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>Since the announcement of the US$0.8 billion secondary offering, <a href="https://www.smartkarma.com/entities/toyoda-gosei-co-ltd" target="_blank" data-smartkarma-citation="entities:20125:1" rel="noopener">Toyoda Gosei (7282 JP)</a>’s shares have declined 4.9% to the undisturbed price of JPY3,754 per share (20 November).</li>
<li>It is instructive to look at recent large Japanese placements to understand the potential trading pattern. Toyoda's share decline is better than the median of recent large placements.</li>
<li>The offering will likely be priced on 1 December. The average large Japanese placement tends to generate positive returns.</li>
</ul>


Since the announcement of the US$0.8 billion secondary offering, Toyoda Gosei (7282 JP)’s shares have declined 4.9% to the undisturbed price of JPY3,754 per share (20 November).
It is instructive to look at recent large Japanese placements to understand the potential trading pattern. Toyoda's share decline is better than the median of recent large placements.
The offering will likely be priced on 1 December. The average large Japanese placement tends to generate positive returns.


Toyoda Gosei (7282 JP): The Current Playbook

<ul>
<li>
<a href="https://www.smartkarma.com/entities/toyoda-gosei-co-ltd" target="_blank" data-smartkarma-citation="entities:20125:1" rel="noopener">Toyoda Gosei (7282 JP)</a> has announced a secondary offering of up to 29.7 million shares (34.2 million including overallotment), worth around US$0.7 billion (US$0.8 billion including overallotment).</li>
<li>Toyoda Gosei's primary goal with the secondary offering is to reduce <a href="https://www.smartkarma.com/entities/toyota-motor-corp" target="_blank" data-smartkarma-citation="entities:73:1" rel="noopener">Toyota Motor (7203 JP)</a>'s shareholding to around 20% of outstanding shares.</li>
<li>The offering as a percentage of outstanding shares and ADV is large compared to recent large placements. The likely pricing date is 1 December.</li>
</ul>



Toyoda Gosei (7282 JP) has announced a secondary offering of up to 29.7 million shares (34.2 million including overallotment), worth around US$0.7 billion (US$0.8 billion including overallotment).
Toyoda Gosei's primary goal with the secondary offering is to reduce Toyota Motor (7203 JP)'s shareholding to around 20% of outstanding shares.
The offering as a percentage of outstanding shares and ADV is large compared to recent large placements. The likely pricing date is 1 December.


Toyoda Gosei (7282 JP): A US$0.8 Billion Secondary Offering

Japanese Turnaround Situations, Short-Ideas, Azabu Research

Michael Allen

Japanese Turnaround Situations, Short-Ideas

Azabu Research

Azabu Research is a publishing and consulting firm focused on distressed equities in the Japanese market. We specialize in turnaround strategies, corporate combinations, divestitures, and restructuring.

Publisher of the Tokyo Turnaround Letter, which conducts the most thorough research possible of publicly available information, including forensic tests for fraudulent overstatement of assets and understatement of liabilities, as well as rigorous market and industry analysis to assess the underlying strengths of the company’s products or services, the appropriateness of the company’s turnaround strategy, and the skill of its current management team. The average length of a report exceeds 25 pages of text and tables, excluding any disclosures or executive summaries.

We have more than 30 years of experience in applying this process to distressed equities in Japan. Additionally, subscribers have free access to detailed, yet easily navigated earnings models for the target company as well as the top five comparable companies, and unlimited access to the analyst for follow-up questions.

Azabu Research also conducts be-spoke research on a project basis, and provides consulting services to companies looking to restructure, divest, make acquisitions, go public, or improve investor sentiment toward their stock.

Independent Research and Consulting Firm

Equity Bottom-Up

<ul>
<li>Japan’s chemicals industry is finally undergoing a long-overdue consolidation that should lead to fewer companies, higher profitability, and less volatility.</li>
<li>These changes may be driving significant mispricing. Like most segments, RoE drives most of the variance in PBR, but with more frequent and far larger outliers.</li>
<li>KH Neochem, Daicel, and Mitsui Chemicals are the undervalued outliers, and all three are positioned for rapid growth in our view.</li>
</ul>


Japan’s chemicals industry is finally undergoing a long-overdue consolidation that should lead to fewer companies, higher profitability, and less volatility.
These changes may be driving significant mispricing. Like most segments, RoE drives most of the variance in PBR, but with more frequent and far larger outliers.
KH Neochem, Daicel, and Mitsui Chemicals are the undervalued outliers, and all three are positioned for rapid growth in our view.


Long-Overdue Consolidation in Japanese Chemicals Drives Growth & Mispricing

Global Materials | Industrials | Commodities

Rahul Jain

<ul>
<li>Resonac continues to reshape its portfolio, scaling growth materials while rationalising legacy chemicals and electrodes.</li>
<li>FY2025 guidance appears conservative, particularly on profit, leaving room for upside if current momentum is sustained.</li>
<li>Valuation &amp; risk: Shares trade at a discount to global peers, with re-rating potential contingent on execution and balance sheet discipline.</li>
</ul>


Resonac continues to reshape its portfolio, scaling growth materials while rationalising legacy chemicals and electrodes.
FY2025 guidance appears conservative, particularly on profit, leaving room for upside if current momentum is sustained.
Valuation &amp; risk: Shares trade at a discount to global peers, with re-rating potential contingent on execution and balance sheet discipline.


Resonac Holdings – Strategic Transition and Re-Rating Potential

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

Index Rebalance

<ul>
<li>There are 39 adds/34 deletes for the JPX Nikkei 400 Index to bring the number of index constituents back to 400. There are stocks with multiple days ADV to trade.</li>
<li>Based on the adds, deletes and capping changes, we estimate one way turnover of 6.7% and a round-trip trade of JPY 946bn (US$6.4bn).</li>
<li>The adds have outperformed the deletes over the last year and there has been a move higher in the last few days too.</li>
</ul>


There are 39 adds/34 deletes for the JPX Nikkei 400 Index to bring the number of index constituents back to 400. There are stocks with multiple days ADV to trade.
Based on the adds, deletes and capping changes, we estimate one way turnover of 6.7% and a round-trip trade of JPY 946bn (US$6.4bn).
The adds have outperformed the deletes over the last year and there has been a move higher in the last few days too.


JPX Nikkei 400 Index Rebalance: US$6.4bn Round-Trip Trade Coming Up

Japan

Resonac Holdings Corporation manufactures and distributes chemical products. The Company produces synthetic resins, petrochemical products, inorganics, and other related products. Resonac Holdings also produces ceramics, metals, carbon, electronic materials, and other products.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Resonac Holdings (4004 JP)

Toyoda Gosei (7282 JP): The Current Playbook

The offering will likely be priced on 1 December. The average large Japanese placement tends to generate positive returns.

Arun George

Toyoda Gosei (7282 JP): A US$0.8 Billion Secondary Offering

The offering as a percentage of outstanding shares and ADV is large compared to recent large placements. The likely pricing date is 1 December.

Arun George

Long-Overdue Consolidation in Japanese Chemicals Drives Growth & Mispricing

Consolidation in Japan's chemicals industry leading to fewer companies, higher profitability, and potential for growth in undervalued outliers...

Michael Allen

Resonac Holdings – Strategic Transition and Re-Rating Potential

Resonac is focusing on growth materials, with potential for upside in profit if momentum continues, while trading at a discount to peers with re...

Rahul Jain

JPX Nikkei 400 Index Rebalance: US$6.4bn Round-Trip Trade Coming Up

There are 39 adds/34 deletes for the JPX Nikkei 400 Index resulting in a one-way turnover of 6.7% and a round-trip trade of JPY 946bn (US$6.4bn)....

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Toyoda Gosei (7282 JP): The Current Playbook

The offering will likely be priced on 1 December. The average large Japanese placement tends to generate positive returns.

Arun George

Toyoda Gosei (7282 JP): A US$0.8 Billion Secondary Offering

The offering as a percentage of outstanding shares and ADV is large compared to recent large placements. The likely pricing date is 1 December.

Arun George

Long-Overdue Consolidation in Japanese Chemicals Drives Growth & Mispricing

​Consolidation in Japan's chemicals industry leading to fewer companies, higher profitability, and potential for growth in undervalued outliers...

Michael Allen

Resonac Holdings – Strategic Transition and Re-Rating Potential

​Resonac is focusing on growth materials, with potential for upside in profit if momentum continues, while trading at a discount to peers with re...

Rahul Jain

JPX Nikkei 400 Index Rebalance: US$6.4bn Round-Trip Trade Coming Up

There are 39 adds/34 deletes for the JPX Nikkei 400 Index resulting in a one-way turnover of 6.7% and a round-trip trade of JPY 946bn (US$6.4bn)....

Brian Freitas

Consolidation in Japan's chemicals industry leading to fewer companies, higher profitability, and potential for growth in undervalued outliers...

Resonac is focusing on growth materials, with potential for upside in profit if momentum continues, while trading at a discount to peers with re...