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.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/modec-inc" target="_blank" data-smartkarma-citation="entities:2840:1" rel="noopener">Modec Inc (6269 JP)</a> has announced a secondary offering of up to 25.2 million shares (including overallotment). The largest shareholder, <a href="https://www.smartkarma.com/entities/mitsui-e-s-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:2402:1" rel="noopener">Mitsui E&amp;S Holdings (7003 JP)</a>, is the seller.</li>
<li>MODEC's goal with the secondary offering is to reconfigure its shareholder mix to have a diverse base of shareholders who support its long-term strategies and a better tradable share ratio.</li>
<li>Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will likely fall between 22 and 28 May (likely 22 May).</li>
</ul>



Modec Inc (6269 JP) has announced a secondary offering of up to 25.2 million shares (including overallotment). The largest shareholder, Mitsui E&amp;S Holdings (7003 JP), is the seller.
MODEC's goal with the secondary offering is to reconfigure its shareholder mix to have a diverse base of shareholders who support its long-term strategies and a better tradable share ratio.
Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will likely fall between 22 and 28 May (likely 22 May).


MODEC (6296 JP): A US$535 Million Secondary Offering

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>In March, <a href="https://www.smartkarma.com/entities/modec-inc" target="_blank" data-smartkarma-citation="entities:2840:1" rel="noopener">Modec Inc (6269 JP)</a> announced the TSE had said Modec at 29.3% (end-Dec-23) was below the required 35% tradable shares level required for continued listing on TSE Prime. </li>
<li>It <a href="https://www.modec.com/news/assets/pdf/20240315_ir_prime_en.pdf" target="_blank" rel="noopener">announced</a> a "Basic Plan" to comply with the criteria which involved convincing one of the three major corporate holders to sell some. They needed to sell about 6%.</li>
<li>Mitsui E&amp;S has announced it will sell 32%, and 37% including greenshoe. This is overdoing it in a huge way. Mitsui E&amp;S is getting out. This is a re-IPO.</li>
</ul>


In March, Modec Inc (6269 JP) announced the TSE had said Modec at 29.3% (end-Dec-23) was below the required 35% tradable shares level required for continued listing on TSE Prime. 
It announced a "Basic Plan" to comply with the criteria which involved convincing one of the three major corporate holders to sell some. They needed to sell about 6%.
Mitsui E&amp;S has announced it will sell 32%, and 37% including greenshoe. This is overdoing it in a huge way. Mitsui E&amp;S is getting out. This is a re-IPO.


YUUUGE Modec (6269) Offering To Stay Listed in TSE Prime - Effectively a Re-IPO

Event-Driven

<ul>
<li>The September 2023 Nikkei 225 Rebalance is tomorrow at the close. This will engender a lot of buying of three names, and a lot of selling of 3 names.  </li>
<li>It will also engender a funding trade of nearly ¥460bn. </li>
<li>I am going to beat the dead horse and warn about certain issues with this rebalance.</li>
</ul>


The September 2023 Nikkei 225 Rebalance is tomorrow at the close. This will engender a lot of buying of three names, and a lot of selling of 3 names.  
It will also engender a funding trade of nearly ¥460bn. 
I am going to beat the dead horse and warn about certain issues with this rebalance.


Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

<ul>
<li>JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.</li>
<li>A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the potential forward inclusions and removals every month.</li>
<li>Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2024 based on trading data as of end-September 2023.</li>
</ul>


JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.
A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the potential forward inclusions and removals every month.
Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2024 based on trading data as of end-September 2023.


Quiddity JPX-Nikkei 400 Rebal 2024: End-Sep 2023

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mercari-inc" target="_blank" data-smartkarma-citation="entities:27149:1" rel="noopener">Mercari (4385 JP)</a>, <a href="https://www.smartkarma.com/entities/lasertec-corp" target="_blank" data-smartkarma-citation="entities:4126:1" rel="noopener">Lasertec (6920 JP)</a> and <a href="https://www.smartkarma.com/entities/nitori-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20386:1" rel="noopener">Nitori (9843 JP)</a> will replace <a href="https://www.smartkarma.com/entities/nippon-sheet-glass-co-ltd" target="_blank" data-smartkarma-citation="entities:9013:1" rel="noopener">Nippon Sheet Glass (5202 JP)</a>, <a href="https://www.smartkarma.com/entities/mitsui-e-s-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:2402:1" rel="noopener">Mitsui E&amp;S (7003 JP)</a> and <a href="https://www.smartkarma.com/entities/matsui-securities-co-ltd" target="_blank" data-smartkarma-citation="entities:6553:1" rel="noopener">Matsui Securities (8628 JP)</a> in the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225</a>.</li>
<li>As expected, <a href="https://www.smartkarma.com/entities/nitori-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20386:1" rel="noopener">Nitori Holdings (9843 JP)</a> will be added at half the planned PAF since the trading value is low compared to the expected index weight.</li>
<li>Passive trackers need to buy between 1-17 days of ADV on the adds while selling between 1.2-16.5 days of ADV on the deletes. There is a big funding trade too.</li>
</ul>



Mercari (4385 JP), Lasertec (6920 JP) and Nitori (9843 JP) will replace Nippon Sheet Glass (5202 JP), Mitsui E&amp;S (7003 JP) and Matsui Securities (8628 JP) in the Nikkei 225.
As expected, Nitori Holdings (9843 JP) will be added at half the planned PAF since the trading value is low compared to the expected index weight.
Passive trackers need to buy between 1-17 days of ADV on the adds while selling between 1.2-16.5 days of ADV on the deletes. There is a big funding trade too.


Nikkei 225 Index Rebalance: Mercari, Lasertec, Nitori IN; Nippon Glass, Mitsui E&S, Matsui Sec OUT

Japan

TADANO LTD. manufactures and sells various types of hydraulic cranes for construction and other industrial use.  The Company, through utilizing its own mechatronics technology, develops truck, all-terrain, and cargo cranes as well as non-crane equipment such as aerial platform trucks and lighting vehicles. The Company also manufactures pneumatic devices.

NTN CORPORATION manufactures a variety of bearings and machinery parts for industrial use.  The Company's products include bearings for office automation equipment, bearings, hubs, and joints for automobile engines, drive-train, suspension, and transmissions, clutch-related products, and precision machinery. NTN has sales networks in Japan and overseas.

Makino Milling Machine Co., Ltd. manufactures, sells, and repairs machining centers (MCs), electrical dischargers, numerical control (NC) milling machines, and other related industrial machinery.  The Company also produces die/mold manufacturing systems as well as Computer Aided Manufacturing (CAM) and Computer Aided Design (CAD) systems software to support its machine tools.

Namura Shipbuilding Co., Ltd. is a manufacturer of cargo vessels, tankers, and steel structures such as bridges and floodgates.  The Company also leases, repairs, and provides maintenance services.  As a group, Namura Shipbuilding operates a variety of businesses including software development, information systems sales, precision coil manufacturing, and catering and security services.

GLORY LTD. produces vending machines, coin-operated lockers, money handling machines, and data processing terminals.

MEIDENSHA CORPORATION manufactures electrical machinery used in the utilities, construction, metal, and transportation industries.  The Company produces heavy/light machinery including power generators, water treatment systems, control circuit devices, transformers, semiconductors, and material handling equipment such as carriages and pallet robots.

Nomura Micro Science Co., Ltd. manufactures and markets water treatment plants and equipments used for the filtration and purification of water. The company's products are mainly used for semiconductor and liquid crystal manufactures.

Mitsuboshi Belting Ltd processes rubber and other resin materials.  The Company's products are industrial belts, such as conveyor belts and V-belts. Mitsuboshi Belting also produces various interior and exterior goods for automobiles.

Mitsubishi Logisnext Co., Ltd. manufactures industrial vehicles and logistics systems. The Company's products include battery forklifts, unmanned forklifts, monorails, automated warehouses, powered moving shelves, and other logistics related products.

MAX CO., LTD. produces and sells office products and industrial equipment. The Company manufactures products such as electronic time recorders, staplers, lettering machines, typing tools, pneumatic nailers and industrial coil nailers.

Shanghai Bestway Marine Engineering Design Corporation Limited engages in proposal design, basic design, detail design, and production design of marine equipments. The Company also provides production supervision and technical service on site.

TriMas Corporation is a diversified manufacturer of proprietary products. The Company manufactures trailer products, recreational accessories, packaging systems, energy products and industrial specialty products for the commercial, manufacturing, and consumer markets.

Shenyang Blue Silver Industry Automatic Equipment Company Limited develops and applies industrial automation technology such as tires, metallurgy, energy, and machinery. The Company's main products include control system solutions, automation equipment, and production lines.

Shenyang Blue Silver Industry Ae (300293 CH)

HSD Engine Co., Ltd. is an integrated engine manufacturer specializing in producing diesel engine for large vessels. The Company provides business in diesel power plant construction and operation, engine parts sales, and engine maintenance and repair services.

Proto Labs, Inc. is low volume manufacturer of custom parts for prototyping and short-run production. The Company utilizes computer numerical control, machining and injection molding to manufacture custom parts for their customers. Proto Labs targets their services to product developers who use three-dimensional computer-aided design to develop products across a diverse range of end-markets.

Kenmec Mechanical Engineering Co., Ltd. manufactures and markets whole factory automated production line systems.  The Company's products include conveyor systems, automated storage and retrieval systems, car parking systems, as well as automatic guided vehicle systems.  Kenmec also produces electronic parts.

Wabash National Corporation manufactures semi trailers in North America. The company specializes in the design and production of dry freight vans, refrigerated vans, flatbed trailers, drop deck trailers, dump trailers, truck bodies and intermodal equipment.

Sam Engineering & Equipment (M) Bhd manufactures production equipment and aerospace products.  The Company produces manufacturing machinery including test handlers, laser mark handlers, material handling systems, vision inspection and automation solutions; and offers metal machining and sheet metal fabrication services.

Shuangliang Eco-Energy Systems Company Ltd. manufactures air conditioning products.  The Company produces flue gas lithium bromide absorption chillers, lithium bromide heat pump chillers, silicon gel absorption chillers, heat exchangers, and direct air cooled condensers.  Shuangliang Eco-Energy also manufactures sea water desalination equipment.

Shuangliang Eco Energy Systems (600481 CH)

Qinchuan Machine Tool & Tool Group Co. Ltd. manufactures and distributes numerical control machine tools and complex cutting tools. The Company produces cylindrical grinders, gear grinding machines, gear cutting tools, thread cutters, and measuring equipment. Qinchuan Machine Tool & Tool Group markets its products worldwide.

Qinchuan Mchn Tool & Tool Gp Shre (000837 CH)

Mitsui E&S Holdings Co., Ltd. engineers, builds, and repairs ships.  The Company also manufactures industrial machinery and equipment and builds power plants.  Mitsui Engineering & Shipbuilding also operates information systems services and real estate business.

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Mitsui E&S Holdings (7003 JP)

MODEC (6296 JP): A US$535 Million Secondary Offering

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

Arun George

YUUUGE Modec (6269) Offering To Stay Listed in TSE Prime - Effectively a Re-IPO

Modec raised capital last year, and tradable shares went below 35pct. That meant someone had to sell by end-2025. Mitsui E and S is selling most of...

Travis Lundy

Nikkei 225 Rebal - Beating a Dead Horse

Tomorrow's Nikkei 225 Rebalance is ¥490bn a side, with ¥460bn of funding trade. Matsui Sec is like a big offering. The three ADDs are all more...

Travis Lundy

Quiddity JPX-Nikkei 400 Rebal 2024: End-Sep 2023

There are 35 Potential ADDs and 39 Potential DELs (unique names) presented in the current Quiddity Leaderboard which is based on the latest...

Janaghan Jeyakumar, CFA

Nikkei 225 Index Rebalance: Mercari, Lasertec, Nitori IN; Nippon Glass, Mitsui E&S, Matsui Sec OUT

The adds are broadly flat since announcement of the changes. The deletes are higher and short interest has continued to increase. The stocks with...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

MODEC (6296 JP): A US$535 Million Secondary Offering

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

Arun George

YUUUGE Modec (6269) Offering To Stay Listed in TSE Prime - Effectively a Re-IPO

Modec raised capital last year, and tradable shares went below 35pct. That meant someone had to sell by end-2025. Mitsui E and S is selling most of...

Travis Lundy

Nikkei 225 Rebal - Beating a Dead Horse

​Tomorrow's Nikkei 225 Rebalance is ¥490bn a side, with ¥460bn of funding trade. Matsui Sec is like a big offering. The three ADDs are all more...

Travis Lundy

Quiddity JPX-Nikkei 400 Rebal 2024: End-Sep 2023

There are 35 Potential ADDs and 39 Potential DELs (unique names) presented in the current Quiddity Leaderboard which is based on the latest...

Janaghan Jeyakumar, CFA

Nikkei 225 Index Rebalance: Mercari, Lasertec, Nitori IN; Nippon Glass, Mitsui E&S, Matsui Sec OUT

The adds are broadly flat since announcement of the changes. The deletes are higher and short interest has continued to increase. The stocks with...

Brian Freitas

Tomorrow's Nikkei 225 Rebalance is ¥490bn a side, with ¥460bn of funding trade. Matsui Sec is like a big offering. The three ADDs are all more...