Most Read

There could be 17 changes at the December rebalance with the Industrials and Materials sectors could gaining 2 spots each and the Information Technology sector losing 3 spots.
Estimated one-way turnover of 3% at the December rebalance leading to a one-way trade of CNY 30.2bn (US$4.3bn). There are 14 stocks with over 2x ADV to trade.
The forecast adds have outperformed the forecast deletes over the last month despite rising markets and a wall of money flowing into Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX) ETFs.

ESR (1821 HK): Sell First, Ask Questions Later

Back on the 13th May 2024, ESR Group (1821 HK) announced a delisting proposal from a consortium of investors formed by Starwood Capital Operations, Sixth Street Partners, and SSW Partners.
The consortium initially controlled 15.7%. Warburg (~14%) and ESR founders (~7.4%) tipped in their stakes. As did Qatar (3%) earlier this month, bringing the collective total to 39.9%.
No terms have been made public. Yesterday a Bloomberg article flagging “an agreement also might not be reached” saw shares freefall. Plus Capital Group recently trimmed its stake.

Sanrio (8136 JP) Placement: Potential Global Index Migration Leads to Interesting Dynamics

Overnight, Sanrio (8136 JP) announced a placement of 25.87m shares to unwind crossholdings and improve corporate value. There is an overallotment option for another 3.88m shares.
There will be limited passive buying in the short-term and the shares offered is a large percentage of real float of the stock.
However, Sanrio (8136 JP) is the highest ranked non-constituent stock in a global index universe and a drop in the stock price could be used to accumulate positions.

Sanrio (8136 JP) Large Secondary Offering – Don’t Say Hello Kitty! Too Soon

Today, Sanrio (8136 JP) announced a large secondary offering where banks would sell down shares and the Tsuji family would sell a few shares at the margin.
The stock has been on a rocket for two years. It’s expensive. Growth slows next year. Will this cause momentum to turn? Maybe. The offering is 38% of Max RWF.
I think one could give this a pass, and even sell it if it opens down small.

Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: Last-Second Changes to the Last-Minute Changes

There are now new changes forecast for the Yuanta/P-Shares Taiwan Dividend Plus ETF in December for a total of 8 inclusions and 7 deletions.
Constituent changes along with capping changes will lead to a one-way turnover of 21.8% and in a one-way trade of TWD 75.8bn (US$2.33bn).
The potential changes had a big one-day move yesterday and we expect similar moves over the next couple of days.

Quiddity Leaderboard CSI 300/500 Dec 24: Final-Minute Changes to Expectations; Time for a Trade

By Janaghan Jeyakumar, CFA

CSI 300 represents the 300 largest stocks by market cap and liquidity from the Shanghai and Shenzhen Exchanges. CSI 500 is the next 500.
The reference period for December 2024 index rebal event ended on 31st October 2024.
In this insight, we take a look at our final list of expected ADDs and DELs.

A Proxy Fight for Korea Zinc in January 2025

There is likely to be a proxy fight for the control of Korea Zinc (010130 KS) between MBK/Young Poong alliance and Chairman Choi/Bain Capital alliance in January 2025.
Young Poong Precision announced that it will acquire 39,254 shares of Korea Zinc. Post this purchase, Young Poong Precision will own a 2.11% stake in Korea Zinc (up from 1.92%).
FSS Governor Lee Bok-Hyun mentioned that the FSS is seriously reviewing a potential accounting issue related to environmental pollution at Young Poong.

Korea Zinc Saga Turning into a Comedy Show: MBK’s Speculative Move & How It’s Shaping Our Trades

Lee Bok-hyun, head of the Financial Supervisory Service, unexpectedly voiced concerns about MBK winning Korea Zinc’s management battle, catching everyone off guard.
The key question is how Michael ByungJu Kim will handle government pressure, with MBK possibly aligning with the opposition if the Democratic Party pushes for commercial law reform.
Korea Zinc now becomes a proxy war over governance reform. Watch MBK’s political stance, as it could drive the stock higher, especially if Michael teams up with the opposition.

Nikkei: MUFG To Launch TOB on WealthNavi (7342)

Early this morning, a Nikkei article said Mitsubishi UFJ Financial (MUFG) (8306 JP) would buy out the remaining 85% of WealthNavi (7342 JP). Expected to be completed by March.
MUFJ Bank and WealthNavi signed a Business Alliance in February. WealthNavi issued 9.11mm new shares to MUFJ at ¥1,718/share. That was a discount to market and shares are down ~40%.
WealthNavi’s AUM is growing (¥1.3trln at end-Oct) and the goal is to launch a money advisory platform by FY2026. Now they need to decide on the premium.

Dai-Nippon Printing (7912) – The First Equity Offering by Cross-Holders – Small And Lots More To Go

Today after the close Dai Nippon Printing (7912 JP) announced 16 corporate and financial entities would be selling cross-held shares in a ~US$240mm equity offering.
The stock has gotten shellacked (relatively speaking given structurally low volatility) since three weeks ago. There’s a reason for that. But it makes it cheaper.
This offering is only 10% of the cross-held total. There’s more to come. But there is more outbound cross-holding to sell too. There’s value here.

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Nov 29

Most Read: ESR Group , Sanrio, Teco Electric & Machinery, SBI Sumishin Net Bank , Hulic Co Ltd, Korea Zinc, Seven & I Holdings, Kioxia Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

ESR (1821 HK): Sell First, Ask Questions Later
7&I (3382 JP) – A York Holdings Deal And Warren Buffett?
Sanrio (8136 JP) Placement: Potential Global Index Migration Leads to Interesting Dynamics
Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: Last-Second Changes to the Last-Minute Changes
NTT (9432 JP) And SBI Sumishin NetBank (7163 JP)? Maybe. Maybe Not. Seven Bank A Better Idea
Hulic Co (3003 JP) Placement: One Big Price Drop Could Lead to Another
A Proxy Fight for Korea Zinc in January 2025
Seven&I (3382): Who Will Be the Greater Fool?
Korea Zinc Saga Turning into a Comedy Show: MBK’s Speculative Move & How It’s Shaping Our Trades
Kioxoa Pre-IPO – Peer Comparison

ESR (1821 HK): Sell First, Ask Questions Later

Back on the 13th May 2024, ESR Group (1821 HK) announced a delisting proposal from a consortium of investors formed by Starwood Capital Operations, Sixth Street Partners, and SSW Partners.
The consortium initially controlled 15.7%. Warburg (~14%) and ESR founders (~7.4%) tipped in their stakes. As did Qatar (3%) earlier this month, bringing the collective total to 39.9%.
No terms have been made public. Yesterday a Bloomberg article flagging “an agreement also might not be reached” saw shares freefall. Plus Capital Group recently trimmed its stake.

7&I (3382 JP) – A York Holdings Deal And Warren Buffett?

The Seven & I Holdings (3382 JP) to rid itself of control of the Ito-Yokado, York Benimaru, Akachan Hompo, and Denny’s Japan businesses in York Holdings proceeds apace.
The First Round of bids is due tomorrow, apparently, and all manner of bidders have assembled.
This leads to the question of a deal for the rest of 7&i. If a TradingCo is a natural co-investor for the Ito family (or ACT), so is Berkshire Hathaway.

Sanrio (8136 JP) Placement: Potential Global Index Migration Leads to Interesting Dynamics

Overnight, Sanrio (8136 JP) announced a placement of 25.87m shares to unwind crossholdings and improve corporate value. There is an overallotment option for another 3.88m shares.
There will be limited passive buying in the short-term and the shares offered is a large percentage of real float of the stock.
However, Sanrio (8136 JP) is the highest ranked non-constituent stock in a global index universe and a drop in the stock price could be used to accumulate positions.

Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: Last-Second Changes to the Last-Minute Changes

There are now new changes forecast for the Yuanta/P-Shares Taiwan Dividend Plus ETF in December for a total of 8 inclusions and 7 deletions.
Constituent changes along with capping changes will lead to a one-way turnover of 21.8% and in a one-way trade of TWD 75.8bn (US$2.33bn).
The potential changes had a big one-day move yesterday and we expect similar moves over the next couple of days.

NTT (9432 JP) And SBI Sumishin NetBank (7163 JP)? Maybe. Maybe Not. Seven Bank A Better Idea

An article in Japanese weekly magazine Bunshun this morning sent shares inSBI Sumishin Net Bank (7163 JP) limit up +17% with a headline that NTT Docomo was interested to buy.
Without access to the article, I can’t go deep, but the base concept is that NTT Docomo is “worried” about KDDI (which has a bank, as does Softbank Corp)
It is not clear how serious it is, SBI Sumishin is super-expensive, and buying a bank isn’t the same as buying a company. Hmmm…

Hulic Co (3003 JP) Placement: One Big Price Drop Could Lead to Another

Overnight, Hulic Co Ltd (3003 JP) announced a placement of 85.37m shares to unwind crossholdings and improve corporate value. There is an overallotment option for another 12.8m shares.
There will be limited passive buying in the short-term and the number of shares offered is a very large percentage of real float of the stock.
A price drop of 20% or more puts Hulic Co Ltd (3003 JP) at risk of deletion from a global index and could lead to a further price drop.

A Proxy Fight for Korea Zinc in January 2025

There is likely to be a proxy fight for the control of Korea Zinc (010130 KS) between MBK/Young Poong alliance and Chairman Choi/Bain Capital alliance in January 2025.
Young Poong Precision announced that it will acquire 39,254 shares of Korea Zinc. Post this purchase, Young Poong Precision will own a 2.11% stake in Korea Zinc (up from 1.92%).
FSS Governor Lee Bok-Hyun mentioned that the FSS is seriously reviewing a potential accounting issue related to environmental pollution at Young Poong.

Seven&I (3382): Who Will Be the Greater Fool?

By Michael Allen

7&I traded at less than 5x reported EV/EBITDA consistently for roughly 4 years straight, and no one seemed to care or notice.
Now that it trades close to 9x, there is an overflow of eager financiers and a mile-long line of analysts who will tell you that it is still undervalued.
This is the stock market equivalent of duct tape and a banana.

Korea Zinc Saga Turning into a Comedy Show: MBK’s Speculative Move & How It’s Shaping Our Trades

Lee Bok-hyun, head of the Financial Supervisory Service, unexpectedly voiced concerns about MBK winning Korea Zinc’s management battle, catching everyone off guard.
The key question is how Michael ByungJu Kim will handle government pressure, with MBK possibly aligning with the opposition if the Democratic Party pushes for commercial law reform.
Korea Zinc now becomes a proxy war over governance reform. Watch MBK’s political stance, as it could drive the stock higher, especially if Michael teams up with the opposition.

Kioxoa Pre-IPO – Peer Comparison

By Sumeet Singh

Kioxia Holdings (6600 JP) is aiming to raise around US$700m (including over-allocation) from its Japan IPO.
It was the world’s largest pure-play NAND flash memory supplier, in terms of both revenue and unit shipments in 2023, according to TechInsights.
We have looked at the company’s past performance in our earlier notes. In this note we undertake a peer comparison.

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Nov 28

Most Read: Seven & I Holdings, Sanrio, Yang Ming Marine Transport, Hulic Co Ltd, Vitasoy Intl Holdings, Teco Electric & Machinery, Shandong Hi-Speed New Energy G, Samsung KODEX 200 ETF and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

7&I (3382 JP) – A York Holdings Deal And Warren Buffett?
Sanrio (8136 JP) Placement: Potential Global Index Migration Leads to Interesting Dynamics
Taiwan Top 50 ETF Rebalance Preview: Double Inclusion for Yang Ming Marine (2609 TT)
HULIC (3003 JP) – Crossholders Show Up with a BIG (Relative) Secondary Offering
Vitasoy (345 HK): Trading Rich As Ng & Yeo Hiap Seng Up Their Exposure
Seven & I Holdings (3382 JP): Implications from the YORK Holdings Stake Sale
Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: Last-Second Changes to the Last-Minute Changes
Shandong Hi-Speed New Energy (1250 HK): Shandong Hi-Speed Holdings (412 HK) Possible MGO
Digging into the Year-End Divvy Arbitrage Game in Korea’s Market
Hulic (3033 JP): A US$800 Million Secondary Offering

7&I (3382 JP) – A York Holdings Deal And Warren Buffett?

The Seven & I Holdings (3382 JP) to rid itself of control of the Ito-Yokado, York Benimaru, Akachan Hompo, and Denny’s Japan businesses in York Holdings proceeds apace.
The First Round of bids is due tomorrow, apparently, and all manner of bidders have assembled.
This leads to the question of a deal for the rest of 7&i. If a TradingCo is a natural co-investor for the Ito family (or ACT), so is Berkshire Hathaway.

Sanrio (8136 JP) Placement: Potential Global Index Migration Leads to Interesting Dynamics

Overnight, Sanrio (8136 JP) announced a placement of 25.87m shares to unwind crossholdings and improve corporate value. There is an overallotment option for another 3.88m shares.
There will be limited passive buying in the short-term and the shares offered is a large percentage of real float of the stock.
However, Sanrio (8136 JP) is the highest ranked non-constituent stock in a global index universe and a drop in the stock price could be used to accumulate positions.

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.

HULIC (3003 JP) – Crossholders Show Up with a BIG (Relative) Secondary Offering

Today, Hulic Co Ltd (3003 JP) announced a large secondary offering where about a quarter of the crossholdings will sell down holdings. Some exit entirely. Some partially.
After this selldown, there is a fair bit more to go later, but more of that will be corporate. It’s a BIG offering: 55d of ADV and 55% of MRWF.
It is “only” about $800mm and retail gets 80% of it. The high div yield will be a selling point but there is a lot of debt.

Vitasoy (345 HK): Trading Rich As Ng & Yeo Hiap Seng Up Their Exposure

Yesterday, beverage maker Vitasoy Intl Holdings (345 HK) announced a 1H25E (Mar Y/E) net profit of HK$171mn, a 4.8% gain yoy. An interim dividend of HK$0.04/share (HK$0.014/share in 1H24), was declared.
What was absent from the announcement/briefing was any comment on Philip Ng Chee-tat’s and Yeo Hiap Seng (YHS SP)‘s recent buying in Vitasoy.
Ng, the younger brother of Sino Land (83 HK)‘s chairman Robert Ng Chee-siong, indirectly holds 12.26%, up from 5.22% on the 7th October. The share price is up 104% since.

Seven & I Holdings (3382 JP): Implications from the YORK Holdings Stake Sale

NHK reports that Seven & I Holdings (3382 JP)‘s first bidding round for a YORK Holdings stake ends on 28 November. The sale provides a third-party valuation benchmark for the asset.
It is an incremental positive for the founding family MBO as it supports the post-privatisation strategy and assists in securing bank financing.
This is an incremental negative for Alimentation Couche-Tard (ATD CN) as it shows that the Board believes the restructuring plan will increase shareholder corporate value.

Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: Last-Second Changes to the Last-Minute Changes

There are now new changes forecast for the Yuanta/P-Shares Taiwan Dividend Plus ETF in December for a total of 8 inclusions and 7 deletions.
Constituent changes along with capping changes will lead to a one-way turnover of 21.8% and in a one-way trade of TWD 75.8bn (US$2.33bn).
The potential changes had a big one-day move yesterday and we expect similar moves over the next couple of days.

Shandong Hi-Speed New Energy (1250 HK): Shandong Hi-Speed Holdings (412 HK) Possible MGO

Shandong Hi-Speed New Energy G (1250 HK) disclosed a possible mandatory unconditional offer from Shandong Hi-Speed Holdings Gro (412 HK) at HK$1.78, a 7.2% premium to the undisturbed price.
The offer is conditional on SDHS completing a sale and purchase agreement (SPA) to acquire CITIC Securities’ entire 13.52% stake at HK$1.78 per share.
The key precondition of the SPA is SDHS shareholder approval of an ordinary resolution relating to the SPA and the possible offer. The vote is a formality.

Digging into the Year-End Divvy Arbitrage Game in Korea’s Market

For March KOSPI 200 futures, expect a 0.95% to 1% yield for spot-futures arbitrage, with contango depending on year-end ex-div trends and passive inflows.
Passive inflows into the value-up index in January and spillover effects into K200 futures, potentially fueling year-end contango due to overlap with KOSPI 200.
Prop trader dynamics are cooling off: Tax-driven buying in December, selling in January likely to ease, reducing the past backwardation. Without it, expect higher volatility in K200 futures.

Hulic (3033 JP): A US$800 Million Secondary Offering

Hulic Co Ltd (3003 JP) has announced a secondary offering of up to 85.4 million shares (98.2 million including overallotment), worth around US$800 million (US$920 million including overallotment).
Unlike the 2021 offer, this is a pure secondary offering. It is smaller in terms of outstanding shares and 1-year ADV. The shares are hovering around all-time highs.
Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 10 and 12 December (likely 10 December).

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Nov 27

Most Read: Nec Networks & System Integr, Kansai Electric Power, Keisei Electric Railway Co, Sanrio, Hyundai Motor Securities and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

NEC Network (1973 JP) Tender Offer – The Landscape Has Fully Changed
Kansai Electric Power (9503 JP) – Huge Offering Is Smaller Now; Reward/Risk Skews Upwards
[JAPAN ACTIVISM] Keisei Elec (9009) – Murakami Stake Causes Pop But the Oppty Is Still Unconvincing
StubWorld: Keisei Electric’s Big Gain On Activist Stake News
Sanrio (8136 JP) Large Secondary Offering – Don’t Say Hello Kitty! Too Soon
Oriental Land ToSTNeT-3 Buyback From Keisei (9009) – It’s In the Plan And Looks Better Than It Is
Sanrio (8136 JP) Placement: Potential Global Index Migration Leads to Interesting Dynamics
Sanrio (8136 JP): A US$840 Million Secondary Offering
Sanrio Placement – Opportunistic >US$800m Selling at All-Time Highs
Hyundai Motor Securities Announces a Rights Offering Involving a 49% Shares Dilution

NEC Network (1973 JP) Tender Offer – The Landscape Has Fully Changed

On 29-October, NEC Corp (6701 JP) announced a low-ball TOB to buy out subsidiary Nec Networks & System Integr (1973 JP). It deserved activism, but finding an activist was tough.
On 7 November, it got an activist, and I wrote on 8-November the Landscape Had Changed that they might have bought 6mm shares more in 5 days. They bought 8.4mm.
The Landscape Has FULLY Changed. The details now matter quite a bit. NEC has two basic choices. Neither are that palatable. But Target Advisor DCF was ¥3,073-4,688 without synergies.

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.

[JAPAN ACTIVISM] Keisei Elec (9009) – Murakami Stake Causes Pop But the Oppty Is Still Unconvincing

13mos ago, activist investor Palliser Capital spoke at a conference about the value offered by Keisei Electric Railway Co (9009 JP) due to its large stake in Oriental Land (4661).
Keisei outperformed OLC by 30% over 3.5mos. Then it fell all the way back, and more, over the next five months. Asset sale, buyback, AGM proposals. Meh.
Nov 25th, Toyo Keizai wrote activist Murakami-san had acquired stakes of <5% in Keikyu Corp (9006 JP) and <1% in Keisei Electric Railway Co (9009 JP). Shares in both jumped.

StubWorld: Keisei Electric’s Big Gain On Activist Stake News

Keisei Electric Railway Co (9009 JP) gained 13.8% yesterday on news that activist investor Murakami-san had acquired a stake.
Preceding my comments on Keisei Electric 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%.

Sanrio (8136 JP) Large Secondary Offering – Don’t Say Hello Kitty! Too Soon

Today, Sanrio (8136 JP) announced a large secondary offering where banks would sell down shares and the Tsuji family would sell a few shares at the margin.
The stock has been on a rocket for two years. It’s expensive. Growth slows next year. Will this cause momentum to turn? Maybe. The offering is 38% of Max RWF.
I think one could give this a pass, and even sell it if it opens down small.

Oriental Land ToSTNeT-3 Buyback From Keisei (9009) – It’s In the Plan And Looks Better Than It Is

In October 2023 and then in early 2024, activist Palliser Capital demanded that Keisei Electric Railway Co (9009 JP) sell down its stake in Oriental Land (4661 JP) to sub-15%.
Keisei in March sold 1% of OLC but in doing so, rejected the concept of removing equity affiliate status. They could go to a level just >15%, or just >20%.
Today, OLC announced a ToSTNeT-3 buyback of 18mm shares – the total for the 2yrs to Mar-26 announced (p19) in April. Keisei will sell and will stay above 20%.

Sanrio (8136 JP) Placement: Potential Global Index Migration Leads to Interesting Dynamics

Overnight, Sanrio (8136 JP) announced a placement of 25.87m shares to unwind crossholdings and improve corporate value. There is an overallotment option for another 3.88m shares.
There will be limited passive buying in the short-term and the shares offered is a large percentage of real float of the stock.
However, Sanrio (8136 JP) is the highest ranked non-constituent stock in a global index universe and a drop in the stock price could be used to accumulate positions.

Sanrio (8136 JP): A US$840 Million Secondary Offering

Sanrio (8136 JP) has announced a secondary offering of up to 25.9 million shares (29.8 million including overallotment), worth around US$840 million (US$970 million including overallotment).
Sanrio’s goal with the secondary offering is (i) to reduce cross-shareholdings and (ii) to expand and diversify the shareholder base, which should further enhance liquidity.
Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 10 and 13 December (likely 10 December).

Sanrio Placement – Opportunistic >US$800m Selling at All-Time Highs

By Clarence Chu

A group of domestic financial institutions and the firm’s executives are looking to raise US$840m from trimming their stakes in Sanrio (8136 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.

Hyundai Motor Securities Announces a Rights Offering Involving a 49% Shares Dilution

Hyundai Motors Securities announced a rights offering worth nearly 200 billion won involving a 49% shares dilution.
The amount of shares dilution is excessive which is likely to result in a share price weakness in Hyundai Motor Securities in the coming weeks.
The expected rights offering price for now is 6,640 won per share which is 24.5% discount to the closing price on 26 November.

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Nov 26

Most Read: Kioxia Holdings , Kansai Electric Power, Midea Group, Kuaishou Technology, Shanghai Henlius Biotech , Keisei Electric Railway Co, FineToday Holdings Co Ltd, Highwealth Construction, Yang Ming Marine Transport and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

Kioxia IPO Preview
Kansai Electric Power (9503 JP) – Huge Offering Is Smaller Now; Reward/Risk Skews Upwards
HSTECH Index Rebalance: Midea (300 HK) Replaces Weibo (9898 HK); US$1.5bn Round-Trip Trade
Hang Seng Index (HSI) Rebalance: Still Baby Steps to Get to 100 Members
Henlius (2696 HK): The Spread Should Narrow After NDRC Approval
Keisei Electric Jumps 14% on Reports of Murakami Stake
FineToday Holdings (289A JP) IPO: The Bear Case
Yuanta/P-Shares Taiwan Div+ ETF Rebalance Preview: Big Shift in Divs Leads to Last Minute Changes
Kansai Electric Power (9503 JP): The Current Playbook
Taiwan Top 50 ETF Rebalance Preview: Double Inclusion for Yang Ming Marine (2609 TT)

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%).

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