In today’s briefing:
- The Honda (7267) Offering – Much Easier Than It Looks
- Honda (7267 JP): The Current Playbook
- Timee IPO: Forecasts and Valuation
- FP Partner (7388 JP): 1H FY11/24 flash update
- Tay Two Co Ltd (7610 JP): Q1 FY02/25 flash update
The Honda (7267) Offering – Much Easier Than It Looks
- At the beginning of this month, we got a scoop from Reuters about a US$3bn selldown of Honda Motor (7267 JP) by P&C insurers and others.
- We knew this was coming at some point. The FSA had pushed the insurers to unwind cross-holdings, and it is otherwise of the zeitgeist.
- It came out as heavily retail-oriented, and the supply/demand details are otherwise interesting. To boot, there is an EPS boost to come.
Honda (7267 JP): The Current Playbook
- Since the US$3.3 billion secondary placement announcement, Honda Motor (7267 JP)’s shares are down 5% from the undisturbed price of JPY1,791 per share (4 July).
- Looking at recent large Japanese placements is instructive to understand the potential trading pattern. So far, Honda’s shares have followed the pattern of previous large placements.
- The offering will likely be priced on 17 July. Investors who have participated in previous large Japanese placements tend to secure positive returns.
Timee IPO: Forecasts and Valuation
- Timee has set an indicative IPO price range of ¥1,350-1,450 per share and will raise US$280m (at the midpoint) where existing shareholders will sell down part of their ownership.
- We expect Timee’s earnings to grow as the company is still in its early stages and with further growth in scale, we expect Timee’s margins to continue to expand further.
- Our analysis shows that Timee Inc (215A JP) IPO is valued attractively as the company has better-than-peer margin profile which suggests that there is further upside to implied valuation multiples.
FP Partner (7388 JP): 1H FY11/24 flash update
- Revenue was JPY17.1bn (+17.6% YoY), with life insurance commission revenue at JPY16.4bn (+18.2% YoY).
- Operating profit was JPY2.7bn (-0.2% YoY), with an OPM decrease of 2.8pp YoY to 15.7%.
- Acquisition of 333,000 treasury shares for JPY1.0bn, with cancellation scheduled for August 30, 2024.
Tay Two Co Ltd (7610 JP): Q1 FY02/25 flash update
- Sales were JPY8.3bn (-0.7% YoY), with secondhand goods accounting for 53.5% of total sales (-0.4pp YoY).
- Operating profit was JPY111mn (-76.3% YoY), with an operating profit margin of 1.3%, down 4.3pp YoY.
- As of end-May 2024, Tay Two had 168 stores, opening five Furuichi stores and two franchise stores.
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