Japan’s Nikkei publication reports Kioxia has filed for an IPO on the Tokyo Stock Exchange with an IPO date scheduled for October.
A valuation in excess of ¥1.5 trillion ($10.3 billion) is suggested and Kioxia told the paper: “Preparations are underway for a listing at an appropriate time.” Kioxia is the fifth largest SSD supplier globally by units and capacity shipped, according to TrendForce numbers for the second 2024 quarter. Samsung, Western Digital, Micron and SK hynix lead the market in that order. The FT says Kioxia is seeking to raise at least $500 million
In April we reported NAND and SSD manufacturer Kioxia was preparing an IPO to recapitalize itself with payment of a ¥900 billion ($5.8 billion) loan due in June as part of the background. Kioxia expects to return to profitability in its next financial year, ending March 2025, as the NAND market picks up boosted by demand for fast AI data storage and model training checkpoints.
Earlier IPO plans were curtailed by the Covid pandemic and a NAND market slowdown. That market is now recovering. A possible merger with Kioxia’s NAND manufacturing joint-venture partner Western Digital in 2023 was derailed by SK hynix.
Kioxia is 56.24 percent owned by a Bain Capital-led private equity consortium, which bought its stake from Toshiba in 2017 for $18 billion and includes NAND and SSD maker SK hynix amongst its investors. Toshiba still has a 40.64 percent stake in Kioxia. The Nikkei, quoting un-named sources, says Bain and Toshiba would sell of part of their holdings in phases after the IPO. Conversely it’s possible SK hynix could increase its stake to have more influence over, and a closer relationship with, Kioxia.
A ¥1.5 trillion valuation would signify a 5:1 price:earnings ratio based on annual net income of ¥300 billion, according to the FT. This is less than the approximate 10:1 PE ratio of Samsung and Western Digital, due to Kioxia’s debt, history, market position and an upside incentive to potential stock buyers.
Wedbush analyst Matt Bryson told subscribers today that the $10 billion valuation “is roughly just half the valuation that Kioxia was seeking in 2020 when it last attempted to list.” He added that such an IPO would have “positive implications for WD. While Western Digital only has about 2/3 of the capacity of Kioxia, we believe it’s NAND business is also more profitable and WD has significantly less debt than Kioxia.”
