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>The consortium has improved the offer price by 6.6% to $61.00 in cash per ADS. The consortium represents 54.9% of the voting rights.</li>
<li>The Board intends to recommend shareholders vote in favour of the transaction. The transaction is expected to close during the first half of 2022.</li>
<li>The combination of the improved offer price and the tech shares sell-off improves the chance of meeting the two-thirds shareholder approval threshold. At last close, the gross spread is 7.0%. </li>
</ul>


The consortium has improved the offer price by 6.6% to $61.00 in cash per ADS. The consortium represents 54.9% of the voting rights.
The Board intends to recommend shareholders vote in favour of the transaction. The transaction is expected to close during the first half of 2022.
The combination of the improved offer price and the tech shares sell-off improves the chance of meeting the two-thirds shareholder approval threshold. At last close, the gross spread is 7.0%. 


51job’s Improved $61 Offer Gets the Board Onside

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Back on the 12 January this year, <a href="https://www.smartkarma.com/entities/51-job-inc-adr" target="_blank" data-smartkarma-citation="entities:532:1" rel="noopener"><strong>51 Job Inc (JOBS US)</strong></a> announced the Offeror had proposed reducing the merger consideration from US$79.05 in cash per common share to US$57.25.</li>
<li>Yesterday 51job said it has <a href="https://ir.51job.com/ir/php/2022/PreRelease20220301.php" target="_blank" rel="noopener">entered</a> into a revised merger agreement at US$61.00/share, a 6.55% bump in terms, but still 22.8% down the initial terms. </li>
<li>Presumably, the amended proposal still requires no PRC regulatory filing. This transaction appears to be done this time, with completion in the 2Q22.</li>
</ul>


Back on the 12 January this year, 51 Job Inc (JOBS US) announced the Offeror had proposed reducing the merger consideration from US$79.05 in cash per common share to US$57.25.
Yesterday 51job said it has entered into a revised merger agreement at US$61.00/share, a 6.55% bump in terms, but still 22.8% down the initial terms. 
Presumably, the amended proposal still requires no PRC regulatory filing. This transaction appears to be done this time, with completion in the 2Q22.


51job (JOB US)'s Offer Price Back Up To $61

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/recruit-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15070:1" rel="noopener">Recruit Holdings (6098 JP)</a> reported its 3QFY03/22 results today and reported a revenue growth of 22.0% YoY to ¥746bn (vs consensus revenue of ¥706.6bn, 5.6% beat).</li>
<li>OP increased 61.5% YoY to ¥110.6bn with an OP beat of 10.1%. Adjusted EBITDA grew by 54.1% to ¥134.8bn compared to ¥87.5bn for the 3rd quarter last year.</li>
<li>Though 3Q results was strong, earnings weakness begins to show up with normalisation of recruitment activities. Stock is down more than 15% since we made our conviction call short.</li>
</ul>



Recruit Holdings (6098 JP) reported its 3QFY03/22 results today and reported a revenue growth of 22.0% YoY to ¥746bn (vs consensus revenue of ¥706.6bn, 5.6% beat).
OP increased 61.5% YoY to ¥110.6bn with an OP beat of 10.1%. Adjusted EBITDA grew by 54.1% to ¥134.8bn compared to ¥87.5bn for the 3rd quarter last year.
Though 3Q results was strong, earnings weakness begins to show up with normalisation of recruitment activities. Stock is down more than 15% since we made our conviction call short.


Conviction Call Recruit – Strong Results; Earnings Weakness Begins to Show Up and Down More Than 15%

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

<ul>
<li>JPX-Nikkei 400 is composed of common stocks listed in the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.</li>
<li>A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year.</li>
<li>Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2022 based on trading data as of end-January 2022.</li>
</ul>


JPX-Nikkei 400 is composed of common stocks listed in the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.
A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year.
Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2022 based on trading data as of end-January 2022.


JPX-Nikkei 400 Rebalance 2022: Leaderboard End-Jan 2022

Travis Lundy

<ul>
<li>Recruit announced a buyback of up to 34 million shares in an own share tender offer to take place at a price below the current market price.</li>
<li>This kind of tender offer is almost always meant for Japanese corporate holders as it rarely makes sense for others to participate.</li>
<li>This is mildly EPS accretive, BVPS decretive, quite ROE accretive, but Recruit can't really use this method for the rest of its cross-holdings.</li>
</ul>


Recruit announced a buyback of up to 34 million shares in an own share tender offer to take place at a price below the current market price.
This kind of tender offer is almost always meant for Japanese corporate holders as it rarely makes sense for others to participate.
This is mildly EPS accretive, BVPS decretive, quite ROE accretive, but Recruit can't really use this method for the rest of its cross-holdings.


Japan

Recruit Holdings Co. Ltd. operates information providing services in human resource, housing, bridal, travel, restaurants, beauty, automobiles, and education and more. The company also operate staffing services and advertising business.

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Recruit Holdings (6098 JP)

51job’s Improved $61 Offer Gets the Board Onside

The consortium has improved its offer by 6.6% from $57.25 to $61.00 per ADS. The combination of the improved offer and the tech shares sell-off...

Arun George

51job (JOB US)'s Offer Price Back Up To $61

Trading at a gross/annualised spread of 7.0%/22.9%. That's very attractive. And it looks done this time. But caution is required given how this...

David Blennerhassett

Conviction Call Recruit – Strong Results; Earnings Weakness Begins to Show Up and Down More Than 15%

Though 3Q results was strong, earnings weakness begins to show up with normalisation of recruitment activities. Stock is down more than 15% since...

Shifara Samsudeen, ACMA, CGMA

JPX-Nikkei 400 Rebalance 2022: Leaderboard End-Jan 2022

A look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2022 based on trading data as of end-January 2022.

Janaghan Jeyakumar, CFA

Recruit (6098) Buyback - Big, But Meh...

Recruit announced a buyback of up to 34 million shares in an own share tender offer to take place at a price near a 52-week low. Three major...

Travis Lundy

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