TSE Market Appeal and Features - A Global Comparison -

© 2014 Japan Exchange Group, Inc. and/or its affiliates. All rights reserved.

TSE Market Appeal and Features

- A Global Comparison - May 2014

New Listings, Tokyo Stock Exchange, Inc.

© 2014 Japan Exchange Group, Inc. and/or its affiliates. All rights reserved. 1

Content

2. Benefits and Features of IPO Market in Japan

1. Japanese Market and Biotech Sector

3. Comparison among Major Stock Markets

2 © 2014 Japan Exchange Group, Inc. and/or its affiliates. All rights reserved.

Establishing Japan Exchange Group (JPX) January 2013 marked the establishment of Japan Exchange Group, following the business combination between Tokyo Stock Exchange Group and Osaka Securities Exchange.

4.97%

Japan Exchange Group, Inc.

Combined Holding Company

Japan Exchange Regulation1

Self-regulatory Organization

Japan Securities Clearing Corporation

Clearing Organization

Tokyo Stock Exchange, Inc.

Cash Market Operator

Osaka Exchange, Inc.2

Derivatives Market Operator

Note: 1 The name of “Tokyo Stock Exchange Regulation” changed to “Japan Exchange Regulation” on April 1, 2014. 2 The name of “Osaka Securities Exchange Co., Ltd.” changed to “Osaka Exchange, Inc.” on March 24, 2014.

http://www.jscc.co.jp/


Structure of TSE Cash Equity Market JPX offers several markets with different concepts to allow companies to make an optimal choice.

- Various Sectors and

Growth Companies -

1st Section - Large-sized companies -

1,805 Companies

2nd Section - Medium-sized

companies - 550 Companies

Market Of The High-growth and

EmeRging Stocks 195 Companies

Available to both individual and professional investors

JASDAQ Standard

815 Companies

JASDAQ Growth

48 Companies

Equity Market Other Cash Products

ETF 155 ETFs

ETN 23 ETNs

REIT 44 REITs

Professional-oriented market: Only available to professional investors Note: As of March 31, 2014

Country Fund 1 Country Fund

Venture Fund 2 Venture Funds

6 Companies 5 Programs


Stock Market Index Performance TOPIX, which represents the movement of the Tokyo market overall, is recording a high growth rate as compared with other markets.

Source: Bloomberg Note: As of March 31, 2014. Indices rebased to 100 as of November 1, 2012.

162

90

100

110

120

130

140

150

160

170

180

11/01/12 01/01/13 03/01/13 05/01/13 07/01/13 09/01/13 11/01/13 01/01/14 03/01/14

TOPIX (Japan) NYSE Composite (US) Nasdaq Composite (US)FTSE All Shares (UK) S&P/HKEx Large Cap Index (Hong Kong) FTSE Straits Times Index (Singapore)KOSPI (Korea) TWSE Index (Taiwan)


0

100

200

300

400

500

600

700

800

900

Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14

Mon

thly

Tra

ding

Val

ue (

USD

bill

ion)

1st section

Value of Share Trading (1st section)

Value of share trading is recording a high growth rate since November, 2012.

Source: Tokyo Stock Exchange Note: 1 USD= 100 JPY

542


19 22

37

52

64

0

10

20

30

40

50

60

70

80

2009 2010 2011 2012 2013

Ｎｕｍｂｅｒ

ｏｆＩＰＯ

IPOs in Japan

IPOs figures showed a significant increase to 641 in 2013 from 52 in 2012, confirming a full-fledged recovery in the Japanese IPO market. The number of IPOs is expected to increase from 2013 onward.

Note 1： The number includes Tokyo Pro Market and REITs.


Number of IPOs in 2013 Japan ranks No.3 globally by number of IPOs in 2013.

191

107

64 54 50 36 36

0

20

40

60

80

100

120

140

160

180

200

US GreaterChina

Japan UK Australia SouthKorea

India

Num

ber

of I

POs

in 2

013

Source: “EY Global IPO Trends 4Q 2013” Note: The number is based on priced IPOs as of 2 December and expected IPOs by end of December.


IPOs in Japan in 2013

Number of IPOs by Market in Japan in 2013 (Total: 64 Cos)1

Note: 1 The data includes Tokyo Pro Market and REITs. 2 The data excludes Tokyo Pro Market and REITs.

Number of IPOs by Sector in Japan in 2013 (Total: 54 Cos)2

Service, 13Cos, 24%

EC/Retail, 8Cos, 15%

Web Service, 8Cos, 15%

Biotech, 5Cos, 9%

Software/SI, 5Cos, 9%

Construction, 3Cos, 5%

Real Estate, 3Cos, 6%

Game, 1Cos, 2%

Others, 8Cos, 15%

TSE 1st, 6Cos, 10%

TSE 2nd, 6Cos, 9%

TSE Mothers, 29Cos, 45%

TSE JASDAQ Standard,

11Cos, 17%

TSE JASDAQ Growth, 1Cos,

2%

TSE TOKYO PRO Market, 4Cos, 6% TSE REIT,

6Cos, 9%

Fukuoka SE, 1Cos, 2%


Rank Listing Date Company Name Sector

TotalIPO Amont(US$ m)

Offering ofNew Shares

(US$ m)

Offeringfor Sale(US$ m)

Market Cap(IPO Price)(US$ m)

Market Cap(First Price)

(US$ m)

Market Cap(30-Dec-13)

(US$ m)

1 3-Jul-13 SUNTORY BEVERAGE & FOOD LTD Foods 3,881 2,883 998 9,579 9,641 10,367

2 19-Dec-13 ASHIKAGA HOLDINGS CO LTD Banks 266 231 35 1,365 1,466 1,398

3 22-Mar-13 BROADLEAF CO LTD Software/SI 233 25 208 267 297 508

4 20-Sep-13 OPEN HOUSE CO LTD Real Estate 149 96 53 492 580 680

5 27-Mar-13 TAMA HOME CO LTD Construction 91 64 27 283 490 295

6 11-Jun-13 PEPTIDREAM INC Biotech 78 42 36 322 1,018 1,863

7 15-Mar-13 KONOIKE TRANSPORT CO LTD Land Transportation 70 26 44 290 399 441

8 6-Dec-13 ONCOLYS BIOPHARMA INC Biotech 66 47 19 221 298 273

9 22-Nov-13 ZIGEXN CO LTD Web Service 59 6 53 306 893 984

10 18-Dec-13 SIGMAXYZ INC Service 55 6 49 142 142 303

11 26-Jun-13 REPROCELL INC Biotech 48 21 27 266 1,478 791

12 10-Dec-13 V-CUBE INC Web Service 44 20 25 142 215 320

13 19-Mar-13 FALTEC CO LTD Transportation Equipment 40 14 26 117 123 118

14 13-Dec-13 NIPPON AQUA CO LTD Construction 30 26 4 110 137 221

15 19-Mar-13 ASANTE INC Service 28 9 19 107 119 108

16 13-Feb-13 MEDRX CO LTD Biotech 27 22 5 51 113 121

17 8-Oct-13 ENERES CO LTD Service 25 12 13 118 301 762

18 19-Dec-13 WILL GROUP INC Service 24 10 15 66 64 63

19 3-Dec-13 RIDE ON EXPRESS CO LTD Service 24 5 19 90 140 134

20 14-Mar-13 ALTPLUS INC Game 23 14 10 60 161 194

21 24-Dec-13 HUMAN METABOLOME TECHNOLOGIE Biotech 22 12 10 66 147 257

22 18-Dec-13 ABIST CO LTD Service 21 16 5 69 69 60

23 17-Dec-13 AZUMA HOUSE CO LTD Real Estate 21 9 12 62 68 66

24 9-Dec-13 HOTTO LINK INC Web Service 15 5 9 49 131 444

25 9-Apr-13 SANYO HOMES CORP Construction 14 13 2 86 154 90

IPOs in Japan in 2013 IPO Amount Ranking

SUNTORY raised more than 3 billion US$ and its IPO was the 2nd biggest IPO in the world in 2013.

Note: 1 USD = 100 JPY


Rank Listing Date Company Name SectorActual PER(IPO Price)

Actual PER(First Price)

Change(IPO Price

to Fist Price)

TotalIPO Amont

(US$ m)


Market Cap(27-Dec-13)

(US$ m)

1 11-Jun-13 PEPTIDREAM INC Biotech 3,231.0 10,209.8 216% 78 322 1,786

2 20-Nov-13 MEDIA DO CO LTD Web Service 1,639.7 5,848.3 257% 13 74 270

3 9-Dec-13 HOTTO LINK INC Web Service 168.1 446.3 166% 15 49 355

4 10-Jul-13 DREAM VISION CO LTD EC/Retail 126.0 252.5 100% 12 35 21

5 10-Dec-13 V-CUBE INC Web Service 121.4 184.3 52% 44 142 277

6 22-Nov-13 ZIGEXN CO LTD Web Service 85.9 250.4 192% 59 306 971

7 9-Apr-13 SANYO HOMES CORP Construction 73.3 130.8 79% 14 86 88

8 14-Mar-13 ALTPLUS INC Game 53.5 143.2 168% 23 60 192

9 29-Nov-13 ALLIED ARCHITECTS INC Web Service 52.1 171.6 229% 13 70 172

10 12-Mar-13 SOFTMAX CO LTD/JAPAN Software/SI 45.5 193.0 324% 7 25 58

11 25-Apr-13 AUCFAN CO LTD Web Service 45.4 182.9 303% 10 46 265

12 3-Jul-13 SUNTORY BEVERAGE & FOOD LTD Foods 41.0 41.2 1% 3,881 9,579 10,352

13 3-Dec-13 RIDE ON EXPRESS CO LTD Service 39.0 60.6 55% 24 90 137

14 27-Mar-13 Tama Home CO LTD Construction 36.1 62.6 73% 91 283 291

15 11-Dec-13 O-UCCINO INC Web Service 36.1 83.0 130% 6 43 64

16 10-Jul-13 PHOTOCREATE CO LTD Web Service 30.3 68.5 126% 4 20 23

17 13-Dec-13 NIPPON AQUA CO LTD Construction 30.2 37.7 25% 30 110 216

18 18-Dec-13 ABIST CO LTD Service 29.8 29.8 0% 21 69 57

19 11-Dec-13 ENCOURAGE TECHNOLOGIES CO LT Software/SI 28.9 62.7 117% 13 55 104

20 19-Dec-13 SHIN PRO MAINT INC Service 28.7 67.5 135% 4 15 31

21 8-Oct-13 ENERES CO LTD Service 28.6 73.3 156% 25 118 748

22 18-Dec-13 ARCHITECTS STUDIO JAPAN INC Service 28.5 63.9 124% 7 30 72

23 19-Dec-13 WILL GROUP INC Service 22.9 21.9 -4% 24 66 67

24 20-Nov-13 M&A CAPITAL PARTNERS CO LTD Service 21.3 71.0 233% 5 64 117

25 20-Sep-13 OPEN HOUSE CO LTD Real Estate 19.5 23.0 18% 149 492 677

IPOs in Japan in 2013 PER Ranking

Tech Sector attract high level of investor interests.

Note: 1 “Actual PER" = "Market Cap" / "Net Profit (the most recent business year)" 2 1 USD = 100 JPY


IPO Amount by Exchanges in 2014 1Q Tokyo Stock Exchange ranks No.3 globally by IPO amount.

Source: Renaissance Capital “1Q 2014 Global IPO Review” Note: Global statistics include IPOs with a deal size of at least $100 million and exclude closed-end funds and SPACs. Data as of Mar. 28, 2014.

7.2 5.5

4.6 4.2

2.0 1.8 0.0

2.0

4.0

6.0

8.0

NYSE HKEx Tokyo SE LSE Main Euronext/Amsterdam

Shanghai SE

IPO

Am

ount

in 2

014

1Q(U

S$ b

illio

n)


Largest Global IPOs in 2014 1Q Japan Display IPO was 2nd largest IPO globally in 2014 1Q.

Source: Renaissance Capital “1Q 2014 Global IPO Review” Note: Global statistics include IPOs with a deal size of at least $100 million and exclude closed-end funds and SPACs. Data as of Mar. 28, 2014.

# Company Ticker ExchangeOfferDate

Deal Size(US$ million) Industry

1 HK Electric Investments 2638.HK Hong Kong Exchange 22-Jan $3,110 Utilities

2 Japan Display 6740.JP Tokyo Stock Exchange 10-Mar $3,083 Technology

3 Santander Consumer USA SC NYSE 22-Jan $1,800 Financial

4 Altice ATC.NA Euronext/Amsterdam 31-Jan $1,766 Communications

5 ISS ISS.DC OMX Nordic Exchange 13-Mar $1,502 Business Services

6 Harbin Bank 6138.HK Hong Kong Exchange 25-Mar $1,130 Financial

7 Lenta LNTA.LI LSE Main 27-Feb $952 Consumer

8 Rice Energy RICE NYSE 23-Jan $924 Energy

9 Gaztransport Et Technigaz GTT.FP Euronext/Paris 26-Feb $832 Capital Goods

10 Hitachi Maxell 6810.JP Tokyo Stock Exchange 7-Mar $706 Technology


Information & Communication,

$11B, 32%

Services, $10B, 29%

Biotech, $9B, 26%

Retail Trade, $1B, 3%

Real Estate, $1B, 3%

Insurance, $1B, 2%

Others, $2B, 5%

Mothers Market Capitalization by Industrial Sector Biotech sector is one of the largest sector by market capitalization in TSE Mothers market.

Mothers Market Capitalization by Industrial Sector

Source: Bloomberg Note: As of December 30, 2013. 1 USD = 100 JPY


Number of Biotech IPOs by Exchange TSE ranks 2nd to NASDAQ in the biotech IPO market by number of IPOs in 2013.

Source: Biocentury.com Note: EUGLENA (TSE Mothers: 2931) is added to Biocentury IPO list.

Number of IPOs by Exchange (2012) Total : 25 IPOs1

Number of IPOs by Exchange (2013) Total: 59 IPOs

NASDAQ, 12Cos, 48%

Euronext, 5Cos, 20%

TSE (Mothers & JASDAQ), 3Cos, 12%

LSE, 2Cos, 8%

GreTai, 2Cos, 8%

SZSE, 1Cos, 4%

NASDAQ, 41Cos, 70%

TSE (Mothers & JASDAQ), 5Cos, 9%

GreTai, 4Cos, 7%

TSX-V, 2Cos, 3%

Euronext, 2Cos, 3%

OTCBB, 2Cos, 3%

Others (NYSE, TSX-V, Tel Aviv, ASX)

3Cos, 5%)


#Listingdate Ticker Market Sector Sub Sector Book Runner Company Name

TotalIPO Amont(US$ m)

Offering ofNew Shares

(US$ m)

Offeringfor Sale(US$ m)


Market Cap(First Price)(US$ m)

Market Cap(31-Mar-14)

(US$ m)

Change ofMarket Cap

(IPO to 31-Mar-14)

1 26-Mar-14 7779 Mothers Medical Device Medical Device SMBC Nikko CYBERDYNE INC 90 45 44 402 924 1,400 249%

2 13-Feb-14 4589 Mothers Pharmaceutical(Drug Discovery)

Ophthalmic Mitsubishi UFJMorgan Stanley Acucela 190 166 25 641 819 563 -12%

3 24-Dec-13 6090 Mothers Service DiagnosticSupply/Service

Ichiyoshi Human Metabolome Technologies 22 12 10 66 147 99 49%

2 6-Dec-13 4588 Mothers Pharmaceutical(Drug Discovery)

Infectious SMBC Nikko Oncolys BioPharma 66 47 19 221 298 143 -35%

5 26-Jun-13 4978 JQGrowth

Chemicals(Drug Discovery,

RegenerativeMedicine）

DiagnosticGene/Celltherapy

Supply/Service

SMBC Nikko REPROCELL INC 48 21 27 266 1,478 437 65%

6 11-Jun-13 4587 Mothers Pharmaceutical(Drug Discovery)

CancerEndocrine/Metab

olicInfectious

Mizuho PEPTIDREAM INC 78 42 36 322 1,018 1,083 236%

7 13-Feb-13 4586 Mothers Pharmaceutical(Drug Discovery)

CardiovascularInflammation

Nomura MEDRX CO LTD 27 22 5 51 113 89 75%

8 20-Dec-12 2931 Mothers Food Food SMBC Nikko EUGLENA CO LTD 11 9 2 45 104 787 1644%

9 11-Dec-12 4585 Mothers Pharmaceutical(Drug Discovery)

Infectious Nomura UMN PHARMA INC 43 28 15 98 90 180 84%

10 30-Nov-12 4584 Mothers Pharmaceutical(Drug Discovery)

AutoimmuneCancer

MusculoskeletalNomura GENE TECHNO SCIENCE CO LTD 12 7 5 23 30 50 113%

Recent Biotech & Medtech IPOs Acucela successfully completed its IPO and raised US$166 million as a U.S. company.

Source: Bloomberg, BioCentury Note: 1 1 USD= 100 JPY 2 Sub Sector based on classification of BioCentury


Biotech Index Performance in 2013 Nikkei BP Bio INDEX outperformed in 2013.

128%

66% 62% 59% 51%

39%

0%

20%

40%

60%

80%

100%

120%

140%

Nikkei BP Bio NASDAQBiotechnology

BioCenturyLondon

BioCentury100

NYSE ArcaBiotechnology

BioCenturyEurope

Source: Biocentury.com, Nikkei Biotech Online


Number of Biotech & Medtech IPOs 5 biotech companies, highest number in history, succeeded IPO on Tokyo Stock Exchange in 2013.

1 1

2

4 4

2

1

3 3 3

1

4

3

5

2

0

1

2

3

4

5

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20141Q

Num

ber

of B

iote

ch &

Med

tech

IPO

s


2. Features and Benefits of IPO Market in Japan




Features of IPO Market in Japan

• Successful Small IPOs

• High Liquidity

• Low IPO Cost & High IPO Valuation

• Flexible IPO Structure

• Successful Follow-on Offerings

1

2

3

4

5


1. Successful Small IPOs More than 90% of IPOs in Japan raised less than $50M.

Source： Tokyo Stock Exchange, NASDAQ website, Hong Kong Exchanges and Clearing Limited website, Singapore Exchange website Note: The total number of IPOs in each country. It includes new listings of foreign companies in the country, excludes listings without public offerings

or selling. It includes new listings on the OTCBB in the United States. Exchange rates as of the listing date.

72%

5% 17%

33%

20%

12%

45% 24%

4%

32%

8% 5%

2%

24%

7% 14%

20% 13% 5%

5% 7% 14%

2% 3% 3% 5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Japan U.S. Hong Kong Singapore

Perc

enta

ge o

f IP

Os

by

Offe

ring

Amou

nt (

2012

) (%

)

Less than$10M

$10Mor more

$50Mor more

$100Mor more

$200Mor more

$500Mor more

$1Bor more

Comparison of Number of IPOs by Offering Amount (US, Japan, Hong Kong, Singapore)


2. High Liquidity - Comparison of Emerging Enterprise Markets

TSE Mothers is larger and more liquid than HKEX GEM and SGX Catalist. Number of Listed Companies (as at of end of Dec. 2013) Trading Value (2013)1

Turnover Velocity (2013)2 Market Capitalization (as of end of Dec. 2013)1

Source: Tokyo Stock Exchange, Hong Kong Exchanges and Clearing Limited, Singapore Exchange Note: 1 Converted into USD as at the end of Dec 2013 2 Turnover Velocity = Annual Trading Value / Market Capitalization as at the end of Dec. 2013

193 192 139

0

50

100

150

200

250

TSE Mothers HKEX GEM SGX Catalist

Num

ber

of L

iste

d Co

mpa

nies

34,235

17,282 7,378

0

10,000

20,000

30,000

40,000


Mar

ket

Cap

(U

S$ m

illio

n)

265

10 15 0

50

100

150

200

250

300


Valu

e of

Sha

re T

radi

ng

(US$

bill

ion)

775%

59%

209%

0%

200%

400%

600%

800%


Turn

over

Vel

ocity

（%）


3. Low IPO Cost & High IPO Valuation Listing expenses at listing on TSE Mothers is much lower than at listing on HKEX GEM or SGX Catalist. IPO valuation in TSE Mothers is relatively higher than IPO valuation in the others.

The Median of Expenses through IPO (2012) The Median of PE Ratio of IPO Price(2012)

The Median of Expenses Ratio through IPO (2012) The Median of PE Ratio of First Price(2012)

8.0%

29.9% 28.6%

0.0%

10.0%

20.0%

30.0%

40.0%

TSE Mothers HKEX GEM SGX CATALIST

Expe

nses

(%

)

0.32

2.21 1.38

0.00

0.50

1.00

1.50

2.00

2.50


Expe

nses

(U

S$ M

)

32.0x

16.9 x 18.9 x

0.0x5.0x

10.0x15.0x20.0x25.0x30.0x35.0x


PER

(x)

(firs

t pr

ice)

19.6x 13.6 x 13.3 x

0.0x

5.0x

10.0x

15.0x

20.0x


PER

(x)

(IPO

pric

e)


TSE Mothers HKEX GEM SGX CATALISTMin Median Max Min Median Max Min Median Max

Number of IPOs 23 Cos. 12 Cos. 8 Cos.

Revenue (US$ M) 2.5 US$31.4M 189.2 3.5 US$19.3M 42.4 12.1 US$30.8M 164.1

Profit (US$ M) -10 US$2.4M 9.3 0.7 US$2.8M 10.1 0.6 US$2.3M 4.9

IPO Amount (Offering andSelling) (US$ M)

2.3 US$8.2M 148.1 5.2 US$10.6M 25.7 3.9 US$5.5M 13.2

Offering (US$ M) 0.5 US$3.9M 99.8 5.2 US$8.9M 25.7 3.3 US$4.6M 13.2

Net proceeds (US$ M) 0.4 US$3.6M 92.8 3.1 US$6.9M 22.5 1.8 US$3.2M 11.8

Expenses (US$ M) 0.04 US$0.32M 6.99 1.93 US$2.21M 4.87 0.92 US$1.38M 2.23

Expenses（%） 7.0% 8.0% 8.1% 12.5% 29.9% 48.5% 10.1% 28.6% 54.9%

Selling (US$ M) 0.7 US$4.2M 48.3 8.5 US$8.5M 8.5 0.5 US$1.1M 2.9

PER (x) (IPO price) 6.6 x 19.6 x 41.9 x 2.5 x 13.6 x 53.9 x 4.1 x 13.3 x 69 x

PER (x) (first price) 15.5 x 32.0x 61.6 x 3.1 x 16.9 x 64.6 x 4.7 x 18.9 x 77.3 x

Market Cap（IPO price）（US$M）

16 US$38.9M 503.4 20.6 US$42.6M 103 19.8 US$26.8M 69.6

Market Cap（first price）（US$M）

28.3 US$86.7M 534.6 21.7 US$46.7M 85.5 23.1 US$37.6M 90.4

Change（％） -8% 93% 213% -17% 11% 63% 12% 29% 55%

3. Low IPO Cost & High IPO Valuation

１

Source: Prospectus and annual report of each company. Note: 1 Comprehensive income is used for SGX CATALIST companies that do not disclose net income. 2 Listing expenses is defined as the difference between the amount raised and the net proceeds. 3 Exchange rates as of the listing date.

2

Comparison of IPOs in 2012 among Emerging Enterprise Markets


4. Flexible IPO Structure Tokyo market accepts flexible IPO structure and procedure. No limit to the ownership of the largest shareholder. No rules about lock-up period. However, lock-up of three months or six months are generically set as a

market practice. No restrictions on offering for sale at IPO even on Emerging Enterprise Markets, Mothers or JASDAQ. In 97% of the IPO in Japan, both offering of new shares and offering for sale are implemented. Tokyo

market is providing funding opportunities and investment income realization opportunities of major shareholders and/or management.

Note: Population is 158 companies that conducted IPO in Japan from 2010 Jan. to 2013 Dec.

Breakdown of the lock-up period for the major shareholder at the time of IPO

Breakdown of IPO Structure

90 days (3 months), 67 Cos, 42%

180 days (6 months), 82 Cos, 52%

90 days and 180 days

(Depends on shareholder),

9 Cos, 6%

Offering of New Shares,

1 Cos, 1%

Both offering of new shares and offering for sale,

154 Cos, 97%

Offering for Sale, 3 Cos, 2%


5. Successful Follow-on Offerings Many biotech Companies successfully conduct follow-on offerings in 2013.

Equity Financing by Biotech Cos in 2013

Note: 1 Raised amount of companies which list on JASDAQ Growth or JASDAQ Standard was sum up only finance carried out after integration of market in July, 2013.

2 1USD = 100 JPY

139.3 119.3

100.3 94.5 94.2

68.5 38.0

28.8 26.9

22.3 12.4

10.0 8.2

7.0 5.7

4.0 3.2 3.2

1.3

0.0 50.0 100.0 150.0

ANGES MG INCTAKARA BIO INC

ONCOTHERAPY SCIENCE INCNANOCARRIER CO LTD

I'ROM HOLDINGS CO LTDEUGLENA CO LTD

SHIN NIPPON BIOMEDICAL LABOR3D MATRIX LTD

SYMBIO PHARMACEUTICALS LTDMEDINET CO LTDPEPTIDREAM INC

D.WESTERN THERAPEUTICS INSTIGNI GROUP LTDMEDIBIC GROUP

CHIOME BIOSCIENCE INCSYSMEX CORP

SOGO RINSHO HOLDINGS CO LTDSOSEI GROUP CORP

REPROCELL INC

Equity Financing (US$ million)

Public Offering Private Placement


Key Benefits of Listing on TSE

Fundraising

Expansion of Business in Japan

M&A with Japanese Companies

Expand fundraising opportunities with High Net Worth Individuals that hold US$15.68 trillion in assets as of end of 2013

High valuation due to great interest in foreign stocks

Enhance corporate profile and credibility in Japan Expand opportunities for strategic alliances with Japanese

corporations

Increase chances of M&A with Japanese corporations


Listing Schedule Depending on the internal systems of the company, however, it takes about one year from kick-off to listing. Note that the company needs to be audited for two business years.

Offering Listing examination by TSE

Underwriting examination Listing preparation Selection of parties

involved in the listing

Selection of parties involved in the listing

Lead underwriter Lawyers (specialized

in Japanese law) Lawyers (specialized

in applicant's home country laws)

Audit firm Financial printer Trust and banking company

Preparation of application forms

Underwriting examination by lead underwriters

List

ing

appl

icat

ion

List

ing

appr

oval

List

ing

About 3 months

Identification of issues to be addressed

Design and implementation of system and improvements hereto

1 month

Offering

Listing examination

by TSE

Submission of Confirmation Report prior to Initial Listing Application (for Trading Participant Handling Matters)

Submission of Confirmation Report prior to Initial Listing Application

(for Applicant Company)


Roles of Each Party Involved in an IPO

Financial Services Agency

Trust and Banking Company

Lead Underwriter

Issuer

Law Firm (Japanese law

/home country laws)

Audit Firm (foreign audit

firm, etc.)

TSE and JPX Regulation

Listing examination

Consultation and underwriting examination

Submission of a “Sponsor’s Letter of Recommendation”

Filing of statutory disclosure documents

Financial Printer

Legal check and review Legal opinion Assistance in preparing

disclosure documents

Audit (audit opinion)

Printing of prospectus

Assistance in preparing disclosure documents

Shareholder services Dividend payment bank Issuance of JDRs

Lead underwriting agreement


Formal Requirements for Listing Each market has different criteria in line with its concept.

Note: 1USD = 100JPY

1st Section 2nd Section Standard GrowthNumber of shareholders 2,200 or more 800 or more 200 or more ―Tradable shares

Number of tradable shares 20,000 unitsor more

4,000 unitsor more

2,000 unitsor more

―

Market capitalization oftradable shares

JPY 1 billion(USD 10m)

or more


or more

JPY 500 million(USD 5m)or more

―

Ratio of tradable shares tolisted shares 35% or more 30% or more 25% or more ―

Public offering ― ―500 trading units

or more ―

Market capitalization of listedshares


or more


or more


or more―

Number of years of businessoperation 1 year or more ―

Shareholders' equity ―JPY 200 million

(USD 2m) or more Not negative ―

Amount of profits or Marketcapitalization ―

[Ordinary profit]JPY100 million(USD 1m) or more[Market cap]JPY5 billion(USD 50m) or more

― ―

―

―

Main MarketMothers

JASDAQ TOKYOPRO Market

3 years or more

JPY 1 billion (USD 10m) or more

[Ordinary profit]Total amount of JPY500 million (USD 5m) or morein the last 2 fiscal years[Market cap]Market cap: JPY 50 billion (USD 500m) or moreSales: JPY 10 billion (USD 100m) or more

10 percent or moreor 1,000 trading units

200 or more

JPY 500 million(USD 5m)or more

―

―


Stock Trading Value by Investor Category (2013) Foreign investors account for more than half of trading in the TSE 1st Section. By contrast, individual investors make up the majority in the TSE 2nd Section, Mothers, and JASDAQ.

Average Daily Trading Value

USD 26,130 M

TSE

2nd

Sect

ion

TSE

1st S

ecti

on

TSE

Mot

hers

TSE

JASD

AQ

Source: TSE Note: 1 USD= 100 JPY

54% 13%

9%

24%

Foreign Investors

Proprietary Trading

Domestic Institutional

Investors

Individuals

Average Daily Trading Value

USD 1,136 M

Average Daily Trading Value USD 867 M

Average Daily Trading Value USD 146 M

15% 3%

12%

70%

16% 3%

8%

73%

17% 3%

9%

71%

Foreign Investors

Foreign Investors

Foreign Investors

Individuals Individuals

Individuals


Investors

Proprietary Trading


Investors

Proprietary Trading


Investors

Proprietary Trading


2. Benefits and Features of IPO Market in Japan




Number of Listed Companies Tokyo Stock Exchange exceeds NYSE and NASDAQ in terms of number of listed companies.

Source: WFE Note: Number of listed companies as of the end of December 2013

3,886 3,419

2,736 2,637 2,371

1,813 1,643 1,536 953 866 776

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

TMXGroup

TokyoStock

Exchange

LondonSE Group

NASDAQOMX

NYSEEuronext

(US)

KoreaExchange

HongKong

Exchanges

ShenzhenSE

ShanghaiSE

TaiwanSE

SingaporeExchange

Num

ber

of L

iste

d Co

mpa

nies


Market Capitalization Tokyo Stock Exchange ranks No.3 globally and No. 1 in Asia by market capitalization.

17,397

//

//

Source: WFE Note: Domestic market capitalization as of the end of December 2013

6,085

4,543 4,429

3,101 2,497 2,114

1,452 1,235 823 744 0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

NYSEEuronext

(US)

NASDAQOMX

TokyoStock

Exchange

LondonSE Group

Hong KongExchanges

ShanghaiSE

TMXGroup

ShenzhenSE

KoreaExchange

TaiwanSE

SingaporeExchange

Mar

ket

Capi

taliz

atio

n (U

SD b

illio

n)

17,950


Value of Share Trading in the World Tokyo Stock Exchange ranked No. 1 outside of the U.S. by value of share trading.

Source: WFE Note: Value of share trading - Electronic order book trades in 2013

13,700

9,585

6,305

3,859 3,731 2,233

1,371 1,323 1,285 624

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

NYSEEuronext

(US)

NASDAQOMX

TokyoStock

Exchange

ShenzhenSE

ShanghaiSE

LondonSE Group

TMXGroup

Hong KongExchanges

KoreaExchange

TaiwanSE

Valu

e of

Sha

re T

radi

ng (

USD

bill

ion)


Turnover Velocity Tokyo Stock Exchange has high turnover velocity.

Source: WFE Note: Turnover velocity = yearly value of share trading / average of market capitalization in 2013

291.8%

178.7% 152.0% 148.6%

110.2% 85.1% 80.9% 66.9% 56.7% 45.5%

0.0%

50.0%

100.0%

150.0%

200.0%

250.0%

300.0%

ShenzhenSE

NASDAQOMX

TokyoStock

Exchange

ShanghaiSE

KoreaExchange

NYSEEuronext

(US)

TaiwanSE

TMXGroup

LondonSE Group

Hong KongExchanges

Turn

over

Vel

ocity

(%

)


Valuation: PER Valuations for Japanese companies are higher than other markets based on PER.

Source: Bloomberg Note: Based on estimated PER from Bloomberg as of January 6, 2014. PER = Price/Estimated EPS Ratio

15.6 15.4 15.0 14.7 14.6 13.7 13.3

9.9 9.8

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

TOPIX(Japan)

S&P 500(US)

ASXS&P 300

(Australia)

S&P/TSXComposite(Canada)

TWSE Index(Taiwan)

FTSE StraitsTimes Index(Singapore)

FTSEAll Shares

(UK)

S&P/HKExLarge Cap

Index(Hong Kong)

KOSPI(Korea)

PER

(x)

© 2014 Japan Exchange Group, Inc. and/or its affiliates. All rights reserved.

Hidetoshi Nagata (Mr.)

General Manager, Head of Global Listing Tel : +81-50-3377-7763 (Direct) E-mail : [email protected]

Junichiro Goto (Mr.)

Account Manager, New Listings Dept. Tel : +81-50-3377-7422 (Direct) E-mail : [email protected]

Please note that this presentation is for informational purposes only. Japan Exchange Group, Inc. and Tokyo Stock Exchange, Inc. are not responsible for any damage caused by using the information contained herein. Please also note that the information is not guaranteed to be complete, correct, or up-to-date, and may be changed without notice. Unauthorized copying, reproduction, republishing, uploading, posting, transmitting or duplicating any part of the material is prohibited.

【Important Information】

【Contact】

Daekak Lee (Mr.)

Co-Head, New Listings Dept. Tel : +81-50-3377-7370 (Direct) E-mail : [email protected]

Documents

TSE Market Appeal and Features - A Global Comparison -