APAC IPOs & Placements, Aequitas Research

Nicholas Tan

APAC 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.

Equity Capital Markets

<ul>
<li>A group of shareholders are looking to raise up to US$1.8bn from the partial sale of their stake in <a href="https://www.smartkarma.com/entities/nintendo-co-ltd" target="_blank" data-smartkarma-citation="entities:5415:1" rel="noopener">Nintendo (7974 JP)</a> .</li>
<li>The deal represents 4.1 days of ADV and 2.4% of shares outstanding.</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 are looking to raise up to US$1.8bn from the partial sale of their stake in Nintendo (7974 JP) .
The deal represents 4.1 days of ADV and 2.4% of shares outstanding.
In this note, we will talk about the placement and run the deal through our ECM framework.


Nintendo Placement: A Relatively Small US$1.8bn Deal

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/nintendo-co-ltd" target="_blank" data-smartkarma-citation="entities:5415:1" rel="noopener">Nintendo (7974 JP)</a> has announced a secondary offering of 32.7 million shares (37.6 million including overallotment), worth around US$1.8 billion (US$2.1 billion including overallotment).</li>
<li>There are four selling shareholders: Nomura Trust and Banking Co, Bank of Kyoto, <a href="https://www.smartkarma.com/entities/dena-co-ltd" target="_blank" data-smartkarma-citation="entities:747:1" rel="noopener">DeNA (2432 JP)</a>, and Resona Bank.</li>
<li>The offering as a percentage of outstanding shares and ADV is below average compared to recent large placements. A ToSTNeT-3 repurchase (up to JPY100 billion) will mitigate the impact.</li>
</ul>



Nintendo (7974 JP) has announced a secondary offering of 32.7 million shares (37.6 million including overallotment), worth around US$1.8 billion (US$2.1 billion including overallotment).
There are four selling shareholders: Nomura Trust and Banking Co, Bank of Kyoto, DeNA (2432 JP), and Resona Bank.
The offering as a percentage of outstanding shares and ADV is below average compared to recent large placements. A ToSTNeT-3 repurchase (up to JPY100 billion) will mitigate the impact.


Nintendo (7974 JP): A US$2.1 Billion Secondary Offering

Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Q3 net sales were JPY806bn (+86% YoY), slightly below consensus of JPY815bn. Operating income rose 23% YoY to JPY155bn, but missed expectations (consensus: JPY180bn),</li>
<li>Nintendo maintained its full-year guidance, forecasting FY sales of JPY2,250bn and operating profit of JPY370bn, unchanged despite consensus expectations of ~JPY415bn operating profit</li>
<li>We forecast FY3/27 OP ~JPY350bn, implying a potential down year before the benefits of a larger installed base — and a more favorable software mix — begin to materialize.</li>
</ul>


Q3 net sales were JPY806bn (+86% YoY), slightly below consensus of JPY815bn. Operating income rose 23% YoY to JPY155bn, but missed expectations (consensus: JPY180bn),
Nintendo maintained its full-year guidance, forecasting FY sales of JPY2,250bn and operating profit of JPY370bn, unchanged despite consensus expectations of ~JPY415bn operating profit
We forecast FY3/27 OP ~JPY350bn, implying a potential down year before the benefits of a larger installed base — and a more favorable software mix — begin to materialize.


Equity/Index & Cross Asset Volatility Specialist, Cameron Design

Jay Cameron

Equity/Index & Cross Asset Volatility Specialist

Cameron Design

We specialize in financial products and volatility. Our strategies balance speed, data, and risk control to capture opportunities across global markets. Our research leverages AI and data analytics to continuously refine our algorithms and adapt to evolving market dynamics.

Equity Derivatives

<ul>
<li>The Switch 2 launch is proving successful, evidenced by observed consumer demand, high retail traffic, and management forecasts that raise both unit production targets (25 million by Mar26), OP targets.</li>
<li>A strategic pivot toward enhanced shareholder returns and a high-margin software rebound are expected to drive gains, thanks to a high adoption rate from the 150-million original Switch user base.</li>
<li>Nintendo's JPY 2.1T in cash, provides a solid financial buffer for some of the risks seen such as dealing with component price fluctuations, production bottlenecks, FX risk, seasonal demand.</li>
</ul>


The Switch 2 launch is proving successful, evidenced by observed consumer demand, high retail traffic, and management forecasts that raise both unit production targets (25 million by Mar26), OP targets.
A strategic pivot toward enhanced shareholder returns and a high-margin software rebound are expected to drive gains, thanks to a high adoption rate from the 150-million original Switch user base.
Nintendo's JPY 2.1T in cash, provides a solid financial buffer for some of the risks seen such as dealing with component price fluctuations, production bottlenecks, FX risk, seasonal demand.


Nintendo Post-Launch Pivot: Why Switch 2 Software Rebound, Enhanced Dividends Support MAR26 Call

<ul>
<li>Rising memory prices are significantly increasing Switch 2 hardware costs, threatening margin compression below expectations and undermining management’s prior guidance on maintaining stable profitability levels.</li>
<li>Even with potential price hikes, higher ASPs may dampen unit demand, reducing operating leverage and forcing consensus earnings cuts across FY3/27–28 as hardware profitability deteriorates.</li>
<li>Valuation remains stretched relative to historical norms, leaving limited downside protection if earnings reset lower and increasing vulnerability to sentiment reversals amid uncertain cost trajectories.</li>
</ul>


Rising memory prices are significantly increasing Switch 2 hardware costs, threatening margin compression below expectations and undermining management’s prior guidance on maintaining stable profitability levels.
Even with potential price hikes, higher ASPs may dampen unit demand, reducing operating leverage and forcing consensus earnings cuts across FY3/27–28 as hardware profitability deteriorates.
Valuation remains stretched relative to historical norms, leaving limited downside protection if earnings reset lower and increasing vulnerability to sentiment reversals amid uncertain cost trajectories.


Japan

Nintendo Co., Ltd. globally develops, manufactures and sells home-use video game hardware and software in home entertainment business.  The company also produces home-game products including cards.

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Nintendo (7974 JP)

Nintendo Placement: A Relatively Small US$1.8bn Deal

A group of shareholders are looking to raise up to US$1.8bn from the partial sale of their stake in Nintendo. In this note, we will talk about the...

Nicholas Tan

Nintendo (7974 JP): A US$2.1 Billion Secondary Offering

The offering as a percentage of outstanding shares and ADV is below average compared to recent large placements. A ToSTNeT-3 repurchase (up to...

Arun George

Nintendo (7974) | The Long Game

Nintendo's Q3 results slightly below expectations, but maintains full-year guidance. We forecast a potential down year before benefits of larger...

Mark Chadwick

Nintendo Post-Launch Pivot: Why Switch 2 Software Rebound, Enhanced Dividends Support MAR26 Call

The successful Switch 2 launch is driving gains for Nintendo, with high demand, increased production targets, and a focus on shareholder returns.

Jay Cameron

Nintendo (7974) | Profitability at Risk

Rising memory prices are driving up Switch 2 hardware costs, leading to potential margin compression and earnings cuts, with stretched valuation...

Mark Chadwick

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Nintendo Placement: A Relatively Small US$1.8bn Deal

A group of shareholders are looking to raise up to US$1.8bn from the partial sale of their stake in Nintendo. In this note, we will talk about the...

Nicholas Tan

Nintendo (7974 JP): A US$2.1 Billion Secondary Offering

The offering as a percentage of outstanding shares and ADV is below average compared to recent large placements. A ToSTNeT-3 repurchase (up to...

Arun George

Nintendo (7974) | The Long Game

​Nintendo's Q3 results slightly below expectations, but maintains full-year guidance. We forecast a potential down year before benefits of larger...

Mark Chadwick

Nintendo Post-Launch Pivot: Why Switch 2 Software Rebound, Enhanced Dividends Support MAR26 Call

​The successful Switch 2 launch is driving gains for Nintendo, with high demand, increased production targets, and a focus on shareholder returns.

Jay Cameron

Nintendo (7974) | Profitability at Risk

​Rising memory prices are driving up Switch 2 hardware costs, leading to potential margin compression and earnings cuts, with stretched valuation...

Mark Chadwick

Nintendo's Q3 results slightly below expectations, but maintains full-year guidance. We forecast a potential down year before benefits of larger...

The successful Switch 2 launch is driving gains for Nintendo, with high demand, increased production targets, and a focus on shareholder returns.

Rising memory prices are driving up Switch 2 hardware costs, leading to potential margin compression and earnings cuts, with stretched valuation...