In today’s briefing:
- Deciphering the Dynamics of a Tachiaigai Bunbai Offering
- Gungho Is Gungho for Gungho (3765 JP)
- SBI Sumishin Net Bank (7163 JP) IPO: Listing in March, TPX Inclusion Possibly in April
- Japan Post Insurance – Why This Could Double… In Charts
- Appier – Baby Thrown Out With the Bathwater Number One
- Japan’s Governance: Considerations for Takeover Defense Measures (3)
- SBI Sumishin NetBank (7163 JP) IPO Details, Fundamentals Tearsheet, and Likely Index Treatment
Deciphering the Dynamics of a Tachiaigai Bunbai Offering
- In Japan, there is a type of offering called a tachiaigai bunbai offering which is used by companies to conduct small, relatively low-cost, offerings to increase liquidity or shareholder breadth.
- These are conducted with a bit over a week of warning, and there are usually very low limits of shares purchasable per applicant.
- There are certain dynamics surrounding such tachiaigai bunbai which are worth understanding.
Gungho Is Gungho for Gungho (3765 JP)
- Gungho on Monday announced results, with both revenues and earnings up.
- They also announced a buyback, which at current price means about 2.8% of shares out.
- That doesn’t sound like a lot, but context matters. It may matter a great deal.
SBI Sumishin Net Bank (7163 JP) IPO: Listing in March, TPX Inclusion Possibly in April
- SBI Sumishin Net Bank (7163 JP)‘s listing has been approved by the JPX and the stock is expected to start trading on 24 March.
- News reports indicate a raise of US$1bn (JPY 115.5bn). This translates to an IPO price of JPY 1,920/share, valuing the company at JPY 300bn (US$2.59bn).
- The stock should be added to the TPX INDEX at the close on 27 April where trackers will need to buy over 14% of the stock issued in the IPO.
Japan Post Insurance – Why This Could Double… In Charts
- Japan Post Insurance beat consensus 3Q estimates by 77% at the NP level and the company revised up FY guidance 30.5% to ¥365.49 in EPS.
- Consensus still forecasts EPS to drop to ¥234 next FY but we see little reason to not expect a further increase.
- If so, the name is likely to be close to 5x PE vs. peers at over 10x creating a significant opportunity.
Appier – Baby Thrown Out With the Bathwater Number One
- Appier reported 4Q21 results on Monday with revenue beating consensus by 5% and EBITDA beating by 323%.
- The company guided for ¥17.5bn in revenue, above consensus at ¥16.2bn but significantly below our guesstimate of ¥20.8bn.
- However, a close look at trends in the US suggest that our initial estimate remains reasonable enough.
Japan’s Governance: Considerations for Takeover Defense Measures (3)
- This article focuses on whether or not a company has takeover defense measures, and conducts further analysis in the evaluation items of Profile, Key Performance Indicators and Corporate Governance Practices.
- Since the presence or absence of anti-takeover measures wasn’t significantly correlated with other board practices, they stand apart from improving efforts in other practices and maintain as an independent policy.
- Companies with anti-takeover show negative correlations with asset/capital efficiency, capital allocation and communication with investors, so companies should be watched if this is related to their inferior ROE and ROA.
SBI Sumishin NetBank (7163 JP) IPO Details, Fundamentals Tearsheet, and Likely Index Treatment
- On 15 February, SBI Holdings (8473 JP) and Sumitomo Mitsui Trust Holdings (8309 JP) announced the likely details/schedule of the IPO of their joint venture online bank.
- Pre-Announcement media commentary had suggested an IPO of US$1bn in size and a potential market cap in the range of ¥300-400bn.
- The stock is likely to see significant interest because of its growthy business model, and non-negligible index buying at end-March and end-April, especially if it prices at the high end.
Before it’s here, it’s on Smartkarma
