In today’s briefing:
- Rakuten Securities IPO: Promising Business with Valuation Caveats
- TRYT IPO: Peer Comparison and Valuation
- Fadu Pre-IPO – Stupendous Revenue Growth but Heavily Reliant on Two Key Customers
Rakuten Securities IPO: Promising Business with Valuation Caveats
- Yesterday, Rakuten Group (4755 JP) announced that its consolidated subsidiary, Rakuten Securities, has applied for a listing on the Tokyo Stock Exchange.
- Rakuten Securities has long-term growth potential through leveraging Rakuten’s ecosystem for steady securities account growth and exploring cross-selling opportunities for related services.
- While the business seems promising, there may be concerns regarding its valuation, given its previous high trailing PE of 43.0x.
TRYT IPO: Peer Comparison and Valuation
- TRYT Group is engaged in job placement and temporary staffing, specialising in the medical and welfare and construction fields. The company has set the pricing for its Tokyo IPO.
- Existing shareholders of the company will offer 40m shares at an indicative price range of ¥1,100-1,300 per share, raising around US$305-360m from the IPO.
- We think Tryt Inc (9164 JP) ’s IPO is overvalued at the above price range compared to Japanese recruitment peers and would recommend staying on the sidelines.
Fadu Pre-IPO – Stupendous Revenue Growth but Heavily Reliant on Two Key Customers
- Fadu (440110 KS) is looking to raise up to US$147m in its Korean IPO.
- Fadu is a South Korean fabless semiconductor maker mainly engaged in flash storage technology innovation. Its core products are Enterprise Solid State Drive (SSD) and Enterprise SSDs.
- Fadu’s revenue growth has been stupendous, to say the least. However, the firm’s revenues are derived mainly from two customers, which exposes it to a large degree of concentration risk.
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