In today’s briefing:
- HULIC (3003 JP) – Crossholders Show Up with a BIG (Relative) Secondary Offering
- FineToday Pre-IPO – Peer Comparison and Thoughts on Valuation
- Hulic (3033 JP): A US$800 Million Secondary Offering
- Hulic Co Placement – US$780m Cross-Shareholding Unwind Is a Large One for the Stock to Digest
- Main Fact Checks on the Mix-Up Around Kum Yang’s Rights Offering Rollout
- Carraro India Pre-IPO – Strategic Partnerships and Related Party Risks
- Talabat Holding IPO Preview
- Suraksha Diagnostic IPO: Premium Valuation Limits Near-Term Upside Potential
- ServiceTitan IPO Preview: Great Success Story, Leader at Scale In The Trade Industry
- Pre-IPO BrainAurora Medical Technology – Weak Growth Prospects Cannot Support High Valuation
HULIC (3003 JP) – Crossholders Show Up with a BIG (Relative) Secondary Offering
- Today, Hulic Co Ltd (3003 JP) announced a large secondary offering where about a quarter of the crossholdings will sell down holdings. Some exit entirely. Some partially.
- After this selldown, there is a fair bit more to go later, but more of that will be corporate. It’s a BIG offering: 55d of ADV and 55% of MRWF.
- It is “only” about $800mm and retail gets 80% of it. The high div yield will be a selling point but there is a lot of debt.
FineToday Pre-IPO – Peer Comparison and Thoughts on Valuation
- CVC Capital is aiming to raise over US$500m, via selling some of its stake in FineToday Holdings Co Ltd (289A JP)in Japan.
- FineToday (FT) is a beauty and personal care company in Asia offering a range of products, including hair care, skin care and body care products.
- In our previous note, we looked at the company’s past performance. In this note, we will undertake a peer comparison.
Hulic (3033 JP): A US$800 Million Secondary Offering
- Hulic Co Ltd (3003 JP) has announced a secondary offering of up to 85.4 million shares (98.2 million including overallotment), worth around US$800 million (US$920 million including overallotment).
- Unlike the 2021 offer, this is a pure secondary offering. It is smaller in terms of outstanding shares and 1-year ADV. The shares are hovering around all-time highs.
- Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 10 and 12 December (likely 10 December).
Hulic Co Placement – US$780m Cross-Shareholding Unwind Is a Large One for the Stock to Digest
- A group of domestic financial institutions are looking to raise US$775m from trimming their stakes in Hulic Co Ltd (3003 JP).
- The deal will be a large one to digest at 48 days of the stock’s three month ADV, representing 11% of its shares outstanding.
- In this note, we will talk about the placement and run the deal through our ECM framework.
Main Fact Checks on the Mix-Up Around Kum Yang’s Rights Offering Rollout
- The FSS’s correction deadline still starts from October 17, giving Kum Yang until January 16 next year to get everything in order.
- We should still be all over this, as the major shareholder likely won’t participate, flooding the market with stock rights and unsubscribed shares, creating a prime 25% discount opportunity.
- Kum Yang needs even this 200-300 billion KRW, so cancellation seems unlikely. With the FSS deadline on January 16, they’ll likely submit the revised report mid to late next month.
Carraro India Pre-IPO – Strategic Partnerships and Related Party Risks
- Carraro India Limited (810618Z IN) is looking to raise about US$216m in its India IPO.
- Carraro India Limited (CIL), is an independent tier 1 solution provider of axles, transmission systems and gears for the agricultural tractor and construction vehicle industries in India.
- In this note, we talk about the company’s historical performance.
Talabat Holding IPO Preview
- Talabat Holding, one of the leading food delivery platforms in the MENA region, is getting ready to complete an IPO in Dubai.
- IPO price is between AED 1.50 ($0.41) and AED 1.60 per share. At the high end of IPO price range, Talabat could raise up to AED 7.5 billion (US$2 billion).
- The final IPO offer price will be announced on Friday (29 November). This IPO is expected to start trading on 10 December.
Suraksha Diagnostic IPO: Premium Valuation Limits Near-Term Upside Potential
- Suraksha Diagnostic (1481262D IN) offers a one-stop integrated solution for pathology and radiology testing, and medical consultation services in Eastern and North Eastern states of India.
- The IPO comprises only an offer for sale of up to 19M equity shares, with no fresh issue. Suraksha Diagnostic has set price band of INR420–441 per share.
- The floor price of the IPO reflects fair value of the company and discounts all near-term growth catalyst. We would advise not to subscribe the issue for listing gain.
ServiceTitan IPO Preview: Great Success Story, Leader at Scale In The Trade Industry
- ServiceTitan, a VC-backed cloud-based software company for the home and commercial service industries, files to go public and may raise up to $500M.
- The company serves many trades, including plumbing, HVAC, garage doors, landscaping, pest control, water treatment, heating, construction and others.
- ServiceTitan is well positioned as a leader at scale in the trade industry. They currently operate in the United States, Canada and see significant opportunity in international markets.
Pre-IPO BrainAurora Medical Technology – Weak Growth Prospects Cannot Support High Valuation
- Although DTx is considered a promising field, the industry is still in the early stages of trial and error development, and there is still a long distance from mature commercialization.
- BrainAurora’s revenue YoY growth rate declined significantly. Considering the small revenue scale and slowdown in revenue growth, is it possible for BrainAurora to experience stagnant growth in the near future?
- BrainAurora’s products haven’t been widely recognized in China’s hospitals/medical system, nor has it established a solid profit model.High valuation isn’t justified. We doubt if this field could bring good return.
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