Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

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Dexerials Corporation aims to raise US$600m in its IPO through a sale of secondary shares.&nbsp;The deal scores a marginal negative score on our framework. We would avoid the deal given: recent revenue growth for the company has remained lackluster, even as smartphone market has continued to grow; while the company has a dominant market share in its two core segments, however, this is not adequately reflected in its growth, which implies pricing power probably remains weak; company seems to be banking on entry into new segments to drive growth, however, its success rate in this largely remains unproven; there remains a high risk of technological obsolescence; moreover, nearest comp trades below the stated forward p/e and only slightly above the adjusted p/e, despite having a 4x bigger market cap.&nbsp;

Dexerials Corporation aims to raise US$600m in its IPO through a sale of secondary shares.&nbsp;The deal scores a marginal negative score on our framework. We would avoid the deal given: recent revenue growth for the company has remained lackluster, even as smartphone market has continued to grow; while the company has a dominant market share in its two core segments, however, this is not adequately reflected in its growth, which implies pricing power probably remains weak; company seems to be banking on entry into new segments to drive growth, however, its success rate in this largely remains unproven; there remains a high risk of technological obsolescence; moreover, nearest comp trades below the stated forward p/e and only slightly above the adjusted p/e, despite having a 4x bigger market cap.&nbsp;

Big fish in a small pond which seems to be drying up. Avoid

Japan

Dexerials Corporation manufactures and sells optical materials, electronic parts and adhesive materials.  The Company produces optical disks, magnetic tapes, magnetic devices, optical film, and touch panel.

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Dexerials Corp (4980 JP)

Big fish in a small pond which seems to be drying up. Avoid

Dexerials Corporation aims to raise US$600m in its IPO through a sale of secondary shares. The deal scores a marginal negative score on our...

Sumeet Singh

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