In today’s briefing:
- [Japan ECM] Kokusai Elec (6525) Offering – Expect It Very Well Bid, and the Back End Squeezy
- Kokusai Electric (6525 JP): Small Index Impact for Now, but Could Lead to Something Bigger
- Kokusai Electric Placement – Well Flagged but past Deal Didn’t Do Well
- Kokusai Electric (TSE: 6525) – KKR’s Secondary Sale Marks Typical PE Exit
- A Pair Trade Between SM Entertainment (Long) Vs HYBE (Short)
- Samsung 2Q25: It’s Even Worse than the Official Leak
- Meta Just Bought into EssilorLuxottica.
- OneConnect Financial (6638 HK/OCFT US): Precondition Satisfied for a Below Net Cash Offer
- Figma Inc (FIG): Peeking at the Prospectus of the Next Software IPO
- TechChain Insights: Zhen Ding – How Next Generation PCBs/Substrates Will Be Critical for AI Devices
[Japan ECM] Kokusai Elec (6525) Offering – Expect It Very Well Bid, and the Back End Squeezy
- After the close today, Kokusai Electric (6525 JP) announced that large holder (and original PE owner) KKR HKE Investment LP would sell down 30mm shares or 12.88% of shares out.
- This is not expected, but also not unexpected – it’s exactly a year since the first selldown. There is a decent-sized short position, and it isn’t a huge offering.
- This changes two aspects of the future supply/demand balance. Both are important for how this trades in coming months.
Kokusai Electric (6525 JP): Small Index Impact for Now, but Could Lead to Something Bigger
- KKR HKE Investment is offering 30m shares (12.86% of shares out) of Kokusai Electric (6525 JP) in a secondary offering that could raise up to JPY 91bn (US$620m).
- Applied Materials (AMAT US) will become the largest shareholder in Kokusai Electric (6525 JP) after the placement.
- There will not be a lot of buying from passive trackers following the placement, but it could ease the way for inclusion of the stock in the Nikkei 225 Index.
Kokusai Electric Placement – Well Flagged but past Deal Didn’t Do Well
- KKR is looking to raise approximately US$620m through an accelerated secondary offering for around 13% of Kokusai Electric (6525 JP)‘s (KE) stock.
- KKR had sold in the IPO and undertaken an extended selldown in July 2024 as well. Hence, this deal is somewhat well flagged.
- In this note, we will talk about the placement and run the deal through our ECM framework.
Kokusai Electric (TSE: 6525) – KKR’s Secondary Sale Marks Typical PE Exit
- On July 9, 2025, KKR announced it would reduce its stake in Kokusai Electric from ~23.5% to ~10.6% through a ¥90 billion overnight secondary offering.
- KKR’s move reflects a classic private equity monetization strategy following operational improvements and a successful IPO.
- While the sale caused a modest short-term share reaction (~2% dip), such liquidity events rarely impact long-term value—fundamentals remain the key driver for patient investors.
A Pair Trade Between SM Entertainment (Long) Vs HYBE (Short)
- In this insight, we discuss a pair trade between SM Entertainment Co (041510 KS) (long) vs HYBE (352820 KS) (short).
- There is an increasing probability that HYBE’s founder Bang Si-hyuk could face some jail time in which case there could be some vacuum of management leadership at HYBE.
- Despite its recent outperformance, SM Entertainment’s valuation is much more attractive than HYBE (SM is trading at 9.6x EV/EBITDA vs 18.5x for HYBE in 2026).
Samsung 2Q25: It’s Even Worse than the Official Leak
- 1st July the Korean media was “pre-announcing” 2Q25 operating profit to be “weaker than expected”, declining “by more than 15% from the first quarter” to KRW mid-5 trillion range.
- Samsung official announcement is worse: operating profit KRW 4.6tn, down -56% YoY and -31% QoQ. This suggests a lower margins mix (less HBM, higher Foundry losses) and more Opex.
- Last week, Consensus was expecting 2Q OP KRW 6.7tn, now down to 6.1tn. The reported 4.6tn is a nasty miss that implies that Consensus is way too high for 2H25.
Meta Just Bought into EssilorLuxottica.
We won’t be generation heads-down forever. Handsets are impractical as our primary device to interact with information technology.
When we use them, we lose touch to the real world. Headsets are the obvious next step to allow for a more integrated experience.
Meta has been betting on the handset-to-headset transition for more than a decade. And they have been doing so with courage and determination.
OneConnect Financial (6638 HK/OCFT US): Precondition Satisfied for a Below Net Cash Offer
- The precondition for Oneconnect Financial Technology (6638 HK)’s scheme offer from Ping An is satisfied. The offer is HK$2.068 per share (US$7.976 per ADS). The offer price is final.
- Ping An Insurance (H) (2318 HK) is hoping that a dire 1Q25 and letters of support will nudge minorities to accept an offer that values OneConnect below net cash.
- The high minority participation rate and protest votes at the recent AGM are warning signs that the vote is far from a done deal. Tread carefully.
Figma Inc (FIG): Peeking at the Prospectus of the Next Software IPO
- Figma (FIG US) filed for an IPO on the NYSE on July 1st for a debut later this month.
- Their revenue was $749.0 million for the year ended December 31, 2024, representing 48% year-over-year growth.
- Adobe’s acquisition of Figma collapsed in December 2023 after regulatory hurdles paving the way for this IPO.
TechChain Insights: Zhen Ding – How Next Generation PCBs/Substrates Will Be Critical for AI Devices
- Zhen Ding Technology Holding (4958 TT) is leveraging its full-stack PCB and IC substrate portfolio to position itself as a critical enabler of AI hardware across cloud, channel, and edge applications.
- AI-Linked hardware is expected to account for over 70% of Zhen Ding’s revenue in 2025, up sharply from 45% in 2024 and just 8% in 2023.
- Zhen Ding shares remain substantially below their 52-week highs; we see the company well-placed in terms of long-term drivers. Well placed for an upcoming AI robotics boom.
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