Yeah, Normal Kanji's total HP is 10500, Awakening activates at 35%. For Kanji, that would be at 3675 HP.
Defense boost reduces all damage by 62.5%, that means every attack would deal almost half than it normally would.
Apply this, and Kanji gets almost 2000 extra HP if he enters Awakening at 35% HP.
Well, someone correct me if the math is wrong but I think the HP buff for Shadows definitely makes up for Awakening loss.