This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.
Receive this weekly newsletter keeping 45k+ investors in the loop
1. Rigaku Holdings IPO – Upside Remains Attractive
- Rigaku Holdings (268A JP) is looking to raise up to US$756m in its Japan IPO.
- Rigaku engages in developing, manufacturing, sales and servicing scientific instruments specializing in X-ray technologies.
- In our earlier notes, we looked at the firm’s past performance and discussed our thoughts on valuation. In this note, we look at Rigaku’s valuation at the final indicative range.
2. Tokyo Metro IPO Valuation Analysis
- Tokyo Metro set the IPO price range at 1,100 to 1,200 Yen per share. At the top end of the range, Tokyo Metro would raise 349 billion yen ($2.35 billion).
- Our base case valuation of Tokyo Metro is implied target price of 1,178 yen per share. This is within the top end of the IPO price range (1,200 yen).
- Given the lack of upside relative to the IPO price range, we have a Negative view of this IPO.
3. Hyundai Motor India Sets IPO Price Range
- Hyundai Motor India (1342Z IN) has set an IPO price range of 1,865 to 1,960 rupees per share, aiming for a valuation as high as US$19 billion.
- Hyundai Motor (005380 KS) is selling a 17.5% stake in Hyundai Motor India in this public offering. Hyundai Motor India IPO is scheduled to trade starting 22 October.
- Our updated base case valuation of Hyundai Motor India is market cap of US$19.7 billion based on P/E of 25.9x our estimated net profit of 64.1 billion INR.
4. USS (4732 JP) – Small Offering on ‘Growth Darling’ – Buyback Offsets 50%
- Ubiquitous used car auction house USS Co Ltd (4732 JP) today announced MUFJ Bank’s Retirement Benefit Trust account would sell its 3.5% stake in an offering.
- Given how much cash the company has and how little cross-holding there is, this seems a bit odd, but they are doing a buyback for half the offer.
- Small offer. Low ADV count. Well-liked by numerous foreign active holders. This should get taken easily.
5. Hyundai Motor India IPO – RHP Updates, Valuation Getting Tricky
- Hyundai Motor (005387 KS) is looking to raise around US$3.3bn via listing its India unit, Hyundai Motor India. HMI is a wholly owned subsidiary of the Hyundai Motor Group.
- HMI primarily manufactures and sells four-wheeler passenger vehicles and parts. Currently its vehicle portfolio includes 13 passenger vehicle models across sedans, hatchbacks, SUVs and battery EVs.
- In our previous notes, we looked at the company’s past performance. In this note, we will talk about its RHP updates and valuations.
6. Hyundai Motor India IPO: Analysis of Latest Financials Signal Challenging Year Ahead
- After 3 years of strong revenue and profits growth, Hyundai Motor India is likely to face a challenging year ahead based on the analysis of 1QFY2025 financials provided in RHP.
- Hyundai Motor India (1342Z IN)‘s strong exports growth in FY2025 will not offset the weakness in domestic sales. This could result in low single-digit revenue growth for the year.
- Increased royalty costs starting in FY2025, coupled with impact of lower cash reserves after special dividend paid out to parent will likely compress profit margins compared to the previous year.
7. Tokyo Metro IPO – Will Price at the Top, but Isn’t Particularly Cheap
- Tokyo Metro (9023 JP)‘s shareholders aim to raise up to US$2.4bn in its Japan IPO.
- Tokyo Metro (TKM) is one of the two metro network operators in the Tokyo region. It operates nine subway lines with a total of 180 stations.
- We have looked at the company’s past performance in our previous notes. In this note, we will talk about the IPO valuations.
8. Akeso Placement – Opportunistic Raise, past Deal Record Has Been Mixed but Relative Size Is Small
- Akeso Biopharma Inc (9926 HK) is looking to raise around US$200m from its primary placement. Proceeds from the placement will be used for R&D.
- Past deals in the name haven’t done well recently but the shares have been doing well and the deal size remains small.
- In this note, we talk about the deal dynamics and run the deal through our ECM framework.
9. CR Beverage IPO: Valuation First-Look
- China Resources Beverage (CRB HK), China’s largest purified drinking water company, is premarketing an HKEx to raise US$0.5-1 billion.
- We previously discussed the IPO in CR Beverage IPO: The Bull Case, CR Beverage IPO: The Bear Case and CR Beverage IPO: The Investment Case.
- In this note, we present our forecasts and examine CR Beverage’s potential valuation range for the first time.
10. Rigaku Holdings (268A JP) IPO: Valuation Insights
- Rigaku Holdings (268A JP) is Japan’s leading manufacturer of X-ray analysis, measurement, and testing instruments. It is seeking to raise up to US$737 million.
- We previously discussed the IPO in Rigaku Holdings (268A JP) IPO: The Bull Case and Rigaku Holdings (268A JP) IPO: The Bear Case.
- In this note, we discuss valuation. Our analysis suggests that Rigaku is attractively valued at the IPO price compared to peer multiples.
