Equity Capital Markets

Weekly Top Ten Equity Capital Markets – Mar 3, 2024

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

Receive this weekly newsletter keeping 45k+ investors in the loop

1. Renesas (6723) – YET ANOTHER Clean-Up Block Trade – This Time Mitsubishi Elec

By Travis Lundy, Quiddity Advisors

  • Today after the close, Mitsubishi Electric (6503 JP) announced the sale of its position in Renesas Electronics (6723 JP). That’s 50,706,800 shares.  
  • This is the third large block in four months (Renesas in November for 223mm shares, NEC and Hitachi in January 2024 for 123mm shares).
  • This is smaller, and reasonably well-flagged. Index demand is longer-dated.

2. Toei Animation (4816 JP) – This Offering Could Be Heavy; the NEXT Offering Is More Interesting

By Travis Lundy, Quiddity Advisors

3. Toei Animation (4816 JP): The Current Playbook

By Arun George, Global Equity Research Ltd

  • Since the US$550 million secondary placement announcement, Toei Animation (4816 JP)’s shares are down 7.0% from the undisturbed price of JPY18,560 per share (14 February).
  • Looking at recent large Japanese placements is instructive to understand the potential trading pattern. So far, Toei Animation’s shares have followed the pattern of previous large placements.
  • The offering will likely be priced on 27 February. Investors participating in previous large Japanese placements tend to secure positive returns.

4. Woori Financial Placement – While the Overhang Remains, the Deal Would Be Easily Digested

By Clarence Chu, Aequitas Research

  • IMM PE, via Obis1, is looking to raise US$136m from selling a portion of its stake in Woori Financial Group (316140 KS).
  • While the deal doesn’t look particularly well-flagged, the PE has been invested for quite some time now. 
  • Despite the overhang, the deal is a small one to digest at just 1.7% of total shares outstanding, representing 5 days of the firm’s ADV.

5. Nippon Express (9147) Secondary Offering – Banks, Sompo, Others Sell – “2024 Problem” Looms

By Travis Lundy, Quiddity Advisors

  • Today post-close, Nippon Express Holdings (9147 JP) announced a secondary offering. Total size is ~¥30bn before considering where it will price; 11-12 days of ADV, 4.6% of shares out.
  • Various banks, Toyota-related auto cos, and Sompo Japan will sell. This is a start to the unwind, but it is a very small portion of the total cross-holding position. 
  • NX also announced an on-market  buyback of up to ¥10bn to run from 11April -31July 2024. This, and index demand, mitigate some heaviness. But The 2024 Problem looms large.

6. ECM Weekly (26th Feb 2024) – Trial Holdings, Juniper, Xiaocaiyuan, Union Bank, Orica, Azure

By Sumeet Singh, Aequitas Research

  • Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
  • On the IPO front, we looked at Trial Holdings (5882 JP) refiling and Xiaocaiyuan International Holding .
  • For placements, it was an action packed week in India, again, with Australia joining in as well.

7. Renesas Electronics Block – Smaller than Recent Deals but Still Likely Well Flagged

By Ethan Aw, Aequitas Research

  • Mitsubishi Electric (6503 JP) is looking to raise approximately US$800m through an accelerated secondary block deal, via selling 50.71m shares (2.6% of TSO) of Renesas Electronics (6723 JP) stock. 
  • The deal will be an easy one to digest at only three days of three month ADV.
  • In this note, we will talk about the placement and run the deal through our ECM framework.

8. Tokyo Metro IPO Early Look – Could Raise Around US$2bn While Still Recovering from COVID

By Sumeet Singh, Aequitas Research

  • Tokyo Metro (TKYMETRO JP)’s shareholders, the Japanese and Tokyo Metropolitan Governments, could look to raise up to US$2bn by selling half of their stake via an IPO.
  • Tokyo Metro is one of the two metro network operators in the Tokyo region. It operates nine subway lines.
  • In this note, we take an early look at the possible listing.

9. Trading Strategy of APR on the First Day of IPO

By Douglas Kim

  • In this insight, we discuss a trading strategy for APR (278470 KS) which starts trading on 27 February. APR is the most anticipated IPO in Korea so far in 2024.
  • Our base case (6 months – 1 year) target price of APR is 370,809 won, which is 48% higher than the IPO price. 
  • We recommend investors to take some profits off the table (30%-50%) if the share price shoots higher by 100% to 200%+ from the IPO price on the first day. 

10. MIXUE/ChaPanda/Good Me Pre-IPO – Peer Comparison

By Sumeet Singh, Aequitas Research

  • Mixue Group  is looking to raise about US$1bn in its Hong Kong IPO, while Sichuan Baicha (ChaPanda) and Guming Holdings (Good me) are said to be looking to raise US$300m each.
  • All three are primarily focussed on providing freshly-made drinks, including freshly-made fruit drinks, and tea, with some selling ice cream, coffee, baked goods and ready to drink beverages as well.
  • In this note, we will undertake a peer comparison, including the Hong Kong listed peer, Nayuki Holdings (2150 HK).