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

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<li>
<a href="https://www.smartkarma.com/entities/socionext-inc" target="_blank" data-smartkarma-citation="entities:36351:1" rel="noopener">Socionext (6526 JP)</a> announced a pure secondary offering of 12.6 million or 37.50% of outstanding shares. At the last close, the placement is worth JPY277 billion (US$1.9 billion)</li>
<li>The selling shareholders' primary motivation for exiting their shareholding is to capitalise on the extraordinary share price. Socionext shares are up 6x from the IPO price of JPY3,650 per share.</li>
<li>We think looking at recent large Japanese placements is instructive to understand the potential offer price. The pricing date will fall between 11 to 13 July (likely 11 July).</li>
</ul>



Socionext (6526 JP) announced a pure secondary offering of 12.6 million or 37.50% of outstanding shares. At the last close, the placement is worth JPY277 billion (US$1.9 billion)
The selling shareholders' primary motivation for exiting their shareholding is to capitalise on the extraordinary share price. Socionext shares are up 6x from the IPO price of JPY3,650 per share.
We think looking at recent large Japanese placements is instructive to understand the potential offer price. The pricing date will fall between 11 to 13 July (likely 11 July).


Socionext (6526 JP): US$1.9bn Secondary Placement

<ul>
<li>Since the announcement of the placement, <a href="https://www.smartkarma.com/entities/rakuten-group-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten (4755 JP)</a>’s shares are down -15.7% from the undisturbed price of JPY707 per share (12 May prior to press reports of the placement).</li>
<li>To understand how the shares will trade as the offer is launched, we think it is instructive to look at recent large Japanese placements. Pricing date is likely 24 May.</li>
<li>So far, Rakuten’s shares have mostly followed the pattern of previous large placements. Investors participating in previous large Japanese placements tend to secure positive returns.</li>
</ul>


Since the announcement of the placement, Rakuten (4755 JP)’s shares are down -15.7% from the undisturbed price of JPY707 per share (12 May prior to press reports of the placement).
To understand how the shares will trade as the offer is launched, we think it is instructive to look at recent large Japanese placements. Pricing date is likely 24 May.
So far, Rakuten’s shares have mostly followed the pattern of previous large placements. Investors participating in previous large Japanese placements tend to secure positive returns.


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

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<li>
<a href="https://www.smartkarma.com/entities/rakuten-group-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten (4755 JP)</a> aims to raise up to US$2.4bn (JPY323bn) via a global offering.</li>
<li>We have covered various aspects of the deal in our earlier notes, see <a href="https://www.smartkarma.com/insights/rakuten-possible-us-2-2bn-placement-will-be-a-huge-deal-to-digest-but-it-s-not-all-bad" target="_blank" rel="noopener">here</a> and <a href="https://www.smartkarma.com/insights/rakuten-us-2-4bn-placement-larger-than-rumored-some-indications-of-finality" target="_blank" rel="noopener">here</a>.</li>
<li>In this note, we will talk about the updates since our last note, as well as the performance of some of the past large primary raises in Japan.</li>
</ul>



Rakuten (4755 JP) aims to raise up to US$2.4bn (JPY323bn) via a global offering.
We have covered various aspects of the deal in our earlier notes, see here and here.
In this note, we will talk about the updates since our last note, as well as the performance of some of the past large primary raises in Japan.


Rakuten US$2.4bn Placement - Recent Updates and Comparison to past Deals

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/rakuten-group-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten (4755 JP)</a> is looking to raise around US$2.4bn by selling shares via a Japanese Public Offering and an International Offering as well as through a third-party allotment.</li>
<li>The stock has already dropped 13.7% in the last couple of days on large volumes as the rumours of the offering started to swirl.</li>
<li>The offering prices late next week and passive trackers will be buying stock once the stock settles and this will provide support in the near-term.</li>
</ul>



Rakuten (4755 JP) is looking to raise around US$2.4bn by selling shares via a Japanese Public Offering and an International Offering as well as through a third-party allotment.
The stock has already dropped 13.7% in the last couple of days on large volumes as the rumours of the offering started to swirl.
The offering prices late next week and passive trackers will be buying stock once the stock settles and this will provide support in the near-term.


Rakuten (4755 JP) Offering: Could Drop Some More Before Passive Buying Kicks In

<ul>
<li>
<a href="https://www.smartkarma.com/entities/japan-post-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:359:1" rel="noopener">Japan Post Holdings (6178 JP)</a> plans to sell around US$9bn worth of <a href="https://www.smartkarma.com/entities/japan-post-bank-co-ltd" target="_blank" data-smartkarma-citation="entities:838:1" rel="noopener">Japan Post Bank (7182 JP)</a>, trimming its stake by a third.</li>
<li>We have looked at the deal in our past note, <a href="https://www.smartkarma.com/insights/japan-post-bank-placement-deal-structure-past-deals-index-buyback" target="_blank" data-smartkarma-citation="insights:96666" rel="noopener">Japan Post Bank Placement - Deal Structure, past Deals, Index, Buyback</a>.</li>
<li>In this note, we talk about the updates since our last note and have a look at some of the past deals.</li>
</ul>



Japan Post Holdings (6178 JP) plans to sell around US$9bn worth of Japan Post Bank (7182 JP), trimming its stake by a third.
We have looked at the deal in our past note, Japan Post Bank Placement - Deal Structure, past Deals, Index, Buyback.
In this note, we talk about the updates since our last note and have a look at some of the past deals.


Japan Post Bank Placement - Misbehaving - Still Has Time to Correct - A Look at past Deals

Japan

Hulic Company, Limited. operates real estate business and marketable securities investment business.  The Company also conducts environment related businesses.

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Hulic Co Ltd (3003 JP)

Socionext (6526 JP): US$1.9bn Secondary Placement

We think looking at recent large Japanese placements is instructive to understand the potential offer price. The pricing date will fall between 11...

Arun George

Rakuten (4755 JP): The Current Playbook

So far, Rakuten’s shares have mostly followed the pattern of previous large placements. Investors participating in previous large Japanese...

Arun George

Rakuten US$2.4bn Placement - Recent Updates and Comparison to past Deals

Rakuten (4755 JP) aims to raise up to US$2.4bn (JPY323bn) via a global offering. In this note, we talk about the updates since our last note. and...

Sumeet Singh

Rakuten (4755 JP) Offering: Could Drop Some More Before Passive Buying Kicks In

Rakuten is looking to raise US$2.45bn via a Japanese, International and third-party offering. The stock has dropped 13.7% in the last 2 days and...

Brian Freitas

Japan Post Bank Placement - Misbehaving - Still Has Time to Correct - A Look at past Deals

Japan Post Holdings (6178 JP) plans to sell US$9bn of Japan Post Bank (7182 JP). The stock price hasn't been behaving particularly well in terms of...

Sumeet Singh

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