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.

Equity Capital Markets

<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> aims to raise up to US$2.4bn (JPY323bn) via a global offering.</li>
<li>The deal was undoubtedly accelerated by Reuters breaking the news of a possible equity raising on 15th May 2023.</li>
<li>We have covered most aspects of the deal in our previous note, in this note we talk about the deal dynamics and run the deal through our ECM framework.</li>
</ul>



Rakuten (4755 JP) aims to raise up to US$2.4bn (JPY323bn) via a global offering.
The deal was undoubtedly accelerated by Reuters breaking the news of a possible equity raising on 15th May 2023.
We have covered most aspects of the deal in our previous note, in this note we talk about the deal dynamics and run the deal through our ECM framework.


Rakuten US$2.4bn Placement - Larger than Rumored, Some Indications of Finality

<ul>
<li>
<a href="https://www.smartkarma.com/entities/rakuten-bank-ltd" target="_blank" data-smartkarma-citation="entities:35638:1" rel="noopener">Rakuten Bank</a>, the online banking arm of <a href="https://www.smartkarma.com/entities/rakuten-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten Inc (4755 JP)</a>, aims to raise around US$500m (estimated) in its Japan listing in April 2023. </li>
<li>RB is the largest internet bank in Japan, by number of accounts. As of Mar 2023, it had 13.39m deposit accounts with a total deposit base of JPY8.6tn. </li>
<li>In this note we take an early look at the IPO and talk about the positive aspects of its past performance.</li>
</ul>



Rakuten Bank, the online banking arm of Rakuten Inc (4755 JP), aims to raise around US$500m (estimated) in its Japan listing in April 2023. 
RB is the largest internet bank in Japan, by number of accounts. As of Mar 2023, it had 13.39m deposit accounts with a total deposit base of JPY8.6tn. 
In this note we take an early look at the IPO and talk about the positive aspects of its past performance.


Rakuten Bank IPO Early Look - The Positives - Has Grown Fast over the past Few Years

'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

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.

Thematic (Sector/Industry)

<div>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/144/315/original/2020-07-05_13-49-05.png?1593924588" class="editor-image img-responsive" data-smartkarma-image-id="144315"></figure><div class="content-caption">Source • Japan Analytics</div>
<p><strong>PROFITS TIMELINE</strong> - As the pace of quarterly results begins to pick up, the downward drift of trailing and forecast profits continue. Forecast Net Income is now below the trough of the previous cycle, and the trailing number should follow soon. Supported by the Bank of Japan, aggregate market capitalisation is above that of the early 2019 profit peak. As a result, earnings multiples are at the upper end of the five-year range, although there is evidence of some resistance at these levels.</p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/144/329/original/2020-07-05_15-13-29.png?1593929621" class="editor-image img-responsive" data-smartkarma-image-id="144329"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/144/331/original/2020-07-05_15-17-50.png?1593929930" class="editor-image img-responsive" data-smartkarma-image-id="144331"></figure><div class="content-caption">Source • Japan Analytics</div>
<p><strong>RESULTS &amp; REVISION SCORES</strong> - Our Scoring methodology tells the same 'story'. We are one to two quarters away from the bottom of this earnings cycle - a bottom that is likely to match that of 2009. Whether a 10% decline in market value from pre-COVID-19 levels is sufficient 'recognition' of the temporary, and in some cases, permanent, impairment of the earnings generation capability and momentum remains to be seen. We suspect the coming 'next wave' of downward revisions, as shown by Friday's one positive to nine negative ratio, will limit any upside over the summer months. </p>
<p style="text-align: center;"><strong>DAILY STATS</strong></p>
</div><hr><div><p style="text-align: center;"><strong>19 Quarterly Results</strong></p></div><div>
<ul>
<li>
<strong>Results Score:</strong> 7 Positive / 2 Neutral / 10 Negative</li>
<li>
<strong>Average Results Score Change</strong>:-2.0</li>
<li>
<strong>Average % Change in Revenue: </strong>-7.8% Quarter YoY* / +3.1% Rolling TTM YoY</li>
<li>
<strong>Average Operating Profit Margin Change:</strong> -0.4ppt</li>
</ul>
<div class="content-remarks"><p>* Excluding Kasumigaseki Capital</p></div>
</div><hr><div><p style="text-align: center;"><br><strong>7 Annual • 3 Interim Forecasts/Revisions</strong></p></div><div><ul>
<li>
<strong>Annual Forecast/Revision Score:</strong> 1 Positive / 0 Neutral / 6 Negative</li>
<li>
<strong>Interim Forecast/Revision Score Change:</strong> 0 Positive / 0 Neutral / 3 Negative</li>
<li>
<strong>Average Forecast/Revision Score Change:</strong> -15.3</li>
</ul></div>


Source • Japan Analytics
PROFITS TIMELINE - As the pace of quarterly results begins to pick up, the downward drift of trailing and forecast profits continue. Forecast Net Income is now below the trough of the previous cycle, and the trailing number should follow soon. Supported by the Bank of Japan, aggregate market capitalisation is above that of the early 2019 profit peak. As a result, earnings multiples are at the upper end of the five-year range, although there is evidence of some resistance at these levels.
Source • Japan Analytics
RESULTS &amp; REVISION SCORES - Our Scoring methodology tells the same 'story'. We are one to two quarters away from the bottom of this earnings cycle - a bottom that is likely to match that of 2009. Whether a 10% decline in market value from pre-COVID-19 levels is sufficient 'recognition' of the temporary, and in some cases, permanent, impairment of the earnings generation capability and momentum remains to be seen. We suspect the coming 'next wave' of downward revisions, as shown by Friday's one positive to nine negative ratio, will limit any upside over the summer months. 
DAILY STATS
19 Quarterly Results


Results Score: 7 Positive / 2 Neutral / 10 Negative

Average Results Score Change:-2.0

Average % Change in Revenue: -7.8% Quarter YoY* / +3.1% Rolling TTM YoY

Average Operating Profit Margin Change: -0.4ppt

* Excluding Kasumigaseki Capital
 7 Annual • 3 Interim Forecasts/Revisions

Annual Forecast/Revision Score: 1 Positive / 0 Neutral / 6 Negative

Interim Forecast/Revision Score Change: 0 Positive / 0 Neutral / 3 Negative

Average Forecast/Revision Score Change: -15.3


🇯🇵 JAPAN • Results & Revisions 3rd July • The Next Wave

Japan

Toshin Group co., ltd. is a holding company, which manages operations for its subsidiaries. Group company primarily wholesales housing products.  The Company sells lighting equipment, electrical engineering materials such as cables and housing fixtures including system kitchens and air-conditioning equipment. Toshin also directly sells the products to electrical and building contractors.

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Toshin Group (2761 JP)

Rakuten US$2.4bn Placement - Larger than Rumored, Some Indications of Finality

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

Sumeet Singh

Rakuten Bank IPO Early Look - The Positives - Has Grown Fast over the past Few Years

Rakuten Bank, the online banking arm of Rakuten Inc (4755 JP), aims to raise around US$500m in its Japan listing in April 2023. In this note, we...

Sumeet Singh

🇯🇵 JAPAN • Results & Revisions 3rd July • The Next Wave

PROFITS TIMELINE - As the pace of quarterly results begins to pick up, the downward drift of trailing and forecast profits continue. Forecast Net...

Campbell Gunn

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