Tokyo Metro Company saw its stock price surge by 47% on the first day of listing, attracting a large number of investors. The company issued shares at 1200 yen per share, raising 348.6 billion yen, making it the largest IPO in Japan since 2018. Analysts point out that its high dividend yield and stable profitability make its stock attractive, with net profit expected to grow by 13% by 2025
Zhitong Finance APP noted that in its trading debut on Wednesday, Tokyo Metro Co.'s stock price soared by as much as 47%, following strong demand from investors in its initial public offering.
The company operates one of the world's largest subway systems and issued shares at a price of 1,200 Japanese yen (approximately $8) per share, raising a total of 348.6 billion yen, making it Japan's largest IPO since SoftBank Group's listing in 2018. According to several major underwriters, the offering was oversubscribed by more than 15 times.
Data from Ichiji Securities shows that the average stock price of Japanese companies listed this year has risen by 34%.
Investors and analysts have stated that the high dividend yield and stable profitability make Tokyo Metro's stock attractive. This is because the company's business is concentrated in urban areas, which is believed to be less affected by Japan's declining population.
Since the outbreak of the epidemic, Tokyo Metro's daily passenger traffic has been steadily increasing.
Previously, Japanese legislation required the government to sell its stake in Tokyo Metro by March 2028 to repay debts issued after the 2011 earthquake and tsunami. Following this offering, the joint ownership of the Japanese government and the Tokyo Metropolitan Government will be reduced by half.
Naoki Fujiwara, Senior Fund Manager at Shin Kin Asset Management, stated that the public nature of the railway business makes it difficult to quickly raise fares and pursue profits.
Fujiwara mentioned that for investors, "as long as the stock price does not fall below 1,200 yen and remains stable, it is reliable enough to receive dividends and shareholder benefits." He added that the growth potential of Tokyo Metro's real estate business is limited, so "performance will be stable, but without a steady upward trend."
Tokyo Metro has a daily passenger flow of over 6.5 million people, and the company expects its net profit to increase by 13% to 52.3 billion yen by the end of the current fiscal year in March 2025. Due to an increase in inbound tourism and other passenger numbers, the company forecasts an 18% growth in operating revenue from its transportation business to 75.3 billion yen. The company expects its real estate business revenue to remain around 4.5 billion yen.
The listing of Tokyo Metro is closely watched by the Japanese securities industry, not only because it is the company's first major transaction in six years, but also because its services impact the daily lives of many people.
Tokyo Metro operates 9 lines and 180 stations, with passenger traffic nearly double that of the New York subway.
Toshio Morita, Chairman of the Japan Securities Dealers Association, stated at a press conference on October 16, "This will have a very significant benefit in expanding the investor base of the Japanese stock market," and added that he hopes this move will increase the number of individual investors buying stocks