🎌 Stock Focus : Kawai Musical 河合楽器製作所 [7952]

 

As can be seen from the snapshots in '58,'76,'78,'90,'91,'96,'98,'16, '19 & '23, the piano maker & instructor's book value & capital adequacy[CAR] has increased steadily over time as well as cumulatively +64% & 16% points respectively compared to 3 decades ago [note the increasing losses in the consecutive years '94 till '96]. In 1996, Kawai, on top of waning demand for upright pianos in the US & Japan, was also hobbled by 'endaka' or yen strength while the opposite situation currently should contribute to improving results, EPS having taken a sharp dip to ¥47 last year, down from a record ¥587, then ¥427 & ¥323.7 in the previous years '22-'24. 

Curiously, the stock more than doubled by June '18  from mid-'17 even though its EPS only rose 26% from '17-'19  & then nearly doubled by July '21 perhaps anticipating the +95% rise in EPS from '21-'22. The sole dividend in March has increased 27% since that EPS record 4 years ago & stands 90% higher than 30 years ago when earnings were spotty despite turnover being 20% lower now, yet projected '26 revenue is still 39% above its lowest level in '13 & only 35% below its all-time record of  ¥117.675 billion in 1991. This forecast figure of  ¥76 billion was first surpassed in '86 when the NTA was 35% lower. The latest Grahamian net-net per share is about ¥1,856, compared to -ve working capital in 1998, when borrowings were 7.5x higher. The ¥520 low in '02, which amazingly matched the 1958 low four years after listing, was printed in the midst of big impairment & restructuring losses of (¥3.342 billion),(¥2.715 billion) & (¥7.077 billion) in '02 - '04, causing NTA to plunge to ¥455 in '05 [ low of ¥320 in '04], when CAR bottomed out at 12.7% before rising to 28-43% in the next 8 years. Dividends halted in the 5 years between '02-'06.

 

 I bought it today after stalking the stock for many months & was delighted to get a fill at  ¥2,778, just two ticks above the intraday low & with 63% of the commission discounted by the close. This is a price barely above the '95 low of ¥2,750, when the yen's strength was a headwind rather than the tailwind which it is now in light of the export ratio exceeding 40%.

Possible risks? The de facto China boycott of Japanese exports due to the recent political spat. Also interesting is the fact that my entry point was first surpassed way back in 1960[!] before the price declined nearly 90% from its 1961 peak of ¥3,870 by 1969. The old record was approached once again in 1973, followed by a 46% drop by the tail end of the 1974 bear market. It rose above this entry level price the next year & did not revisit this price despite a 65% decline from the 1976 fresh record of ¥8,180 in the following 5 years. Post '85 Plaza Accord, the stock nearly quintupled in the Bubble Era to set a fresh high of ¥15,200 by Feb '90. Based just on the intervals between historic highs, Kawai's next peak could come in '30 -'31, perhaps on the wave of what some project as 100,000 points on the Nikkei index!

Another area of concern is that free cash flow is (¥3.989 billion), accompanied by operating cashflow of (¥1.698 billion) in '25.  

A 44% discount to book that I obtained, backed by a forecast EPS that is double '25's figure, plus the maintained 3.4% dividend, will be comprise a buffer of safety for this investment choice that could bear fruit as early as March!

*As an aside, I have honed my piano playing skills on a Kawai instrument that has lasted 45 years & still works well despite some very minor issues: a testament to the quality of their product!

Miracle Streak : #8 Tomei Consolidated Exits the Portfolio ! {5th Feb '26}

 Goldsmith & jeweler Tomei is finally released from my grasp as gold plunges below $5000 once again...it has helped perpetuate the marathon many times in all of the years of this decade, save 2021!

Miracle Streak : WTK comes through a 16th time in the last half year ! {4th Feb '26}

 

Remnant shares from a re-entry around 70c are resold close to 79c for a revel-worthy 1,373 days in a row! Thus, 6,800 shares still trapped at a high price of  over $1 are nearly completely paid up with perhaps less than $300 outstanding.

Miracle Streak : A most Unlikely Winner emerges in Matsumoto マツモト, the 3rd🎌 of the Year & the 116th since July 2017! {3rd Feb '26}

 Today, Japan's Matsumoto マツモト , a shaky microcap bought a week after my '25 birthday that was down 38% at its worst point after Christmas, debuts at a very respectable 18th place[kicking Toyota down to 19th!] among what is now 116

contributors since '17 & the 3rdin the new year: taking the baton from S'pore's Sunright in the marathon's 67th month! The BEST trading gain thus far in 2026!!!

Latest Japanese targets:

Eidai, which went bankrupt in 1978 at a last quotation of  ¥51, returned to the Tokyo market after an almost 30 year restructuring, and now trades at a 85% discount to projected '26 revenue compared to a 92% discount at the time of its delisting. Interestingly, it has only 30% of its original amount of shares outstanding but trades for a steep 76.3% discount to its book value & a healthy 4.2% dividend yield [compared to 1.5% in 1973 before it was halved in '74 & then eliminated by '75]. Its '23 debt load was ¥23 billion[ compared to ¥75.3 billion in '77!], giving it a cash:debt ratio of 28% & a capital adequacy[CAR] of 43.8%. Since then, its book value has advanced 10% & CAR has popped over 50% while cash:debt has improved. Treasury & biz association shares total about 18.7% of its outstanding scrip of 46.783 million compared to less than 18% in '23.

Miracle Streak : Sunright returns to contribute after 56 months ! {2nd Feb '26}

 With another pesky market holiday, I turn to S'pore,amid tumbling markets worldwide to lock in a narrow gain made possible by quadrupling down on a remnant 2020 position last year : big 2017-2018 winner Sunright shines on the marathon once again after its last contribution 56 months ago, which sealed 207 days in a row together with Theta Edge !

🎌 Stock Focus : CVS Bay Area [2687]

 

The company used to operate convenience stores as a Lawson franchisee but sold most of its stores to the former in 2018, realizing a one-off record EPS of ¥770 in Feb '19 . It now runs only 7 stores & mainly operates 6 capsule hotels & a main BAY Hotel complex with easy access to Tokyo Disney Resort. Other minor business segments include mansion front, cleaning & real estate management services. I am targetting purchase to earn the Feb & Aug dividends of ¥10 each, comprising a yield of 1.5-1.9% each half year. 

It's interesting to note that the major downtrends from '06-'11 & from '13 to '20 which lasted about 6 years & 6.5 years respectively may suggest to some that the next major bottom would occur around Aug '29 based on the most recent peak in Aug '23.  

On a separate more somber note, a gold bug Clive Thompson, who was obviously unsettled by the vicious plunge in the metals markets on Friday, analyzed all the Dow crashes going back to 1885 & the gold & silver market  crashes going back to 2000 & these are his data results:

                        

              

Miracle Streak : Guocoland M'sia finally Rewards after 9 long Years ! {30th Jan '26}

 

Quite the challenging journey, but Guocoland M'sia finally delivers 9 years into my dance with it, thanks to an additional risk-taking @ half the 1st entry last year : 9 dividends in the interim & two meeting attendances, sealing up the first month of the new year for the record!

On a separate note, PNE PCB releases its latest AR, showing that the Top 5 holders increased their holdings to over 233.8 million shares vs 227 million in the previous snapshot 18 months ago, while the Top 10 increased their holdings to about 270 million shares from 259.3 million in the same timeframe. Also, a third in the Top 30 upped their stakes while 16 of them[> half, including #1 & #3] kept their stakes unchanged & only one or two pared their holdings:

Miracle Streak : Bermaz Auto takes back the baton from Ledaxレダックスto Bag 66 Full Months ! {29th Jan '26}

 

Today, Bermaz Auto takes back the steering wheel from fellow car stock Ledax レダックス to throttle the record to a fresh unprecedented peak as blue chips take a frightening tumble locally with losers outnumbering gainers by 4 to 1! The streak now runs from 29th July 2020 till 29th January 2026, ergo 66 complete months!!!