In today’s briefing:
- Teijin (3401 JP): Alternative Play on the Potential Infocom Tender
- Engagement Keeps Widening the Profitability Gap Between the Top and Bottom Companies in Market Cap
- Aisin – 141% Profit Growth, With Future to Have More Sales for Electric and Hybrid Vehicles
- ECM Weekly (3rd June 2024) – Shift Up, QuantumPharm, Telix, Sompo, ASMedia, Exedy, Barito, Zomato
Teijin (3401 JP): Alternative Play on the Potential Infocom Tender
- Blackstone (BX US) is widely reported to have agreed to acquire Teijin Ltd (3401 JP)’s 55% stake in Infocom Corp (4348 JP) at a valuation of JPY260 billion.
- If the valuation refers to market cap and Teijin shares its tax benefits, Teijin’s sale proceeds are around JPY128 billion, which is 42% of its market cap.
- However, since 9 May, Teijin shares have been flat vs. Infocom shares are up 63%. Teijin’s medium-term plan suggests that the Infocom proceeds could result in substantial share buybacks.
Engagement Keeps Widening the Profitability Gap Between the Top and Bottom Companies in Market Cap
- Companies with larger market capitalizations tend to have higher profitability and valuations, and those companies have higher foreign ownership.
- Given that board practices improved and that valuations, highly correlated with foreign ownership, are higher for companies with larger market capitalizations, this can be due to engagement of overseas investors.
- If this hypothesis is correct, the gap between the top and bottom market capitalization companies will widen further as it takes a certain time for engagement to pay off.
Aisin – 141% Profit Growth, With Future to Have More Sales for Electric and Hybrid Vehicles
- Aisin is already achieving strong growth, across many markets, and this should continue with more sales into EV and HEV markets
- Financial strength is improving, with gearing moving lower, and debt/ebitda moving lower
- Balance sheet clean up can lead to some volatility, but overall a general positive, as is the focus on capital management
ECM Weekly (3rd June 2024) – Shift Up, QuantumPharm, Telix, Sompo, ASMedia, Exedy, Barito, Zomato
- Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
- On the IPO front, we undertook a peer comparison and looked at valuations for Shift Up (462870 KS).
- On the placement front, it was another busy week with a number of blocks in India along with Asmedia Technology (5269 TT)‘s GDR offering and Exedy Corp (7278 JP).
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