In today’s briefing:
- Huge Denso (6902) Secondary Sale by Toyota Group – Admiral Ackbar Says “It’s A Trap!”
- Denso Offering, Buyback, and New Cross-Holding Reduction Policy – It WAS a Trap
- Denso (6902 JP): US$4.0 Billion Secondary Offering and US$1.4 Billion Buyback
- Denso Corp Placement – Toyota to Raise US$4.4bn, as Expected
- Dekon Food and Agriculture Group IPO – Ebbs and Flows of Cycle Have Hurt Profitability
- Tata Technologies IPO: Trading Debut
- Tata Technologies IPO Trading – Will Be a Good Listing Owing to over Enthusiasm
- Fedbank Financial IPO Trading – Subscription Rates Hint at a Snoozy Debut
- Leader Energy Holdings Pre-IPO – Still Too Early for an ESG Angle
- Sino-Synergy Hydrogen IPO – High Potential but Comes with Ample Issues
Huge Denso (6902) Secondary Sale by Toyota Group – Admiral Ackbar Says “It’s A Trap!”
- Yesterday, Reuters reported that multiple Toyota Group companies would sell ~10% of Denso Corp (6902 JP) worth ¥700bn in a secondary share sale by year-end.
- The sellers would be Toyota, selling down to just over 20%, Toyota Industries (6201) (selling down a bit more than half, and Aisin Seiki (7259 JP) selling its 2% stake.
- Denso would buy back shares. This whole thing is both interesting and complicated so I discuss the interesting complications below. It looks bigger than it probably is.
Denso Offering, Buyback, and New Cross-Holding Reduction Policy – It WAS a Trap
- 15 minutes after I published what I thought was a considered analysis, Denso dumps the details. I thought it might be a trap. It looks like a trap.
- A holistic view of the three different documents here suggests, indeed, “It was a trap”.
- This giant offering is not bearish overhang but likely tilts bullish with greenshoe support, a large buyback, a new cross-holding reduction policy, and the follow-on effects from that.
Denso (6902 JP): US$4.0 Billion Secondary Offering and US$1.4 Billion Buyback
- Denso Corp (6902 JP) announced a secondary offering of up to 294.8 billion shares (including overallotment) and a buyback (maximum shares of 125 million or maximum value of JPY200 billion).
- Denso also announced a cross-holding reduction policy. In an unspecified timeframe, it will sell part of its holdings in Toyota Industries (6201 JP) and Aisin (7259 JP).
- Looking at recent large Japanese placements is instructive to understand the potential offer price. The pricing date will fall between 13 and 18 December (likely 13 December).
Denso Corp Placement – Toyota to Raise US$4.4bn, as Expected
- Following yesterday’s news release by Reuters that Toyota Motor (7203 JP) could sell up to 10% of Denso Corp (6902 JP), the deal was officially launched today.
- Toyota is the company’s largest shareholder and its largest customer.
- We have covered the deal background in our earlier note, Denso Corp Placement – Possible Placement by Toyota to Raise US$4.7bn. In this note, we talk about the final terms.
Dekon Food and Agriculture Group IPO – Ebbs and Flows of Cycle Have Hurt Profitability
- Dekon Food and Agriculture Group (DFAG CH) is looking to raise up to US$128m in its Hong Kong IPO.
- Dekon Food and Agriculture Group (DFAG) is a vertically integrated livestock farming enterprise in China.
- In this note, we will look at past performance, and share our thoughts on valuation.
Tata Technologies IPO: Trading Debut
- Tata Technologies (TATATECH IN) priced its IPO at Rs500 per share to raise gross proceeds of US$365 million. The shares will start trading tomorrow.
- We previously discussed the IPO in Tata Technologies IPO: The Investment Case and Tata Technologies IPO: Valuation Insights.
- The market sentiment on the sector has improved. In 2023, Indian IPOs with a >US$100 million raise had an average first-day gain of 28.3%. The IPO price is attractive.
Tata Technologies IPO Trading – Will Be a Good Listing Owing to over Enthusiasm
- Tata Technologies (TATATECH IN) (TT) raised around US$370m in its India IPO.
- Tata Technologies is a global engineering services company offering product development and digital solutions, including turnkey solutions, to global original equipment manufacturers (OEMs) and their tier 1 suppliers.
- In our previous note, we looked at the company’s past performance and valuation. In this note, we talk about the demand and trading dynamics.
Fedbank Financial IPO Trading – Subscription Rates Hint at a Snoozy Debut
- Fedbank Financial Services (0702066D IN) raised around US$130m in its India IPO.
- Fedbank Financial Services (Fedbank) is a retail-focused non-banking finance company (NBFC) promoted by The Federal Bank Limited.
- In our previous note, we looked at the company’s past performance and valuation. In this note, we talk about the demand and trading dynamics.
Leader Energy Holdings Pre-IPO – Still Too Early for an ESG Angle
- Leader Energy Holdings (1814173D MK) is looking to raise up to US$215m in its upcoming Malaysia IPO.
- Leader Energy Holdings (LE) is an independent power producer (IPP) primarily engaged in the development, ownership, O&M of power assets and projects.
- LE’s revenue has grown on the back of higher power generation as well as coal price increases over the track record period, which drove profitability up.
Sino-Synergy Hydrogen IPO – High Potential but Comes with Ample Issues
- Sino-Synergy Hydrogen Energy Technology (9663 HK) (SHET) is looking to raise around US$200m in its Hong Kong IPO.
- SHET is a hydrogen fuel cell company in the PRC focusing on research, development, production and sales of hydrogen fuel cell stacks and hydrogen fuel cell systems.
- In this note, we will look at the company’s background and talk about valuations.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
