Industrials

Monadelphous (MND AU) will be added to the S&P ASX 200 Index on 16 December 2022.
This is not a surprise. It has been the lead contender for a December ADD slot since the day after the September rebalance was completed (see here).
There is a fair bit of volume to buy, and there are pair trades to do.

Weekly Deals Digest (04 Dec) – Chip Eng Seng, Bigtincan, Genex, ReadyTech, Warrego, Sunshine,Growatt

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments – Sunshine Insurance (6963 HK) launches a US$950m IPO, Lygend Resources & Technology (2245 HK) debuts flat, Growatt Technology (1833969D CH) puts its US$1 billion IPO on hold.
Event-Driven developments – Chip Eng Seng Corp (CHIP SP), Bigtincan Holdings Ltd (BTH AU), Genex Power Ltd (GNX AU), ReadyTech Holdings Ltd (RDY AU), Warrego Energy (WGO AU).

Daiei Kankyo (9336): TSE Prime IPO and Index Demand

Daiei Kankyo (9336 JP) – designer, builder, operator/maintainer of waste management/recycling, soil purification, waste-to-energy, and similar infrastructure – will IPO on the TSE Prime market on 14 December.
The business is somewhat unexciting, but likely a non-growing, non-shrinking business which could roll up others.
The TSE Prime listing will mean it will have a TOPIX Inclusion at the end of January.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Dec 05

Daily Brief Industrials: Monadelphous, Chip Eng Seng Corp, Daiei Kankyo and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Monadelphous (MND AU) Is The S&P ASX 200 ADD – There’s a Trade Here
Weekly Deals Digest (04 Dec) – Chip Eng Seng, Bigtincan, Genex, ReadyTech, Warrego, Sunshine,Growatt
Daiei Kankyo (9336): TSE Prime IPO and Index Demand

Monadelphous (MND AU) Is The S&P ASX 200 ADD – There’s a Trade Here

Monadelphous (MND AU) will be added to the S&P ASX 200 Index on 16 December 2022.
This is not a surprise. It has been the lead contender for a December ADD slot since the day after the September rebalance was completed (see here).
There is a fair bit of volume to buy, and there are pair trades to do.

Weekly Deals Digest (04 Dec) – Chip Eng Seng, Bigtincan, Genex, ReadyTech, Warrego, Sunshine,Growatt

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments – Sunshine Insurance (6963 HK) launches a US$950m IPO, Lygend Resources & Technology (2245 HK) debuts flat, Growatt Technology (1833969D CH) puts its US$1 billion IPO on hold.
Event-Driven developments – Chip Eng Seng Corp (CHIP SP), Bigtincan Holdings Ltd (BTH AU), Genex Power Ltd (GNX AU), ReadyTech Holdings Ltd (RDY AU), Warrego Energy (WGO AU).

Daiei Kankyo (9336): TSE Prime IPO and Index Demand

Daiei Kankyo (9336 JP) – designer, builder, operator/maintainer of waste management/recycling, soil purification, waste-to-energy, and similar infrastructure – will IPO on the TSE Prime market on 14 December.
The business is somewhat unexciting, but likely a non-growing, non-shrinking business which could roll up others.
The TSE Prime listing will mean it will have a TOPIX Inclusion at the end of January.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Dec 04

Daily Brief Industrials: Far Eastern New Century, Chip Eng Seng Corp, Monadelphous, Keppel Corp, Toyo Construction and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Index Rebalance & ETF Flow Recap: STAR50, CSI300/500, SSE50/180/380, ChiNext, SZSE1000, CH50, EPRA
Chip Eng Seng (CHIP SP)’s Revised S$0.75 VGO from the Tangs
S&P/ASX Index Rebalance (Dec 2022): Couple of Changes to Close Out the Year
FTSE TWSE 50 & 100 Dec 22 Rebal: Greatek Deletion Confirmed; One Surprise Change
Last Week in Event SPACE: Keppel/Sembcorp, Carbon Revolution, Toyo Construction, Fuji Oil, Toshiba
Offer Price for Chip Eng Seng Bumped And Declared Final
(Mostly) Asia-Pac Weekly Risk Arb Wrap: Bigtincan, Carbon Revolution, Warrego, Toyo, Hitachi T’sport

Index Rebalance & ETF Flow Recap: STAR50, CSI300/500, SSE50/180/380, ChiNext, SZSE1000, CH50, EPRA

It was a busy week with the implementation of the MSCI Nov SAIR and the Hang Seng December rebalance, plus a lot of announcements for the FTSE indices.
The coming week has the implementation of the December rebalance for the KOSPI2 INDEX, KOSDAQ 150 Index and a range of indices in China.
Inflows to iShares MSCI Emerging Markets (EEM) and iShares MSCI ACWI ETF (ACWI US) during the week as markets move higher on expectations of slower rate hikes from the Fed.

Chip Eng Seng (CHIP SP)’s Revised S$0.75 VGO from the Tangs

Chip Eng Seng Corp (CHIP SP) disclosed a revised conditional VGO from the Tangs at S$0.75, a 4.2% premium to the previous offer of S$0.72. The offer is final.
The offeror (47.27% of outstanding shares) and immediate family represent 50.49% of outstanding shares or 48.63% of diluted shares, which is just shy of the 50%+ minimum acceptance condition.
The bump was to increase the chances of privatisation rather than hitting the 50%+ minimum acceptance condition. At the last close, the gross spread is 1.4%.

S&P/ASX Index Rebalance (Dec 2022): Couple of Changes to Close Out the Year

Pilbara Minerals (PLS AU) will replace Lendlease Group (LLC AU) in the S&P/ASX 50 Index, while Monadelphous (MND AU) will replace St Barbara Ltd (SBM AU) in the S&P/ASX 200.
The largest impact from passive trading will be on Monadelphous (MND AU) while the largest flow will be on Pilbara Minerals (PLS AU).
There appears to be significant short positioning on Lendlease Group (LLC AU) as cumulative excess volume and short interest continue to rise.

FTSE TWSE 50 & 100 Dec 22 Rebal: Greatek Deletion Confirmed; One Surprise Change

By Janaghan Jeyakumar, CFA

The index changes for the FTSE TWSE Taiwan 50 and Taiwan Mid-Cap 100 indices for the December 2022 Rebalance were announced after the close on Friday.
There will be one change for the Taiwan 50 Index and three changes for the Taiwan Mid-Cap 100 Index.
In this insight, we take a closer look at the possible explanations for this surprise and our index flow expectations for this Rebalance event.

Last Week in Event SPACE: Keppel/Sembcorp, Carbon Revolution, Toyo Construction, Fuji Oil, Toshiba

Keppel Corp (KEP SP) shareholders vote next week. Sembcorp Marine (SMM SP) shareholders are awaiting their Circular. Expect both sets of shareholders will approve. The optics and performance look good.
Carbon Revolution Ltd (CBR AU) SPAC Offer is a high-cost red-herring. Management who support this takeover should be fired.
Nintendo Founder Family Office “YFO” bought 25+% of Toyo Construction (1890 JP), then offered to buy it out. Negotiations are ongoing. We still don’t really know what is going on.

Offer Price for Chip Eng Seng Bumped And Declared Final

In Chip Eng Seng: Low-Balled MBO At $0.72/Share, I thought there was scope for a bump. But then the Tang family bought a 9.02% stake on market.
The Tangs have now bumped the Offer Price for Chip Eng Seng Corp (CHIP SP) to S$0.75/share, up from S$0.72/share, and declared the terms final.
The Offer remains conditional on a 50% acceptance hurdle. With 47.27% in the bag, this is done.

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Bigtincan, Carbon Revolution, Warrego, Toyo, Hitachi T’sport

There are 48 – 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 were discussed on Smartkarma: Bigtincan Holdings Ltd (BTH AU)‘s low-balled Offer; Carbon Revolution Ltd (CBR AU)‘s desperate SPAC takeover.
Key updates took place for: Warrego Energy (WGO AU), Toyo Construction (1890 JP), and Hitachi Transport System (9086 JP).

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Dec 04

Daily Brief Industrials: Far Eastern New Century, Chip Eng Seng Corp, Monadelphous, Keppel Corp, Toyo Construction and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Index Rebalance & ETF Flow Recap: STAR50, CSI300/500, SSE50/180/380, ChiNext, SZSE1000, CH50, EPRA
Chip Eng Seng (CHIP SP)’s Revised S$0.75 VGO from the Tangs
S&P/ASX Index Rebalance (Dec 2022): Couple of Changes to Close Out the Year
FTSE TWSE 50 & 100 Dec 22 Rebal: Greatek Deletion Confirmed; One Surprise Change
Last Week in Event SPACE: Keppel/Sembcorp, Carbon Revolution, Toyo Construction, Fuji Oil, Toshiba
Offer Price for Chip Eng Seng Bumped And Declared Final
(Mostly) Asia-Pac Weekly Risk Arb Wrap: Bigtincan, Carbon Revolution, Warrego, Toyo, Hitachi T’sport

Index Rebalance & ETF Flow Recap: STAR50, CSI300/500, SSE50/180/380, ChiNext, SZSE1000, CH50, EPRA

It was a busy week with the implementation of the MSCI Nov SAIR and the Hang Seng December rebalance, plus a lot of announcements for the FTSE indices.
The coming week has the implementation of the December rebalance for the KOSPI2 INDEX, KOSDAQ 150 Index and a range of indices in China.
Inflows to iShares MSCI Emerging Markets (EEM) and iShares MSCI ACWI ETF (ACWI US) during the week as markets move higher on expectations of slower rate hikes from the Fed.

Chip Eng Seng (CHIP SP)’s Revised S$0.75 VGO from the Tangs

Chip Eng Seng Corp (CHIP SP) disclosed a revised conditional VGO from the Tangs at S$0.75, a 4.2% premium to the previous offer of S$0.72. The offer is final.
The offeror (47.27% of outstanding shares) and immediate family represent 50.49% of outstanding shares or 48.63% of diluted shares, which is just shy of the 50%+ minimum acceptance condition.
The bump was to increase the chances of privatisation rather than hitting the 50%+ minimum acceptance condition. At the last close, the gross spread is 1.4%.

S&P/ASX Index Rebalance (Dec 2022): Couple of Changes to Close Out the Year

Pilbara Minerals (PLS AU) will replace Lendlease Group (LLC AU) in the S&P/ASX 50 Index, while Monadelphous (MND AU) will replace St Barbara Ltd (SBM AU) in the S&P/ASX 200.
The largest impact from passive trading will be on Monadelphous (MND AU) while the largest flow will be on Pilbara Minerals (PLS AU).
There appears to be significant short positioning on Lendlease Group (LLC AU) as cumulative excess volume and short interest continue to rise.

FTSE TWSE 50 & 100 Dec 22 Rebal: Greatek Deletion Confirmed; One Surprise Change

By Janaghan Jeyakumar, CFA

The index changes for the FTSE TWSE Taiwan 50 and Taiwan Mid-Cap 100 indices for the December 2022 Rebalance were announced after the close on Friday.
There will be one change for the Taiwan 50 Index and three changes for the Taiwan Mid-Cap 100 Index.
In this insight, we take a closer look at the possible explanations for this surprise and our index flow expectations for this Rebalance event.

Last Week in Event SPACE: Keppel/Sembcorp, Carbon Revolution, Toyo Construction, Fuji Oil, Toshiba

Keppel Corp (KEP SP) shareholders vote next week. Sembcorp Marine (SMM SP) shareholders are awaiting their Circular. Expect both sets of shareholders will approve. The optics and performance look good.
Carbon Revolution Ltd (CBR AU) SPAC Offer is a high-cost red-herring. Management who support this takeover should be fired.
Nintendo Founder Family Office “YFO” bought 25+% of Toyo Construction (1890 JP), then offered to buy it out. Negotiations are ongoing. We still don’t really know what is going on.

Offer Price for Chip Eng Seng Bumped And Declared Final

In Chip Eng Seng: Low-Balled MBO At $0.72/Share, I thought there was scope for a bump. But then the Tang family bought a 9.02% stake on market.
The Tangs have now bumped the Offer Price for Chip Eng Seng Corp (CHIP SP) to S$0.75/share, up from S$0.72/share, and declared the terms final.
The Offer remains conditional on a 50% acceptance hurdle. With 47.27% in the bag, this is done.

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Bigtincan, Carbon Revolution, Warrego, Toyo, Hitachi T’sport

There are 48 – 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 were discussed on Smartkarma: Bigtincan Holdings Ltd (BTH AU)‘s low-balled Offer; Carbon Revolution Ltd (CBR AU)‘s desperate SPAC takeover.
Key updates took place for: Warrego Energy (WGO AU), Toyo Construction (1890 JP), and Hitachi Transport System (9086 JP).

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Dec 03

Daily Brief Industrials: Far Eastern New Century, Toshiba Corp, Monadelphous and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

FTSE TWSE Taiwan 50 Index Rebalance: Far Eastern New Century IN; AUO OUT
Toshiba Privatisation In Trouble
S&P ASX Dec 22 Rebalance: MND Is the Top Pick

FTSE TWSE Taiwan 50 Index Rebalance: Far Eastern New Century IN; AUO OUT

Far Eastern New Century (1402 TT) will replace AU Optronics (2409 TT) in the FTSE TWSE Taiwan 50 Index at the close on 16 December.
Passive trackers will need to buy 4.8 days of ADV on Far Eastern New Century (1402 TT) and sell 1.9 days of ADV on AU Optronics (2409 TT).
There will be same way flow from FTSE TWSE Taiwan Dividend+ Index trackers on both stocks and that will significantly add to the passive flow.

Toshiba Privatisation In Trouble

After a few successive rounds of Management and Board Proposals were shot down, last March Toshiba Corp (6502 JP) embarked on a process to generate a privatisation proposal.
The result has ended up with one, maybe two privatisation proposals in the offing. The “leading” candidate’s proposal will not fly as proposed. The other is MIA for the moment.
That leaves a complicated situation. Activists+active holders are stuck with Toshiba and vice versa. They want change, and out, and financiers do too. Change happens. The question is how.

S&P ASX Dec 22 Rebalance: MND Is the Top Pick

By Janaghan Jeyakumar, CFA

The index changes for the S&P ASX Index family for the December 2022 Rebalance were announced after the close on Friday 2nd December 2022.
There will be one ADD/DEL for the ASX 50 index and one ADD/DEL for the ASX 200 index.
In this insight, we take a closer look at our expectations for index flows and potential trading ideas.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Dec 02

Daily Brief Industrials: Skymark Airlines and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Skymark IPO – Valuation

Skymark IPO – Valuation

By Mio Kato

Skymark is a little difficult to value given wide dispersions in peer multiples and earnings recovery trajectories.
However, on balance we believe the issue looks to be on the cheap side.
In addition, there are several quirks to the balance sheet, not all of which are negative.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Dec 02

Daily Brief Industrials: Skymark Airlines and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Skymark IPO – Valuation

Skymark IPO – Valuation

By Mio Kato

Skymark is a little difficult to value given wide dispersions in peer multiples and earnings recovery trajectories.
However, on balance we believe the issue looks to be on the cheap side.
In addition, there are several quirks to the balance sheet, not all of which are negative.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Dec 01

Daily Brief Industrials: Toyo Construction and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Toyo Construction (1890) – Creeping Up On The Next “Tender Offer Start Date”….. Uh…. Maybe

Toyo Construction (1890) – Creeping Up On The Next “Tender Offer Start Date”….. Uh…. Maybe

In March 2022, Toyo Construction (1890 JP) agreed to be taken over by equity affiliate stake owner INFRONEER Holdings (5076 JP) at what was a low price.
Nintendo Founder Family Office “YFO” objected, and bought 25+% of the company, then offered to buy it out 30% higher. Toyo Construction objected.
Four months later they finally signed an NDA and then started negotiating. Early in November the target date for a Tender Offer start by YFO was pushed to early December.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Dec 01

Daily Brief Industrials: Toyo Construction and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Toyo Construction (1890) – Creeping Up On The Next “Tender Offer Start Date”….. Uh…. Maybe

Toyo Construction (1890) – Creeping Up On The Next “Tender Offer Start Date”….. Uh…. Maybe

In March 2022, Toyo Construction (1890 JP) agreed to be taken over by equity affiliate stake owner INFRONEER Holdings (5076 JP) at what was a low price.
Nintendo Founder Family Office “YFO” objected, and bought 25+% of the company, then offered to buy it out 30% higher. Toyo Construction objected.
Four months later they finally signed an NDA and then started negotiating. Early in November the target date for a Tender Offer start by YFO was pushed to early December.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Nov 30

Daily Brief Industrials: Doosan Bobcat Inc, Iljin Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, Industrials

In today’s briefing:

Doosan Bobcat Placement – Momentum Is Strong but past Deals Have Been a Mixed Bag
StubWorld: Iljin Holdings – Discounts On Discounts
Doosan Bobcat Block Deal Sale – Overhang Remains

Doosan Bobcat Placement – Momentum Is Strong but past Deals Have Been a Mixed Bag

By Ethan Aw

Doosan Bobcat Inc (241560 KS) aims to sell a US$145m block. Its recent price momentum is strong but past deals have shown mixed results.
The deal doesn’t appear to be well flagged and is a relatively large one to digest, representing 20.9 days of its three month ADV.
In this note, we will run the deal through our ECM framework and comment on other deal dynamics.

StubWorld: Iljin Holdings – Discounts On Discounts