In today’s briefing:
- Socionext IPO – Ample Upside Even After Discount
- Bilibili (9626 HK): Implications of Dual Primary Listing
- SATS to Buy Worldwide Flight Services (WFS) As Private Equity Exits
- SATS/WFS: The Future Is Cargo
- Accenture Japan Bids a 120% Premium for Datascience Company ALBERT (3906)
- Leapmotor IPO: Thoughts on First Day Trading
- JPX-Nikkei 400 Rebal 2023: End-Sep 2022
- WCP IPO Trading – Peer Correction Means Price Cut Still Wasn’t Enough
- KOSPI 200 Rebalancing: Recent Changes in the Race
- CALB IPO: First Day Trading Strategy Amid Market Turmoil
Socionext IPO – Ample Upside Even After Discount
- Socionext (6526 JP) is looking to raise up to US$463m in its Japan IPO.
- Socionext is a fabless semiconductor provider which commenced operations after integrating the system on a chip (SoC) businesses of Fujitsu Semiconductor Limited and Panasonic Holding Corporation.
- In this note, we will look at the updated deal dynamics, our earlier assumptions, and share our thoughts on valuation.
Bilibili (9626 HK): Implications of Dual Primary Listing
- Earlier today, Bilibili (9626 HK) announced the voluntary conversion of its Secondary Listing on the HKEX (388 HK) to a Dual Primary Listing effective 3 October.
- Though the timing is tricky, this could result in the stock not being deleted from the Hang Seng China Enterprises Index (HSCEI INDEX) at the December rebalance.
- This could also lead to inflows at the December rebalance from Hang Seng China Enterprises Index (HSCEI INDEX) and Hang Seng Tech Index (HSTECH INDEX) trackers.
SATS to Buy Worldwide Flight Services (WFS) As Private Equity Exits
- SATS (SATS SP) has announced that it is buying Worldwide Flight Services (WFS) from an affiliate of Cerberus Capital Management at an Enterprise Value of €2.25bn (S$3.107bn).
- The cash consideration is €1.187bn (S$1.639bn) and will likely be financed by an equity fund raising. This could be a rights issue and could be combined with a private placement.
- Expect the stock to drop once it resumes trading. A significant drop from current levels could provide a buying opportunity as the rights issue could be backstopped.
SATS/WFS: The Future Is Cargo
- Last week, SATS (SATS SP), a leading inflight catering and gateway service provider in Asia, confirmed media reports it was in talks to buy Cerberus Capital Management-backed Worldwide Flight Services.
- Yesterday, SATS announced it will acquire WFS, the world’s largest air cargo handler, for €1.187bn or S$1.639bn (9.7x EV/EBITDA). Funding is to be primarily sourced from a S$1.7bn equity fundraising.
- The transaction appears all stitched up with SATS’ 40% shareholder Temasek backing the deal. The acquisition is expected to close in March 2023, subject to regulatory clearance.
Accenture Japan Bids a 120% Premium for Datascience Company ALBERT (3906)
- Accenture Japan has just bid a 120% premium for fast-growing smallcap ALBERT Inc (3906 JP) which provides data science solutions to a focused client base.
- Revenues are growing fast. EBIT is growing faster. EBIT is expected to be 300% higher in 3 years.
- This is 50+% corporate-held. Retail decides the rest. This is probably a done deal.
Leapmotor IPO: Thoughts on First Day Trading
- Leapmotor (9863 HK) has priced its IPO at HK$48 per share, at the lower end of the indicative IPO price range of HK$48-62 per share.
- At the above price, the company raised net proceeds of approx. HK$6,057.4m at a market capitalisation of HK$54.9bn and a post-money EV of HK$45.9bn.
- The HK offering was undersubscribed while the international offering was initially oversubscribed by 2.33x and the unsubscribed portion of the HK offering was later reallocated to international offering.
JPX-Nikkei 400 Rebal 2023: End-Sep 2022
- JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.
- A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the potential forward inclusions and removals every month.
- Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2023 based on trading data as of end-September 2022.
WCP IPO Trading – Peer Correction Means Price Cut Still Wasn’t Enough
- WCP raised around US$314m via selling a mix of primary and secondary shares in its Korean IPO.
- WCP designs, manufactures, and sells separators, which are one of the four core materials for secondary Lithium-ion batteries.
- In this note, we will talk about the demand for the deal and other trading dynamics.
KOSPI 200 Rebalancing: Recent Changes in the Race
- In addition to Lotte Confectionery, Samyang Foods is also in the inclusion zone. As for deletions, Samyang Holdings and Boryung are the most likely deletes at this point.
- Samyang Foods and Boryung have a small passive impact but have way more liquidity than Lotte and Samyang Holdings. We should approach them differently depending on the target trading window.
- Samyang Foods is in a tight situation, and Boryung’s fate depends on Samyang Foods. But given the recent price trends, Samyang Foods appears to have a good shot.
CALB IPO: First Day Trading Strategy Amid Market Turmoil
- In this insight, we discuss the first day trading strategy of CALB (3931 HK) amid market turmoil.
- CALB priced its IPO at HK$38 per share, which is at the low end of the IPO price range. CALB raised US$1.3 billion in this IPO.
- Unlike recent disappointing IPOs for Leapmotor and Onewo, we believe CALB’s IPO could perform better in its IPO debut.
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