Category

Most Read

Aug 20
0

Most Read: Japan Post Holdings, Celltrion Inc, Trent Ltd, Celltrion Healthcare , ZJLD Group , SK Rent A Car, Tokyo Stock Exchange Tokyo Price Index Topix, Silicon Motion Technology and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Japan Post Holdings (6178) Starts Its Bigly Buyback With a Sale from the MOF-Boffins
  • Celltrion Merger: Index Implications
  • Celltrion Merger Swap: Conditions & Schedule
  • NIFTY NEXT50 Index Rebalance: Five Changes; Big Impact; Cross Index Flow
  • Celltrion Inc/Healthcare Merger. Pharm Is Next
  • Merger Between Celltrion Inc and Celltrion Healthcare (Phase I First)
  • HSCI Index Rebalance: 22 Adds, 27 Deletes & Changes to Southbound Stock Connect
  • Fully Disseting SK Rent A Car’s Hybrid Tender Offer Disclosure, Whose Cash Offer at a 5.7% Spread
  • Share Buybacks In Japan – A 2023 Primer
  • What’s Next for SiMo?

Japan Post Holdings (6178) Starts Its Bigly Buyback With a Sale from the MOF-Boffins

By Travis Lundy

Celltrion Merger: Index Implications

By Brian Freitas

Celltrion Merger Swap: Conditions & Schedule

By Sanghyun Park

  • The swap prices, ₩148,853 for Celltrion Inc and ₩66,874 for Celltrion Healthcare, specified below are not tentative prices but confirmed prices. So, the merger ratio has been determined as 1:0.4492620.
  • The key focus now is the appraisal rights exercise. Both offer attractive spreads. Yet, the ₩1T combined ceiling might seem restricted considering potential dissenting Celltrion Inc shareholders exceeding expectations.
  • Nonetheless, considering the strong determination of the company towards this merger, we should consider a strategy of approaching this spread aggressively while keeping the cancellation risk in mind.

NIFTY NEXT50 Index Rebalance: Five Changes; Big Impact; Cross Index Flow

By Brian Freitas

Celltrion Inc/Healthcare Merger. Pharm Is Next

By David Blennerhassett

  • It’s finally happening:  biopharmaceuticals developer and producer Celltrion Inc (068270 KS) will acquire Celltrion Healthcare (091990 KS).  
  • Inc will issue 0.4492620 new shares for each share in Healthcare. The swap prices of ₩148,853 for Inc and ₩66,874 for Healthcare are firm. 
  • Celltrion Pharm (068760 KS) is excluded from the original three-way merger plan, but is expected to be merged with the enlarged Inc/Healthcare entity around July 2024.

Merger Between Celltrion Inc and Celltrion Healthcare (Phase I First)

By Douglas Kim

  • On 17 August, Celltrion Inc announced that it will merge with Celltrion Healthcare. The merger ratio is 0.449262 Celltrion Inc share for each share of Celltrion Healthcare.
  • There was a negative surprise which was that Celltrion Pharm will not be included as part of the three companies merger which has been promised in the past several years. 
  • Overall, we believe that this merger will have a positive impact on Celltrion Inc and Celltrion Healthcare’s share prices. 

HSCI Index Rebalance: 22 Adds, 27 Deletes & Changes to Southbound Stock Connect

By Brian Freitas

  • There are 22 adds and 27 deletes for the Hang Seng Composite Index (HSCI) at the September rebalance to take the number of index constituents down to 518.
  • We expect all 22 inclusions to the HSCI will be added to Stock Connect, while 24 of the 27 HSCI deletions will be removed from Southbound Stock Connect.
  • Since the end of June, shares held though Southbound Connect have increased on 20 of the 27 HSCI deletions and there could be some unwinding in the next two weeks.

Fully Disseting SK Rent A Car’s Hybrid Tender Offer Disclosure, Whose Cash Offer at a 5.7% Spread

By Sanghyun Park

  • With just the SK Networks stake, both of these conditions are already satisfied. So, the key point will be how quickly the spread of the cash offer narrows next Monday.
  • We need to watch whether the spread for the exchange offer opens. As SK Networks is a K200 constituent, it’s subject to short selling, making a Long Short play possible.
  • Worth noting, among the 24% minority shareholders, NPS and KIT hold a combined 15%, potentially leading to limited market circulation volume. This is something we should also be mindful of.

Share Buybacks In Japan – A 2023 Primer

By Travis Lundy

  • The TSE and Government are pressuring low-PBR companies to DO SOMETHING to raise their PBR to >1.0x. The easiest way to do that is raise ROE.
  • Raising R requires customers “agree” (buying more, paying a higher price, etc). Lowering E means buying back shares or paying big special dividends. That’s easier for a company.
  • So buybacks have been increasing in number, and breadth, and to some degree in size. This insight describes the mechanics/details of how buybacks work in Japan.

What’s Next for SiMo?

By Jim Handy

  • MaxLinear’s acquisition of Silicon Motion has been abandoned, with both sides threatening arbitration. 
  • It is difficult to understand why the acquisition would have resulted in the synergies projected by management.  The businesses are very different.
  • Assuming the companies go different ways, expect for SiMo to perform as it has in the past.

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

Sign Up for Free

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

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Analytics and News
  • ✓ Events & Webinars
Sign Up for Free



Aug 19
0

Most Read: Li Auto , BeiGene , Renesas Electronics, Celltrion Inc, Trent Ltd, Celltrion Healthcare , Rakuten Securities and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Hang Seng Index Rebalance Preview: 80 Member Target Achieved; What Next?
  • HSCEI Index Rebalance Preview: Deletions Fairly Certain; Uncertainty Among the Adds
  • Nikkei 225 Methodology Change. Again. This Time Better But Still Not Good Enough
  • Celltrion Merger: Index Implications
  • Celltrion Merger Swap: Conditions & Schedule
  • NIFTY NEXT50 Index Rebalance: Five Changes; Big Impact; Cross Index Flow
  • Celltrion (068270 KS) Merger with Celltrion Healthcare (091990 KS)
  • Celltrion Inc/Healthcare Merger. Pharm Is Next
  • Merger Between Celltrion Inc and Celltrion Healthcare (Phase I First)
  • Rakuten Securities IPO: Japan Optimism and Fractional Trading Boost Revenue Amid Stable Costs

Hang Seng Index Rebalance Preview: 80 Member Target Achieved; What Next?

By Brian Freitas

  • We finally got to 80 Hang Seng Index constituents in June. Now comes the next step of moving up to 100 index constituents though there is no timeline for completion.
  • The conclusions of the market consultation on the inclusion of foreign stocks in the Hang Seng Index should be announced soon though implementation could start only in December.
  • We highlight 10 potential inclusions to the index with passive trading impact varying from 1.5-5.6 days of ADV. There are large shorts on some of the stocks.

HSCEI Index Rebalance Preview: Deletions Fairly Certain; Uncertainty Among the Adds

By Brian Freitas

Nikkei 225 Methodology Change. Again. This Time Better But Still Not Good Enough

By Travis Lundy

  • The Nikkei Index Team has suggested a methodology change to the Nikkei 225 Average.
  • It involves capping stocks, creating a method for re-weighting once capped then stocks fall, and they recommend changing to a semi-annual Periodic Review – twice a year rather than once.
  • More interestingly, they also change the “High Liquidity” definition to be related to traded value not volume, which starts to favour higher-market cap stocks with more shares out.

Celltrion Merger: Index Implications

By Brian Freitas

Celltrion Merger Swap: Conditions & Schedule

By Sanghyun Park

  • The swap prices, ₩148,853 for Celltrion Inc and ₩66,874 for Celltrion Healthcare, specified below are not tentative prices but confirmed prices. So, the merger ratio has been determined as 1:0.4492620.
  • The key focus now is the appraisal rights exercise. Both offer attractive spreads. Yet, the ₩1T combined ceiling might seem restricted considering potential dissenting Celltrion Inc shareholders exceeding expectations.
  • Nonetheless, considering the strong determination of the company towards this merger, we should consider a strategy of approaching this spread aggressively while keeping the cancellation risk in mind.

NIFTY NEXT50 Index Rebalance: Five Changes; Big Impact; Cross Index Flow

By Brian Freitas

Celltrion (068270 KS) Merger with Celltrion Healthcare (091990 KS)

By Arun George

  • Celltrion Inc (068270 KS) will merger with Celltrion Healthcare (091990 KS). Celltrion Healthcare shareholders will receive 0.4492620 Celltrion shares per Celltrion Healthcare share. 
  • The merger requires shareholder (approval by at least two-thirds of the votes of the shareholders present representing at least one-third of the outstanding shares) and Fair Trade Commission approval.
  • The merger ratio, based on regulations, is attractive compared to historical VWAP exchange ratios and multiples. At last close prices, Celltrion Healthcare shares are trading broadly at terms. 

Celltrion Inc/Healthcare Merger. Pharm Is Next

By David Blennerhassett

  • It’s finally happening:  biopharmaceuticals developer and producer Celltrion Inc (068270 KS) will acquire Celltrion Healthcare (091990 KS).  
  • Inc will issue 0.4492620 new shares for each share in Healthcare. The swap prices of ₩148,853 for Inc and ₩66,874 for Healthcare are firm. 
  • Celltrion Pharm (068760 KS) is excluded from the original three-way merger plan, but is expected to be merged with the enlarged Inc/Healthcare entity around July 2024.

Merger Between Celltrion Inc and Celltrion Healthcare (Phase I First)

By Douglas Kim

  • On 17 August, Celltrion Inc announced that it will merge with Celltrion Healthcare. The merger ratio is 0.449262 Celltrion Inc share for each share of Celltrion Healthcare.
  • There was a negative surprise which was that Celltrion Pharm will not be included as part of the three companies merger which has been promised in the past several years. 
  • Overall, we believe that this merger will have a positive impact on Celltrion Inc and Celltrion Healthcare’s share prices. 

Rakuten Securities IPO: Japan Optimism and Fractional Trading Boost Revenue Amid Stable Costs

By Oshadhi Kumarasiri

  • Rakuten Group (4755 JP) announced last month that its consolidated subsidiary, Rakuten Securities (RAKUSEC JP), has applied for a listing on the Tokyo Stock Exchange.
  • In the last eight quarters, the Securities business has experienced more than 100% profit growth, thanks to linear revenue growth while costs remained relatively stable.
  • The previous private market valuation of ¥400bn implies a PE ratio of 15.0x, assuming the company maintains its current 2Q23 profitability level.

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

Sign Up for Free

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

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Analytics and News
  • ✓ Events & Webinars
Sign Up for Free



Aug 18
0

Most Read: Ramelius Resources, Celltrion Inc, Celltrion Healthcare , Sanei Architecture Planning, Hwatsing Technology , T&K Toka Co Ltd, Amorepacific Group, Lotte Tour Development Co, Ltd., Trent Ltd and more

By | Daily Briefs, Most Read

In today’s briefing:

  • S&P/​​​​​​​​​ASX Index Rebalance Preview: Potential Adds Have Outperformed
  • Celltrion Merger: Index Implications
  • Celltrion Merger Swap: Conditions & Schedule
  • Celltrion (068270 KS) Merger with Celltrion Healthcare (091990 KS)
  • Sanei Architecture Planning (3228) Finds Saviour from Mafia-Linked Former Boss and Majority Owner
  • Quiddity Leaderboard STAR 50 Dec 23: The Real Deal
  • Second Go-Round Tender for T&K TOKA (4636) As Bain Wants It All At ¥1,400/Share
  • Amorepacific Group: SoTP Valuation and Meaning of Min-Jung Suh Taking One Year Leave of Absence
  • Addressing Misconceptions: Lotte Tour’s Short-Selling Entry Point
  • NIFTY NEXT50 Index Rebalance: Five Changes; Big Impact; Cross Index Flow

S&P/​​​​​​​​​ASX Index Rebalance Preview: Potential Adds Have Outperformed

By Brian Freitas

  • We forecast 26 changes across the ASX50 Index, ASX100 Index, S&P/ASX 200 (AS51 INDEX) and ASX300 Index at the September rebalance.
  • The review period ends tomorrow, so most changes are high probability. Though there are some changes that will be up to the discretion of the index committee.
  • There will be a lot of stock to trade on the changes to the ASX200 and indices higher up the hierarchy. But there will be a lot of pre-positioning too.

Celltrion Merger: Index Implications

By Brian Freitas

Celltrion Merger Swap: Conditions & Schedule

By Sanghyun Park

  • The swap prices, ₩148,853 for Celltrion Inc and ₩66,874 for Celltrion Healthcare, specified below are not tentative prices but confirmed prices. So, the merger ratio has been determined as 1:0.4492620.
  • The key focus now is the appraisal rights exercise. Both offer attractive spreads. Yet, the ₩1T combined ceiling might seem restricted considering potential dissenting Celltrion Inc shareholders exceeding expectations.
  • Nonetheless, considering the strong determination of the company towards this merger, we should consider a strategy of approaching this spread aggressively while keeping the cancellation risk in mind.

Celltrion (068270 KS) Merger with Celltrion Healthcare (091990 KS)

By Arun George

  • Celltrion Inc (068270 KS) will merger with Celltrion Healthcare (091990 KS). Celltrion Healthcare shareholders will receive 0.4492620 Celltrion shares per Celltrion Healthcare share. 
  • The merger requires shareholder (approval by at least two-thirds of the votes of the shareholders present representing at least one-third of the outstanding shares) and Fair Trade Commission approval.
  • The merger ratio, based on regulations, is attractive compared to historical VWAP exchange ratios and multiples. At last close prices, Celltrion Healthcare shares are trading broadly at terms. 

Sanei Architecture Planning (3228) Finds Saviour from Mafia-Linked Former Boss and Majority Owner

By Travis Lundy

  • [cue Tom Hardy gif saying “That’s Bait”]. But yes, this story has a backstory to the Japanese underworld, and while the original sin may have been minor, it’s everything.
  • The firm was raided, the CEO resigned, a govt authority “recommended” Sanei get rid of Mr Koike’s influence, banks got antsy, employee morale dropped. Sanei needed a saviour.
  • Koike-San asked Open House (3288 JP) to buy his shares. They agreed to take over the company. It’s basically a done deal with a possible twist.

Quiddity Leaderboard STAR 50 Dec 23: The Real Deal

By Janaghan Jeyakumar, CFA

  • STAR 50 Index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
  • Recently, I discussed the historical price and volume performance of STAR 50 rebalance events in Quiddity Primer for STAR 50 Index Rebalance Events. 
  • In this insight, we take a look at our expectations for potential ADDs and DELs for the STAR 50 index during the December 2023 Rebalance event.

Second Go-Round Tender for T&K TOKA (4636) As Bain Wants It All At ¥1,400/Share

By Travis Lundy

  • In January 2023, NAVF and Michael 1925 LLC – affiliates of Dalton Investments LLC – announced a hostile partial Tender Offer for T&K Toka Co Ltd (4636 JP). 
  • It failed. They wanted to buy 21.72% at ¥1300 to get to 44% post-Tender. The Company objected. Dalton/etc didn’t get the shares. Shares fell afterward. 
  • Today, Bain announced a deal to take over the company at ¥1,400/share. T&K TOKA has agreed. It may not be as easy as that. And there is a fulcrum investor.

Amorepacific Group: SoTP Valuation and Meaning of Min-Jung Suh Taking One Year Leave of Absence

By Douglas Kim

  • About a week ago, it was announced that Chairman’s elder daughter Min-Jung Suh will take a long one year leave of absence.
  • Chairman Suh is very dissatisfied with the company’s results in the past three years and wants to shake up the company to improve its operations, in our view. 
  • Our base case NAV valuation of Amorepacific Group (002790 KS) is 39,611 won, which is 29% higher than current price.

Addressing Misconceptions: Lotte Tour’s Short-Selling Entry Point

By Sanghyun Park

  • Lotte Tour has emerged as a prominent short-selling target in the Korean market, and there are efforts to use an ₩80B convertible bond (CB) to exploit its dilution/overhang risk.
  • Linden Capital and LMR, upon obtaining the CB, promptly borrowed 4.6M shares from Donghwa for short selling. Thus, the CB conversion incentive remains largely unaffected by stock price changes.
  • We should avoid synchronizing our entry point with CB conversion. Instead, we should target the likely rights issuance in the latter half of the year, anticipated in the market.

NIFTY NEXT50 Index Rebalance: Five Changes; Big Impact; Cross Index Flow

By Brian Freitas

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

Sign Up for Free

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

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Analytics and News
  • ✓ Events & Webinars
Sign Up for Free



Aug 17
0

Most Read: Japan Post Holdings, Great Wall Motor, Brilliance China Automotive, BeiGene , Value Added Technologies, Sea , Tongcheng Travel Holdings , Ramelius Resources, Sanei Architecture Planning, Splitit Ltd and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Japan Post Holdings (6178) Starts Its Bigly Buyback With a Sale from the MOF-Boffins
  • The Brand Spanking New Extra Spiffy 🦄H/A-Share Discount/Premium Weekly (As of 11 Aug 2023)
  • Brilliance China (1114 HK): Driving Back Into Passive Portfolios
  • Quiddity HSCEI Sep 23 Flow Expectations Update: US$367mn One-Way, Beigene Vs Peers Interesting
  • KOSDAQ150 Ad Hoc Index Rebalance Preview: VAT Could Replace Lutronic
  • Sea Ltd 2Q23: Revenue Should Align with Consensus, Profitability a Puzzle
  • Quiddity HSTECH Sep 23 Flow Expectations Update: Last Trade Sucessful; Some New Trade Ideas
  • S&P/​​​​​​​​​ASX Index Rebalance Preview: Potential Adds Have Outperformed
  • Sanei Architecture Planning (3228 JP): Open House’s JPY2,025 Tender Offer
  • Splitit Pursues Split From The ASX

Japan Post Holdings (6178) Starts Its Bigly Buyback With a Sale from the MOF-Boffins

By Travis Lundy

The Brand Spanking New Extra Spiffy 🦄H/A-Share Discount/Premium Weekly (As of 11 Aug 2023)

By Travis Lundy

  • This is the Brand Spanking New and Extra Spiffy H/A-Share Discount/Premium Weekly designed to help investors see the relationships easily. We used to do it. 
  • We decided to bring it back better. There are lots of cool interactive tables, and charts, heat maps, and comparative data. And 19 Trade Recommendations. 
  • We hope this new version serves readers even better. Feedback is actively solicited to see if we can improve it from here. 

Brilliance China (1114 HK): Driving Back Into Passive Portfolios

By Brian Freitas

  • Brilliance China Automotive (1114 HK) was deleted from local and global indices following its prolonged trading suspension from April 2021 to September 2022.
  • Following the resumption of trading, Brilliance China Automotive (1114 HK) was added to the HSCI in March and subsequently to Southbound Stock Connect.
  • The stock should be bought by global passive trackers over the next few months and there should be substantial passive inflows.

Quiddity HSCEI Sep 23 Flow Expectations Update: US$367mn One-Way, Beigene Vs Peers Interesting

By Janaghan Jeyakumar, CFA

  • In three more weeks, the index changes and the indicative capping changes for the September 2023 rebalance will be officially announced. 
  • We first looked at the potential HSCEI index changes and the resultant capping flows for September 2023 in Quiddity HSCEI Sep 23 Flow Expectations: Two Changes Likely, US$276mn One-Way 
  • In this insight, we take a look at Quiddity’s updated flow expectations which account for the changes in prices in the last ~1.5 months.

KOSDAQ150 Ad Hoc Index Rebalance Preview: VAT Could Replace Lutronic

By Brian Freitas

Sea Ltd 2Q23: Revenue Should Align with Consensus, Profitability a Puzzle

By Oshadhi Kumarasiri

  • We remain bearish on Sea (SE US) leading upto Q2 results on 15th August 2023.
  • Our analysis suggests Sea Ltd could hit around $3.25bn revenue in 2Q23, in line with consensus. However, profitability could fall short of consensus expectations.
  • Nonetheless, any downside stemming from a minor earnings shortfall could be rather limited given the existing low consensus and the lackluster price performance leading up to the Q2 earnings announcement.

Quiddity HSTECH Sep 23 Flow Expectations Update: Last Trade Sucessful; Some New Trade Ideas

By Janaghan Jeyakumar, CFA

S&P/​​​​​​​​​ASX Index Rebalance Preview: Potential Adds Have Outperformed

By Brian Freitas

  • We forecast 26 changes across the ASX50 Index, ASX100 Index, S&P/ASX 200 (AS51 INDEX) and ASX300 Index at the September rebalance.
  • The review period ends tomorrow, so most changes are high probability. Though there are some changes that will be up to the discretion of the index committee.
  • There will be a lot of stock to trade on the changes to the ASX200 and indices higher up the hierarchy. But there will be a lot of pre-positioning too.

Sanei Architecture Planning (3228 JP): Open House’s JPY2,025 Tender Offer

By Arun George

  • Sanei Architecture Planning (3228 JP) has recommended Open House (3288 JP)’s tender offer of JPY2,025 per share, an 18.0% premium to the undisturbed price (15 August).
  • The transaction is required to facilitate the exit of Mr Koike, the largest shareholder, and satisfy Article 27 of the Tokyo Metropolitan Organized Crime Exclusion Ordinance.
  • Irrevocables represent a 64.21% ownership ratio, and the lower limit requires a 6.9% minority acceptance rate. The offer is a reasonable solution to the current predicament. 

Splitit Pursues Split From The ASX

By David Blennerhassett

  • Splitit Ltd (SPT AU) will seek approval from shareholders to delist the Buy Now, Pay Later micro-play from the ASX and redomicile to the Cayman Islands.
  • Concurrent with the voluntary delisting proposal, PE outfit Motive Partners will pump in US$50mn in exchange for preference shares – assuming the delisting occurs and certain earnings targets are met. 
  • This is not an Offer for shares. If delisted, Splitit shareholders will hold scrip in an unlisted private vehicle. 

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

Sign Up for Free

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

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Analytics and News
  • ✓ Events & Webinars
Sign Up for Free



Aug 16
0

Most Read: BeiGene , Lasertec Corp, Japan Post Holdings, Japan Post Bank, InterGlobe Aviation Ltd, Brilliance China Automotive, BrainChip Holdings, Value Added Technologies, Tokyo Electron and more

By | Daily Briefs, Most Read

In today’s briefing:

  • HSCEI Index Rebalance Preview: Deletions Fairly Certain; Uncertainty Among the Adds
  • Lasertec (6920) – The State of Things May Be Different Than You Think
  • Japan Post Holdings (6178) Starts Its Bigly Buyback With a Sale from the MOF-Boffins
  • Japan Post Bank (7182) – The October TOPIX FFW Adjustment
  • Sep 2023 Nikkei 225 Review – Not An Easy Rebal 🤨
  • Interglobe Aviation (Indigo) Lockup – Time for Another Selldown, This Time Could Touch US$900m
  • Brilliance China (1114 HK): Driving Back Into Passive Portfolios
  • [Update] Tax-Loss Selling In Australia – Closing the Circle on the Rebound Trade
  • KOSDAQ150 Ad Hoc Index Rebalance Preview: VAT Could Replace Lutronic
  • Tokyo Electron (8035 JP): Saved from Disaster by China

HSCEI Index Rebalance Preview: Deletions Fairly Certain; Uncertainty Among the Adds

By Brian Freitas

Lasertec (6920) – The State of Things May Be Different Than You Think

By Travis Lundy

  • Lasertec (6920) is a shoo-in for Nikkei 225 inclusion in September according to the quantitative analysis. The amount to buy is a small multiple of ADV, making the inclusion “unimpressive.”
  • It is probably worth looking at the details of ownership, of volume, and of relationship to other stocks in the same general sector.
  • It is also worth thinking about flow channels (stock up or down changes flows) and forward fundamental calculations.

Japan Post Holdings (6178) Starts Its Bigly Buyback With a Sale from the MOF-Boffins

By Travis Lundy

Japan Post Bank (7182) – The October TOPIX FFW Adjustment

By Travis Lundy

  • Japan Post Bank (7182 JP) was effectively re-IPOed in March when Japan Post Holdings (6178 JP) offered more than a BILLION shares against the 400mm shares then in float. 
  • It was a huge offering. A huge increase in float. Lots of immediate liquidity. A PERFECT opportunity for the TSE to do an ad hoc FFW change. But they didn’t. 
  • Then in June they lowered the FFW (on a technicality). That leaves a big upweight in October. In this insight we measure the opportunity.

Sep 2023 Nikkei 225 Review – Not An Easy Rebal 🤨

By Travis Lundy

Interglobe Aviation (Indigo) Lockup – Time for Another Selldown, This Time Could Touch US$900m

By Sumeet Singh

  • InterGlobe Aviation Ltd (INDIGO IN)’s co-founder Rakesh Gangwal’s 29%+ stake was released from lock-up today.
  • He had earlier stated his intention to pare down his stake after a long drawn, and very public battle, with his co-founder Rahul Bhatia. 
  • In this note, we will talk about the lockup dynamics and possible placement.

Brilliance China (1114 HK): Driving Back Into Passive Portfolios

By Brian Freitas

  • Brilliance China Automotive (1114 HK) was deleted from local and global indices following its prolonged trading suspension from April 2021 to September 2022.
  • Following the resumption of trading, Brilliance China Automotive (1114 HK) was added to the HSCI in March and subsequently to Southbound Stock Connect.
  • The stock should be bought by global passive trackers over the next few months and there should be substantial passive inflows.

[Update] Tax-Loss Selling In Australia – Closing the Circle on the Rebound Trade

By Travis Lundy

  • Originally, this was an analysis of tax-loss selling baskets over the years, and seasonal performance of baskets of stocks with certain attributes. On average, they fell vs index.
  • Of course, on average, they also rose vs index after the selling was done.
  • This insight puts a cap on the 2023 edition with results across the four baskets. The sell made 4.2% vs ASX200 in May, then is up

KOSDAQ150 Ad Hoc Index Rebalance Preview: VAT Could Replace Lutronic

By Brian Freitas

Tokyo Electron (8035 JP): Saved from Disaster by China

By Scott Foster

  • Thanks to strong demand from China, 1Q results at Tokyo Electron (TEL) were just bad, not horrible. Operating profit was down 30% YoY on a 17% decline in sales.
  • 1H guidance implies that 2Q will also be weak. Full-year FY Mar-24 guidance implies an unlikely 50% sequential increase in net profit, putting the shares on 32x projected EPS.
  • A return to peak EPS next fiscal year would drop the P/E ratio to 21x, which used to be the top of TEL’s P/E range. Sell. 

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

Sign Up for Free

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

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Analytics and News
  • ✓ Events & Webinars
Sign Up for Free



Aug 15
0

Most Read: Great Wall Motor, Lasertec Corp, Japan Post Bank, Japan Post Holdings, Kum Yang, Abacus Group, Charter Hall, Chindata Group, Brilliance China Automotive, Appier Group and more

By | Daily Briefs, Most Read

In today’s briefing:

  • The Brand Spanking New Extra Spiffy 🦄H/A-Share Discount/Premium Weekly (As of 11 Aug 2023)
  • Sep 2023 Nikkei 225 Review – Not An Easy Rebal 🤨
  • Japan Post Bank (7182) – The October TOPIX FFW Adjustment
  • Japan Post Holdings (6178) Starts Its Bigly Buyback With a Sale from the MOF-Boffins
  • Where & How to Check CFD Trading Data Starting Sept 1st
  • MVIS Australia A-REITs Index Rebalance Preview: One Delete, One Close Delete & Capping
  • MVIS Australia Equal Weight Index Rebalance Preview: Deletes, Close Deletes, Capping Changes
  • Chindata Backs Bain’s Revised Terms
  • Brilliance China (1114 HK): Driving Back Into Passive Portfolios
  • Appier (4180) | Be Happier

The Brand Spanking New Extra Spiffy 🦄H/A-Share Discount/Premium Weekly (As of 11 Aug 2023)

By Travis Lundy

  • This is the Brand Spanking New and Extra Spiffy H/A-Share Discount/Premium Weekly designed to help investors see the relationships easily. We used to do it. 
  • We decided to bring it back better. There are lots of cool interactive tables, and charts, heat maps, and comparative data. And 19 Trade Recommendations. 
  • We hope this new version serves readers even better. Feedback is actively solicited to see if we can improve it from here. 

Sep 2023 Nikkei 225 Review – Not An Easy Rebal 🤨

By Travis Lundy

Japan Post Bank (7182) – The October TOPIX FFW Adjustment

By Travis Lundy

  • Japan Post Bank (7182 JP) was effectively re-IPOed in March when Japan Post Holdings (6178 JP) offered more than a BILLION shares against the 400mm shares then in float. 
  • It was a huge offering. A huge increase in float. Lots of immediate liquidity. A PERFECT opportunity for the TSE to do an ad hoc FFW change. But they didn’t. 
  • Then in June they lowered the FFW (on a technicality). That leaves a big upweight in October. In this insight we measure the opportunity.

Japan Post Holdings (6178) Starts Its Bigly Buyback With a Sale from the MOF-Boffins

By Travis Lundy

Where & How to Check CFD Trading Data Starting Sept 1st

By Sanghyun Park

  • The CFD balance information (both overall and individual stock) will be provided by KOFIA and KOSCOM, starting from September 1st.
  • September 1st also marks the day when local brokerages that temporarily suspended CFD trading services will resume them.
  • With the disclosure of individual stock CFD balances starting from September 1st, there’s a high probability of another volatility turning point.

MVIS Australia A-REITs Index Rebalance Preview: One Delete, One Close Delete & Capping

By Brian Freitas

  • There should be one deletion from the index in September. And there could be another deletion. And there will be capping changes for a few stocks.
  • The index changes will lead to a one-way turnover of 2.12% resulting in a one-way trade of A$13m. There is only one stock with over A$5m to trade.
  • Following the spinoff, Abacus Group (ABG AU) and Abacus Storage King (ASK AU) will be the lowest ranked index constituents and at risk of deletion from the index.

MVIS Australia Equal Weight Index Rebalance Preview: Deletes, Close Deletes, Capping Changes

By Brian Freitas

  • There could be two deletes for the index in September. There are two other stocks that are close to the deletion threshold.
  • Even if there are no constituent changes, there will be capping changes that will result in one-way turnover of around 2.7% and a one-way trade of A$51m.
  • Short interest has been increasing on Charter Hall (CHC AU) and JB Hi-Fi Ltd (JBH AU) and could be partially driven by potential index deletions.

Chindata Backs Bain’s Revised Terms

By David Blennerhassett

  • Back on the 7 June, Chindata Group (CD US) announced Bain Capital’s NBIO to buy all shares of the Chinese data center provider it does not already own for $8/ADS.
  • On the 13 July, Chindata announced that China Merchants Capital has made an NBIO at $9.20/ADS.
  • Now Bain has entered into a definitive agreement with Chindata at US$8.60/ADS. Bain holds more than 2/3s of Chindata to vote this through. And there is no PRC regulator approval.

Brilliance China (1114 HK): Driving Back Into Passive Portfolios

By Brian Freitas

  • Brilliance China Automotive (1114 HK) was deleted from local and global indices following its prolonged trading suspension from April 2021 to September 2022.
  • Following the resumption of trading, Brilliance China Automotive (1114 HK) was added to the HSCI in March and subsequently to Southbound Stock Connect.
  • The stock should be bought by global passive trackers over the next few months and there should be substantial passive inflows.

Appier (4180) | Be Happier

By Mark Chadwick

  • Strong Q2 results with revenue +42% yoy versus +33% in Q1
  • Gross margin expansion to 51.3% on improving AI algorithm performance
  • Stock down around 20% over past couple of months, No change to bullish growth forecasts.

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

Sign Up for Free

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

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Analytics and News
  • ✓ Events & Webinars
Sign Up for Free



Aug 14
0

Most Read: Lasertec Corp, Chindata Group, Great Wall Motor, L’Occitane, Supreme Industries, Daiken Corp, Kum Yang, Charter Hall, Abacus Group and more

By | Daily Briefs, Most Read

In today’s briefing:

  • Sep 2023 Nikkei 225 Review – Not An Easy Rebal 🤨
  • Chindata (CD US): Bain’s Binding Proposal at US$8.60 Per ADS
  • The Brand Spanking New Extra Spiffy 🦄H/A-Share Discount/Premium Weekly (As of 11 Aug 2023)
  • L’Occitane (973 HK): Board Updates on the Potential Offer Structure and Price
  • Index Rebalance & ETF Flow Recap: JPXNK400, Kenedix, Positioning – India, Japan, Korea
  • Itochu Takeout of Daiken (7905) – Too Low at ¥3,000/Share But May Be Tough To Oppose
  • Where & How to Check CFD Trading Data Starting Sept 1st
  • MVIS Australia Equal Weight Index Rebalance Preview: Deletes, Close Deletes, Capping Changes
  • MVIS Australia A-REITs Index Rebalance Preview: One Delete, One Close Delete & Capping
  • Ohayo Japan| Uncertainty Reigns in Equity World; NUGGET: Honda – A Bike Company that Makes Cars

Sep 2023 Nikkei 225 Review – Not An Easy Rebal 🤨

By Travis Lundy

Chindata (CD US): Bain’s Binding Proposal at US$8.60 Per ADS

By Arun George

  • Chindata Group (CD US) has entered a definite agreement with Bain Capital at US$8.60 per ADS, 7.5% higher than its previous offer of US$8.00 per ADS.
  • Completion is conditional on shareholder approval, dissenting shareholders representing less than 12% of outstanding shares and any applicable regulatory approvals. The completion conditions should be met.
  • CMC’s offer, while higher, does not meet the “superior proposal” criterion. At the last close price and December-end completion, the gross and annualised spread is 6.0% and 16.6%, respectively.

The Brand Spanking New Extra Spiffy 🦄H/A-Share Discount/Premium Weekly (As of 11 Aug 2023)

By Travis Lundy

  • This is the Brand Spanking New and Extra Spiffy H/A-Share Discount/Premium Weekly designed to help investors see the relationships easily. We used to do it. 
  • We decided to bring it back better. There are lots of cool interactive tables, and charts, heat maps, and comparative data. And 19 Trade Recommendations. 
  • We hope this new version serves readers even better. Feedback is actively solicited to see if we can improve it from here. 

L’Occitane (973 HK): Board Updates on the Potential Offer Structure and Price

By Arun George

  • In response to media speculation, L’Occitane (973 HK) has clarified that Reinold Geiger, the Chairman and the largest shareholder, is contemplating a possible transaction through a voluntary general offer.
  • However, the rumoured offer of HK$35 per share is false. Mr Geiger has confirmed that the potential offer price would be no less than HK$26.00 per share.
  • The floor price of HK$26 is light and needs a bump (towards HK$30), particularly if Mr Geiger wants 95% of voting rights to exercise the right of compulsory acquisition (squeeze-out).

Index Rebalance & ETF Flow Recap: JPXNK400, Kenedix, Positioning – India, Japan, Korea

By Brian Freitas

Itochu Takeout of Daiken (7905) – Too Low at ¥3,000/Share But May Be Tough To Oppose

By Travis Lundy

  • Itochu owns 36.3% of building materials and engineering firm Daiken Corp (7905 JP). They have launched a tender with gimmicky Majority-of-Minority to buy the rest at ¥3,000/share, 4.7x FY2024e EBITDA. 
  • That’s low-ish, but given securities holdings, inventory, and net receivables at 4+x EBITDA it’s probably too cheap, but it gets quite close to the minimum threshold just with cross-holders.
  • This deal price doesn’t include synergies (according to the valuations and the SC) but a bump would need an agitator. Hope alone won’t get it.

Where & How to Check CFD Trading Data Starting Sept 1st

By Sanghyun Park

  • The CFD balance information (both overall and individual stock) will be provided by KOFIA and KOSCOM, starting from September 1st.
  • September 1st also marks the day when local brokerages that temporarily suspended CFD trading services will resume them.
  • With the disclosure of individual stock CFD balances starting from September 1st, there’s a high probability of another volatility turning point.

MVIS Australia Equal Weight Index Rebalance Preview: Deletes, Close Deletes, Capping Changes

By Brian Freitas

  • There could be two deletes for the index in September. There are two other stocks that are close to the deletion threshold.
  • Even if there are no constituent changes, there will be capping changes that will result in one-way turnover of around 2.7% and a one-way trade of A$51m.
  • Short interest has been increasing on Charter Hall (CHC AU) and JB Hi-Fi Ltd (JBH AU) and could be partially driven by potential index deletions.

MVIS Australia A-REITs Index Rebalance Preview: One Delete, One Close Delete & Capping

By Brian Freitas

  • There should be one deletion from the index in September. And there could be another deletion. And there will be capping changes for a few stocks.
  • The index changes will lead to a one-way turnover of 2.12% resulting in a one-way trade of A$13m. There is only one stock with over A$5m to trade.
  • Following the spinoff, Abacus Group (ABG AU) and Abacus Storage King (ASK AU) will be the lowest ranked index constituents and at risk of deletion from the index.

Ohayo Japan| Uncertainty Reigns in Equity World; NUGGET: Honda – A Bike Company that Makes Cars

By Mark Chadwick

  • OVERSEAS. Uncertainty reigns as SPX closed flat Friday; US Treasury Yields rise as Yield Curve flattens on strong producer price data; Headwinds Mount in China’s Economy;  Oil Demand reach record.
  • JAPAN. Nikkei Futures -0.1% vs Cash; USDJPY 145; Kishida Cabinet approval down; Wholesale prices slow; Japanese firms opt to go private rather than face activists; Inbound Boost from China.
  • NUGGET. Honda has a robust earnings structure that we think will be resilient to the increasing investment spend on BEV, with motor bike profitability

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

Sign Up for Free

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

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Analytics and News
  • ✓ Events & Webinars
Sign Up for Free



Aug 13
0

Most Read: MOG Digitech Holdings , Zydus Lifesciences Ltd, ROHM Co Ltd, Mercari , Inpex Corp, Chindata Group, Rakuten Bank , Lasertec Corp, Supreme Industries and more

By | Daily Briefs, Most Read

In today’s briefing:

  • MOG Digitech (1942 HK): What the Flow Is Going On?
  • Nikkei 225 Index Rebalance Preview (Sep 2023): Final Look as Review Period Ends
  • NIFTY/NEXT50 Index Rebalance Preview: Loads of Changes if Proposed Methodology Is Implemented
  • JPX Nikkei 400 Index Rebalance: Some Big Impact Names
  • Index Rebalance & ETF Flow Recap: NKY, STAR50, NIFTY NEXT50, SF Holding
  • Inpex (1605 JP) – Earnings, Forecasts and a BIGLY Buyback (Aug 2023 Version)
  • Chindata (CD US): Bain’s Binding Proposal at US$8.60 Per ADS
  • Rakuten Bank (5838 JP) – At a Valuation Inflection Point
  • Sep 2023 Nikkei 225 Review – Not An Easy Rebal 🤨
  • Index Rebalance & ETF Flow Recap: JPXNK400, Kenedix, Positioning – India, Japan, Korea

MOG Digitech (1942 HK): What the Flow Is Going On?

By Brian Freitas

  • MOG Holdings (1942 HK) has been skyrocketing in price since the start of the year. Remarkably, there is little change in the number of shares that trade daily.
  • MOG Holdings (1942 HK) has a market cap of US$6.44bn and trades at a modest Price/Sales ratio of 75x and an equally modest Price to Book Value of 89.5x.
  • Liquidity has improved to the point where the stock could be added to some indices. However, there is a precedent of stocks not being added following market participant feedback.

Nikkei 225 Index Rebalance Preview (Sep 2023): Final Look as Review Period Ends

By Brian Freitas

  • The review period for the Nikkei 225 (NKY) September rebalance ended yesterday. There should be three index changes, potential stepwise inclusion, no Fast Retailing capping and a big funding trade.
  • There appears to be decent positioning on the potential adds, while it is the close adds that are spiking along with a big increase in traded volumes.
  • If the three changes are on expected lines, estimated one-way turnover at the rebalance is 2.01% resulting in a one-way trade of JPY 461bn (US$3.24bn). 

NIFTY/NEXT50 Index Rebalance Preview: Loads of Changes if Proposed Methodology Is Implemented

By Brian Freitas

  • Using the current index methodology throws up 5 changes for the NSE Nifty Next 50 Index (NIFTYJR INDEX) in September. Turnover will be BIG.
  • Using the proposed index methodology throws up 11 changes for the NSE Nifty Next 50 Index (NIFTYJR INDEX) in September. Turnover will be HUGE.
  • The market consultation being put on hold could indicate pushback from index users or the possibility of F&O contracts being introduced on some of the non-F&O index constituents.

JPX Nikkei 400 Index Rebalance: Some Big Impact Names

By Brian Freitas

  • There are 38 adds/36 deletes for the JPX Nikkei 400 Index to bring the number of index constituents back to 400. There are stocks with multiple days ADV to trade.
  • Based on the adds, deletes and capping changes, we estimate one way turnover of 4.35% and a two-way trade of JPY 461bn (US$3.24bn).
  • There are a few stocks that will have same way flow from other index trackers within a few weeks of the JPX Nikkei 400 Index rebalance.

Index Rebalance & ETF Flow Recap: NKY, STAR50, NIFTY NEXT50, SF Holding

By Brian Freitas

Inpex (1605 JP) – Earnings, Forecasts and a BIGLY Buyback (Aug 2023 Version)

By Travis Lundy

  • A year ago I wrote that same headline as Inpex Corp (1605 JP) reported H1 results, a change in forecasts, and a bigly buyback.
  • Yesterday, Inpex reported FY2023 H1 results, a change in forecasts, and a bigly buyback. 
  • The mechanics are the same. The impact is a bit different, but it is worth looking at. Then there is the event on 28 February 2024.

Chindata (CD US): Bain’s Binding Proposal at US$8.60 Per ADS

By Arun George

  • Chindata Group (CD US) has entered a definite agreement with Bain Capital at US$8.60 per ADS, 7.5% higher than its previous offer of US$8.00 per ADS.
  • Completion is conditional on shareholder approval, dissenting shareholders representing less than 12% of outstanding shares and any applicable regulatory approvals. The completion conditions should be met.
  • CMC’s offer, while higher, does not meet the “superior proposal” criterion. At the last close price and December-end completion, the gross and annualised spread is 6.0% and 16.6%, respectively.

Rakuten Bank (5838 JP) – At a Valuation Inflection Point

By Victor Galliano

  • Rakuten Bank is a clear beneficiary of the steepening yield curve in Japan, with its low LDR and healthy capital ratio
  • Rakuten Bank’s LTM PE multiple of 11.4x, LTM PBV ratio of 1.5x and ROE of 13.8% makes it the best ROE to PBV ratio bank among its digital peers
  • Rakuten Bank is also the lowest cost to serve Japanese digital bank; it is narrowing the PBV ratio discount gap with SBI Sumishin

Sep 2023 Nikkei 225 Review – Not An Easy Rebal 🤨

By Travis Lundy

Index Rebalance & ETF Flow Recap: JPXNK400, Kenedix, Positioning – India, Japan, Korea

By Brian Freitas

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

Sign Up for Free

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

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Analytics and News
  • ✓ Events & Webinars
Sign Up for Free



Aug 12
0

Most Read: MOG Digitech Holdings , ROHM Co Ltd, Mercari , Power Finance, Alibaba Group Holding , Eoflow , Hongkong Land, Hotel Shilla, Metro Pacific Investments Co and more

By | Daily Briefs, Most Read

In today’s briefing:

  • MOG Digitech (1942 HK): What the Flow Is Going On?
  • JPX Nikkei 400 Index Rebalance: Some Big Impact Names
  • Index Rebalance & ETF Flow Recap: NKY, STAR50, NIFTY NEXT50, SF Holding
  • India – Positioning on Some Interesting Names
  • Alibaba (9988 HK): 1Q24, Brilliant Result After Reorganization, 90% Upside
  • Insulet’s Lawsuit Against Eoflow, Medtronic’s Tender Offer, and Eoflow’s “Special Sauce”
  • Hongkong Land: Exchange Square Sale Would Be BIG News. (If True)
  • Metro Pacific Investments (MPI PM): Risk/Reward as Uncertainty Hangs on the Delisting Threshold
  • Hotel Shilla Pref: Discount Vs Common to Narrow and Boost from Chinese Group Tours to Korea
  • Metro Pacific’s Tender Offer Kicks Off

MOG Digitech (1942 HK): What the Flow Is Going On?

By Brian Freitas

  • MOG Holdings (1942 HK) has been skyrocketing in price since the start of the year. Remarkably, there is little change in the number of shares that trade daily.
  • MOG Holdings (1942 HK) has a market cap of US$6.44bn and trades at a modest Price/Sales ratio of 75x and an equally modest Price to Book Value of 89.5x.
  • Liquidity has improved to the point where the stock could be added to some indices. However, there is a precedent of stocks not being added following market participant feedback.

JPX Nikkei 400 Index Rebalance: Some Big Impact Names

By Brian Freitas

  • There are 38 adds/36 deletes for the JPX Nikkei 400 Index to bring the number of index constituents back to 400. There are stocks with multiple days ADV to trade.
  • Based on the adds, deletes and capping changes, we estimate one way turnover of 4.35% and a two-way trade of JPY 461bn (US$3.24bn).
  • There are a few stocks that will have same way flow from other index trackers within a few weeks of the JPX Nikkei 400 Index rebalance.

Index Rebalance & ETF Flow Recap: NKY, STAR50, NIFTY NEXT50, SF Holding

By Brian Freitas

India – Positioning on Some Interesting Names

By Brian Freitas

Alibaba (9988 HK): 1Q24, Brilliant Result After Reorganization, 90% Upside

By Ming Lu

  • The revenue growth rate rose to 14% in 1Q24, compared to the past four stagnant quarters.
  • All businesses continued to improve their margins, so that the general operating margin rose to 19% in 1Q24 versus 12% in 1Q23.
  • We believe the re-organization is successful and the stock price is overly impacted. Buy.

Insulet’s Lawsuit Against Eoflow, Medtronic’s Tender Offer, and Eoflow’s “Special Sauce”

By Douglas Kim

  • Insulet Corp (PODD US)’s lawsuit against Eoflow (294090 KS) caused a sharp decline in Eoflow’s share price today (down 10.7% to 24,950 won).
  • Insulet is accusing Eoflow of hiring several senior personnel that have helped Eoflow to develop a product that could take away market share from Insulet. 
  • The most important factor may be Eoflow’s “special sauce” which is some kind of technology/mechanism that allows this 17% greater efficiency/convenience for the wearable EOPatch insulin device.

Hongkong Land: Exchange Square Sale Would Be BIG News. (If True)

By David Blennerhassett

  • According to Sing Tao, two PRC firms and a mainland bank have formed a consortium to acquire Hongkong Land (HKL SP)‘s 33-storey Three Exchange Square.
  • This “news” is straight out of left field. For its part, HKL said the market rumour is pure speculation.
  • HKL’s P/B of 0.24x is closing in on its all-time low of 0.21x during the depths of Covid. 

Metro Pacific Investments (MPI PM): Risk/Reward as Uncertainty Hangs on the Delisting Threshold

By Arun George

  • Metro Pacific Investments Co (MPI PM)‘s voluntary delisting tender offer from a consortium at PHP5.20 (net price of PHP5.1677 per share) will run from 9 August to 7 September.
  • The delisting proposal was approved on 8 August. Excluding the consortium’s votes, only 37.4% of minorities (representing 13.73% of outstanding shares) voted YES for the delisting proposal.
  • A key risk is satisfying the 95% delisting threshold, which would require a minorities acceptance rate of 86.4%. The risk/reward is unattractive at the current spread of 4.4% (net 3.8%). 

Hotel Shilla Pref: Discount Vs Common to Narrow and Boost from Chinese Group Tours to Korea

By Douglas Kim

  • Hotel Shilla, one of the largest operators of duty free shops in Korea, will be a major beneficiary of the return of the group tours from China to Korea.
  • We expect the consensus to raise the company’s sales estimates in 2024 to 2025 by about 3-7% and net profit estimates by 20-25%+ in this period. 
  • Currently, Hotel Shilla Pref/Common stock price ratio is 0.61 which is 22% below the five year average of 0.78. 

Metro Pacific’s Tender Offer Kicks Off

By David Blennerhassett

  • Back on the 26 April, First Pacific (142 HK) and three other entities, proposed delisting Metro Pacific Investments (MPI PM) at PHP 4.63/share. This was subsequently bumped to PHP 5.20.
  • A Special Stockholders’ Meeting was held on August 8, and MPI stakeholders approved all the resolutions. An SGM for independent First Pac shareholders will be held on the 24 August. 
  • The Tender Offer is now open and closes on the 7 September, with (expected) settlement on 19 September – provided the Tender Offer delisting conditions are met.

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

Sign Up for Free

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

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Analytics and News
  • ✓ Events & Webinars
Sign Up for Free



Aug 11
0

Most Read: MOG Digitech Holdings , Power Finance, Hotel Shilla, Eoflow , Inpex Corp, Alibaba Group Holding , Alibaba (ADR), Hongkong Land, Ecopro Co Ltd and more

By | Daily Briefs, Most Read

In today’s briefing:

  • MOG Digitech (1942 HK): What the Flow Is Going On?
  • India – Positioning on Some Interesting Names
  • China to Finally Allow Group Tours to Korea and Japan?
  • Insulet’s Lawsuit Against Eoflow, Medtronic’s Tender Offer, and Eoflow’s “Special Sauce”
  • Inpex (1605 JP) – Earnings, Forecasts and a BIGLY Buyback (Aug 2023 Version)
  • Alibaba (9988 HK): 1Q24, Brilliant Result After Reorganization, 90% Upside
  • Alibaba: A Quick Take on 1QFY24
  • Hongkong Land: Exchange Square Sale Would Be BIG News. (If True)
  • StubWorld: Japex/Inpex, Amorepacific, Wynn, Shimao, Takara, Silicon Integrated/United Micro
  • Two Noteworthy Issues in Korea’s SSF/SSO Selection in September Round

MOG Digitech (1942 HK): What the Flow Is Going On?

By Brian Freitas

  • MOG Holdings (1942 HK) has been skyrocketing in price since the start of the year. Remarkably, there is little change in the number of shares that trade daily.
  • MOG Holdings (1942 HK) has a market cap of US$6.44bn and trades at a modest Price/Sales ratio of 75x and an equally modest Price to Book Value of 89.5x.
  • Liquidity has improved to the point where the stock could be added to some indices. However, there is a precedent of stocks not being added following market participant feedback.

India – Positioning on Some Interesting Names

By Brian Freitas

China to Finally Allow Group Tours to Korea and Japan?

By Douglas Kim

  • In the past several days, there have been numerous new flow that the Chinese government is likely to allow group tours to South Korea and Japan in the coming days. 
  • The group tours from China to South Korea which has been banned since March 2017, are expected to resume after six years, according to the Korean Embassy in China.
  • Nikkei Asia also reported on 9 August that the Chinese government is ready to allow group tours to Japan as early as this week.

Insulet’s Lawsuit Against Eoflow, Medtronic’s Tender Offer, and Eoflow’s “Special Sauce”

By Douglas Kim

  • Insulet Corp (PODD US)’s lawsuit against Eoflow (294090 KS) caused a sharp decline in Eoflow’s share price today (down 10.7% to 24,950 won).
  • Insulet is accusing Eoflow of hiring several senior personnel that have helped Eoflow to develop a product that could take away market share from Insulet. 
  • The most important factor may be Eoflow’s “special sauce” which is some kind of technology/mechanism that allows this 17% greater efficiency/convenience for the wearable EOPatch insulin device.

Inpex (1605 JP) – Earnings, Forecasts and a BIGLY Buyback (Aug 2023 Version)

By Travis Lundy

  • A year ago I wrote that same headline as Inpex Corp (1605 JP) reported H1 results, a change in forecasts, and a bigly buyback.
  • Yesterday, Inpex reported FY2023 H1 results, a change in forecasts, and a bigly buyback. 
  • The mechanics are the same. The impact is a bit different, but it is worth looking at. Then there is the event on 28 February 2024.

Alibaba (9988 HK): 1Q24, Brilliant Result After Reorganization, 90% Upside

By Ming Lu

  • The revenue growth rate rose to 14% in 1Q24, compared to the past four stagnant quarters.
  • All businesses continued to improve their margins, so that the general operating margin rose to 19% in 1Q24 versus 12% in 1Q23.
  • We believe the re-organization is successful and the stock price is overly impacted. Buy.

Alibaba: A Quick Take on 1QFY24

By Oshadhi Kumarasiri

  • Alibaba (ADR) (BABA US)‘s 1QFY24 revenue and OP beat consensus by RMB 9.2bn and RMB 14.4bn respectively, possibly on the back of a successful 6.18 shopping festival.
  • It looks like Alibaba Group Holding (9988 HK) has decided to abandon its New Retail Strategy and instead, put more effort into e-commerce, especially on popular platforms like Taobao and Tmall.
  • Although this is a good-sign and could rally the stock short-term, we would still steer clear of Alibaba as we remain skeptical about the overall health of the Chinese economy.

Hongkong Land: Exchange Square Sale Would Be BIG News. (If True)

By David Blennerhassett

  • According to Sing Tao, two PRC firms and a mainland bank have formed a consortium to acquire Hongkong Land (HKL SP)‘s 33-storey Three Exchange Square.
  • This “news” is straight out of left field. For its part, HKL said the market rumour is pure speculation.
  • HKL’s P/B of 0.24x is closing in on its all-time low of 0.21x during the depths of Covid. 

StubWorld: Japex/Inpex, Amorepacific, Wynn, Shimao, Takara, Silicon Integrated/United Micro

By David Blennerhassett

  • For a change of pace, this insight briefly canvasses a clutch of Holdco’s trading at extreme levels. 
  • Preceding the chart-heavy insight 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%.

Two Noteworthy Issues in Korea’s SSF/SSO Selection in September Round

By Sanghyun Park

  • Recent information leaked through local media reveals that KRX has ultimately opted not to list Ecopro Co’s SSF in the upcoming September round.
  • Given the unusually high trading volume of at-the-money (ATM) options in the local SSO market, the market’s interest in covered calls for dividend-yielding stocks can be substantial.
  • So, we should pay attention to stocks whose SSO is already listed or will be newly listed in September among those that have shifted their ex-dividend dates to post-dividend confirmation.

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

Sign Up for Free

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

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Analytics and News
  • ✓ Events & Webinars
Sign Up for Free