Tokyo, Japan
PRONEXUS INC.(TOKYO:7893), Japan's leading financial printing company, takes this opportunity to report on the conditions in the IPO market during the first three quarters of 2007 (January to September 2007).
1. Overview
The number of IPOs during the first three quarters of 2007 declined by 34 companies to 93 for a 27% fall from 127 in the same period last year. During the July to September quarter alone, the number of IPOs fell from 34 in the third quarter of last year to 20, a large 41% year-over-year decline of 14 companies. Furthermore we note that the number of IPOs in the emerging markets during the third quarter fell by 16 companies or 52% year-over-year to 15 companies from 31 that went public in the third quarter of 2006. Reductions in the number of IPOs in the commerce, finance, insurance, and service industries were particularly large, with their number falling by 31 companies to 39 from 70 in same period of the previous year for a decline of 44%. At the same time the average sales of each of the IPO companies in the year before they went public fell by 8% while their average recurring profits grew by 6% year-over-year. Furthermore the average amount of capital raised during the IPO fell by 16% year-over-year to JPY2.67 billion, and the gains in the share price from the subscription to the opening price on the first day of trading fell considerably from the previous year's levels. Many market participants attribute this weaker performance to the stricter screening process implemented by both the securities companies and stock markets, in addition to the general weakening of interest in the emerging markets since the start of the year. As part of the tougher screening process, the Tokyo Stock Exchange announced on September 25 that it would implement new measures as part of the IPO screening process designed to specifically assess the "worthiness" of companies going public.
2. Details
(1) IPOs by Stock Market
We report the number of IPOs during the July to September quarter by stock market below (Numbers in parenthesis represent figures from the previous year).
Main markets: 5 (3), Mothers: 4 (9), JASDAQ: 4 (9), Hercules: 4 (8), Centrex: 0 (2), Ambitious: 1 (2), Q-Board: 2 (1)
During the January to September first three quarters.
Main markets: 11 (21), Mothers: 19 (23), JASDAQ: 36 (42), Hercules: 19 (30), Centrex: 1 (5), Ambitious: 5 (4), Q-Board: 2 (2)
(2) IPOs by Industry
Looking at the number of IPOs by industry during the July to September quarter, the number of IPOs in the manufacturing, real estate and commerce industries were 6, 5, and 4 respectively. During the January to September 2007 period, the number of IPOs in the commerce, finance, insurance and service industries fell from 70 in the previous year to 39. There were no particular changes worth noting amongst the other industries. We report the number of IPOs by industry below (Numbers in parenthesis represent figures from the previous year).
Construction: 1 (1), manufacturing: 23 (24), transportation, communications: 22 (23), commerce: 15 (32), finance, insurance: 4 (8), real estate: 8 (9), service: 20 (30).
(3) Number of Foreign Companies Going Public in Japan
Two foreign companies, ASIA MEDIA Co., Inc. (April) and CHINA BOQI Inc. (August), went public in Japan during the January to September period.
(4) Number of Years from Founding to IPO
The average number of years from founding to IPO for the 93 companies which went public during the January to September period shortened by 9 months to 21.9 years from 22.7 years in the same period last year.
(5) Sales, Recurring Profits of Companies in the Year Before Their IPO
Amongst the 93 companies which went public during the January to September period, the spread between the companies which went public with the largest and smallest sales remained in line with the previous year, with TS Tech Co., Ltd., which went public on the First Section of the Tokyo Stock Exchange, boasting of the largest sales of JPY357.5 billion (Last year JASDAQ listed BIC Camera Inc. had the largest sales of JPY433.2 billion), and UBIC, Inc., which went public on the Mothers market, having the smallest sales of JPY190 million (Last year Ambitious listed ECOMIC Co., Ltd. had the smallest sales of JPYl70 million). The average sales of all companies that went public declined by 8% year-over-year to JPY15.8 billion, down from JPY17.2 billion during the previous year. At the same time the average recurring profits of all companies that went public rose by 6% year-over-year to JPY970 million, up from JPY920 million in the previous year.
(6) Capital Raised During the IPO (Including both New and Existing Shares)
During January to September 2007, the spread between companies raising the largest and smallest amount of capital was large with USJ Co., Ltd. raising JPY29.9 billion with its listing on the Mothers market, and OST Japan Group Inc. raising JPY70 million with its listing on the Ambitious market. Also the average amount of capital raised by the 93 companies that went public during the period declined by 16% year-over-year or JPY520 million to JPY2.67 billion from the JPY3.19 billion for the 127 companies which went public during the same period last year.
(7) Increase from Subscription Price to Opening Price of First Day of Trading
The average increase from the pricing in the subscription to the opening price on the first day of trading for the 93 companies that went public during the January to September period was 41.5%, down from the 89.3% increase recorded during the last year.
Profile of Pronexus
1. Name Pronexus Inc.
2. CEO Morio Ueno, President and Representative Director
3. Address
Atago East Building, 3-16-11 Nishi-Shimbashi, Minato-ku, Tokyo
(Head office: 1-25-7 Toranomon, Minato-ku, Tokyo)
4. Established May 1947
5. Major activities
Creation and printing of corporate disclosure documents and other IR support services. Our main products include IPO documentation, financial reports and other earnings reports, shareholder meeting materials and IR materials including web contents for listed firms, as well as disclosure documents and IR materials for mutual funds, and J-REITs. In addition, the company provides consulting, digitalizing services, information security support, printing and other support services designed to meet the latest legal requirements, with well-organized expertise and unique IT for a variety of customers' disclosure and IR activities.
-- Our company also provides IPO support services for foreign companies in Japan.
Example: We helped ASIA MEDIA Co., Inc. and CHINA BOQI Inc. to
list in Japan
6. URL: http://www.pronexus.co.jp/
Source: Business Wire (Business Wire India)