Daily Brief Japan: Intermestic, Fast Retailing, TSE Tokyo Price Index TOPIX and more

In today’s briefing:

Intermestic IPO: Forecasts and Valuation
Fast Retailing(9983) | Weaving a Global Empire; FY8/25 Outlook
Slightly More than the Annual IPOs, 119 Companies Newly Applied for Transitional Measures This Year

Intermestic IPO: Forecasts and Valuation

The Japanese eyewear company Intermestic (262A JP) has set the terms for its Tokyo IPO and plans to raise US$121m through the IPO.
Our analysis shows that the company’s IPO is valued attractively compared to JINS Inc (3046 JP) , who offers eyewear at a similar price range to Intermestic.
Japanese eyewear makers who have aggressively expanded into overseas markets seems to be suffering from falling sales and margins, particularly in China due to economic slowdown.

Fast Retailing, through its flagship Uniqlo, is redefining retail by focusing on high-quality, functional apparel, surpassing global peers in operating profit margins.
The company’s “scrap & build” strategy revitalizes underperforming stores in China, while expanding internationally, with a strong growth trajectory across North America and Europe.
With a revised fair value of 52,500 yen, we forecast significant sales growth, driven by favorable seasonal trends, global expansion and recovering consumer sentiment in China.

Of the companies that have been removed from the list of companies subject to transitional measures, only about half have been able to meet the criteria for maintaining their listing.
It’s not easy for companies applying transitional measures to comply with the criteria for maintaining listing, so it’s realistic to move to a market with looser criteria for maintaining listing.
Besides problems with listing screening process, many managers consider IPO to be the goal and have little will to grow the company after listing, leading to slump in corporate value.

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