JAPAN FIRST TO MARKET

Research evidence excerpt

JAPAN FIRST TO MARKET

Asia Pacific Equity Research

Japan First to Market 07 July 2026

Top Stories

Init | Zensho Holdings (7550) (Ami Terai) (7550 JP, OW)

FY2026 earnings driven by Hamasushi’s profit growth and Sukiya’s earnings recovery; initiate

coverage at Overweight, shares look undervalued

We initiate coverage of Zensho Holdings with an Overweight rating and a price target of ¥10,100 through December 2027.

Zensho is one of Japan's largest restaurant operators, having expanded its business scale through a multi-brand strategy

centered on M&A. Although FY2026 operating profit guidance was viewed negatively by the equity market, we expect solid

earnings driven by its core brands Hamasushi and Sukiya. While the store count trend in the global prepared food segment, a

key focus for investors, is hard to forecast, we believe there is room to expand its wholesale network over the medium term,

and we think the stock currently looks undervalued.

Autos/Auto Parts/Tires: Earnings Outlook (Apr-Jun) (Akira Kishimoto)

Expect solid results despite risk factors, particularly for automobiles and tires

Although cyclical value auto and auto parts stocks have underperformed YTD, we think the gap between fundamentals and

share prices has widened considerably, as indicated in our June 30 report (link). We expect automakers and tire makers to

announce positive results for April-June. We are particularly interested in the impact of higher gasoline prices on auto and tire

demand and whether higher costs are being passed through to prices. We forecast solid earnings for automakers Isuzu,

Suzuki, Honda, and Toyota, and for parts/tire makers Koito Manufacturing, Nifco, and Yokohama Rubber.

Transportation: Earnings Outlook (Apr-Jun) (Ryota Himeno)