This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.
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1. Tokyo Metro (9023 JP) IPO: The Bull Case
- Tokyo Metro (TKYMETRO JP), a mass transit operator, is seeking to raise up to US$2.3 billion. Pricing is on 15 October, and the listing is on 23 October.
- Tokyo Metro is held 53.42% by the Minister of Finance and 46.58% by the Tokyo Metropolitan Government.
- The bull case rests on a core high-quality asset, future growth drivers, top-quartile profitability, high FCF generation, and peer-leading dividend payout.
2. Tokyo Metro IPO – The Positives – Quasi-Monopoly Status
- Tokyo Metro (9023 JP)‘s shareholders aim to raise up to US$2.3bn in its upcoming 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.
- In this note, we talk about the positive aspects of the deal.
3. New Fast Entry Rule for KOSPI 200 & KOSDAQ 150: Post-IPO Price Swings Ramping Up
- Besides ranking in the top 50 by market cap, it must also meet a minimum float-adjusted cap for K200 fast entry: at least 50% of the 50th-ranked stock’s market cap.
- Even if new stocks meet KRX’s float cap, their actual float share volume may still be low, risking inflation from local pension funds’ preemptive passive inflows post-listing.
- This could reduce predictability for KOSPI 200 fast entry, increasing price swings post-listing and forcing traders to develop new volatility strategies after IPOs.
4. K Bank IPO – Peer Comparison – Lags Its Main Peer on Most Fronts
- K Bank (279570 KS) plans to raise up to US$740m in its upcoming South Korean IPO.
- K Bank is one of three Internet-only banks in Korea. It provides a full range of commercial banking products and services.
- In our previous note, we have looked at the company’s past performance. In this note, we will undertake a peer comparison.
5. Sino-American Silicon GDR Offering – Relatively Large One to Digest, Although Discount Is Attractive
- Sino American Silicon Products (5483 TT) is looking to raise US$287m in its GDRs offering. Proceeds will be used to purchase overseas raw materials, repay bank loans and purchase machinery.
- Similar to previous GDR listings, the deal has had a long drawn out approval process. Thus, the deal is a very well flagged one.
- The deal is a relatively large one to digest at 15.7 days of the stock’s three month ADV.
6. ECM Weekly (23rd Sep 2024) – Tokyo Metro, Midea, Intermestic, Sagility, Belstar, Kuaishou, Bajaj HF
- Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
- On the IPO front, Midea Group Co Ltd A (000333 CH) and Bajaj Housing Finance (BHF IN) hogged much of the limelight this week as well.
- On the placements front, there were a few large US$400m+ placements across the region this week.
7. Tokyo Metro (9023 JP) IPO: The Bear Case
- Tokyo Metro (9023 JP), a mass transit operator, is seeking to raise up to US$2.3 billion. Pricing is on 15 October, and the listing is on 23 October.
- In Tokyo Metro (9023 JP) IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
- The bear case rests on mid-tier revenue growth, low revenue diversification, the highest leverage among peers and a sizeable post-IPO share overhang.
8. Rigaku IPO – The Positives – Catering to a Range of End Industries, and Track Record Has Been Strong
- Rigaku Holdings (268A JP) is looking to raise US$762m in its Japan IPO.
- Rigaku engages in developing, manufacturing, sales and servicing scientific instruments specializing in X-ray technologies.
- In this note, we will talk about the positive aspects of the deal.
9. Rigaku Holdings IPO: Initial Thoughts
- Rigaku Holdings (268A JP) provides cutting-edge analytical solutions centered on X-ray technology globally. The company is one of the largest players globally in X-ray diffraction instrument market.
- The company has filed for an IPO on the Tokyo Stock Exchange and plans to raise proceeds of around US$900m from the IPO at a potential valuation of US$2bn.
- In this insight, we discuss Rigaku’s business model, key drivers, financials and outlook for the company.
10. K Bank IPO: Valuation Insights
- K Bank (279570 KS) is a Korean internet bank. It has launched an IPO to raise up to US$734 million.
- We previously discussed the IPO in K Bank IPO: The Bear Case and K Bank IPO: The Bull Case.
- We examine the syndicate’s valuation methodology. Our analysis suggests that K Bank is unattractively valued in the IPO price range. We would pass on the IPO.
