Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Capital Markets

<ul>
<li>Last week, before the long weekend, <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 <a href="https://www.smartkarma.com/entities/sumitomo-mitsui-financial-group-inc" target="_blank" data-smartkarma-citation="entities:217:1" rel="noopener">Sumitomo Mitsui Financial Group (8316 JP)</a> announced a very big secondary selldown of shares in <a href="https://www.smartkarma.com/entities/toyoda-gosei-co-ltd" target="_blank" data-smartkarma-citation="entities:20125:1" rel="noopener">Toyoda Gosei (7282 JP)</a>. </li>
<li>The selldown is 85x 3mo ADV, 27% of shares out. 125% of Max Real World Float. It's a lot of stock at $750mm. One wonders where demand is.</li>
<li>They also announced a big buyback, which is some of it, and there are index impacts, BUT this offering needs to find LOTS of new fundamental owners quickly.</li>
</ul>


Last week, before the long weekend, Toyota Motor (7203 JP) and Sumitomo Mitsui Financial Group (8316 JP) announced a very big secondary selldown of shares in Toyoda Gosei (7282 JP). 
The selldown is 85x 3mo ADV, 27% of shares out. 125% of Max Real World Float. It's a lot of stock at $750mm. One wonders where demand is.
They also announced a big buyback, which is some of it, and there are index impacts, BUT this offering needs to find LOTS of new fundamental owners quickly.


[Japan Offering] Toyota Selling Down Toyoda Gosei (7282) In BIG Offering; 85d ADV, 125% of Max RWF

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.

<ul>
<li>
<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 <a href="https://www.smartkarma.com/entities/sumitomo-mitsui-financial-group-inc" target="_blank" data-smartkarma-citation="entities:217:1" rel="noopener">Sumitomo Mitsui Financial Group (8316 JP)</a> plan to raise around US$700m via selling down some of their stake in <a href="https://www.smartkarma.com/entities/toyoda-gosei-co-ltd" target="_blank" data-smartkarma-citation="entities:20125:1" rel="noopener">Toyoda Gosei (7282 JP)</a>.</li>
<li>The deal is a large one to digest at over 20% of the company and 90 days of ADV.</li>
<li>In this note, we will talk about the placement and run the deal through our ECM framework.</li>
</ul>



Toyota Motor (7203 JP) and Sumitomo Mitsui Financial Group (8316 JP) plan to raise around US$700m via selling down some of their stake in Toyoda Gosei (7282 JP).
The deal is a large one to digest at over 20% of the company and 90 days of ADV.
In this note, we will talk about the placement and run the deal through our ECM framework.


Toyoda Gosei Placement - Somewhat Expected but Relatively Large with Delayed Buyback

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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/toyoda-gosei-co-ltd" target="_blank" data-smartkarma-citation="entities:20125:1" rel="noopener">Toyoda Gosei (7282 JP)</a> has announced a secondary offering of up to 29.7 million shares (34.2 million including overallotment), worth around US$0.7 billion (US$0.8 billion including overallotment).</li>
<li>Toyoda Gosei's primary goal with the secondary offering is to reduce <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>'s shareholding to around 20% of outstanding shares.</li>
<li>The offering as a percentage of outstanding shares and ADV is large compared to recent large placements. The likely pricing date is 1 December.</li>
</ul>



Toyoda Gosei (7282 JP) has announced a secondary offering of up to 29.7 million shares (34.2 million including overallotment), worth around US$0.7 billion (US$0.8 billion including overallotment).
Toyoda Gosei's primary goal with the secondary offering is to reduce Toyota Motor (7203 JP)'s shareholding to around 20% of outstanding shares.
The offering as a percentage of outstanding shares and ADV is large compared to recent large placements. The likely pricing date is 1 December.


Toyoda Gosei (7282 JP): A US$0.8 Billion Secondary Offering

Event-Driven

<ul>
<li>Last month, nearly two dozen global asset managers, through ACGA, <a href="https://www.acga-asia.org//pdf/tico-tmc-letter-english-public-version" target="_blank" rel="noopener">submitted a joint letter</a> to the boards of <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> and Toyota Motor regarding the tender offer.</li>
<li>The letter outlined five issues, which distilled down to concerns about a low-balled offer. Their cause is increasingly supported by market movements, which support the case for the bump.</li>
<li>Recent activism against several low-balled tenders signals that TICO, despite its size, is not immune. My SoTP valuation is JPY19,607, which is 20.3% above the offer price.</li>
</ul>


Last month, nearly two dozen global asset managers, through ACGA, submitted a joint letter to the boards of Toyota Industries (6201 JP) and Toyota Motor regarding the tender offer.
The letter outlined five issues, which distilled down to concerns about a low-balled offer. Their cause is increasingly supported by market movements, which support the case for the bump.
Recent activism against several low-balled tenders signals that TICO, despite its size, is not immune. My SoTP valuation is JPY19,607, which is 20.3% above the offer price.


Toyota Industries (6201 JP): Market Movements Support the Case of a Higher Offer

Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

Thematic (Sector/Industry)

<ul>
<li>Intel sees its PC biz improve. Positive for flip-chip suppliers including Ibiden.</li>
<li>Honeywell sees strong performance from its commercial aero after-market business. IHI gets a D/G but this may lift.</li>
<li>Nidec ADR's take a -25% thumping on numbers and a bevvy of bad news. Could this be the end for Nagamori?</li>
</ul>


Intel sees its PC biz improve. Positive for flip-chip suppliers including Ibiden.
Honeywell sees strong performance from its commercial aero after-market business. IHI gets a D/G but this may lift.
Nidec ADR's take a -25% thumping on numbers and a bevvy of bad news. Could this be the end for Nagamori?


Japan Morning Connection: STM -14% but Nexperia Cannot Guarantee Supplies to JP Autos

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)

[Japan Offering] Toyota Selling Down Toyoda Gosei (7282) In BIG Offering; 85d ADV, 125% of Max RWF

The Toyoda Gosei offering announced late last week is big. The stock fell sharply; it bounced since. The overhang is large. And the register...

Travis Lundy

Toyoda Gosei Placement - Somewhat Expected but Relatively Large with Delayed Buyback

Toyota Motor (7203 JP) and Sumitomo Mitsui Financial Group (8316 JP) plan to raise around US$700m via selling down some of their stake in Toyoda...

Sumeet Singh

Toyoda Gosei (7282 JP): A US$0.8 Billion Secondary Offering

The offering as a percentage of outstanding shares and ADV is large compared to recent large placements. The likely pricing date is 1 December.

Arun George

Toyota Industries (6201 JP): Market Movements Support the Case of a Higher Offer

Recent activism against several low-balled tenders signals that TICO, despite its size, is not immune. Their cause is increasingly supported by...

Arun George

Japan Morning Connection: STM -14% but Nexperia Cannot Guarantee Supplies to JP Autos

ECU prices higher should be a positive for Renesas Electronics and Denso Corp. Uncertainty for power/analog names. HDD laggards picked up overnight.

Andrew Jackson

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