In today’s briefing:
- JMDC (4483) Partial Offer Update (Updated Pro-Ration Range)
- NTT Docomo’s Deal with Monex (8698); The Goal Is Bigger and Better but Not Compelling Yet
- Kokusai Electric IPO: Valuation Insights
- Kokusai Electric Pre-IPO – Thoughts on Valuation
- Rakuten Mobile Could Be Churning Profits Next Year
JMDC (4483) Partial Offer Update (Updated Pro-Ration Range)
- When this was launched, it traded more a fair bit on the first day, but then more volume traded than I expected. This could mean a couple of things.
- Re-Reading the original doc leaves nuances. The change in management responsibilities this past summer make some holders less certain. It’s complicated.
- There have been several blocks traded, and a large short instantiated. And if one has a more conservative estimate at a higher top-end participation, the back end gets uglier.
NTT Docomo’s Deal with Monex (8698); The Goal Is Bigger and Better but Not Compelling Yet
- Today, Monex Group Inc (8698 JP) and NTT (Nippon Telegraph & Telephone) (9432 JP)‘s NTT Docomo announced a Capital and Business Alliance Agreement. It is a complicated deal.
- Monex GROUP will create a holdco which owns Monex Inc (the broker) and sell 51% to Docomo. Docomo will consolidate. Monex Group will own 49% as an equity method affiliate.
- Monex GROUP will then double its dividend, maybe buy back shares, and expects to grow as Docomo pushes and Monex invests. But what remains is a mixed bag.
Kokusai Electric IPO: Valuation Insights
- Kokusai Electric (6525 JP) is a speciality manufacturer of semiconductor production equipment. KKR & (KKR US) seeks to raise about US$745 million through listing Kokusai.
- We previously discussed the IPO in Kokusai Electric IPO: The Bull Case and Kokusai Electric IPO: The Bear Case.
- In this note, we discuss valuation. Our analysis suggests that Kokusai is fully valued at the IPO reference price of JPY1,890 per share. We would pass on the IPO.
Kokusai Electric Pre-IPO – Thoughts on Valuation
- KKR is looking to raise around US$750m via selling a stake in Kokusai Electric (6525 JP) (KE) in its Japan IPO.
- KE main business activities consist of the manufacturing, sales and maintenance service of semiconductor manufacturing equipment.
- In our previous notes we have looked at the company’s past performance and undertaken a peer comparison. In this note, we talk about valuations.
Rakuten Mobile Could Be Churning Profits Next Year
- Rakuten Group (4755 JP)‘s shares plummeted 80% in 8 years, reaching ¥500 in June 2023 due to ¥1.3 trillion mobile business losses.
- Expecting a positive shift as Rakuten Mobile approaches platinum band access and subscribers poised for exponential growth following the KDDI agreement.
- We are expecting Rakuten Mobile to turn profitable next year, while the consensus is projecting an operating loss of around ¥200bn for the business.
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