In today’s briefing:
- Toyota To Sell Harmonic Drive (6324 JP) Shares in Overseas Offering
- Harmonic Drive Placement – Cleanup Share Sale Will Remove the Overhang
- Japan Airlines (9201 JP, BUY, TP: JPY3150): Slow, Steady, Stable Recovery
- Shanghai Port’s Shipping Service Spinoff Surges 58.6% in Strong Debut
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.
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.
Japan Airlines (9201 JP, BUY, TP: JPY3150): Slow, Steady, Stable Recovery
- Japan Airlines (9201 JP) (JAL) is making a positive recovery on strong domestic and international demand
- Weak JPY is a big headwind and so is its 40% fuel hedge cover locked in at higher than-market price. These factors should reverse and unwind next year
- Target price JPY3,150 based on 1.65x FY24 P/BV – one standard deviation above its mean. Borderline attractive with 12% UPSIDE, and 2.3% dividend yield
Shanghai Port’s Shipping Service Spinoff Surges 58.6% in Strong Debut
- Shanghai Jinjiang Shipping Group Co. Ltd., the shipping business unit of Shanghai International Port Group, gained 58.6% in its trading debut in Shanghai after a 2.18 billion yuan ($306 million) initial public offering.
- The container shipping service provider finished its first day of trading at 17.84 yuan a share, giving it a market cap of 23.1 billion yuan.
- Jinjiang Shipping was spun off from the world’s largest container port operator for a separate listing on the mainboard of Shanghai stock exchange.
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