IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/jsr-corp" target="_blank" data-smartkarma-citation="entities:17620:1" rel="noopener">JSR Corp (4185 JP)</a>’s shares rose 4.8% due to a <a href="https://www.nikkan.co.jp/articles/view/00703806" target="_blank" rel="noopener">Nikkan Kogyo article</a> that states that JIC will start the tender within the month due to concluding negotiations with SAMR. </li>
<li>Caution is warranted as JSR has not provided a customary timeline update, no confirmatory disclosure from SAMR and JSR’s response to SUNY RF’s claims are yet to be filed.</li>
<li>Based on current information, there are five possible tender scenarios. In the worst case, the downside risk on a deal break should be muted due to the market re-rating. </li>
</ul>



JSR Corp (4185 JP)’s shares rose 4.8% due to a Nikkan Kogyo article that states that JIC will start the tender within the month due to concluding negotiations with SAMR. 
Caution is warranted as JSR has not provided a customary timeline update, no confirmatory disclosure from SAMR and JSR’s response to SUNY RF’s claims are yet to be filed.
Based on current information, there are five possible tender scenarios. In the worst case, the downside risk on a deal break should be muted due to the market re-rating. 


JSR Corporation (4185 JP): Something Is Brewing, but Nobody Knows Quite What

Semiconductor & Technology Specialist, Ingenuity

William Keating

Semiconductor & Technology Specialist

Ingenuity

Our focus is exclusively on in-depth research & consulting in the broader semiconductor industry. We focus on the key players, namely Intel, Micron, Qualcomm, Apple, Samsung, NVIDIA, AMD, TSMC & Global Foundries - as well as some of the lesser known, but nonetheless critical, companies such as ASML (for EUV), Mellanox, Cavium, Xilinx etc. We specialise in their products, roadmaps, process technologies, competitive advantages & threats etc. We also help our clients understand the implications of new and emerging technologies, e.g. 3D X-Point, 3D NAND, Carbon Nanotubes, Autonomous Driving, Graphene, Silicon Photonics, Wafer-Level Optics, Artificial Intelligence, FPGA, GPU, ASIC etc. 

Semiconductor Analysis & Research

Equity Bottom-Up

<ul>
<li>Q423 revenues of ¥105.1 billion, about 5% better than forecasted, up 5% QoQ but down ~10% YoY.</li>
<li>Q124 revenues forecasted to decline 17% QoQ to ¥87 billion. Not surprisingly, EBITDA will also decline 33% QoQ to ¥22.1 billion.</li>
<li>On a brighter note, demand growth driven by generative AI will roughly double wafer demand for servers (AI+General) by 2027</li>
</ul>


Q423 revenues of ¥105.1 billion, about 5% better than forecasted, up 5% QoQ but down ~10% YoY.
Q124 revenues forecasted to decline 17% QoQ to ¥87 billion. Not surprisingly, EBITDA will also decline 33% QoQ to ¥22.1 billion.
On a brighter note, demand growth driven by generative AI will roughly double wafer demand for servers (AI+General) by 2027


SUMCO's Sobering Outlook For Silicon Wafers

<ul>
<li>The Research Foundation of the State University of New York (SUNY RF) has filed a patent infringement lawsuit against <a href="https://www.smartkarma.com/entities/jsr-corp" target="_blank" data-smartkarma-citation="entities:17620:1" rel="noopener">JSR Corp (4185 JP)</a> and its subsidiary, Inpria.</li>
<li>SUNY RF claims the “planned tender offer will irreparably harm SUNY RF absent preliminary relief” and filed a motion for a preliminary injunction to stop JSR licensing patents to JIC.</li>
<li>JSR has yet to file a response, making it hard to judge the lawsuit’s merits. The best case is the PI is not granted, delaying the tender by a month.  </li>
</ul>


The Research Foundation of the State University of New York (SUNY RF) has filed a patent infringement lawsuit against JSR Corp (4185 JP) and its subsidiary, Inpria.
SUNY RF claims the “planned tender offer will irreparably harm SUNY RF absent preliminary relief” and filed a motion for a preliminary injunction to stop JSR licensing patents to JIC.
JSR has yet to file a response, making it hard to judge the lawsuit’s merits. The best case is the PI is not granted, delaying the tender by a month.  


JSR Corporation (4185 JP): An Unwelcome US Lawsuit as Tender Start Looms

Shinko Electric Industries / Event-Driven

<ul>
<li>We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.</li>
<li>Highest spreads - <a href="https://www.smartkarma.com/entities/hollysys-automation-technologies" target="_blank" data-smartkarma-citation="entities:26078:1" rel="noopener">Hollysys Automation Technologies (HOLI US)</a>, <a href="https://www.smartkarma.com/entities/probiotec-ltd" target="_blank" data-smartkarma-citation="entities:12047:1" rel="noopener">Probiotec Ltd (PBP AU)</a>, <a href="https://www.smartkarma.com/entities/shinko-electric-industries" target="_blank" data-smartkarma-citation="entities:15066:1" rel="noopener">Shinko Electric Industries (6967 JP)</a>, <a href="https://www.smartkarma.com/entities/genetron-holdings-ltd" target="_blank" data-smartkarma-citation="entities:28435:1" rel="noopener">Genetron Holdings Ltd (GTH US)</a>, <a href="https://www.smartkarma.com/entities/jsr-corp" target="_blank" data-smartkarma-citation="entities:17620:1" rel="noopener">JSR Corp (4185 JP)</a>.</li>
<li>Lowest spreads - <a href="https://www.smartkarma.com/entities/tietto-minerals-ltd" target="_blank" data-smartkarma-citation="entities:28006:1" rel="noopener">Tietto Minerals Ltd (TIE AU)</a>, <a href="https://www.smartkarma.com/entities/orecorp-ltd" target="_blank" data-smartkarma-citation="entities:8120:1" rel="noopener">Orecorp Ltd (ORR AU)</a>, <a href="https://www.smartkarma.com/entities/pact-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:692:1" rel="noopener">Pact Group Holdings (PGH AU)</a>, <a href="https://www.smartkarma.com/entities/benefit-one-inc" target="_blank" data-smartkarma-citation="entities:14502:1" rel="noopener">Benefit One Inc (2412 JP)</a>, <a href="https://www.smartkarma.com/entities/benesse-holdings-inc" target="_blank" data-smartkarma-citation="entities:12877:1" rel="noopener">Benesse Holdings (9783 JP)</a>, T&amp;K Toka. </li>
</ul>


We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads - Hollysys Automation Technologies (HOLI US), Probiotec Ltd (PBP AU), Shinko Electric Industries (6967 JP), Genetron Holdings Ltd (GTH US), JSR Corp (4185 JP).
Lowest spreads - Tietto Minerals Ltd (TIE AU), Orecorp Ltd (ORR AU), Pact Group Holdings (PGH AU), Benefit One Inc (2412 JP), Benesse Holdings (9783 JP), T&amp;K Toka. 


Merger Arb Mondays (29 Jan) - Shinko, JSR, Payroll, T&K Toka, Weiqiao, Hollysys, Newmark, OreCorp

<ul>
<li>
<a href="https://www.smartkarma.com/entities/jsr-corp" target="_blank" data-smartkarma-citation="entities:17620:1" rel="noopener">JSR Corp (4185 JP)</a> pre-conditional tender offer from JIC is JPY4,350 per share. Since the deal announcement, the gross spread has averaged 7.7%.</li>
<li>The wide gross spread reflects the risk in satisfying the pre-condition related to China SAMR approval and potentially shareholder approval due to <a href="https://www.smartkarma.com/entities/shin-etsu-chemical-co-ltd" target="_blank" data-smartkarma-citation="entities:4481:1" rel="noopener">Shin Etsu Chemical (4063 JP)</a>’s re-rating.</li>
<li>SAMR conditional approval would fit with the late February tender start timeline (at the earliest). Despite Shin-Etsu’s re-rating, the offer still looks reasonable.</li>
</ul>



JSR Corp (4185 JP) pre-conditional tender offer from JIC is JPY4,350 per share. Since the deal announcement, the gross spread has averaged 7.7%.
The wide gross spread reflects the risk in satisfying the pre-condition related to China SAMR approval and potentially shareholder approval due to Shin Etsu Chemical (4063 JP)’s re-rating.
SAMR conditional approval would fit with the late February tender start timeline (at the earliest). Despite Shin-Etsu’s re-rating, the offer still looks reasonable.


JSR Corporation (4185 JP): Risk/Reward in Context of Shin-Etsu’s Re-Rating and Looming Tender Start

Japan

Shin-Etsu Chemical Co., Ltd. produces and distributes synthetic resins and other chemical products such as fertilizers. The Company also manufactures electronic materials such as semiconductor silicon, synthetic, and rare earth quartz. Shin-Etsu Chemical operates in Japan and overseas.

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Shin Etsu Chemical (4063 JP)

JSR Corporation (4185 JP): Something Is Brewing, but Nobody Knows Quite What

While a tender start by March-end is possible, we would treat the news article cautiously. Based on current information, there are five possible...

Arun George

SUMCO's Sobering Outlook For Silicon Wafers

Q423 revenues of ¥105.1 billion, +5% QoQ but -10% YoY. Q124 revenues -17% QoQ to ¥87 billion. EBITDA -33% QoQ to ¥22.1 billion. AI demand will...

William Keating

JSR Corporation (4185 JP): An Unwelcome US Lawsuit as Tender Start Looms

SUNY RF filed a patent lawsuit against JSR and a motion to prevent licensing patents to JIC. Court proceedings over the coming weeks will clarify...

Arun George

Merger Arb Mondays (29 Jan) - Shinko, JSR, Payroll, T&K Toka, Weiqiao, Hollysys, Newmark, OreCorp

This week, the highest gross spreads are Hollysys (14.2%), Probiotec (8.7%), Shinko Electric (8.3%), Genetron (7.7%), JSR (7.4%), Adbri (4.6%), IRC...

Arun George

JSR Corporation (4185 JP): Risk/Reward in Context of Shin-Etsu’s Re-Rating and Looming Tender Start

SAMR conditional approval would fit with the late February tender start timeline. Despite Shin-Etsu’s re-rating, the offer still looks reasonable....

Arun George

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