In today’s briefing:
- NTT’s Really Big/Weird Stock Split Goes Ex- 29 June 2023. Now With D-Points!
- Tryt IPO – Peer Comp – One of the Widest Margins Historically, but Has Lagged over the Track Record
- TRYT IPO: The Bear Case
- Independence of BOD Is Necessary, but Can Independence of Subordinate Companies Really Be Ensured?
NTT’s Really Big/Weird Stock Split Goes Ex- 29 June 2023. Now With D-Points!
- NTT (Nippon Telegraph & Telephone) (9432 JP) is splitting its stock 25:1 on record date 30 June 2023. That means it goes ex- at the new price on 29 June.
- The day before, the stock is up nearly 5% on heavy volume. This is likely punters buying before it splits so one round lot will be <¥20,000 vs ~¥420,000 yesterday.
- But there is a new attraction for retail, somewhat un-noticed.
Tryt IPO – Peer Comp – One of the Widest Margins Historically, but Has Lagged over the Track Record
- Tryt Inc (9164 JP) is looking to raise about US$460m in its Japan IPO.
- Tryt Inc (Tryt) offers employee placement services and temporary staffing services for the elderly care, nursing care and childcare workers segments.
- We have looked at the company’s past performance in our earlier notes, in this note we will undertake a peer comparison.
TRYT IPO: The Bear Case
- Tryt Inc (9164 JP), a leading professional recruiting and temporary staffing service in Japan, seeks to raise US$450 million. Pricing is on 5 July, and book-building is 6-11 July.
- In TRYT IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
- The key elements of the bear case rest on mid-tier revenue growth rates, margin pressure led by rising labour expenses, bottom-tier FCF margin and high leverage.
Independence of BOD Is Necessary, but Can Independence of Subordinate Companies Really Be Ensured?
- While many listed companies have already established formal standards, TSE plans to establish rules with higher hurdles to ensure the independence of listed subsidiaries and other dependent companies.
- It would make more sense for TSE to question why the parent company maintains the subsidiary’s listing, and minority shareholders of both parent and subsidiary would be more interested.
- Certainly TSE’s “independence criteria” for independent directors is loose, which has negatively impacted the operation of the Board of Directors, so it would be effective to re-establish the criteria.
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