Telco/Internet specialist

Kirk Boodry

Redex Research

Thematic (Sector/Industry)

KDDI's new pricing is the closest that Japan has come to a pre-pay service since Vodafone bought Japan Telecom in 2001 whilst its Starlink announcement gives all four mobile operators a satellite option.

KDDI's new pricing is the closest that Japan has come to a pre-pay service since Vodafone bought Japan Telecom in 2001 whilst its Starlink announcement gives all four mobile operators a satellite option.

Japan Telecom Sector - Read Across from KDDI’s Pricing and Starlink Announcements

The telecom sector seems like a notable winner with a change in political leadership.  Pushing through mobile price reductions was one of the few policy successes for the Suga administration and record low approval ratings meant a revival of the issues was never entirely off the table. New leadership without historical ties to the regulator is an improvement. We remain positive on Japanese telecoms with Buy ratings for NTT, KDDI and Softbank.

The telecom sector seems like a notable winner with a change in political leadership.  Pushing through mobile price reductions was one of the few policy successes for the Suga administration and record low approval ratings meant a revival of the issues was never entirely off the table. New leadership without historical ties to the regulator is an improvement. We remain positive on Japanese telecoms with Buy ratings for NTT, KDDI and Softbank.   

Japan Telecoms - Surprise Resignation of the Prime Minister Should Ease Regulatory Pressure

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<ul>
<li>
<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> and <a href="https://www.smartkarma.com/entities/daimler-truck-holding-ag" target="_blank" data-smartkarma-citation="entities:35551:1" rel="noopener">Daimler Truck Holding (DTG GR)</a> (DT) are looking to raise up to US$1.7bn via selling around 35% of their stake in <a href="https://www.smartkarma.com/entities/archion-corporation" target="_blank" data-smartkarma-citation="entities:47577:1" rel="noopener">Archion (543A JP)</a>.</li>
<li>The news of the possible deal had been leaked ahead of the actual launch, although the overall selldown was very well flagged.</li>
<li>We have looked at most aspects of the deal in our earlier notes. In this note, we talk about the recent share price performance and provide our thoughts on valuations.</li>
</ul>



Toyota Motor (7203 JP) and Daimler Truck Holding (DTG GR) (DT) are looking to raise up to US$1.7bn via selling around 35% of their stake in Archion (543A JP).
The news of the possible deal had been leaked ahead of the actual launch, although the overall selldown was very well flagged.
We have looked at most aspects of the deal in our earlier notes. In this note, we talk about the recent share price performance and provide our thoughts on valuations.


Aequitas: Archion Placement - Past Large Deals Performance and Thoughts on Valuations

Alpha-Centric ESG Research

Kyle Rudden

Better late than never, as they say.Typically, I publish pre-IPO ESG assessments well before book building). This pre-IPO ESG report on <a href="https://www.smartkarma.com/entities/full-truck-alliance" target="_blank" data-smartkarma-citation="entities:33429:1" rel="noopener">Full Truck Alliance (YMM US)</a>, aka Manbang, aka the "Uber for trucks," is admittedly a tad late in the IPO process – given that shares are expected to be trading in one day from now.Nevertheless, there are some important ESG issues to contemplate. Nothing that will alter the IPO, of course. And there really aren't all that many highly-material ESG issues for FTA. However, there are one or two big ones – the sort that could crush a technology stock just out of the IPO gate.For this Insight, I changed my modus operandi. Instead of addressing every conceivable ESG issue, I focus on the two most material issues for each ESG pillar. The ultra-condensed version is as follows (in decreasing order of materiality hence the Social, Governance, Environmental sequence):<ul>
<li>
Social: Nothing else matters in terms of acute investment risk. To be clear, FTA seems on top of things vis-à-vis cyber-risk management. There are no specific concerns. But one data breach, or one ransomware attack. That's all it takes to decimate any newly-listed technology company.</li>
<li>
Governance: They pale in comparison to Social-pillar cyber-risks, but two material Governance issues are: 1) disproportionate ownership and voting control (nothing new for tech, but an ESG hot-button), and 2) regulatory risk and uncertainty, mainly regarding China's antitrust stance.</li>
<li>
Environmental: Environmental issues just don't matter that much from a financial-materiality viewpoint. As a technology firm, FTA's direct climate footprint is negligible. Longer-term it must address its indirect footprint (emissions from third-party activities enabled by its platform).</li>
</ul>

Better late than never, as they say.Typically, I publish pre-IPO ESG assessments well before book building). This pre-IPO ESG report on Full Truck Alliance (YMM US), aka Manbang, aka the "Uber for trucks," is admittedly a tad late in the IPO process – given that shares are expected to be trading in one day from now.Nevertheless, there are some important ESG issues to contemplate. Nothing that will alter the IPO, of course. And there really aren't all that many highly-material ESG issues for FTA. However, there are one or two big ones – the sort that could crush a technology stock just out of the IPO gate.For this Insight, I changed my modus operandi. Instead of addressing every conceivable ESG issue, I focus on the two most material issues for each ESG pillar. The ultra-condensed version is as follows (in decreasing order of materiality hence the Social, Governance, Environmental sequence):

Social: Nothing else matters in terms of acute investment risk. To be clear, FTA seems on top of things vis-à-vis cyber-risk management. There are no specific concerns. But one data breach, or one ransomware attack. That's all it takes to decimate any newly-listed technology company.

Governance: They pale in comparison to Social-pillar cyber-risks, but two material Governance issues are: 1) disproportionate ownership and voting control (nothing new for tech, but an ESG hot-button), and 2) regulatory risk and uncertainty, mainly regarding China's antitrust stance.

Environmental: Environmental issues just don't matter that much from a financial-materiality viewpoint. As a technology firm, FTA's direct climate footprint is negligible. Longer-term it must address its indirect footprint (emissions from third-party activities enabled by its platform).


Pre-IPO ESG Analysis of Full Truck Alliance: Strong ESG Profile... But With One Potential Landmine

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

On Friday 11 June, the TSE published its final revisions to the Corporate Governance Code which had been undergoing review by the Council of Experts Concerning the Follow-up of Japan’s Stewardship Code and Japan’s Corporate Governance Code and subsequently comment for the past many months. The new Code went into effect as of 11 June. The first revision to the Guidelines for Investor and Company Engagement were published as well. The new version of Japan's Corporate Governance Code is <a href="https://www.jpx.co.jp/english/news/1020/b5b4pj0000046kxj-att/b5b4pj0000046l07.pdf" target="_blank" rel="noopener">here</a> with the tracked change version <a href="https://www.jpx.co.jp/english/news/1020/b5b4pj0000046kxj-att/b5b4pj0000046l0c.pdf" target="_blank" rel="noopener">here</a>. This is the second revision of the Code (the first revision was in 2018).The revisions to the JFSA Guidelines for Investor and Company Engagement are <a href="https://www.jpx.co.jp/english/news/1020/b5b4pj0000046kxj-att/b5b4pj0000046l3e.pdf" target="_blank" rel="noopener">here</a>. Tracked changes are <a href="https://www.jpx.co.jp/english/news/1020/b5b4pj0000046kxj-att/b5b4pj0000046l50.pdf" target="_blank" rel="noopener">here</a>.The major changes to the Code recommend enhancements to Board independence, diversity, Sustainability and ESG, and also recommend improvements to investor accessibility and voting and a small change to listed parent-listed subsidiary relationships which unfortunately will not do much to counter abuse by companies of listed sub minority shareholders. Below is more discussion of the changes and what they mean.But I remind investors, these changes are almost all box-ticking exercises. They will not improve governance for shareholders except at the margins. Companies which "get" good governance are still rare. And those which don't get it seem to abuse shareholders on a regular basis. And for that, investors still need more cowbell.

On Friday 11 June, the TSE published its final revisions to the Corporate Governance Code which had been undergoing review by the Council of Experts Concerning the Follow-up of Japan’s Stewardship Code and Japan’s Corporate Governance Code and subsequently comment for the past many months. The new Code went into effect as of 11 June. The first revision to the Guidelines for Investor and Company Engagement were published as well. The new version of Japan's Corporate Governance Code is here with the tracked change version here. This is the second revision of the Code (the first revision was in 2018).The revisions to the JFSA Guidelines for Investor and Company Engagement are here. Tracked changes are here.The major changes to the Code recommend enhancements to Board independence, diversity, Sustainability and ESG, and also recommend improvements to investor accessibility and voting and a small change to listed parent-listed subsidiary relationships which unfortunately will not do much to counter abuse by companies of listed sub minority shareholders. Below is more discussion of the changes and what they mean.But I remind investors, these changes are almost all box-ticking exercises. They will not improve governance for shareholders except at the margins. Companies which "get" good governance are still rare. And those which don't get it seem to abuse shareholders on a regular basis. And for that, investors still need more cowbell.

TSE Prime: Japan's Corporate Governance Code Finalized So Boxes Will Be Furiously Ticked

Japan

Softbank Corporation provides mobile phone telecommunication and networking services. The Company offers mobile communication opening, short messaging function opening, video function opening, and other services. Softbank also provides mobile phones.

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

Softbank Corp (9434 JP)

Japan Telecom Sector - Read Across from KDDI’s Pricing and Starlink Announcements

KDDI's new pricing is the closest Japan has come to a pre-pay service since Vodafone bought Japan Telecom in 2001 whilst its Starlink announcement...

Kirk Boodry

Japan Telecoms - Surprise Resignation of the Prime Minister Should Ease Regulatory Pressure

The telecom sector wins with political change. Mobile price cuts were one of the few policy successes for this PM and record low approval meant a...

Kirk Boodry

Aequitas: Archion Placement - Past Large Deals Performance and Thoughts on Valuations

Toyota Motor (7203 JP) and Daimler Truck Holding (DTG GR) are looking to raise up to US$1.7bn via selling some of their stake in Archion (543A JP)....

Sumeet Singh

Pre-IPO ESG Analysis of Full Truck Alliance: Strong ESG Profile... But With One Potential Landmine

There aren't many highly material ESG issues for FTA. But quantity is irrelevant when there is one big ESG issue with the potential to crush any...

Kyle Rudden

TSE Prime: Japan's Corporate Governance Code Finalized So Boxes Will Be Furiously Ticked

The TSE on Friday announced the revisions to the Governance Code. This codifies the "governance thresholds" required to join TSE Prime next year....

Travis Lundy

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)