This Week in Asia #38

Last week, Asian semiconductor stocks came under pressure due to reports that Nvidia might reduce the memory content in its next-generation GPU. In other news, the US Senate passed a bill imposing 100% tariffs on countries buying Russian energy, including India and China. And finally, Chinese low-cost retailer Shein has now begun premarketing for its Hong Kong IPO.

In today's email:

• Watchlist update
• Worth your time
• Integral

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Watchlist update

• InBody rallied by over 50% after Korean brokers pushed the stock as a GLP-1 beneficiary. InBody's last result was strong, with a 2026 forecast of +23% revenue growth and +43% EBITDA growth.
• Second-hand goods trading platform Mercari's FY2026 result surprised to the upside, with top-line growth of +19% and operating profit growth of +58%. It also announced the first share buyback since its 2018 listing. The beat was driven by a greater number of cross-border transactions, fintech revenues, and the popularity of trading cards. (Full disclosure: I own shares in Mercari.)
• Video game company Nintendo reported that its 1QFY2027 operating profit jumped by +151%. Part of the growth came from refunds on US tariffs, as well as from strong sales of software titles. (Full disclosure: I own shares in Nintendo.)
• Indonesian beer producer Multi Bintang reported strong second-quarter revenue growth of +20% and net profit growth of +30%. The biggest driver was sales to its Bali distributor, including for the new beer brand Kawan Senja.
• Smart Insider data showed a cluster buy in the Indonesian telecom company Indosat by CEO Vikram Sinha and HR head Irsyad Sahroni. Indosat reported strong second-quarter revenue growth of +14%, with significantly higher ARPU, AI Cloud revenues more than doubling, and IDR 12 trillion in proceeds from its recent FiberCo partial divestiture.

Worth your time

• I jumped on a call with investor and Substack author Hugo Navarro to discuss whether the global cinema industry is finally turning around. The bull points: cinemas have survived many technological shifts before streaming, the theatrical exclusivity window is lengthening, and AI will lower barriers to entry for studios. The bear points: cinema tickets are unaffordable, there's hero-movie fatigue, and young people prefer short-form video.
• Brad Setser argued in a podcast that the yen is undervalued, even beyond what the US-Japan interest rate differential would normally imply. But he also thinks that higher Japanese interest rates will be needed for the yen to enter a bull market.
• Marathon Asset Management's portfolio manager Justin Hill spoke with Ed Chancellor about Japanese share buybacks. One example was the 100-yen store Seria's 2025 buyback of 17% of shares outstanding, which lowered its P/E.
• Smoak Capital Management's 1H2026 letter was excellent, as usual. It discussed Japanese fan-club platform m-up, Singapore SaaS company Azeus, and Korea's InBody.
• Finally, Substack author Price to Tangible Bruce wrote about a few Japanese small-cap defense stocks: Rikei, Ryoyu Systems, Hosoya Pyro-Engineering, and Ishikawa Seisakusho.

Integral

Yesterday, I published a deep dive on the Japanese private equity firm Integral.

Many investors consider Integral to be Japan's version of KKR, in that it tends to co-invest with its funds. So far, it's raised five private equity funds, with a sixth one due in 2027 or 2028. Some analysts are projecting the sixth fund will reach JPY 500 billion, equivalent to US$3.2 billion. If successful, it would add to Integral's fee-related earnings.

Read the full story here:

Integral (5842 JP)

Japanese private equity firm at 10x P/E

Asian Century StocksMichael Fritzell