Chapter 314 Listing Plan
Hearing Shirakawa Kaede's answer, Watanabe Ichiro nodded. He took a document from the assistant beside him and handed it to him.
“For listing on the Tokyo Stock Exchange’s first section, the requirement is to have at least 2,000 shareholders and at least 20,000 shares in circulation.
The market value of tradable shares is 2 billion yen or more, and the tradable share ratio is 35% or more.
The company's total market value is more than 50 billion yen and it has been in continuous operation for more than 3 years.
Net assets: more than 2 billion yen, total profit: more than 1 billion yen in the past two fiscal years.
Of course, if the total profit is not reached, the total market value can exceed 100 billion yen or the sales volume can reach 25 billion yen.
But there is no doubt that Shirakawa Electric meets all the above conditions. "
This is why Shirakawa Kaede is confident that he wants Shirakawa Electric to be listed on the first section of the Tokyo Stock Exchange in one step.
Even if the company is listed on the second section of the Tokyo Stock Exchange now, it can be transferred to the first section later.
However, not only has its status dropped, but the market liquidity of the second section of the Tokyo Stock Exchange is also relatively poor.
Low stock market activity has a significant impact on a company’s market value.
Especially for new companies, it is almost impossible for stock prices to skyrocket.
As vested interests, the wealth growth of Baichuan Feng and others is also limited.
But this situation does not exist in the first section of the Tokyo Stock Exchange. After all, more than 96% of the total market value of all Japan's listed companies is here.
With such a large scale, there is naturally no shortage of transactions.
In the impression of later generations, even though Neon is one of the largest economies in the world, its stock market seems to have had little presence.
This is indeed the case. In the 1920s after the millennium, many Japanese people were able to keep the stock certificates they bought for twenty or thirty years.
This is almost equivalent to treating stocks as retirement products for financial management. It is really rare for someone to play with the stock market like this during their daily life.
But in the final analysis, the long-term sluggish stock market activity is actually due to the aftermath of the bubble burst.
But it was only the early 1980s, and Japan's economy was booming.
Especially since the 1970s, the Ministry of Finance has encouraged companies to issue bonds, stocks and other securities and relaxed issuance standards.
This provided a policy basis for the active stock market, and capital accounts also began to gradually open up to the outside world.
Relax the amount of yen that foreign residents can exchange and remove restrictions on the amount of Japanese securities that foreign residents can purchase.
Implement liberalization of foreign resident investment trusts and allow general investors to freely purchase foreign securities.
These measures have greatly stimulated the prosperity of the capital market and the stock market.
However, the landmark event in Japan's liberalization of capital was in December 1980, when the government comprehensively revised the Foreign Exchange Law.
The law stipulates that foreign exchange controls will be abolished in principle and free convertibility will be achieved under the capital account.
Stimulated by various policies, not only are Japanese citizens keen on the stock market, but it has also attracted a lot of international capital to enter Japan's financial market.
Therefore, the current Japanese stock market has shown signs of initial prosperity.
In the current environment, Shirakawa Electric has no need to worry about no one paying attention to its stocks.
When professional stock investors and professional investment institutions see a new company go public, they swarm in like sharks smelling blood.
Needless to say, the first section of the Tokyo Stock Exchange is definitely the best choice for Shirakawa Electric to go public.
According to the information just submitted by Shirakawa Electric, both Dai-ichi Kangyo Bank and Nomura Securities are confident about the final outcome of its listing.
Because of the size of Shirakawa Electric, it far exceeds the listing requirements of the Tokyo Stock Exchange's first section.
Regarding the listed sector, all parties present had no objection, and Ichiro Watanabe confirmed the next detail again.
"So what do you think about the tradable shares? What is the specific share ratio?"
"About 35 %." Without much thought, Yu Arai gave the answer.
This is the minimum circulating share required by the first section of the Tokyo Stock Exchange. It cannot be any more. If it is more, Shirakawa Holdings may not be able to have absolute control over Shirakawa Electric.
If it was 25% of the second section of the Tokyo Stock Exchange, Shirakawa Kaede would definitely choose the lowest share.
Dai-ichi Kangyo Bank and Nomura Securities were not surprised by his answer.
This is the choice of most newly listed companies, and it is still necessary to retain absolute controlling rights at this time.
A young company can only consolidate its foundation and achieve sustainable development by maintaining its operational independence.
"If it is 35%..." Watanabe Ichiro took out a pen and wrote, "Shirakawa Holdings still holds 77% * (1-35%) = 50.05% of the shares.
Similarly, Dai-ichi Kangyo Bank was diluted to 6.5%, Nomura Securities was diluted to 5.2%, and Kitato Bank was diluted to 3.25%.
This number is very interesting. Ichiro Watanabe raised his eyebrows when he looked at the data on the paper.
It seems that Shirakawa Holdings only has 50.05% left, which is a little short of the absolute controlling stake of 51%.
But don’t forget who owns Kitato Bank. If necessary, 50.05% + 3.25% will be 53%.
Although the method has changed, it still has absolute control.
I guess this is another work of Arai-san, and the purpose of doing this is to conceal his tracks.
At the same time, it can greatly stimulate the development of Kitato Bank. It seems that Mr. Shirakawa has high hopes for Kitato Bank and he did not forget to give it a helping hand at this time.
Although he was muttering in his heart, Ichiro Watanabe did not stop calculating.
"The total equity is 586.5 billion yen, and 35% of that is 205.2 billion yen."
Ichiro Watanabe put down his pen, his eyes flashing with the light of money.
There is no doubt that this is a huge sum of money, much more than the money they used to acquire Shirakawa Electric shares.
But this is financing funds and cannot be moved casually. It will be used for the future development of Shirakawa Electric.
But it doesn’t matter, Dai-ichi Kangyo Bank has plenty of ways to make money with them.
“The circulating market value of 205.2 billion is a huge financing plan, so the corresponding value of each stock should be carefully considered.
Based on past experience and the performance of similar companies in the stock market, we recommend that the share price should be within 1,000 yen per share. "
Soon, based on the market capitalization, Ichiro Watanabe immediately gave suggestions on single stock pricing.
This pricing was determined based on the comparison method, and at that time the value of a single share of Sony was approximately 1,500 yen.
The price of a single share of Panasonic is 1,600 yen, and the share prices of other companies such as Sanyo and Pioneer are also around 1,200 to 1,300 yen.
These are the stock prices of companies whose businesses are quite similar to Shirakawa Electric. Their individual stock pricing serves as a reference for Shirakawa Electric to a certain extent.
As a newly listed company, it is reasonable for Shirakawa Electric to be lower than theirs. This will help attract investment from shareholders and invigorate the stock market.
As for the pricing of other similar companies, some of them are not of reference value.
For example, Nintendo's current share price is 149 yen...
It is a complete disgrace to the electronics industry and has absolutely no reference value.
This is also the reason why Shirakawa Electric did not refer to it in its previous valuation. After all, it is the huge debt that dragged down its market value.
However, there are low and high prices, such as Sharp and Fujitsu, whose single share prices are as high as more than 10,000 yen per share.
Why? Because Japan was undergoing a home appliance revolution at that time, with larger televisions, more advanced refrigerators, air conditioners, etc. being replaced.
As companies mainly engaged in home appliance business, Sharp and Fujitsu have seen the most significant business growth.
From the 1970s to the 1980s, the market value of these two companies increased five or six times in 10 years, which is higher than the current market value of Sony and Panasonic.
This is a doubling of the market value after listing, not a doubling of the valuation at the initial listing, which shows how fierce their business expansion is.
Although Sony also has a home appliance business, the only business it can sustain is televisions.
For refrigerators, washing machines, and air conditioners, you still have to look to Sharp and Fujitsu.
However, because their stock prices are over-invested, they are not of reference value for Shirakawa Electric.
Around 1,000 yen is the most suitable range for the new issue price of Shirakawa Electric.
In response to Dai-ichi Kangyo Bank's suggestion, Shirakawa Kaede lowered his head and communicated with Arai Yu and agreed to this pricing.
The other party is a professional organization and also a shareholder of Shirakawa Electric. Shirakawa Feng trusts their judgment.
Seeing that Shirakawa Kaede and the others had no objections, Watanabe Ichiro started calculating again.
"With 1,000 yen as the dividing line, the issue price can be slightly lower in order to stimulate investors' enthusiasm for investment.
If the price is 700 yen per share, then the market value of 205.2 billion will correspond to 293 million shares. "
Not bad, Watanabe Ichiro put down his pen and nodded with satisfaction. The stock price is reasonable, and the number of shares issued is also reasonable.
If the price is set too high, it may fall below the issue price. If the price is set too low, investors may mistakenly believe that Shirakawa Electric has no confidence in its business operations.
700 is a very appropriate number. I believe that after they see the financial report released by Shirakawa Electric, they will be very tempted by such pricing.
As the saying goes, action is worse than thought. If there is action, there will be transactions, then the stock market will become active, right?
As for the number of stocks issued, that is even less of a problem.
Many companies issue hundreds of millions of shares when they first go public, and Sony's outstanding shares at that time amounted to more than 1 billion shares.
Shirakawa Electric issued less than 300 million shares, which is definitely a drizzle.
Shirakawa Kaede and the people from Nomura Securities looked at Watanabe Ichiro's plan and nodded in approval.
The determination of data in this way is very professional and scientific, and not just something that is thought up arbitrarily.
This is also the reason why companies need to seek professional institutions when going public.
Everyone has their own expertise, and having their help will save you a lot of trouble.
"Since everyone has no objection, let's talk about the underwriting of tradable shares."
When it comes to this topic, whether it is Ichiro Watanabe, the host of the meeting, Takashi Yanagidani of Nomura Securities, or Hiroshi Arai of Kitato Bank, their eyes light up.
Why? Because this was the first round of returns from their investment in Shirakawa Electric's IPO.
When a company goes public and raises funds, it needs to issue stocks to obtain the funds needed for development.
So how do these stocks flow into the primary trading market?
Well, the people present here are the stock issuance windows.
Whether it is Dai-ichi Kangyo Bank, Nomura Securities, or even the newly established Hokuto Bank, they all have subsidiaries that operate securities businesses under their umbrella.
That’s right, Kitato Bank just established Kitato Securities this year, isn’t it for the day when Shirakawa Electric goes public?
Why did Shirakawa Kaede let Kitato Bank participate in the listing financing of Shirakawa Electric? Investment was one of the purposes.
One of the goals is to let Kitato Securities serve as the stock underwriter of Shirakawa Electric. This is a great opportunity for Kitato Bank to participate in the stock market and bond business.
In order to make Kitato Bank a comprehensive financial business, Shirakawa Feng also took great pains and put in a lot of thought.
But he knew that it was all worth it. In a few years, Beidu Bank would become a truly large bank.
However, for the time being, the listing of Shirakawa Electric is the top priority.
So what benefits can Dai-ichi Kangyo Bank, Nomura Securities, and Kitato Bank gain as stock underwriters?
