In today’s briefing:
- Kansai Electric (9503 JP) – HUGE Equity Offering To Stuff Retail
- Kansai Electric Placement – A US$3.5bn Raising Which Doesn’t Appear Well Flagged
- Kansai Electric Power (9503 JP): A US$3.5 Billion Primary/Secondary Offering
- Initial Thoughts on the Klarna IPO
- Zinka Logistics Pre-IPO – Continued Financial Underperformance in a Highly Fragmented Market
- GMM Group Pre-IPO: Tuning into Thailand’s Digital Music Boom
- Niva Bupa Health Insurance IPO Trading – Demand Lagged Recent Listings
Kansai Electric (9503 JP) – HUGE Equity Offering To Stuff Retail
- The past few years, large equity offerings have either been IPOs or secondary offerings (without dilution). Today we get a big dilutive secondary offering from Kansai Electric Power (9503 JP).
- This is ~223mm shares or roughly ¥530bn against a current market cap of ¥2.1+trln. A 25% increase in share count. It is quite dilutive, but the stock is not rich.
- Because dilutive, not overly-well-flagged, and mostly retail, this could get hammered. The div is not high enough to make it attractive, so one has to appreciate high earnings yield.
Kansai Electric Placement – A US$3.5bn Raising Which Doesn’t Appear Well Flagged
- Kansai Electric Power (9503 JP) plans to raise up to US$3.5bn (including over-allocation) to partly fund its investment plans.
- This will be a large deal for the stock to digest and doesn’t appear to have been particularly well flagged.
- In this note, we will talk about the placement and run the deal through our ECM framework.
Kansai Electric Power (9503 JP): A US$3.5 Billion Primary/Secondary Offering
- Kansai Electric Power (9503 JP) has announced primary and secondary offerings of up to 223.1 million shares (including overallotment) and a third-party allotment of 29.1 million shares.
- JPY239.9 billion of proceeds will be used to improve energy efficiency and decarbonisation, while other funds will be used for data centres, renewable energy and overseas investments.
- Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 26 and 29 November (likely 26 November).
Initial Thoughts on the Klarna IPO
- On 12 November, Klarna announced that it confidentially filed public offering paperwork. The company is getting ready for an IPO in 1H 2025.
- Klarna’s valuation reached as high as $45 billion in 2021 which declined to as low as $6.5 billion. Its valuation has recently risen to about $14.6 billion.
- Klarna generated 13.27 billion SEK in revenue (US$1.2 billion) in 1H 2024 (up 27% YoY). Operating margin improved significantly from -18% in 1H 2023 to -2% in 1H 2024.
Zinka Logistics Pre-IPO – Continued Financial Underperformance in a Highly Fragmented Market
- Blackbuck (1355652D IN) is looking to raise around US$130m in its India IPO.
- Zinka Logistics (Blackbuck) is India’s largest digital platform for truck operators (in terms of number of users), with 963,345 truck operators transacting on its platform in FY24, as per Redseer.
- In this note, we talk about the company’s historical performance.
GMM Group Pre-IPO: Tuning into Thailand’s Digital Music Boom
- GMM Music (2465778D TB) is looking to raise at least US $100m in its upcoming Thai IPO.
- It is part of the largest, sprawling, public listed media conglomerate, GMM Grammy, and operates a pure play music business covering the entire value chain.
- In this note, we look at the firm’s past performance.
Niva Bupa Health Insurance IPO Trading – Demand Lagged Recent Listings
- Niva Bupa Health Insurance (1226871D IN) raised around US$260m in its India IPO.
- Niva Bupa Health Insurance (Niva Bupa) is a health insurance firm. Its portfolio consists of health (including retail and group), personal accident, and travel insurance.
- We have looked at the company’s past performance and valuations in our earlier notes. In this note, we talk about the trading dynamics.
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