In today’s briefing:
- Rakuten Bank (5838 JP) Overnight Offering at a Fat Discount
- Toyota To Sell Harmonic Drive (6324 JP) Shares in Overseas Offering
- Rakuten Bank Placement – Was Expected at Some Point, Current Timing Seems Opportunistic
- Harmonic Drive Placement – Cleanup Share Sale Will Remove the Overhang
- Boss Energy Placement – Heavy Dilution and Doesn’t Appear Well Flagged
- Rept Battero IPO: The Bull Case
- Robosense Technology Pre-IPO – PHIP Updates – ADAS Sales Strong but Profitability Remains Distant
- Rept Battero IPO (PHIP Updates): Margin Sustainability Is Concerning
- Sunshine Insurance Group IPO Lock-Up – US$5.3bn Lockup Release Tomorrow, with No Liquidity
- Pre-IPO Jiangxi Rimag Group – Unclear Profit Model, Uncertain Future Expansion, and Worrying Outlook
Rakuten Bank (5838 JP) Overnight Offering at a Fat Discount
- After the close today, Rakuten Group (4755 JP) announced the sale of 25.5mm shares of Rakuten Bank (5838 JP), right as the IPO lockup was reaching its expiry. Expected.
- Pricing is 6-7 Dec (pre-Tokyo open 7 Dec), delivery 11 Dec 2023. Indicative price range is 8.5-12.5% discount for a deal of US$425mm or so.
- In an interesting technical detail, this will take Rakuten below 50%. There is some near-term index demand, some in April, some next October. Rheos could be more overhang.
Toyota To Sell Harmonic Drive (6324 JP) Shares in Overseas Offering
- Today, Toyota Motor (7203 JP) announced it would sell 4.379mm shares (4.55%) of Harmonic Drive Systems (6324 JP) in an overseas placement.
- This is not so big as it is emblematic, adding to the recent news on Toyota unwinds.
- Harmonic Drive is heavily held by foreign institutions. This is a foreigners-only deal. But it will need to be absorbed by that group too.
Rakuten Bank Placement – Was Expected at Some Point, Current Timing Seems Opportunistic
- Rakuten Group (4755 JP) aims to raise US$430m via selling around 14.6% of Rakuten Bank (5838 JP).
- RB is the largest internet bank in Japan, by number of accounts. As of Sep 23, it had 14.3m deposit accounts with a total deposit base of JPY9.5tn.
- In this note, we will talk about the deal dynamics and updates since our last note.
Harmonic Drive Placement – Cleanup Share Sale Will Remove the Overhang
- Toyota Motor (7203 JP) is looking to raise US$116m from selling its entire stake in Harmonic Drive Systems (6324 JP).
- Toyota Motors has indicated over the past one-two weeks that it will be looking to sell/trim its stakes in various entities as part of its exit from its multiple cross-holdings.
- While the deal would be a relatively large one to digest at 10 days of ADV, Toyota Motors will be selling its entire stake, clearing the overhang.
Boss Energy Placement – Heavy Dilution and Doesn’t Appear Well Flagged
- Boss Energy (BOE AU) is looking to raise up to A$205m (US$135m) through its primary placement. The proceeds will be used to fund an acquisition and replenish working capital.
- The deal will be a large one to digest, at 19.7 days of three month ADV and 14% dilution.
- In this note, we will talk about the placement and run the deal through our ECM framework.
Rept Battero IPO: The Bull Case
- REPT BATTERO Energy (1998104D CH), a leading EV battery manufacturer, is premarketing a US$300 million HKEx IPO, according to press reports.
- According to Frost & Sullivan, in 1H23, Rept was the tenth-largest lithium-ion battery manufacturer globally for annual installations for new energy applications.
- The bull case rests on rapid ESS revenue growth, reducing customer concentration risks, ambitious capacity expansion plans, promising margin trajectory and improving cash collection cycle.
Robosense Technology Pre-IPO – PHIP Updates – ADAS Sales Strong but Profitability Remains Distant
- Robosense Technology (ROBO HK) (RT) is now looking to raise up to US$150m in its upcoming Hong Kong IPO, down from US$300-400m earlier.
- As of Mar 23, it had earned design wins for mass production of LiDAR for 52 vehicles with 21OEMs and Tier 1 suppliers, ranking No. 1 globally, according to CIC.
- We looked at its past performance in our earlier notes. In this note, we talk about its PHIP updates.
Rept Battero IPO (PHIP Updates): Margin Sustainability Is Concerning
- REPT BATTERO Energy (1998104D CH) is a lithium-ion battery manufacturer focusing EV and ESS battery products. The company’s application for a HKEx IPO has been approved.
- Though the company had reported strong growth in revenue over the last 3-4 years, the company has been struggling to make profits.
- Rept Battero has started to generate GPM, however, our analysis suggests that there is very little room for GPM to improve.
Sunshine Insurance Group IPO Lock-Up – US$5.3bn Lockup Release Tomorrow, with No Liquidity
- Sunshine Insurance Group (6963 HK) (SIG), a life, health and P&C insurance company, raised around US$850m in its HK IPO in Dec 2022. Its IPO linked lockup will expire tomorrow.
- SIG is an integrated insurance provider which offers both life and health (L&H) and property and casualty (P&C) insurance in China
- In this note, we will talk about the lock-up dynamics and updates since our last note.
Pre-IPO Jiangxi Rimag Group – Unclear Profit Model, Uncertain Future Expansion, and Worrying Outlook
- People think that third-party medical imaging service providers targeting the grassroots market would have considerable development potential.However, even overseas leading players haven’t formed large profit scale after decades of establishment.
- Different types of competitors would enter this market, and the consortium formed by public hospitals in grassroots market will be the biggest game changer. Potential legal risks also worth attention.
- The profit model is still unclear. It’s uncertain whether the anticipated sizeable scale will eventually materialise. There’s still a long way to explore the third-party imaging industry in China.
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