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/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba Corp (6502 JP)</a> Board now recommends shareholders accept Japan Industrial Partners (JIP)’s pre-conditional tender offer of JPY4,620 per share. The Board also effectively rules out a bump.</li>
<li>The Board unconvincingly recommends the offer in part on the premise that the IFA’s DCF valuation is unrealistic due to punchy forecasts and positive feedback from stakeholders.  </li>
<li>The Board fails to consider that the peers have materially re-rated, the offer’s price ratio remains unattractive and the declining premium of the offer’s implied multiple vs peers’ multiples.</li>
</ul>



Toshiba Corp (6502 JP) Board now recommends shareholders accept Japan Industrial Partners (JIP)’s pre-conditional tender offer of JPY4,620 per share. The Board also effectively rules out a bump.
The Board unconvincingly recommends the offer in part on the premise that the IFA’s DCF valuation is unrealistic due to punchy forecasts and positive feedback from stakeholders.  
The Board fails to consider that the peers have materially re-rated, the offer’s price ratio remains unattractive and the declining premium of the offer’s implied multiple vs peers’ multiples.


Toshiba (6502 JP): Risk/Reward as Board Unconvincingly Recommends JIP’s Offer

Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>OVERSEAS.  US Equities Soar on Debt Resolution and Payrolls; Markets continue to price in Fed Pause; Leaks about China Property stimulus support sentiment; Saudi Arabia slashes oil output.</li>
<li>JAPAN. NKY Futs +1.4% vs Cash;  JP bid to continue after US Rally; Inflation pushing households to stocks; Japan prioritizes hydrogen; Companies face a raft of proposals at June AGMs</li>
<li>NUGGET. Where Nvidia Goes, Advantest Follows; Advantest now simply just a proxy on Nvidia's share price</li>
</ul>


OVERSEAS.  US Equities Soar on Debt Resolution and Payrolls; Markets continue to price in Fed Pause; Leaks about China Property stimulus support sentiment; Saudi Arabia slashes oil output.
JAPAN. NKY Futs +1.4% vs Cash;  JP bid to continue after US Rally; Inflation pushing households to stocks; Japan prioritizes hydrogen; Companies face a raft of proposals at June AGMs
NUGGET. Where Nvidia Goes, Advantest Follows; Advantest now simply just a proxy on Nvidia's share price


Ohayo Japan |Stocks Soar on Debt Resolution/Jobs/China; NUGGET: Where Nvidia Goes, Advantest Follows

<ul>
<li>It was a relatively quiet week for the broader index. However, there was a big sector shift towards tech and AI winners.</li>
<li>Japanese Heavy Equipment makers have technologies that will be in demand for decades. KHI trades below book. </li>
<li>As we head into AGM season, we take a look at interesting activist campaigns. </li>
</ul>


It was a relatively quiet week for the broader index. However, there was a big sector shift towards tech and AI winners.
Japanese Heavy Equipment makers have technologies that will be in demand for decades. KHI trades below book. 
As we head into AGM season, we take a look at interesting activist campaigns. 


Japan Weekly | Advantest, Ibiden, Kawasaki Heavy, SK Kaken, NCHD

<ul>
<li>
<a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba Corp (6502 JP)</a> reports FY2022 results on 12 May. Since the announcement of Japan Industrial Partners (JIP)’s pre-conditional tender offer of JPY4,620 per share, there have been no progress updates. </li>
<li>The spread to the offer is currently 4.2%, suggesting a reasonable probability of success. However, the offer's success ultimately depends on shareholder backing, particularly from the activists on the register.</li>
<li>Shareholder support continues to pose a considerable risk as the peers have re-rated, the offer’s price ratio remains unattractive and the declining premium of the offer’s implied multiple vs peers.</li>
</ul>



Toshiba Corp (6502 JP) reports FY2022 results on 12 May. Since the announcement of Japan Industrial Partners (JIP)’s pre-conditional tender offer of JPY4,620 per share, there have been no progress updates. 
The spread to the offer is currently 4.2%, suggesting a reasonable probability of success. However, the offer's success ultimately depends on shareholder backing, particularly from the activists on the register.
Shareholder support continues to pose a considerable risk as the peers have re-rated, the offer’s price ratio remains unattractive and the declining premium of the offer’s implied multiple vs peers.


Toshiba (6502 JP): Tender Offer Risk/Reward

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>According to the Stockholm International Peace Research Institute (SIPRI), total global military expenditure increased by 3.7% in real terms in 2022, to reach a new high of $2,240bn.</li>
<li>A number of European states significantly increased their military spending following Russia’s invasion of Ukraine. Elsewhere, Japan’s 2022 military spending accounts for 1.1% of GDP, the highest level since 1960.</li>
<li>South Korea had four companies inside the world’s top 100 arms manufacturers in 2021. These conglomerates are expected to move up the ranking in 2022. </li>
</ul>


According to the Stockholm International Peace Research Institute (SIPRI), total global military expenditure increased by 3.7% in real terms in 2022, to reach a new high of $2,240bn.
A number of European states significantly increased their military spending following Russia’s invasion of Ukraine. Elsewhere, Japan’s 2022 military spending accounts for 1.1% of GDP, the highest level since 1960.
South Korea had four companies inside the world’s top 100 arms manufacturers in 2021. These conglomerates are expected to move up the ranking in 2022. 


Japan

Kawasaki Heavy Industries, Ltd. designs, develops, and manufactures transport equipment and industrial heavy machinery for military and commercial use.  The Company produces ships, railroad cars, aircraft engines and parts, hydraulic and gas turbines, submarine engines, boilers, and industrial robots.  Kawasaki Heavy Industries offers engineering and construction services to industrial plants.

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Kawasaki Heavy Industries (7012 JP)

Toshiba (6502 JP): Risk/Reward as Board Unconvincingly Recommends JIP’s Offer

Peers have materially re-rated, the offer’s price ratio remains unattractive and the declining premium of the offer’s implied multiple vs peers’...

Arun George

Ohayo Japan |Stocks Soar on Debt Resolution/Jobs/China; NUGGET: Where Nvidia Goes, Advantest Follows

US Equites well bid as SPX closes up +1.5% on Debt relief/Strong payrolls. NKY Futs +1.4% vs Cash; Inflation pushing households to stocks;...

Mark Chadwick

Japan Weekly | Advantest, Ibiden, Kawasaki Heavy, SK Kaken, NCHD

Foreign investors continue to flood into the Japanese market. There are plenty of AI beneficiaries and plenty of old economy companies that have in...

Mark Chadwick

Toshiba (6502 JP): Tender Offer Risk/Reward

Shareholder support continues to pose a considerable risk as the peers have re-rated, the offer’s price ratio remains unattractive and the...

Arun George

Asian Defence Contractors: Up In Arms

Defence spending beneficiaries include Hyundai Rotem (064350 KS) and Aerospace Industrial Development (2634 TT). For relval, short Poongsan Corp...

David Blennerhassett

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