In today’s briefing:
- COLOWIDE (7616) – UGLY Register On Expensive Co Needs a Capital Construct Upgrade, Won’t Get It Here
- Colowide Placement – Needs a Very Large Correction
- I-Scream Media IPO Book Building Results Analysis
- Hyosung Siblings’ Cross-Transfers Are Done: The 10%+ Hyosung Corp Stake Block Deal Remains
- CJ Darcl Logistics Pre-IPO – Diversifying and Integrating Operations for a Larger Pie
- Lumir IPO Valuation Analysis
- Hero Fincorp Pre-IPO – The Negatives – Still Has Issues to Contend With
- Pre-IPO Tong Ren Tang Healthcare Investment – Profitability and Growth Sustainability Are Worrying
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COLOWIDE (7616) – UGLY Register On Expensive Co Needs a Capital Construct Upgrade, Won’t Get It Here
- Colowide Co Ltd (7616 JP) is an industrial fastish-food operator in Japan. They sell several dozen kinds of cuisine under several dozen brands, owned and franchised in Japan and overseas.
- The company “philosophy” is “Everything we do is for our customers and employees.” The stock is up 30% in 10yrs. It pays no dividend, but it pays a big yutairimawari.
- This means Real World Float is 100% owned by retail who want restaurant coupons. This offering will be bought by index, short covers, and another 20-30k coupon holders.
Colowide Placement – Needs a Very Large Correction
- Colowide Co Ltd (7616 JP) aims to raise around US$230m in order to fund its prospective M&A transactions over the next few years
- While the company has undertaken a number of M&A transactions in the past, it hasn’t clearly stated its intended targets for this round.
- In this note, we will talk about the deal dynamics and run the deal through our ECM framework.
I-Scream Media IPO Book Building Results Analysis
- I-Scream Media reported its IPO book building results. The IPO price has been determined at 32,000 won, which is at the low end of the IPO price range.
- A total of 561 institutional investors participated in the IPO survey. The final demand ratio was 31.3 to 1.
- Our valuation analysis suggests an implied price per share of 41,450 won, which represent a 29.5% upside from the IPO price.
Hyosung Siblings’ Cross-Transfers Are Done: The 10%+ Hyosung Corp Stake Block Deal Remains
- The Hyosung siblings swapped ₩60B in shares over August 13-14, raising the elder brother’s Hyosung Corp stake to 40.9% and lowering HS Hyosung below 3%.
- The younger brother must sell additionally at least 11.2% of his 14.2% Hyosung Corp stake. The elder brother may buy, but his cash position and 40% stake limit his need.
- This block deal will be the first to apply the new pre-disclosure rule. So, we should use it to test how the rule affects price movements for better entry timing.
CJ Darcl Logistics Pre-IPO – Diversifying and Integrating Operations for a Larger Pie
- CJ Darcl Logistics Limited (1506129D IN) is looking to raise around US$100m in its upcoming India IPO.
- CJ Darcl Logistics (CJDL) is a diversified logistics company in India, with market leadership in full truck load (FTL) vertical in terms of revenue for FY23, according to CRISIL.
- In this note, we talk about the company’s historical performance.
Lumir IPO Valuation Analysis
- Base case valuation of Lumir is target price of 18,542 won per share. Given the low upside relative to IPO price range, we have a Negative view of this IPO.
- Our net profit estimates in 2025 and 2026 are 38% and 63.3% lower than the company’s estimates.
- Lumir provides key technologies for satellite systems, including small synthetic aperture radar (SAR) satellite systems and payloads.
Hero Fincorp Pre-IPO – The Negatives – Still Has Issues to Contend With
- Hero FinCorp (HF) is looking to raise around US$438m in its upcoming India IPO.
- HF is a non-deposit taking NBFC. It offers a suite of financial products catering primarily to the retail segment and the MSME customer segment in India.
- In this note, we talk about the not-so-positive aspects of the deal.
Pre-IPO Tong Ren Tang Healthcare Investment – Profitability and Growth Sustainability Are Worrying
- Tong Ren Tang’s performance growth is mainly driven by M&As. Its organic growth and operation management capability are not strong, leading to the concerns on the sustainability of future growth.
- Profit margin is disappointing.If Tong Ren Tang fails to balance the interests of different parties and control costs/expenses,low profit margins will be the norm despite the growth of revenue scale.
- From the perspectives of revenue scale, profitability, operational efficiency, business model, there’s still a gap between Tong Ren Tang and Gushengtang. Tong Ren Tang’s valuation should be lower than Gushengtang.