APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC 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>Nomura Trust (the retirement benefit trust account for MUFG) is looking to raise US$132m via selling some shares in <a href="https://www.smartkarma.com/entities/uss-co-ltd" target="_blank" data-smartkarma-citation="entities:19770:1" rel="noopener">USS Co Ltd (4732 JP)</a>.</li>
<li>While the deal appears somewhat well flagged, given that its part of the ongoing cross-shareholding unwind narrative in Japan, the timing of such a selldown isn’t always certain.</li>
<li>In this note, we will talk about the placement and run the deal through our ECM framework.</li>
</ul>


Nomura Trust (the retirement benefit trust account for MUFG) is looking to raise US$132m via selling some shares in USS Co Ltd (4732 JP).
While the deal appears somewhat well flagged, given that its part of the ongoing cross-shareholding unwind narrative in Japan, the timing of such a selldown isn’t always certain.
In this note, we will talk about the placement and run the deal through our ECM framework.


USS Placement - Buyback and Decent Momentum Will Aid Dynamics

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Ubiquitous used car auction house <a href="https://www.smartkarma.com/entities/uss-co-ltd" target="_blank" data-smartkarma-citation="entities:19770:1" rel="noopener">USS Co Ltd (4732 JP)</a> today announced MUFJ Bank's Retirement Benefit Trust account would sell its 3.5% stake in an offering. </li>
<li>Given how much cash the company has and how little cross-holding there is, this seems a bit odd, but they are doing a buyback for half the offer.</li>
<li>Small offer. Low ADV count. Well-liked by numerous foreign active holders. This should get taken easily.</li>
</ul>


Ubiquitous used car auction house USS Co Ltd (4732 JP) today announced MUFJ Bank's Retirement Benefit Trust account would sell its 3.5% stake in an offering. 
Given how much cash the company has and how little cross-holding there is, this seems a bit odd, but they are doing a buyback for half the offer.
Small offer. Low ADV count. Well-liked by numerous foreign active holders. This should get taken easily.


USS (4732 JP) - Small Offering on 'Growth Darling' - Buyback Offsets 50%

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>NextAge has, in just two short years, moved from number 3 to number 1 in the used car market in Japan. </li>
<li>It’s market share is still less than 7% and we no longer see any meaningful obstacle in the company’s path to 30% share within the next 8 years. </li>
<li>The stock underperformed Topix by 59% following a series of earnings misses, but we think all issues have been resolved. Fair value could be 3x the current price.</li>
</ul>


NextAge has, in just two short years, moved from number 3 to number 1 in the used car market in Japan. 
It’s market share is still less than 7% and we no longer see any meaningful obstacle in the company’s path to 30% share within the next 8 years. 
The stock underperformed Topix by 59% following a series of earnings misses, but we think all issues have been resolved. Fair value could be 3x the current price.


NextAge (3186):  Disruptive Business Model at Massive Discount

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

Event-Driven

<ul>
<li>There are a bunch of stocks that have underperformed the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 (NKY INDEX)</a> and their peers and could be deleted from global passive portfolios in May.</li>
<li>The deletion from passive portfolios will lead to a liquidity event at the end of May where passive trackers will need to sell multiple days of ADV.</li>
<li>Shorts have been built up on all the stocks over the last few months and the extent of the positioning varies across stocks.</li>
</ul>


There are a bunch of stocks that have underperformed the Nikkei 225 (NKY INDEX) and their peers and could be deleted from global passive portfolios in May.
The deletion from passive portfolios will lead to a liquidity event at the end of May where passive trackers will need to sell multiple days of ADV.
Shorts have been built up on all the stocks over the last few months and the extent of the positioning varies across stocks.


Japan - Increase in Shorts & Potential Passive Selling in May

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

TSE Tokyo Price Index TOPIX / Technical Analysis

<ul>
<li>The MSCI ACWI index ACWI-US briefly fell below major support at $90.50-$91.50, though we do not consider it a "decisive" breakdown and we now see a false breakdown (bullish).</li>
<li>On MSCI ACWI (local currency), a false breakdown appears to already be in place, which is bullish as long as the index does not break to a new low.</li>
<li>MSCI EM (EEM-US) continues to hold above $36.50-$37 support, while MSCI ACWI ex-US (ACWX-US) and EAFE (EFA-US) remain above supports at $45 and $65-$66, respectively. Pullback is likely over.</li>
</ul>


The MSCI ACWI index ACWI-US briefly fell below major support at $90.50-$91.50, though we do not consider it a "decisive" breakdown and we now see a false breakdown (bullish).
On MSCI ACWI (local currency), a false breakdown appears to already be in place, which is bullish as long as the index does not break to a new low.
MSCI EM (EEM-US) continues to hold above $36.50-$37 support, while MSCI ACWI ex-US (ACWX-US) and EAFE (EFA-US) remain above supports at $45 and $65-$66, respectively. Pullback is likely over.


Japan Bullishly Inflecting; Constructive Outlook Intact; Global Pullback Likely Over

Japan

USS CO LTD manages used car auction facilities throughout  Japan. The Company al so conducts auto auctions through satellites, and provides used car information through internet.

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USS Co Ltd (4732 JP)

USS Placement - Buyback and Decent Momentum Will Aid Dynamics

Nomura Trust (the retirement benefit trust account for MUFG) is looking to raise US$132m via selling some shares in USS Co Ltd (4732 JP).

Clarence Chu

USS (4732 JP) - Small Offering on 'Growth Darling' - Buyback Offsets 50%

USS today announced an equity offering by MUFJ Bank's Retirement Benefit Trust. There aren't that many financial and corporate crossholders. Small...

Travis Lundy

NextAge (3186): Disruptive Business Model at Massive Discount

Couche tard's bid for 7&i was made possible by a combination of a weak yen and an undervalued stock. NextAge is in a similar situation, but unlike...

Michael Allen

Japan - Increase in Shorts & Potential Passive Selling in May

There are a bunch of stocks in Japan that could be sold by passive global investors in May. Shorts have increased on all stocks and the extent of...

Brian Freitas

Japan Bullishly Inflecting; Constructive Outlook Intact; Global Pullback Likely Over

The MSCI $ACWI briefly fell below our $90.50 support but quickly reclaimed, suggesting a false breakdown and the likely end to this pullback in...

Vermilion Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

USS Placement - Buyback and Decent Momentum Will Aid Dynamics

Nomura Trust (the retirement benefit trust account for MUFG) is looking to raise US$132m via selling some shares in USS Co Ltd (4732 JP).

Clarence Chu

USS (4732 JP) - Small Offering on 'Growth Darling' - Buyback Offsets 50%

USS today announced an equity offering by MUFJ Bank's Retirement Benefit Trust. There aren't that many financial and corporate crossholders. Small...

Travis Lundy

NextAge (3186): Disruptive Business Model at Massive Discount

Couche tard's bid for 7&i was made possible by a combination of a weak yen and an undervalued stock. NextAge is in a similar situation, but unlike...

Michael Allen

Japan - Increase in Shorts & Potential Passive Selling in May

There are a bunch of stocks in Japan that could be sold by passive global investors in May. Shorts have increased on all stocks and the extent of...

Brian Freitas

Japan Bullishly Inflecting; Constructive Outlook Intact; Global Pullback Likely Over

​The MSCI $ACWI briefly fell below our $90.50 support but quickly reclaimed, suggesting a false breakdown and the likely end to this pullback in...

Vermilion Research

The MSCI $ACWI briefly fell below our $90.50 support but quickly reclaimed, suggesting a false breakdown and the likely end to this pullback in...