Key Takeaways
- • SILQ Capital founder Hideki Kinuhata told the Sohn Tokyo 2026 audience that a Japanese precision machine tool maker is still priced as a failed takeover story, even though its underlying business has reached record revenue and margins.
- • The company was the target of a takeover fight involving a hostile bidder, a foreign private equity firm, a domestic fund and the Japanese government; none of the proposed deals closed, and the stock has lagged peers.
- • Aerospace accounts for about 20% of revenue and is the earnings driver, according to Kinuhata; Asia generates 49% of revenue, the Americas 29%, Japan 13% and Europe 8%.
- • The company has committed to returning a larger share of profit to shareholders, a factor Kinuhata cites as under-appreciated by the market.
- • SILQ Capital, a Tokyo-based long/short manager with over $1 billion AUM, is positioning the stock as a mispricing among overlooked Japanese mid-caps.
Summary
SILQ Capital's Hideki Kinuhata argued at the Sohn Tokyo 2026 conference that a Japanese machine tool manufacturer has outgrown the takeover saga that has weighed on its valuation for almost two years, according to a report by Jacob Wolinsky on HedgeFundAlpha. The company, which makes precision machining centers ranging from small machines to very large units and sells most of them outside Japan, was the subject of a contested control battle that drew a hostile bidder, a foreign private equity firm, a domestic fund and ultimately the Japanese government. None of the proposed transactions closed. Analysts have largely drifted away and the shares have underperformed peers, Kinuhata said.
Kinuhata contended that the market continues to treat the company as a failed deal story, while the operating business has quietly reached record revenue and margins. He highlighted an aerospace franchise that few competitors can match, which accounts for roughly 20% of revenue and is the main earnings driver. Customers span aerospace, autos, medical devices and semiconductors. By region, Asia contributes 49% of revenue, the Americas 29%, Japan 13% and Europe 8%.
The company has also committed to distributing a substantially larger share of its profits to shareholders, a development Kinuhata believes the market has not priced in.
Kinuhata's background includes 24 years at Goldman Sachs, where he started in 1995 as an equity and equity derivatives trader and left as a partner, co-heading the Pan-Asia portfolio and later serving as co-CIO of the global public equity portfolio. He founded SILQ Capital in Tokyo in 2019 and launched its flagship Japan long-short strategy in September 2020. The firm reports over $1 billion in AUM.
Kinuhata contended that the market continues to treat the company as a failed deal story, while the operating business has quietly reached record revenue and margins. He highlighted an aerospace franchise that few competitors can match, which accounts for roughly 20% of revenue and is the main earnings driver. Customers span aerospace, autos, medical devices and semiconductors. By region, Asia contributes 49% of revenue, the Americas 29%, Japan 13% and Europe 8%.
The company has also committed to distributing a substantially larger share of its profits to shareholders, a development Kinuhata believes the market has not priced in.
Kinuhata's background includes 24 years at Goldman Sachs, where he started in 1995 as an equity and equity derivatives trader and left as a partner, co-heading the Pan-Asia portfolio and later serving as co-CIO of the global public equity portfolio. He founded SILQ Capital in Tokyo in 2019 and launched its flagship Japan long-short strategy in September 2020. The firm reports over $1 billion in AUM.
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