Equity Analyst - Fundamental & Thematic, Sree Capital

Sreemant Dudhoria

Equity Analyst - Fundamental & Thematic

Fundamental Research on Listed Indian Companies

Sree Capital

Sree Capital is a platform to share fundamental research on listed Indian companies. We do this research for our own investment

Equity Bottom-Up

<ul>
<li>
Cross-Holding Overhang Easing:<a href="https://www.smartkarma.com/entities/denso-corp" target="_blank" data-smartkarma-citation="entities:18703:1" rel="noopener">Denso Corp (6902 JP)</a> accelerates exit from Toyota Industries stake via tender offer, unlocking capital and aligning with capital efficiency and governance reforms.</li>
<li>
Profitability Set to Improve: FY2026 profit outlook strong, driven by reduced quality-related costs, better operating leverage, and ongoing cost controls post fuel pump recall.</li>
<li>
Valuation Comfort with Growth Drivers: Stock trades below historical average P/E; SDV, electrification, and semiconductor focus positions Denso well for re-rating amid sector tailwinds.</li>
</ul>



Cross-Holding Overhang Easing:Denso Corp (6902 JP) accelerates exit from Toyota Industries stake via tender offer, unlocking capital and aligning with capital efficiency and governance reforms.

Profitability Set to Improve: FY2026 profit outlook strong, driven by reduced quality-related costs, better operating leverage, and ongoing cost controls post fuel pump recall.

Valuation Comfort with Growth Drivers: Stock trades below historical average P/E; SDV, electrification, and semiconductor focus positions Denso well for re-rating amid sector tailwinds.


Denso Corp(6902 JP)–Value Zone, Upgraded Growth Outlook, Sooner Resolution of Cross-Holding Overhang

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>Several investors have sharply criticised <a href="https://www.smartkarma.com/entities/toyota-industries-corp" target="_blank" data-smartkarma-citation="entities:4500:1" rel="noopener">Toyota Industries (6201 JP)</a>’s preconditional tender offer from Toyota Fudosan. Oasis is pushing for a higher offer. </li>
<li>The offer has several issues that are detrimental to minorities' interests. The key grievance is that it is below TICO’s intrinsic value.</li>
<li>Due to TICO’s varied business units, SoTP valuation is the most appropriate methodology. My analysis suggests a base case intrinsic value of around JPY19,000.</li>
</ul>


Several investors have sharply criticised Toyota Industries (6201 JP)’s preconditional tender offer from Toyota Fudosan. Oasis is pushing for a higher offer. 
The offer has several issues that are detrimental to minorities' interests. The key grievance is that it is below TICO’s intrinsic value.
Due to TICO’s varied business units, SoTP valuation is the most appropriate methodology. My analysis suggests a base case intrinsic value of around JPY19,000.


Toyota Industries (6201 JP): Thoughts on Intrinsic Value

<ul>
<li>
<a href="https://www.smartkarma.com/entities/toyota-industries-corp" target="_blank" data-smartkarma-citation="entities:4500:1" rel="noopener">Toyota Industries (6201 JP)</a> disclosed a preconditional tender offer from Toyota Fudosan at JPY16,300, a 23.3% premium to the undisturbed price but a 11.4% discount to last close.</li>
<li>While representing a pre-rumour all-time high, the offer is below the midpoint of the special committee IFA DCF valuation range. The Board has a neutral recommendation. </li>
<li>The offer undermines minorities as it lacks split pricing for the <a href="https://www.smartkarma.com/entities/toyota-motor-corp" target="_blank" data-smartkarma-citation="entities:73:1" rel="noopener">Toyota Motor (7203 JP)</a> and its affiliates’ shareholding and likely undervalues the significant real estate holdings. </li>
</ul>



Toyota Industries (6201 JP) disclosed a preconditional tender offer from Toyota Fudosan at JPY16,300, a 23.3% premium to the undisturbed price but a 11.4% discount to last close.
While representing a pre-rumour all-time high, the offer is below the midpoint of the special committee IFA DCF valuation range. The Board has a neutral recommendation. 
The offer undermines minorities as it lacks split pricing for the Toyota Motor (7203 JP) and its affiliates’ shareholding and likely undervalues the significant real estate holdings. 


Toyota Industries (6201 JP): After a High, Comes the Low of a Takeunder

<ul>
<li>
<a href="https://www.47news.jp/12601000.html" target="_blank" rel="noopener">Kyodo news agency</a> reported that <a href="https://www.smartkarma.com/entities/toyota-industries-corp" target="_blank" data-smartkarma-citation="entities:4500:1" rel="noopener">Toyota Industries (6201 JP)</a> plans to accept a tender offer by <a href="https://www.smartkarma.com/entities/toyota-motor-corp" target="_blank" data-smartkarma-citation="entities:73:1" rel="noopener">Toyota Motor (7203 JP)</a> and Toyota Chairman Akio Toyoda, potentially in May or June.</li>
<li>The <a href="https://www.nikkei.com/article/DGXZQOFD305LH0Q5A430C2000000/" target="_blank" rel="noopener">Nikkei reported</a> that Toyota plans to borrow JPY3 trillion to fund the acquisition. These articles provide more clarity on price, composition of the offeror, financing structure, and timeline. </li>
<li>These articles increase the probability of a tender offer around JPY18,515 (JPY6 trillion market cap). At the last close, the gross spread was 12.1%.</li>
</ul>



Kyodo news agency reported that Toyota Industries (6201 JP) plans to accept a tender offer by Toyota Motor (7203 JP) and Toyota Chairman Akio Toyoda, potentially in May or June.
The Nikkei reported that Toyota plans to borrow JPY3 trillion to fund the acquisition. These articles provide more clarity on price, composition of the offeror, financing structure, and timeline. 
These articles increase the probability of a tender offer around JPY18,515 (JPY6 trillion market cap). At the last close, the gross spread was 12.1%.


Toyota Industries (6201 JP): A Potential Privatisation Sooner than Expected

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Contemporary Amperex Technology / Equity Capital Markets

Contemporary Amperex Technology (3750 HK)

<ul>
<li>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.</li>
<li>On the IPO front, <a href="https://www.smartkarma.com/entities/contemporary-amperex-technolog" target="_blank" data-smartkarma-citation="entities:24404:1" rel="noopener">Contemporary Amperex Technology (CATL) (300750 CH)</a> and <a href="https://www.smartkarma.com/entities/jiangsu-hengrui-medicine-co-ltd" target="_blank" data-smartkarma-citation="entities:14128:1" rel="noopener">Jiangsu Hengrui Medicine (600276 CH)</a> will remain in the spotlight in the coming week as well.</li>
<li>On the placements front, Japan deals appear to be picking up again.</li>
</ul>


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, Contemporary Amperex Technology (CATL) (300750 CH) and Jiangsu Hengrui Medicine (600276 CH) will remain in the spotlight in the coming week as well.
On the placements front, Japan deals appear to be picking up again.


ECM Weekly (19 May 2025) - CATL, Hengrui, Green Tea, SMPP, Unisound, Renesas, Genda, GMO, PayTM

Japan

DENSO CORPORATION manufactures electronic parts for automobiles.  The Company's products include automobile air conditioners, air bags, ignition systems, generators, power steering systems, and spark plugs with iridium electrode. The Company also produces communication equipment for mobile navigation system.

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Denso Corp (6902 JP)