In today’s briefing:
- Kokusai Elec (6525) ¥300bn+ Offering at ATH – Almost a Second IPO
- Kokusai Electric (6525 JP): Placement, Buyback & Index Flows
- Wiwynn GDR Offering – US$1.45bn Dilutive Offering, but Momentum Has Been Very Strong
- Kokusai Electric (6525 JP): A US$2.0 Billion Secondary Offering
- Taiwan Tech Weekly: TSMC Sales Beat High Expectations; Wiwynn GDR Offering; IPhone 17 to Use 2nm
- Hang Seng Internet & IT Index (HSIII) Rebalance Preview: Three Adds/Deletes & Capping Changes
- Trading Strategy of Shift Up on the First Day of IPO
- Taiwan Dual-Listings Monitor: TSMC Spread on Brink of Falling to Past Levels; UMC Extreme Premium
- Kokusai Electric Placement – US$1.7bn Selldown for a Good Quality Name
- An Interview with Wes Cummins, CEO of Applied Digital
Kokusai Elec (6525) ¥300bn+ Offering at ATH – Almost a Second IPO
- Today post-close we got confirmation of yesterday’s Reuters scoop of a secondary selldown on Kokusai Electric (6525 JP) after the stock fell 7.2% in heavy volume.
- KKR HKE LP and KSP Kokusai LLC (Koch) will together sell 52.5mm shares plus another 7.8mm+ in the greenshoe. Split is 50/50 domestic/international.
- This is 60+mm shares against 51mm shares held by non-passive holders ex-Capital (who has been selling). It’s a lot of stock at a high price.
Kokusai Electric (6525 JP): Placement, Buyback & Index Flows
- KKR and KSP Kokusai will offer 52.51m-60.38m shares (US$1.76bn-2bn) of Kokusai Electric (6525 JP) in a secondary offering that will likely be priced on 22 July.
- Kokusai Electric (6525 JP) will also buy back up to JPY 18bn of its shares. At the last close, that is 3.33m shares (1.2x ADV).
- Trackers of one global index will buy stock at the time of settlement of the shares. The (much) bigger buying will come at the end of August.
Wiwynn GDR Offering – US$1.45bn Dilutive Offering, but Momentum Has Been Very Strong
- Wiwynn Corp (6669 TT) is looking to raise around US$850m in its global depository receipts (GDRs) offering.
- Similar to previous GDR listings, the deal is a long drawn out process with the firm required to jump through a number of board/shareholder/regulatory approval loops.
- In this note, we run the deal through our ECM framework and comment on deal dynamics.
Kokusai Electric (6525 JP): A US$2.0 Billion Secondary Offering
- Kokusai Electric (6525 JP) has announced a secondary offering of up to 60.4 million shares (including overallotment). At the close, the offer, including overallotment, is worth JPY326 billion (US$2.0 billion).
- The secondary offering facilitates KKR and KSP Kokusai Investments’ ability to crystallise substantial IPO gains—the shares are trading at 3.2x the IPO price of JPY1,840.
- Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 22 and 24 July (likely 22 July).
Taiwan Tech Weekly: TSMC Sales Beat High Expectations; Wiwynn GDR Offering; IPhone 17 to Use 2nm
- TSMC June Sales Surge Higher Than Expectations; Apple Will Be Use TSMC’s 2nm Node for Next Year’s iPhone 17
- Wiwynn GDR Offering – US$1.45bn Dilutive Offering, but Momentum Has Been Very Strong
- Silergy (6415.TT): Trial-Run with Vanguard, and Recent Stock Drops Represent an Entry Opportunity.
Hang Seng Internet & IT Index (HSIII) Rebalance Preview: Three Adds/Deletes & Capping Changes
- The review cutoff date for the September rebalance of the HSIII was 28 June. The changes will be announced on 16 August and become effective after the close 6 September.
- There could be 3 changes to the index with some inclusions driven by potential addition to the Hang Seng Composite Index. That could lead to buying via Southbound Stock Connect.
- Capping will result in passives buying Kuaishou Technology (1024 HK) and JD.com (9618 HK) while selling Meituan (3690 HK) and Tencent (700 HK).
Trading Strategy of Shift Up on the First Day of IPO
- In this insight, we discuss a trading strategy for Shift Up which starts trading on 11 July. Shift Up is one of the most anticipated IPOs in Korea this year.
- Our base case (6 months – 1 year) target price of Shift Up is 95,510 won, which is 59% higher than the IPO price.
- We recommend investors to take some profits (about 50% of invested capital) if the share price shoots higher by 100% or more from the IPO price on the first day.
Taiwan Dual-Listings Monitor: TSMC Spread on Brink of Falling to Past Levels; UMC Extreme Premium
- TSMC: +15.1% Premium; Will It Break Down to Lower Past Trading Levels?
- UMC: +2.4% Premium; Can Consider Shorting This Historically High Level
- ChipMOS: -3.1% Discount; Long The Spread Given Historically Extreme Discount
Kokusai Electric Placement – US$1.7bn Selldown for a Good Quality Name
- KKR & Co (KKR US) and KSP Kokusai Investments are looking to raise approximately US$1.7bn through an extended secondary follow-on offering, selling approximately 52.5m shares of Kokusai Electric (6525 JP)’s stock.
- The deal is a large one to digest at 19 days of three month ADV.
- In this note, we will talk about the placement and run the deal through our ECM framework.
An Interview with Wes Cummins, CEO of Applied Digital
- Doug O’Laughlin: Today, on Fabricated Knowledge, I have the privilege of having Wes from Applied Digital on to talk about Applied Digital.
- Today, we’re gonna talk about the change in his business model. The company is experiencing a lot of changes, and there are a lot of new things in the pipeline.
- And so I just wanted to sit him down and have an opportunity to chat about that.
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