Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Hamamatsu Photonics Kk / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/toyota-motor-corp" target="_blank" data-smartkarma-citation="entities:73:1" rel="noopener">Toyota Motor (7203 JP)</a> aims to raise around US$190m via selling over a 4% stake in <a href="https://www.smartkarma.com/entities/hamamatsu-photonics-kk" target="_blank" data-smartkarma-citation="entities:14074:1" rel="noopener">Hamamatsu Photonics Kk (6965 JP)</a>.</li>
<li>This is another cross-shareholding unwind and hence, won’t be a huge surprise. Although given the recent share price weakness, the timing appears peculiar.</li>
<li>In this note, we will talk about the deal dynamics and run the deal through our ECM framework.</li>
</ul>



Toyota Motor (7203 JP) aims to raise around US$190m via selling over a 4% stake in Hamamatsu Photonics Kk (6965 JP).
This is another cross-shareholding unwind and hence, won’t be a huge surprise. Although given the recent share price weakness, the timing appears peculiar.
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.


Hamamatsu Photonics Placement - Peculiar Timing

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/terumo-corp" target="_blank" data-smartkarma-citation="entities:6708:1" rel="noopener">Terumo Corp (4543 JP)</a> has announced a secondary offering of up to 73.2 million shares, worth JPY203 billion (US$1.4 billion) at the last close. </li>
<li>The secondary offering facilitates the exit of large shareholders. Terumo also announced a buyback worth a maximum of JPY30 billion or 15 million shares.</li>
<li>Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 10 and 12 September (likely 10 September).</li>
</ul>



Terumo Corp (4543 JP) has announced a secondary offering of up to 73.2 million shares, worth JPY203 billion (US$1.4 billion) at the last close. 
The secondary offering facilitates the exit of large shareholders. Terumo also announced a buyback worth a maximum of JPY30 billion or 15 million shares.
Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 10 and 12 September (likely 10 September).


Terumo (4543 JP): A US$1.4 Billion Secondary Offering

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>In late May, Toyota Group member <a href="https://www.smartkarma.com/entities/aisin-corp" target="_blank" data-smartkarma-citation="entities:11809:1" rel="noopener">Aisin (7259 JP)</a> announced it would sell its 37% stake in <a href="https://www.smartkarma.com/entities/exedy-corp" target="_blank" data-smartkarma-citation="entities:6516:1" rel="noopener">Exedy Corp (7278 JP)</a>. The market dropped. But that was an opportunity. </li>
<li>There was an announcement, a ToSTNeT-3 buyback, the offering, and more buyback to come. On 30 May, I said "Buy the deal, buy in the market. It's cheap and vulnerable."</li>
<li>Exedy is up 21% since. On 17 June, activist Murakami-san's group went over 5%. Then they bought more. Now they have 15%. Or more. Still cheap. Still vulnerable. </li>
</ul>


In late May, Toyota Group member Aisin (7259 JP) announced it would sell its 37% stake in Exedy Corp (7278 JP). The market dropped. But that was an opportunity. 
There was an announcement, a ToSTNeT-3 buyback, the offering, and more buyback to come. On 30 May, I said "Buy the deal, buy in the market. It's cheap and vulnerable."
Exedy is up 21% since. On 17 June, activist Murakami-san's group went over 5%. Then they bought more. Now they have 15%. Or more. Still cheap. Still vulnerable. 


[JAPAN ACTIVISM] - Murakami Group Bigger and Bolder on Exedy - STILL Room to Run

Equity Bottom-Up

<ul>
<li>With FY23 earnings in May, <a href="https://www.smartkarma.com/entities/toyota-motor-corp" target="_blank" data-smartkarma-citation="entities:73:1" rel="noopener">Toyota Motor (7203 JP)</a> announced a ¥1trn buyback (410mm shares, 3.04%). Given shares were ¥3,599 the day before, it meant fewer shares or a Tender.</li>
<li>Like Honda (who hadn't bought pre-offering), Toyota hadn't bought back in the first couple of months. We knew there was bank and insurer overhang. That overhang lasts for years. </li>
<li>Today, Toyota announced an "organised" 410mm share ¥1trln Tender Offer Buyback. Several financial institutions have announced plans to tender. This provides guidance on supply/demand for the rest of the year.</li>
</ul>


With FY23 earnings in May, Toyota Motor (7203 JP) announced a ¥1trn buyback (410mm shares, 3.04%). Given shares were ¥3,599 the day before, it meant fewer shares or a Tender.
Like Honda (who hadn't bought pre-offering), Toyota hadn't bought back in the first couple of months. We knew there was bank and insurer overhang. That overhang lasts for years. 
Today, Toyota announced an "organised" 410mm share ¥1trln Tender Offer Buyback. Several financial institutions have announced plans to tender. This provides guidance on supply/demand for the rest of the year.


Toyota's BIG Buyback Via Tender Offer from Banks & Insurers

<ul>
<li>Since the US$1.4 billion secondary placement announcement, <a href="https://www.smartkarma.com/entities/asics-corp" target="_blank" data-smartkarma-citation="entities:16287:1" rel="noopener">ASICS Corp (7936 JP)</a>’s shares are up 0.9% from the undisturbed price of JPY2,564 per share (12 July).</li>
<li>Looking at recent large Japanese placements is instructive to understand the potential trading pattern. So far, Asics’ shares have deviated from the pattern of previous large placements.</li>
<li>The offering will likely be priced on 23 July. Investors who have participated in previous large Japanese placements tend to secure positive returns.</li>
</ul>


Since the US$1.4 billion secondary placement announcement, ASICS Corp (7936 JP)’s shares are up 0.9% from the undisturbed price of JPY2,564 per share (12 July).
Looking at recent large Japanese placements is instructive to understand the potential trading pattern. So far, Asics’ shares have deviated from the pattern of previous large placements.
The offering will likely be priced on 23 July. Investors who have participated in previous large Japanese placements tend to secure positive returns.


Japan

Aisin Corporation manufactures and distributes motor vehicle parts. The Company produces drive train, transmissions, clutches, disc brakes, anti-skid brake system, suspensions, oil pumps, power windows, power door locks, and more. Aisin operates sales and production subsidiaries worldwide.

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Aisin (7259 JP)

Hamamatsu Photonics Placement - Peculiar Timing

Toyota Motor (7203 JP) aims to raise around US$190m via selling over a 4% stake in Hamamatsu Photonics Kk (6965 JP). The timing of the selldown...

Sumeet Singh

Terumo (4543 JP): A US$1.4 Billion Secondary Offering

Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 10 and...

Arun George

[JAPAN ACTIVISM] - Murakami Group Bigger and Bolder on Exedy - STILL Room to Run

Murakami-san now owns c16% of Exedy. Exedy had 10mos to do the rest of its buyback. It is 60% done in Month 1. Accretion is faster than expected....

Travis Lundy

Toyota's BIG Buyback Via Tender Offer from Banks & Insurers

Toyota today announced an ¥800bn Tender Offer Buyback to buy back one-third of the equity stakes held by major non-life insurers. They, in turn,...

Travis Lundy

ASICS (7936 JP): The Current Playbook

The offering will likely be priced on 23 July. Investors who have participated in previous large Japanese placements tend to secure positive returns.

Arun George

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