Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<ul>
<li>The Hang Seng Index is the benchmark index for Hong Kong stocks. It follows a highly-subjective selection process which makes it difficult to predict index changes.</li>
<li>In this insight, we take a look at a group of names with reasonably high likelihood of being involved in index changes during the next review in December 2024.</li>
<li>The index changes for the December 2024 index rebal event will be announced after market close on 22nd November 2024.</li>
</ul>


The Hang Seng Index is the benchmark index for Hong Kong stocks. It follows a highly-subjective selection process which makes it difficult to predict index changes.
In this insight, we take a look at a group of names with reasonably high likelihood of being involved in index changes during the next review in December 2024.
The index changes for the December 2024 index rebal event will be announced after market close on 22nd November 2024.


Quiddity Leaderboard Hang Seng Index Dec 24: Special Focus on IT, Healthcare, and SOEs

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>
<a href="https://finance.yahoo.com/news/kkr-said-weigh-takeover-bid-065550154.html" target="_blank" rel="noopener">Bloomberg reported</a> that KKR has made a non-binding, preliminary approach to taking <a href="https://www.smartkarma.com/entities/asm-pacific-technology-ltd" target="_blank" data-smartkarma-citation="entities:15061:1" rel="noopener">ASM Pacific Technology (522 HK)</a> private. ASMPT has been the subject of takeover rumours in the past.</li>
<li>The trading patterns of the substantial shareholders suggest a willingness to exit. However, past privatisation rumours suggest issues with the offeror matching key shareholders' price expectations. </li>
<li>A binding proposal is unlikely as the timing would be viewed as opportunistic, with the recent market rally eroding a potential takeover premium and ASMPT’s premium multiple compared to peers.</li>
</ul>



Bloomberg reported that KKR has made a non-binding, preliminary approach to taking ASM Pacific Technology (522 HK) private. ASMPT has been the subject of takeover rumours in the past.
The trading patterns of the substantial shareholders suggest a willingness to exit. However, past privatisation rumours suggest issues with the offeror matching key shareholders' price expectations. 
A binding proposal is unlikely as the timing would be viewed as opportunistic, with the recent market rally eroding a potential takeover premium and ASMPT’s premium multiple compared to peers.


ASMPT (522 HK): Don’t Bet on a KKR Privatisation

Global TMT Analyst, Ex-PM, 30 years experience

Neil Campling

<ul>
<li>The second PE rumoured interest in ASMPT in 18 months, with KKR circling.</li>
<li>Semiconductor M&amp;A has surged in 2024 YTD with a 33% increase in deal activity compared to 2023.</li>
<li>ASM's leadership in TCB, potential growth within HBM, expansion at TSM and enabling the Nvidia Blackwell platform are all reasons for M&amp;A interest.</li>
</ul>


The second PE rumoured interest in ASMPT in 18 months, with KKR circling.
Semiconductor M&amp;A has surged in 2024 YTD with a 33% increase in deal activity compared to 2023.
ASM's leadership in TCB, potential growth within HBM, expansion at TSM and enabling the Nvidia Blackwell platform are all reasons for M&amp;A interest.


ASMPT (ASM Pacific). 522 HK. M&A. Takeover Target Talk. Déjà Vu ?

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

<ul>
<li>Reportedly - Bloomberg - KKR has made a non-binding proposal for <a href="https://www.smartkarma.com/entities/asm-pacific-technology-ltd" target="_blank" data-smartkarma-citation="entities:15061:1" rel="noopener">ASM Pacific Technology (522 HK)</a>, the world’s leading back-end semiconductor production equipment supplier. </li>
<li>ASMPT's largest shareholder, <a href="https://www.smartkarma.com/entities/asm-international-nv" target="_blank" data-smartkarma-citation="entities:21096:1" rel="noopener">ASM International Nv (ASM NA)</a>, with 25%, has been the focus of activists for some time to sell its stake. </li>
<li>This bid has all the hallmarks of the approach (also cited by Bloomberg) by PAG last year. Which came to nought. From a regulatory standpoint, I can't see this happening.</li>
</ul>


Reportedly - Bloomberg - KKR has made a non-binding proposal for ASM Pacific Technology (522 HK), the world’s leading back-end semiconductor production equipment supplier. 
ASMPT's largest shareholder, ASM International Nv (ASM NA), with 25%, has been the focus of activists for some time to sell its stake. 
This bid has all the hallmarks of the approach (also cited by Bloomberg) by PAG last year. Which came to nought. From a regulatory standpoint, I can't see this happening.


ASMPT (522 HK): KKR's Proposal Is A Non-Starter

<ul>
<li>
<a href="https://www.smartkarma.com/entities/pentamaster-international-ltd" target="_blank" data-smartkarma-citation="entities:31099:1" rel="noopener">Pentamaster International (1665 HK)</a> disclosed a Cayman scheme privatisation offer from <a href="https://www.smartkarma.com/entities/pentamaster-corp-bhd" target="_blank" data-smartkarma-citation="entities:15302:1" rel="noopener">Pentamaster Corp (PENT MK)</a> and AchiCapital at HK$1.00 (HK$0.93 cash + HK$0.07 dividend), a 56.3% premium to the undisturbed price. </li>
<li>The offer is final but unattractive compared to peer multiples. The shareholder with a blocking stake is a seller, but there is risk due to a high AGM participation rate.</li>
<li>An arguably light offer in which the Holdco is privatising its OpCo by arbitraging the valuation discrepancies across two exchanges may not sit well with minorities.</li>
</ul>



Pentamaster International (1665 HK) disclosed a Cayman scheme privatisation offer from Pentamaster Corp (PENT MK) and AchiCapital at HK$1.00 (HK$0.93 cash + HK$0.07 dividend), a 56.3% premium to the undisturbed price. 
The offer is final but unattractive compared to peer multiples. The shareholder with a blocking stake is a seller, but there is risk due to a high AGM participation rate.
An arguably light offer in which the Holdco is privatising its OpCo by arbitraging the valuation discrepancies across two exchanges may not sit well with minorities.


Pentamaster International (1665 HK): Pentamaster Corp and AchiCapital’s Light Scheme Offer

Hong Kong

ASM Pacific Technology Limited manufactures semiconductor back end equipment. The Company produces assembly equipment, packaging equipment, surface mount technology equipment, and other equipment. ASM Pacific Technology supplies its products in microelectronics, semiconductor, optoelectronics, and other fields.

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ASM Pacific Technology (522 HK)

Quiddity Leaderboard Hang Seng Index Dec 24: Special Focus on IT, Healthcare, and SOEs

The HIGH conviction basket has been outperforming the Hang Seng index over the last few weeks. If you have not already initiated the trade...

Janaghan Jeyakumar, CFA

ASMPT (522 HK): Don’t Bet on a KKR Privatisation

ASMPT's offer period for the potential privatisation ends. Reuters reports that KKR backed out due to regulatory and geopolitical risks, such as...

Arun George

ASMPT (ASM Pacific). 522 HK. M&A. Takeover Target Talk. Déjà Vu ?

Private equity interest in ASMPT has surged due to its leadership in TCB, potential growth in HBM, expansion at TSM, and enabling the Nvidia...

Neil Campling

ASMPT (522 HK): KKR's Proposal Is A Non-Starter

This rumoured bid from KKR has all the hallmarkts of the approach (also cited by Bloomberg) by PAG last year. Which came to nought. From a...

David Blennerhassett

Pentamaster International (1665 HK): Pentamaster Corp and AchiCapital’s Light Scheme Offer

The risk/reward is unattractive. An arguably light offer in which the Holdco is privatising its OpCo by arbitraging the valuation discrepancies...

Arun George

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Quiddity Leaderboard Hang Seng Index Dec 24: Special Focus on IT, Healthcare, and SOEs

The HIGH conviction basket has been outperforming the Hang Seng index over the last few weeks. If you have not already initiated the trade...

Janaghan Jeyakumar, CFA

ASMPT (522 HK): Don’t Bet on a KKR Privatisation

ASMPT's offer period for the potential privatisation ends. Reuters reports that KKR backed out due to regulatory and geopolitical risks, such as...

Arun George

ASMPT (ASM Pacific). 522 HK. M&A. Takeover Target Talk. Déjà Vu ?

​Private equity interest in ASMPT has surged due to its leadership in TCB, potential growth in HBM, expansion at TSM, and enabling the Nvidia...

Neil Campling

ASMPT (522 HK): KKR's Proposal Is A Non-Starter

This rumoured bid from KKR has all the hallmarkts of the approach (also cited by Bloomberg) by PAG last year. Which came to nought. From a...

David Blennerhassett

Pentamaster International (1665 HK): Pentamaster Corp and AchiCapital’s Light Scheme Offer

The risk/reward is unattractive. An arguably light offer in which the Holdco is privatising its OpCo by arbitraging the valuation discrepancies...

Arun George

Private equity interest in ASMPT has surged due to its leadership in TCB, potential growth in HBM, expansion at TSM, and enabling the Nvidia...