Daily Brief Japan: Japan Post Bank, SBI Sumishin Net Bank, Fuji Oil Holdings, Tokyo Stock Exchange Tokyo Price Index Topix, MonotaRO Co Ltd, Trial Holdings and more

In today’s briefing:

Japan Post Bank (7182 JP): Offering Price Decided; Buyback & Passive Flow Coming Up
Japan Post Bank (7182 JP): JPY1,131 Offer Price; Updated Playbook
SBI Sumishin Net Bank IPO – It Was All Good, till Friday
Fuji Oil: Probably The Last Chance For Itochu to Scoop Up Fuji Oil at a Bargain
What’s Solution for TSE Growth Market, Where IPOs Became the Goal and Lost Growth Due to Burnout?
Monotaro (3064) | Pricing in Downside Risks
Trial Holdings Pre-IPO – The Positives – Steady past Performance with an Expanding Footprint

Japan Post Bank (7182 JP): Offering Price Decided; Buyback & Passive Flow Coming Up

Japan Post Bank (7182 JP) has announced that the offering price has been set at JPY 1131/share, a 2.08% discount to the closing price. Settlement is on 20 March.
The buyback will run from 22 March to 12 May and at last prices will mop up 1.85% of shares outstanding or 4.62% of post-offering float.
In the short-term, we expect buying from Topix (TPX INDEX), MSCI and other global trackers to support the stock price.

Japan Post Bank (7182 JP) priced its offer at JPY1,131, a discount of 2.1% to the last close. JPB’s on-market buyback period runs from 22 March to 12 May.
Japan Post Holdings (6178 JP)/ JPH’s 2021 offering suggests that the share price will have support to trade above the offer price at delivery date and the on-market buyback period.
The offer price’s forward P/B of 0.45x and yield of 4.42% are attractive vs peers. JPB’s price ratio at the offer price is undemanding vs TOPIX Banks ETF and JPH.

SBI Sumishin Net Bank (7163 JP) (SSNB) is looking to raise around US$390m in its second listing attempt.
SBI Sumishin Net Bank is a Japanese digital bank set up as a 50-50 joint venture between Sumitomo Mitsui Trust Bank, Japan’s largest trust bank, and SBI Group.
In this note, we talk about implied valuations in the IPO price range

Having conducted several acquisitions and reinvested most of the operating cashflows into building its overseas business base, Fuji Oil Holdings (2607 JP) seems ready to unleash its earnings potential.
There could be more than a 100% upside to Fuji Oil shares if ROE returns to the historical median of 9% in the next few years.
Therefore, if Itochu Corp (8001 JP) has plans to takeover Fuji-Oil, the current price and the position in the business-cycle present the best opportunity to buy-out Fuji-Oil at a bargain.

Few companies have generally achieved significant growth since listing, and about half of the companies are below their market capitalization at the IPO, which is challenges in TSE Growth Market.
Even if the number of companies subject to such shares is limited, the use of multiple voting shares shouldn’t be ruled out if the dilution of voting rights hinders fundraising.
The key to solving the challenges of TSE Growth Market, where few companies have growth potential and have financing needs, is the ability of management to realize growth potential post-listing.

We reassess our long-term financial model for Monotaro following 2 consecutive months of weak monthly data
Just two months into the new fiscal year, but YTD sales growth of 13% is far short of the full year target
Our DCF valuation highlights further 21% downside assuming 10y CAGR of 10.5%

Trial Holdings (5882 JP)‘s is looking to raise around US$375m in its Japan IPO.
TH operates a network of retail stores that offer one-stop shopping under its everyday low price model, across a variety of daily necessities, food items and other products.
In this note, we will talk about the positive aspects of the deal.

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