JAPAN FIRST TO MARKET

Research evidence excerpt

JAPAN FIRST TO MARKET

Akira Kishimoto AC Asia Pacific Equity Research

(81-3) 6736-8646 29 June 2026 J P M O R G A N

akira.x.kishimoto@jpmorgan.com

We view a cautious stance on the overall sector as appropriate: Divergence in earnings and share price performance

between sectors has reached unprecedented levels due to the concentration of capital in AI-related names, and domestic

demand sectors have tended to underperform overall. TOPIX is up 17.9% YTD while the TOPIX Retail index is down 0.3% (as

of June 24). As we discuss in detail below, we believe that since March, business conditions have been generally favorable for

major retailers, with almost all companies posting higher revenue and profit than their internal plans and Bloomberg consensus

estimates. Key factors behind the solid earnings since March include (i) no impact from Middle East conflict or rising crude oil

prices, (ii) favorable weather, robust consumer sentiment and income conditions, and (iii) some special demand from

expectations of higher prices, leading to more demand for necessities and consumables. However, differences in relative

sector profit growth rates and outlooks have led to a tendency for retail stocks to underperform.

Kamigumi (9364) (Ryota Himeno) (9364 JP, OW)

Announces ¥15 billion share buyback; scale in line with expectations, but management’s

responsiveness looks positive

At 15:30 on June 26, Kamigumi made a timely disclosure of a share buyback. We think the share buyback’s scale is in line with

expectations, but its announcement and implementation are earlier than we expected based on management’s previous

behavior, and we like its responsiveness to the share price’s current weakness (which we think mainly reflects FY2026

guidance for a greater-than-expected profit decline).