In today’s briefing:
- ASICS (7936 JP): The Current Playbook
- Fancl (4921 JP): Evaluating the Potential of Kirin (2503 JP) Offer Bump
- True Wind Raises Partial TOB Price for Sun Corp (6736 JP) By 8%. Not Enough.
- BUY/SELL/HOLD: Hong Kong Stock Updates (July 22)
- The Warehouse Group (WHS NZ): Tindall (Potentially) Reloads
- NIFTY50 Index Rebalance Preview: Big Flow, Big Impact, Big Positioning
- Block Deal Sale of Kumho Tire: More Shares Likely to Be Sold by Creditors
- Thai Beverage (THBEV SP) – Increasingly Streamlined SEA F&B Play
- Bloks Group Pre-IPO – The Positives – Wide Portfolio of Established IPs
- Bloks Group Pre-IPO – The Negatives – Concentration Risk Is Concerning, and Limited Overseas Reach
ASICS (7936 JP): The Current Playbook
- Since the US$1.4 billion secondary placement announcement, ASICS Corp (7936 JP)’s shares are up 0.9% from the undisturbed price of JPY2,564 per share (12 July).
- Looking at recent large Japanese placements is instructive to understand the potential trading pattern. So far, Asics’ shares have deviated from the pattern of previous large placements.
- The offering will likely be priced on 23 July. Investors who have participated in previous large Japanese placements tend to secure positive returns.
Fancl (4921 JP): Evaluating the Potential of Kirin (2503 JP) Offer Bump
- Kirin Holdings (2503 JP)’s JPY8,620 offer for Fancl Corp (4921 JP) closes on 29 July. The shares have traded above terms for 25 out of the 26 trading days.
- MY.Alpha Management has amassed 10.3 million shares (8.51% ownership ratio) with several purchases above terms. MY.Alpha could catalyse other shareholders to rally against a light offer.
- The emergence of MY.Alpha, the high volume above terms, peers re-rating, the required minority acceptance rate, and an offer unattractive to historical trading ranges increase the probability of a bump.
True Wind Raises Partial TOB Price for Sun Corp (6736 JP) By 8%. Not Enough.
- Today, the final day of the Tender Offer that True Wind Capital launched on 10 June 2024 to buy 19% of Sun Corp (6736 JP), TWC raised its price to ¥4,750/share./
- They also lowered their minimum from 3.7934mm shares (17.0%) to 3.3472mm shares (15.0%).
- As Cellebrite DI (CLBT US) had traded higher, SunCorp had too, and even though shares fell today, they are at ¥4,785/share.
BUY/SELL/HOLD: Hong Kong Stock Updates (July 22)
- The Hong Kong market trades about 30% below analysts’ estimated 12 month target price.
- Analysts are raising forecasts forXiaomi Corp (1810 HK) as it meets success with new phone rollouts and its EV business.
- Sunny Optical Technology Group (2382 HK) had a positive profit alert and Minth Group Ltd (425 HK) is showing growth in its international business. Both are rated BUY from analysts.
The Warehouse Group (WHS NZ): Tindall (Potentially) Reloads
- General merchandise retailer Warehouse Group Limited (WHS NZ) (TWG) has announced it has received an approach from Stephen Tindall and PE outfit, Adamantem Capital Partners
- Founder and major shareholder Tindall holds a shade over 50%. He launched a $1.6bn privatisation attempt in 2006, but Foodstuffs and Woolworths Ltd (WOW AU) effectively blocked the Offer.
- The approach arrives after TWG’s shares trade around multi-year lows.
NIFTY50 Index Rebalance Preview: Big Flow, Big Impact, Big Positioning
- Trent Ltd (TRENT IN) and Bharat Electronics (BHE IN) are shoo-ins to replace LTIMindtree (LTIM IN) and Divi’s Laboratories (DIVI IN) in the NIFTY Index (NIFTY INDEX) in September.
- Passive NIFTY Index trackers will need to trade at least 3.3x ADV and 7.7x delivery volume on the stocks. There is some opposite flow from Nifty Next 50 Index trackers.
- Cumulative excess volume has increased in all stocks but there are some stocks where there will still be more positioning over the next few weeks.
Block Deal Sale of Kumho Tire: More Shares Likely to Be Sold by Creditors
- Woori Bank completed a block deal sale of 11 million shares of Kumho Tire Co (073240 KS) (3.83% of outstanding shares) on 18 July.
- After the recent sales by Woori Bank and the Export-Import Bank of Korea, the creditors’ stakes in Kumho Tire has been reduced to 19.17%.
- Despite Kumho Tire’s recent improvement in financial performance, we are more concerned about the additional stake sale by the financial institutions that still own 19.2% stake in the company.
Thai Beverage (THBEV SP) – Increasingly Streamlined SEA F&B Play
- Thai Beverage will offload its entire stake in Frasers Property Ltd to TCC Assets in a share swap for an increased share in Fraser And Neave streamlining its business focus.
- The share swap values Fraser And Neave on a par with peers which is at a significant premium to the share price but Fraser And Neave was excessively undervalued.
- Thai Beverage deserves to trade on a higher multiple given its pure-play status and a succession of recent restructurings including Serm Suk and Oishi Holdings.
Bloks Group Pre-IPO – The Positives – Wide Portfolio of Established IPs
- Bloks Group (1850960D CH) is looking to raise US$300m in its upcoming Hong Kong IPO.
- Bloks Groups (Bloks) operates in the toy segment where it primarily assembles character and brick-based toys.
- In this note, we will talk about the positive aspects of the deal.
Bloks Group Pre-IPO – The Negatives – Concentration Risk Is Concerning, and Limited Overseas Reach
- Bloks Group (1850960D CH) is looking to raise US$300m in its upcoming Hong Kong IPO.
- Bloks Groups (Bloks) operates in the toy segment where it primarily assembles character and brick-based toys.
- In this note, we will talk about the not so positive aspects of the deal.
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