JX Metals Cuts Price of Japan’s Biggest IPO Since Softbank

(Bloomberg) -- JX Advanced Metals Corp. cut Japan’s biggest initial public offering since Softbank Group Corp.’s to ¥439 billion yen ($2.9 billion), fueling concerns that demand for IPOs is waning after a banner year.

The shares will be offered at ¥810 to ¥820 each after feedback from investors, JX Metals said in a filing in Tokyo on Monday. That’s as much as 6% lower than what the company had indicated just over two weeks ago.

The move could bode ill for Japanese companies planning to go public given the scale of JX Metals’ offering — it’s poised to be Japan’s largest since 2018. After IPO proceeds climbed to ¥960 billion last year, optimism had carried over to 2025, with Tokyo’s first listing of the year surging during its trading debut.  

“JX’s debut turned into a concern for the IPO market,” said Takamasa Ikeda, a senior portfolio manager at GCI Asset Management Inc. “The cut clearly shows the price was too expensive for investors, and that may suggest the stock won’t perform well after listing.”

JX Metals is a unit of the nation’s biggest oil refiner, Eneos Holdings Inc., which is selling part of its stake. Eneos has said it would use the funds raised to improve shareholder returns and invest in decarbonization as it aims for more than 10% of return-on-equity under a mid-term management plan through March 2026.

The IPO also reflects demand for semiconductors, given that JX has more than 60% of the global market share for so-called sputtering target materials, which are used in the circuitry of semiconductors, according to a filing. It competes with other manufacturers globally such as US-based Honeywell International Inc. and China’s Konfoong Materials International Co.

JX Metals generated ¥26.4 billion of operating profit from the chip materials segment in its fiscal year ended in March last year, equivalent to about a third of the total ¥86.1 billion. It forecasts earnings will increase 11% this fiscal year.

Since the metals refiner, which supplies key semiconductor materials to clients including Taiwan Semiconductor Manufacturing Co. and Intel Corp., last announced its pricing expectations, the Nikkei 225 Stock Average has fallen nearly 5% amid flaring concerns about tariffs and a selloff of chip stocks. 

“Investors are clearly starting to take a more risk-averse approach to chasing tech and AI,”  said Andrew Jackson, head of Japan Equity Strategy at Ortus Advisors. “The timing isn’t great.”

(Updates with reaction in fourth paragraph.)

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