Event-Driven

The family which owns and controls ubiquitous Nagoya supermarket chain Aoki Super (9977 JP) will acquire the 47% it does not own in an MBO.
This appears to be an estate planning exercise, creating a context to hand off ownership from the 77yr old former CEO to his 44yr old son and current CEO.
This comes in at a 44% premium, an all-time high price, and 15+x forecast FCF (even if the forecast looks a little light). This gets done easily.

Kerry Express (KEX TB): Kerry Logistics (636 HK)’s In-Specie Triggers MTO

Last week Kerry Logistics Network (636 HK) (KLN) announced it would in-specie its entire 52.1% stake in Kerry Express Thailand (KEX TB) (KET).
As S.F. Holding (002352 CH) holds a controlling 51.5% stake in KLN after the 2021 partial Offer, it will hold 26.8% in KET post-in-specie. That triggers an unconditional MTO.
The MTO price will be THB5.50/share. The key regulatory approval is Thai SFC. That won’t be an issue.

Aoki Super (9977 JP): MBO Tender Offer at JPY3,800

By Arun George

Aoki Super (9977 JP) has recommended an MBO tender offer of JPY3,800 per share, a 43.9% premium to the undisturbed (5 January).
The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the tender offer is set at a 13.35% ownership ratio.
Based on the irrevocables, the minimum acceptance condition requires a 28.6% minority acceptance rate. This acceptance rate is achievable as the offer represents an all-time high.

StubWorld: Hanmi Science’s Implied Stub Nearing All-Time Lows

A double dose of stubs this week as Hanmi Science (008930 KS) comes up “cheap” on my monitor.
Preceding my comments on Hanmi are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

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Jan 05

Daily Brief Event-Driven: Korea’s Short Selling Ban to Stay and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Korea’s Short Selling Ban to Stay, Likely Until EquiLend-Korean Version Launch
New Year New NISA Accounts – It’s BIG, But Not so Big
PICC’s (1339 HK)’s Implied Stub Plumbs New Lows As Interest Rate Cuts Bite
Quiddity Leaderboard for Hang Seng Index Mar 24: More Room Being Created for IT Names?

Korea’s Short Selling Ban to Stay, Likely Until EquiLend-Korean Version Launch

By Sanghyun Park

Local market information indicates potential collaboration between KRX, FSS, and KSD to create a Korean EquiLend, aiming to centralize the stock lending channel.
Unprecedented globally, President Yoon aims to centralize short selling. The challenge lies in mandating foreign investors to use Korea’s platform, necessitating a complex legal framework.
Despite the difficulty, local authorities are compelled to pursue this initiative, raising the likelihood of a Korean EquiLend. Developing strategic plans in response is imperative.

New Year New NISA Accounts – It’s BIG, But Not so Big

The Kishida administration put out a Doubling Asset-Based Income Plan in 2022. The goal? To get cash savings (corporate/individual) into growth assets and increase asset-based return contribution to income.
The goal included doubling the number of NISA accounts, and the amount invested in the next five years. On 1 January 2024, NEW NISA account contribution totals were trebled.
If accounts double, and contribution totals treble, and exemptions are now permanent, investment doubling is a quasi-certainty. The question is how it turns into income-producing assets. That’s MUCH tougher.

PICC’s (1339 HK)’s Implied Stub Plumbs New Lows As Interest Rate Cuts Bite

Back in October, I wrote in PICC’s (1339 HK) Lifetime Low Implied Stub that People’s Insurance (1339 HK) was trading at an all-time low implied stub. It’s widened further since.
Over the past 12-months, excluding PICC’s 68.98% stake in PICC Property & Casualty (2328 HK), the market has assigned HK$42.6bn less for PICC’s steady and profitable life/health insurance stub ops.
What gives? Falling interest rates is one. EV insurance in another. Yet this bifurcation is extreme.

Quiddity Leaderboard for Hang Seng Index Mar 24: More Room Being Created for IT Names?

By Janaghan Jeyakumar, CFA

In this insight, we take a look at a group of names with reasonably high likelihood of being involved in index changes for the Hang Seng Index in March 2024.
The index changes for the March 2024 index rebal will be announced on 16th February 2024.
While the Hang Seng Index selection process is highly subjective, we continue to believe that identifying eligible names and grouping them by conviction level could be a valuable exercise.

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Jan 04

Daily Brief Event-Driven: Celltrion Pharm (068760 KS) Looks Frothy and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Celltrion Pharm (068760 KS) Looks Frothy
KRX New Deal Index Rebalance Preview: Changes with Flow & Impact
NIFTY NEXT50 Index Rebalance Preview: Potential Adds Skyrocketing
Avangrid (Iberdrola) Terminates Merger Agreement with PNM Resources

Celltrion Pharm (068760 KS) Looks Frothy

After biopharmaceuticals developer and producer Celltrion Inc (068270 KS) recently completed its merger with Celltrion Healthcare (091990 KS), Celltrion Pharm (068760 KS) came (more) into focus.
Pharma is now up ~37% since Inc and Healthcare merged.
That’s quite a lot of expectation baked in. Probably too much.

KRX New Deal Index Rebalance Preview: Changes with Flow & Impact

The review period for the March rebalance ends on 31 January, the changes will be announced early March and implemented at the close of trading on 14 March.
There is one change currently for each of the Secondary Battery, Bio, Internet and Game indices. There are two changes for the BBIG Index.
There will be big flow on Ecopro BM (247540 KS) and Posco Future M (003670 KS) and big impact on Douzone Bizon (012510 KS) and DearU (376300 KS).

NIFTY NEXT50 Index Rebalance Preview: Potential Adds Skyrocketing

Nearing the end of the review period, we see 6 potential changes for the NSE Nifty Next 50 Index (NIFTYJR INDEX) using the current index methodology.
Estimated one-way turnover is 13.9% resulting in a one-way trade of INR 26.9bn. There will be more than 1.5x ADV to sell on nearly all deletes.
The potential adds have outperformed the potential deletes by 35% over the last two months and some stocks are looking extremely frothy.

Avangrid (Iberdrola) Terminates Merger Agreement with PNM Resources

By Jesus Rodriguez Aguilar

Iberdrola SA (IBE SM)‘s U.S. subsidiary Avangrid (AGR US) terminated its $8.3 billion deal for PNM Resources (PNM US) as it could not New Mexico regulatory approval by 31 December 2023.
Iberdrola lost its patience but freed up €11.5 billion from that deal, together with €5.5 billion from assets sold to the Mexican Government. That’s a lot for inorganic growth.
PNM, at 9.7x EV/Fwd EBITDA, is trading in line with comparables, thus on a multiples basis there should be limited downside to the share price.

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Jan 03

Daily Brief Event-Driven: Allkem + Livent = Arcadium : Updated Expected Index Flows and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Allkem + Livent = Arcadium : Updated Expected Index Flows
HSCI Index Rebalance Preview and Stock Connect: Potential Changes in March
KRX’s Mandatory English Disclosure Debut: A Detailed Guide on Utilizing This Without Confusion
HS Holdings (8699) – New Year, New Issues So Lots of Value But Buyer Beware!
Quiddity Leaderboard T50/100 Mar 24: Bizlink TDIV Deletion Very Close!
End of Mandatory Lock-Up Periods for 41 Companies in Korea in January 2024
NIFTY50 Index Rebalance Preview: One Change, Maybe Two, Low Probability of Three
Quiddity JPX-Nikkei 400 Rebal 2024: End-Dec 2023

Allkem + Livent = Arcadium : Updated Expected Index Flows

Allkem Ltd (AKE AU) saw its last day of trading on 21 December. There was large volume at the close as one major index provider gave it the boot.
Another delayed their treatment at the last minute, and eliminated a cross-flow.
But there is still a lot of net buy flow tomorrow (3 Jan) and the next day in the US. Perhaps more than I expected.

HSCI Index Rebalance Preview and Stock Connect: Potential Changes in March

We see 30 potential adds (including plenty of new listings) and 28 potential deletes (on market cap and liquidity) for the Hang Seng Composite Index in March.
We expect 26 stocks to be added to Southbound Stock Connect following the rebalance while 25 stocks could be deleted from the trading link and become Sell-only.
There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.

KRX’s Mandatory English Disclosure Debut: A Detailed Guide on Utilizing This Without Confusion

By Sanghyun Park

KRX’s lack of a standardized English translation platform may lead to non-standardized terminology and varying translation quality. KRX stresses cross-checking Korean and English disclosures due to potential errors.
The 3-day lag between Korean and English disclosures poses timeliness challenges, requiring consistent cross-checking. Overall, the process for foreign investors using Korean market disclosure sites remains largely unchanged.
The common procedure should still be to first check disclosures using English titles, then convert to Korean for reading. If English disclosures exist, utilize them for cross-checking.

HS Holdings (8699) – New Year, New Issues So Lots of Value But Buyer Beware!

Under the requirements of the Amended Mongolian Banking Law (Feb 2021), Khan Bank (KHAN MO) needed to IPO. It did, and HS Holdings (8699 JP)‘s stake fell to 49.77%.
It was de-consolidated. They were locked up for 6mos. The look-through financials are easier now. The company has bought back stock and trades at <0.5x book.
But the Mongolian Banking Law required one more thing. All D-SIBs had to get all shareholders below 20% by 31 December 2023. It’s not clear that happened.

Quiddity Leaderboard T50/100 Mar 24: Bizlink TDIV Deletion Very Close!

By Janaghan Jeyakumar, CFA

In this insight, we take a look at the names leading the race to become ADDs/DELs for the T50 and T100 Indices for the March 2024 Index Rebalance.
As things stand, I see one change for the T50 index and one more change for the T100 index.
TDIV member Bizlink Holding (3665 TT) is very close to getting deleted from the T100 index and that could have significant TDIV flow implications too.

End of Mandatory Lock-Up Periods for 41 Companies in Korea in January 2024

We discuss the end of the mandatory lock-up periods for 41 stocks in Korea in January 2024, among which 4 are in KOSPI and 37 are in KOSDAQ.
These 41 stocks on average could be subject to further selling pressures in January and could underperform relative to the market.
Among these 41 stocks, top five market cap stocks include Posco International, Doosan Robotics, Rainbow Robotics, Qualitas Semiconductor, and PhilEnergy.

NIFTY50 Index Rebalance Preview: One Change, Maybe Two, Low Probability of Three

Shriram Finance (SHFL IN) is a high probability add and UPL Ltd (UPLL IN) is a high probability delete at the NIFTY Index (NIFTY INDEX) rebalance in March.
There is a lower probability of Bharat Electronics (BHE IN) or Trent Ltd (TRENT IN) replacing Bharat Petroleum Corp (BPCL IN) at the rebalance.
Jio Financial Services (JIOFIN IN), Avenue Supermarts Ltd (DMART IN) and Zomato (ZOMATO IN) will enter the running once added to the F&O segment of the market.

Quiddity JPX-Nikkei 400 Rebal 2024: End-Dec 2023

By Janaghan Jeyakumar, CFA

JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.
A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the rankings of the potential ADDs/DELs every month.
Below is a look at potential ADDs/DELs for the JPX-Nikkei 400 Index Rebal to come in August 2024 based on trading data as of end-December 2023.

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Jan 02

Daily Brief Event-Driven: HSCEI Index Rebalance Preview: Zhongsheng (881 HK) Should Go This Time and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

HSCEI Index Rebalance Preview: Zhongsheng (881 HK) Should Go This Time
Insiders Related Daisy Partners Sells About 270 Billion Won of Ecopro Co and Ecopro BM
NIFTY Bank Index Rebalance Preview: Canara Bank Could Replace Bandhan Bank
Pyridam Farma (PYFA IJ): Acquisition of Australian Contract Manufacturer to Add Long-Term Value
Selected European HoldCos and DLC: December’23 Report

HSCEI Index Rebalance Preview: Zhongsheng (881 HK) Should Go This Time

Zhongsheng Group (881 HK) pops up as a potential deletion yet again and a much lower rank raises the probability of deletion to just short of a near certainty.
With BeiGene (6160 HK) failing the Velocity Test for Tradeable Indexes, Zhongsheng Group (881 HK)‘s deletion from the index should result in China Unicom Hong Kong (762 HK)‘s inclusion.
Estimated one-way turnover at the rebalance is 1.47% resulting in a one-way trade of HK$946m. Passives will need to trade over 2.5x ADV on both stocks.

Insiders Related Daisy Partners Sells About 270 Billion Won of Ecopro Co and Ecopro BM

On 29 December, Ecopro Group announced large selling of Ecopro Co Ltd (086520 KS) and Ecopro BM (247540 KS) by Daisy Partners worth 272 billion won in December.
Daisy Partners is a company 100% owned by Chairman of Ecopro Group Lee Dong-Chae and his family members.
Daisy Partners is likely to sell more shares in Ecopro Co and Ecopro BM in the next several years to increase the foundation’s capital to about 500 billion won.

NIFTY Bank Index Rebalance Preview: Canara Bank Could Replace Bandhan Bank

Canara Bank (CBK IN) could replace Bandhan Bank Ltd (BANDHAN IN) in the NSE Nifty Bank Index (NSEBANK INDEX) at the March rebalance.
Passive trackers will need to buy 2 days of ADV on Canara Bank (CBK IN) while selling over 1 day of ADV on Bandhan Bank Ltd (BANDHAN IN).
The impact is even higher where passives will need to buy nearly 6x delivery volumes in Canara Bank and sell 3x delivery volumes in Bandhan Bank Ltd.

Pyridam Farma (PYFA IJ): Acquisition of Australian Contract Manufacturer to Add Long-Term Value

By Tina Banerjee

Pyridam Farma (PYFA IJ) is acquiring Probiotec Ltd (PBP AU), a leading contract manufacturer and packer of prescription and OTC pharmaceuticals, complementary medicines, consumer health products, and FMCG.
Under the terms of the scheme, Probiotec shareholders will receive cash consideration of A$3.00 per share. This implies an equity value of ~A$251M for Probiotec and enterprise value of ~A$326M.
The acquisition will add an attractive high-margin revenue stream to Pyridam. Through the acquisition of Probiotec, Pyridam will be capable to reach a wider market, thereby increasing its market share.

Selected European HoldCos and DLC: December’23 Report

By Jesus Rodriguez Aguilar

The discounts to NAV of covered holdcos have mainly widened during December. Discounts to NAV: C.F.Alba, 49.1% (vs. 47.1%); GBL, 36.6% (vs. 34.9%); Heineken Holding, 16.7% (vs. 14.5%);
Industrivärden C, 5.4% (vs.4.9%); Investor B, 13.5% (vs. 14.6%); Porsche Automobile Holding, 37.1% (vs. 39.9%). The spread of Rio DLC widened to 24.2% (vs.17.2%).
What seems interesting: in holding trades, Porsche SE/vs. listed assets and the Rio DLC: long RIO LN/short RIO AU.

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Jan 01

Daily Brief Event-Driven: Merger Arb Mondays (01 Jan) – Weiqiao Textile and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Merger Arb Mondays (01 Jan) – Weiqiao Textile, IRC, IJTT, JSR, Shinko Electric, Hollysys, OreCorp
(Mostly) Asia M&A, Dec 2023: Vinda, Adbri, Perpetual, CPMC, Sigma Health, Shinko Electric

Merger Arb Mondays (01 Jan) – Weiqiao Textile, IRC, IJTT, JSR, Shinko Electric, Hollysys, OreCorp

By Arun George

We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads – Irc Ltd (1029 HK), Hollysys Automation Technologies (HOLI US), JSR Corp (4185 JP), Shinko Electric Industries (6967 JP), Adbri (ABC AU), Probiotec Ltd (PBP AU).
Lowest spreads – Tietto Minerals Ltd (TIE AU), A2B Australia (A2B AU), T&K Toka Co Ltd (4636 JP), Tokyo Rakutenchi (8842 JP), Pact Group Holdings (PGH AU).

(Mostly) Asia M&A, Dec 2023: Vinda, Adbri, Perpetual, CPMC, Sigma Health, Shinko Electric

For the month of December 2023, 16 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$10bn.
The average premium for the new deals announced (or first discussed) in December was 44.7%. The average YTD is 39% (117 deals).
This compares to the average premium for all deals in 2022 (106 deals), 2021 (165 deals), 2020 (158 deals), and 2019 (145 deals) of 41%, 33%, 31%, and 31% respectively.

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Dec 31

Daily Brief Event-Driven: HK Connect SOUTHBOUND Flows (To 29Dec23); CNOOC & Telcos to the BUY Side and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

HK Connect SOUTHBOUND Flows (To 29Dec23); CNOOC & Telcos to the BUY Side, Tracker Fund Sold Bigly
(Mostly) Asia-Pac Weekly Risk Arb Wrap: Meldia DC, Boart Longyear, Orecorp, Symbio, Shidax, Hollysys
Last Week in Event SPACE: Fujitsu General, Swire Pacific, Li Ning, IJJT
Mainland Connect NORTHBOUND Flows (To 29 Dec 23): Renewables Are a BIG NET BUY This Week
A/H Premium Tracker (To 29 Dec 23): STAY Long Hs Vs As, Wide Premia in Renewables Look Vulnerable

HK Connect SOUTHBOUND Flows (To 29Dec23); CNOOC & Telcos to the BUY Side, Tracker Fund Sold Bigly

SOUTHBOUND flows showing momentum tendencies this past week on a single-stock basis. Hs up vs As quite strongly. Liquid Hs even better.
SOUTHBOUND saw HK$1.2bn of net IN-flows in the 3-day week to 29 Dec. Total flows were HK$88bn.
Bullish end to year for SOUTHBOUND owners but they did not mark the close. They were, however, big buyers of high-div SOEs.

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Meldia DC, Boart Longyear, Orecorp, Symbio, Shidax, Hollysys

I tally 50 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Two new deals discussed this week: Seedheiwa (1739 JP)‘s (now Meldia DC) Tender Offer; and Boart Longyear (BLY AU)‘s ignominious exit.
Key updates took place on: Orecorp (ORR AU), Symbio Holdings (SYM AU), IJTT (7315 JP), Shidax Corp (4837 JP), Ohizumi Mfg (6618 JP), and Hollysys Automation Technologies (HOLI US).

Last Week in Event SPACE: Fujitsu General, Swire Pacific, Li Ning, IJJT

The BIG Risk is that Fujitsu Ltd (6702 JP) sells its stake in Fujitsu General (6755 JP) to someone in a below-market tender offer.
Swire Pacific (A) (19 HK) may still see more outperformance from its latest buyback. But it’s up ~29% since the company announced it was buying both the As and Bs.
Li Ning (2331 HK)‘s shares continue to edge up after its founder recently increased its stake.

Mainland Connect NORTHBOUND Flows (To 29 Dec 23): Renewables Are a BIG NET BUY This Week

The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
Last week saw NORTHBOUND net BUY RMB 18.7bn of A-shares on stronger average activity. BIG net buying flows on Weds and Thursday.
Looking at the change in the weekly position charts over the last year is striking (easiest in the Sectors table to start). Still.

A/H Premium Tracker (To 29 Dec 23): STAY Long Hs Vs As, Wide Premia in Renewables Look Vulnerable

The New and Better (5mos old) A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
SOUTHBOUND flows flat/light and NORTHBOUND flows a significant net buy, respectively, but liquid Hs with H/A pairs OUT-perform As on average by 200+bp.
STILL time to go long Hs vs As for the new year. 52wk wide discounts were just last week. Wide A/H premia in renewables space look vulnerable.

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Dec 30

Daily Brief Event-Driven: Investigating the Use of SSF Listing Events as Fresh Flow Trading Opportunities in Korea and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Investigating the Use of SSF Listing Events as Fresh Flow Trading Opportunities in Korea
EQD | The S&P500 WEEKLY Rally Is At A Crucial Fork: Higher or Lower?

Investigating the Use of SSF Listing Events as Fresh Flow Trading Opportunities in Korea

By Sanghyun Park

The spot prices of the newly listed SSFs generally exhibited a notable upward trend. This trend was consistently more pronounced in KOSDAQ-listed stocks compared to KOSPI-listed ones.
Various factors, including actions by ETF operators, may contribute. Their SSF purchases could deepen contango, leading to temporary spot price increases through arb spread seekers anticipating this development.
We should focus on a potentially consistent price pattern persisting before a sufficient learning effect accumulates. The tight schedule after July increases the likelihood of similar opportunities next March.

EQD | The S&P500 WEEKLY Rally Is At A Crucial Fork: Higher or Lower?

By Nico Rosti

The S&P 500 INDEX has been closing up for 9 consecutive weeks (CC=+9). In theory it could go higher for another 3 weeks, but it is ultra-OVERBOUGHT.
The market has moved past the Tails resistance limit at 4747 this last week, rallying more than +15% from the bottom on October 26th.
A SHORT trade may not be effective but being prepared for a pullback is a good idea, maybe just to add positions at better prices (assuming the rally will continue).

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Dec 29

Daily Brief Event-Driven: StubWorld: Swire Pac Trading “Rich” As Props Announces Big Write-Down and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

StubWorld: Swire Pac Trading “Rich” As Props Announces Big Write-Down
Boart Longyear’s (ASX:BLY) Ignominious Exit
ADNOC/Covestro: Bargaining On
EQD | The Nikkei Will Pullback Within 1-3 Weeks
HK CEO & Director Dealings (29 Dec 2023): Li Ning, Meitu

StubWorld: Swire Pac Trading “Rich” As Props Announces Big Write-Down

Swire Pacific (19 HK)‘s NAV discount has narrowed, and implied stub widened, after announcing its latest buyback. Separately, Swire Properties (1972 HK) flagged a HK$4.5bn writedown on its investment property.
Preceding my comments on Swire are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

Boart Longyear’s (ASX:BLY) Ignominious Exit

Drilling services company Boart Longyear (BLY AU) has agreed to a takeover by American Industrial Partners. Boart’s five largest shareholders – collectively holding 98.86% of shares out – are supportive.
Highly-Leveraged Boart copped the brunt of the GFC, and never fully recovered. American Industrial Partners’ Offer values Boart at A$543mn against its 2007 IPO value of A$2.3bn.
The takeover is expected to be completed in the first quarter of 2024. This is done.

ADNOC/Covestro: Bargaining On

By Jesus Rodriguez Aguilar

Covestro AG (1COV GR) has been the subject of a potential takeover from ADNOC since Bloomberg reported on 20 June. The last reported potential offer is €60/share (c.€11.3 billion).
ADNOC could be willing to offer €64.5 (7.1x EV/EBITDA on mid-cycle €2,110 million EBITDA), but Covestro is rumoured to seek €70/share (typical chemicals 6x on €2,675 million EBITDA, likely demanding).
Considering a takeout price of €60, gross spread is 11.7% and the shares are pricing a 64% probability of deal completion. I’d be long at €53/share, as downside seems limited.

EQD | The Nikkei Will Pullback Within 1-3 Weeks

By Nico Rosti

The Nikkei 225 (NKY INDEX) is about to close up for the 3rd consecutive week (CC=+3), it’s towards the Q3 resistance level at 33984: it’s short-term overbought.
There is a good chance that the index will pull back in the next 1-3 weeks, at the moment it looks like the rally has “stalled”.
The pullback may be an opportunity to buy again, and ride a rebound to previous highs, we will discuss LONG levels in a separated insight.

HK CEO & Director Dealings (29 Dec 2023): Li Ning, Meitu

The data in this insight is collated from the “shareholding disclosure” link on the HKEx website
Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.
The key stocks mentioned in this regular insight is Li Ning (2331 HK) and Meitu Inc (1357 HK).

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Dec 28

Daily Brief Event-Driven: Kum Yang: Announces Its Shares Will Be Listed on the US Stock Market Through ADRs and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

Kum Yang: Announces Its Shares Will Be Listed on the US Stock Market Through ADRs
Hollysys (HOLI US): Dazheng Consortium “Trumps” Ascendent’s Bid
Updated NAV on SK Inc Post 660 Billion Pre-IPO Investment in SK Pharmteco
Whispir (WSP AU) Backs Soprano’s Bump
OreCorp (ORR AU): Silvercorp Switches to a Takeover Offer to Counter Perseus

Kum Yang: Announces Its Shares Will Be Listed on the US Stock Market Through ADRs

On 27 December, Kum Yang announced that its shares will be listed on the US stock market in the form of DRs, resulting in its shares rising by 11.7%.
The listing of Kum Yang ADRs is likely to have a short-term positive impact on its share price as this is likely to reduce free float of local common shares.
Nonetheless, over the next 6-12 months, we expect Kum Yang’s share price to trade much lower (30% or more) as its shares are highly overvalued.

Hollysys (HOLI US): Dazheng Consortium “Trumps” Ascendent’s Bid

On the 13 December, Bloomberg reported that the Recco-led group consortium was weighing a revised Offer to be “significantly higher than the $26.50-a-share cash offer from Ascendent Capital”
On the 24 December, a buyer consortium led by Dazheng Group announced an all-cash proposal of US$29.00/share, a 9.4% premium to Ascendent’s Offer. “Credible” financing is in place.
“The Consortium stands ready to engage with the Board“. The Board should engage. The one curious aspect of this latest Offer is the apparent absence of Recco’s involvement.

Updated NAV on SK Inc Post 660 Billion Pre-IPO Investment in SK Pharmteco

It was reported today that SK Pharmteco completed a 660 billion won in pre-IPO funding valuing the company at 4 trillion won.
Prior to this investment, SK Inc owned a 100% stake in SK Pharmteco. After this investment, it is estimated that SK Inc will own about 83.5% stake in SK Pharmteco.
Our base case valuation of SK Inc is NAV of 19.0 trillion won (NAV per share of 258,967 won), representing a 47% upside from current levels.

Whispir (WSP AU) Backs Soprano’s Bump