Most Read

Kioxia plans to complete its IPO on 18 December, valuing Kioxia at 750 billion yen ($4.8 billion), down nearly 50% from the initial market value estimates about 2-3 months ago.
Kioxia had revenue of 909.4 billion Yen (up 84.6% YoY) and EBITDA of 449.6 billion Yen in 1H FY24, driven by the recovering demand for data center and enterprise SSDs.
As of 2Q 2024, Samsung Electronics was the largest player in the global NAND Flash market with a 36.9% market, followed by SK Group (22.1%), and Kioxia (13.8%).

Kansai Electric Power (9503 JP) – Huge Offering Is Smaller Now; Reward/Risk Skews Upwards

On 13 November, Kansai Electric Power (9503 JP) announced an equity offering to raise capital for capex expenditures over the next several years. It is significantly dilutive.
The shares responded by falling 23% to 8-months lows of ¥1,850 last Thursday and Friday. That puts the stock at the same forward PER post-offering as it was pre-offering.
That’s probably not an awful place to own now that the stock will have been slightly de-risked/de-levered.

HSTECH Index Rebalance: Midea (300 HK) Replaces Weibo (9898 HK); US$1.5bn Round-Trip Trade

In a surprise, Midea Group (300 HK) will replace Weibo (9898 HK) in the Hang Seng TECH Index (HSTECH INDEX) after the close of trading on 6 December.
Estimated one-way turnover at the rebalance is 4.5% resulting in a round-trip trade of HK$11.72bn (US$1.51bn). Passives need to buy 9x ADV in Midea Group (300 HK).
The Midea Group Co Ltd A (000333 CH) / Midea Group (300 HK) premium could drop due to the index inclusion providing an entry point into an AH expansion trade.

Hang Seng Index (HSI) Rebalance: Still Baby Steps to Get to 100 Members

Kuaishou Technology (1024 HK) and New Oriental Education (9901 HK) will be added to the Hang Seng Index in December while New World Development (17 HK) will be deleted.
Estimated one-way turnover is 2.7% and the estimated round-trip trade is HK$10.89bn (US$1.4bn) with over 1 day of ADV to trade in the adds and the delete.
The index committee has net added 1 stock to the Hang Seng Index this year to go from 82 to 83 constituents. Reaching the 100-member target will drag into 2026.

Henlius (2696 HK): The Spread Should Narrow After NDRC Approval

On the 24th June, Fosun Pharmaceutical (2196 HK) made a HK$24.60/share Offer, in cash, for H-shares not held in Shanghai Henlius Biotech (2696 HK). A scrip alternative was subsequently afforded.
This is a pre-conditional Offer, subject to NDRC, Mofcom and SAFE – followed by a Scheme-like vote for independent H-shareholders. Henlius has announced that NDRC approval has now been secured.
Trading at a massive gross spread of ~21.5% compared to ~10% just prior to China Traditional Chinese Medicine (570 HK)‘s capitulation. This is excessive.

Keisei Electric Jumps 14% on Reports of Murakami Stake

By Oshadhi Kumarasiri

Keisei Electric Railway Co (9009 JP) rose 14% after reports that a fund linked to activist investor Murakami bought a stake, while Oriental Land also gained 2.9% in a volatile market.
Down 50% since February 2024, Keisei Electric seems to have limited downside risks. We believe its valuation could increase if Murakami’s stake leads to activism.
The long Keisei Electric, short Oriental Land (4661 JP) trade could work well too, especially if Murakami’s activism and the risks to Oriental Land’s guidance materialize.

FineToday Holdings (289A JP) IPO: The Bear Case

FineToday Holdings Co Ltd (289A JP) is a Japanese personal care business seeking to raise up to US$500 million. It will be listed on 17 December.
In FineToday Holdings (289A JP) IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The bear case rests on the weak 3Q24 revenue performance, mid-tier revenue growth, leveraged balance sheet, share overhang and pre-IPO dividend.

Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: Big Shift in Divs Leads to Last Minute Changes

Using data from the close on 25 November, there could be 6 adds and 5 deletes for the Yuanta/P-Shares Taiwan Dividend Plus ETF in December.
There will also be capping and funding flows that will lead to a one-way turnover of 17.3% and a one-way trade of TWD 60.6bn (US$1.86bn).
On average, the forecast adds have started to outperform the forecast deletes. Positioning should continue in stocks that have large flow/impact or have recently joined the list of forecast adds/deletes.

Kansai Electric Power (9503 JP): The Current Playbook

Since the US$3.5 billion primary/secondary offering announcement, Kansai Electric Power (9503 JP)’s shares have been down 20.6% from the undisturbed price of JPY2,397 per share (13 November).
Looking at recent large Japanese placements is instructive to understand the potential trading pattern. So far, KEPCO’s shares have followed the pattern of previous large placements.
The offering will likely be priced on 26 November. The average large Japanese placement tends to generate positive returns.

Taiwan Top 50 ETF Rebalance Preview: Double Inclusion for Yang Ming Marine (2609 TT)

Yang Ming Marine Transport (2609 TT) is forecast to be added to the Yuanta/P-Shares Taiwan Top 50 ETF in December, replacing Airtac International (1590 TT).
Yang Ming Marine Transport (2609 TT) is also expected to be added to the Yuanta/P-shares Dividend Plus ETF in December, so there will be buying from multiple trackers.
Shorts are near their lows in Yang Ming Marine Transport (2609 TT) while there has been covering in Airtac International (1590 TT) after an increase in the last few months.

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Nov 25

Most Read: Zomato, Kioxia Holdings , Meiji Holdings, Seven & I Holdings, Shanghai Henlius Biotech , Midea Group, Kuaishou Technology and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Shanghai Henlius Biotech (2696.HK) Privatization Update – These Are the Potential Risks Behind
SENSEX Index Rebalance: F&O Inclusion Brings First of Many Index Inclusions for Zomato
Kioxia IPO Preview
Meiji Holdings (2269 JP) Offering – May Approach a 9Yr Low
Merger Arb Mondays (25 Nov) – Seven & I, Fuji Soft, ID&EH, Arcadium, Henlius, Canvest, GAPack
Henlius (2696 HK): NDRC Approval Should Calm Nerves
HSTECH Index Rebalance: Midea (300 HK) Replaces Weibo (9898 HK); US$1.5bn Round-Trip Trade
HSCI Index Rebalance: Midea (300 HK) And Black Sesame (2533 HK) Added
Hang Seng Index (HSI) Rebalance: Still Baby Steps to Get to 100 Members
Meiji Holdings Placement – Momentum Leading into This Cross-Shareholding Selldown Isn’t the Greatest

Shanghai Henlius Biotech (2696.HK) Privatization Update – These Are the Potential Risks Behind

By Xinyao (Criss) Wang

On the surface, the 24Q3 results are not bad, but if take a close look, the real situation of Fosun Pharma is still not optimistic.
There are rumors that Fosun Pharma may have encountered funding issues, thus casting a shadow over the prospects of this privatization.
The motivation and underlying logic for Fosun Pharma to privatize Henlius are both solid.Potential risks currently on the table are funding issues and whether Pre-Condition approval process will go smoothly.

SENSEX Index Rebalance: F&O Inclusion Brings First of Many Index Inclusions for Zomato

Zomato (ZOMATO IN) will replace JSW Steel Ltd (JSTL IN) in the S&P BSE SENSEX Index (SENSEX INDEX) at the close on 20 December.
This is the first of many potential inclusions for Zomato in local indices over the next few months and is due to inclusion of the stock in the F&O segment.
Futures and options in Zomato (ZOMATO IN) start trading from the open on 29 November. Expect increased volatility in the short-term and an increase in traded volumes.

Kioxia IPO Preview

Kioxia plans to complete its IPO on 18 December, valuing Kioxia at 750 billion yen ($4.8 billion), down nearly 50% from the initial market value estimates about 2-3 months ago.
Kioxia had revenue of 909.4 billion Yen (up 84.6% YoY) and EBITDA of 449.6 billion Yen in 1H FY24, driven by the recovering demand for data center and enterprise SSDs.
As of 2Q 2024, Samsung Electronics was the largest player in the global NAND Flash market with a 36.9% market, followed by SK Group (22.1%), and Kioxia (13.8%).

Meiji Holdings (2269 JP) Offering – May Approach a 9Yr Low

Meiji Holdings (2269 JP) on Friday announced 9 different banks would sell 4.7% of float in an equity offering to price in the first few days of December 2024.
The shares closed Friday within 1.5% of a 52wk low. The shares are less than 9% off a 9-year low. The offering is about US$300mm and 15 days of ADV.
Given the stock is under-levered, and structurally a low volatility name, a large move should encourage buying.

Merger Arb Mondays (25 Nov) – Seven & I, Fuji Soft, ID&EH, Arcadium, Henlius, Canvest, GAPack

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: Shanghai Henlius Biotech (2696 HK), Canvest Environmental Protection Group (1381 HK), Get Nice Financial Group Ltd (1469 HK), Shinko Electric Industries (6967 JP), Arcadium Lithium (LTM AU).
Lowest spreads: Renewable Japan (9522 JP), Macromill, Inc (3978 JP), Nec Networks & System Integr (1973 JP), Fuji Soft Inc (9749 JP), Xingda International (1899 HK), Elematec Corp (2715 JP).

Henlius (2696 HK): NDRC Approval Should Calm Nerves

Due to several factors, the gross spread of Shanghai Fosun Pharmaceutical (Group) (2196 HK)’s HK$24.60 offer for Shanghai Henlius Biotech (2696 HK) has widened to 21.5%.
The wide gross spread reflects the China TCM deal break hangover, slow progress in satisfying the precondition, Fosun Pharma’s potential funding challenges, and the shareholder vote.
NDRC approval should calm nerves about precondition satisfaction. Even with lingering deal-break concerns, a 21.5% gross spread is excessive.

HSTECH Index Rebalance: Midea (300 HK) Replaces Weibo (9898 HK); US$1.5bn Round-Trip Trade

In a surprise, Midea Group (300 HK) will replace Weibo (9898 HK) in the Hang Seng TECH Index (HSTECH INDEX) after the close of trading on 6 December.
Estimated one-way turnover at the rebalance is 4.5% resulting in a round-trip trade of HK$11.72bn (US$1.51bn). Passives need to buy 9x ADV in Midea Group (300 HK).
The Midea Group Co Ltd A (000333 CH) / Midea Group (300 HK) premium could drop due to the index inclusion providing an entry point into an AH expansion trade.

HSCI Index Rebalance: Midea (300 HK) And Black Sesame (2533 HK) Added

Midea Group (300 HK) and Black Sesame International Holding (2533 HK) will be added to the Hang Seng Composite Index (HSCI) after the close on 6 December.
Midea Group (300 HK) is already in Southbound Stock Connect while Black Sesame International Holding (2533 HK) will be added from the open on 9 December.
There is a huge lock-up expiry for Black Sesame International Holding (2533 HK) in February while the lock-up for Midea Group (300 HK) cornerstone investors ends in March.

Hang Seng Index (HSI) Rebalance: Still Baby Steps to Get to 100 Members

Kuaishou Technology (1024 HK) and New Oriental Education (9901 HK) will be added to the Hang Seng Index in December while New World Development (17 HK) will be deleted.
Estimated one-way turnover is 2.7% and the estimated round-trip trade is HK$10.89bn (US$1.4bn) with over 1 day of ADV to trade in the adds and the delete.
The index committee has net added 1 stock to the Hang Seng Index this year to go from 82 to 83 constituents. Reaching the 100-member target will drag into 2026.

Meiji Holdings Placement – Momentum Leading into This Cross-Shareholding Selldown Isn’t the Greatest

By Clarence Chu

A group of investors are looking to raise US$264m from trimming a portion of their stakes in Meiji Holdings (2269 JP).
While the deal shouldn’t come as a surprise, given the ongoing cross-shareholding unwind narrative in Japan, the timing of such a selldown isn’t always certain.
In this note, we will talk about the placement and run the deal through our ECM framework.

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Nov 24

Most Read: Evergreen Marine Corp, Kuaishou Technology, PICC Property & Casualty H, Samsung Electronics Pref Shares, Arcadium Lithium , LG Corp, SK Square , Meiji Holdings, Kioxia Holdings , Seven & I Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: 6 Adds, 5 Deletes, Capping, US$3.5bn Trade
Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for December
HSCEI Index Rebalance: PICC P&C (2328 HK) Replaces Longfor (960 HK)
Dividend Tax Cut Decision Scheduled for 25th, Next Monday: Watch Sammy Prefs
(Mostly) Asia-Pac M&A: Sayona/Piedmont, I D & E Holdings, Arcadium, Pacific Smiles, HKBN, MAHB
LG Corp: Key Highlights from Its Corporate Value-Up Plan and Updated NAV Valuation
SK Square: A Solid Corporate Value Up Plan Likely to Lead to Continued Outperformance
Meiji Holdings (2269 JP) Offering – May Approach a 9Yr Low
Kioxia IPO Preview
Last Week in Event SPACE: Seven & I, Amcor/Berry, WH Group/Smithfield, Tuya

Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: 6 Adds, 5 Deletes, Capping, US$3.5bn Trade

Using data from the close on 15 November, there could be 6 adds and 5 deletes for the Yuanta/P-Shares Taiwan Dividend Plus ETF in December.
There will also be capping and funding flows that will lead to a one-way turnover of 16.9% and a one-way trade of TWD 57.5bn (US$1.77bn).
Short interest is at the highs in most forecast deletes, while the trend is mixed among the potential inclusions.

Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for December

Post market close on Friday, Hang Seng Indexes will announce the changes for the Hang Seng Index (HSI INDEX) that will be implemented at the close on 6 December.
With no increase in the number of index constituents this calendar year, there could be inclusions in December. The process of getting to 100 index constituents could drag into 2026.
Short interest is especially large in Sinotruk, Giant Biogene, Kuaishou Technology, ASMPT and JD Logistics and inclusion could set off some short covering.

HSCEI Index Rebalance: PICC P&C (2328 HK) Replaces Longfor (960 HK)

PICC Property & Casualty H (2328 HK) will replace Longfor Properties (960 HK) in the Hang Seng China Enterprises Index (HSCEI INDEX) at the close on 6 December.
Estimated one-way turnover is 2.68% resulting in a round-trip trade of HK$2.84bn (US$365m). The final capping will use the close of trading on 3 December.
There could be a move higher in PICC Property & Casualty over the next few days while any selling in Longfor Properties will be a covering opportunity for the shorts.

Dividend Tax Cut Decision Scheduled for 25th, Next Monday: Watch Sammy Prefs

The opposition’s pushing a Commercial Act amendment, and to gain ruling party support, they might strategically ease up on the dividend tax issue—classic quid pro quo.
The Samsung family’s collateral risk eased with a 10 trillion won buyback, but local markets are still cautious. Local traders now eye another 10 trillion won shareholder return.
The timing of the special dividend and tax deadlines may cause mismatches, but we should watch for earlier price moves in Samsung Electronics preferred shares.

(Mostly) Asia-Pac M&A: Sayona/Piedmont, I D & E Holdings, Arcadium, Pacific Smiles, HKBN, MAHB

I tally 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.
Six new deals this week: Amcor (AMC AU)takes out Berry Global (BERY US);Sayona (SYA AU)and Piedmont (PLL AU) merge; and Integrated Design & Engineering (9161 JP)‘s TOB.
Key updates/news took place on: Arcadium Lithium (LTM AU), Pacific Smiles (PSQ AU), Hotel Property Investments (HPI AU), HKBN (1310 HK), Xingda International (1899 HK), and Malaysia Airports Holdings (MAHB MK).

LG Corp: Key Highlights from Its Corporate Value-Up Plan and Updated NAV Valuation

In this insight, we provide the major highlights of the solid Corporate Value Up plan announced by LG Corp on 22 November.
The key highlights include about 500 billion won worth of share cancellation by 2026, improved dividend policy, and higher ROE target.
Our base case NAV valuation analysis of LG Corp suggests implied NAV of 16.1 trillion won or NAV per share of 102,426 won, which is 33.4% higher than current price.

SK Square: A Solid Corporate Value Up Plan Likely to Lead to Continued Outperformance

SK Square (402340 KS) announced a solid corporate value up plan pushing up its share price by 8.8% to 87,500 won on 22 November.
Major highlights of the corporate value up plan included cancellation of 200 billion won of treasury shares, higher ROE target, and achieve 1x PBR ratio (nearly double the current ratio).
Our NAV analysis of SK Square suggests NAV of 15.2 trillion won or 112,822 won per share, representing 29% higher than current share price.

Meiji Holdings (2269 JP) Offering – May Approach a 9Yr Low

Meiji Holdings (2269 JP) on Friday announced 9 different banks would sell 4.7% of float in an equity offering to price in the first few days of December 2024.
The shares closed Friday within 1.5% of a 52wk low. The shares are less than 9% off a 9-year low. The offering is about US$300mm and 15 days of ADV.
Given the stock is under-levered, and structurally a low volatility name, a large move should encourage buying.

Kioxia IPO Preview

Kioxia plans to complete its IPO on 18 December, valuing Kioxia at 750 billion yen ($4.8 billion), down nearly 50% from the initial market value estimates about 2-3 months ago.
Kioxia had revenue of 909.4 billion Yen (up 84.6% YoY) and EBITDA of 449.6 billion Yen in 1H FY24, driven by the recovering demand for data center and enterprise SSDs.
As of 2Q 2024, Samsung Electronics was the largest player in the global NAND Flash market with a 36.9% market, followed by SK Group (22.1%), and Kioxia (13.8%).

Last Week in Event SPACE: Seven & I, Amcor/Berry, WH Group/Smithfield, Tuya

At equal price to ACT, Ito-san wins because of certainty/immediacy, but provided his price is above the bottom of the range and adequately compensates 7&i for “additional actionable avenues.”
The Amcor Limited (AMC AU)/Berry Global Group (BERY US) merger looks clean. However, Berry’s % of earnings (revs, EBITDA, and profit), are higher than the % under the share split
This Temasek-led development will have a marginal impact on Tuya Inc (TUYA US). Creating supply and demand is hard. And Temasek-held/backed vehicles on the SGX are already abundant.

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Nov 23

Most Read: Kansai Electric Power, Kuaishou Technology, AppLovin , Hyosung Heavy Industries Corp, Sunic System Ltd., LG Energy Solution, Arcadium Lithium , Qualcomm Inc, Samsung Electronics Pref Shares and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

KEPCO (9503 JP): Index Implications of US$3.5bn Primary + Secondary Offering
Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for December
S&P500 December 2024 Forecasts: APP, APO and TPL Leading the Pack
Kansai Electric US$3.5bn Deal Updates – Has Delivered a Decent Correction, as Compared to past Deals
KOSPI200 Index Rebalance: Adds in Line; Couple of Deletes Are Surprises
KOSDAQ150 Index Rebalance: 8 Changes a Side; Fadu Appears to Be a 4 Letter Word
LG Chem’s Tax Alarm: Pillar Two Tax Could Soar Next Year + LGES Block Deal on the Horizon
Rio Tinto/Arcadium: Trading Wide Ahead Of 23rd Dec Vote
Qualcomm’s $4 Billion PC Chip Bet: Can It Dominate Beyond Smartphones?
Dividend Tax Cut Decision Scheduled for 25th, Next Monday: Watch Sammy Prefs

KEPCO (9503 JP): Index Implications of US$3.5bn Primary + Secondary Offering

Kansai Electric Power (9503 JP) is looking to raise up to US$3.5bn via a primary offering and a sale of Treasury shares. Pricing date is between 26-29 November.
Kansai Electric Power (9503 JP) is among the better performing stocks from the Electric Utilities industry and trades at higher valuations compared to its peers.
There will be a fair bit of passive buying with around 29% of the offering being bought at the time of settlement of the shares.

Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for December

Post market close on Friday, Hang Seng Indexes will announce the changes for the Hang Seng Index (HSI INDEX) that will be implemented at the close on 6 December.
With no increase in the number of index constituents this calendar year, there could be inclusions in December. The process of getting to 100 index constituents could drag into 2026.
Short interest is especially large in Sinotruk, Giant Biogene, Kuaishou Technology, ASMPT and JD Logistics and inclusion could set off some short covering.

S&P500 December 2024 Forecasts: APP, APO and TPL Leading the Pack

By Dimitris Ioannidis

AppLovin (APP US) and Apollo Global Management (APO US) are the main candidates for addition by transition as they are passing the estimated transition threshold and have strong eligibility metrics.
Texas Pacific Land (TPL US) is the main candidate for addition by migration – despite failing eligibility – due to its significant distance above the minimum S&P500 mcap threshold.
Emcor Group (EME US) and Lennox International (LII US) are the next candidates for addition by migration with both passing eligibility and adequate distance above the mcap threshold.

Kansai Electric US$3.5bn Deal Updates – Has Delivered a Decent Correction, as Compared to past Deals

By Sumeet Singh

Kansai Electric Power (9503 JP) plans to raise up to US$3.5bn (including over-allocation) to partly fund its investment plans.
In our earlier note, we talked about the placement and ran the deal through our ECM framework.
In this note, we talk about the updates and share price performance since then.

KOSPI200 Index Rebalance: Adds in Line; Couple of Deletes Are Surprises

There will be 4 additions and 5 deletions for the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) at the next rebalance to be implemented at the close on 12 December.
The 4 adds are exactly in line with our forecast but a couple of the deletions are surprises. Those two names were close deletes though.
The are some large shorts on a few deletes and there could be covering over the next few weeks as borrows are recalled and as the stocks drop.

KOSDAQ150 Index Rebalance: 8 Changes a Side; Fadu Appears to Be a 4 Letter Word

There will be 8 additions and 8 deletions for the KOSDAQ 150 Index (KOSDQ150 INDEX) at the next rebalance to be implemented at the close on 12 December.
Most of the inclusions were forecast but there is a lot of variance among the list of deletions… index committee knows best!
Fadu (440110 KS) was ignored for yet another rebalance, while Snh Inc (051980 KS) has also not been included in the index.

LG Chem’s Tax Alarm: Pillar Two Tax Could Soar Next Year + LGES Block Deal on the Horizon

The local market’s buzzing that LG Chem could face a 200-300 billion KRW tax hit from Pillar Two next year, with LGES ramping up U.S. production.
LG Chem may be reconsidering its plan to sell 2% of its LGES stake, dropping ownership below 80%, shifting the tax burden to LGES instead of itself.
Flagging this now—LG Chem’s tax burden looms. Consider shorting LGES or a long-short with LG Chem, plus prep for the 2T KRW block deal with the pre-disclosure process.

Rio Tinto/Arcadium: Trading Wide Ahead Of 23rd Dec Vote

Back on the 9th October, Rio Tinto Ltd (RIO AU) reached an agreement to buy Arcadium Lithium (LTM AU/ALTM US) for US$5.85/share (~A$8.70/share), a ~90% premium to undisturbed.
The proxy statement is now out, with a Scheme Meeting scheduled for 23 December. The transaction is expected to close in mid-2025. The long stop is the 9th October 2025.
Trading wide-ish at a gross spread of 11.9%, reflecting the timing to secure regulatory approvals – notably from China – as opposed the Offer Price being viewed as opportunistic.

Qualcomm’s $4 Billion PC Chip Bet: Can It Dominate Beyond Smartphones?

By Baptista Research

Qualcomm is aggressively pushing into the PC market, aiming to transform its identity from a mobile chip giant to a diversified computing powerhouse.
At its recent investor day, Qualcomm announced bold revenue projections of $4 billion from PC chips by 2029, alongside significant strides in automotive, industrial IoT, and XR markets.
This marks a pivotal moment as Qualcomm ventures beyond its traditional smartphone business, which currently accounts for 75% of its chip revenue.

Dividend Tax Cut Decision Scheduled for 25th, Next Monday: Watch Sammy Prefs

The opposition’s pushing a Commercial Act amendment, and to gain ruling party support, they might strategically ease up on the dividend tax issue—classic quid pro quo.
The Samsung family’s collateral risk eased with a 10 trillion won buyback, but local markets are still cautious. Local traders now eye another 10 trillion won shareholder return.
The timing of the special dividend and tax deadlines may cause mismatches, but we should watch for earlier price moves in Samsung Electronics preferred shares.

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Nov 22

Most Read: Seven & I Holdings, Kadokawa Dwango, Zomato, Mitsui Matsushima, Arcadium Lithium , Shinsung Delta Tech, Adani Enterprises, Hyosung Heavy Industries Corp, Kansai Electric Power and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

KEPCO (9503 JP): Index Implications of US$3.5bn Primary + Secondary Offering
Seven & I Holdings (3382 JP): Evaluating the Potential MBO
Kadokawa (9468 JP): Take Profits as a Sony Privatisation Rumours Surface
NIFTY200 Momentum30 Index Rebalance Preview: More Changes with New F&O Stocks
[JAPAN Activism]: Murakami Target Mitsui Matsushima (1518 JP) Getting Sold Down For a Reason
Arcadium Lithium (ALTM US/LTM AU): Scheme Vote on 23 December as Risks Mount
KOSPI 200 & KOSDAQ 150 December Rejig Lineup
Adani Group’s Indictment: Bribery, Fraud, and the Global Fallout
KOSPI200 Index Rebalance: Adds in Line; Couple of Deletes Are Surprises
Kansai Electric US$3.5bn Deal Updates – Has Delivered a Decent Correction, as Compared to past Deals

KEPCO (9503 JP): Index Implications of US$3.5bn Primary + Secondary Offering

Kansai Electric Power (9503 JP) is looking to raise up to US$3.5bn via a primary offering and a sale of Treasury shares. Pricing date is between 26-29 November.
Kansai Electric Power (9503 JP) is among the better performing stocks from the Electric Utilities industry and trades at higher valuations compared to its peers.
There will be a fair bit of passive buying with around 29% of the offering being bought at the time of settlement of the shares.

Seven & I Holdings (3382 JP): Evaluating the Potential MBO

Seven & I Holdings (3382 JP) did not dispute the NHK article’s claims that the founding family aims to raise buyout funds by the end of the fiscal year.
Since 13 November, there have been conflicting press reports on the MBO offer price. The NHK article’s implied offer price of JPY3,082 seems the most credible.
The MBO’s aggressive completion timeline pressures Alimentation Couche-Tard (ATD CN) to respond by either overbidding, working with the founding family at the back-end or walking away.

Kadokawa (9468 JP): Take Profits as a Sony Privatisation Rumours Surface

Kadokawa Dwango (9468 JP) shares rose 16% after Reuters reported that Sony Corp (6758 JP) is in talks to acquire it. Kadokawa confirmed an initial letter of intent.
The privatisation interest is unsurprising as Kadokawa’s publishing arm, acclaimed intellectual properties, and positioning in the anime industry would be attractive to Sony.
The upside is limited as the last close reflects a significant takeover premium. There is a risk if a binding proposal emerges, it could be takeunder like Bain/T-Gaia.

NIFTY200 Momentum30 Index Rebalance Preview: More Changes with New F&O Stocks

There could be 17 changes for the Nifty200 Momentum 30 Index that will be implemented at the close on 30 December. Some changes from earlier following 45 new F&O stocks.
If all changes are on expected lines, one-way turnover is estimated at 61.5% and that will result in a one-way trade of INR 63.4bn (US$752m).
The potential inclusions to the index have outperformed the potential deletions since the start of June. This trend could continue for a couple of weeks till the changes are announced.

[JAPAN Activism]: Murakami Target Mitsui Matsushima (1518 JP) Getting Sold Down For a Reason

Mitsui Matsushima (1518 JP) was trading ¥2,800-3,200 earlier this year before Murakami-san bought a large stake. All the news of coal shut down and cash pile were in the price.
After he bought, the stock popped. It fell back, went sideways in a range, and for 5 weeks has been falling in a straight line.
There’s a reason for that. But it may not be a great reason. And the stock is in a great place.

Arcadium Lithium (ALTM US/LTM AU): Scheme Vote on 23 December as Risks Mount

The Arcadium Lithium (ALTM US) scheme meeting relating to Rio Tinto Ltd (RIO AU)’s US$5.85 offer is on 23 December. The transaction is expected to close in mid-2025.
The high current 12.3% spread reflects risk related to regulatory and shareholder approvals. The numerous required regulatory approvals pose a risk to completion and/or timing.
Despite depressed lithium prices, the offer remains unattractive on several fronts. Blackwattle, which opposes the offer, could rally others to force a bump. Rio conceding to a bump is uncertain.

KOSPI 200 & KOSDAQ 150 December Rejig Lineup

KOSPI 200 & KOSDAQ 150 Dec reshuffle looks set—official lineup drops post-close today.
Passive flows for KOSPI 200 and KOSDAQ 150 are estimated at 40T KRW and 3.5T KRW, based on typical flow sizes until the effective date.
These predictions combine my sim results with reliable local intel. The accuracy’s solid enough to start pulling the trigger on trades.

Adani Group’s Indictment: Bribery, Fraud, and the Global Fallout

By Nimish Maheshwari

Gautam Adani and executives indicted in U.S. for bribery, fraud, and obstructing justice tied to renewable energy projects worth billions.
Allegations spotlight governance risks, promoter-driven models, and transparency issues in Indian conglomerates, threatening investor trust in Adani Group and renewable energy sectors.
Adani Group issued media statement saying that charges in indictment are baseless and denied.

KOSPI200 Index Rebalance: Adds in Line; Couple of Deletes Are Surprises

There will be 4 additions and 5 deletions for the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) at the next rebalance to be implemented at the close on 12 December.
The 4 adds are exactly in line with our forecast but a couple of the deletions are surprises. Those two names were close deletes though.
The are some large shorts on a few deletes and there could be covering over the next few weeks as borrows are recalled and as the stocks drop.

Kansai Electric US$3.5bn Deal Updates – Has Delivered a Decent Correction, as Compared to past Deals

By Sumeet Singh

Kansai Electric Power (9503 JP) plans to raise up to US$3.5bn (including over-allocation) to partly fund its investment plans.
In our earlier note, we talked about the placement and ran the deal through our ECM framework.
In this note, we talk about the updates and share price performance since then.

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Nov 21

Most Read: Shinko Electric Industries, Seven & I Holdings, Synnex Technology International, Kuaishou Technology, Integrated Design & Engineering Holdings, Berry Global Group, Exedy Corp, Kadokawa Dwango and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Shinko Electric (6967 JP) Takeover – THIS Is a Dip to Buy
7&I (3382) Ito Family MBO – New Urgency for ACT
TIP Taiwan Value High Dividend Index Rebalance: A Lot to Trade This Week
Seven & I Holdings (3382 JP): Evaluating the Potential MBO
Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for December
I D & E Holdings (9161 JP) Gets a TOB Offer from Tokio Marine at +63% (¥6,500) – Probably Done
Amcor Ltd/Berry Global: Packing Them In
[JAPAN ACTIVISM] Exedy (7278) – Immediate Results Reaction Was a Damp Squib, But Climbing Now
Kadokawa (9468 JP): Take Profits as a Sony Privatisation Rumours Surface
Even in Japan, Significant Growth Potential for Seven Eleven and Other CVS

Shinko Electric (6967 JP) Takeover – THIS Is a Dip to Buy

Over the last few days, Shinko Electric Industries (6967 JP) shares have dipped lower than the previous standard trading range.
I expect this weakness is related to investors in other deals deciding to sell this deal too. I believe it is not related to Shinko specifically.
For that, while gap risk remains somewhat high, I still see break risk as low and see this as a great opportunity to buy the dip.

7&I (3382) Ito Family MBO – New Urgency for ACT

Days ago we got a dramatic headline about Ito family scion ITO Junro and his family company Ito Kogyo making a bid for Seven & I Holdings (3382 JP).
The stock popped, then fell. Details were not clear. Was the ¥9trln an EV number? A market cap? Was he serious? How would he get funding. Skepticism was rife.
Today we get more headlines from NHK. who says the family wants to raise ¥8trln to take 7&i private by end-Feb 2025.

TIP Taiwan Value High Dividend Index Rebalance: A Lot to Trade This Week

There are 15 changes for the TIP Taiwan Value High Dividend Index in November. The Yuanta Taiwan Value High Dividend ETF (00940 TT) has an AUM of US$5bn.
Estimated one-way turnover is 26% and there are 16 stocks with over 4 days of ADV left to trade. The rebalance commenced yesterday and will end on Friday.
An equal weighted basket of inclusions has outperformed an equal weighted basket of deletions since July. That could continue over the week as the ETF continues to rebalance their portfolio.

Seven & I Holdings (3382 JP): Evaluating the Potential MBO

Seven & I Holdings (3382 JP) did not dispute the NHK article’s claims that the founding family aims to raise buyout funds by the end of the fiscal year.
Since 13 November, there have been conflicting press reports on the MBO offer price. The NHK article’s implied offer price of JPY3,082 seems the most credible.
The MBO’s aggressive completion timeline pressures Alimentation Couche-Tard (ATD CN) to respond by either overbidding, working with the founding family at the back-end or walking away.

Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for December

Post market close on Friday, Hang Seng Indexes will announce the changes for the Hang Seng Index (HSI INDEX) that will be implemented at the close on 6 December.
With no increase in the number of index constituents this calendar year, there could be inclusions in December. The process of getting to 100 index constituents could drag into 2026.
Short interest is especially large in Sinotruk, Giant Biogene, Kuaishou Technology, ASMPT and JD Logistics and inclusion could set off some short covering.

I D & E Holdings (9161 JP) Gets a TOB Offer from Tokio Marine at +63% (¥6,500) – Probably Done

In 2023, Integrated Design & Engineering Holdings (9161 JP) was created as a technical listing, succeeding Nippon Koei (1954 JP). It has been listed for decades.
On Tuesday 19 November, Tokio Marine Holdings (8766 JP) announced an agreed/supported deal to buy out Integrated Design & Engineering Holdings (9161 JP). The register is open. Should be easy.
It’s a nice high price for a boring stock, but it is cheap. They are NOT overpaying, but I don’t see who would want to run interference on this.

Amcor Ltd/Berry Global: Packing Them In

Packing giants Amcor Limited (AMCR US/AMC AU) and Berry Global Group (BERY US) announced they will combine in an all-stock transaction, with a ~63%/37% ownership split (respectively) in the MergeCo.
Amcor will issue 7.25 Amcor shares for each Berry share, for a US$73.59/share implied price. US$650mn of benefits from identified cost, growth and financial synergies by end of third year.
Closing, subject to shareholder and reg approvals, is targeted in the middle of 2025. The transaction has been unanimously approved by the boards of both Amcor and Berry.

[JAPAN ACTIVISM] Exedy (7278) – Immediate Results Reaction Was a Damp Squib, But Climbing Now

I wrote last when Exedy was at ¥3,900 and had just announced, good earnings, a sharp div hike, and a huge buyback. The stock reacted well, but not THAT well.
Murakami-San had indeed lifted his stake, and the stock is now climbing again. Presumably, the company is in the market buying. At this price, it depends on what Murakami-san does.
Fat div. Lots of volume to buy in the next several months, but the big story is future measures.

Kadokawa (9468 JP): Take Profits as a Sony Privatisation Rumours Surface

Kadokawa Dwango (9468 JP) shares rose 16% after Reuters reported that Sony Corp (6758 JP) is in talks to acquire it. Kadokawa confirmed an initial letter of intent.
The privatisation interest is unsurprising as Kadokawa’s publishing arm, acclaimed intellectual properties, and positioning in the anime industry would be attractive to Sony.
The upside is limited as the last close reflects a significant takeover premium. There is a risk if a binding proposal emerges, it could be takeunder like Bain/T-Gaia.

Even in Japan, Significant Growth Potential for Seven Eleven and Other CVS

By Michael Causton

Seven Eleven’s future usually gets outlined as: Japan ex-growth and only growth is overseas. This is wrong. While the CVS sector is saturated, Seven Eleven itself has not reached saturation.
There are major areas of growth, both territorially and new offshoot businesses. Seven is already 32% more efficient than Lawson but more to come.
Here we take a deep dive into the state of CVS retailing in Japan and how Seven Eleven does, and will, fit into this – and how it will grow.

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Nov 20

Most Read: Wisdom Marine Lines, Synnex Technology International, S.F. Holding, Seven & I Holdings, HKBN Ltd, CAR Group , Kuaishou Technology, Keppel DC REIT and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

7&I (3382) – What If… A Modest Proposal
TIP Customized Taiwan Select High Div Index Rebalance Preview: 32% T/O; US$2.75bn Trade; HUGE Impact
TIP Taiwan Value High Dividend Index Rebalance: A Lot to Trade This Week
SF Holding (6936 HK): No Index Inclusion till Mid-2025; AH Premium Could Stay Wide
7&I (3382) Ito Family MBO – New Urgency for ACT
HKBN (1310 HK): China Mobile Comes Knocking. Again.
SF Holdings A/H Listing – Lower End Looks Digestable
S&P/ASX Index Rebalance Preview (Dec 2024): Dexus and Spark NZ with Double Deletions
Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for December
KDC REIT Placement – Accretive Acquisitions Should Garner Strong Support

7&I (3382) – What If… A Modest Proposal

A lot of the talk around the news that Ito family scion Ito Junro had proposed to Seven & I Holdings (3382 JP) an MBO was about thwarting Alimentation Couche-Tard.
Several mentioned that this bid – seemingly uncompetitive at the moment – would make ACT back down. I discussed the bid and its repercussions here.
Here I suggest an alternate solution which might get everyone what they want.

TIP Customized Taiwan Select High Div Index Rebalance Preview: 32% T/O; US$2.75bn Trade; HUGE Impact

The TIP Taiwan Select High Dividend ETF (00919 TW) tracks the TIP Customized Taiwan Select High Dividend Index and has an AUM of TWD 284bn (US$8.7bn).
We forecast 8 changes a side at the December rebalance with an estimated one-way turnover of around 15.8% and a round-trip trade of around US$2.75bn.
An equal weighted basket of potential inclusions has outperformed an equal weighted basket of potential deletions since beginning September with a pick-up in pace over the last 2-3 weeks.

TIP Taiwan Value High Dividend Index Rebalance: A Lot to Trade This Week

There are 15 changes for the TIP Taiwan Value High Dividend Index in November. The Yuanta Taiwan Value High Dividend ETF (00940 TT) has an AUM of US$5bn.
Estimated one-way turnover is 26% and there are 16 stocks with over 4 days of ADV left to trade. The rebalance commenced yesterday and will end on Friday.
An equal weighted basket of inclusions has outperformed an equal weighted basket of deletions since July. That could continue over the week as the ETF continues to rebalance their portfolio.

SF Holding (6936 HK): No Index Inclusion till Mid-2025; AH Premium Could Stay Wide

The S.F. Holding (002352 CH) H-shares are being offered at a price range of HK$32.3-36.3/share, a discount of 20.2%-29% to the A-shares. The max raise (including oversubscription) is US$912m.
Unlike Midea Group (300 HK), the S.F. Holding (002352 CH) H-shares will not get Fast Entry to any indices. Southbound Stock Connect inclusion will take place on 23 December.
With no index inclusion in the short-term, the H-shares discount to the A-shares should remain wide. The H-shares could become short sell eligible in February.

7&I (3382) Ito Family MBO – New Urgency for ACT

Days ago we got a dramatic headline about Ito family scion ITO Junro and his family company Ito Kogyo making a bid for Seven & I Holdings (3382 JP).
The stock popped, then fell. Details were not clear. Was the ¥9trln an EV number? A market cap? Was he serious? How would he get funding. Skepticism was rife.
Today we get more headlines from NHK. who says the family wants to raise ¥8trln to take 7&i private by end-Feb 2025.

HKBN (1310 HK): China Mobile Comes Knocking. Again.

HKBN Ltd (1310 HK), a Hong Kong broadband play, is never short on privatisation rumours. China Mobile (941 HK) is reportedly (again) holding talks with HKBN’s major shareholders.
China Mobile is a logical suitor. I highly doubt a non-PRC (government-affiliated) corporation would be permitted to take HKBN private.
Previous takeover rumours over the years came to nought. It may be different this time. HKBN was suspended this morning pursuant to the Takeovers Code.

SF Holdings A/H Listing – Lower End Looks Digestable

By Sumeet Singh

S.F. Holding (002352 CH), China’s largest express delivery company, is now looking to raise around US$800m in its H-share listing in Hong Kong.
SFH is the largest integrated express logistics service provider in China and the fourth largest in the world. It has been listed on the Shenzhen Stock Exchange since 2017.
We have covered the company and deal background in our previous notes. In this note, we talk about the IPO pricing.

S&P/ASX Index Rebalance Preview (Dec 2024): Dexus and Spark NZ with Double Deletions

With the review period nearly complete, there could be one change for the S&P/ASX 50 Index and one change for the S&P/ASX 200 (AS51 INDEX) in December.
Both deletes are also deletions from a global index next week and there could be short-term buying/covering opportunities on a drop in the stock price.
There has been a buildup of cumulative excess volume in all stocks over the last few months. There has been no increase in positioning in CAR Group (CAR AU) recently.

Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for December

Post market close on Friday, Hang Seng Indexes will announce the changes for the Hang Seng Index (HSI INDEX) that will be implemented at the close on 6 December.
With no increase in the number of index constituents this calendar year, there could be inclusions in December. The process of getting to 100 index constituents could drag into 2026.
Short interest is especially large in Sinotruk, Giant Biogene, Kuaishou Technology, ASMPT and JD Logistics and inclusion could set off some short covering.

KDC REIT Placement – Accretive Acquisitions Should Garner Strong Support

By Clarence Chu

Keppel DC REIT (KDCREIT SP) is looking to raise S$600m (US$450m) from a primary placement. The proceeds will be used to acquire interest in two data centers in Singapore.
The deal will be a large one to digest, accounting for 47 days of the stock’s three month ADV. That said, the acquisitions appear to be accretive to bottomline.
In this note, we’ll run the deal through our ECM framework and comment on deal dynamics.

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Nov 19

Most Read: Seven & I Holdings, Evergreen Marine Corp, Ping An Healthcare and Technology, Samsung Electronics, 99 Speed Mart Retail Holdings, WH Group, Synnex Technology International, Wisdom Marine Lines, Jb Financial Group and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

7&I (3382) – What If… A Modest Proposal
Quiddity Leaderboard TDIV Dec 24: Trade Successful; +9.5% in Three Weeks; More Upside Possible.
Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: 6 Adds, 5 Deletes, Capping, US$3.5bn Trade
Ping An Healthcare and Technology (1833 HK) – Privatization Ahead?
My Take on the Three Scenarios that Sammy Buyback Stirred up in the Market Today
KLCI Index Rebalance Preview: One High Probability Change; One at the Cusp
WH Group (288 HK)’s US/Mexican Spin-Off
TIP Taiwan Value High Dividend Index Rebalance: A Lot to Trade This Week
TIP Customized Taiwan Select High Div Index Rebalance Preview: 32% T/O; US$2.75bn Trade; HUGE Impact
KRX Value-Up Special Rebalance in December: Playbook & Screening Rundown

7&I (3382) – What If… A Modest Proposal

A lot of the talk around the news that Ito family scion Ito Junro had proposed to Seven & I Holdings (3382 JP) an MBO was about thwarting Alimentation Couche-Tard.
Several mentioned that this bid – seemingly uncompetitive at the moment – would make ACT back down. I discussed the bid and its repercussions here.
Here I suggest an alternate solution which might get everyone what they want.

Quiddity Leaderboard TDIV Dec 24: Trade Successful; +9.5% in Three Weeks; More Upside Possible.

By Janaghan Jeyakumar, CFA

In this insight, we take look at Quiddity’s expectations for index changes and capping flows for the TDIV Index for the December 2024 index rebal event.
I currently see 5 ADDs and 4 DELs but some of these names are different from what we had last time (link).
The current estimate for one-way flow in December 2024 is US$1.54bn.

Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: 6 Adds, 5 Deletes, Capping, US$3.5bn Trade

Using data from the close on 15 November, there could be 6 adds and 5 deletes for the Yuanta/P-Shares Taiwan Dividend Plus ETF in December.
There will also be capping and funding flows that will lead to a one-way turnover of 16.9% and a one-way trade of TWD 57.5bn (US$1.77bn).
Short interest is at the highs in most forecast deletes, while the trend is mixed among the potential inclusions.

Ping An Healthcare and Technology (1833 HK) – Privatization Ahead?

By Xinyao (Criss) Wang

PAGD’s business model is problematic, leading to continuous shrinking revenue scale. As PAGD will entirely lose competitiveness in the future, the management wants to find a suitable way to “exit”.
Privatizing PAGD at low price and integrating it into the Ping An Group’s system is a good choice. In other words, Ping An hopes other shareholders to choose cash dividends.
Due to high tax, Hong Kong Stock Connect investors would prefer to sell in advance. Arbitrageurs can wait until stock price drops then make decisions based on new conversion price.

My Take on the Three Scenarios that Sammy Buyback Stirred up in the Market Today

The market’s reaction to Samsung Fire’s stake sale seems overhyped. Given past share sales, Life may outperform Fire as this momentum unfolds.
I don’t see SDS merging with Samsung Electronics. It lacks synergy and could stir up PR issues. If Sammy’s stock stalls, Lee Jae-yong might sell more of his SDS stake.
I’m still bullish on Sammy prefs. If the tax reform passes, a special dividend, not a buyback, will be the cleanest way for Samsung to address inheritance tax.

KLCI Index Rebalance Preview: One High Probability Change; One at the Cusp

There is a high probability of Gamuda Bhd (GAM MK) replacing Genting Malaysia (GENM MK) in the Kuala Lumpur Composite Index (KLCI) (FBMKLCI INDEX) in December.
99 Speed Mart Retail Holdings (99SPD MK) is a close add and needs small outperformance over the next week to be added. That could see Genting Bhd (GENT MK) deleted.
Passive funds benchmarked to the Kuala Lumpur Composite Index (KLCI) (FBMKLCI INDEX) will need to buy 0.3-0.75x ADV on the potential adds and sell 0.9-1.3x ADV on the potential deletes.

WH Group (288 HK)’s US/Mexican Spin-Off

Back on 14 July 2024, WH Group (288 HK) (WHG) announced it had submitted a plan to spin-off its Smithfield US and Mexican ops on the NYSE or NASDAQ
WHG the world’s largest pork producer, has now confirmed it will sell up to 20% of Smithfield’s shares on a fully diluted basis, in an initial public offering.
WHG has also proposed an assured entitlement for existing shareholders by way of a distribution in specie of existing shares of Smithfield, or a cash alternative.

TIP Taiwan Value High Dividend Index Rebalance: A Lot to Trade This Week

There are 15 changes for the TIP Taiwan Value High Dividend Index in November. The Yuanta Taiwan Value High Dividend ETF (00940 TT) has an AUM of US$5bn.
Estimated one-way turnover is 26% and there are 16 stocks with over 4 days of ADV left to trade. The rebalance commenced yesterday and will end on Friday.
An equal weighted basket of inclusions has outperformed an equal weighted basket of deletions since July. That could continue over the week as the ETF continues to rebalance their portfolio.

TIP Customized Taiwan Select High Div Index Rebalance Preview: 32% T/O; US$2.75bn Trade; HUGE Impact

The TIP Taiwan Select High Dividend ETF (00919 TW) tracks the TIP Customized Taiwan Select High Dividend Index and has an AUM of TWD 284bn (US$8.7bn).
We forecast 8 changes a side at the December rebalance with an estimated one-way turnover of around 15.8% and a round-trip trade of around US$2.75bn.
An equal weighted basket of potential inclusions has outperformed an equal weighted basket of potential deletions since beginning September with a pick-up in pace over the last 2-3 weeks.

KRX Value-Up Special Rebalance in December: Playbook & Screening Rundown

Since Sep 24, 32 companies made Value-Up disclosures. After filtering, 17 remain, but KRX will keep inclusions tight. They’ll likely use PBR and ROE rankings for final selection.
We have 6 names—3 financials, 2 healthcare, 1 industrial. New Value-Up disclosures through Dec 6 could add more, but these 6 are the frontrunners for now.
KRX is likely to announce results by Dec 10-11. Start eyeing entry points 10 days prior, and if price action heats up early, consider pulling the trigger sooner.

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Nov 18

Most Read: Ping An Healthcare and Technology, Fuji Soft Inc, Samsung Electronics, Samsung Electronics Pref Shares, Evergreen Marine Corp, Seven & I Holdings, Yankuang Energy Group, S.F. Holding, Xingda International and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

2025 High Conviction: PA Gooddoctor (1833 HK) – The Arb Is To Take The Stock
Fuji Soft (9749): KKR To Launch at ¥9,451, Fuji Soft REJECTS Bain’s Bid – Governance in Shambles
Samsung Electronics: A Massive 10 Trillion Won Share Buyback Program
Sammy’s Massive Buyback: Play the Pref Compression, Not Outright Long
Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: 6 Adds, 5 Deletes, Capping, US$3.5bn Trade
Fuji Soft (9749 JP): KKR Bumps to JPY9,451 as Bain Left High and Dry
7&I (3382) – What If… A Modest Proposal
FXI Rebalance Preview: One Change in December as Shorts Spike
SF Holding H Share Listing: AH Discount Views
Xingda (1899 HK): A Surprising Result as Offer Declared Unconditional

2025 High Conviction: PA Gooddoctor (1833 HK) – The Arb Is To Take The Stock

Ping An Healthcare (1833 HK) (PA Gooddoctor), which was spun off from Ping An Insurance (601318 CH) and listed in May 2018, has announced a change in use of proceeds.
Part of that change includes the payment of a punchy HK$9.70/share special dividend.
The more interesting aspect is that a scrip dividend is also afforded, which should allow a stealth MBO from Ping An at zero premium.

Fuji Soft (9749): KKR To Launch at ¥9,451, Fuji Soft REJECTS Bain’s Bid – Governance in Shambles

On Friday 15 November, KKR announced it would launch KKR Tender2 to buy the rest of FujiSoft not purchased in KKR Tender1. Their new price is ¥1 higher than Bain’s.
Fuji Soft Inc (9749 JP) announced (J) it supported the KKR2 Tender and rejected the Bain TOB Proposal. KKR1 shareholders are “made whole” at ¥9,451/share. Minimum is 53.22%.
The document, however, is a Governance Disaster – an absolute shambles, effectively gaslighting investors at every turn. And now investors can see it was problematic from the start.

Samsung Electronics: A Massive 10 Trillion Won Share Buyback Program

Samsung Electronics (005930 KS) announced a massive share buyback program worth 10 trillion won which represents 3.1% of its market cap.
Of this total amount, about 3 trillion won will be purchased and cancelled in the next three months. This will include 50,144,628 common shares and 6,912,036 preferred shares.
We believe that this massive share buyback and cancellation is likely to boost Samsung Electronics’ share price resulting in a strong outperformance relative to KOSPI in the next 6-12 months.

Sammy’s Massive Buyback: Play the Pref Compression, Not Outright Long

The stock’s still below 1x PBR. But with Samsung’s tech gaps and slowdowns, going all-in on an outright long here off the back of this buyback feels way too early
The key is whether pref discounts tighten like 2015, but with a more balanced buyback this time and narrowing pref discounts, making a pref rally harder to predict short-term.
The goal’s the same as 2015—boosting the family’s control. If the remaining buyback leans pref-heavy, it could further tighten pref discounts, creating a potential opportunity to play the compression.

Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: 6 Adds, 5 Deletes, Capping, US$3.5bn Trade

Using data from the close on 15 November, there could be 6 adds and 5 deletes for the Yuanta/P-Shares Taiwan Dividend Plus ETF in December.
There will also be capping and funding flows that will lead to a one-way turnover of 16.9% and a one-way trade of TWD 57.5bn (US$1.77bn).
Short interest is at the highs in most forecast deletes, while the trend is mixed among the potential inclusions.

Fuji Soft (9749 JP): KKR Bumps to JPY9,451 as Bain Left High and Dry

KKR & Co (KKR US) has secured the Fuji Soft Inc (9749 JP) Board’s unanimous support by bumping its second tender offer to JPY9,451, a JPY1 premium to Bain’s JPY9,450 offer.
The Board is claiming a “fiduciary duty” win as it has secured a higher offer from KKR but paradoxically signalling that it will not negotiate a bump from Bain.
Bain will likely walk rather than try to win the Board’s support by revising terms. At the last close, the gross spread to KKR’s offer is 3.7%.

7&I (3382) – What If… A Modest Proposal

A lot of the talk around the news that Ito family scion Ito Junro had proposed to Seven & I Holdings (3382 JP) an MBO was about thwarting Alimentation Couche-Tard.
Several mentioned that this bid – seemingly uncompetitive at the moment – would make ACT back down. I discussed the bid and its repercussions here.
Here I suggest an alternate solution which might get everyone what they want.

FXI Rebalance Preview: One Change in December as Shorts Spike

With one trading day left in the review period, we expect one change with China Merchants Securities Co Ltd (H) (6099 HK) replacing Yankuang Energy Group (1171 HK) in December.
Capping will result in selling for Meituan (3690 HK) and buying in Tencent (700 HK) and Alibaba Group Holding (9988 HK).
Short interest has jumped on both stocks, but the increase is far higher in China Merchants Securities Co Ltd (H) (6099 HK) compared to Yankuang Energy Group (1171 HK).

SF Holding H Share Listing: AH Discount Views

S.F. Holding (002352 CH), the largest Asian integrated logistics service provider, is premarketing an H Share listing to raise US$1.0-1.5 billion, according to press reports.
In SF Holding H Share Listing: Updates Point to Improving Fundamentals, we noted that SF is in good health, with a return to growth, rising margins, and strong cash generation.
In this note, we examine the likely discount SF Holding will offer its H Shares compared to the A Shares.

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

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%.

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Nov 17

Most Read: Kansai Electric Power, Zomato, Nexchip Semiconductor , SGX Rubber Future TSR20, S.F. Holding, Jiangxi Boya Bio Pharmaceutical, Seven & I Holdings, Yankuang Energy Group, Fuji Soft Inc, NAURA Technology Group and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

KEPCO (9503 JP): Index Implications of US$3.5bn Primary + Secondary Offering
INDIA: Index Changes Due to the 45 New Additions to the F&O Segment
CES China Semiconductor Chips Index Rebalance Preview: Three Changes in December
Tire Industry: Premium Brands Exit Small-Rim Market Amidst Rising Competition
SF Holding Pre-IPO: Three Important Issues for Long-Term Investors to Consider
China Healthcare Weekly (Nov.17) – TCM VBP New Updates, CR Boya Completes Acquisition of Green Cross
Weekly Deals Digest (17 Nov) – Seven & I, Fuji Soft, Nishimoto, Macromill, CPMC, KEPCO, SF Holding
FXI Rebalance Preview: One Change in December as Shorts Spike
Fuji Soft (9749 JP): KKR Bumps to JPY9,451 as Bain Left High and Dry
China A50 ETFs Rebalance Preview: One Change to Close Out the Year

KEPCO (9503 JP): Index Implications of US$3.5bn Primary + Secondary Offering

Kansai Electric Power (9503 JP) is looking to raise up to US$3.5bn via a primary offering and a sale of Treasury shares. Pricing date is between 26-29 November.
Kansai Electric Power (9503 JP) is among the better performing stocks from the Electric Utilities industry and trades at higher valuations compared to its peers.
There will be a fair bit of passive buying with around 29% of the offering being bought at the time of settlement of the shares.

INDIA: Index Changes Due to the 45 New Additions to the F&O Segment

The National Stock Exchange (NSEIN IN) has announced a list of 45 stocks that will be added to the Futures & Options (F&O) segment of the market from 29 November.
There will be changes to the NIFTY Index, NSE Nifty Next 50 Index, S&P BSE SENSEX Index and the CNXIT Index over the next couple of rebalances.
There are some interesting situations out there, including a change to the universe for the NSE Nifty Next 50 Index (NIFTYJR INDEX) that could lead to more changes.

CES China Semiconductor Chips Index Rebalance Preview: Three Changes in December

There could be three changes for the CES China Semiconductor Chips Index at the close of trading on 13 December.
Based on the assets tracking the index, passive trackers will need to trade between 0.1-0.3x ADV in the stocks.
There will be selling in Semiconductor Manufacturing International Corporation (SMIC) (688981 CH) to cap the stock at 10% of the index weight.

Tire Industry: Premium Brands Exit Small-Rim Market Amidst Rising Competition

By Farah Miller

Premium brands focus on high-value large rims, leaving small-rim markets.
Factory closures signal overcapacity as brands exit small-rim tire production.
New players gain ground in small-rim segments in Europe and North America.

SF Holding Pre-IPO: Three Important Issues for Long-Term Investors to Consider

By Daniel Hellberg

SF Holding’s domestic parcel volumes have grown slower than overall market volumes recently; is this strategic, or simply a loss of share?
SF Holding is not closely aligned with any of the large online retail platforms in China; ultimately, is this independence an advantage or a disadvantage?
When will SF Holdings’ varied international operations — and there are a few of them — begin to pull their own weight, in terms of profitability and growth?

China Healthcare Weekly (Nov.17) – TCM VBP New Updates, CR Boya Completes Acquisition of Green Cross

By Xinyao (Criss) Wang

The new round of national TCM decoction pieces VBP has started. We think the overall price reduction would be relatively mild, and the impact on related TCM enterprises is limited.
The NHSA will vigorously promote the expansion of TCM VBP, which is another challenge for TCM injections. But the impact on exclusive TCM varieties and innovative TCM injections is smaller.
CR Boya has completed the acquisition of 100% equity of Green Cross and has included it in the scope of consolidated financial statements starting from November. Future M&As will continue.

Weekly Deals Digest (17 Nov) – Seven & I, Fuji Soft, Nishimoto, Macromill, CPMC, KEPCO, SF Holding

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: S.F. Holding (002352 CH) is premarketing an H Share listing to raise US$1.0-1.5 billion, Kansai Electric Power (9503 JP)‘s US$3.5 billion placement.
Event-Driven developments: Seven & I Holdings (3382 JP), Fuji Soft Inc (9749 JP), Nishimoto (9260 JP), Macromill, Inc (3978 JP), Agro Kanesho (4955 JP), Renewable Japan (9522 JP), CPMC.

FXI Rebalance Preview: One Change in December as Shorts Spike

With one trading day left in the review period, we expect one change with China Merchants Securities Co Ltd (H) (6099 HK) replacing Yankuang Energy Group (1171 HK) in December.
Capping will result in selling for Meituan (3690 HK) and buying in Tencent (700 HK) and Alibaba Group Holding (9988 HK).
Short interest has jumped on both stocks, but the increase is far higher in China Merchants Securities Co Ltd (H) (6099 HK) compared to Yankuang Energy Group (1171 HK).

Fuji Soft (9749 JP): KKR Bumps to JPY9,451 as Bain Left High and Dry

KKR & Co (KKR US) has secured the Fuji Soft Inc (9749 JP) Board’s unanimous support by bumping its second tender offer to JPY9,451, a JPY1 premium to Bain’s JPY9,450 offer.
The Board is claiming a “fiduciary duty” win as it has secured a higher offer from KKR but paradoxically signalling that it will not negotiate a bump from Bain.
Bain will likely walk rather than try to win the Board’s support by revising terms. At the last close, the gross spread to KKR’s offer is 3.7%.

China A50 ETFs Rebalance Preview: One Change to Close Out the Year