Australia

• Agile Response to Visa Changes: NextEd’s nimble approach to the end of the COVID-19 408 visa showcases adaptability in uncertain times.
• Tech Sector Growth Potential: Expanding in the thriving tech field, NextEd taps into strong post-study work rights and sector support.
• Regulatory Challenges: Navigating regulatory shifts, NextEd’s resilience shines amid uncertainty in the non-university education landscape.

• There are a bunch of stocks that are constituents of the S&P/ASX family of indices and could go private or merge prior to the next scheduled rebalance in December.
• That will lead to ad hoc inclusions for the S&P/ASX 200 (AS51 INDEX) and could also lead to ad hoc inclusions for the S&P/ASX 50 and S&P/ASX 100 indices.
• There is a fair amount of short interest on some of the potential inclusions and short covering due to index inclusion could take the stocks higher.

• Orora Ltd (ORA AU) is looking to raise A$1,345m (~US$870m) via a primary placement and an entitlement offer to partially fund its acquisition of Saverglass.
• While the exact size/target of an acquisition wasn’t explicitly mentioned earlier, the firm had discussed its potential use of M&A to grow its North American/Europe regions. 
• Including the entitlement offer, the deal would represent 212 days of three month ADV and add 58.9% to the firm’s total shares outstanding.

• Kinatico Ltd (ASX:KYP) is a ‘Know Your People” regtech company providing workforce compliance monitoring and management technology and services.
• KYP has reported FY23 NPAT of $0.237m, an increase of 116% on the previous corresponding period (pcp), the company’s best-ever result.
• On an adjusted basis (for non-cash items), NPAT was $0.75m, a turnaround of $1.5m on the prior period while the gross margin and EBITDA margin hit record levels of 65.7% and 11.2% respectively. 

• Liontown Resources (LTR AU) has received a revised non-binding privatisation proposal from Albemarle Corp (ALB US) at A$3.00 per share, a 20.0% premium to the previously rejected offer of A$2.50.
• The revised offer is attractive compared to the Kathleen Valley Lithium Project’s NPV range, peer multiples and historical share prices. The offer price is final, barring a superior proposal.
• Liontown has granted Albemarle a limited period of exclusive due diligence. The Board intends to recommend a binding proposal at A$3.00 per share. The retail vote could be a risk.

• The S&P/ASX 200 INDEX has been stuck in the 7000-7600 range for the past 2 years, with a brief dive to 6500 during the summer of 2022. 
• If we consider the bottom at 6411 in October 2022, the index may have started to build an uptrend since then, but failed repeatedly to breach past the 7600 barrier.
• After a brief correction in August 2023, the index is currently rising, but soon it will encounter WEEKLY resistance that could hamper its chances of breaking out of its range.

• There is 1 change for the S&P/ASX100 Index, 5 adds/ 6 deletes for the S&P/ASX 200 INDEX, and 10 adds/ 8 deletes for the S&P/ASX300 Index at the September rebalance.
• There will be 4-14 days of ADV to trade on the S&P/ASX100 Index and S&P/ASX 200 INDEX adds while the impact on the deletions is between 3-12 days of ADV.
• On average, the adds to the S&P/ASX 200 (AS51 INDEX) and S&P/ASX 300 Index have outperformed the deletes over the last few months.

• The review period for the MVIS Global Rare Earth/Strategic Metals Index ended 31 August. The changes will be announced on 8 September and implemented at the close on 15 September.
• Coming in around the 85% cutoff, Rising Nonferrous Metals Share (600259 CH) is a potential inclusion. There are two stocks that are very close to the 98% deletion threshold.
• Lake Resources Nl (LKE AU) is a deletion from the S&P/ASX 200 (AS51 INDEX) at the September rebalance and there could be more to sell if deleted from this index.

• Back on the 28 March, Liontown Resources (LTR AU) rejected the third proposal of $2.50/share from Albemarle (ALB US), the world’s largest lithium producer, citing terms were opportunistic.
• Then everything went quiet. There appeared to be an interested party building a stake ~$2.75/share, but nothing concrete emerged. 
• Now Albemarle has returned with a revised indicative proposal of $3.00/share – best and final. Due diligence has been granted. The board is supportive if terms are firmed.

• I tally 49 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
• Quiet week – only one new deal: STG’s Offer for Energy One Ltd (EOL AU).
• Key updates took place for Costa Group Holdings (CGC AU), DDH1 (DDH AU), ENM Holdings (128 HK), and Penguin International (PBS SP).

• The September 2023 review results for ASX indices were announced after the close on Friday 1st September 2023. 
• There will be 15 ADD names and 15 DELETE names across ASX 100, ASX 200, and ASX 300. Collectively, the ADDs could see one-way flow of roughly US$450mn. 
• Many names have a significant number of days to trade. Some of these names have seen a spike in short interest recently. This should be an interesting flow event.

• Ventia Services Group Pty (VNT AU) (VSG)’s two largest shareholders, Apollo Global Management and CIMIC Group, aim to raise around US$214m via selling 14% of the company.
• The two largest shareholders together owned nearly 30% of the company and have pared their stake twice this year.
• In this note, we will talk about the deal dynamics.

• The review period for the September rebalance ended yesterday. There could be one deletion from the index and a bunch of capping changes.
• The index changes will lead to a one-way turnover of 3.4% resulting in a one-way trade of A$21m. There are two stocks with over A$5m to trade.
• Short interest has increased on a few REITs recently while decreasing on most of the other names.

• JB Hi-Fi Ltd (JBH AU) and Charter Hall (CHC AU) could be deleted as the lowest ranked current index constituents.
• There are three other stocks that are close to the deletion threshold and a change in the free float could result in the stocks being deleted.
• Short interest has been increasing on JB Hi-Fi Ltd (JBH AU), Charter Hall (CHC AU) and Lendlease Group (LLC AU) and could be partially driven by potential index deletions.

Leveraging the expanded scope of operations from its recent acquisition of Access Managed Services (AMS), Respiri has announced the signing of new remote patient monitoring (RPM) contracts with VDO Cardiology and Angelic Health Partners, along with an extended contract with Minnesota Lung Center (existing client) for a sponsored remote therapeutic monitoring (RTM) pilot study in patients with obstructive sleep apnea (OSA). These contracts will add a total of 600 patients to Respiri’s customer base, with a potential A$900k in annual revenues. The new contracts bode well for the company’s break even target of 9,000 patients by H2 CY24 and re-emphasise the contribution of the AMS deal in achieving this. They also broaden Respiri’s addressable RPM market beyond respiratory to cardiovascular, diabetes, asthma, obesity and sleep apnea-related treatments. As advanced discussions are underway with other healthcare organisations and payors according to management, we see incremental revenue expansion opportunities in the near term. We plan to revisit our assumptions post the AMS acquisition; therefore, we have placed our estimates and valuation under review.

• Yesterday (28 August) software provider Energy One Ltd (EOL AU)  announced an indicative Offer, by way of a Scheme, from STG at A$5.85/share, a solid 44% premium to last close. 
• Energy One has granted STG due diligence on an exclusive basis and the board is supportive if terms are firmed. All looks good. However …
• … Vaughan Busby, a NED and founding CEO of Energy One, is not aligned with the board. And he holds ~14%. 

• PolyNovo Ltd (PNV AU) reported record high sales of A$66.5M, up 59% YoY during FY23, mainly driven by strong momentum in the U.S. RoW sales increased 134% YoY to A$14M.
• However, net underlying loss widened to A$2.3M in FY23 from A$2.0M in FY22 due to a 50% YoY increase in operating expenses due to increasing headcount and R&D investment.
• In FY23, the U.S. customer accounts increased to 299 hospitals from 189 hospitals in FY22. PolyNovo continued geography expansion and entered Hong Kong, India, and Canada markets.

• Comms Group Ltd (ASX:CCG) has reported FY23 earnings and provided a more detailed and narrower range for both revenue and EBITDA guidance in FY24.
• The result was largely in-line with expectations and with guidance already provided.
• Revenue increased 27% and adjusted EBITDA ~17% as the onPlatinum acquisition contributed for a full 12-months and investment was made in the Global business for future growth.