YB new stock pitches (Fri, Jul 18)

Ikena Oncology (IKNA) presents a rare setup with shares trading at $1.30, 45% below the $2.38 PIPE price supported by Tier 1 investors like Deep Track Capital and RTW Investments. The recently approved reverse merger with Inmagene faced 45% shareholder opposition, with 17 million 'no' shares (35%) potentially selling after closing. IKNA shareholders will receive a valuable CVR lasting 10 years, granting rights to former assets including potentially $500M from Pionyr (50% of a $1B deal), plus smaller monetizations of IK-175 ($0.4M), preclinical assets ($1.5M), and potential value from IK-595 and IK-412. Inmagene's lead asset is an OX40 monoclonal antibody for atopic dermatitis showing promising early results in 13 patients with a favorable safety profile and long half-life, though the SC formulation's efficacy remains unproven compared to the IV version tested. The stock represents an attractive entry below $1.43 (60% of deal price), with potential for significant upside as institutional interest may increase after merger closing, despite the near-term risk from possible selling pressure and limited catalysts until Phase 2b data in Q4 2026.

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Molten Ventures (GROW.L), a prominent UK venture capital firm, currently trades at a 50% discount to its £1.28 billion NAV. The portfolio comprises 17 core investments valued at £839 million (with Revolut being the largest at £157 million) and £530 million in funds, totaling £1.37 billion before accounting for £87.5 million in external partner shares. Molten has established an impressive track record, achieving an average annual return of 28% since its 2016 IPO, exceeding its 20% target. The firm maintains a conservative valuation approach, waiting for new funding rounds to confirm valuations rather than using speculative DCF models, which contributes to its low write-off rate. Despite the NAV growing by nearly 30% since April 2021, the share price has more than halved, creating the current discount. The company is actively buying back shares and occasionally realizing profits on investments. A potential Revolut IPO represents a significant catalyst, as it's one of Molten's top holdings and 'only a matter of time' before going public. The stock has begun to rise but remains well below NAV despite improving sentiment, particularly in the US market.

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Toyo Engineering Corporation (6330.T), a plant engineering firm with a 40.2B yen market cap and 25B yen net cash, trades at 7.5x LTM/3x NTM PER and 0.89x PBR with a 2.40% yield. The stock has five key drivers: 1) Small-cap net-cash status making it significantly undervalued; 2) No exposure to the current tariff war due to limited U.S. operations; 3) Successful shift to a higher-margin recurring revenue model, already achieving its 2030 target of 50% gross profit from non-EPC business in 2023, with management projecting doubled net income in five years; 4) Participation in the strategic Minamitori Island rare earth recovery project since 2019, positioning it as a national security play amid China's export restrictions; and 5) Dual-listing situation with Mitsui & Co owning 23%, making it a likely takeover target as the Tokyo Stock Exchange campaigns against parent-child listings. The bullish technical chart shows recent gains in rare earth-related stocks, with a price target of 2,000 yen (92% upside).

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