In today’s briefing:
- TOPIX Inclusions: Who Is Ready (Mar 2025)
- Austal (ASB AU)’s Placement Puts The Skids On Near-Term M&A
- Austal Placement: Thematically Hot, Relatively Low Valuation
- Japan Steel Works (5631) | Artillery Giant Reloads for Growth
- GiG Works (2375 JP): Q1 FY10/25 flash update
- Grupo Aeroportuario del Pacifi – Actinver Research
TOPIX Inclusions: Who Is Ready (Mar 2025)
- Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
- Recently, IT-solutions company Baudroie (4413 JP) announced a move to the Prime Market. This would result in a TOPIX Inclusion event for the stock at the end of April 2025.
- Separately, the TOPIX Liquidity factor removal event will take place in April 2025 and there could be some positive index flows for Tokyo Metro (9023 JP) during this event.
Austal (ASB AU)’s Placement Puts The Skids On Near-Term M&A
- Taking advantage of a doubling in its share price over the last year, Austal is tapping the market to fund the expansion of its US facilities to fulfil US Navy contracts.
- Austal is placing out 52.6mn new shares (non-underwritten) at A$3.80/share – ~A$200mn all-in – a 15.6% discount to last close, and effectively tapping out its annual placement capacity.
- Provided the placement is squared away, founder John Rothwell will unload $50mn of his own stock. As such, any M&A activity is now firmly on the backburner.
Austal Placement: Thematically Hot, Relatively Low Valuation
- Austal Ltd (ASB AU) is looking to raise US$157m, with US$125m from a primary placement and the remainder, a secondary placement contingent on the primary being fully subscribed.
- The deal will be a large one to digest at 58 days of the stock’s three month ADV, representing 15.3% of its shares outstanding.
- In this note, we will talk about the placement and run the deal through our ECM framework.
Japan Steel Works (5631) | Artillery Giant Reloads for Growth
- Defense Windfall: JSW dominates Japan’s artillery market, set to benefit as defense spending triples, driving a 232% surge in defense sales to 80 billion yen by 2028.
- Strategic Expansion: Exclusive forging capabilities secure JSW’s artillery monopoly, while investments in railguns and next-gen armoured vehicles fuel long-term growth.
- Energy Tailwinds: JSW’s nuclear and offshore wind expertise ensures stable revenue, with reactor restarts and turbine foundations boosting its power segment’s profitability.
GiG Works (2375 JP): Q1 FY10/25 flash update
- GiG Works reported a revenue of JPY5.9bn, an 8.6% YoY decline, with all profit categories turning to losses.
- The On-demand Economy business, accounting for 42% of Q1 revenue, saw a YoY decline in revenue and profit.
- The Sharing Economy business achieved YoY revenue and profit growth, with a 10.8% revenue increase to JPY1.2bn.
Grupo Aeroportuario del Pacifi – Actinver Research
- The Mexican transport sector posted another positive quarterly result.
- The company’s efforts to contain costs, a better tariff environment, and diversified revenues resulted in margin expansions.
- VOLAR reported the most robust expansion in margins, followed by ASUR.
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