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

Hisamitsu Pharmaceutical Co / Event-Driven

<ul>
<li>Since announcing the offer, <a href="https://www.smartkarma.com/entities/hisamitsu-pharmaceutical-co" target="_blank" data-smartkarma-citation="entities:17008:1" rel="noopener">Hisamitsu Pharmaceutical Co (4530 JP)</a>’s shares have traded consistently above the MBO offer price of JPY6,082. The offer closes on 19 February. </li>
<li>While there was no auction, the offer is reasonable. The spate of recent MBOs that attracted activists successfully securing better terms may also be behind the share price action.</li>
<li>The probability of a bump is low due to no visible activism, peers not re-rating, irrevocables, several crossholders, and the minimum can be lowered. Take profits.  </li>
</ul>


Since announcing the offer, Hisamitsu Pharmaceutical Co (4530 JP)’s shares have traded consistently above the MBO offer price of JPY6,082. The offer closes on 19 February. 
While there was no auction, the offer is reasonable. The spate of recent MBOs that attracted activists successfully securing better terms may also be behind the share price action.
The probability of a bump is low due to no visible activism, peers not re-rating, irrevocables, several crossholders, and the minimum can be lowered. Take profits.  


Hisamitsu Pharma (4530 JP): Risk/Reward as Shares Trade Through Terms

Global Healthcare Analyst

Tina Banerjee

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hisamitsu-pharmaceutical-co" target="_blank" data-smartkarma-citation="entities:17008:1" rel="noopener">Hisamitsu Pharmaceutical Co (4530 JP)</a> announced MBO intending to take it private. The offer has been set at ¥6,082 per share which translates to an offer size of roughly ¥400B.</li>
<li>In 9MFY26, the company reported revenue of ¥114.5B up 3% YoY, mainly driven by the overseas prescription drug business while the Salonpas focused OTC pharmaceutical products, revenue remained flat.</li>
<li>Given the fundamentals with new products gaining momentum, Salonpas getting back on track and overseas market growing the offer price of ¥6082 seems a decent exit opportunity at the moment.</li>
</ul>



Hisamitsu Pharmaceutical Co (4530 JP) announced MBO intending to take it private. The offer has been set at ¥6,082 per share which translates to an offer size of roughly ¥400B.
In 9MFY26, the company reported revenue of ¥114.5B up 3% YoY, mainly driven by the overseas prescription drug business while the Salonpas focused OTC pharmaceutical products, revenue remained flat.
Given the fundamentals with new products gaining momentum, Salonpas getting back on track and overseas market growing the offer price of ¥6082 seems a decent exit opportunity at the moment.


Hisamitsu Pharma (4530 JP): MBO at ¥6,082 Offers A Decent Exit Opportunity

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hisamitsu-pharmaceutical-co" target="_blank" data-smartkarma-citation="entities:17008:1" rel="noopener">Hisamitsu Pharmaceutical Co (4530 JP)</a> has recommended an MBO at JPY6,082, a 17.0% premium to the last close and in line with Bloomberg’s stated JPY450 billion valuation. </li>
<li>The offer is attractive compared to precedent transactions and peer multiples. The offer is struck at the midpoint of the IFA DCF valuation range. </li>
<li>The sheer number of irrevocables and the presence of several cross-holders will aid in deal completion. The tender closes on 19 February.</li>
</ul>



Hisamitsu Pharmaceutical Co (4530 JP) has recommended an MBO at JPY6,082, a 17.0% premium to the last close and in line with Bloomberg’s stated JPY450 billion valuation. 
The offer is attractive compared to precedent transactions and peer multiples. The offer is struck at the midpoint of the IFA DCF valuation range. 
The sheer number of irrevocables and the presence of several cross-holders will aid in deal completion. The tender closes on 19 February.


Hisamitsu Pharma (4530 JP): MBO at JPY6,082

Equity Bottom-Up

Kobayashi Pharmaceutical Co / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/kobayashi-pharmaceutical-co" target="_blank" data-smartkarma-citation="entities:14930:1" rel="noopener">Kobayashi Pharmaceutical Co (4967 JP)</a> witnessed business revival in Q3, especially in the domestic household and the U.S. business. In Q3, revenue increased 6% YoY and 13% QoQ to ¥45.4B.</li>
<li>Kobayashi has reiterated FY24 guidance. The company has guided for FY24 revenue of ¥172.0B (+4% YoY), operating income of ¥25.5B (-4% YoY), and net profit of ¥20.2B (-1% YoY).</li>
<li>By establishing the supplement business in North America and further expanding OTC medicines, the company aims to achieve sales of ¥34B in the U.S. in 2030, including ¥16B from healthcare.</li>
</ul>



Kobayashi Pharmaceutical Co (4967 JP) witnessed business revival in Q3, especially in the domestic household and the U.S. business. In Q3, revenue increased 6% YoY and 13% QoQ to ¥45.4B.
Kobayashi has reiterated FY24 guidance. The company has guided for FY24 revenue of ¥172.0B (+4% YoY), operating income of ¥25.5B (-4% YoY), and net profit of ¥20.2B (-1% YoY).
By establishing the supplement business in North America and further expanding OTC medicines, the company aims to achieve sales of ¥34B in the U.S. in 2030, including ¥16B from healthcare.


Kobayashi Pharmaceutical Co (4967 JP): Q3 Shows Early Signs of Business Revival; Aims Big for US

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

<ul>
<li>There should be liquidity events on <a href="https://www.smartkarma.com/entities/temp-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1428:1" rel="noopener">Persol Holdings</a>, <a href="https://www.smartkarma.com/entities/hakuhodo-dy-holdings-inc" target="_blank" data-smartkarma-citation="entities:8736:1" rel="noopener">Hakuhodo Dy Holdings</a>, <a href="https://www.smartkarma.com/entities/welcia-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20895:1" rel="noopener">Welcia Holdings</a>, <a href="https://www.smartkarma.com/entities/gmo-payment-gateway-inc" target="_blank" data-smartkarma-citation="entities:1492:1" rel="noopener">GMO Payment Gateway</a>, <a href="https://www.smartkarma.com/entities/cyberagent-inc" target="_blank" data-smartkarma-citation="entities:8197:1" rel="noopener">CyberAgent</a>, <a href="https://www.smartkarma.com/entities/kobayashi-pharmaceutical-co" target="_blank" data-smartkarma-citation="entities:14930:1" rel="noopener">Kobayashi Pharmaceutical</a>, <a href="https://www.smartkarma.com/entities/ngk-insulators-ltd" target="_blank" data-smartkarma-citation="entities:12580:1" rel="noopener">NGK Insulators</a>, <a href="https://www.smartkarma.com/entities/lixil-group-corp" target="_blank" data-smartkarma-citation="entities:454:1" rel="noopener">Lixil Group</a>, <a href="https://www.smartkarma.com/entities/kurita-water-industries-ltd" target="_blank" data-smartkarma-citation="entities:3870:1" rel="noopener">Kurita Water Industries</a> and <a href="https://www.smartkarma.com/entities/keio-corp" target="_blank" data-smartkarma-citation="entities:1223:1" rel="noopener">Keio Corp</a> tomorrow.</li>
<li>On average, the stocks have underperformed the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 Index</a> over the last 2-3 months but there has been near-term outperformance.</li>
<li>There has been a big increase in shorts on the stocks over the last couple of months and positioning varies across stocks.</li>
</ul>


There should be liquidity events on Persol Holdings, Hakuhodo Dy Holdings, Welcia Holdings, GMO Payment Gateway, CyberAgent, Kobayashi Pharmaceutical, NGK Insulators, Lixil Group, Kurita Water Industries and Keio Corp tomorrow.
On average, the stocks have underperformed the Nikkei 225 Index over the last 2-3 months but there has been near-term outperformance.
There has been a big increase in shorts on the stocks over the last couple of months and positioning varies across stocks.


Japan - A Last Look at Shorts on Some Interesting Stocks & Positioning

Japan

KOBAYASHI PHARMACEUTICAL CO., LTD. manufactures and wholesales pharmaceuticals and medical equipment.  The Company also develops and manufactures fragrances, deodorant, sanitary products, and ointment for stiff shoulders, as well as exports to Southeast Asia and the US.

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Kobayashi Pharmaceutical Co (4967 JP)

Hisamitsu Pharma (4530 JP): Risk/Reward as Shares Trade Through Terms

The probability of a bump is low due to no visible activism, peers not re-rating, irrevocables, several crossholders, and the minimum can be...

Arun George

Hisamitsu Pharma (4530 JP): MBO at ¥6,082 Offers A Decent Exit Opportunity

Hisamitsu Pharmaceutical Co announced MBO to go private at ¥6,082 per share. Given the fundamentals the offer price seems a decent exit...

Tina Banerjee

Hisamitsu Pharma (4530 JP): MBO at JPY6,082

The offer is attractive. The sheer number of irrevocables and the presence of several cross-holders will aid in deal completion.

Arun George