Japan/Asia Long-Short, LightStream Research

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Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

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Equity Capital Markets

<p>Aruhi is the leading domestic mortgage provider focused on "Flat 35" loans - 15 to 35 year fixed rate mortgages. The company's competitive strengths are:</p><ul><li>The lowest interest rates in the industry</li><li>A full support system connecting customers from web chats all the way through in-store consultations</li><li>A one week approval period (compared to about one month at competitors)</li><li>A partner ecosystem offering special discounts on consumer goods and services.</li></ul><div class="content-caption"><strong>Basic Information</strong></div><table class="table table-striped"><tbody><tr><td></td><td></td></tr><tr><td>Company Name</td><td>Aruhi</td></tr><tr><td>Company Ticker</td><td>7198</td></tr><tr><td>Stock Exchange</td><td>TSE 1st Section</td></tr><tr><td>Business Description</td><td><p>Mortgage lending and intermediation</p><p>Insurance and banking agency.</p></td></tr><tr><td>Unit Size</td><td>100</td></tr><tr><td>New Shares Offered</td><td>0</td></tr><tr><td>Existing Shares Offered</td><td>18,040,300</td></tr><tr><td>Overallotment (Existing Shares)</td><td>1,082,500</td></tr><tr><td>Total Shares Offered</td><td>19,122,800</td></tr><tr><td>Tentative Pricing Date</td><td>27th November</td></tr><tr><td>Tentative Price</td><td>Undisclosed</td></tr><tr><td>Estimated Capital to be Raised (JPY bn)</td><td>25.625</td></tr><tr><td>Pricing Date</td><td>5th December</td></tr><tr><td>Price</td><td>Undecided</td></tr><tr><td>Bookbuilding</td><td>28th November - 4th December</td></tr><tr><td>Application Dates</td><td>7th December - 12th December</td></tr><tr><td>Listing Date</td><td>14th December</td></tr><tr><td>Shares Outstanding at Listing</td><td>36,080,600</td></tr><tr><td>Estimated Market Capitalisation (JPY bn)</td><td>48.348</td></tr></tbody></table><div style="text-align: left;" class="content-caption">Source: Company Disclosures, LightStream Research</div><div class="content-caption"><strong>Underwriters</strong></div><table class="table table-striped"><tbody><tr><td style="text-align: center;"> </td><td style="text-align: center;">Broker</td></tr><tr><td rowspan="3">Lead and International Underwriters</td><td>Nomura Securities</td></tr><tr><td>Mizuho Securities</td></tr><tr><td>UBS Securities</td></tr><tr><td>Co-Lead Underwriters</td><td>SMBC Nikko Securities</td></tr><tr><td rowspan="2">Underwriters</td><td>Daiwa Securities</td></tr><tr><td>SBI Securities</td></tr></tbody></table><div style="text-align: left;" class="content-caption">Source: Company Disclosures, LightStream Research</div><div class="content-caption"><strong>Domestic and International Tranches</strong></div><table class="table table-striped"><tbody><tr><td style="text-align: center; width: 208px;"> </td><td style="text-align: center; width: 348.5px;">Domestic</td><td style="text-align: center; width: 290.5px;">International</td></tr><tr><td style="width: 208px;">Number of Shares</td><td style="text-align: right; width: 348.5px;">10,824,200</td><td style="text-align: right; width: 290.5px;">7,216,100</td></tr><tr><td style="width: 208px;">Seller</td><td style="text-align: right; width: 348.5px;"><p>CJP: 10,015,700</p><p>Tokyo Marine Mezzanine: 808,500</p></td><td style="text-align: right; width: 290.5px;">CJP: 7,216,100</td></tr><tr><td style="width: 208px;">Capital Raised (JPY)</td><td style="text-align: right; width: 348.5px;">14,504,428,000</td><td style="text-align: right; width: 290.5px;">9,669,574,000</td></tr><tr><td style="width: 208px;">Proportion</td><td style="text-align: right; width: 348.5px;">60.00%</td><td style="text-align: right; width: 290.5px;">40%</td></tr></tbody></table><div style="text-align: left;" class="content-caption">Source: Company Disclosures, LightStream Research</div><div class="content-caption"><strong>Shareholders and Lockup</strong></div><table class="table table-striped"><tbody><tr><td>Shareholder</td><td>Shares Held</td><td>Current Percentage</td><td>Percentage After Listing</td><td>Lockup</td></tr><tr><td>CJP CSM Holdings, L.P.</td><td>30,780,200</td><td>81.05%</td><td>35.67%</td><td>180 days</td></tr><tr><td>SBI Holdings</td><td>3,621,200</td><td>9.54%</td><td>9.54%</td><td>180 days</td></tr><tr><td>Hiroshi Hamada (CEO)</td><td>1,000,000</td><td>2.63%</td><td>2.63%</td><td>180 days</td></tr><tr><td>Tokyo Marine Mezzanine</td><td>808,500</td><td>2.13%</td><td>0.00%</td><td> </td></tr><tr><td>細野 恭史</td><td>266,000</td><td>0.70%</td><td>0.70%</td><td>180 days</td></tr><tr><td>五十川 毅 </td><td>135,000</td><td>0.36%</td><td>0.36%</td><td>180 days</td></tr><tr><td>井上 明大</td><td>98,500</td><td>0.26%</td><td>0.26%</td><td>180 days</td></tr><tr><td>市川 裕康</td><td>97,000</td><td>0.26%</td><td>0.26%</td><td>180 days</td></tr><tr><td>荻野 大輔 </td><td>80,000</td><td>0.21%</td><td>0.21%</td><td>180 days</td></tr><tr><td>土門 智康 </td><td>80,000</td><td>0.21%</td><td>0.21%</td><td>180 days</td></tr><tr><td>75 Others</td><td>206,000</td><td>0.54%</td><td>0.54%</td><td>180 days</td></tr></tbody></table><div style="text-align: left;" class="content-caption">Source: Company Disclosures, LightStream Research</div>

Aruhi is the leading domestic mortgage provider focused on "Flat 35" loans - 15 to 35 year fixed rate mortgages. The company's competitive strengths are:The lowest interest rates in the industryA full support system connecting customers from web chats all the way through in-store consultationsA one week approval period (compared to about one month at competitors)A partner ecosystem offering special discounts on consumer goods and services.Basic InformationCompany NameAruhiCompany Ticker7198Stock ExchangeTSE 1st SectionBusiness DescriptionMortgage lending and intermediationInsurance and banking agency.Unit Size100New Shares Offered0Existing Shares Offered18,040,300Overallotment (Existing Shares)1,082,500Total Shares Offered19,122,800Tentative Pricing Date27th NovemberTentative PriceUndisclosedEstimated Capital to be Raised (JPY bn)25.625Pricing Date5th DecemberPriceUndecidedBookbuilding28th November - 4th DecemberApplication Dates7th December - 12th DecemberListing Date14th DecemberShares Outstanding at Listing36,080,600Estimated Market Capitalisation (JPY bn)48.348Source: Company Disclosures, LightStream ResearchUnderwriters BrokerLead and International UnderwritersNomura SecuritiesMizuho SecuritiesUBS SecuritiesCo-Lead UnderwritersSMBC Nikko SecuritiesUnderwritersDaiwa SecuritiesSBI SecuritiesSource: Company Disclosures, LightStream ResearchDomestic and International Tranches DomesticInternationalNumber of Shares10,824,2007,216,100SellerCJP: 10,015,700Tokyo Marine Mezzanine: 808,500CJP: 7,216,100Capital Raised (JPY)14,504,428,0009,669,574,000Proportion60.00%40%Source: Company Disclosures, LightStream ResearchShareholders and LockupShareholderShares HeldCurrent PercentagePercentage After ListingLockupCJP CSM Holdings, L.P.30,780,20081.05%35.67%180 daysSBI Holdings3,621,2009.54%9.54%180 daysHiroshi Hamada (CEO)1,000,0002.63%2.63%180 daysTokyo Marine Mezzanine808,5002.13%0.00% 細野 恭史266,0000.70%0.70%180 days五十川 毅 135,0000.36%0.36%180 days井上 明大98,5000.26%0.26%180 days市川 裕康97,0000.26%0.26%180 days荻野 大輔 80,0000.21%0.21%180 days土門 智康 80,0000.21%0.21%180 days75 Others206,0000.54%0.54%180 daysSource: Company Disclosures, LightStream Research

Aruhi IPO: Concerns About Long-Term Growth Prospects

Japan

ARUHI Corporation offers finance services. The Company provides mortgage lending, stock acquisition, and other services. ARUHI also operates bank agency, insurance agency, and other businesses.

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Aruhi Corp (7198 JP)

Aruhi IPO: Concerns About Long-Term Growth Prospects

Aruhi is the leading domestic mortgage provider focused on "Flat 35" loans - 15 to 35 year fixed rate mortgages. The company's competitive...

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