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• After being suspended for 7 months for not publishing its 2020 annual results, Gcl Poly Energy Holdings Limited (3800 HK) resumed trading on 1 November 2021.
• We expect Gcl Poly Energy Holdings Limited (3800 HK) to be added to the MSCI China Index in August and to the FTSE All-World Index in September.
• Passive index trackers will need to buy over US$1.1bn of stock over the next few months. The stock has run-up inline with peers and this demand could keep it supported.

• The AFR reports that after weeks of talk, Dye & Durham (DND) is expected to lob a revised lower proposal for Link Administration (LNK AU) as soon as this week.
• Presumably, DND’s justification for a lower offer is to facilitate ACCC approval timelines. It remains to be seen if this is enough for the Board to recommend a lower offer. 
• Tweaking the IE’s valuation range for the current peer multiples and PEXA Group (PXA AU) share price points to a Link valuation range of A$3.52-4.40 per share. 

• Meituan is starting to show waning upside momentum as it near key resistance at 220/230 (sell or short zone) ahead of a harder pullback cycle that will be choppy initially.
• Meituan has outperformed its peer group but due for a pullback. Price and RSI rising wedges are maturing and nearing a bearish inflection point to short (watch poor buy volume).
• Tactical rally window in mid July with a better rally cycle slated for August head of a negative September.

• EPAM is an IT Services firm that does high end software development for Fortune 2000 customers.
• One of the great under the radar compounders of all time. Feb 2012 IPO-Feb 2022: ~27% revenue, earnings, FCF CAGR, 45% equity CAGR.
• Core engineering talent historically in Ukraine, Belarus, and Russia, this is the overhang. We think great management team can navigate relocation and return to growth.

• Z HD’s media business accounts for 80% of consolidated earnings.
• We believe that the combination of Yahoo Japan and LINE is driving new synergies and growth opportunities.
• We believe that the media business alone could justify an EV of ¥4.5t, way above ZHD’s current EV of ¥3.5t

• Our new target price 4,000 yen; Raising our rating to Buy

• We believe that market participants have become increasingly concerned about the sustainability of high growth for loss-making SaaS companies

• We raise our 2Q (Mar-May) FY11/22 sales forecast from 5.102bn yen to 5.145bn yen (+28.8% YoY, company guidance median 4.912 bn yen)

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• This IPO’s valuation is the trickiest among Korea’s recent IPOs. Whether all of these ten valuation peers have high enough business relevance to SOCAR is highly doubtful.
• Whether SOCAR can evolve from a simple car sharing (or rental) operator to an in-vehicle software platform provider actually determines the success or failure of this IPO.
• However, the IPO prospectus available to us lacks the evidence to favorably judge SOCAR’s growth potential. So, I will consider taking this IPO as conservatively as possible.

• PUSU deadline for TTB (Gopher) has been extended until 15 July. Playtech states that this time will allow progress in additional negotiations. Talks are credible, but progress is at snail’s pace.
• Taking comparables’ median 9x EV/Fwd EBITDA, fair value for Playtech would be 772p. TTB should offer close to 800p to entice the Honk Kong based shareholders who derailed Aristocrat’s offer.
• I see the current valuation of Playtech as an attractive entry point, with the upside of a likely bid. Long PTEC LN.

• There is a risk that the ¥7,000/share bid for Toshiba Corp (6502 JP) gets pulled/lowered in Round 2 because of due diligence, conditionality, market environment, etc.
• Hutchison Telecommunications Hong Kong Holdings (215 HK)‘s share price was up 33% month to date, on triple the average daily volume. Then promptly sheds 23% on an even larger volume. 
• Even if one assumes that Softbank, Baba, and Cornerstones won’t sell, there is still 45% of SenseTime Group (20 HK) of shares out, worth US$11bn, unlocking next week.

• MSCI had announced the results of the 2022 Global Market Accessibility Review earlier this month. Based on that, no changes were expected at the Market Classification Review.
• Earlier this morning, MSCI announced the results of the Market Classification Review and there are no changes for Asia.
• Korea has not been placed on the watchlist for an upgrade from Emerging to Developed Market. The earliest that Korea could be reclassified from EM to DM is now 2025.

• Chinese e-commerce is having a solid month with most names up 30% in June. Yet this seems more a dead-cat-bounce than a change in direction of the share price momentum.
• While there’s plenty of additional downside to big e-commerce players in e-commerce, smaller ones such as Baozun Inc. (BZUN US) has limited down side with shares trading near 1.0x P/B multiple.   
• Meanwhile Huitongda (9878 HK) is yet to experience the post IPO sell-off and trading at expensive multiples. This raises an opportunity for a Long Bozun Short Huitongda trade.

• Z Holdings has the best ecosystem in Japan with 30% top line growth over the past year
• We think that Z HD can out grow the competition in E-Commerce this year by leveraging group synergies
• Z HD has earmarked an aggressive ¥35b to grow its Commerce Business this year 

• Socar, the largest car sharing platform in Korea, is getting ready to complete its IPO in KOSPI. The IPO base case offering size is from $120 million to $159 million.
• The IPO price range is from 34,000 won to 45,000 won. The expected market cap of the company is from 1.2 trillion won to 1.6 trillion won.
• Book building for the institutional investors starts on 1 August. Mirae Asset Securities and Samsung Securities are the lead underwriters in this IPO. 

• Uniden Holdings (6815 JP) is a ubiquitous manufacturer in its niche field of CBs, scanners, radar detectors, and marine radios. It used to be famous for cordless phones.
• That was then. Manufacturing revenues dropped 90% in 20yrs, there were some weird related party transactions, an accounting scandal, and now the company is fixing itself.
• And now value fund Cornwall Capital has launched an MBO at a [checks notes] 2.5% premium to last trade. This is going to be interesting. 

• Tencent has been actively divesting its investments (mainly in China) given the ongoing regulatory challenges faced by tech platforms in China. Moreover, macroeconomic conditions also have led to these sell-downs.
• The company has explicitly mentioned that it would restructure its investment portfolio to manage risk, this includes divestments and distribution to shareholders.
• The latest sell-down was Tencent (700 HK)  stake in online education platform Koolearn, whose share price more-than tripled this month following its venture into livestreaming.

• My E.G. Services (MYEG MK) ‘s share price is pummelled down from the reopening sentiment, although investors missed the point on this given the range of services MyEG offers. 
• Plenty of the upsides from the new JV in the Philippines and Indonesia are yet to contribute to the full extent due to COVID-19.
• Trades at 19x PER, a deep discount to its historical highs despite stable profitability and a healthy ROE at 23%.  

• Hong Kong’s Link Riet has excellent assets, but the fears of further lockdowns and rising interest rates do not make for a good combination.
• They seem to be leading other mall operators despite higher quality assets (mostly low-end and necessities).
• Globally none of the delivery services has a cost-effective, scalable model, as they hit the regulatory challenges and hiring costs increases for every scaleup. 

• Smallcap semiconductor/component/design/assembly service trading house Shinko Shoji (8141 JP) has been buying back stock. It cancelled 20% of shares out last year. Today it buys back nearly 7%. 
• The question is, who sells. What one might want to do may depend on who sells. And we will know that in 1-5 days. 
• The stock itself trades at less than net current assets. The entire market cap and indeed equity is its funding of inventory and net receivables. It’s cheap. 

• SenseTime Group (STG) raised US$741m in its Hong Kong IPO in Dec 21. The IPO barely made it through and was priced at the bottom of its IPO price range.
• STG is a leading AI software company. STG was the largest AI software company in Asia in terms of 2020 revenue, as per Frost & Sullivan (F&S).
• In this note, we will talk about the lock-up dynamics and updates since our last note.

• Grab continues to innovate and adapt to more challenging times, with a needle focus on moving toward profitability with ongoing efforts to reduce incentives and rationalise non-core businesses.
• The launch of GrabMaps is interesting in that it has the potential to generate new revenue streams, create substantial cost savings, and enable targeted advertising adding to the enterprise segment.
• Grab (GRAB US)  has cash liquidity of US$8.2bn, which makes it look cheap relative to its market cap of only US$8.9bn and it is trading on 2.0x FY2023E EV/Sales. 

• Consumerism has taken the Western World hostage over the course of the last few hundred years.
• Defined loosely, this term encompasses a general social and economic order that encourages the acquisition of both goods and services in ever-increasing amounts.
• Capitalism, at its very core, is fundamentally reliant on these behaviour patterns, with the constant and widespread itch for more spurring endless arrays of both corporate and nationwide growth and enrichment. 

• Nearing the end of the review period, we see 5 stocks moving from MidCap to LargeCap, 2 new listings added to LargeCap and 7 stocks moving from LargeCap to MidCap.
• We see 7 stocks moving from SmallCap to MidCap, 3 new listings added to MidCap, and 12 stocks moving from MidCap to SmallCap.
• Stock migrating upward have, on average, outperformed stocks that are downward migrations. Stocks moving from MidCap to LargeCap have performed the best.

• Infomedia Ltd (IFM AU) disclosed an indicative non-binding proposal from Vista Equity Partners at A$1.70 a share. The Board has provided due diligence to all three bidders
• Curiously, Vista’s offer is in line with TA/Viburnum but below the Battery Ventures’ offer of A$1.75. This suggests that Vista requires due diligence to firm up a higher bid.   
• With the market downturn starting to blow up M&A deals, the three-way auction for Infomedia lowers its risk profile. At last close, the gross spread to the offers is 6.3-9.4%.

• Lunit is getting ready to complete its IPO in Korea in July. The IPO base deal size is from $42 million to $46 million.
• Established in 2013, Lunit is one of the leading companies in Korea that specializes in AI-based cancer diagnosis and treatment solutions.
• Lunit is a pioneer in the medical artificial intelligence industry. The company has developed and commercialized AI-assisted detection solutions that complement human visual limitations through deep learning technology. 

• We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Thailand and Chinese ADRs.
• The highest spreads are Sezzle Inc (SZL AU), Link Administration (LNK AU), 21Vianet Group (VNET US), Alliance Aviation Services (AQZ AU), Ramsay Health Care (RHC AU), Resapp Health (RAP AU).
• The lowest gross spreads are Irongate Group (IAP AU), AKM Industrial (1639 HK), Beijing Enterprises Urban Resources (3718 HK), Hwa Hong Corp (HWAH SP), Uniti Group Ltd (UWL AU). 

• Grab is Southeast Asia’s dominant on-demand platform for ride-hailing and deliveries. It is also one of the top mobile wallet/fintech player in the region.

• Amidst the dramatic turn in macro and capital markets conditions, incentives spending in the industry seems to be coming down fast and across the board as management teams’ focus shifts to profitability.

• While share prices of tech companies have been severely punished, the downturn may also be a positive turning point to catalyze more rational industry behavior moving forward.

• Online auto parts and service provider Infomedia Ltd (IFM AU) has received a third non-binding proposal; this time from U.S.-based software company Solera Holdings. 
• The Offer price is A$1.70/share, in line with TA Associates-led consortium’s bid, but below Battery Ventures’ A$1.75/share offer.
• As with TA and Battery, Solera has been granted limited due diligence. TA holds a 19.4% stake.

• There are 49 – mostly firm – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
• Two new deals this week: Frasers Hospitality Trust (FHT SP)‘s Scheme, and  Pfizer Inc (PFE US)‘s Offer for Resapp Health (RAP AU).
• Key updates took place for: Link Administration (LNK AU), Virtus Health (VRT AU), Toyo Construction (1890 JP), Kito Corporation (6409 JP), and Hwa Hong Corp (HWAH SP).

• It was a busy Friday with multiple implementations of the June rebalance – FTSE All-World/All-Cap, FTSE China 50/A50/TW50, S&P/ASX, REMX and GDXJ among others.
• We highlight potential upcoming changes to the HSCEI INDEX and LQ45 Index, when Kakao Pay (377300 KS) could be added in MSCI Korea & the Thai Life IPO index inclusion.
• There were large inflows to China and Korea focused ETFs during the week.

• There has been a recent press commentary about Sea Ltd laying off staff, which although unpleasant reflects management’s decisive and pragmatic decision-making style which is no bad thing.
• It is unclear how many staff are being laid off and where but it seems that Indonesia is not impacted in a big way and core markets continue to perform.
• We will not follow on the coattails of liquidity with a negative recommendation when what management is doing looks positive and Sea Ltd (SE US) is batting above its peers.

• Confluent (CFLT US)  is an American-based data infrastructure software company and a major contributor to the open-source project Apache Kafka. 
• Original creators of Apache Kafka founded the company in 2014. Today, Kafka has 5M+ lifetime downloads, and >100,000 organizations use the successful open source project.
• We believe Confluent (CFLT US)  is uniquely positioned to benefit from the widespread adoption of Apache Kafka and the growing $50B+ total addressable market.