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.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/inageya-co-ltd" target="_blank" data-smartkarma-citation="entities:13994:1" rel="noopener">Inageya Co Ltd (8182 JP)</a> announced a share exchange offer by <a href="https://www.smartkarma.com/entities/united-super-markets-holdings" target="_blank" data-smartkarma-citation="entities:26107:1" rel="noopener">United Super Markets (3222 JP)</a> at 1.46 USMH shares per Inageya share.</li>
<li>The share exchange aligns with <a href="https://www.smartkarma.com/entities/aeon-co-ltd" target="_blank" data-smartkarma-citation="entities:3:1" rel="noopener">Aeon Co Ltd (8267 JP)</a>’s well-flagged intention of making Inageya a wholly-owned subsidiary of USMH.</li>
<li>Aeon’s 50%+ shareholding in Inageya and USMH facilitates the two EGM votes. The deal metrics are broadly fair for both sets of shareholders. </li>
</ul>



Inageya Co Ltd (8182 JP) announced a share exchange offer by United Super Markets (3222 JP) at 1.46 USMH shares per Inageya share.
The share exchange aligns with Aeon Co Ltd (8267 JP)’s well-flagged intention of making Inageya a wholly-owned subsidiary of USMH.
Aeon’s 50%+ shareholding in Inageya and USMH facilitates the two EGM votes. The deal metrics are broadly fair for both sets of shareholders. 


Inageya (8182 JP): Share Exchange Offer from USMH (3222 JP)

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.

<ul>
<li>The Japanese Financial Services Agency has asked the general insurers to reduce/eliminate their cross-shareholdings.</li>
<li>
<a href="https://www.smartkarma.com/entities/sompo-holdings-inc" target="_blank" data-smartkarma-citation="entities:632:1" rel="noopener">Sompo Holdings (8630 JP)</a> had a stake over US$100m in at least 16 listed Japanese stocks, amounting to a total of around US$6bn.</li>
<li>In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.</li>
</ul>


The Japanese Financial Services Agency has asked the general insurers to reduce/eliminate their cross-shareholdings.

Sompo Holdings (8630 JP) had a stake over US$100m in at least 16 listed Japanese stocks, amounting to a total of around US$6bn.
In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.


Sompo Holdings Cross-Shareholding - At Least US$8bn of Cross-Shareholding to Sell

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>The first piece had a question mark in the title. This one has an exclamation point. The exclamation point has value for one investor. Other people? Not so much.</li>
<li>Today post-close we got the deal. I was a little surprised it came this fast, but it's now mostly done it appears - largely as predicted in the <a href="https://www.smartkarma.com/insights/tsuruha-3391-and-welcia-3141-aeon-tsuruha-stake-buy-followed-by-merger" target="_blank" rel="noopener">last piece</a>.</li>
<li>There are things one can probably read into the details. It is probably worth thinking about those, and how those details affect the industry. </li>
</ul>


The first piece had a question mark in the title. This one has an exclamation point. The exclamation point has value for one investor. Other people? Not so much.
Today post-close we got the deal. I was a little surprised it came this fast, but it's now mostly done it appears - largely as predicted in the last piece.
There are things one can probably read into the details. It is probably worth thinking about those, and how those details affect the industry. 


Tsuruha (3391) And Welcia (3141) - Aeon Tsuruha Stake Buy Followed by Merger! [Redux]

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/trial-holdings-inc" target="_blank" data-smartkarma-citation="entities:36821:1" rel="noopener">Trial Holdings (5882 JP)</a> priced its IPO at JPY1,700 per share to raise gross proceeds of US$256 million. The shares will start trading on 21 March.</li>
<li>We previously discussed the IPO in <a href="https://www.smartkarma.com/insights/trial-holdings-ipo-the-investment-case" target="_blank" data-smartkarma-citation="insights:130521" rel="noopener">Trial Holdings IPO: The Investment Case</a> and <a href="https://www.smartkarma.com/insights/trial-holdings-ipo-valuation-thoughts" target="_blank" data-smartkarma-citation="insights:132126" rel="noopener">Trial Holdings IPO: Valuation Thoughts</a>. </li>
<li>The peers have modestly re-rated since the prospectus was released on February 19. The IPO price remains attractive. </li>
</ul>



Trial Holdings (5882 JP) priced its IPO at JPY1,700 per share to raise gross proceeds of US$256 million. The shares will start trading on 21 March.
We previously discussed the IPO in Trial Holdings IPO: The Investment Case and Trial Holdings IPO: Valuation Thoughts. 
The peers have modestly re-rated since the prospectus was released on February 19. The IPO price remains attractive. 


Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

Thematic (Sector/Industry)

<ul>
<li>E-Commerce growth slowed marginally as the sector consolidated post-Covid but remained higher than any other channel in 2022. </li>
<li>By 2025-26, it will be the largest channel, overtaking convenience stores – but Japan’s continuing support for retail stores means that omnichannel will be the main model.</li>
<li>As a result, the majority of transactions will be researched, initiated, and fulfilled through a combination of online and physical stores.</li>
</ul>


E-Commerce growth slowed marginally as the sector consolidated post-Covid but remained higher than any other channel in 2022. 
By 2025-26, it will be the largest channel, overtaking convenience stores – but Japan’s continuing support for retail stores means that omnichannel will be the main model.
As a result, the majority of transactions will be researched, initiated, and fulfilled through a combination of online and physical stores.


E-Commerce in Japan: Omnichannel Consolidation

Japan

LAWSON, INC. operates a chain of convenience stores in Japan. The Company sells a variety of products including fast food, beverages, snacks, magazines, newspapers, and sundry goods.

Seven & i Holdings Co., Ltd. is a holding company which was established through the merger of Ito-Yokado Co., Seven Eleven Japan Co., and Denny's Japan. The Company plans, manages, and operates mainly convenience stores, supermarkets, and department stores.

KOBE BUSSAN CO., LTD. is a supermarket franchise store operator which mainly deals in foods stuffs.  The Company also has direct-run stores.

Yaoko Co., Ltd. operates local supermarkets in the Saitama Prefecture. The Company handles fresh food products, daily-use sundry products, and other various goods in local area.

COSMOS Pharmaceutical Corporation operates drug stores based in Kyushu. The Company sells daily necessities such as drug medicines, foodstuffs, and alcoholic beverages.

SUGI HOLDINGS CO., LTD. operates a chain of drug stores located mainly in Aichi Prefecture.  The Company sells prescription and nonprescription medicine, cosmetics, health foods, and general merchandise.

TSURUHA HOLDINGS INC. is a holding company which manages subsidiaries that operate drug stores in Hokkaido and the Tohoku area.  The Company's product line includes drugs, cosmetics, and household utensils.

SUNDRUG CO., LTD. operates an outlet drug store chain primarily in the Tokyo area.  The Company sells mainly medicines, cosmetics, baby care products, and household utensils.  Sundrug supplies merchandise to franchise stores.  The Company also operates a real estate business.

WELCIA HOLDINGS CO.,LTD. is a holding company established through a merger of Welcia Kanto and Takada Pharmacy.  The Group mainly operates drug chain stores which sell medicines, health foods, cosmetics, nursery items and daily necessity goods.

Kusuri no Aoki Holdings Co., Ltd. operates as a holding company. The Company, through its subsidiaries, provides medicines, cosmetics, health foods, beauty care, and household products. Kusuri no Aoki Holdings serves customers in Japan.

Casey's General Stores, Inc. operates convenience stores in the Midwest.  The Company's stores, operating under the name Casey's General Store, carry a selection of food, beverages, tobacco products, health and beauty aids, automotive products, and other non-food items, as well as sells gasoline.

CP ALL PCL operates convenience store chains in Thailand and China.  The Company also owns and operates the a department store chain located primarily in Shanghai city and Chonqing city of China.

Jeronimo Martins, SGPS, S.A. is a holding company. The Company, through subsidiaries, distributes food in Portugal, Poland and Colombia. The Company operates supermarkets and cash and carry stores in Portugal as well as retail stores in Poland and Colombia. Jeronimo Martins also manufactures various food products as well as provides services to the restaurant industry.

Carrefour SA operates chains of supermarkets, hypermarkets, discount, cash and carry, and frozen food stores in Europe, the Americas, and Asia.

BIM Birlesik Magazalar A.S. operates food and basic consumer goods discount stores in Turkey.  The Company provides an assortment of private label products.

George Weston Limited operates as a super market. The Company processes and distributes food and pharmacy products to grocer wholesalers, warehouses, and independent accounts, as well as provides real estate services. George Weston serves customers in Canada.

Metro Inc. distributes food and pharmaceutical products. The Company operates a network of food stores and drug stores in the provinces of Quebec and Ontario.

BJ's Wholesale Club Holdings, Inc. operates as a warehouse club. The Company delivers electronics, furniture, fitness, video games, health, toys, home decor, computers, landscaping, jewelry, and grocery products. BJ's Wholesale Club Holdings serves customers in the United States.

Coles Group Limited owns and operates a chain of supermarkets and department stores. The Company offers apparels, liquor, office supplies, groceries, and household products. Coles Group serves customers throughout Australia and New Zealand.

US Foods Holding Corp. operates as a holding company. The Company, through its subsidiaries, provides catering services. US Foods Holding serves healthcare, hospitality, educational, government facilities, and other sectors in the United States.

AEON CO., LTD. operates general merchandise stores, supermarkets, and convenience stores throughout Japan. The Company is also engaged in women's and casual clothing store business, development business of commercial property, and financing service through the subsidiaries.

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Aeon Co Ltd (8267 JP)

Sompo Holdings Cross-Shareholding - At Least US$8bn of Cross-Shareholding to Sell

The Japanese Financial Services Agency has asked the general insurers to reduce/eliminate their cross-shareholdings. Sompo had a stake of over...

Sumeet Singh

Tsuruha (3391) And Welcia (3141) - Aeon Tsuruha Stake Buy Followed by Merger! [Redux]

The idea of holding the potential targets (Sundrug, Sugi, Cosmo, Kusuri no Aoki, Create SD, Ain, Nihon Chozai) against a short (or implied short)...

Travis Lundy

Trial Holdings IPO: Trading Debut

The shares will start trading on 21 March. The peers have modestly re-rated since the prospectus was released on February 19. The IPO price remains...

Arun George

E-Commerce in Japan: Omnichannel Consolidation

E-commerce growth in Japan remains strong post-Covid, set to overtake convenience stores by 2025-26, with omnichannel model becoming dominant for...

Michael Causton

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52-week Range

Market Cap (USDm)

P/E

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Inageya (8182 JP): Share Exchange Offer from USMH (3222 JP)

Aeon’s 50%+ shareholding in Inageya and USMH facilitates the two EGM votes. The deal metrics are broadly fair for both sets of shareholders.

Arun George

Sompo Holdings Cross-Shareholding - At Least US$8bn of Cross-Shareholding to Sell

The Japanese Financial Services Agency has asked the general insurers to reduce/eliminate their cross-shareholdings. Sompo had a stake of over...

Sumeet Singh

Tsuruha (3391) And Welcia (3141) - Aeon Tsuruha Stake Buy Followed by Merger! [Redux]

The idea of holding the potential targets (Sundrug, Sugi, Cosmo, Kusuri no Aoki, Create SD, Ain, Nihon Chozai) against a short (or implied short)...

Travis Lundy

Trial Holdings IPO: Trading Debut

The shares will start trading on 21 March. The peers have modestly re-rated since the prospectus was released on February 19. The IPO price remains...

Arun George

E-Commerce in Japan: Omnichannel Consolidation

​E-commerce growth in Japan remains strong post-Covid, set to overtake convenience stores by 2025-26, with omnichannel model becoming dominant for...

Michael Causton

E-commerce growth in Japan remains strong post-Covid, set to overtake convenience stores by 2025-26, with omnichannel model becoming dominant for...