Nippon Seiki Co., Ltd.

Disclosure filings released after the September 17 market close produced a full slate of positive and negative developments relevant to investment decisions. On the positive side, Apple International raised its ordinary profit forecast for the current fiscal year by 18% and increased its dividend by 5 yen; Choshimaru reversed its current-year ordinary profit outlook to a 21% increase, projecting a record high for the first time in three terms along with a 1 yen dividend hike; Kasumigaseki Capital raised its prior-year ordinary profit forecast by 7%, adding to its record-high projection; and Hobonichi raised its prior-year ordinary profit forecast by 67%. In M&A, Saint Marc Holdings will take over the udon specialty restaurant business Tsurutontan from K Express for 12.8 billion yen, while B-style Holdings will acquire all shares of HR Asocié for 1.21 billion yen, making it a subsidiary. Ferrotec will launch a tender offer for Japan Resistor Manufacturing at 1,901 yen per share, a 49.1% premium to the September 17 closing price, aiming to make it a wholly owned subsidiary, while Nippon Seiki will buy back up to 3.61 million shares, or 6.27% of its outstanding shares, for a maximum of 9.979 billion yen. On the negative side, Chubu Steel Plate reversed its current-year ordinary profit outlook to a 46% decline; PharmaRise Holdings ended the June-August quarter with a 31% drop in ordinary profit; Industrial & Infrastructure Fund Investment Corporation is expected to post a 2% decline in current-year ordinary profit; Advance Residence Investment Corporation a 6% decline; and Ichigo Hotel REIT Investment Corporation an 18% decline.

Ridge-i and Nippon Seiki announced share buybacks after the close of trading on the 17th. Ridge-i will repurchase up to 160,000 shares, equivalent to 3.6% of its outstanding shares excluding treasury stock, for a maximum of 450 million yen, with the buyback period running from September 24 to November 30. Nippon Seiki will repurchase up to 3.61 million shares, equivalent to 6.27% of its outstanding shares excluding treasury stock, for a maximum of 9.979 billion yen, through the Tokyo Stock Exchange's off-auction own share repurchase trading system ToSTNeT-3 on the morning of September 18.

Japanese auto parts maker Nippon Seiki has agreed to acquire Denso's head-up display (HUD) business, which develops, manufactures, and sells displays that project driving data onto windshields. The deal covers Denso's HUD operations in Japan, China, Spain, the US, and Mexico, and includes production equipment and related intellectual property, but excludes Denso officers, staff, land, and buildings. The assets were valued at 1.16 billion yen ($7.2 million) as of March 31, 2026, and the purchase price, undisclosed, will be under 1% of Nippon Seiki's consolidated net assets for the year ending March 2026. Nippon Seiki will pay in cash from its own funds, and the acquisition, expected to close on February 26, 2027, is subject to regulatory approvals and customer consent, with production transferred in stages to avoid disruption.

Nippon Seiki is trading at an undervalued level with a PBR of 0.6x and a dividend yield of over 3%, and its three consecutive dividend increases and progress in structural reforms are being recognized. The company's market capitalization is approximately 158.4 billion yen (as of August 26, 2026, share price 2,710 yen). If the target of 28 billion yen in operating income for the fiscal year ending March 2030 is factored in, reaching a scale of 250 billion yen at a PER of 15x is within sight. For the first quarter of the fiscal year ending March 2027, consolidated results showed revenue of 83,252 million yen (up 9.2% year-on-year), operating income of 2,191 million yen (up 44.0%), and profit attributable to owners of the parent of 1,517 million yen (up 116.2%), marking a significant increase in both revenue and profit. Additionally, the company plans to make Toyo Denso a wholly owned subsidiary in October 2026, and on August 28, it announced the acquisition of Denso's head-up display business. For the fiscal year ending March 2027, the company expects a dividend of 90 yen per share (up 10 yen from the previous year), marking the third consecutive annual dividend increase.