Daily Brief Event-Driven: [Japan Event] Sony Financial (8729 JP) Moves On From ToSTNeT-3 Buybacks and more

In today’s briefing:

[Japan Event] Sony Financial (8729 JP) Moves On From ToSTNeT-3 Buybacks, Now In the Market
Sihuan Pharma (460 HK): On Xuanzhu Biopharm’s Imminent Spin-Off
Fermi (FRMI): The Devil Is In The Footnotes, Hidden Risk Triggers

[Japan Event] Sony Financial (8729 JP) Moves On From ToSTNeT-3 Buybacks, Now In the Market

Sony Financial Group (8729 JP) started ToSTNeT-3 buybacks last week and did one this week to jumpstart the buyback, cushioning the Nikkei 225 deletion on 29 Sep and subsequent overhang.
In three ToSTNeT-3 buybacks in 6 trading days spending ¥28.9bn, the company bought back 177.513mm shares or 2.5% of shares out, or about 6.2% of Max Real World Float (MRWF).
With ¥71.1bn left, at last that’s 460mm shares, or 16.2% of MRWF. Over 10mos that is 1.62%/month. That will boost Mar26 DPS, Mar27 DPS projections, EPS, etc.

On the 12th November 2024, Sihuan Pharmaceutical (460 HK) proposed spinning-off the shares of Xuanzhu Biopharm on the main board of Hong Kong.
Xuanzhu Biopharmaceutical‘s prospectus is now out. Shares are priced at HK$11.60/share, backing out a market cap of ~HK$6bn vs. Sihuan Pharma’s HK$17.4bn market cap. Trading commences on the 15th October.
Sihuan Pharma will hold 49.1% post IPO. Its share price is up 189% YTD. Looks frothy. Then again, so does Hong Kong’s IPO market.

Private debt terms signal stress. The primary lender’s 1YR term facility implies a 50%+ IRR via a MOIC option. This is under-covered and signals constrained alternatives.
Calendar precedes cash. Fixed obligations hit before revenue, so equity value is driven by sequencing rather than AI demand narratives.
Underwriting focus. Binding large-scale lease, funded bridge through fuel and logistics, and a credible take-out or refinance of the short-tenor facility.

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