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.

Event-Driven

<ul>
<li>Following up on our earlier cross-shareholding work, in this note we look to summarize our work so far by looking at where most of the selling will likely come.</li>
<li>Of the seven companies that we have looked at so far, collectively they have around US$102bn worth of shares to sell in 118 companies. </li>
<li>Of these, they have a combined stake of over US$1bn in 23 companies.</li>
</ul>


Following up on our earlier cross-shareholding work, in this note we look to summarize our work so far by looking at where most of the selling will likely come.
Of the seven companies that we have looked at so far, collectively they have around US$102bn worth of shares to sell in 118 companies. 
Of these, they have a combined stake of over US$1bn in 23 companies.


Japan Cross-Shareholding - Summary Matrix - Over US$100bn of Selling in 118 Companies

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/riso-kyoiku-co-ltd" target="_blank" data-smartkarma-citation="entities:20848:1" rel="noopener">Riso Kyoiku (4714 JP)</a> announced a tender offer from <a href="https://www.smartkarma.com/entities/hulic-co-ltd" target="_blank" data-smartkarma-citation="entities:388:1" rel="noopener">Hulic Co Ltd (3003 JP)</a> at JPY295, a 37.2% premium to the last close of JPY215.</li>
<li>The offer is light, as it is below Hulic's 2024 offer and its IFA DCF midpoint. There was also no market check, and the committee's adviser is a related party.</li>
<li>However, the offer looks attractive as it is above the target IFA’s DCF midpoint and well above peer multiples. Completion looks likely, as only 22.2% of minorities need to tender.</li>
</ul>



Riso Kyoiku (4714 JP) announced a tender offer from Hulic Co Ltd (3003 JP) at JPY295, a 37.2% premium to the last close of JPY215.
The offer is light, as it is below Hulic's 2024 offer and its IFA DCF midpoint. There was also no market check, and the committee's adviser is a related party.
However, the offer looks attractive as it is above the target IFA’s DCF midpoint and well above peer multiples. Completion looks likely, as only 22.2% of minorities need to tender.


Riso Kyoiku (4714 JP): Weak Process, but Hulic’s JPY295 Offer Will Succeed

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hulic-co-ltd" target="_blank" data-smartkarma-citation="entities:388:1" rel="noopener">Hulic Co Ltd (3003 JP)</a> formed a Business+Capital Alliance with prep/cram/etc school operator <a href="https://www.smartkarma.com/entities/riso-kyoiku-co-ltd" target="_blank" data-smartkarma-citation="entities:20848:1" rel="noopener">Riso Kyoiku (4714 JP)</a> in 2020. They bought 20% by 2021. Then went to 51% in 2024.</li>
<li>Now they want the rest. This is utterly unsurprising. And will be easy. Nobody else really wants this and Hulic controls it already. </li>
<li>This is fair enough as a price in my opinion. It is easy, small, illiquid, and roughly meaningless, except for one small quirk.</li>
</ul>



Hulic Co Ltd (3003 JP) formed a Business+Capital Alliance with prep/cram/etc school operator Riso Kyoiku (4714 JP) in 2020. They bought 20% by 2021. Then went to 51% in 2024.
Now they want the rest. This is utterly unsurprising. And will be easy. Nobody else really wants this and Hulic controls it already. 
This is fair enough as a price in my opinion. It is easy, small, illiquid, and roughly meaningless, except for one small quirk.


[Japan M&A] Hulic Takes Out Riso Kyoiku at ¥295/Share - Small, Unsurprising, Fair Enough, One Quirk.

Equity Capital Markets

<ul>
<li>Today after the close, <a href="https://www.smartkarma.com/entities/hulic-co-ltd" target="_blank" data-smartkarma-citation="entities:388:1" rel="noopener">Hulic Co Ltd (3003 JP)</a> announced that several crossholders would sell about ¥30bn of stock in an overnight offering to international investors. </li>
<li>The Real World Float on this stock is about 27% or so 2.3% is about 8% of Max RWF. Given 75% of MRWF is held by retail, this is surprising.</li>
<li>The stock is far less volatile than its leverage would suggest but the stock is performing better than a sector suffering from waning investor interest. Could be a good punt.</li>
</ul>


Today after the close, Hulic Co Ltd (3003 JP) announced that several crossholders would sell about ¥30bn of stock in an overnight offering to international investors. 
The Real World Float on this stock is about 27% or so 2.3% is about 8% of Max RWF. Given 75% of MRWF is held by retail, this is surprising.
The stock is far less volatile than its leverage would suggest but the stock is performing better than a sector suffering from waning investor interest. Could be a good punt.


[Japan Offering] Hulic (3003) Sees Crossholder Selldown in ABO Offering Despite Retail Dominance

APAC IPOs & Placements, Aequitas Research

Nicholas Tan

APAC IPOs & Placements

<ul>
<li>A group of shareholders is looking to raise up to ¥28.7bn (US$181m) from a share sale in Japanese real estate and insurance business, <a href="https://www.smartkarma.com/entities/hulic-co-ltd" target="_blank" data-smartkarma-citation="entities:388:1" rel="noopener">Hulic Co Ltd (3003 JP)</a> .</li>
<li>The deal is another cross-shareholding unwind, which has been an ongoing narrative in Japan over the past 1-2 years</li>
<li>In this note, we will talk about the placement and run the deal through our ECM framework.</li>
</ul>


A group of shareholders is looking to raise up to ¥28.7bn (US$181m) from a share sale in Japanese real estate and insurance business, Hulic Co Ltd (3003 JP) .
The deal is another cross-shareholding unwind, which has been an ongoing narrative in Japan over the past 1-2 years
In this note, we will talk about the placement and run the deal through our ECM framework.


Aequitas: Hulic Placement - Recent Momentum Hasn’t Been Great but past Deals Have Done Well

Japan

Hulic Company, Limited. operates real estate business and marketable securities investment business.  The Company also conducts environment related businesses.

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Hulic Co Ltd (3003 JP)

Japan Cross-Shareholding - Summary Matrix - Over US$100bn of Selling in 118 Companies

Toyotal has just announced that it will buy back around 290m (around 2% of the stock) of its own shares from MS&AD, Tokio Marine, MUFG and SMFG. In...

Sumeet Singh

Riso Kyoiku (4714 JP): Weak Process, but Hulic’s JPY295 Offer Will Succeed

The offer is below Hulic's 2024 price and its IFA's DCF midpoint, but above peer multiples. Only 22.2% minority acceptance needed, so likely to...

Arun George

[Japan Offering] Hulic (3003) Sees Crossholder Selldown in ABO Offering Despite Retail Dominance

Hulic has HUGE numbers of Fuyo Group crossholders who own 50%. Today we see some start to sell in an overseas offering despite the fact that most...

Travis Lundy

Aequitas: Hulic Placement - Recent Momentum Hasn’t Been Great but past Deals Have Done Well

A group of shareholders is looking to raise up to US$181m from a share sale in Hulic. In this note, we will talk about the placement and run the...

Nicholas Tan

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Japan Cross-Shareholding - Summary Matrix - Over US$100bn of Selling in 118 Companies

Toyotal has just announced that it will buy back around 290m (around 2% of the stock) of its own shares from MS&AD, Tokio Marine, MUFG and SMFG. In...

Sumeet Singh

Riso Kyoiku (4714 JP): Weak Process, but Hulic’s JPY295 Offer Will Succeed

The offer is below Hulic's 2024 price and its IFA's DCF midpoint, but above peer multiples. Only 22.2% minority acceptance needed, so likely to...

Arun George

[Japan M&A] Hulic Takes Out Riso Kyoiku at ¥295/Share - Small, Unsurprising, Fair Enough, One Quirk.

Hulic is taking out the rest of Riso Kyoiku minorities. This was just a matter of time. They'd been heading in that direction. This is an easy...

Travis Lundy

[Japan Offering] Hulic (3003) Sees Crossholder Selldown in ABO Offering Despite Retail Dominance

Hulic has HUGE numbers of Fuyo Group crossholders who own 50%. Today we see some start to sell in an overseas offering despite the fact that most...

Travis Lundy

Aequitas: Hulic Placement - Recent Momentum Hasn’t Been Great but past Deals Have Done Well

A group of shareholders is looking to raise up to US$181m from a share sale in Hulic. In this note, we will talk about the placement and run the...

Nicholas Tan