In today’s briefing:
- Meiji Holdings (2269 JP) Offering – May Approach a 9Yr Low
- Kioxia IPO Preview
- Last Week in Event SPACE: Seven & I, Amcor/Berry, WH Group/Smithfield, Tuya
- Kioxia (285A JP): Early Christmas with IPO Approval, Grinch Steals Fast-Entry
- The Impact of Launching a Publicly Offered Mutual Fund by an Activist Investor Is ….
Meiji Holdings (2269 JP) Offering – May Approach a 9Yr Low
- Meiji Holdings (2269 JP) on Friday announced 9 different banks would sell 4.7% of float in an equity offering to price in the first few days of December 2024.
- The shares closed Friday within 1.5% of a 52wk low. The shares are less than 9% off a 9-year low. The offering is about US$300mm and 15 days of ADV.
- Given the stock is under-levered, and structurally a low volatility name, a large move should encourage buying.
Kioxia IPO Preview
- Kioxia plans to complete its IPO on 18 December, valuing Kioxia at 750 billion yen ($4.8 billion), down nearly 50% from the initial market value estimates about 2-3 months ago.
- Kioxia had revenue of 909.4 billion Yen (up 84.6% YoY) and EBITDA of 449.6 billion Yen in 1H FY24, driven by the recovering demand for data center and enterprise SSDs.
- As of 2Q 2024, Samsung Electronics was the largest player in the global NAND Flash market with a 36.9% market, followed by SK Group (22.1%), and Kioxia (13.8%).
Last Week in Event SPACE: Seven & I, Amcor/Berry, WH Group/Smithfield, Tuya
- At equal price to ACT, Ito-san wins because of certainty/immediacy, but provided his price is above the bottom of the range and adequately compensates 7&i for “additional actionable avenues.”
- The Amcor Limited (AMC AU)/Berry Global Group (BERY US) merger looks clean. However, Berry’s % of earnings (revs, EBITDA, and profit), are higher than the % under the share split
- This Temasek-led development will have a marginal impact on Tuya Inc (TUYA US). Creating supply and demand is hard. And Temasek-held/backed vehicles on the SGX are already abundant.
Kioxia (285A JP): Early Christmas with IPO Approval, Grinch Steals Fast-Entry
- Kioxia Holdings (285A JP) is scheduled to be listed on 18 December 2024, at the prime market of TSE at an expected valuation of ~$4.9bn.
- The security’s low free float is the main cause of Fast-Entry rejection by both global indices and quarterly exclusion from the one global index.
- Quarterly inclusion to the other global index is forecasted for June 2025 following the 3-month minimum trading requirement.
The Impact of Launching a Publicly Offered Mutual Fund by an Activist Investor Is ….
- Even if the initial AUM is small, the impact of launch of a publicly offered mutual fund for retail investors by a foreign activist investor is expected to be significant.
- If Dalton gains the support of individual investors through publicly offered investment trust, it would give more legitimacy to the management improvement plans that Dalton is pressing Japanese company for.
- Increased attention to the activist investors is expected to lead to a certain number of individual shareholders voting in favor of shareholder proposals, as well as overseas investor engagement.
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