Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Bottom-Up

<ul>
<li>Kiswire Ltd (002240 KS) is the number one player for steel wire and rope products in Korea. More than 85% of its sales are generated overseas. </li>
<li>The company has a consistent record of generating positive net profit. It is trading at low valuations (P/B of 0.3x and EV/EBITDA of 4.5x).</li>
<li>Its average net profit from 2021 to 2023 are much higher than previous three years from 2018 to 2020, which is a testament of increasing demand for its products globally. </li>
</ul>


Kiswire Ltd (002240 KS) is the number one player for steel wire and rope products in Korea. More than 85% of its sales are generated overseas. 
The company has a consistent record of generating positive net profit. It is trading at low valuations (P/B of 0.3x and EV/EBITDA of 4.5x).
Its average net profit from 2021 to 2023 are much higher than previous three years from 2018 to 2020, which is a testament of increasing demand for its products globally. 


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.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/xingda-international-holdings" target="_blank" data-smartkarma-citation="entities:17836:1" rel="noopener">Xingda International (1899 HK)</a> has disclosed a voluntary conditional offer from Mr Liu Jinlan (Chairman) at HK$1.30 per share, which aligns with the last close price. </li>
<li>The offer is conditional on the offeror and concert parties representing more than 50% of voting rights. The offeror and concert parties represent 37.03% of voting rights.  </li>
<li>The offer is a reaction to Mr Zhao Yue's “hostile” emergence as a substantial shareholder. It is unattractive and will require a bump to satisfy the minimum acceptance condition.   </li>
</ul>



Xingda International (1899 HK) has disclosed a voluntary conditional offer from Mr Liu Jinlan (Chairman) at HK$1.30 per share, which aligns with the last close price. 
The offer is conditional on the offeror and concert parties representing more than 50% of voting rights. The offeror and concert parties represent 37.03% of voting rights.  
The offer is a reaction to Mr Zhao Yue's “hostile” emergence as a substantial shareholder. It is unattractive and will require a bump to satisfy the minimum acceptance condition.   


Xingda (1899 HK): No Premium Voluntary Conditional Offer to Ward off a Hostile Holder

<ul>
<li>
<a href="https://www.smartkarma.com/entities/xingda-international-holdings" target="_blank" data-smartkarma-citation="entities:17836:1" rel="noopener">Xingda International (1899 HK)</a> entered a trading halt pending the release of an announcement under the Hong Kong Code on Takeovers and Mergers. </li>
<li>Significant changes in substantial shareholders have occurred since the previous partial offer closed on 10 March 2023, which could be the catalyst for an offer. </li>
<li>Management is likely reloading a partial offer to exercise statutory control and bypass the 2% creeper rule. The partial offer price could be around HK$1.60-1.70 per share. </li>
</ul>



Xingda International (1899 HK) entered a trading halt pending the release of an announcement under the Hong Kong Code on Takeovers and Mergers. 
Significant changes in substantial shareholders have occurred since the previous partial offer closed on 10 March 2023, which could be the catalyst for an offer. 
Management is likely reloading a partial offer to exercise statutory control and bypass the 2% creeper rule. The partial offer price could be around HK$1.60-1.70 per share. 


Xingda (1899 HK): Management to Reload with a Partial Offer?

<ul>
<li>On its first closing date on 15 November, <a href="https://www.smartkarma.com/entities/xingda-international-holdings" target="_blank" data-smartkarma-citation="entities:17836:1" rel="noopener">Xingda International (1899 HK)</a> declared the Chairman’s offer unconditional as the offeror and concert parties represented 60.76% of outstanding shares. </li>
<li>The result was surprising. The IFA opined that the offer was not fair or reasonable, and the independent Board recommended that the shareholder not accept it. </li>
<li>The CCASS movements suggest that the offer was declared unconditional mainly because friends and family supported the Chairman’s offer. The gross/annualised spread is 1.6%/92.6%.</li>
</ul>


On its first closing date on 15 November, Xingda International (1899 HK) declared the Chairman’s offer unconditional as the offeror and concert parties represented 60.76% of outstanding shares. 
The result was surprising. The IFA opined that the offer was not fair or reasonable, and the independent Board recommended that the shareholder not accept it. 
The CCASS movements suggest that the offer was declared unconditional mainly because friends and family supported the Chairman’s offer. The gross/annualised spread is 1.6%/92.6%.


Xingda (1899 HK): A Surprising Result as Offer Declared Unconditional

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 review period for the March rebalance of the KOSPI Size Indices commences on 1 December and will end on 28 February.</li>
<li>We see 5 migrations from MidCap to LargeCap, 1 new addition to LargeCap, 8 stocks moving from SmallCap to MidCap and 1 new addition to MidCap.</li>
<li>The migrations from MidCap to LargeCap have outperformed the other migration categories. Four potential LargeCap to MidCap migrations will be deleted from a global index later this month.</li>
</ul>


The review period for the March rebalance of the KOSPI Size Indices commences on 1 December and will end on 28 February.
We see 5 migrations from MidCap to LargeCap, 1 new addition to LargeCap, 8 stocks moving from SmallCap to MidCap and 1 new addition to MidCap.
The migrations from MidCap to LargeCap have outperformed the other migration categories. Four potential LargeCap to MidCap migrations will be deleted from a global index later this month.


KOSPI Size Indices: Global Index Selling Leads to Potential Downward Migration

South Korea

KISWIRE Ltd. manufactures secondary steel products, such as wire ropes and wire strands for electric wire and springs.  The Company markets to the shipbuilding and construction industries, and exports products to overseas markets.  KISWIRE also has a financial subsidiary.

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Kiswire Ltd (002240 KS)

Korea Small Cap Gem #30: Kiswire

Kiswire is the number one player for steel wire and rope products in Korea. Its average net profit from 2021 to 2023 are much higher than previous...

Douglas Kim

Xingda (1899 HK): No Premium Voluntary Conditional Offer to Ward off a Hostile Holder

Unsurprisingly, the IFA has opined that the offer is not fair and reasonable, and the independent Board committee recommends not accepting it. The...

Arun George

Xingda (1899 HK): Management to Reload with a Partial Offer?

Management is likely reloading a partial offer to exercise statutory control and bypass the 2% creeper rule. The partial offer price could be...

Arun George

Xingda (1899 HK): A Surprising Result as Offer Declared Unconditional

The result was surprising as the IFA opined that the offer was not fair or reasonable. At the last close and for a 26 November payment, the gross...

Arun George

KOSPI Size Indices: Global Index Selling Leads to Potential Downward Migration

There could be 29 migrations for the KOSPI Size indices in March, plus 1 LargeCap and 1 MidCap inclusion. The MidCap to LargeCap migrations have...

Brian Freitas

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