Japanese chipmaking equipment firm Kokusai Electric Corp. debuted on the Tokyo Stock Exchange Wednesday in Japan’s largest initial public offering this year, ending nearly 28 percent above its IPO price.
Shares of Kokusai Electric jumped to 2,436 yen at one point before ending the first trading day on the Tokyo market’s top-tier Prime Market at 2,350 yen, or $16, compared with its IPO price of 1,840 yen.
Based on the closing price, Kokusai Electric is valued at 541.4 billion yen. Upon its debut on the Tokyo Stock Exchange in the morning, it took about 30 minutes to get its initial price of 2,116 yen.
“Our technologies can be used in manufacturing logic chips for artificial intelligence,” said Kokusai Electric CEO Fumiyuki Kanai at a press conference in Tokyo, adding he hopes to boost its sales in the next three to five years.
Kokusai Electric, formerly a Hitachi Ltd. unit, is owned by U.S. private equity giant Kohlberg Kravis Roberts & Co., which acquired the unit and spun off the semiconductor device manufacturing business in 2018.
Kokusai Electric produces machines that deposit films on silicon wafers. It has a manufacturing base in the central Japan prefecture of Toyama and is constructing another factory there.
The company’s shareholders include the Qatar Investment Authority, which acquired around a 5 percent stake in June while noting that the semiconductor device market is seeing “rapid growth with increasing demand” from such industries as artificial intelligence.
Calling the performance of the company shares unexpectedly strong, Toshikazu Horiuchi, equity strategist at IwaiCosmo Securities Co., said investors may have been influenced by Western countries’ attempts to reduce their reliance on China in the chip sector.
“The moves could subsequently boost domestic chip production, potentially leading to business expansion for the company,” Horiuchi said.
For the current business year next March, the company has forecasted its net profit to shrink 49.9 percent to 20.2 billion yen, and its projected operating profit to fall 48.1 percent to 29.1 billion yen on sales of 180 billion yen, down 26.7 percent.
It cited weakening demand for consumer electronics, including personal computers and smartphones, together with U.S. chip regulations in its earnings forecast.
By Muhammad Umair