In today’s briefing:
- Rakuten (4755 JP) – A Big Deal With Very Interesting Characteristics – Index Matters
- Rakuten US$2.4bn Placement – Larger than Rumored, Some Indications of Finality
- Rakuten (4755 JP) Offering: Could Drop Some More Before Passive Buying Kicks In
- Rakuten: ¥333bn Offering Confirmed, Cheap Valuation and Mobile Turnaround on the Horizon
- Focus on 5 Korean Small Cap, Cosmetics Stocks With Significant Growth in Operating Profit in 1Q 2023
- Aeon to Launch Ground-Breaking Online Food Business
- XWELL, INC – Reports 1Q23 Results; Early Steps on the Way Back to Profitability
Rakuten (4755 JP) – A Big Deal With Very Interesting Characteristics – Index Matters
- Yesterday (15 May 2023) just before EOD, an article ran suggesting a ¥300bn capital raise by Rakuten (4755 JP). The stock fell 10% in 10mins. Rakuten hemmed/hawed but didn’t deny.
- One day later, we have a deal. It is up to 546mm shares including greenshoe, which at the close was ¥333bn. 468mm shares to the public, 79mm to 3rd parties.
- This increases Real World Float by 95%. In that respect this is vaguely IPO-ish. Investors have to re-underwrite. Then Passive re-shrinks the float. Details matter.
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.
- 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 (4755 JP) Offering: Could Drop Some More Before Passive Buying Kicks In
- 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: ¥333bn Offering Confirmed, Cheap Valuation and Mobile Turnaround on the Horizon
- Rakuten (4755 JP) announced a public offering of 468.1m new shares and third-party allotment of 78.8m shares to secure ¥333bn.
- Enhanced network coverage via KDDI network sharing to attract new users and overcome previous barriers for Rakuten Mobile.
- Mobile breakeven could drive Rakuten’s operating profit to ¥150-200bn, potentially boosting the share price to around ¥2,000.
Focus on 5 Korean Small Cap, Cosmetics Stocks With Significant Growth in Operating Profit in 1Q 2023
- In this insight, we discuss 10 small cap cosmetic stocks in Korea, which are up on average 26.6% YTD, outperforming KOSPI which is up 10.9% YTD.
- The drivers of their strong share price performances include reopening after the COVID-19 pandemic and ending of nearly all pandemic related restrictions (including wearing of face masks).
- Among the 10 companies, we would focus on the top five small cap cosmetics stocks with the highest growth in operating profit in 1Q 2023 including Cosmecca Korea and Clio.
Aeon to Launch Ground-Breaking Online Food Business
- It has taken three years to build and set up but Aeon will finally open its first automated warehouse for online food sales in Chiba this summer.
- The warehouse will run on technology from Ocado and act as the backend for a completely new online supermarket called Green Beans.
- A second warehouse is due to come online in 2026, expanding sales to all of Tokyo and into Kanagawa. This is the most advanced food e-commerce operation in Japan.
XWELL, INC – Reports 1Q23 Results; Early Steps on the Way Back to Profitability
- XWELL reported 1Q23 revenue of $7.1 million, compared with $7.6 million in 4Q22, which is a reasonable performance given that the first quarter tends to be seasonally slow.
- The spa business contributed $4.7 million, helped by growth in international spas.
- The XpresTest segment, which included the CDC program and the one remaining XpresCheck location, contributed $1.8 million, while HyperPointe contributed $0.6 million.
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