In today’s briefing:
- Kokusai Electric (6525 JP): Sell-Off Presents Buying Opportunity
- PKSHA Tech (3993 JP) – TOPIX Inclusion in October 2024
- CELSYS (3663 JP) Finally Makes It to Prime Time (TOPIX Inclusion Next Month)
- ECM Weekly (23rd Sep 2024) – Tokyo Metro, Midea, Intermestic, Sagility, Belstar, Kuaishou, Bajaj HF
- Ain Shifts Focus with FrancFranc Acquisition
Kokusai Electric (6525 JP): Sell-Off Presents Buying Opportunity
- Kokusai has dropped 44% from its July peak, offering a long-term opportunity at reasonably attractive valuations. Management’s guidance looks conservative.
- KKR has reduced its stake from 43.4% to 23.2%, increasing the float while indicating that it still sees a long-term opportunity. Applied Materials has bought 14.7% of the company.
- The completion of a new factory in Japan should double production capacity to meet demand from makers of AI processors, high-bandwidth memory, 3D NAND and power devices.
PKSHA Tech (3993 JP) – TOPIX Inclusion in October 2024
- PKSHA is an AI company. It was before this year, and got a boost this past spring. The stock price rose 60% in two weeks in February and March 2024.
- Then it fell more than 50%. Back to late 2023 levels. High growth, growing into its valuations. Now moving to TSE Prime this week, TOPIX next month.
- Impact in days of ADV is lower than impact in Real World Float metrics. There are lots of day-traders. This probably has legs.
CELSYS (3663 JP) Finally Makes It to Prime Time (TOPIX Inclusion Next Month)
- 12 days ago, Janaghan Jeyakumar, CFA published his September version of TOPIX Inclusions: Who Is Ready (September 2024). His chosen name was CELSYS (3663 JP), a long-time TSE-Prime inclusion bet.
- This week on the 18th, they announced they were going to enter TSE Prime on 25 September. This was a somewhat well-known known. They were interested and had been.
- The stock popped 15% the next day. It’s a small cap, but there is a lot of float.
ECM Weekly (23rd Sep 2024) – Tokyo Metro, Midea, Intermestic, Sagility, Belstar, Kuaishou, Bajaj HF
- Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
- On the IPO front, Midea Group Co Ltd A (000333 CH) and Bajaj Housing Finance (BHF IN) hogged much of the limelight this week as well.
- On the placements front, there were a few large US$400m+ placements across the region this week.
Ain Shifts Focus with FrancFranc Acquisition
- Ain is best known for running prescription pharmacies but also has a lifestyle-oriented cosmetics chain called Ainz & Tulpe.
- Without this, the acquisition of FrancFranc would look odd, but the merger of the two will create genuine synergies and a lifestyle business targeting women in their 20s and 30s.
- The move makes sense given the pressure on margins in drug dispensing, Ain’s main business.
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