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Semiconductor materials group JX Advanced Metals rose on its first day of trading — in a litmus test of investor appetite for chip-related stocks — after raising $3bn in Japan’s biggest IPO in almost seven years.
Shares traded up 2.8 per cent at ¥843 ($5.64) on their first day, edging above the ¥820 at which the initial public offering was priced, as investors bought up the stock exposed to artificial intelligence and computing trends despite its peers taking a bruising in recent weeks. The shares went untraded for a short time at the open in Tokyo due to a glut of buyer orders.
The offering provides a windfall for Eneos, which fully owned JX Advanced Metals and will still retain 42.4 per cent of shares, as Japan’s largest oil refiner attempts to shift towards low-carbon businesses and reduce its conglomerate discount.
The IPO is the largest on the Japanese market since the $23.5bn float of SoftBank’s telecoms arm in late 2018 and tops the $2.3bn raised in October by Tokyo Metro, the capital’s subway operator.
But the listing of the 120-year-old business comes at a rocky time for semiconductor, tech and AI stocks, which have pulled back significantly since the start of the year on Donald Trump’s tariff threats.
Shifara Samsudeen, analyst at LightStream Research, said she recommended investors stay out because of negative sentiment towards tech stocks, despite the reasonable price of JX Advanced Metals.
“During the past few weeks, tech, AI and semiconductor stocks faced a huge sell-off as investors were more cautious over the US tariffs,” she said in a note.
Eneos had been forced to cut the indicated IPO price range by more than 5 per cent following tepid investor interest and negative sentiment around semiconductor stocks.
However, two longtime Japan investors said such sentiment could change rapidly and falling share prices have been seen as a buying opportunity.
JX Advanced Metals, which had an opening day market capitalisation of about ¥782bn, produces advanced materials from rare metals and copper that are used in semiconductors and other communication devices.
It holds 60 per cent global market share for so-called sputtering targets, solid materials deposited in thin films on semiconductor substrates.
The company has been seeking to shift from metals recycling and processing into higher-growth cutting-edge semiconductor material technologies, including selling stakes in mines and smelters in recent years.
The group’s operating profit rose 18 per cent to ¥86bn in the year ending in March 2024 on revenues that fell 7.6 per cent to ¥1.51tn.
However, the company still derives more than 70 per cent of its profit from its legacy metals and recycling segment centred on copper.
As a result, Sumeet Singh, analyst at Aequitas Research, said the stock was still more of a “commodity play” and he viewed the IPO as more of a test of investor discipline around valuation.
Eneos also hoped the IPO would boost the market value of both companies by separating the semiconductor metals unit and simplifying its own conglomerate structure.
Analysts said they were paying attention to whether the fossil fuel group would announce additional returns policies such as share buybacks and dividends as a result of the IPO.
Daiwa Securities, Mizuho Securities and Mitsubishi UFJ Morgan Stanley were among the principal underwriters for the IPO.
