| 1770 | FUJITA ENGINEERING CO | Engineering & Construction | 566 | 1209 | 28.76% |
| 9867 | SOLEKIA LIMITED | Data Processing Services | 782 | 727 | 21.84% |
| 4976 | TOYO DRILUBE CO LTD | Industrial Specialties | N/A | 501 | 29.86% |
| 7217 | TEIN INC | Auto Parts: OEM | 326 | 929 | 24.37% |
| 6734 | NEWTECH CO LTD | Computer Peripherals | 70 | 1399 | 30.40% |
| 7671 | AMIDA HOLDINGS CO LTD | Information Technology Services | N/A | 974 | 15.77% |
| 6554 | SUS CO LTD | Miscellaneous Commercial Services | 1742 | 2925 | 34.82% |
| 3712 | INFORMATION PLANNING CO | Packaged Software | 136 | 3407 | 33.90% |
| 3671 | SOFTMAX CO LTD | Medical Specialties | 173 | 3213 | 34.81% |
| 5070 | DRAFT INC | Miscellaneous Commercial Services | 144 | 2166 | 27.91% |
| 3542 | VEGA CORP CO LTD | Internet Retail | 239 | 4003 | 29.74% |
| 2480 | SYSTEM LOCATION | Finance/Rental/Leasing | 42 | 514 | 12.11% |
| 3934 | BENEFIT JAPAN CO LTD | Specialty Telecommunications | 202 | 2044 | 22.01% |
| 3904 | KAYAK INC | Information Technology Services | 435 | 5524 | 26.93% |
| 4424 | AMAZIA INC | Packaged Software | 25 | 4475 | 31.17% |
| 7902 | SONOCOM CO LTD | Industrial Machinery | 104 | 1324 | 29.66% |
| 9325 | PHYZ HOLDINGS INC | Miscellaneous Commercial Services | 397 | 3822 | 31.67% |
| 2814 | SATO FOODS INDUSTRIES CO | Beverages: Alcoholic | 178 | 826 | 13.66% |
| 7320 | JAPAN LIVING WARRANTY INC | Homebuilding | N/A | 766 | 34.45% |
| 4496 | COMMERCE ONE HOLDINGS INC | Packaged Software | 129 | 1612 | 23.74% |
| 4380 | M MART INC | Food Distributors | 52 | 2253 | 25.86% |
| 4495 | I3 SYSTEMS INC | Packaged Software | N/A | 20 | 16.10% |
| 3991 | WANTEDLY INC | Packaged Software | 123 | 1518 | 11.64% |
| 7353 | KIYO LEARNING CO LTD | Internet Software/Services | 30 | 952 | 33.93% |
| 2934 | J FRONTIER CO LTD | Medical Distributors | 45 | 3 | 0.00% |
Disclaimer: This is not investment advice. It's just a shortlist of ideas. You should always do your own research or consult a specialist.
Shareholder Activism in Japan
This is a list of companies publicly listed in Japan, that have been subject to shareholder activism:
| Ticker | Name | Activist | Link |
|---|---|---|---|
| 3381 | Seven & i Holdings | ValueAct Capital | Letter |
Disclaimer: This is not investment advice. It's just a shortlist of ideas. You should always do your own research or consult a specialist.
Investing in Japan - Resources
This is a list of resources about investing in Japanese stocks:
About Growth Samurai
This website is a collection of resources about investing in Japanese stocks. This website is for informational purposes only and does not count as investment advice. You should always do your own research.
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