Equity Capital Markets

Weekly Top Ten Equity Capital Markets – Jun 30, 2024

This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.

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1. Mitsui & Co (8031) – ¥100bn Overnight Equity Offering

By Travis Lundy, Quiddity Advisors

  • Today after the close, Mitsui & Co Ltd (8031 JP) announced that MS&AD Insurance (8725 JP) and Sumitomo Mitsui Financial Group (8316 JP) would sell 14.9mm shares in an offering.
  • This will get priced today or tomorrow, sold to institutional investors. This is ¥107bn, 4 days of ADV and 1% of shares out. It is not dilutive. 
  • Mitsui & Co has a buyback program with ¥123bn left til end-Sep, when presumably it will reload. Looks easy today, but measuring Mitsui & Co vs Peers is less flattering.

2. Big Aisin (7259) Offering Sets Stage for First Toyota Group Full Unwind

By Travis Lundy, Quiddity Advisors

  • Today (27 June 2024) after the close, Aisin (7259 JP) announced three Toyota Group companies (Toyota, Toyota Industries, and Denso) would sell shares in Aisin in a ¥180bn offering.
  • This is ALL of Denso’s holdings, 63% of Toyota Industries stake, and ~12% of Toyota’s stake. Separately, Aisin announced a 17mm share (6.3%) ¥100bn buyback and a 3:1 split Oct1.
  • The recent yuho shows us the progress of Aisin’s promised selldown of crossholdings. There are three large chunks left. One is easy. The climb to capital allocation credibility easier too.

3. Sanil Electric IPO Preview

By Douglas Kim, Douglas Research Advisory

  • Sanil Electric is getting ready to complete its IPO in late July in KOSPI. The IPO price range is from 24,000 won to 30,000 won per share. 
  • The company is planning is raise between 182.4 billion won and 228 billion won in this IPO. The book building for the institutional investors lasts from 9 to 15 July. 
  • Sanil Electric is best known for making special transformers used for special purposes in environments with severe weather changes, such as offshore wind power, solar power, and offshore plants. 

4. Aisin (7259 JP): A US$1.1 Billion Secondary Offering

By Arun George, Global Equity Research Ltd

  • Aisin (7259 JP) has announced a secondary offering of up to 38.9 million shares (including overallotment) and a buyback worth a maximum of JPY100 billion or 17 million shares.
  • Denso Corp (6902 JP), Toyota Industries (6201 JP), and Toyota Motor (7203 JP) are the selling shareholders. The offering aims to reconfigure the company’s shareholder mix and reduce cross-shareholdings.
  • Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 8 and 10 July (likely 8 July).

5. Timee Pre-IPO – The Positives – Exponential Growth Since Inception

By Clarence Chu, Aequitas Research

  • Timee Inc (215A JP) is looking to raise US$290m from its Japan IPO. The IPO will be a 100% secondary selldown by existing shareholders.
  • Timee operates an on-demand staffing platform that connects part-time jobseekers with businesses in Japan.
  • In this note, we will talk about the positive aspects of the deal.

6. Aisin Corp Placement – US$1.1bn Selldown by Toyota and DENSO

By Clarence Chu, Aequitas Research

7. Initial Thoughts on LG Electronics India IPO

By Douglas Kim, Douglas Research Advisory

  • According to local media, LG Electronics is reviewing for a potential IPO of LG Electronics India. LG Electronics has approached JP Morgan and Morgan Stanley to be potential IPO underwriters.
  • If LG Electronics’ Indian subsidiary is listed, it is expected to be able to raise at least $500 million from the stock market.
  • Post IPO, the market value of LG Electronics India is estimated to be between $2.1 billion (3 trillion won) and $4.3 billion (6 trillion won).

8. Hyundai Motor India Pre-IPO – The Positives – Quasi-Local, Riding the SUV Wave

By Sumeet Singh, Aequitas Research

  • Hyundai Motor (005387 KS) is looking to raise around US$3bn via listing its India unit, Hyundai Motor India. HMI is a wholly owned subsidiary of the Hyundai Motor Group.
  • HMI primarily manufactures and sells four-wheeler passenger vehicles and parts. Currently its vehicle portfolio includes 13 passenger vehicle models across sedans, hatchbacks, SUVs and battery EVs.
  • In this note, we talk about the positive aspects of the deal.

9. ECM Weekly (24th June 2024)-Webtoon, Guzman, Black Ses, Johor Plant, Bajaj Housing, Infratil, Mizuho

By Sumeet Singh, Aequitas Research

  • Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
  • On the IPO front, Guzman provided some hope to the Australian market, while Webtoon Entertainment (WBTN US) and Allied Blenders & Distillers will soon test their respective markets.
  • There was no dearth of placement this week, with large deals in Hong Kong, New Zealand and India.

10. Local Capital Market Movements Targeting July Implementation of Block Deal Pre-Disclosure Rule

By Sanghyun Park, Clepsydra Capital

  • The new pre-disclosure rule starting July 24th will reshape business practices. Local institutions are now preparing by launching dedicated block deal funds, targeting 40 to 80 deals annually.
  • No rule bars short-sellers from block deals post-pre-disclosure. Local institutions are planning to exploit this, anticipating sellers favoring club deals under new July rules, potentially stabilizing prices for hedge strategies.
  • Access to club deals will be crucial post-July in Korea’s block deal market. Effective short-selling instruments are also vital with the ban extended until March next year.