1. Rakuten Bank (5838 JP) Overnight Offering at a Fat Discount
- After the close today, Rakuten Group (4755 JP) announced the sale of 25.5mm shares of Rakuten Bank (5838 JP), right as the IPO lockup was reaching its expiry. Expected.
- Pricing is 6-7 Dec (pre-Tokyo open 7 Dec), delivery 11 Dec 2023. Indicative price range is 8.5-12.5% discount for a deal of US$425mm or so.
- In an interesting technical detail, this will take Rakuten below 50%. There is some near-term index demand, some in April, some next October. Rheos could be more overhang.
2. Toyota To Sell Harmonic Drive (6324 JP) Shares in Overseas Offering
- Today, Toyota Motor (7203 JP) announced it would sell 4.379mm shares (4.55%) of Harmonic Drive Systems (6324 JP) in an overseas placement.
- This is not so big as it is emblematic, adding to the recent news on Toyota unwinds.
- Harmonic Drive is heavily held by foreign institutions. This is a foreigners-only deal. But it will need to be absorbed by that group too.
3. Rakuten Bank Placement – Was Expected at Some Point, Current Timing Seems Opportunistic
- Rakuten Group (4755 JP) aims to raise US$430m via selling around 14.6% of Rakuten Bank (5838 JP).
- RB is the largest internet bank in Japan, by number of accounts. As of Sep 23, it had 14.3m deposit accounts with a total deposit base of JPY9.5tn.
- In this note, we will talk about the deal dynamics and updates since our last note.
4. REPT BATTERO Energy Pre-IPO – PHIP Updates – Leaning on ESS
- REPT BATTERO Energy (REPT HK) is now looking to raise around US$300m in its upcoming Hong Kong IPO, down from the US$1bn it was aiming for earlier.
- REPT BATTERO Energy (REPT) is a lithium-ion battery manufacturer in China, focusing on R&D, production, and sales of EV/ESS lithium-ion battery products such as battery cells, modules and packs.
- We have looked at the company’s past performance in our previous note. In this note, we talk about its PHIP updates.
5. Harmonic Drive Placement – Cleanup Share Sale Will Remove the Overhang
- Toyota Motor (7203 JP) is looking to raise US$116m from selling its entire stake in Harmonic Drive Systems (6324 JP).
- Toyota Motors has indicated over the past one-two weeks that it will be looking to sell/trim its stakes in various entities as part of its exit from its multiple cross-holdings.
- While the deal would be a relatively large one to digest at 10 days of ADV, Toyota Motors will be selling its entire stake, clearing the overhang.
6. Evolution Mining Placement – Back to Equity Markets Again to Fund Another M&A Deal
- Evolution Mining (EVN AU) is looking to raise around US$350m to partially fund its acquisition of an 80% stake in the Northparkes copper and gold mines.
- While the acquisition wasn’t explicitly flagged, the firm has guided that it had been eyeing acquisitions into gold/copper pathways. Thus, we would argue that the deal is somewhat well flagged.
- That being said, at 14 days of three month ADV, the deal isn’t a particularly small one for the firm to digest.
7. Dekon Food and Agriculture Group IPO Trading – Tight Float at Listing, Subscription Rates Were Tepid
- Dekon Food and Agriculture Group (DFAG CH) raised around US$128m in its Hong Kong IPO.
- Dekon Food and Agriculture Group (DFAG) is a vertically integrated livestock farming enterprise in China.
- We have covered various aspects of the deal in our previous note. In this note, we will talk about the demand and trading dynamics.
8. 2024 Major IPOs Pipeline in Korea
- This is our 9th “Annual Edition of the Major Korean IPOs Pipeline Preview” at Smartkarma.
- This insight will feature 50 of the biggest potential IPOs in Korea in 2024.
- These 50 IPOs in Korea are likely to represent more than 80% of all capital raised through IPOs in Korea next year.
9. Rept Battero IPO: The Bull Case
- REPT BATTERO Energy (1998104D CH), a leading EV battery manufacturer, is premarketing a US$300 million HKEx IPO, according to press reports.
- According to Frost & Sullivan, in 1H23, Rept was the tenth-largest lithium-ion battery manufacturer globally for annual installations for new energy applications.
- The bull case rests on rapid ESS revenue growth, reducing customer concentration risks, ambitious capacity expansion plans, promising margin trajectory and improving cash collection cycle.
10. Kasumigaseki Capital (3498 JP) – An Offering Worth Examining
- Kasumigaseki Capital is a small cap consulting real estate speculator/developer. They have an interesting, aggressive model. People will recognise the model from pre-GFC but this one is structured better.
- The company had planned explosive growth and in October, brought growth plans forward and guidance way up. Now there is an offering to fund that growth.
- It appears to also be an offering to get a very large short position out of a risk of potential squeeze. For that, I expect this goes smoothly.
Weekly Top Ten Equity Capital Markets
Receive this weekly newsletter keeping 45k+ investors in the loop
