In today’s briefing:
- KKR To Sell a 20-22% Stake in Kokusai Electric (6525)?
- Kokusai Electric (6525 JP): Rumoured KKR US$1.8 Billion Secondary Offering
- Emcure Pharma Pre-IPO Trading – Strong Subscription, Will Pop
- India Car Sales Slow: Can Hyundai Keep Its No. 2 Spot Amidst Fierce Competition?
- Sanil Electric IPO – Stars Aligned with High Growth and Strong Sentiment
- Shenzhen Yuejiang Technology IPO: What’s The IPO Valuation? Long-Term Growth Prospects
- Vietcombank (VCB VN Equity): Secondary Placement Offer, up to 2.4% Discount
- Shift Up IPO Trading – Strong Demand for Quality Asset but It Has Slipped Out of the Top Games
KKR To Sell a 20-22% Stake in Kokusai Electric (6525)?
- Today, a Reuters article came out saying that KKR would sell down half its 43% stake in Kokusai Electric (6525 JP) according to “two people familiar with the matter.”
- The article also said Kokusai Electric would buy back shares. Kokusai responded with a TDNET release saying “we did not release this info but we are considering various capital policies.
- It pays to look at the Shareholder Structure as it stands. This is bigger than it looks.
Kokusai Electric (6525 JP): Rumoured KKR US$1.8 Billion Secondary Offering
- Reuters reported that KKR & Co (KKR US), the largest Kokusai Electric (6525 JP) shareholder, plans to sell about half of its 43% stake, worth around JPY300 billion.
- As Kokusai’s shares are trading at 3.2x the IPO price of JPY1,840, KKR would be tempted to reduce its stake further. The 180-day IPO lock-up period expired on 22 April.
- Kokusai anticipates a return to growth and margin improvement. However, Kokusai trades at a material premium to peer multiples and is fully priced.
Emcure Pharma Pre-IPO Trading – Strong Subscription, Will Pop
- Emcure Pharmaceuticals raised around US$240m in its India IPO. Subscription rates were strong.
- Emcure Pharmaceuticals (EP) is an Indian Pharmaceutical company engaged in the developing, manufacturing and globally marketing a broad range of pharmaceutical products across several major therapeutic areas.
- We have looked at the company’s past performance in our earlier note. In this note, we talk about the trading dynamics.
India Car Sales Slow: Can Hyundai Keep Its No. 2 Spot Amidst Fierce Competition?
- Hyundai Motor India (HMIL) saw a market share loss in India Passenger Vehicles sales reported for June 2024 and 1QFY2025, impacted by intensified competition in the SUV segment.
- Mahindra & Mahindra, and Toyota Kirloskar India gained market share in 1QFY2025 led by upgraded model launches in the SUV segment, traditionally a strong category for HMIL.
- HMIL’s declining market share, if not reversed soon, could challenge optimistic growth projections and valuation multiples for its upcoming IPO.
Sanil Electric IPO – Stars Aligned with High Growth and Strong Sentiment
- Sanil Electric (062040 KS) is looking to raise up to US$165m in its Korean IPO.
- Sanil Electric is a specialized company that manufactures and sells reactors, transformers, railway vehicle parts, and switchboards. As an industrial transformer manufacturer, the company mainly manufactures power and distribution transformers.
- In our previous notes, we talked about the company’s historical performance. In this note, we undertake a quick peer comparison and share our thoughts on valuation.
Shenzhen Yuejiang Technology IPO: What’s The IPO Valuation? Long-Term Growth Prospects
- Shenzhen Yuejiang Technology (Dobot), a Shenzhen-based cobot company with a diversified customer base globally, filed publicly for Hong Kong IPO.
- The terms of the IPO were not disclosed. The robotics company plans to increase production capacity due to high demand in the coming years.
- Dobot may be trading above the last round valuation of ~RMB3.5b, but I believe investors should focus on the company’s long-term growth prospects and rapidly growing TAM.
Vietcombank (VCB VN Equity): Secondary Placement Offer, up to 2.4% Discount
- Secondary placement taking place, ~29million share on offer via accelerated bookbuild, for total offer size of ~USD100 million
- Discount of 0-2.4% relative to market close 9 July, discount depends on demand
- Free float will increase by 0.5% to 8.4%, which is low but typical for Vietnamese government linked (GLC) stocks
Shift Up IPO Trading – Strong Demand for Quality Asset but It Has Slipped Out of the Top Games
- Shift Up (462870 KS) raised around US$320m in its South Korean IPO, after pricing at the top.
- Shift Up is a South Korean games developer, which as released three games so far for the global markets.
- We have looked at the company’s performance and valuation in our earlier notes. In this note, we talk about the trading dynamics.
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