This Week in Asia #42

Industrial gas supplier Air Water's stock price rallied +20% after ISS and Glass Lewis backed its governance overhaul ahead of a 22 September EGM. FnGuide's professional CEO resigned, leaving the controlling shareholder's son-in-law in charge. And finally, an individual investor bid HK$0.10 for 5% of suspended Chinese cemetery operator Fu Shou Yuan, a whopping 96% below the last traded price.

Watchlist update

• The Japanese industrial gas supplier Air Water rallied last week. On 29 August 2026, it released materials for the extraordinary general meeting on 22 September 2026. The company plans to introduce a new Audit & Supervisory Committee Structure to improve its governance. Investors may finally be willing to see through the accounting problems that have plagued the business over the past year. Though I want to caution that the audit opinion is still qualified. (Full disclosure: I own shares in Air Water.)
• Korean index provider FnGuide's co-CEO Lee Ki-tae suddenly resigned. I have a lot of respect for Lee: he came from Samsung Securities and revitalized the organization. Jeon Min-seok, the son-in-law of the Chairman of parent company Hwacheon Group, will now run the business himself. While he might be talented, I prefer to have a professional with actual industry experience in charge.
• Best Mart 360's 1H2026 results were better than expected, given the share price reaction. I sold my own shares in Best Mart last month, and this has proven to be a poor decision so far. Best Mart reported revenue up +1.0% year-on-year, with gross profit flat and earnings per share down -4%. The slight margin compression came from heavy promotions. On the positive side, private label sales rose +10% year-on-year, and you can argue that its private label products differentiate it from its peers.
• Fast-food operator Jollibee took a major step forward with a spin-off and an IPO of its international segment in Hong Kong. Anthony Bourdain once praised Jollibee for being the "wackiest, jolliest place on earth". Some investors on Value Investors Club and elsewhere think that the spin-off will unlock value. But I've always felt that the Jollibee brand is weak outside the Philippines. In my personal view, the jewel remains Jollibee's domestic business.
• A senior executive at South Korean cosmetics company Amorepacific Holdings bought US$73,000 worth of shares. The buyer was Ahn Jae-sung, the company's head of compliance. Amore owns brands such as Sulwhasoo, Laneige, Innisfree and ETUDE, mostly through the separately listed operating company Amorepacific Corporation, which is also experiencing insider buying. Amore Corporation's 2Q2026 results showed revenue growth of +17% year-on-year and operating profit +59%. It seems Amore is finally reaching an inflection point, with US and European demand for Korean cosmetics offsetting weakness in Mainland China. That said, one quarter is not enough to guarantee a turnaround and US$73,000 is small in absolute terms.

Worth your time

• Schroders Japan's Masaki Taketsume was on MoneyWeek Talks discussing the bull case for Japanese equities. He argues that Japan has successfully transitioned out of two decades of stagnation into an environment of structurally higher inflation. Corporate governance reforms have improved returns on equity. He sees policy stability under the pro-business Takaichi administration until at least 2028. However, I'd caution that much of the nominal growth we've seen comes from the post-2022 weakness in the Japanese yen.
• Our friends at Theoria Capital have started writing weekly updates on Chinese stocks. I really enjoy these. In today's post, Theoria provided context on the recent low-ball offer for Chinese cemetery stock Fu Shou Yuan, which I wrote about in 2024 here. Its previous CEO, Wang Jishen, was removed as President. Meanwhile, the incoming management team found "questionable transactions", and trading was suspended. Now, an individual investor has launched a HK$0.10 tender offer for 5% of the shares, at a massive 96% discount to the last traded price. Nobody knows what's truly going on, but after reading Theoria's post, I think we may have witnessed a state-sponsored takeover of the business.
• I read an old post on Toumei by The Capital Chronicle. The company resells fiber lines and electricity to small- and medium-sized enterprises in Japan. What makes Toumei different is that it's run by Fumihiko Yamamoto, a Hikari Tsushin alumnus. Hikari Tsushin takes capital allocation seriously, and I suspect that Toumei does, too. Today, the stock trades at 9.7x P/E and has 90%+ recurring revenue. And note that reselling fiber and electricity is a competitive and low-margin business.
• Finally, Philipp Haas's write-up on Digital Grid caught my eye. It operates an energy marketplace that connects power producers with corporate buyers. It has 79% gross margins and operating margins above 40%. The company IPO'd in 2025 but has performed poorly since then. In the last quarter, contracted capacity rose +25%, but due to a lower fee per transaction, revenue actually fell -7% year-on-year. A potentially moaty business, though with some question marks.

Mizuno

In case you missed it, check out last week's deep-dive on Japanese sporting goods maker Mizuno, prepared for Asian Century Stocks by recent graduate Meera Kapoor.

She made the case that Mizuno has seen its margins expand thanks to a shift to direct-to-consumer sales. This has occurred through an improved e-commerce business and greater popularity of its lifestyle ("Sportstyle") products. It also has strength in certain sports, including golf, baseball, and football. Since COVID-19, many of us seem to have become more health-focused. Mizuno might be a beneficiary of this trend. On the other hand, the stock trades at a somewhat elevated 16x P/E.

You can read the full update here (free):

Mizuno (8022 JP)

Japanese sportswear brand at 16x P/E

Asian Century StocksMichael Fritzell

This was a free-to-read edition of Asian Century Stocks – a newsletter about Asian value stocks. New to the publication? Sign up here. If you don't want to receive these free weekly updates, you can adjust your e-mail preferences here.