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/k-bank-co-ltd" target="_blank" data-smartkarma-citation="entities:36073:1" rel="noopener">K Bank (279570 KS)</a> is a Korean internet bank. It has launched an IPO to raise up to US$734 million.</li>
<li>We previously discussed the IPO in <a href="https://www.smartkarma.com/insights/k-bank-ipo-the-bear-case" target="_blank" data-smartkarma-citation="insights:160037" rel="noopener">K Bank IPO: The Bear Case</a> and <a href="https://www.smartkarma.com/insights/k-bank-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:159133" rel="noopener">K Bank IPO: The Bull Case</a>. 
</li>
<li>We examine the syndicate's valuation methodology. Our analysis suggests that K Bank is unattractively valued in the IPO price range. We would pass on the IPO.</li>
</ul>



K Bank (279570 KS) is a Korean internet bank. It has launched an IPO to raise up to US$734 million.
We previously discussed the IPO in K Bank IPO: The Bear Case and K Bank IPO: The Bull Case. 

We examine the syndicate's valuation methodology. Our analysis suggests that K Bank is unattractively valued in the IPO price range. We would pass on the IPO.


Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>On Friday 13 September, the Ministry of Finance of Japan released revisions to the list (<a href="https://www.mof.go.jp/policy/international_policy/gaitame_kawase/press_release/20240913.html" target="_blank" rel="noopener">Japanese</a>, <a href="https://www.mof.go.jp/english/policy/international_policy/fdi/Related_Guidance_and_Documents/20240913.html" target="_blank" rel="noopener">English</a>) of company classifications under the Foreign Exchange and Foreign Trade Act (FEFTA)</li>
<li>It appears 72 names were newly upgraded to "Core" ("3"), 21 newly listed companies (since the last list in Nov 2021) were labeled "3", and six lost their Type3 designation. </li>
<li>
<a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a> saw breathless news articles Friday suggesting a foreign takeover became more difficult. Not really. </li>
</ul>


On Friday 13 September, the Ministry of Finance of Japan released revisions to the list (Japanese, English) of company classifications under the Foreign Exchange and Foreign Trade Act (FEFTA)
It appears 72 names were newly upgraded to "Core" ("3"), 21 newly listed companies (since the last list in Nov 2021) were labeled "3", and six lost their Type3 designation. 

Seven &amp; I Holdings (3382 JP) saw breathless news articles Friday suggesting a foreign takeover became more difficult. Not really. 


The New FEFTA List (With 7&I (3382) As "Core") Is Not a Big Hurdle for Couche-Tard

<ul>
<li>On 30 August, 7&amp;i shareholder Artisan Partners (holder since 2019, now at 1%) wrote an <a href="https://www.morningstar.com/news/globe-newswire/9223425/artisan-partners-international-value-team-sends-letter-to-the-board-of-seven-i" target="_blank" rel="noopener">open letter to the Board of Directors</a> of <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a> </li>
<li>There are several comments in bold. "It is imperative that the board of directors negotiate with ACT immediately to achieve the best possible outcome for shareholders" is one.</li>
<li>The letter is a bit preachy, a bit fluffy, and a bit misleading in parts. But it requests the Company brief shareholders on the negotiations by 19 September 2024. </li>
</ul>


On 30 August, 7&amp;i shareholder Artisan Partners (holder since 2019, now at 1%) wrote an open letter to the Board of Directors of Seven &amp; I Holdings (3382 JP) 
There are several comments in bold. "It is imperative that the board of directors negotiate with ACT immediately to achieve the best possible outcome for shareholders" is one.
The letter is a bit preachy, a bit fluffy, and a bit misleading in parts. But it requests the Company brief shareholders on the negotiations by 19 September 2024. 


Artisan Partners Writes a Letter To the 7&I Board (3382) - Meh...

<ul>
<li>The largest potential inbound cross-border M&amp;A in years - for a national champion no less - gets a lot of press coverage. </li>
<li>This morning, a Nikkei <a href="https://asia.nikkei.com/Business/Business-deals/Seven-i-s-proposed-buyout-to-require-preapproval-by-Japan" target="_blank" rel="noopener">article</a> noted <a href="https://www.smartkarma.com/entities/alimentation-couche-tard-inc" target="_blank" data-smartkarma-citation="entities:25103:1" rel="noopener">Alimentation Couche-Tard (ATD CN)</a> was likely to need "prior approval" from Japanese regulatory authorities for its takeover "the Nikkei has learned."</li>
<li>It wasn't difficult for the Nikkei to learn that. METI publishes a FEFTA List. 7&amp;i has been on it for years as Type II Designated Business, requiring prior approval.</li>
</ul>


The largest potential inbound cross-border M&amp;A in years - for a national champion no less - gets a lot of press coverage. 
This morning, a Nikkei article noted Alimentation Couche-Tard (ATD CN) was likely to need "prior approval" from Japanese regulatory authorities for its takeover "the Nikkei has learned."
It wasn't difficult for the Nikkei to learn that. METI publishes a FEFTA List. 7&amp;i has been on it for years as Type II Designated Business, requiring prior approval.


Couche-Tard Bid for 7&I (3382) - FEFTA and Economic Security

Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

<ul>
<li>Rakuten Bank, in its present form, is positioned to benefit from rising interest rates in Japan, with its low LDR, high cash balances, growing loan book and healthy capital ratio</li>
<li>The proposed FinTech reorganization of the group around the bank should drive further potential shareholder benefits; higher ROE, lower customer acquisition costs, increased active account penetration and lower operating costs</li>
<li>We believe that there will be effective governance checks and balances in place to ensure fair valuations of the FinTech segments pre-reorganization; we include our base valuations in this report</li>
</ul>


Rakuten Bank, in its present form, is positioned to benefit from rising interest rates in Japan, with its low LDR, high cash balances, growing loan book and healthy capital ratio
The proposed FinTech reorganization of the group around the bank should drive further potential shareholder benefits; higher ROE, lower customer acquisition costs, increased active account penetration and lower operating costs
We believe that there will be effective governance checks and balances in place to ensure fair valuations of the FinTech segments pre-reorganization; we include our base valuations in this report


Rakuten Bank (5838 JP) – The Bank in Current Form and the Promise of FinTech Reorganization

Japan

Seven Bank, Ltd. provides banking services mainly through Automated Teller Machine (ATM) across Japan. The bank cooperates with affiliated financial institutions to establish the nationwide ATM network and provide remote banking services, including deposits and loans.

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

Seven Bank Ltd (8410 JP)

K Bank IPO: Valuation Insights

We examine the syndicate's valuation methodology. Our analysis suggests that K Bank is unattractively valued in the IPO price range. We would pass...

Arun George

The New FEFTA List (With 7&I (3382) As "Core") Is Not a Big Hurdle for Couche-Tard

The Japan Ministry of Finance made an updated FEFTA classification list on Friday. 7 and i got "upgraded" to Type 3 as Core. That doesn't change...

Travis Lundy

Artisan Partners Writes a Letter To the 7&I Board (3382) - Meh...

The Artisan Partners Int'l Value Strategy team owns 1% of 7ni. They wrote a public letter saying the Board should engage with ACT. It is bland,...

Travis Lundy

Couche-Tard Bid for 7&I (3382) - FEFTA and Economic Security

The ATD bid for 7&i is subject to Prior Notification under FEFTA. This is not news, or special. It is and was known. But I expect that price is far...

Travis Lundy

Rakuten Bank (5838 JP) – The Bank in Current Form and the Promise of FinTech Reorganization

Rakuten Bank is set to benefit from rising interest rates in Japan, with potential shareholder benefits from proposed FinTech reorganization; we...

Victor Galliano

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

K Bank IPO: Valuation Insights

We examine the syndicate's valuation methodology. Our analysis suggests that K Bank is unattractively valued in the IPO price range. We would pass...

Arun George

The New FEFTA List (With 7&I (3382) As "Core") Is Not a Big Hurdle for Couche-Tard

The Japan Ministry of Finance made an updated FEFTA classification list on Friday. 7 and i got "upgraded" to Type 3 as Core. That doesn't change...

Travis Lundy

Artisan Partners Writes a Letter To the 7&I Board (3382) - Meh...

The Artisan Partners Int'l Value Strategy team owns 1% of 7ni. They wrote a public letter saying the Board should engage with ACT. It is bland,...

Travis Lundy

Couche-Tard Bid for 7&I (3382) - FEFTA and Economic Security

The ATD bid for 7&i is subject to Prior Notification under FEFTA. This is not news, or special. It is and was known. But I expect that price is far...

Travis Lundy

Rakuten Bank (5838 JP) – The Bank in Current Form and the Promise of FinTech Reorganization

​Rakuten Bank is set to benefit from rising interest rates in Japan, with potential shareholder benefits from proposed FinTech reorganization; we...

Victor Galliano

Rakuten Bank is set to benefit from rising interest rates in Japan, with potential shareholder benefits from proposed FinTech reorganization; we...