Global Materials | Industrials | Commodities

Rahul Jain

Thematic (Sector/Industry)

<ul>
<li>Japan’s defence renaissance is underway, driven by structural budget growth toward 2%+ of GDP.</li>
<li>Multi-Decade tailwinds in missiles, cyber, and naval systems will reshape the domestic defence industry.</li>
<li>Investors should balance national champions with mid-cap leverage plays to capture both visibility and alpha.</li>
</ul>


Japan’s defence renaissance is underway, driven by structural budget growth toward 2%+ of GDP.
Multi-Decade tailwinds in missiles, cyber, and naval systems will reshape the domestic defence industry.
Investors should balance national champions with mid-cap leverage plays to capture both visibility and alpha.


Japan Defence Supercycle: Multi-Decade Tailwinds, Near-Term Catalysts

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

Event-Driven

<ul>
<li>Overnight, <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 a placement of 85.37m shares to unwind crossholdings and improve corporate value. There is an overallotment option for another 12.8m shares.</li>
<li>There will be limited passive buying in the short-term and the number of shares offered is a very large percentage of real float of the stock.</li>
<li>A price drop of 20% or more puts <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 risk of deletion from a global index and could lead to a further price drop.</li>
</ul>


Overnight, Hulic Co Ltd (3003 JP) announced a placement of 85.37m shares to unwind crossholdings and improve corporate value. There is an overallotment option for another 12.8m shares.
There will be limited passive buying in the short-term and the number of shares offered is a very large percentage of real float of the stock.
A price drop of 20% or more puts Hulic Co Ltd (3003 JP) at risk of deletion from a global index and could lead to a further price drop.


Hulic Co (3003 JP) Placement: One Big Price Drop Could Lead to Another

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.

Equity Capital Markets

<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> has announced a secondary offering of up to 85.4 million shares (98.2 million including overallotment), worth around US$800 million (US$920 million including overallotment).</li>
<li>Unlike the 2021 offer, this is a pure secondary offering. It is smaller in terms of outstanding shares and 1-year ADV. The shares are hovering around all-time highs.</li>
<li>Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 10 and 12 December (likely 10 December).</li>
</ul>



Hulic Co Ltd (3003 JP) has announced a secondary offering of up to 85.4 million shares (98.2 million including overallotment), worth around US$800 million (US$920 million including overallotment).
Unlike the 2021 offer, this is a pure secondary offering. It is smaller in terms of outstanding shares and 1-year ADV. The shares are hovering around all-time highs.
Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 10 and 12 December (likely 10 December).


Hulic (3033 JP): A US$800 Million Secondary Offering

Research Coverage of Japanese Listed Companies, Shared Research Inc

Shared Research

Research Coverage of Japanese Listed Companies

Shared Research Inc

Pioneering research coverage of Japanese listed companies. Now customizable and interactive for global institutional investors. Corporate access reimagined.

Equity Bottom-Up

<ul><li>1H FY03/24 sales increased 13.0% YoY, driven by large-scale projects, with operating profit rising 513.8% YoY.</li><li>FY03/25 forecast anticipates JPY460.0bn sales (+9.0% YoY) but decreased operating profit and net income YoY.</li><li>Segment forecasts revised: Public Solutions sales up 43.7% YoY, EMS sales down 2.6% YoY, exchange rates adjusted.</li></ul>

1H FY03/24 sales increased 13.0% YoY, driven by large-scale projects, with operating profit rising 513.8% YoY.FY03/25 forecast anticipates JPY460.0bn sales (+9.0% YoY) but decreased operating profit and net income YoY.Segment forecasts revised: Public Solutions sales up 43.7% YoY, EMS sales down 2.6% YoY, exchange rates adjusted.

Oki Electric Industry (6703 JP): 1H FY03/25 flash update

<ul><li>Q1 sales increased 20.1% YoY to JPY97.9bn, with operating profit at JPY3.9bn and net income at JPY1.8bn.</li><li>Q1 segment sales surged 65.2% YoY, driven by large-scale projects, with segment profit expanding approximately 4.1x YoY.</li><li>Q1 segment sales declined 11.8% YoY due to shrinking semiconductor demand, resulting in a loss for the quarter.</li></ul>

Q1 sales increased 20.1% YoY to JPY97.9bn, with operating profit at JPY3.9bn and net income at JPY1.8bn.Q1 segment sales surged 65.2% YoY, driven by large-scale projects, with segment profit expanding approximately 4.1x YoY.Q1 segment sales declined 11.8% YoY due to shrinking semiconductor demand, resulting in a loss for the quarter.

Oki Electric Industry (6703 JP): Q1 FY03/25 flash update

Japan

Oki Electric Industry Company, Limited, develops, produces, and sells a broad range of communication and information related equipment.  The Company's products include personal computers (PCs), PC peripheral equipment, and electronic devices such as semiconductors and automated teller machines (ATMs). Oki Electric Industry also provides installation and maintenance services.

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Oki Electric Industry (6703 JP)

Japan Defence Supercycle: Multi-Decade Tailwinds, Near-Term Catalysts

Japan's defense industry is experiencing a renaissance with increased budget allocation, leading to opportunities for investors in national...

Rahul Jain

Hulic Co (3003 JP) Placement: One Big Price Drop Could Lead to Another

The secondary offering in Hulic is US$793m and represents 43x ADV and 37% of real float. A large price drops raises risk of deletion from a global...

Brian Freitas

Hulic (3033 JP): A US$800 Million Secondary Offering

Unlike the 2021 offer, this is a pure secondary offering. It is smaller in terms of outstanding shares and 1-year ADV. The shares are hovering...

Arun George