Global Materials | Industrials | Commodities

Rahul Jain

Equity Bottom-Up

<ul>
<li>Q4 FY25 delivered best operational quarter with 27% EBITDA margin and steady 80–85% utilization despite global steel demand weakness.</li>
<li>Expanding graphite electrodes to 100 ktpa, commissioning 20 ktpa anode plant by FY27, and deepening exposure via GrafTech stake.</li>
<li>Base case SOTP implies Rs614/share, valuing core at 8× EV/EBITDA and anode business at 2.5× invested capital.</li>
</ul>


Q4 FY25 delivered best operational quarter with 27% EBITDA margin and steady 80–85% utilization despite global steel demand weakness.
Expanding graphite electrodes to 100 ktpa, commissioning 20 ktpa anode plant by FY27, and deepening exposure via GrafTech stake.
Base case SOTP implies Rs614/share, valuing core at 8× EV/EBITDA and anode business at 2.5× invested capital.


HEG IN – Graphite Leader Expands into Anodes; Capacity Edge and Battery Optionality Key

<ul>
<li>Past Performance: Revenues stable; margins improved due to semiconductor growth, despite weak performance in legacy chemicals and graphite electrodes.</li>
<li>Strategy &amp; Shutdown: Shutting 30% electrode capacity; refocusing on high-margin semiconductor, SiC, and packaging materials with ¥330 bn capex planned by FY25.</li>
<li>Valuation: Trades at 8x EV/EBITDA and 14x P/E FY25E; re-rating possible with higher margins and semiconductor mix.</li>
</ul>


Past Performance: Revenues stable; margins improved due to semiconductor growth, despite weak performance in legacy chemicals and graphite electrodes.
Strategy &amp; Shutdown: Shutting 30% electrode capacity; refocusing on high-margin semiconductor, SiC, and packaging materials with ¥330 bn capex planned by FY25.
Valuation: Trades at 8x EV/EBITDA and 14x P/E FY25E; re-rating possible with higher margins and semiconductor mix.


Resonac Holdings (TSE: 4004) – Strategic Pivot Toward Semiconductor Materials

Technology / Semiconductor / Internet Research

Nicolas Baratte

<ul>
<li>Over past year the price of Silicon Carbide wafers has declined by 50-60%, leading to the bankruptcy of Wolfspeed. The Western media tends to blame Chinese over-capacity and price cuts. </li>
<li>But all SiC firms have massively increased capacity: Infineon, Onsemi, STMicro. The vertical integration of the majors is also to blame: over-investments in a small market (rapidly growing, but small). </li>
<li>Who benefits? Nominally the big integrated vendors Infineon, Onsemi, Rohm, STMicro – but Power SiC is a small fraction of their revenues.</li>
</ul>


Over past year the price of Silicon Carbide wafers has declined by 50-60%, leading to the bankruptcy of Wolfspeed. The Western media tends to blame Chinese over-capacity and price cuts. 
But all SiC firms have massively increased capacity: Infineon, Onsemi, STMicro. The vertical integration of the majors is also to blame: over-investments in a small market (rapidly growing, but small). 
Who benefits? Nominally the big integrated vendors Infineon, Onsemi, Rohm, STMicro – but Power SiC is a small fraction of their revenues.


Automotive Power SiC: The Bankruptcy of Wolfspeed

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/gmo-internet-inc-919fd60b-ad2a-4c5f-b333-167a849b67b0" target="_blank" data-smartkarma-citation="entities:9029:1" rel="noopener">GMO Internet (4784 JP)</a> has announced a secondary offering of 91.7 million shares, worth around US$1.9 billion.</li>
<li>The selling shareholder is <a href="https://www.smartkarma.com/entities/gmo-internet-group-inc" target="_blank" data-smartkarma-citation="entities:13631:1" rel="noopener">GMO Internet Group (9449 JP)</a>. The secondary offering aims to increase the tradable share ratio to satisfy the TSE Prime Market's continued listing criteria.</li>
<li>The offering represents 239.4 days of the 1-year ADV, the highest compared to the recent large Japanese placements. Pricing is likely to be on 5 June.</li>
</ul>



GMO Internet (4784 JP) has announced a secondary offering of 91.7 million shares, worth around US$1.9 billion.
The selling shareholder is GMO Internet Group (9449 JP). The secondary offering aims to increase the tradable share ratio to satisfy the TSE Prime Market's continued listing criteria.
The offering represents 239.4 days of the 1-year ADV, the highest compared to the recent large Japanese placements. Pricing is likely to be on 5 June.


GMO Internet (4784 JP): A Huge US$1.9 Billion Secondary Offering

<ul>
<li>Since the announcement of the US$1.1 billion secondary offering, <a href="https://www.smartkarma.com/entities/suzuki-motor-corp" target="_blank" data-smartkarma-citation="entities:732:1" rel="noopener">Suzuki Motor (7269 JP)</a>’s shares have remained broadly unchanged at the undisturbed price of JPY1570.5 per share (7 April).</li>
<li>It is instructive to look at recent large Japanese placements to understand the potential trading pattern. Suzuki's share performance is the joint best among recent large placements.</li>
<li>However, the shares have underperformed the Nikkei 225 index (up 7.9%). The offering will likely be priced on 14 April. The average large Japanese placement tends to generate positive returns.</li>
</ul>


Since the announcement of the US$1.1 billion secondary offering, Suzuki Motor (7269 JP)’s shares have remained broadly unchanged at the undisturbed price of JPY1570.5 per share (7 April).
It is instructive to look at recent large Japanese placements to understand the potential trading pattern. Suzuki's share performance is the joint best among recent large placements.
However, the shares have underperformed the Nikkei 225 index (up 7.9%). The offering will likely be priced on 14 April. The average large Japanese placement tends to generate positive returns.


Suzuki Motor (7269 JP): The Current Playbook

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.

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Resonac Holdings (4004 JP)

HEG IN – Graphite Leader Expands into Anodes; Capacity Edge and Battery Optionality Key

Strong operational performance in Q4 FY25 with high EBITDA margin and utilization, plans for expansion and deepening exposure driving positive...

Rahul Jain

Resonac Holdings (TSE: 4004) – Strategic Pivot Toward Semiconductor Materials

Article highlights stable revenues and improved margins in semiconductor sector, with plans to shut down electrode capacity and focus on high...

Rahul Jain

Automotive Power SiC: The Bankruptcy of Wolfspeed

The decline in Silicon Carbide wafer price led to bankruptcy of Wolfspeed. Blame placed on Chinese over-capacity but the vertical integration of...

Nicolas Baratte

GMO Internet (4784 JP): A Huge US$1.9 Billion Secondary Offering

The offering is enormous, representing 239.4 days of the 1-year ADV, the highest compared to the recent large Japanese placements. Along with a...

Arun George

Suzuki Motor (7269 JP): The Current Playbook

Suzuki's share performance is the joint best among recent large placements but has underperformed compared to the Nikkei index. The average large...

Arun George

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

HEG IN – Graphite Leader Expands into Anodes; Capacity Edge and Battery Optionality Key

​Strong operational performance in Q4 FY25 with high EBITDA margin and utilization, plans for expansion and deepening exposure driving positive...

Rahul Jain

Resonac Holdings (TSE: 4004) – Strategic Pivot Toward Semiconductor Materials

​Article highlights stable revenues and improved margins in semiconductor sector, with plans to shut down electrode capacity and focus on high...

Rahul Jain

Automotive Power SiC: The Bankruptcy of Wolfspeed

​The decline in Silicon Carbide wafer price led to bankruptcy of Wolfspeed. Blame placed on Chinese over-capacity but the vertical integration of...

Nicolas Baratte

GMO Internet (4784 JP): A Huge US$1.9 Billion Secondary Offering

The offering is enormous, representing 239.4 days of the 1-year ADV, the highest compared to the recent large Japanese placements. Along with a...

Arun George

Suzuki Motor (7269 JP): The Current Playbook

Suzuki's share performance is the joint best among recent large placements but has underperformed compared to the Nikkei index. The average large...

Arun George

Strong operational performance in Q4 FY25 with high EBITDA margin and utilization, plans for expansion and deepening exposure driving positive...

Article highlights stable revenues and improved margins in semiconductor sector, with plans to shut down electrode capacity and focus on high...

The decline in Silicon Carbide wafer price led to bankruptcy of Wolfspeed. Blame placed on Chinese over-capacity but the vertical integration of...