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Japan's Activist Stock Names

This post first appeared on 8percentpa.substack.com and is now the #1 most read post on our substack.

Since we started to talk about shareholder activism, the biggest hotbed has been Japan. There are now a few hundred Japanese names owned by activists today. Shareholder activism in Japan started around 2005 when the activist pioneers targeted Japanese broadcasters and food sauces*.

It did not end well.

Foreigners were labelled as arrogant gaijins (i.e. aliens) who didn’t know Japanese ethics and were just vultures, barbarians at the gates, greedy capitalists and enemies of corporate and basically the whole of Japan. Activists were mocked, fined, thrown in jail and chased out of the country.

The Japanese activist pioneer, Murakami Yoshiaki, founder of the eponymous Murakami fund, was imprisoned, taking one for the global activist teams trying to transform corporate Japan during trying times. He now lives in Singapore. Together with his daughter, they are playing key supporting roles in Act II of Shareholder Activism in Japan. 

Fast forward to 2025, things have really changed. 

Activists are no longer the villains. 

Villains today are sleepy management in corporate Japan who couldn’t spell ROE. Okay, they can spell ROE, but probably couldn’t fully appreciate its importance. Certainly, most of them do not know what’s FCF, acronym for Free Cashflow, another key metric for investors. 

That said, you would be surprised how fast Japanese management learn. Once activists show up at their doorstep, you will see FCF on their investor relations’ presentation materials the next quarter. Because their jobs and the company’s independence are now on the line if they cannot win in the court of public opinion. 

Hence we thought it would be interesting and pertinent to write down a list of activist stocks recently and currently “in play”. This would also serve as a good go-to-post should we need to come back to refer to some names. It would also be updated with important new names. New activist campaigns are happening almost weekly. 

Without further ado, here’s the list of the Japan’s activist names in alphabetical order. 

Current List

Alps Alpine (6770 JP, Mkt Cap: USD2.3bn, PER: 15.3x, PBR: 0.7x) : Alps Alpine is a prominent electronics components and car audio manufacturer currently owned by the abovementioned Murakami team (c.17% of outstanding shares) but multiple activists have engaged the company in the past. 

Anicom Holdings (8715 JP, Market Cap: USD440m, PER: 25.5x PBR: 2.3x, EV/EBITDA: 8.8x, Dividend Yield: 1.0%) : Largest pet insurer in Japan invested by Taiyo Pacific Partners for a couple years. Recently, Dalton Investments of Fuji Media fame disclosed a 5% stake in Anicom, causing the stock to jump c.10%. Dalton has signalled that it would made its proposals known. (Updated Sep 2025)

Astellas Pharma (4503 JP, Market Cap: USD20bn, PER: 17.0x PBR: 2.0x, EV/EBITDA: 7.7x, Dividend Yield: 4.7%) : Farallon Capital engaged Astellas with 3% stake and calling for more cost cutting and optimizing R&D. Interestingly, CEO acknowledged the engagement, calling Farallon constructive. Astellas faces a huge patent expiration of its blockbuster prostate cancer drug Xtandi and is probably keen to study more growth strategies, even from activists. (Updated Sep 2025)

Calbee (2229 JP, Market Cap: USD2.7bn, PER: 21.8x, PBR: 1.9x, EV/EBITDA: 8.9x, FCF Yield 3.2%, Dividend Yield 2.0%) : As with Pepsico (engaged by Elliott), Japan’s largest potato chips maker, which is c.21% owned by Pepsico, was similarly engaged by Hong Kong’s Oasis to buck up. Calbee’s earnings have stagnated for 10 years. Calbee is a household name in Japan, but with mere market cap of USD2.7bn and share price having done nothing for a decade, the onus is on management to prove the activist wrong. Oasis has gone up the league table and have engaged bigger boys. This activist might have good ideas up its sleeves to create shareholder value with Calbee. (Updated Sep 2025)

Casio (6952 JP, Mkt Cap: USD1.8bn, PER: 16.2x, PBR: 1.2x) : Casio needs no introduction, its G-shocks, calculators, electronic pianos are ubiquitous but management seemed unable to drive earnings growth and Oasis, yes, the same HK based activist has targeted this company recently (like literally a few days ago in early July 2025). This would be an interesting name to watch for 2025-2026.

Daiichi Life (8750 JP, Mkt Cap: USD28.0bn, PER: 9.2x, PBR: 1.0x) : Daiichi is the only one among four traditional Japanese insurer that is listed and has been targeted by Effissimo, which was the reincarnation of the original Murakami Fund. With 11% stake, Effissimo’s stake is close to USD3bn.

Daihatsu Infinearth (6023 JP, Mkt Cap: USD540mn, PER: 16.4x, PBR: 1.3x, EV/EBITDA: 6.7x, Dividend Yield 1.9%) : Formerly known as Daihatsu Diesel, company was engaged by Kaname Capital which owns 18% of the company. The maker of marine and land-use internal diesel combustion engines share price has rallied sharply since Kaname’s engagement. Most of the engagement details are not public. What we can see in disclosures are i) Imabari is now the largest shareholder (19.6% stake), replacing Daihatsu Kogyo ii) Good english earnings presentation with business details iii) dramatic PBR improvement from 0.4x to current 1.3x! (Updated Oct 2025)

DIC Corp (4631 JP, Mkt Cap: USD2.0bn, PER: 10.5x, PBR: 0.7x, EV/EBITDA: 14.6x, Dividend Yield 3.2%) : Oasis engaged this Japanese fine chemical company making inks, pigments and resins for its art collection in the Kawamura Memorial DIC Museum which rightfully belongs to all shareholders. A.I. estimated the 384 artwork could be worth c.USD1bn. (Updated Sep 2025)

eGuarantee (8771 JP, Mkt Cap USD510mn, PER: 19.6x PBR: 3.3x, EV/EBITDA: 10.6x, Dividend Yield: 2.3%) : This is an interesting financial services company that helps companies hedge credit risks, especially invoice non-payments in Japan. Ariake Capital, a constructivist fund launched by ex-Goldman Sachs analyst Katsunori Tanaka, currently owns c.7% of outstanding shares. Responding positively, eGuarantee recently revised its policy to improve shareholder returns. (Updated Oct 2025)

Eiken Chemical (4549 JP, Mkt Cap USD500mn, PER: 22.4x PBR: 1.8x, EV/EBITDA: 11.9x, Dividend Yield: 2.5%) : Japanese diagnostics company with 70% market share in colon cancer screening tests is concurrently engaged by AVI and Dalton (cumulatively owning c.20-25%). Company has responded with new mid term plan and strived to improve shareholder returns. However, with continuing lacklustre earnings (earnings halved from its peak in 2022), it might be privatized should activists find the right buyers. (Updated Oct 2025)

Ezaki Glico (2206 JP, Mkt Cap: USD2.0bn, PER: 25.7x, PBR: 1.1x) : The maker of chocolate Pocky sticks has been targeted by Dalton, the activist that stirred up the media circus in Japan’s media industry (see next entry). Glico was trading below book despite being one of the most iconic Japanese brands with not just Pocky and Pretz but also its Glico Man in Osaka.

Fuji Media (4676 JP, Mkt Cap USD5.5bn, PER: 16.5x, PBR: 0.8x) : This is one of the five TV broadcaster in Japan under fire and the biggest Japan activist play of 2025. Dalton Investments is the main cheerleader now but multiple activists, including the Murakamis have targeted this name.

Gungho Online (3755 JP, Market Cap: USD1.0bn, PER: 16.3x PBR: 1.2x, EV/EBITDA: 3.0x, Dividend Yield: 2.2%) : Once Japan’s famed gaming company founded by Taizo Son (the more famous Son’s younger brother) and creator of megahit Puzzles and Dragons mobile game, the company is being targeted by the aggressive Strategic Capital in Jan 2025. Recently, Strategic raised its stake from 7.5% to 8.5% and seek to remove the CEO and improve transparency on management pay packages can better capital allocation and growth strategies. (Updated Sep 2025)

Heiwa Real Estate (8803 JP, Market Cap: USD1.1bn, PER: 15.6x, PBR: 1.3x, Dividend Yield 3.7%) : Japan’s mid-tier developer owning prime land around the Tokyo Stock Exchange was engaged by LIM advisors, Simplex Asset Management and the Murakami family. The earlier activists were successful in their campaigns selling their stake to Taisei, currently owning c.20%. It is unclear what Murakami family is asking for at this juncture. (Updated Sep 2025)

Hogy Medical (3593 JP, Mkt Cap USD0.7bn, PER: 35.1x, PBR: 1.5x) : Company makes surgical kits in Japan and has been “in play” for some time. In its July 2025 results meeting, Hogy Medical’s management remarked that going private was on cards and stock price went limit up. Otto Oehring knows this name well and has written interesting stuff on Japan.

IG Port (3791 JP, Mkt Cap USD590mn, PER: 35x PBR: 3.7x, EV/EBITDA: 8.7x, FCF Yield: 6.6% Dividend Yield: 1.1%) : Japan’s fabled animation studio behind iconic animation like Ghost In The Shell, which was made into Hollywood movie starring Scarlett Johansson in 2017. The firm appointed Hibiki’s CIO as an independent advisor on its board. (Updated Oct 2025)

Kao (4452 JP, Mkt Cap USD21.1bn, PER: 24.2x, PBR: 3.0x) : Kao is the P&G of Japan without P&G’s high ROEs and valuations. It makes washing detergents, diapers, soaps and shampoos and its brands are well-loved in Asia. Management hasn’t really been sleeping at the wheels but its ROE can definitely be higher than the current 9%. Oasis has started to engage the company as one of its first large / megacap engagement.

Kawasaki Kisen (9107 JP, Mkt Cap USD8.9bn, PER: 9.5x, PBR: 0.8x) : Kawasaki Kisen or K-Line is one of the three Japanese mega-shippers companies that is 35% owned by Effissimo for c.10 years. However, exactly how Effissimo engaged K-Line has remained largely elusive and the one prominent activist action that is public is that one of Effissimo’s key employee became a board director for K-Line.

Keisei Railway (9009 JP, Mkt Cap USD5.4bn, PER: 16.8x, PBR: 1.5x) : Palliser Capital, an upcoming activist, started engaging Keisei Railway to try to catalyze the divestment of Keisei’s crown jewel: its 21% stake in Tokyo Disneyland (Oriental Land 4661 JP) which is worth >JPY1trn and more than Keisei’s own market cap. Insofar, Palliser has not been successful. Similarly, Elliott has engaged Mitsui Fudosan to do the same with its 6% in Oriental Land.

Kobayashi Pharma (4967 JP, Mkt Cap USD2.7bn, PER: 30.4x, PBR: 1.9x) : One of Japan’s well-known OTC drugmaker that also manufactures sanitary products, air fresheners, breath fresheners, pain relief medicine, denture cleaning agents and a slew of household products. Oasis targeted the company after one of their supplement caused 5 confirmed and 75 unconfirmed deaths.

Kyocera (6971 JP, Mkt Cap USD5.4bn, PER: 25.4x, PBR: 0.7x) : Kyoto’s largest electronic components behemoth founded by the legendary Kazuo Inamori which has gone sleepy. Oasis recent launched a campaign to create “A Better Kyocera”.

Kyoto Financial Group (5844 JP, Mkt Cap USD5.2bn, PER: 19.1x, PBR: 0.7x) : Largest regional bank in Kyoto whose holdings of famed Kyoto companies such as Nintendo, Nidec, Murata and Kyocera is more than its own market cap. Silchester, owning an 8.5% stake has been calling for the unwinding of these cross-shareholdings, which is one of the worst use of precious capital.

Lifenet (7157 JP, Mkt Cap USD1.2bn, PER: 23.7x, PBR: 1.8x) : Japan’s first and largest online life insurer held by Effissimo for many years. Constructive engagement coupled with Lifenet’s executive team’s savviness resulted in share price quadrupling over the last couple of years. Effissimo continues to own a big stake.

Lion (4912 JP, Mkt Cap USD2.7bn, PER: 16.4x, PBR: 1.4x) : Japan’s dental care play targeted by Japan Activation Capital, new activist on the block founded by ex-Carlyle senior executive. Lion’s business is great (just look at Colgate’s long-term share price) and yes, it should trade at higher multiples.

Kansai Electric Power (9503 JP, Market Cap: USD16.4bn, PER: 8.2x, PBR: 0.8x, EV/EBITDA: 8.7x, FCF Yield 3.3%, Dividend Yield 2.8%) : Japan’s top utility company is being engaged by Elliott which publicized its 4-5% stake recently. Elliott is calling management to sell non-core assets which it estimated to amount to c.JPY2trn (80% of its market cap) including real estate. The monies could then be used to raise dividends and push share price above 1x PBR. Kansai Electric also has the largest nuclear power footprint in Japan. (Updated Sep 2025)

Keeper Technology (6036 JP, Mkt Cap USD670mn, PER: 20.5x PBR: 5.6x, EV/EBITDA: 12.8x, FCF Yield: 3.9% Dividend Yield: 1.6%) : It was reported that domestic activist, Misaki Capital now owns c.5% of Keeper which is Japan’s largest car waxing company, competitor and interestingly, strategic shareholder to Soft99 (below). Misaki is known to be non-hostile and might perhaps engineer another MBO in this somewhat popular car waxing industry in Japan. Or advise both Keeper and Soft99 to merge perhaps? (Updated Oct 2025)

Mandom (4917 JP, Market Cap: USD650mn, PER: 29.3x, PBR: 1.4x, EV/EBITDA: 9.8x, FCF Yield 8.8%, Dividend Yield 1.9%) : Japan’s leading male cosmetics and hairstyle product maker is being taken private by its own management. Mandom has been engaged by multiple activists, notably Hibiki Path Advisors amongst others and this is management’s bid to get the activists off their backs. Hikibi is fighting for a higher price. This is a portfolio name and we made c.50%. So, Hibiki Path Advisors. Thank you so much! Our analysis on Mandom written in Apr 2025 and updated in Sep 2025.

Meisei Industrial (1976 JP, Market Cap: USD520m, PER: 9.6x PBR: 1.1x, EV/EBITDA: 4.4x, FCF Yield 6.5%, Dividend Yield: 3.7%) : Meisei Industrial specializes in thermal insulation for construction works, an important technology as we need more insulated data centers, more cold chain warehouses in the face of global warming. Dalton related Nippon Active Value Fund has increased its stake to c.10% today and likely targeting privatization given the firm’s cheap valuations. This would be an interesting name to monitor. (Updated Oct 2025)

Mitsui Soko (9302 JP, Mkt Cap USD2.0bn, PER: 28.2x, PBR: 2.5x) : Warehousing subsidiary of Mitsui Group. Japanese newswires got excited when 3D Investment Partners raised its stake from 8% to 9% in July 2025. That said, share price has rallied quite nicely over the past 12 months. Warehouse names in Japan used to be really cheap but at close to 30x PER, perhaps this trade is over. Sumitomo Warehouse (9303 JP) is still cheap though. (Updated Aug 2025)

Money Forward (3994 JP, Mkt Cap USD2.2bn, PER: Negative, PBR: 8.5x) : Japan’s unicorn fintech play listed just a few years ago caught ValueAct’s attention. ValueAct and related parties now owns c.5% of Money Forward. ValueAct believes margins could be higher and the activist intends to use its expertise having engaged co.s like Microsoft, Adobe and Trend Micro to help Money Forward. (Updated Aug 2025)

Nippon TV (9404 JP, Mkt Cap USD5.5bn, PER: 15.8x, PBR: 0.8x) : Japan’s leading TV broadcaster and owner of Studio Ghibli (whose style is being popularized by OpenAI and used for various purposes). While there is no public record of activist holding the name, it is definitely on many’s radar. This substack has written about Nippon TV and the portfolio is also invested in this name.

Nissan Shatai (7222 JP, Mkt Cap USD980mn, PER: 25.6x, PBR: 0.9x, Dividend Yield: 1.1%) : Nissan’s listed subsidiary making various specially-equipped vehicles, such a, ambulances, children’s school buses, and refrigerator vans. Activists Effissimo and Strategic collectively owns c.33%. The play seems to be targeted buyout by Nissan, but alas, the parent has no money at the moment… (Updated in Oct 2025)

Omron (6645 JP, Mkt Cap USD5.1bn, PER: 20.5x, PBR: 1.0x) : One of Japan’s top player in factory automation, sensors and controllers, Omron is the newest target of Japan Activation Capital, founded by former Carlyle executive Hiroyuki Otsuka. (Updated in Aug 2025)

Pigeon (7956 JP, Mkt Cap USD1.4bn, PER: 22.0x, PBR: 2.6x) : Pigeon used to be the stock market darling as the China play for premium baby products but has since derated. Japan Activation Capital, which has targeted Lion has also targeted Pigeon. This activist seems to like animals (or rather companies with animal related names).

Ricoh (7752 JP, Mkt Cap USD5.2bn, PER: 13.1x, PBR: 0.7x) : Once the global #3 photocopier alongside iconic names like HP, Fuji Xerox, Canon, Konica Minolta and also Kyocera etc, this stock has languished with bad business decisions and attracted Effissimo is now the #1 shareholder with 21% stake in the company.

Rohto Pharma (4527 JP, Mkt Cap USD3.2bn, PER: 15.1x, PBR: 1.8x) : One of Japan’s household name in OTC and skincare, Rohto is well-known for its eye-drops and lip-balms. AVI, a UK based activist, launched its campaign “Awaken Rohto” to catalyze the firm to focus on its core businesses and not squander capital on regenerative medicine. Presentation link: https://www.assetvalueinvestors.com/agt/campaign/awakening-rohto/

Sagami Rubber (5194 JP, Mkt Cap USD69m, PER: 25.4x PBR: 1.0x, EV/EBITDA: 17.2x, FCF Yield: 7.0%, Dividend Yield: 1.1%) : Second largest condom maker in Japan after Okamoto (which we own) targeted by Oasis and Briarwood Chase and the two collectively own c.23% of outstanding shares. Total foreign ownership is c.31%. With its small market cap, this company might be taken private in a flash. That said, there is very little available publicly as to what the activists have in mind or what they want to do with Sagami Rubber. (Updated Sep 2025)

Sanken (6707 JP, Mkt Cap USD1.3bn, PER: 3.9x, PBR: 1.2x) : Targeted by both Oasis and Effissimo, Sanken’s story revolved around its 50% stake in Allegro Microsystem (ALGM US), a power semiconductor company listed on Nasdaq. Sanken’s stake is worth way more than its own market cap and Allegro has initiated a buyback 18% of the stake for USD666m. That said, Sanken still owns 32% of Allegro.

Sapporo (2501 JP, Mkt Cap USD3.7bn, PER: 44.1x, PBR: 3.0x) : Japan’s fourth largest beer company with real estate worth more than its market cap was engaged by activist 3D Investment Partners. Share price has rallied significantly since 3D’s investment was made public (see link below). https://www.compoundsapporo.com/home-eng

Seibu Group (9024 JP, Mkt Cap USD7.3bn, PER: 38.3x, PBR: 1.9x) : Once a sprawling railway empire in Japan with its founder the richest man in the world, Seibu Group now trades at a mere USD7bn market cap but 3D Investment Partners believe that the stock is undervalued with its vast land holdings and lucrative domestic businesses such as Prince Hotels and baseball games.

Shibaura Electronics (6957 JP, Market Cap: USD670m, PER: 21.6x PBR: 2.8x, EV/EBITDA: 9.8x, Dividend Yield: 2.3%) : In a rare case of corporate activism, Taiwan’s Yageo made an unsolicited hostile bid for Shibaura Electronics, Japan’s thermistor and sensor maker, earlier this year. This ruffled a lot of feathers and MinebeaMitsumi was brought in as a white knight. After multiple rounds of bids and counterbids, Yageo bid 7,130 yen for Shibaura and looks like Yageo will win. (Updated Sep 2025)

Shiseido (4911 JP, Mkt Cap USD7.1bn, PER: 58.6x, PBR: 1.7x) : IFP, a consumer focused long-only turned activist fund engaged Shiseido, Japan’s #1 cosmetic maker, as its high-profile target in 2025 following a previous failed attempt with Kirin Holdings (beer). IFP has not made its proposals to Shiseido publicly but share price has rallied in anticipation.

Soft99 (4464 JP, Mkt Cap USD590mn, PER: 30.1x PBR: 1.5x, EV/EBITDA: 12.8x, FCF Yield: 9.4% Dividend Yield: 1.1%) : Soft99, Japan’s car wax and automotive chemical product company launched a MBO privatization to rid itself of activist Effissimo. But it was a low-ball bid and Effissimo countered with a higher price which was 66% higher at JPY4,100 per share. Inexplicably, Soft99’s board is arguing that shareholders should accept the lower bid. They might just succeed because the top shareholders are either friends or strategic partners. If so, it will be a blow to activism in Japan. Someone should sue. (Updated Oct 2025)

Square Enix (9684 JP, Mkt Cap USD8.1bn, PER: 37.8x, PBR: 3.5x) : Square Enix is a big name in gaming with valuable IPs such as Final Fantasy and Dragon Quest, featuring the artwork of Toriyama Akira, the author of Dragonball, Japan’s iconic manga and anime of the 1980s and 1990s. 3D Investment Partners have engaged the company to help improve its corporate value.

Sumitomo Corp (8053 JP, Mkt Cap USD30.5bn, PER: 7.9x, PBR: 1.0x) : One of the top trading houses in Japan targeted by Elliott, one of the most aggressive activist globally. Warren Buffett is also a shareholder and this substack has written about this name at https://8percentpa.substack.com/p/bonus-idea-2.

Sumitomo Realty (8830 JP, Mkt Cap USD17.0bn, PER: 12.5x, PBR: 1.2x) : One of the top three property developers in Japan currently being targeted by Elliott as per the above name. Sumitomo Realty recently gave up on its poison pill / takeover defense measure, one of the last large cap companies in Japan to do so. In Aug 2025, Elliott released its public letter calling for Sumitomo Realty to wake up. It’s an awful interesting read if anyone’s interested. Please DM 8percentpa if you want the pdf. (Update in Sep 2025)

Synchro Food (3963 JP, Market Cap: c.USD120mn, PER: 29.3x, PBR: 3.7x, EV/EBITDA: 11.8x, FCF Yield 8.8%, Dividend Yield 2.5%) : Japan’s #1 one-stop-shop platform for restaurant operator benefitting from high restaurant turnovers and labor shortage being engaged by multiple activists. AVI owns c.18% while LIM advisors have another c.14%. The founder has sold down his stake and so, this company is primed for private equity to take over. (Update in Sep 2025)

Tadano (6395 JP, Mkt Cap USD0.8bn, PER: 10.1x, PBR: 0.7x) : One of Japan’s largest construction crane maker, Tadano announced a strategic partnership with Japan Activation Capital with the latter owning 11% stake. Tadano hopes JAC can help with crafting its global expansion ambition. This is a rare example of friendly activism. (Update in Aug 2025)

Taiyo Holdings (4626 JP, Market Cap: USD2.9bn, PER: 24.3x PBR: 4.3x, EV/EBITDA: 12.8x, Dividend Yield: 3.7%) : Japan’s electronic material and chemical company with niches in liquid solder resist and printed wiring boards currently being engaged by Oasis and Misaki Capital. DIC, another chemical company was roped in as a white knight against Oasis. DIC received c.20% share ownership of Taiyo via a dilutive share offering. The fight continues and this saga is currently “live”. (Updated Sep 2025)

TBS (9401 JP, Mkt Cap USD5.3bn, PER: 18.1x, PBR: 0.8x) : Japan’s TV broadcaster originally targeted by Yoshiaki Murakami and currently owned by multiple activists. TBS is known for its intriguing dramas but also its ownership of Tokyo Electron and prime land in Akasaka, Central Tokyo. Added together, these assets are worth multiple times its own market cap.

Teijin (3401 JP, Mkt Cap USD1.6bn, PER: 19.0x, PBR: 0.5x) : Teijin is one of Japan’s traditional textile makers which has successfully transformed itself into a chemical conglomerate and carbon fiber manufacturer in the early 2000s. Since then, company ‘s earnings stagnated and Effissimo bought c.10% of Teijin, likely targeting divestment of its non-performing businesses to better focus on its core franchises. Previously Elliott also engaged Dai Nippon Printing, another chemical maker. Multiple activists targeting Japan’s chemical sector has sparked a lot of interest in other Japanese chemical companies as well.

Tokyo Cosmos (6772 JP, Market Cap: USD77m, PER: 20.4x PBR: 1.6x, EV/EBITDA: 6.8x, Dividend Yield: 2.0%) : This is a microcap name in Japan making electronics components for cars, gaming consoles and white goods etc. It was engaged by activist Global ESG Strategy. The activist managed to replace the entire board and appointed its own representative, Mr Yasuto Monden, to be the Representative Director, President and CEO of Tokyo Cosmos. Could this be another privatization candidate? (Updated Oct 2025)

Tokyo Gas (9531 JP, USD12.5bn, PER: 11.4x PBR: 1.2x, EV/EBITDA: 6.9x, Dividend Yield: 1.5%) : Tokyo Gas, is Japan’s largest city gas provider with substantial real estate holdings. Elliott bought c.5% stake in late 2024 and urged the company to divest its real estate portfolio and improve shareholder return. The company has responded positively and share price has done really well (up c.50%)! (Updated Sep 2025)

Tokyo Tatemono (8804 JP, Mkt Cap USD3.6bn, PER: 9.3x, PBR: 1.0x) : Tokyo Tatemono is a Tokyo based Tier 2 developer (Tier 1 refers to the top developers like Mitsubishi Estate, Sumitomo Realty and Mitsui Fudosan) with prime land near Tokyo station and is perennially undervalued. Palliser Capital engaged the company calling for its divestment of strategic cross-shareholdings to fund its prime development projects.

Toyo Suisan (2875 JP, Mkt Cap USD6.1bn, PER: 14.1x, PBR: 1.9x) : Japan’s #2 instant noodle maker competing with the more famous Nissin Cup Noodle. With its brand Maruchan though, Toyo Suisan has built leading market share in the Americas. Nihon Global Growth Partners targeted this undervalued name and requested management to return more cash to shareholders. (Updated Sep 2025)

Toyo Tire (5105 JP, Mkt Cap USD3.2bn, PER: 8.2x, PBR: 1.0x) : As one of the neglected smaller car tire maker globally, Toyo Tire has not been able fully realize its corporate value. Toyo Tire is also an affiliate of Mitsubishi Corporation, its largest shareholder with 20% stake. Palliser has engaged the company, targeting to resolve the parent-child listing issue by privatization.

UACJ (5741 JP, Mkt Cap USD2.0bn, PER: 10.5x, PBR: 1.1x, EV/EBITDA: 7.1x, Dividend Yield: 2.4%) : Japan’s leading comprehensive aluminium manufacturer was formed in 2013 through the merger of Furukawa-Sky Aluminium and Sumitomo Light Metal Industries. Effissimo has bought c.18% of the company and is the second largest shareholder behind Furukawa Electric, one of its parentco. As with most other Effissimo’s investments, it is unclear what the fund has requested the company to improve on. (Updated Oct 2025)

The rest on the post is at https://8percentpa.substack.com/p/japans-activist-stock-names-large

How Warner Bros Discovery Delivered An Agonizing 126% Return For Our Portfolio

Background: Warner Bros Discovery, one of our earliest portfolio names, might be bought out and merged with Paramount Skydance as reported by Wall Street Journal last week. The attached video and the bullet points below depict our journey with this stock since 2023. The situation is “live” and circumstances will be changing rapidly. We will monitor and update when new salient information becomes available. This is not investment advice.

This video post first appeared on 8percentpa.substack.com

Warner Bros Discovery (Ticker: $WBD) is one of our portfolio names and after last week, it delivered 126% return over 2 years. Well, if we had timed it better, it could have been 126% in 10 months. As such, this was an agonizing win because the stock roller-coastered with no alpha for a long time. We shall go into all the gory details below:

This was our Original Investment Thesis

• WBD has one of the best content library globally with iconic franchises like Harry Potter, DC Comics, Game of Thrones amongst many other brands (HBO, Discovery, CNN and more).
• The company is also a strong free cashflow generator and trading at double digit FCF yield was stable and EBITDA growing.  
•  Its closest competitor, Disney was engaged by activists and we thought US media could become more interesting. WBD was way cheaper than Disney in market cap and hence more interesting. WBD is also one of John Malone’s Liberty Global companies and his team has a strong track record of strong execution.

Our Full Roller-Coaster Ride

• Background: WBD was formed when Discovery merged with AT&T’s Warner Media c.2022 and was loaded with c.USD66bn of debt. Share price subsequently bobbed up and down violently but ultimately ranged bound from 2022 to 2024.
• This was pure pain and agony which we shall describe further below with our powerpoint slide. Fast forward to 2025, WBD then announced to split into two companies earlier this June.
• WBD was supposed to split into GrowthCo with Streaming, Movies, Content and all the sexy businesses and LegacyCo with free-to-air TV, CNN, Discovery and other less sexy businesses.
• However, there was another plot twist last week (12 Sep 2025). It was reported that Paramount Skydance ($PSKY) is preparing to buy Warner Bro Discovery (WBD) with funds backed by the Oracle’s Larry Ellison and his son.
• This came as a big surprise because Paramount Skydance was only formed weeks ago when Skydance bought Paramount for USD8.4bn. The market believed this though.
• Why? Oracle had a blow-out quarter with over USD450bn future orders, Oracle’s share price jumped >30% making Larry Ellison the richest person on the planet.
• With WBD’s share price pop, we have taken the bulk of the profits while keep a small toehold. but still, it was an agonizing victory as the stock did nothing for two years.
• Also, there was always the risk that WBD might have too much debt on its balance sheet and might need an equity recap. Equity recap or dilution usually meant permanent loss of capital.

• In the slide above, we describe our agony and pain in gory details. When we invested, there was the hype of the Max launch. We made money and thought we were geniuses.
• Max was WBD’s answer to Netflix and Disney+. But Max did not do well, cord cutting turned further south and earnings downgrades came in waves. Our position bled and the portfolio continued to suffer as market cap collapsed to USD20bn.
• In 2024, there were more twists and turns as depicted in the purple boxes. At times, we watched Shawshank Redemption on Netflix to remind ourselves that we needed hope. Hope is a dangerous thing. Hope can drive a man insane. But hope is also perhaps the best of things.

• Thanks to the Ellison family though, WBD now earned 126% return for our portfolio, making it the largest profit contributor for the portfolio.
• Please watch the attached video above which we included more slides and details.

Lessons Learnt

• Be careful when buying highly indebted companies, there is no room for error and there is high risk of permanent loss of capital. This played out as we held WBD. The market was constantly worried about equity recap. Share price traded as low as USD7. With market cap falling below USD20bn.
• Be careful of businesses in secular decline. Cord cutting was in secular decline. 70-80% of WBD’s EBITDA was in linear and free-to-air media and was impacted. But we ignored it. This was just stupidity.
• Size the bets properly. WBD should have been a more manageable position. Our team’s investment psyche is more suitable for more mid size positions rather than 1-2 outsized high risk high return bets.
• Lastly, for fun, the following is reproduced by the author after reading similar creations from smart people on X / Twitter. Apologies, yours truly cannot remember who but hope to thank the anonymous genius who inspired us.

Huat Ah! 

This post does not constitute investment advice and should not be deemed to be an offer to buy or sell or a solicitation of an offer to buy or sell any securities or other financial instruments.

This post first appeared on 8percentpa.substack.com

Pivot to Shareholder Activism as 8% Value Activist!

This post first appeared on 8percentpa.substack.com

Time files. It has been c.20 years since we started blogging here. Today, few people use blogger. Blogger itself became difficult to use, ads and clickbaits dominate the posts. As such we ported to substack, an innovative newsletter platform, a while back. But we continue to post here from time to time.

In 2025, we pivoted to talk about activist stocks i.e. stocks owned by diligent, smart, activist fund managers who have made good money for their investors. From 2022 to 2025, we have also covered a couple of free cashflow compounders. We will still touch on these great stocks, the basic investment related stuff periodically, where relevant.

Shareholder activism is coming to Asia and Japan, because there are too many undervalued names. Even though everyone’s focused on US and its exceptionalism today, value is in Asia. As of 2025, roughly half of Asia’s listed stocks trade below book. 40% of all listed companies in Japan trade below book.

What is Shareholder Activism?

Shareholder activism is about investors using their stake in publicly listed companies to change the companies they have invested in for the better. In activist marketing lingo, it’s called positive transformation.

Publicly listed companies are complex animals. Most companies today have hundreds to thousands and for larger caps, hundreds of thousands or even more shareholders. Executive management of these companies answer to the board of directors who supposedly represent all shareholders.

But sometimes, things don’t really work. 

Cosy management are supported by dysfunctional boards and share price languished for years. Hence we have so many companies trading below book and we need activists to shake things up.

How do Activists Make Money?

Activists invest in cheap companies stuck with certain issues and they try to unlock value by resolving those issues. It could be changing management, or divesting poor performing businesses, or even taking the entire company private. It has been a viable strategy and some of the best activist funds have generated stellar long-term track records. Interested readers please read the Harvard study link below:

Harvard study on activists: https://corpgov.law.harvard.edu/2023/08/01/do-activists-beat-the-market/

Activism is not new. Warren Buffett was the activist when he took over Berkshire Hathaway in 1965. In the early 2000s, the current version of activism came back to the US in a big way and the movement then grew globally into Europe and more recently Japan.

Family controlled businesses in Asia might need a bit more time before activists can work their magic. This is because families owning 30-50% of outstanding shares make it difficult for activist to do anything. But the time will come. It is a matter of when, not if.

We want to be ready. We hope to make money by identifying the best activist ideas. That’s the mission!

What substack has to offer?

We have published monthly investment ideas for the past few years. We started with the usual free cashflow compounder ideas but we pivoted to discuss activist names in 2025. Interestingly, many names turned out to have activist involvement. Since Japan is the biggest hotbed, we will discuss a lot of Japan ideas, but will also touch on interesting global and Asian activist names.

From time to time we will opine on investment basics, fundamentals, portfolio trades and updates, investment strategies, market analysis and more. This substack is targeting both aspiring and seasoned investors. We publish posts every 5-10 days on both invested and toehold ideas.

We invite you to start as a free subscriber on substack. We are also on X, LinkedIn and Telegram!

Let's also connect on: 

LinkedIn: https://www.linkedin.com/in/8percentpa
X: https://x.com/ArvelVista
Telegram: https://t.me/+zF0bRcOXXo4zOTc9 

The rest of the post is on 8percentpa.substack.com

QYLP ETF - Deep Dive

This post first appeared on 8percentpa.substack.com

We wrote an earlier post on this covered call ETF. We discussed how it could be an interesting hedged play to benefit from the continuing rise of the Magnificent Seven and NASDAQ. Today, we will go through the fundamentals, technicals and valuation more deeply.

1. Fundamentals

QYLP is a covered call ETF for the NASDAQ100 (top 100 stocks on NASDAQ) denominated in British pounds (GBP). There is a primary ETF listed on NASDAQ with ticker QYLD and it tracks the index BXNT which is basically the same thing - covered call version of the NASDAQ100. Both QYLP and QYLD pay dividend monthly by writing covered call options of its constituents. Here’s the investment thesis for QYLP:

The QYLP ETF (Ticker: QYLP) is a covered call ETF listed in the UK that tracks the NASDAQ100 but overlaid with the writing of covered calls which generates option premiums that is paid out monthly. It has generated c.7% return over the last 12 months and would be able to contribute stable dividends to the portfolio while providing exposure to the NASDAQ top 100 constituents. While unrelated to activism, this exposure ensures participation in the event of continuing melt-up of the Magnificent Seven and the best run companies in the world today.

QYLP is an Ireland domiciled ETF and has the following fund details (screenshot below). As an innovative covered call ETF, expense ratio is slightly higher at 0.45%. Market cap is decent at c.USD480m (although the primary ETF has >USD8bn in AUM. The primary ticker is QYLD and there is more information for QYLD which is the ticker for the same instrument listed on NASDAQ and the USD denominated version on the LSE. QYLP is the GBP denominated version.

The following table shows the top 10 constituents of the QYLP as of Jul 2025. We can see the Magnificent Seven (Alphabet / Google, Amazon, Apple, Meta / Facebook, Microsoft, Nvidia and Tesla) prominently featured. In fact, the NASDAQ index represents the best run companies on our planet with perhaps a couple of exceptions. In a way, this investment idea is a hedge against missing out on the continuing growth of these greater-than-great companies. Granted the risk is that we are near the peak and should markets collapsed, we will be underwater for a while.

Performance and Track Record

The following charts show the performance of QYLP, QYLD and the QQQ indices. The Ireland domiciled, UK listed QYLP has the shortest track record and the numbers also assume that the dividends are re-invested. At 7+% annualized return, the track record is decent and comparable to the primary ETF (second table below).

Performance of the QYLP ETF listed on LSE with okay track record

The next table shows the performance of the primary index QYLD, listed on NASDAQ and denominated in USD. We can see that the annualized returns are not far from QYLP (above) at 7+%pa. That has been the case for the past 10 years and also since inception in 2013. Both indices are managed by the Korean asset manager, Mirae.

QYLD listed on NASDAQ with longer track record

The last chart shows the performance of QQQ, one of the most popular NASDAQ ETFs and we can see that performance triumphed both QYLP and QYLD by a huge margin. For 10Y, annualized return it was 18.7%! The price to pay for regular dividend income and less volatility is c.10% of return per annum, which is a lot.

That said, let’s analyze some of the positives and risks of owning this ETF.

Positives

Participation and diversification: As alluded to above, the exceptionalism of the Magnificent Seven (Mag7) is something unique in the past twenty years or perhaps the entirety of humankind. Less than 10 companies today generate more than USD50bn free cashflow (FCF) globally on an annual basis and we have almost every member of the Mag7 generating that much. To add, apart from the Mag7, most of the NASDAQ companies in the index are actually best-in-class and might well be the next generation of FCF juggernauts. As such, I believe the risk of missing out is not small and it pays to just have some exposure via this ETF.

To delve delve a little more on this topic, since we pivoted the portfolio to focus on activists, which is inherently a value strategy, there is almost no opportunity to invest in these best of the best NASDAQ names. Yes, one activist had engaged Google and even Microsoft was targeted in the past but activist stocks are usually not compounders. So having c.5% in some of these idiosyncratic strategies is a very pertinent for the portfolio. That’s one reason why we also have physical gold in the portfolio.

Next topic, regular dividends!

QYLP and QYLD’s distribution calendar published on https://globalxetfs.eu/funds/qyld/

Regular Dividend Income: The other attractiveness of QYLP is that we get regular monthly dividend (table above) on top of exposure to NASDAQ. The annual dividend has hovered around 11-14% which is highly attractive to dividend investors. Owning this ETF in the UK, which has no with-holding tax, is also one of the reason why we chose QYLP. Additionally, there is always a base of dividend buyers which ensures liquidity for the ETF. However, we pay a big price for this regular income. We missed out almost 10%pa based on past 10Y track record. Although I believe the gap should close the longer we hold this instrument.

Another way to think about QYLP is that rather than holding cash or T-bills in the portfolio, owning this ETF gives us regular dividends, exposure to NASDAQ and firepower to add to high conviction activist names should interesting opportunities arise in the future.

With that, let's discuss the risks.

Risks

Deviation in performance in performance: While the NASDAQ has recovered and exceeded its previous all-time high in Feb 2025, the stock price of QYLP has languished. I can think of two reasons.

The rest of the post is on substack.

Huat Ah!

Activist Targets Swatch!

This post first appeared on 8percentpa.substack.com

Today, we would like to discuss Swatch. We have looked at Swatch for donkey years and wrote a tonne of materials about it. See below:

https://8percentpa.blogspot.com/search/label/Swatch

Since then, share price underperformed big time. To us, there is no surprise that an activist came in and now trying to shake things up. It might be interesting to do more research now and perhaps add this to the portfolio.

This post will not be a full analysis. More like a preamble. We will keep this short and sweet for now. Provide a brief background, tell the activist’s story and how the founding family reacted and set the stage for the bigger analysis.

Here we go!

1. Background

Swatch Group (Market Cap USD8.9bn, EV/EBITDA 8.8x), while being known for its plastic, colourful, quartz wristwatches for kids and youngsters, is actually a watchmaking conglomerate. Swatch owns Omega, with all the heritage - worn to the moon and all, which could have become a premium luxury watch brand like Rolex, but that did not happen. It also owns both mass-tige and high end watch brands like Longines and Breguet amongst others.

Swatch x Omega, the solar system collection

In 2013, Swatch bought jewellery brand Harry Winston as one of the early steps to compete against LVMH, the world’s largest luxury player and also its arch-nemesis, Richemont. While it created much hype back then, management did not follow through. Supposed synergies and growth did not come and Swatch’s growth stagnated and free cashflow generation also collapsed.

Meanwhile, LVMH became Europe’s largest company by market cap (only recently overtaken by Novo Nordisk) and Richemont double its market cap to almost CHF100bn, which is 10x bigger than Swatch over the 10-15 years.

 

Swatch’s overview, thanks to Finchat.io.

In the same time period, Swatch’s market cap more than halved. Its financial ratios became pretty dismal, as we can see above. Both ROE and Operating Margin are at 4+%. Price-to-Book is at 0.6x. The founding family, with two generations of family members running the business and owning majority of the company, are burying their heads in the sand, resisting advice.

Under its founder Nicholas Hayek, Swatch used to be a FCF generating machine. But after he passed, mis-management has caused FCF to turn negative. This was the result of declining margins, ballooning of its inventory (unsold watches) and increasing capex.

FCF from macrotrends.net showed that Swatch’s 2023 FCF was negative…

Swatch also has CHF1.4bn in net cash, which together with its inventory of CHF7bn, amounts to more than its market cap. In fact, Swatch recently met Ben Graham’s Net Net (Current Asset - Total Liability > Market Cap) criteria. Which is somewhat unthinkable for a luxury company.

2. Activist’s Side of the Story

As such, activists found this name. Steven Wood of Greenwood Capital, owning 0.5% of Swatch, called out Swatch’s management. He would like to see the company engaging shareholders and asked for seat on the board. As expected, Swatch’s management poo-pooed him and voted down his request for a board seat.

However, it seemed unlikely that this is the end of the story. For the share price to collapsed so much to become a net-net, it seemed difficult to justify Swatch has done a lot of things right. There is definitely room to improve margins, ROEs and to think about the six point plan (below) that Mr Wood has raised.

1. Breguet: Improve the retail experience, add personalization programs at scale, reduce the wholesale channel variety and improve residual values. We believe these steps can make Breguet once again king of the Swiss watch industry.

2. Harry Winston: Emphasize the brand’s core design elements through annual collections that both reinforce the icons and the exceptionally rare jewels that the group is known for. With annual collections taking the opposite approach as Van Cleef and Arpels, the goal is to replicate Hermès Birkin playbook for unoccupied ultra-high-end jewelry industry.

3. Omega: Increase collaborations to expand the collection, and target audience. A key priority is to add new collaborations, staying true to the brand’s core DNA but aimed to make the brand more relevant with Gen Z. Utilize what’s working and “hot” in the vintage market to inform new design trends and take a few more risks with selected exclusive editions.

4. Capital Markets: Strengthen perception and credibility of the company in the capital markets and media by creating an offensive narrative, as opposed to letting others define the company’s story. Continue to increase transparency and add an entrepreneurial Investor Relations officer to help management stay focused on the business. By regaining a more rational valuation, this will improve stakeholder perceptions of organizational culture, lead to higher employee satisfaction, higher productivity, ultimately benefitting all stakeholders.

5. Brand Marketing: Increase marketing spend, funded by removing overhead burden, to double-down on storytelling for the incredible historic brands and ongoing innovation within the group. Remove layers in between founding family, executives and the company’s core employees of doers, sellers and inventors.

6. Technology Innovation: Expand the group’s innovations across the portfolio brands by layering in technology into replaceable and upgradeable bands.

Courtesy of https://www.watchpro.com/activist-investors-six-point-plan-to-strengthen-swatch-group/

2. Founding Family Strikes Back!

Alas, the founding family is not interested. They believe they know their business best. They would say it was because of China. Once China recovers, all will be good. They believe analysts and investors know shit and so, while they own >50% of the company, it is difficult to see how things could change.

The rest of the post is on 8percentpa.substack.com

The Curious Case of UOI

This post first appeared on substack.

This is a short commentary about UOI and not a full review for the stock to be in the portfolio. Interested readers, please click the following newslink for context.

https://sg.news.yahoo.com/minority-investor-says-uoi-over-014825695.html

Activism is coming into Asia. It has already taken Japan by storm. It may take years, or even decades but it is a matter of when, not if. Why? Because tonnes of Asian stocks trade below book. In Singapore, >50% of our listed stocks trade below book. We are worse than Japan (which only has 40%).

320 out of 620 listed stocks on SGX trade below book!

We have listed stocks trading at 0.03x price to book. More than one. There is Sapphire Corp, China ShenShan Orchard and Fuxing China Group. All trading at 0.03x. (See screenshot below).

Take the case of Fuxing China Group trading at $3.15m (not enough to buy a 3-bedroom condo in Singapore) which is at 0.03x book value. What it means is that you can buy the company for $3.15m today (technically, you may need to pay a takeover premium but let’s keep is simple), but the net assets on its balance sheet is worth c.$100m. Isn’t that the bargain of the century?

A couple of them trading at 0.03-0.09x Price to Book!

Alas no. I dug into its financials. $50m of that is account receivables, which is money not paid to Fuxing yet. The other $50m is supposedly depreciated property, plant and equipment: its factories and facilities. Apparently, Fuxing make zippers in China. Someone needs to fly down and check those assets. They may not be there. So, yup, even though its 3c to the dollar, nobody is buying.

But there are real unpolished gems around. Usually companies that are, for one reason or another, trading very cheaply for some time already. That is when activists come in to try to unlock value. Today’s story is about the curious case of United Overseas Insurance (UOI) with an individual activist.

First, let's look at UOI's financial numbers:

Simple Financials (Dec 25 estimate, SGD)

    • Sales: 100m, Net income: 30m 

    • Operating Income: 35m, Investment Income: 17m 

    • Debt: -100m (Net cash), Mkt Cap: 477m 

    • Investments: c.414m of which 47m in Haw Par shares 

 Financial Ratios 

    • ROE: 6.5%, ROIC: 2.6% 

    • PBR: 1.0x (Dec 25) 

    • PER: 15.9x (Dec 25) 

    • Dividend: 23 cents per share, Yield: 2.9%

UOI used to trade below book but has since rallied because the said individual activist called management out via the media. The market got interested and bought the shares up. However, without more firepower, it might be difficult to create genuine change.

That’s the difficulty and complexity about activism. Many things need to fall in place. E.g. Low allegiant shareholder ratio. Latent value that needs to be unlocked. Potential angle to catalyse some transformation and importantly, the core business should be sound and valuations should make sense.

Here’s the usual Fundamentals, Technicals and Valuation framework.

1. Fundamentals

UOI operates a simple business of selling insurance via Singapore’s second largest banking group - United Overseas Bank (UOB) Group. It is a unique bancassurance business which has enjoyed steady growth alongside Singapore’s economy (or perhaps more relevantly Singapore’s property market). By leveraging on the UOB Group’s infrastructure, UOI has also been able to keep underwriting cost low (no agents and lower IT cost), thereby generating steady underwriting profits.

Actually, both underwriting and investment profits had done well. From what I can tell, UOI had positive investment income for the past few years. Please see slides below:

It is not clear if other income is investment income. The assumption is yes. The slide above shows it has been positive from 2018-2022 and the next slide shows 2023-24 did well too.

Investment profits had grown last year as a function of the stock market. UOI uses its own inhouse asset management team and Schroders and both adopt conservative investment strategies and have, by and large, made returns. In short, it’s a decent business.

Let's discuss the elephant in the room.

Activism in Singapore: What's really the crux of the issue here is that an individual activist has called out poor management under UOB’s leadership. He believes that UOI is over-capitalized (>400% capital adequacy ratio) and should sell stuff to return capital to investors and he proposed the following two resolutions: 

    Resolution 1: To distribute UOI’s 4,274,600 ordinary shares in Haw Par Corporation directly to UOI shareholders. 

    Resolution 2: To appoint a financial advisor to evaluate strategic options for maximising shareholder value.

As we can expect, UOI threw them out, citing no legal requirement to put these to the vote. What transpired was a tense shareholder meeting which we all get to learn more a little bit more about UOI’s business. 

Due to to the lack of disclosure, it is hard to analyze UOI. What we know is that it runs a profitable general insurance business (after selling the life insurance to Prudential) and pays 2+% dividend yield. It used to be cheaper, but thanks to the spotlight being shone on it now, share price has rallied. The investment thesis should still be intact though.

Investment Thesis

UOI enjoys an interesting niche general insurance business (Residential mortgage, property, personal accident) in Singapore with its lower-than-industry cost base by leveraging on UOB’s group infrastructure. It enjoys marginal growth alongside the strength of Singapore’s property market. Recent shareholder activism while un-successful would keep management on their toes to continue to increase its dividend payout (currently 47% payout ratio).

Risks

Conversely, the risk is that management decides to do the opposite, since the activist would never gather enough shares to mount any serious challenge to the UOB group (which owns c.60% of UOI). It is a given that UOI will not sell Haw Par shares nor change anything that the activist demanded (even though he may be right, and especially if he is right, that’s how politics work right?). The only hope is that dividend can be raised because the UOB group will also benefit.

Should that not happen, share price will then trade at where it is now and we can only eat the 2+% dividend or worse, the bigger risk is that share price corrects back to a lower level (c.$6.50 from current $7.70). That’s 18% downside!

The rest of it is on substack.

This post does not constitute investment advice and should not be deemed to be an offer to buy or sell or a solicitation of an offer to buy or sell any securities or other financial instruments.

Tariff Tantrums and the SPX Bear Run

This post is also on substack.

Thanks to Trump, April 2025 might go down in history as the first President-inflicted bear market of the 21st Century. Veteran market participants (like this blogger) would remember the past bear markets well. There was the dotcom bust which lasted almost three years. There was the March 2020 pandemic scare which was a 29% drop in just one month. More recently, in 2022, the market dropped more gradually and the whole ordeal lasted 9 months. 

Then there was the mother of all bear markets, the GFC, which was a whopping 55% drop over 17 months back in 2007-2009. Scary, would be an under-statement. The global financial system as we knew it could collapse. We were days from the Second Great Depression. It was hard to believe, and still is, but both God of Fortune and Lady Luck smiled on us all. So we can just talk about it rather than experience it.

S&P Bear Runs since the 1950s

For the story today, the S&P500 peaked in Feb 2025 slightly above 6,000 and then things fell apart, as they do when markets peaked. Only this time, we shot ourselves in the foot. Or rather Trump did. We are now almost 20% below the peak, which by definition, means we are entering bear market territory. In the last two weeks, the drop was drastic enough that Trump himself got nervous and backtracked his tariffs by postponing it for 90 days. 

The markets heaved a sigh of relief, stock prices stabilized and some hoped that the good old days will come back. By that, I mean Nvidia leading the Magnificent Seven to higher highs. Bitcoin and A.I. names rallying again. S&P500 revisiting 6,000 and surpass that, with major global indices (except China) following behind. And more euphorias, kumbayas and what not. Alas, the probability of that happening seemed pretty low now.

Change in world order

What we are seeing could be a generational change in the world order which started when Trump became President back in 2016. That coincided with Xi's rise in China amongst many global events (Brexit etc) which culminated to Russia's invasion of Ukraine. The world, led by US to cooperate, globalize, trade and prosper since WWII changed to one that is about self-interest. We are talking about protectionism. De-globalization. Every country for herself. Friend-shoring, onshoring, you know the rest. 

The markets ignored these seismic geo-political shifts because there were exciting stories. It started with the FAANGs (Facebook, Amazon, Apple, Netflix and Google) which then morphed into the Magnificent Seven (Tesla, Nvidia, Microsoft, Meta, Amazon, Alphabet and Apple). There was the whole Bitcoin mania and then the A.I. mania. If we dig deeper, there were also other sub-plots like shareholder activism, Novo Nordisk and some big pharma with their gamechanging obesity drugs. There was also Japan, with Nikkei breaking its 1989 high after 34 years. Even in Singapore, we had DBS having its market cap exceeding USD100bn and taking over Singtel as Singapore's proxy stock. 

https://companiesmarketcap.com/sgd/banks/largest-banks-by-market-cap/

Today, DBS' market cap exceeded SMFG's (Japan's second largest bank) market cap and also UBS' momentarily when it had to rescue Credit Suisse. This is quite unthinkable. Japan has a population twenty times bigger than ours. And UBS is the pre-eminent wealth manager and now Switzerland's only big bank. What did we do so right? If you scrutinize the table above (courtesy of companiesmarketcap.com), we are on our way to surpass more G7 banks like BNP and Citigroup. Citigroup! The Citi that never sleeps!

Anyways, back to the story, so, the markets were busy. Who cares if Russia and Ukraine started a war. Or if China threatened to invade Taiwan. Market participants were enjoying the bull market and making money left, right, centre. But Trump slapped the markets in the face and everyone woke up. So the question now is would he double down or would he backtrack? Extrapolating from these two simple actions, there are two possible scenarios:

Slight return to normalcy

This is the bull scenario that everyone hopes for. Trump, worried about his own finances, or simply focuses to whip China differently, backs down. The markets think its business-as-usual and we avert that 50% drop we saw with the GFC and the dotcom bust. But still, it is hard to imagine that we go back to the previous world order of global cooperation, more trade, less bitching. Even if this scenario pans out, it will not be Mag7 leading the markets. It is hard to say who are the new leaders, I would focus on what I have preached - strong FCF companies which are now featured on substack.

All hell breaks loose

This is the doomsday scenario where Trump loses it (which is highly possible) and we have full-blown trade wars, not just with China but with allies, neutral countries. Basically, total collapse of the world order since WWII. This bear market could become a combination of the dotcom bust and GFC, lasting into years and dropping 50% at the end. The only safe assets to hold would be cash and gold. Ironically, property as well. The end game here is WWIII.

This is not impossible. And if WWIII happens, cash is worthless. Only gold can preserve wealth.

Of course, predicting the future is never so simple. The future is a set of probabilities and the two scenarios above probably lies on a spectrum with normalcy at one end and hell at the other. So we might avert WWIII like how we averted the Second Great Depression back in 2009. Regardless, it would be a very uncertain 12-18 months ahead. Hold more cash and be less courageous.

2025 FCF and Dividend List

This post first appeared on 8percentpa.substack.com

This year's first batch of dividend lists are out!

Instead of using Poems, we will try out a new platform - Finchat.io. This is one of the most powerful toolkit for publicly listed stock research and I would encourage all readers to give it a try. It's a freemium model, so anyone can use the free ones, which is already very powderful!

For this year's lists I have similarly used FCF as the main filter, but added dividend and net cash and excluded certain industries. Here's the list for Singapore:

Venture (Market cap c.SGD 3.6bn) is the stand out here, with 35% of its market cap in cash and generating a whopping 12.7% free cashflow yield. This stock used to be a darling with share price hitting >$25 a couple of times since its IPO (today's share price is $12.5). It competes in a very good niche today, making hardware for the leading players in life sciences and networking equipment the growth segments of today, having successfully transitioned from PC and printers eons ago.

However, such hardware manufacturing business is inherently cyclical and share price had gone through  many boom and bust cycles. Today, it is trading near trough valuations but without studying closer, it is hard to say when things would recover. It is also worth noting that the founder still runs the company and Venture's success over the last 40 years is largely attributable to him. Should he retire, it is unclear if the company can continue to grow and compound as it had.

US FCF and dividend list for 2025

This second list churns out the US names of which Acuity and Dolby are the largest. Acuity makes lighting and Dolby makes sound systems. In our substack, we have covered IMAX, which is in the same space as Dolby - cinemas. Both names look interesting but again, without doing the work, it is hard to say if they are good buys are not. The other issue with US stocks for us is also that dividends get taxed. 20% would be withheld and taxed so it makes more sense to buy stocks with little dividend if we really want to optimize returns. Almost all the stocks on this lists all have very high dividends. Dolby has a whopping 9% dividend! 

Japan's list

Given the craze on Japan in 2024 and hopefully we see more buzz in 2025, this last list is on Japanese names. For those of us who don't look closely at the land of the rising sun, Japan has been undergoing a stealth transformation for many years after the burst of its bubble, banking crisis and corporate governance overhaul. The stock market finally exceeded its high in 1989 and a huge wave of shareholder activism is under way. We might see Nikkei successfully breaking through at hit 45,000, if not 50,000.

This is not a number plugged out of thin air. The math around it is as follows:

• Next year's Topix EPS (2026) is c.220 yen (and growing) and multiplying that by PER of 16x (one turn higher than its historical average to reflect Japan's transformation discussed above), we can explain Topix at 3,520 (vs only 2,800) today.
• The Nikkei / Topix ratio has a historical average of 14x and using that (i.e. 3520 x 14), we have Nikkei at 49,280.
• With that, 50,000 is not too far away. 

Although we do need the yen to remain weak and the activism momentum to continue. Japan has had so many false starts over the decades it is hard to believe whether the country could really embrace capital markets transformation. I think Japan can change and will change because this provides part of the solution to solve its aging issue (e.g. more capital to attract workers into Japan) and Japanese themselves are frustrated that countries that were behind are now richer. This is a strong impetus to push the country to progress.

With that, we shall discuss two names on the list briefly. Both have what Japan is most famous for - animation:

Bandai Namco (Mkt cap USD22bn, net cash at c.USD2.5bn, dividend yield 4.5%, FCF yield 5.7%): this is the ultimately anime IP play with its strong library of the most famous IP and manga titles like Dragonball, Naruto, Gundam and One Piece. Its businesses span toys, games, amusement centres but as with most sleepy Japanese management, financial metrics such as OPMs and ROEs are not optimized and hence we see the stock trading cheaply. Activists need to come in to shake things up.

Nippon TV (Mkt cap USD4.8bn, net cash USD1bn, dividend yield 1.1%, FCF yield 5.5%): broadcasters are right in the middle of shareholder activism with Fuji TV being targeted. The other four broadcasters including Nippon TV. They all face similar issues with Fuji TV: traditional management who knows nothing about capital markets and doesn't give a shit about shareholders. Hence, they all trade below book despite owning the most valuable real estate on prime land in Tokyo. Nippon TV also owns the crown jewel of Japanese animation - Studio Ghibli. As such, there a lot of hidden value beneath the PBR <1x apparent cheapness. 

So, hope these ideas help. Please conduct your own deep dive research. Our substack will also write these out should they qualify to be in the portfolio.

Huat Ah!

Past lists:

2024 Dividend List - Tokyo!

2024 Dividend List - UK!

2024 Dividend List

2023 Dividend List

2022 Dividend List - Australia!

2022 Dividend List

2021 Dividend List - HK!

2021 Dividend List

2020 Dividend List

2019 Dividend List

2018 Dividend List - Part 4

2018 Dividend List - Part 3

2018 Dividend List - Part 2

2018 Dividend List - Part 1

2017 Oct Dividend List - Part 2

2017 Oct Dividend List - Part 1

2017 Mar Dividend List

2016 Dividend List - Part 2

2016 Dividend List - Part 1

2015 Dividend List - Part 2

2015 Dividend List - Part 1

2014 Dividend List

2013 Dividend List - Part 2

2013 Dividend List - Part 1

2012 Dividend List

2011 Dividend List

2010 Dividend List

2009 Dividend List