Category

Daily Briefs

Jun 05
0

Daily Brief Macro: ETFs Are Reaching Way Beyond Passive Investing and more

By | Daily Briefs, Macro

In today’s briefing:

  • ETFs Are Reaching Way Beyond Passive Investing
  • Impact of China’s Economic Deceleration on EM Economies
  • Energy Cable: OPEC needs a big rebound on the demand side
  • Market Trends and Strategy: Hong Kong Bull Market Broadens
  • Positioning Watch – Turmoil in Markets Is Returning
  • UK/Europe: Softly, Softly…
  • Switzerland CPI Inflation 1.4% y-o-y (consensus 1.4%) in May-24

ETFs Are Reaching Way Beyond Passive Investing

By Srinidhi Raghavendra

  • ETFs are synonymous with passive investing. It passive investing and beyond. ETFs have been stealing breakfast, lunch and dinner away from mutual funds.
  • Active ETFs have jumped from obscurity to ubiquity. >70% of new ETF launches in the US over the last seven years have been active ETFs.
  • Active ETFs in the cheapest quintile command AUM of USD 325 billion while those in the most expensive quintile hold merely USD 35 billion.

Impact of China’s Economic Deceleration on EM Economies

By Alex Ng

  • China’s economic growth is expected to decelerate from the previous high-growth period in the 2000s and early 2010s. This will have an impact on other EMs. 
  • We track the impact from the angles of China’s commodity imports, supply-chain position, and foreign investment.
  • Commodity producer countries can be more heavily impacted. The impact on Asia will be mixed, suffering from regional trade, but some supply chains could be diverted away from China.

Energy Cable: OPEC needs a big rebound on the demand side

By Andreas Steno

  • Evening from Europe!What a bloodbath in long oil bets today, and we are bleeding alongside the crowd as we are down 5.7% in our long bets in the CLN4 future.
  • The OPEC+ meeting over the weekend did not fuel a bullish supply narrative as we can (at best) expect the status quo.
  • The supply cuts were prolonged (as was our base-case), but assuming that the cuts will actually be reversed by June or September 2025, which seems to be the forward guidance from OPEC now, we’d have to see a much stronger business cycle in Manufacturing for that to match with the demand side.

Market Trends and Strategy: Hong Kong Bull Market Broadens

By David Mudd

  • High dividend yield  names continue to outperform the broader market.  Energy and Materials sectors are best performers over the last year.
  • Mainland buying has continued to buoy the Hong Kong market even through the pullback in May.
  • Short selling is declining and market breadth is increasing supporting rotational buying between sectors.

Positioning Watch – Turmoil in Markets Is Returning

By Andreas Steno

  • Hello everyone, and welcome back to our weekly positioning watch.
  • The divergence between market-cap weighted and and non market-cap weighted indices is slowly normalizing, but the impact that NVIDIA (and some of the other big tech firms) has on both broad equity returns is notable with the 5 largest companies in the S&P 500 accounting for roughly 30% of the index by now.
  • This does not only have implications for the distribution of returns between bigger indices (Nasdaq vs Dow Jones for instance), but also on indices option volatility, with the VIX ex NVIDIA hitting lows of around 9 in May (2017/2018 lows).

UK/Europe: Softly, Softly…

By Alastair Newton

  • Labour’s dual strategy towards Europe could potentially enhance the UK’s economy.
  • Despite the potential benefits, it is unlikely to yield significant results until the end of the next parliamentary term.
  • This suggests that even in a best-case scenario, the economic impact may not be immediate.

Switzerland CPI Inflation 1.4% y-o-y (consensus 1.4%) in May-24

By Heteronomics AI

  • Switzerland’s CPI inflation rate was stable at 1.4% year-on-year in May 2024, aligning with consensus expectations and the rate of the previous month, with slight variations from historical averages.
  • There was a 0.3% month-on-month CPI increase in May 2024.
  • A 0.6% month-on-month PPI increase in April 2024 suggests controlled price transmission and effective measures to maintain consumer price stability.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

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Jun 05
0

Daily Brief Australia: Mmg Ltd, Northern Mining, Dexus Property, Amaero International Ltd and more

By | Australia, Daily Briefs

In today’s briefing:

  • MMG (1208 HK) – $1.1bn+ Rights Offering – Expect Regular Rights Trading Dynamics
  • MMG (1208 HK): US$1.2bn Highly Dilutive Rights Issue
  • Northern Minerals (NMI AU): Chinese Investors Forced To Exit
  • MV Australia A-REITs Index Rebalance Preview: ASK May Be Deleted; HMC Close Add; Capping Changes
  • MMG Limited’s Rights Issue (1208.HK)
  • Amaero International Ltd – Atomiser commissioned ahead of June 30 deadline

MMG (1208 HK) – $1.1bn+ Rights Offering – Expect Regular Rights Trading Dynamics

By Travis Lundy

  • Mmg Ltd (1208 HK) today announced a 2:5 Rights Offering to raise US$1.15bn at HK$2.62/share in order to pay down debt from their recent Botswanan copper mine acquisition. 
  • It was a sizeable acquisition, and the near-term EV/EBITDA of the acquisition is 10x or above. The longer-term EV/EBITDA is in the 3s based on expansion later this decade.
  • The Rights Offering is underwritten, supported by its 67.5% owner. SOUTHBOUND holds 10+%. There are short dynamics, arb dynamics, “don’t wanna spend more” dynamics. There’s a path here.

MMG (1208 HK): US$1.2bn Highly Dilutive Rights Issue

By Arun George

  • Mmg Ltd (1208 HK) will raise HK$9.1bn (US$1.2bn) through 2 rights shares for every 5 existing shares rights offering. The rights price is HK$2.62, a 24.7% discount to the TERP.
  • The rights proceeds will be used to repay existing debt, which will allow it to use other funds to better support the ongoing development of the operating mines.
  • MMG shares should continue to decline heading into the ex-rights date. The shares go ex-rights on 11 June, and the rights start trading from 24 June to 2 July (inclusive).

Northern Minerals (NMI AU): Chinese Investors Forced To Exit

By David Blennerhassett

  • Back in February last year, the Aussie Treasurer prohibited Yuxiao Fund from buying an additional 9.92% in Northern Minerals (NTU AU) which would have increased its stake to 19.9%.
  • On the 20th November 2023, Yuxiao sought the removal of Nicholas Curtis as director of the rare-metal play at an EGM; however Curtis resigned his post and the EGM cancelled.
  • The Aussie Treasurer has now made orders requiring Yuxiao and four (deemed) associated investors to sell their holdings (~10.4% all-in) within 60 days. 

MV Australia A-REITs Index Rebalance Preview: ASK May Be Deleted; HMC Close Add; Capping Changes

By Brian Freitas

  • The review period for the June rebalance ended last week. There could be one deletion from the index and a bunch of capping changes.
  • There is one stock that is close to inclusion zone but may not make it in June.
  • The expected index changes will lead to a one-way turnover of 2.5% resulting in a one-way trade of A$14m. That will increase if there is an inclusion.

MMG Limited’s Rights Issue (1208.HK)

By Rikki Malik

  • Short term overhang from expanded share count and selling from unwilling participants
  • The copper supply and demand story is intact and the fundamentals of the company remain strong
  • Parent’s uptake of the rights is positive but the stock will take time to build a base for the next leg up 

Amaero International Ltd – Atomiser commissioned ahead of June 30 deadline

By Research as a Service (RaaS)

  • RaaS Research Group has published a flash comment on advanced materials manufacturing group Amaero International (ASX:3DA) following its announcement that the first atomiser has been commissioned at its Tennessee facility ahead of schedule.
  • The commissioning is an important step toward the production of C103 and specialty alloy powder at the facility and allows the company to move to the next step of achieving qualification and, ultimately, commercialisation.
  • Amaero’s announcement underpins our confidence in the production timing we have applied to our estimates.

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Jun 05
0

Daily Brief South Korea: GS Retail and more

By | Daily Briefs, South Korea

In today’s briefing:

  • GS Retail: Equity Spin Off of Parnas Hotel and Freshmeat Subsidiaries

GS Retail: Equity Spin Off of Parnas Hotel and Freshmeat Subsidiaries

By Douglas Kim

  • On 3 June, GS Retail (007070 KS) announced that it will spin off Parnas Hotel and Freshmeat subsidiaries to simplify its business structure and enhance shareholder value.
  • The company plans to create a new entity tentatively called Parnas Holdings which will include Parnas hotel and Freshmeat (a meat processing company). 
  • We have a positive view of GS Retail’s decision to conduct this equity spin off which simplifies the business structures and it could raise the valuation multiples of GS Retail. 

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Jun 05
0

Daily Brief Singapore: Wirecard AG and more

By | Daily Briefs, Singapore

In today’s briefing:

  • Using AI to Detect Fraud and Protect Your Investments

Using AI to Detect Fraud and Protect Your Investments

By Mark Jolley

  • Accounting fraud costs the global economy at least US$1 trillion each year in losses to investors, suppliers and consumers
  • Detecting accounting fraud early gives investors valuable intel to rethink certain stock or bond holdings.
  • Transparently.AI’s AI-powered solution is highly accurate in measuring and detecting accounting manipulation and fraud.

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Jun 05
0

Daily Brief United States: Bitcoin Pro, Carnival Corp, Bitcoin, MediciNova , Organovo Holdings , Marathon Oil and more

By | Daily Briefs, United States

In today’s briefing:

  • April Showers Bring May Flowers
  • Carnival Corporation &Amp; Plc (CCL) – Tuesday, Mar 5, 2024
  • Crypto Crisp: Three In A Row
  • MNOV: Multiple Abstracts Presented at 92nd EAS Congress
  • ONVO: Annual Report Bolsters Case for Company
  • ConocoPhillips/Marathon Oil and Shale Consolidation

April Showers Bring May Flowers

By Delphi Digital

  • BTC Spot ETFs Net $2Bn in May: Discover how consistent ETF inflows are driving Bitcoin’s impressive rally and near all-time highs.
  • BTC Market Structure Insights: Learn about the consolidation patterns and market scenarios that could lead to Bitcoin breaking new highs.
  • Upcoming Token Unlocks: Stay informed about significant upcoming token unlocks and their potential market impact.

Carnival Corporation &Amp; Plc (CCL) – Tuesday, Mar 5, 2024

By Value Investors Club

  • Carnival Corporation is the world’s largest cruise ship operator with a large fleet and significant market share
  • The company was severely impacted by the COVID-19 pandemic, halting service for 15 months and taking on substantial debt
  • Since resuming cruises in July 2021, Carnival has seen a rebound in revenues driven by strong demand for post-COVID travel, but still faces challenges with cashflow and debt sustainability

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Crypto Crisp: Three In A Row

By Mads Eberhardt

  • In the past one and a half months, exchange-traded crypto funds have been launched in two countries.
  • Hong Kong introduced both Bitcoin and Ethereum exchange-traded products in late April, followed by the UK doing the same last week.
  • Tomorrow, Australia will launch its Bitcoin spot ETF, but like the recent launches in Hong Kong and the UK, we do not expect it to be a major success.

MNOV: Multiple Abstracts Presented at 92nd EAS Congress

By Zacks Small Cap Research

  • On May 28, 2024, MediciNova, Inc. (MNOV) announced that two abstracts regarding MN-001 (tipelukast) and MN-002 were presented as posters at the 92nd European Atherosclerosis Society (EAS) 2024 Congress.
  • The poster on MN-001 discussed the objectives and design of the ongoing Phase 2 clinical trial enrolling patients with Type 2 diabetes, dyslipidemia, and NAFLD, which has now enrolled a total of 33 patients.
  • The other presentation regarded the mechanism of action of MN-001/MN-002 in lipid metabolism.

ONVO: Annual Report Bolsters Case for Company

By Zacks Small Cap Research

  • Organovo is a biotech company that has 3D technology enabling the company to produce various human tissues, allowing the company to target diseases and accelerate the drug development process.
  • The company released its annual report that showed good cash balances, and also recently released positive Phase 2 results for one of its primary treatments-FXR314.
  • These results are very encouraging and bolster our belief in the future prospects for ONVO.

ConocoPhillips/Marathon Oil and Shale Consolidation

By Jesus Rodriguez Aguilar

  • Conocophillips is set to acquire Marathon Oil in an all-stock deal (0.2550 COP US per 1 MRO US) valued at $22.5 billion ($30.33/share), including $5,379 million in net debt.
  • Most of the frenzy in the US oil industry has focused on the consolidation within the Permian Basin, a maturing region that offers opportunities to reduce costs and increase profitability.
  • The acquisition of Marathon will add highly complementary acreage to ConocoPhillips’ existing U.S. onshore portfolio. Spread as of 4 June is 2.6%/4.7% (gross/annualised, assuming settlement by late Q4).

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Jun 05
0

Daily Brief China: JD.com , Tencent, Great Eagle Holdings, Pop Mart International Group L, BYD Electronics, Guangzhou Great Power Ener-A, China Traditional Chinese Medicine, Chow Tai Fook Jewellery, China Vanke and more

By | China, Daily Briefs

In today’s briefing:

  • HSI, HSCEI, HSTECH, HSIII: Rebalance Flows Post Capping (June 2024)
  • MSC May Rebalance: SA & China Net Sells, NPN, PRX & Tencent Sold Down on Buybacks
  • StubWorld: What Now With Langham (1270 HK)?
  • Pop Mart (9992 HK):  Accelerating Momentum Internationally; Raising My Estimates
  • HSI/HSCEI/HSTECH June 2024 Rebal Final Re-Capping (Or Re-Re-Capping) Flows
  • Quiddity ChiNext/ChiNext 50 Jun 24 Rebalance: ~US$700mn One-Way Flows; Thoughts on Surprises
  • China TCM (570.HK) Privatization Update – Investors May Need to Prepare for a Longer Wait
  • Chow Tai Fook (1929 HK): What if Special Dividends Are Declared?
  • Morning Views Asia: China Vanke

HSI, HSCEI, HSTECH, HSIII: Rebalance Flows Post Capping (June 2024)

By Brian Freitas

MSC May Rebalance: SA & China Net Sells, NPN, PRX & Tencent Sold Down on Buybacks

By Charlotte van Tiddens, CFA

  • MSC indices were rebalanced in the closing auction on Friday. Turnover for the day on the JSE was R41.9bn, R25bn traded in the closing auction (60%).
  • Turnover at the February rebalance was R25.6bn. Most SA constituents were pushed lower in the closing auction and for the day, consistent with the downweighting of SA Inc.
  • China was downweighted in the ACWI and EM indices for a second straight quarter, reducing the country weight in ACWI by 6bps to 2.69%.

StubWorld: What Now With Langham (1270 HK)?

By David Blennerhassett

  • Unexpectantly, Great Eagle Holdings (41 HK) said it would not proceed with an Offer; and Hong Kong hotel-play Langham Hospitality (1270 HK) promptly cratered. But why the flip flop?
  • Preceding my comments on GE, Langham and Champion REIT (2778 HK), 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%.

Pop Mart (9992 HK):  Accelerating Momentum Internationally; Raising My Estimates

By Steve Zhou, CFA

  • In 1Q24, Pop Mart International Group L (9992 HK)‘s international sales grew around 250% yoy, and made up around one quarter of sales (vs. 17% of sales in 2023). 
  • I now expect 39% sales growth in 2024, driven by 140% yoy growth in the international business and 18% growth in domestic China business. 
  • I further expect a 50% yoy growth in net profit growth in 2024 driven by a 0.8ppt increase in gross margin and 0.5ppt in operating leverage. 

HSI/HSCEI/HSTECH June 2024 Rebal Final Re-Capping (Or Re-Re-Capping) Flows

By Travis Lundy

Quiddity ChiNext/ChiNext 50 Jun 24 Rebalance: ~US$700mn One-Way Flows; Thoughts on Surprises

By Janaghan Jeyakumar, CFA

  • The June 2024 index review results for the ChiNext and ChiNext 50 indices were announced yesterday.
  • There will be seven changes for the ChiNext index and five changes for the ChiNext 50 index. Some of these names surprised us.
  • In this insight, we take a look at our final flow expectations for the confirmed index changes and our thoughts on the selection process.

China TCM (570.HK) Privatization Update – Investors May Need to Prepare for a Longer Wait

By Xinyao (Criss) Wang

  • The approval/filing process of China TCM’s privatization is complicated and would take some time, but there’re almost no cases of disapproval. It also depends on the adequacy of materials submitted.
  • Due to the extension of time for the despatch of Scheme Document, this process would be delayed for more months.But we should receive clear information by October at the latest.
  • For arbitrageurs, China TCM is an investment opportunity of high success rate, which becomes more attractive if HK stock market is depressed.It’s better suited to idle funds considering potential risks/returns.

Chow Tai Fook (1929 HK): What if Special Dividends Are Declared?

By Osbert Tang, CFA

  • The market’s assumption of no special dividends in Chow Tai Fook Jewellery (1929 HK)‘s upcoming FY24 result is conservative, and this does not fit into its usual pattern. 
  • Should it pay special DPS, the dividend yield may reach an attractive 10.7%. With its net cash position, CTF can financially maintain the average 135.6% payout ratio. 
  • A return to its historical average dividend yield of 7.4% means that CTF’s share price will need to go up by 45% from the current level.

Morning Views Asia: China Vanke

By Leonard Law, CFA

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

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Jun 05
0

Daily Brief Japan: Shinko Electric Industries, Tosei Corp, Kosaido and more

By | Daily Briefs, Japan

In today’s briefing:

  • Shinko Electric (6967) – Break/Gap Risk Early June 2024 Update
  • Tosei (8923) | Strong Performance with Dalton’s Governance Watch
  • KOSAIDO Holdings (7868) – Pursuing Comprehensive Growth

Shinko Electric (6967) – Break/Gap Risk Early June 2024 Update

By Travis Lundy

  • When this deal was announced, it was light. But the timing, JSR influence, large-ish float, ensured FUD would make this trade wide. It traded wider.
  • Nearly 5mos ago, Shinko had much-underperformed peer Ibiden, meaning downside gap risk from undisturbed was negative as spreads were wide. I reco’d a buy. Then 12wks ago, recommended taking profits.
  • Shinko had outperformed Ibiden, gross spreads had narrowed 5+% on JSR approval. Spreads are now 2.6% wider than at narrowest. In May, gap risk narrowed as Shinko underperformed Ibiden.

Tosei (8923) | Strong Performance with Dalton’s Governance Watch

By Mark Chadwick

  • Tosei achieved record revenue and profit, driven by robust growth in its fund management business and a balanced portfolio of stable and sales-driven operations.
  • Activist investor Dalton acquired a 5.02% stake, highlighting concerns over recent governance decisions and potential Board independence dilution due to the Nagoya Railroad alliance.
  • Dalton’s involvement ensures heightened scrutiny, promising better governance, and potentially favorable outcomes for minority shareholders amid Tosei’s continued strong business performance.

KOSAIDO Holdings (7868) – Pursuing Comprehensive Growth

By Astris Advisory Japan

  • Results underline high earnings visibility in Profit-Generating Funeral Services – Q1-4 FY3/24 results were in line with guidance, with positive high growth momentum being sustained at Profit- Generating Funeral Services.
  • The legacy businesses (Information and HR) missed forecasts, highlighting turnaround challenges.
  • However, the new business Asset Consulting has started strongly as a high-margin activity, and the outlook is positive. 

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Jun 05
0

Most Read: Mmg Ltd, SK Inc, Shinko Electric Industries, Kakaopay , JD.com , Great Eagle Holdings, Tencent, BYD Electronics, Northern Mining and more

By | Daily Briefs, Most Read

In today’s briefing:

  • MMG (1208 HK) – $1.1bn+ Rights Offering – Expect Regular Rights Trading Dynamics
  • Impact on SK Inc Post Record Divorce Ruling for SK Group Chairman Chey Tae-Won
  • Shinko Electric (6967) – Break/Gap Risk Early June 2024 Update
  • Kakao Pay Lockup Expiry – US$1bn Overhang from Alipay
  • HSI, HSCEI, HSTECH, HSIII: Rebalance Flows Post Capping (June 2024)
  • StubWorld: What Now With Langham (1270 HK)?
  • MSC May Rebalance: SA & China Net Sells, NPN, PRX & Tencent Sold Down on Buybacks
  • HSI/HSCEI/HSTECH June 2024 Rebal Final Re-Capping (Or Re-Re-Capping) Flows
  • MMG (1208 HK): US$1.2bn Highly Dilutive Rights Issue
  • Northern Minerals (NMI AU): Chinese Investors Forced To Exit

MMG (1208 HK) – $1.1bn+ Rights Offering – Expect Regular Rights Trading Dynamics

By Travis Lundy

  • Mmg Ltd (1208 HK) today announced a 2:5 Rights Offering to raise US$1.15bn at HK$2.62/share in order to pay down debt from their recent Botswanan copper mine acquisition. 
  • It was a sizeable acquisition, and the near-term EV/EBITDA of the acquisition is 10x or above. The longer-term EV/EBITDA is in the 3s based on expansion later this decade.
  • The Rights Offering is underwritten, supported by its 67.5% owner. SOUTHBOUND holds 10+%. There are short dynamics, arb dynamics, “don’t wanna spend more” dynamics. There’s a path here.

Impact on SK Inc Post Record Divorce Ruling for SK Group Chairman Chey Tae-Won

By Douglas Kim

  • We discuss the outlook for the likely impact on SK Inc post record divorce ruling for the SK Group Chairman Chey Tae-Won and his estranged wife Roh So-Young. 
  • Last week, a South Korean appellate court ordered Chairman Chey to pay 1.38 trillion won to Roh. Chey is appealing this case and the Supreme Court’s ruling is still pending. 
  • It is in the best interest of SK Inc to raise the overall value of the company since the payment of the divorce is mostly based in cash.

Shinko Electric (6967) – Break/Gap Risk Early June 2024 Update

By Travis Lundy

  • When this deal was announced, it was light. But the timing, JSR influence, large-ish float, ensured FUD would make this trade wide. It traded wider.
  • Nearly 5mos ago, Shinko had much-underperformed peer Ibiden, meaning downside gap risk from undisturbed was negative as spreads were wide. I reco’d a buy. Then 12wks ago, recommended taking profits.
  • Shinko had outperformed Ibiden, gross spreads had narrowed 5+% on JSR approval. Spreads are now 2.6% wider than at narrowest. In May, gap risk narrowed as Shinko underperformed Ibiden.

Kakao Pay Lockup Expiry – US$1bn Overhang from Alipay

By Sumeet Singh

  • Alipay will come out of its placement linked lockup for its remaining stake in Kakaopay (377300 KS) today.
  • Alipay (i.e. Alibaba Group (9988 HK)) had earlier sold some of its stake in Jun 2022 and Mar 2024. It still has over US$1bn worth of shares left to sell.
  • In this note, we talk about the deal dynamics and run the deal through our ECM framework.

HSI, HSCEI, HSTECH, HSIII: Rebalance Flows Post Capping (June 2024)

By Brian Freitas

StubWorld: What Now With Langham (1270 HK)?

By David Blennerhassett

  • Unexpectantly, Great Eagle Holdings (41 HK) said it would not proceed with an Offer; and Hong Kong hotel-play Langham Hospitality (1270 HK) promptly cratered. But why the flip flop?
  • Preceding my comments on GE, Langham and Champion REIT (2778 HK), 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%.

MSC May Rebalance: SA & China Net Sells, NPN, PRX & Tencent Sold Down on Buybacks

By Charlotte van Tiddens, CFA

  • MSC indices were rebalanced in the closing auction on Friday. Turnover for the day on the JSE was R41.9bn, R25bn traded in the closing auction (60%).
  • Turnover at the February rebalance was R25.6bn. Most SA constituents were pushed lower in the closing auction and for the day, consistent with the downweighting of SA Inc.
  • China was downweighted in the ACWI and EM indices for a second straight quarter, reducing the country weight in ACWI by 6bps to 2.69%.

HSI/HSCEI/HSTECH June 2024 Rebal Final Re-Capping (Or Re-Re-Capping) Flows

By Travis Lundy

MMG (1208 HK): US$1.2bn Highly Dilutive Rights Issue

By Arun George

  • Mmg Ltd (1208 HK) will raise HK$9.1bn (US$1.2bn) through 2 rights shares for every 5 existing shares rights offering. The rights price is HK$2.62, a 24.7% discount to the TERP.
  • The rights proceeds will be used to repay existing debt, which will allow it to use other funds to better support the ongoing development of the operating mines.
  • MMG shares should continue to decline heading into the ex-rights date. The shares go ex-rights on 11 June, and the rights start trading from 24 June to 2 July (inclusive).

Northern Minerals (NMI AU): Chinese Investors Forced To Exit

By David Blennerhassett

  • Back in February last year, the Aussie Treasurer prohibited Yuxiao Fund from buying an additional 9.92% in Northern Minerals (NTU AU) which would have increased its stake to 19.9%.
  • On the 20th November 2023, Yuxiao sought the removal of Nicholas Curtis as director of the rare-metal play at an EGM; however Curtis resigned his post and the EGM cancelled.
  • The Aussie Treasurer has now made orders requiring Yuxiao and four (deemed) associated investors to sell their holdings (~10.4% all-in) within 60 days. 

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Jun 05
0

Daily Brief Energy/Materials: Mmg Ltd, Northern Mining, Marathon Oil, Omai Gold Mines and more

By | Daily Briefs, Energy & Materials Sector

In today’s briefing:

  • MMG (1208 HK) – $1.1bn+ Rights Offering – Expect Regular Rights Trading Dynamics
  • MMG (1208 HK): US$1.2bn Highly Dilutive Rights Issue
  • Northern Minerals (NMI AU): Chinese Investors Forced To Exit
  • MMG Limited’s Rights Issue (1208.HK)
  • ConocoPhillips/Marathon Oil and Shale Consolidation
  • Omai Gold Mines Corp – Mining Monthly: May Edition

MMG (1208 HK) – $1.1bn+ Rights Offering – Expect Regular Rights Trading Dynamics

By Travis Lundy

  • Mmg Ltd (1208 HK) today announced a 2:5 Rights Offering to raise US$1.15bn at HK$2.62/share in order to pay down debt from their recent Botswanan copper mine acquisition. 
  • It was a sizeable acquisition, and the near-term EV/EBITDA of the acquisition is 10x or above. The longer-term EV/EBITDA is in the 3s based on expansion later this decade.
  • The Rights Offering is underwritten, supported by its 67.5% owner. SOUTHBOUND holds 10+%. There are short dynamics, arb dynamics, “don’t wanna spend more” dynamics. There’s a path here.

MMG (1208 HK): US$1.2bn Highly Dilutive Rights Issue

By Arun George

  • Mmg Ltd (1208 HK) will raise HK$9.1bn (US$1.2bn) through 2 rights shares for every 5 existing shares rights offering. The rights price is HK$2.62, a 24.7% discount to the TERP.
  • The rights proceeds will be used to repay existing debt, which will allow it to use other funds to better support the ongoing development of the operating mines.
  • MMG shares should continue to decline heading into the ex-rights date. The shares go ex-rights on 11 June, and the rights start trading from 24 June to 2 July (inclusive).

Northern Minerals (NMI AU): Chinese Investors Forced To Exit

By David Blennerhassett

  • Back in February last year, the Aussie Treasurer prohibited Yuxiao Fund from buying an additional 9.92% in Northern Minerals (NTU AU) which would have increased its stake to 19.9%.
  • On the 20th November 2023, Yuxiao sought the removal of Nicholas Curtis as director of the rare-metal play at an EGM; however Curtis resigned his post and the EGM cancelled.
  • The Aussie Treasurer has now made orders requiring Yuxiao and four (deemed) associated investors to sell their holdings (~10.4% all-in) within 60 days. 

MMG Limited’s Rights Issue (1208.HK)

By Rikki Malik

  • Short term overhang from expanded share count and selling from unwilling participants
  • The copper supply and demand story is intact and the fundamentals of the company remain strong
  • Parent’s uptake of the rights is positive but the stock will take time to build a base for the next leg up 

ConocoPhillips/Marathon Oil and Shale Consolidation

By Jesus Rodriguez Aguilar

  • Conocophillips is set to acquire Marathon Oil in an all-stock deal (0.2550 COP US per 1 MRO US) valued at $22.5 billion ($30.33/share), including $5,379 million in net debt.
  • Most of the frenzy in the US oil industry has focused on the consolidation within the Permian Basin, a maturing region that offers opportunities to reduce costs and increase profitability.
  • The acquisition of Marathon will add highly complementary acreage to ConocoPhillips’ existing U.S. onshore portfolio. Spread as of 4 June is 2.6%/4.7% (gross/annualised, assuming settlement by late Q4).

Omai Gold Mines Corp – Mining Monthly: May Edition

By Atrium Research

  • May was silver’s time to shine, hitting 12-year highs up 13.7% on the month, significantly outperforming gold and other metals.
  • The silver equities also followed suit, up 13.4%.
  • Gold and copper posted smaller gains, despite both metals setting all-time highs mid-month, closing up 0.2% and 1.7%, respectively.

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Jun 05
0

Daily Brief Industrials: Guangzhou Great Power Ener-A, Kosaido, Amaero International Ltd, Melrose Industries and more

By | Daily Briefs, Industrials

In today’s briefing:

  • Quiddity ChiNext/ChiNext 50 Jun 24 Rebalance: ~US$700mn One-Way Flows; Thoughts on Surprises
  • KOSAIDO Holdings (7868) – Pursuing Comprehensive Growth
  • Amaero International Ltd – Atomiser commissioned ahead of June 30 deadline
  • Melrose Industries – Crystallisation of the 2020 Employee Share Plan

Quiddity ChiNext/ChiNext 50 Jun 24 Rebalance: ~US$700mn One-Way Flows; Thoughts on Surprises

By Janaghan Jeyakumar, CFA

  • The June 2024 index review results for the ChiNext and ChiNext 50 indices were announced yesterday.
  • There will be seven changes for the ChiNext index and five changes for the ChiNext 50 index. Some of these names surprised us.
  • In this insight, we take a look at our final flow expectations for the confirmed index changes and our thoughts on the selection process.

KOSAIDO Holdings (7868) – Pursuing Comprehensive Growth

By Astris Advisory Japan

  • Results underline high earnings visibility in Profit-Generating Funeral Services – Q1-4 FY3/24 results were in line with guidance, with positive high growth momentum being sustained at Profit- Generating Funeral Services.
  • The legacy businesses (Information and HR) missed forecasts, highlighting turnaround challenges.
  • However, the new business Asset Consulting has started strongly as a high-margin activity, and the outlook is positive. 

Amaero International Ltd – Atomiser commissioned ahead of June 30 deadline

By Research as a Service (RaaS)

  • RaaS Research Group has published a flash comment on advanced materials manufacturing group Amaero International (ASX:3DA) following its announcement that the first atomiser has been commissioned at its Tennessee facility ahead of schedule.
  • The commissioning is an important step toward the production of C103 and specialty alloy powder at the facility and allows the company to move to the next step of achieving qualification and, ultimately, commercialisation.
  • Amaero’s announcement underpins our confidence in the production timing we have applied to our estimates.

Melrose Industries – Crystallisation of the 2020 Employee Share Plan

By Edison Investment Research

The crystallisation of the employee plan highlights the value created through the GKN acquisition, benefiting from the strong performance from the restructuring programme and current positive trends in the aerospace sector. The impact of the scheme on our forecasts will be limited, having already assumed the full value the scheme would accrue. There are no changes to our valuation of 654p per share as set out in our previous note.

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