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 US$535 million secondary placement announcement, <a href="https://www.smartkarma.com/entities/modec-inc" target="_blank" data-smartkarma-citation="entities:2840:1" rel="noopener">Modec Inc (6269 JP)</a>’s shares are down 15% from the undisturbed price of JPY3,320 per share (14 May).</li>
<li>Looking at recent large Japanese placements is instructive to understand the potential trading pattern. So far, Modec’s shares have followed the pattern of previous large placements.</li>
<li>The offering will likely be priced on 22 May. Investors who have participated in previous large Japanese placements tend to secure positive returns.</li>
</ul>


Since the US$535 million secondary placement announcement, Modec Inc (6269 JP)’s shares are down 15% from the undisturbed price of JPY3,320 per share (14 May).
Looking at recent large Japanese placements is instructive to understand the potential trading pattern. So far, Modec’s shares have followed the pattern of previous large placements.
The offering will likely be priced on 22 May. Investors who have participated in previous large Japanese placements tend to secure positive returns.


<ul>
<li>
<a href="https://www.smartkarma.com/entities/modec-inc" target="_blank" data-smartkarma-citation="entities:2840:1" rel="noopener">Modec Inc (6269 JP)</a> has announced a secondary offering of up to 25.2 million shares (including overallotment). The largest shareholder, <a href="https://www.smartkarma.com/entities/mitsui-e-s-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:2402:1" rel="noopener">Mitsui E&amp;S Holdings (7003 JP)</a>, is the seller.</li>
<li>MODEC's goal with the secondary offering is to reconfigure its shareholder mix to have a diverse base of shareholders who support its long-term strategies and a better tradable share ratio.</li>
<li>Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will likely fall between 22 and 28 May (likely 22 May).</li>
</ul>



Modec Inc (6269 JP) has announced a secondary offering of up to 25.2 million shares (including overallotment). The largest shareholder, Mitsui E&amp;S Holdings (7003 JP), is the seller.
MODEC's goal with the secondary offering is to reconfigure its shareholder mix to have a diverse base of shareholders who support its long-term strategies and a better tradable share ratio.
Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will likely fall between 22 and 28 May (likely 22 May).


MODEC (6296 JP): A US$535 Million Secondary Offering

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/lawson-inc" target="_blank" data-smartkarma-citation="entities:1040:1" rel="noopener">Lawson Inc (2651 JP)</a>'s Tender Offer is still too cheap. It is also a somewhat non-transparent and unfair process. And it does not adhere to the METI Fair M&amp;A Guidelines.</li>
<li>
<a href="https://www.smartkarma.com/entities/samsonite-international-sa" target="_blank" data-smartkarma-citation="entities:12790:1" rel="noopener">Samsonite (1910 HK)</a>'s pursuit of a dual listing (primary or secondary?) appears to be put the buyout on the backburner. For now.</li>
<li>
<a href="https://www.smartkarma.com/entities/socionext-inc" target="_blank" data-smartkarma-citation="entities:36351:1" rel="noopener">Socionext (6526 JP)</a> and <a href="https://www.smartkarma.com/entities/zozo-inc" target="_blank" data-smartkarma-citation="entities:18379:1" rel="noopener">ZOZO Inc (3092 JP)</a> have a large part of the Max Real World Float to displace. Neither of those two names are outlandishly expensive.</li>
</ul>



Lawson Inc (2651 JP)'s Tender Offer is still too cheap. It is also a somewhat non-transparent and unfair process. And it does not adhere to the METI Fair M&amp;A Guidelines.

Samsonite (1910 HK)'s pursuit of a dual listing (primary or secondary?) appears to be put the buyout on the backburner. For now.

Socionext (6526 JP) and ZOZO Inc (3092 JP) have a large part of the Max Real World Float to displace. Neither of those two names are outlandishly expensive.


Last Week in Event SPACE: Lawson, Samsonite, Socionext, ZOZO

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>
<a href="https://www.smartkarma.com/entities/disco-corp" target="_blank" data-smartkarma-citation="entities:15817:1" rel="noopener">DISCO (6146 JP)</a>, <a href="https://www.smartkarma.com/entities/socionext-inc" target="_blank" data-smartkarma-citation="entities:36351:1" rel="noopener">Socionext (6526 JP)</a> and <a href="https://www.smartkarma.com/entities/zozo-inc" target="_blank" data-smartkarma-citation="entities:18379:1" rel="noopener">ZOZO (3092 JP)</a> will replace <a href="https://www.smartkarma.com/entities/takara-holdings-inc" target="_blank" data-smartkarma-citation="entities:11074:1" rel="noopener">Takara Holdings (2531 JP)</a>, <a href="https://www.smartkarma.com/entities/sumitomo-osaka-cement-co-ltd" target="_blank" data-smartkarma-citation="entities:20460:1" rel="noopener">Sumitomo Osaka Cement (5232 JP)</a> and <a href="https://www.smartkarma.com/entities/pacific-metals-co-ltd" target="_blank" data-smartkarma-citation="entities:3439:1" rel="noopener">Pacific Metals (5541 JP)</a> in the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225</a>.</li>
<li>
<a href="https://www.smartkarma.com/entities/nitori-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20386:1" rel="noopener">Nitori Holdings (9843 JP)</a>'s PAF will increase from 0.3 to 0.5, and surprisingly there is no PAF adjustment for <a href="https://www.smartkarma.com/entities/zozo-inc" target="_blank" data-smartkarma-citation="entities:18379:1" rel="noopener">ZOZO Inc (3092 JP)</a>. </li>
<li>Passive trackers need to buy between 1-18 days of ADV on the adds while selling between 2.7-28 days of ADV on the deletes. There is a big funding trade too.</li>
</ul>



DISCO (6146 JP), Socionext (6526 JP) and ZOZO (3092 JP) will replace Takara Holdings (2531 JP), Sumitomo Osaka Cement (5232 JP) and Pacific Metals (5541 JP) in the Nikkei 225.

Nitori Holdings (9843 JP)'s PAF will increase from 0.3 to 0.5, and surprisingly there is no PAF adjustment for ZOZO Inc (3092 JP). 
Passive trackers need to buy between 1-18 days of ADV on the adds while selling between 2.7-28 days of ADV on the deletes. There is a big funding trade too.


Nikkei 225 Index Rebalance: DISCO, Socionext, ZOZO In; PacMetals, Sumitomo Osaka, Takara Holding Out

Travis Lundy

<ul>
<li>
<a href="https://www.smartkarma.com/entities/zozo-inc" target="_blank" data-smartkarma-citation="entities:18379:1" rel="noopener">ZOZO Inc (3092 JP)</a> is +10% since the close after the Nikkei 225 inclusion announcement vs Nikkei225 +2%. Fellow upweight Nitori is up too. Disco and Socionext are up less.</li>
<li>All three inclusions and one upweight see considerable inclusion demand when compared to active holdings. Some more than others. </li>
<li>Some trades here are more interesting than others, still. Cumulative excess volumes are one guide. Fundamentals, and flow dynamics are another.</li>
</ul>



ZOZO Inc (3092 JP) is +10% since the close after the Nikkei 225 inclusion announcement vs Nikkei225 +2%. Fellow upweight Nitori is up too. Disco and Socionext are up less.
All three inclusions and one upweight see considerable inclusion demand when compared to active holdings. Some more than others. 
Some trades here are more interesting than others, still. Cumulative excess volumes are one guide. Fundamentals, and flow dynamics are another.


Mar24 Nikkei 225 Rebal: Zozo (3092) And Other ADDs Update

Japan

Socionext Inc. designs, develops, and provides SoC (system on chip) solutions and services. The Company offers digital broadcast demodulation solution, video interface conversion solution, imaging solution, engine and accelerator solution, industrial connected solution, and more. Socionext serves customers in consumer, automotive, industrial, and other fields.

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Socionext (6526 JP)

MODEC (6296 JP): The Current Playbook

The offering will likely be priced on 22 May. Investors who have participated in previous large Japanese placements tend to secure positive returns.

Arun George

MODEC (6296 JP): A US$535 Million Secondary Offering

Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will likely fall between...

Arun George

Last Week in Event SPACE: Lawson, Samsonite, Socionext, ZOZO

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Nikkei 225 Index Rebalance: DISCO, Socionext, ZOZO In; PacMetals, Sumitomo Osaka, Takara Holding Out

The adds are all up since announcement, led by Zozo. Nitori is up too even though the upweight was knows. Two of the three deletes are lower....

Brian Freitas

Mar24 Nikkei 225 Rebal: Zozo (3092) And Other ADDs Update

The Mar24 N225 rebal has 5 days to run. So far, 3 of 4 stocks ADDed or UPweighted are up vs N225. DELETEs are down. There is a big funding sell....

Travis Lundy

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