Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Daifuku released FY3/24 results on 10 May. Since then the share price has declined by 15%, giving investors an attractive entry point.</li>
<li>Daifuku is a key beneficiary of warehouse automation, which is forecast to grow at a CAGR of over 6%, with industry spend projected to reach $37 billion by 2030</li>
<li>We expect the market to price in an order recovery in the core electronics segment and believe that the MTP is yet to be factored into the current share price.</li>
</ul>


Daifuku released FY3/24 results on 10 May. Since then the share price has declined by 15%, giving investors an attractive entry point.
Daifuku is a key beneficiary of warehouse automation, which is forecast to grow at a CAGR of over 6%, with industry spend projected to reach $37 billion by 2030
We expect the market to price in an order recovery in the core electronics segment and believe that the MTP is yet to be factored into the current share price.


Daifuku (6383) | Time to Pick up Global Leader

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.

Event-Driven

<ul>
<li>Following up on our earlier cross-shareholding work, in this note we look to summarize our work so far by looking at where most of the selling will likely come.</li>
<li>Of the seven companies that we have looked at so far, collectively they have around US$102bn worth of shares to sell in 118 companies. </li>
<li>Of these, they have a combined stake of over US$1bn in 23 companies.</li>
</ul>


Following up on our earlier cross-shareholding work, in this note we look to summarize our work so far by looking at where most of the selling will likely come.
Of the seven companies that we have looked at so far, collectively they have around US$102bn worth of shares to sell in 118 companies. 
Of these, they have a combined stake of over US$1bn in 23 companies.


Japan Cross-Shareholding - Summary Matrix - Over US$100bn of Selling in 118 Companies

Thematic (Sector/Industry)

<ul>
<li>Furukawa's stock surged after announcing shareholder-friendly measures, including asset sales, a buyback, and a dividend hike; activist City Index takes some profits.</li>
<li>The Japanese market faced a volatile week, ultimately closing lower, with the Nikkei declining by 1% - a mix of strong macro data, tariffs, and yen moves</li>
<li>Daifuku surged 25% on strong earnings, cost savings, and a robust FY25 order outlook, reinforcing confidence in long-term growth.</li>
</ul>


Furukawa's stock surged after announcing shareholder-friendly measures, including asset sales, a buyback, and a dividend hike; activist City Index takes some profits.
The Japanese market faced a volatile week, ultimately closing lower, with the Nikkei declining by 1% - a mix of strong macro data, tariffs, and yen moves
Daifuku surged 25% on strong earnings, cost savings, and a robust FY25 order outlook, reinforcing confidence in long-term growth.


Japan Strategy Weekly | City Index Cashes in on Furukawa

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

Kokusai Electric  / Equity Capital Markets

<ul>
<li>Reuters reported that <a href="https://www.smartkarma.com/entities/kkr-co-inc" target="_blank" data-smartkarma-citation="entities:27333:1" rel="noopener">KKR &amp; Co (KKR US)</a>, the largest <a href="https://www.smartkarma.com/entities/kokusai-electric-corp" target="_blank" data-smartkarma-citation="entities:40152:1" rel="noopener">Kokusai Electric (6525 JP)</a> shareholder, plans to sell about half of its 43% stake, worth around JPY300 billion.</li>
<li>As Kokusai’s shares are trading at 3.2x the IPO price of JPY1,840, KKR would be tempted to reduce its stake further. The 180-day IPO lock-up period expired on 22 April.</li>
<li>Kokusai anticipates a return to growth and margin improvement. However, Kokusai trades at a material premium to peer multiples and is fully priced. </li>
</ul>


Reuters reported that KKR &amp; Co (KKR US), the largest Kokusai Electric (6525 JP) shareholder, plans to sell about half of its 43% stake, worth around JPY300 billion.
As Kokusai’s shares are trading at 3.2x the IPO price of JPY1,840, KKR would be tempted to reduce its stake further. The 180-day IPO lock-up period expired on 22 April.
Kokusai anticipates a return to growth and margin improvement. However, Kokusai trades at a material premium to peer multiples and is fully priced. 


Kokusai Electric (6525 JP): Rumoured KKR US$1.8 Billion Secondary Offering

<ul>
<li>
<a href="https://www.smartkarma.com/entities/kokusai-electric-corp" target="_blank" data-smartkarma-citation="entities:40152:1" rel="noopener">Kokusai Electric (6525 JP)</a>’s 180-day IPO lock-up period for 71% of outstanding shares expires on 22 April. The shares exiting the lock-up period are worth US$4.8 billion.</li>
<li>The likely seller will be <a href="https://www.smartkarma.com/entities/kkr-co-inc" target="_blank" data-smartkarma-citation="entities:27333:1" rel="noopener">KKR &amp; (KKR US)</a> as it was the sole selling shareholder in the IPO. The shares are currently trading at 2.4x the IPO price.</li>
<li>Kokusai anticipates a return to growth and margin improvement in FY24. However, Kokusai trades at a material premium to peer multiples and is fully priced. </li>
</ul>



Kokusai Electric (6525 JP)’s 180-day IPO lock-up period for 71% of outstanding shares expires on 22 April. The shares exiting the lock-up period are worth US$4.8 billion.
The likely seller will be KKR &amp; (KKR US) as it was the sole selling shareholder in the IPO. The shares are currently trading at 2.4x the IPO price.
Kokusai anticipates a return to growth and margin improvement in FY24. However, Kokusai trades at a material premium to peer multiples and is fully priced. 


Kokusai Electric (6525 JP): The US$4.8 Billion Lock up Expiry

Japan

DAIFUKU CO., LTD. designs, manufactures, and sells material handling equipment such as automated storage systems, conveyors, and automatic sorters.  The Company's products are used for automation in manufacturing and distribution businesses.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Daifuku Co Ltd (6383 JP)

Daifuku (6383) | Time to Pick up Global Leader

Daifuku's share price decline presents an attractive entry point for investors, with growth potential in warehouse automation and an expected...

Mark Chadwick

Japan Cross-Shareholding - Summary Matrix - Over US$100bn of Selling in 118 Companies

Toyotal has just announced that it will buy back around 290m (around 2% of the stock) of its own shares from MS&AD, Tokio Marine, MUFG and SMFG. In...

Sumeet Singh

Japan Strategy Weekly | City Index Cashes in on Furukawa

Furukawa's shareholder-friendly measures boost stock, Japanese market faces volatility, Daifuku surges on strong earnings and outlook.

Mark Chadwick

Kokusai Electric (6525 JP): Rumoured KKR US$1.8 Billion Secondary Offering

As Kokusai’s shares are trading at 3.2x the IPO price, KKR would be tempted to reduce its stake further. Expect a secondary offering announcement...

Arun George

Kokusai Electric (6525 JP): The US$4.8 Billion Lock up Expiry

Kokusai’s 180-day IPO lock-up period for 71% of outstanding shares expires on 22 April. Kokusai trades at a material premium to peer multiples and...

Arun George

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Daifuku (6383) | Time to Pick up Global Leader

​Daifuku's share price decline presents an attractive entry point for investors, with growth potential in warehouse automation and an expected...

Mark Chadwick

Japan Cross-Shareholding - Summary Matrix - Over US$100bn of Selling in 118 Companies

Toyotal has just announced that it will buy back around 290m (around 2% of the stock) of its own shares from MS&AD, Tokio Marine, MUFG and SMFG. In...

Sumeet Singh

Japan Strategy Weekly | City Index Cashes in on Furukawa

​Furukawa's shareholder-friendly measures boost stock, Japanese market faces volatility, Daifuku surges on strong earnings and outlook.

Mark Chadwick

Kokusai Electric (6525 JP): Rumoured KKR US$1.8 Billion Secondary Offering

As Kokusai’s shares are trading at 3.2x the IPO price, KKR would be tempted to reduce its stake further. Expect a secondary offering announcement...

Arun George

Kokusai Electric (6525 JP): The US$4.8 Billion Lock up Expiry

Kokusai’s 180-day IPO lock-up period for 71% of outstanding shares expires on 22 April. Kokusai trades at a material premium to peer multiples and...

Arun George

Daifuku's share price decline presents an attractive entry point for investors, with growth potential in warehouse automation and an expected...

Furukawa's shareholder-friendly measures boost stock, Japanese market faces volatility, Daifuku surges on strong earnings and outlook.