In today’s briefing:
- Large GS Yuasa (6674) Placement – 20% Dilution, Needs Lots of Love
- Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: 18% One-Way Turnover & US$2.74bn Trade
- Quiddity Leaderboard TDIV Dec 23: US$1.36bn One-Way, 20%+ Turnover, 2 Weeks to Announcement
- GS Yuasa Placement – Well Flagged but Relatively Large Deal, Liquidity Might Be an Issue
- DS Dansuk IPO Preview
- Hyundai Elevator: Hyun Jeong-Eun Resigns from the BOD Chairwoman Position
- CaiNiao’s FYQ2: Revenue +25% Y/Y, Led by Int’l | EBITA Margin Up, Too | Solid Showing Ahead of IPO
- AZ Com Maruwa Placement – Mixed Feelings About the Mixed Offering
- JETS US Equity: Attempting to Take Off
- Sodick (6143 JP) – Revisiting the Strategy and Accelerating Structural Reforms
Large GS Yuasa (6674) Placement – 20% Dilution, Needs Lots of Love
- Today after the close, noted Japanese battery maker Gs Yuasa Corp (6674 JP) announced a public equity offering accompanied by a 3rd party placement to Honda Motor (7267 JP).
- Total $300mm+ raise is nearly 20.0mm shares against ~80mm shares out now. That’s 20% EPS dilution at a still-decent discount to book value.
- This creates a weird situation of a low ROE stock becoming lower ROE, at a lower PBR, with “more growth ahead” in a hyper-competitive space.
Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: 18% One-Way Turnover & US$2.74bn Trade
- Using data from the close on 20 November, there could be 6 adds and 5 deletes to the Yuanta/P-Shares Taiwan Dividend Plus ETF in December.
- There will also be capping and funding flows that will lead to a one-way turnover of 17.8% and a one-way trade of US$1.37bn.
- There are 16 stocks with at least 3 days ADV to trade from passive trackers and another 10 stocks that have at least 1-day ADV to trade.
Quiddity Leaderboard TDIV Dec 23: US$1.36bn One-Way, 20%+ Turnover, 2 Weeks to Announcement
- In this insight, we take look at Quiddity’s expectations for index changes and capping flows for the TDIV Index for the December 2023 review.
- There are some key changes to expectations since my last TDIV insight as a consequence of changes in share prices and/or dividend expectations.
- I currently expect 6 ADDs and 5 DELs during the December 2023 review.
GS Yuasa Placement – Well Flagged but Relatively Large Deal, Liquidity Might Be an Issue
- Gs Yuasa Corp (6674 JP) (GSY) is looking to raise around US$240m via a public offering, along with placing shares via third-party allotment with Honda Motor (7267 JP) .
- The company formed a JV with Honda Motors earlier this year and will use the bulk of the proceeds for investments in the JV.
- In this note, we will talk about the deal dynamics and run the deal through our ECM framework.
DS Dansuk IPO Preview
- DS Dansuk is getting ready to complete its IPO in Korea in the next several weeks. The IPO price range is from 79,000 won to 89,000 won.
- The book building for the institutional investors will be from 5-11 December. The IPO offering amount is from 96.4 billion won to 108.6 billion won.
- According to the bankers’ valuation, DS Dansuk’s valuation would range from 462 billion won to 522 billion won.
Hyundai Elevator: Hyun Jeong-Eun Resigns from the BOD Chairwoman Position
- On 17 November, Hyun Jeong-Eun resigned from the Hyundai Elevator Co Board of Directors Chairwoman and internal director positions, mainly due to strong pressures from other major shareholders.
- With Hyun Jeong-Eun finally out of the company, Hyundai Elevator is likely to significantly emphasize on improving its corporate governance.
- Hyundai Elevator is considering new shareholder return policies, including a potential 50%+ dividend payout, higher share buybacks, and a mandatory minimum dividend yield.
CaiNiao’s FYQ2: Revenue +25% Y/Y, Led by Int’l | EBITA Margin Up, Too | Solid Showing Ahead of IPO
- Led by international activity, CaiNiao booked +25% Y/Y revenue growth in FYQ2
- FYQ2 EBITA margin improved Y/Y and Q/Q, even as express companies struggled
- Result bolsters CaiNiao status as vehicle to access BABA’s international growth
AZ Com Maruwa Placement – Mixed Feelings About the Mixed Offering
- AZ-Com Maruwa Holdings (9090 JP) is looking to raise around US$206m in its mixed follow-on offering.
- The deal will be a large one to digest, at 129 days of three month ADV, 5.5% dilution and 12.2% of current mcap.
- In this note, we will talk about the deal dynamics and run the deal through our ECM framework.
JETS US Equity: Attempting to Take Off
- US Global Jets ETF (JETS US) surged by 6.6% last week, bringing the YTD to -2.1%. The strong move was in tandem with U.S. major indexes, but at 3x greater
- Positive fund inflow of US$92m, the second month in a row, reversing 17 months’ downtrend. Accumulation suggests the bottom is over, and investors turning positive on the aviation sector
- Maintain TP of US$19 (+14% UPSIDE), but it might be a good idea to protect the downside with a short-term Put option, last week’s action was too fast and furious
Sodick (6143 JP) – Revisiting the Strategy and Accelerating Structural Reforms
- Major change of gameplan – Q1-3 FY12/2023 results were weaker than expected with the company revising down FY guidance, and withdrawing both current medium and long-term plans given highly challenging business conditions.
- An overview plan of structural reforms has been unveiled, focusing on becoming a more resilient and profitable business, realigning product lines, and rebuilding sales and production setups.
- Although an ambitious initiative with a wide scope, we believe that this will have a positive impact of significantly accelerating transformation initiatives, and transitioning the company to a more optimal business model.
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