This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.
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1. Exedy Corporation Placement – Relatively Large One, Although Buyback Should Aid Share Price
- Aisin (7259 JP) is looking to raise US$290m from selling its entire stake in Exedy Corp (7278 JP).
- While the selldown doesn’t seem to be particularly well-flagged, this appears to be another cross-shareholder unwind in Japan.
- In this note, we will talk about the placement and run the deal through our ECM framework.
2. Barito Renewables Lockup Expiry – US$8bn Lockup Expiry for Largest Indonesian Market Cap Stock
- Barito Renewables Energy (BREN IJ) raised around US$200m in its Indonesian IPO, after pricing at the top end at IDR780/share. Its eight-month lockup will expire on 29th May 2024.
- Barito Renewables (BR) is Indonesia’s largest geothermal power producer, and the third-largest globally by installed capacity, as per the firm.
- In this note, we will talk about the lock-up dynamics and updates since our last note.
3. Alibaba/JD.com: Thoughts On The Recent Convertible Bond Issuance
- Alibaba Group Holding (9988 HK) and JD.com (9618 HK) both announced the issuance of convertible debt last week (Alibaba on May 23 and JD.com on May 21).
- Both have mentioned that the reasons for the issuance are the low funding cost (0.25% coupon for JD.com and 0.5% for Alibaba) and to fund their current share repurchase program.
- I think the convertible debt structures makes sense and it is beneficial for both companies to buy back as much as possible at the current share price.
4. Shift Up IPO – Thoughts on Valuations – Bear/Base/Bull
- Shift Up (462870 KS) plans to raise up to US$320m in its South Korean IPO.
- Shift Up is a South Korean games developer, which as released three games so far for the global markets.
- We have looked at the company’s performance in our past notes. In this note, we talk about valuations.
5. Shift Up IPO: Valuation Insights
- Shift Up (462870 KS) is Korea’s leading game development studio. It is seeking to raise up to US$320 million.
- We previously discussed the IPO in Shift Up IPO: The Investment Case.
- We examine the syndicate’s valuation methodology. Our analysis suggests that Shift Up is attractively valued in the IPO price range. We would participate in the IPO.
6. Shift Up IPO: The Investment Case
- Shift Up (462870 KS) is Korea’s leading game development studio. It is seeking to raise up to US$320 million.
- Shift Up now focuses only on game development and has a policy of publishing games in cooperation with global partners such as Tencent (700 HK) and Sony Corp (6758 JP).
- The investment case rests on a stellar game development track record, several growth drivers, high profitability and cash generation.
7. Hoshino Resorts REIT Placement – Another Raising to Fund an Accretive Acquisition
- Hoshino Resorts Reit (3287 JP) is looking to raise US$125m from a primary follow-on. Proceeds will be used to acquire the OMO7 Osaka asset.
- The REIT has been active on the acquisition front, undertaking a number of capital raisings in recent years.
- In this note, we will talk about the placement and run the deal through our ECM framework.
8. Shift Up IPO – Peer Comparison – Small in Size but Ranks High on Growth and Margins
- Shift Up (462870 KS) plans to raise up to US$320m in its upcoming South Korean IPO.
- Shift Up is a South Korean games developer, which as released three games so far for the global markets.
- In our previous note, we looked at the company’s past performance. In this note, we will undertake a peer comparison.
9. ASMedia GDR Offering – Well Flagged, and Momentum Has Been Strong Leading into the Offering
- Asmedia Technology (5269 TT) is looking to raise up to US$335m in its global depository receipts (GDRs) offering.
- Overall, the deal would be a relatively small one for the stock to digest at just 5.6 days of its three month ADV.
- In this note, we run the deal through our ECM framework and comment on deal dynamics.
10. ECM Weekly (27th May 2024) – Renesas, AUB, Modec, Tata Tech, MUFG, Shift Up, Novelis, Shulan
- 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, Go Digit managed to do well despite somewhat tepid subscription rates, while Shift Up (462870 KS) was looking to be the next hot listing in Korea.
- On the placement front, Renesas Electronics (6723 JP) mega-block kept the cross-shareholding unwind going.
