In today’s briefing:
- TRYT IPO: Trading Debut
- Rohm (6963): Investment in Toshiba Rounds Out Long-Term Plans
- Last Week in Event SPACE: Takisawa Machine Tools, Kesei Electric/Oriental, Shenzhen Int’l/Way, HMM
- 2023 High Conviction Update | Polycab: Played Out As Anticipated, Now Time to Exit
TRYT IPO: Trading Debut
- Tryt Inc (9164 JP) priced its IPO at JPY1,200 per share to raise gross proceeds of US$339 million. The shares will start trading on 24 July.
- We previously discussed the IPO in TRYT IPO: The Bull Case, TRYT IPO: The Bear Case, TRYT IPO: Valuation Insights and TRYT IPO: Revised IPO Price Range Remains Unattractive.
- The market sentiment on the sector has broadly remained unchanged since the release of the prospectus. Our analysis suggests that Tryt is, at best, fully priced at the IPO price.
Rohm (6963): Investment in Toshiba Rounds Out Long-Term Plans
- As expected, Rohm has decided to invest ¥300 billion in the JIP-led buyout of Toshiba: ¥100 billion in voting equity shares and ¥200 billion in non-voting preferred shares.
- This would make Toshiba an equity-method affiliate of Rohm, facilitating synergetic cooperation in power semiconductors. The investment is large, but Rohm would still have a sound balance sheet.
- Rohm also plans to buy Solar Frontier’s Kunitomi factory to meet SiC power device capacity requirements through 2030. Investors can now focus on profit growth, which should resume next year.
Last Week in Event SPACE: Takisawa Machine Tools, Kesei Electric/Oriental, Shenzhen Int’l/Way, HMM
- Keisei Electric (9009 JP)‘s valuation has deviated from Oriental Land (4661 JP)‘s since the proposed expansion of Tokyo Disney Sea, Fantasy Springs. That bifurcation should now reverse.
- Don’t expect a serious fight in Nidec (6594 JP)‘s hostile for Takisawa Machine Tool (6121 JP). Fanuc could counter. It is possible others could step up but we wouldn’t know.
- On the back of the news to spin off and list some logistics ops, Shenzhen International (152 HK) is probably a buy on weakness vs Stub Ops Peers.
2023 High Conviction Update | Polycab: Played Out As Anticipated, Now Time to Exit
- We published on Polycab as our 2023 high conviction idea on Dec 25 2022. Since then, the stock has been up 75%+, exceeding our 65%+ upside FY26 target.
- The steep rise was probably driven by strong earnings growth on the back of upbeat demand environment led by healthy domestic capex, rising exports and robust housing demand.
- At the current valuation, Polycab is richly valued and we assign a “SELL” rating. Polycab’s current market cap at INR 68700cr+ is well above our FY26 projection of INR 63500cr+.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
