Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Murakami to tender stake in <a href="https://www.smartkarma.com/entities/jsr-corp" target="_blank" data-smartkarma-citation="entities:17620:1" rel="noopener">JSR Corp (4185 JP)</a>? Maybe the "double arb": i.e. short on swap, long on cash, will tender the cash, remain short the back end.</li>
<li>
<a href="https://www.smartkarma.com/entities/austal-ltd" target="_blank" data-smartkarma-citation="entities:14420:1" rel="noopener">Austal Ltd (ASB AU)</a> rejected (for now) <a href="https://www.smartkarma.com/entities/hanwha-ocean-co-ltd" target="_blank" data-smartkarma-citation="entities:12531:1" rel="noopener">Hanwha Ocean (042660 KS)</a>'s bid based on regulatory concerns.  Hanwha reckons these should not be an issue.</li>
<li>If you can tolerate owning the mobile biz, buy <a href="https://www.smartkarma.com/entities/rakuten-group-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten (4755 JP)</a> on dips. If not, avoid Rakuten Group and Rakuten Bank short-term; buy Rakuten Bank on larger dips.</li>
</ul>


Murakami to tender stake in JSR Corp (4185 JP)? Maybe the "double arb": i.e. short on swap, long on cash, will tender the cash, remain short the back end.

Austal Ltd (ASB AU) rejected (for now) Hanwha Ocean (042660 KS)'s bid based on regulatory concerns.  Hanwha reckons these should not be an issue.
If you can tolerate owning the mobile biz, buy Rakuten (4755 JP) on dips. If not, avoid Rakuten Group and Rakuten Bank short-term; buy Rakuten Bank on larger dips.


Last Week in Event SPACE: JSR, Austal, Rakuten, Hyundai Home Shopping, Hanmi Science

Hyundai Home Shopping Network / Event-Driven

<ul>
<li>Yesterday, the 3rd April, <a href="https://www.smartkarma.com/entities/hyundai-g-f-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:19560:1" rel="noopener">Hyundai G.F. Holdings (005440 KS)</a> <a href="https://n.news.naver.com/mnews/article/030/0003194952" target="_blank" rel="noopener">announced</a> it would conduct a Tender Offer for 3mn shares, or 25% of <a href="https://www.smartkarma.com/entities/hyundai-home-shopping-network-corp" target="_blank" data-smartkarma-citation="entities:2357:1" rel="noopener">Hyundai Home Shopping Network (057050 KS)</a> (HHSN).</li>
<li>A successful Tender would lift Holdings stake to 50% from 25% currently, satisfying the <a href="https://www.businesskorea.co.kr/news/articleView.html?idxno=55003" target="_blank" rel="noopener">30% holding company threshold</a> introduced in 2022.</li>
<li>Minimum proration is 33%. Shares popped 13.8% on the news. That looks a bit too aggressive. </li>
</ul>


Yesterday, the 3rd April, Hyundai G.F. Holdings (005440 KS) announced it would conduct a Tender Offer for 3mn shares, or 25% of Hyundai Home Shopping Network (057050 KS) (HHSN).
A successful Tender would lift Holdings stake to 50% from 25% currently, satisfying the 30% holding company threshold introduced in 2022.
Minimum proration is 33%. Shares popped 13.8% on the news. That looks a bit too aggressive. 


Hyundai Home Shopping (057050 KS)'s Partial Offer

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>On 3 April, it was reported that Hyundai G.F. Holdings will be conducting a tender offer of 3 million shares of Hyundai Home Shopping (25% of outstanding shares). </li>
<li>The tender offer price is 64,200 won. The main reason for this tender offer is to meet the regulatory requirement of a holding company by 2025. </li>
<li>We are positive on the tender offer of a 25% stake in Hyundai Home Shopping by Hyundai G.F. Holdings.</li>
</ul>


On 3 April, it was reported that Hyundai G.F. Holdings will be conducting a tender offer of 3 million shares of Hyundai Home Shopping (25% of outstanding shares). 
The tender offer price is 64,200 won. The main reason for this tender offer is to meet the regulatory requirement of a holding company by 2025. 
We are positive on the tender offer of a 25% stake in Hyundai Home Shopping by Hyundai G.F. Holdings.


Tender Offer of 25% of Hyundai Home Shopping Shares by Hyundai GF Holdings

Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

<ul>
<li>It is somewhat unusual that there is still a spread of over 5%. This likely reflects concerns about the relatively high intensity of allocation risk.</li>
<li>Retail: 30%, Institutions: 16% of float shares (46%). Retailers may contribute 20%, institutions 10-15%. Total tender rate: 30-35%.</li>
<li>In that case, it means that roughly 70% of our holdings could be tendered. And at this level, it seems reasonable enough to target the current spread of 5%.</li>
</ul>


It is somewhat unusual that there is still a spread of over 5%. This likely reflects concerns about the relatively high intensity of allocation risk.
Retail: 30%, Institutions: 16% of float shares (46%). Retailers may contribute 20%, institutions 10-15%. Total tender rate: 30-35%.
In that case, it means that roughly 70% of our holdings could be tendered. And at this level, it seems reasonable enough to target the current spread of 5%.


Estimating Participation Rate for Hyundai HS Tender Offer, Currently at a 5% Spread

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

<ul>
<li>The last week was a very busy one. The coming week has some announcements and implementations but is a relatively quieter one.</li>
<li>The <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">SSE STAR50 (STAR50 INDEX)</a> and STAR100 Index changes for March will be implemented at the close on Friday, the 8th.</li>
<li>Another week of inflows for the <a href="https://www.smartkarma.com/entities/ishares-msci-emerging-markets-223f5da3-7054-4e4f-bc55-b7f0852c2581" target="_blank" data-smartkarma-citation="entities:31998:1" rel="noopener">iShares Emerging Markets ex-China (EMXC US)</a> ETF as creations cross US$2bn for 2024. ETF AUM has gone from US$420m in 2021 to US$11bn now!</li>
</ul>


The last week was a very busy one. The coming week has some announcements and implementations but is a relatively quieter one.
The SSE STAR50 (STAR50 INDEX) and STAR100 Index changes for March will be implemented at the close on Friday, the 8th.
Another week of inflows for the iShares Emerging Markets ex-China (EMXC US) ETF as creations cross US$2bn for 2024. ETF AUM has gone from US$420m in 2021 to US$11bn now!


Index Rebalance & ETF Flow Recap: STAR50/100, FXI, NIFTY/NEXT50, S&P500, KOSPI, Goodman, Ecopro BM

South Korea

BGF Retail Co. Ltd. operates convenience store chains called CU in South Korea. The Company, through company owned stores or franchise, sells general groceries such as food and beverage.  The Company also offers ticketing, parcel pick-up, ATM machine and bill payment service.

CJ Freshway Corp. markets and provides various groceries to food service companies and restaurants.  The Company also caters to company's restaurants, schools, airports, and private restaurants and processes agricultural products.

E-MART Inc. operates E-Mart discount stores. The Company retails food, clothing, household goods, electronics, and other items through several branch stores.

Dongsuh Companies Inc. imports, manufactures, processes, markets and distributes general food products such as vegetable cooking oils. The Company also produces packaging materials and ceramic products including food and oil containers. Dongsuh has a cooperative relationship with Kraft Foods Inc.

BGF Retail Co., Ltd. operates convenience stores. The Company retails delicatessen, sweets, snacks, beverages, tobacco, and other related products. BGF Retail markets its products throughout South Korea.

GS Retail Co., Ltd. operates a chain of retail stores. The Company provides beauty and skincare products, candles, gifts, perfumes, ornaments, bathroom accessories, and other products. GS Retail serves its customers in the Republic of South Korea.

Naturecell Co Ltd manufactures fruit beverages, canned beverage, and health functional foods. The Company's prodcuts are tomato juices, peach juice, pineapple juice, orange juice, organic health conscious beverage, and canned yellow peach.  The Company was established in 1971, and its headquarters are located in Korea.

Sajodaerim Corporation specializes in deep sea fishing of pollack, cod, tuna, mackerel, and squid.  The Company's fishing territories cover domestic coastal areas, the North Pacific, South Atlantic, Western Africa, and Southeast Asia. Sajodaerim also manufactures, wholesales, and resells raw fish and processed frozen seafood.

Binggrae Co., Ltd. manufactures dairy food products.  The Company has cold-storage and frozen divisions.  Bonggrae's main items include Banana Flavoured Milk, yogurts, snacks and various types of ice cream.

Dongwon F&B Co., Ltd. manufactures various processed food products. The Company' s products include agricultural and marine products, beverages, dairy products, processed meat, fast food, frozen food, and ginseng. The company's main product in early stage was canned tuna and expanded their business into a variety of food production.

SHOEI FOODS CORPORATION trades foodstuff materials.  The Company trades milk-based products, canned foods, dried fruits, and confectionery.

7-Eleven Malaysia Holdings Berhad owns, operates, and franchises a chain of convenience stores under the 7-Eleven brand name.

Mammy Mart Corporation operates supermarkets in Saitama Prefecture.  The Company mainly operates small scale stores.

RETAIL PARTNERS CO., LTD. operates regional supermarket chain based in Yamaguchi Prefecture.  The Company also sells household utensils, appliances, and clothing.

Cosco Capital, Inc. operates as a retail holding company. The Company owns a diverse portfolio of real estate holdings that includes retail outlets, pharmacy chains, restaurants, wine and liquor distribution businesses, and unibanks. Cosco Capital focuses on the retail, real estate, liquor distribution and oil and mineral exploration industries in the Philippines.

Natural Grocers by Vitamin Cottage Inc through its subsidiary operates in the food industry. The Company provides healthy foods, vitamins, and supplements including allergy, aloe products, amino acids,  antioxidants, animal products, beverages, medical, cleansing and clearance, weight loss,  electrolytes, energy, cosmetics, natural, minerals, vitamins, pain relief, and supplements.

Natural Grocers By Vitamin Cottage (NGVC US)

ITOCHU-SHOKUHIN Co., Ltd. is a wholesaler of alcoholic beverages, general foods, and frozen foods.  The Company's products include beer, sake, distilled spirits, seasonings, canned goods, noodles, dried foodstuffs, confectionery, and processed foods.  Itochu-Shokuhin also plans, develops, and sells gift products.

Taiwan Tea Corporation imports and sells motorcycles, building materials, frozen meats, and copper wires.  The Company also produces tea and operates in the commercial building leasing business.

New Huadu Supercenter Co., Ltd. engages in chain operations in marketplaces, sup ermarkets, department stores.

Cawachi Ltd. operates a chain of drug stores in the Tohoku and Chubu regions. The Company's stores sell products such as pharmaceuticals, cosmetics, health products, foodstuffs, and household consumable goods.  Cawachi also operates a chain of pharmacies.

Hyundai G.F. Holdings Co., Ltd. operates as a office furniture distribution company. The Company produces built in furniture, upcycling waste materials bottles furniture, wood furniture, and other related products. Hyundai G.F. Holdings also offers food, information and technology, groceries sale, and food materials distribution services.

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Hyundai G.F. Holdings (005440 KS)

Last Week in Event SPACE: JSR, Austal, Rakuten, Hyundai Home Shopping, Hanmi Science

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Hyundai Home Shopping (057050 KS)'s Partial Offer

HHSN is not particularly liquid, trading ~US$1mn/day. Unless you believe pro-ration to be materially higher than 65%, I'd be disinclined to enter...

David Blennerhassett

Tender Offer of 25% of Hyundai Home Shopping Shares by Hyundai GF Holdings

We are positive on the tender offer of a 25% stake in Hyundai Home Shopping by Hyundai G.F. Holdings. Hyundai Home Shopping is trading at only 0.3x...

Douglas Kim

Estimating Participation Rate for Hyundai HS Tender Offer, Currently at a 5% Spread

This post assesses the actual tendering participation rate for the Hyundai Home Shopping tender offer, currently at a 5% spread.

Sanghyun Park

Index Rebalance & ETF Flow Recap: STAR50/100, FXI, NIFTY/NEXT50, S&P500, KOSPI, Goodman, Ecopro BM

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

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