In today’s briefing:
- Big ¥500bn Honda (7267) Offering Is Small
- Honda (7267 JP): A US$3.3 Billion Secondary Offering
- Honda Motor Placement – Large in Size, Relatively Small in Other Terms
- Sanil Electric IPO: Valuation Insights
- Timee (215A JP) IPO: The Bear Case
- Aisin Corp Placement – Follow Up – Could Fall into a Similar Fate as past Large JP Secondary Deals
- Hozon New Energy Automobile Pre-IPO Tearsheet
Big ¥500bn Honda (7267) Offering Is Small
- Just pre-close on 2 July, Reuters carried an article suggesting a ¥500bn secondary offering in Honda Motor (7267 JP) as insurers sold. The stock fell 4% in minutes.
- Honda semi-confirmed but it took two days to get to the details, now out. The stock climbed in the meantime.
- At launch, this deal is two-thirds covered by buyback + passive demand but the supply is heavily-weighted to retail. Cheaper than it looks, lots of moving parts. Read the details!
Honda (7267 JP): A US$3.3 Billion Secondary Offering
- Honda Motor (7267 JP) has announced a secondary offering of up to 298.9 million shares (including overallotment). At the close, the offer, including overallotment, is worth JPY535 billion (US$3.3 million).
- The offering is another sign that the unwinding of cross-shareholdings is catching pace as part of Japan’s corporate governance reforms.
- Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 17 and 22 July (likely 17 July).
Honda Motor Placement – Large in Size, Relatively Small in Other Terms
- A group of shareholders aims to raise up to US$3.2bn via selling around 5% of Honda Motor (7267 JP) .
- The possibility of such a selldown was flagged earlier in the week by Reuters. Thus, the deal is well flagged.
- In this note, we will talk about the placement and run the deal through our ECM framework.
Sanil Electric IPO: Valuation Insights
- Sanil Electric (062040 KS), a Korean industrial transformer manufacturer, is seeking to raise up to US$165 million.
- We previously discussed the IPO in Sanil Electric IPO: The Bull Caseand Sanil Electric IPO: The Bear Case.
- We examine the syndicate’s valuation methodology. Our analysis suggests that Sanil is fully valued in the IPO price range. We would pass on the IPO.
Timee (215A JP) IPO: The Bear Case
- Timee Inc (215A JP), a leading part-time job platform in Japan, is seeking to raise up to US$286 million. Book-building runs from 9 to 23 July.
- In Timee (215A JP) IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
- The bear case rests on rapidly slowing growth, an industry-low FCF profile, and a business model predicated on access to large funding and significant share option dilution.
Aisin Corp Placement – Follow Up – Could Fall into a Similar Fate as past Large JP Secondary Deals
- Denso Corp (6902 JP), Toyota Motor (7203 JP) and Toyota Industries (6201 JP) are looking to raise US$1.1bn from selling some of their stakes in Aisin (7259 JP).
- We have covered the background of the deal in our earlier note, Aisin Corp Placement – US$1.1bn Selldown by Toyota and DENSO.
- In this note, we talk about the updates since and look at the performance of some of the past large Japan deals.
Hozon New Energy Automobile Pre-IPO Tearsheet
- Hozon New Energy Automobile Co Ltd (1850123D CH) seeks to raise up to US$1bn in its upcoming HK IPO. The deal will be run by CICC, MS, Citic, ABCI and CMBI.
- Hozon New Energy Automobile (HNEA) is a NEV technology company which sells cars under the Neta brand. The prices of its vehicles generally range between US$15,000 to US$45,000.
- The firm has been expanding into the more profitable mid-to-high-end market segment and replicating its local success in overseas markets.
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