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>Bain/<a href="https://www.smartkarma.com/entities/ly-corp" target="_blank" data-smartkarma-citation="entities:19603:1" rel="noopener">LY (4689 JP)</a> revised their <a href="https://www.smartkarma.com/entities/kakaku-com-inc" target="_blank" data-smartkarma-citation="entities:7408:1" rel="noopener">Kakaku.com Inc (2371 JP)</a> offer to JPY3,520 (JPY3,640 if KDDI agrees to share buyback), a 2.0% premium to EQT/<a href="https://www.smartkarma.com/entities/digital-garage-inc" target="_blank" data-smartkarma-citation="entities:13747:1" rel="noopener">Digital Garage (4819 JP)</a>’s JPY3,450 offer.</li>
<li>The latest Bain/LY offer mirrors the EQT/DG offer by gaming the competing offer clauses. Crucially, the new disclosure of Bain/LY IFA’s valuation range points to headroom for further increases.</li>
<li>EQT/DG can match Bain/LY’s JPY3,520 offer with a modest 2.0% increase to the effective cost of its 17 July offer. If it matches Bain/LY's effective cost, EQT can offer JPY3,790.</li>
</ul>


Bain/LY (4689 JP) revised their Kakaku.com Inc (2371 JP) offer to JPY3,520 (JPY3,640 if KDDI agrees to share buyback), a 2.0% premium to EQT/Digital Garage (4819 JP)’s JPY3,450 offer.
The latest Bain/LY offer mirrors the EQT/DG offer by gaming the competing offer clauses. Crucially, the new disclosure of Bain/LY IFA’s valuation range points to headroom for further increases.
EQT/DG can match Bain/LY’s JPY3,520 offer with a modest 2.0% increase to the effective cost of its 17 July offer. If it matches Bain/LY's effective cost, EQT can offer JPY3,790.


Kakaku.com (2371 JP): More to Go as Bain/LY Return with a Revised Offer

Telco/Internet specialist

Kirk Boodry

Redex Research

Thematic (Sector/Industry)

<ul>
<li>MIC data provides further support that regulatory pressure was successful in driving down industry prices with 40mn users on discount plans that are among the cheapest globally</li>
<li>That has led to ¥230-250bn in service revenue erosion for both FY21 and FY22e but evidence of a solid win for regulators reassures that further action isn't needed</li>
<li>Handset pricing is on the rise as 5G proliferates, which is good news for incumbents that can lock users in through instalment payment plans</li>
</ul>


MIC data provides further support that regulatory pressure was successful in driving down industry prices with 40mn users on discount plans that are among the cheapest globally
That has led to ¥230-250bn in service revenue erosion for both FY21 and FY22e but evidence of a solid win for regulators reassures that further action isn't needed
Handset pricing is on the rise as 5G proliferates, which is good news for incumbents that can lock users in through instalment payment plans


Japan Telecoms - Update from Regulators’ Competition Working Group

<ul>
<li>The regulator says that subscribers to discount mobile plans have exceeded 40mn, 15 months after mobile operators first launched them  in response to regulatory pressure</li>
<li>Net additons have stepped down as the rush of early adopters has passed and the data seems supportive of financial guidance for erosion that is modestly higher YoY</li>
<li>A press release touting the success of <em>ongoing</em> efforts to control mobile pricing comes at a good time</li>
</ul>


The regulator says that subscribers to discount mobile plans have exceeded 40mn, 15 months after mobile operators first launched them  in response to regulatory pressure
Net additons have stepped down as the rush of early adopters has passed and the data seems supportive of financial guidance for erosion that is modestly higher YoY
A press release touting the success of ongoing efforts to control mobile pricing comes at a good time


Japan Telecoms - New (Discount) Mobile Pricing Plan Users Exceed 40mn

<ul>
<li>With inflation exceeding 2% for only the third time in 22 years, hopes for employee wage hikes in Prime Minister Kishida's New Capitalism are likely to get more attention</li>
<li>But the telcos appear to be largely ahead of this already where we have visibility with wage increases of 1-2% already built into FY22 financial guidance </li>
<li>NTT's widespread telework offer is an example of how telcos have other tools to apply. We remain Overweight the Japan telecom sector with NTT and KDDI as top picks</li>
</ul>


With inflation exceeding 2% for only the third time in 22 years, hopes for employee wage hikes in Prime Minister Kishida's New Capitalism are likely to get more attention
But the telcos appear to be largely ahead of this already where we have visibility with wage increases of 1-2% already built into FY22 financial guidance 
NTT's widespread telework offer is an example of how telcos have other tools to apply. We remain Overweight the Japan telecom sector with NTT and KDDI as top picks


Japan Telecoms - FY22 Guidance Largely Insulated from Pressure to Raise Wages

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

iShares MSCI ACWI ETF / Technical Analysis

<ul>
<li>Many indexes (ACWI-US,ACWX-US,etc.) are near support, and we could see a bear market bounce, but until these indexes reverse their downtrends and break above resistance levels, we cannot be bullish.</li>
<li>On a positive note, we are starting to see signs that inflation is peaking, as commodity prices have pulled back substantially, and the Energy/Materials Sectors are under significant pressure.</li>
<li>If inflation and commodity prices have indeed peaked, global equities are likely in the early stages of a bottoming process.</li>
</ul>


Many indexes (ACWI-US,ACWX-US,etc.) are near support, and we could see a bear market bounce, but until these indexes reverse their downtrends and break above resistance levels, we cannot be bullish.
On a positive note, we are starting to see signs that inflation is peaking, as commodity prices have pulled back substantially, and the Energy/Materials Sectors are under significant pressure.
If inflation and commodity prices have indeed peaked, global equities are likely in the early stages of a bottoming process.


Inflation Peaking?; ACWI, ACWI Ex-US Near Support; Many Bottoms-Up Stock Recommendations

Japan

KDDI CORPORATION provides mobile communication services and sells mobile devices.  The Company also is a broadband provider.

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KDDI Corp (9433 JP)

Kakaku.com (2371 JP): More to Go as Bain/LY Return with a Revised Offer

The latest Bain/LY offer mirrors the EQT/DG offer by gaming the competing offer clauses. Crucially, the new disclosure of Bain/LY IFA’s valuation...

Arun George

Japan Telecoms - Update from Regulators’ Competition Working Group

Further evidence that price reductions have met expectations as regulator working group prepares its final report on the competition. NTT remains...

Kirk Boodry

Japan Telecoms - New (Discount) Mobile Pricing Plan Users Exceed 40mn

The regulator says there are users of new discount mobile pricing plans have exceeded 40mn. That tracks with financial guidance and is a positive...

Kirk Boodry

Japan Telecoms - FY22 Guidance Largely Insulated from Pressure to Raise Wages

With inflation rising above 2% for only the third time in 22 years, talk of the need for higher wages is likely to increase but telecom operators...

Kirk Boodry

Inflation Peaking?; ACWI, ACWI Ex-US Near Support; Many Bottoms-Up Stock Recommendations

We're starting to see signs that inflation is peaking, as commodity prices have pulled back substantially or are breaking, and the Energy $XLE and...

Vermilion Research

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