In today’s briefing:
- CSI300 Index Rebalance Preview: Round-Trip Trade Tops US$6bn as ETF Creations Soar
- Hanwha Galleria Tender Results Are in with No Proration Issue Despite a Fat Spread. What’s Next?
- Puig Brands (PUIG SM): 50/50 Global Index Inclusion for Largest Spanish IPO Since 2015
- The Born Korea IPO Valuation Vs Recent M&A Valuation of Compose Coffee by Jollibee Foods
- Seiren (3569) | Synthetic Leather, Real Growth
- Kim Dong-Sun Likely to Purchase More Shares of Hanwha Galleria Post Tender Offer
- Trial Holdings IPO Lockup – Large Number of Small Holders Hold Around US$400m of Stock
CSI300 Index Rebalance Preview: Round-Trip Trade Tops US$6bn as ETF Creations Soar
- There could be 17 changes at the December rebalance with the Industrials sector gaining 3 index spots and the Information Technology sector losing 3 spots.
- We estimate one-way turnover of 2.9% at the rebalance leading to a one-way trade of CNY 21.96bn (US$3.1bn). There are 22 stocks with over 3x ADV to trade.
- Impact on the stocks has increased as creations in ETFs linked to the CSI 300 Index continue. That flow will reverse from the deletions in the next few months.
Hanwha Galleria Tender Results Are in with No Proration Issue Despite a Fat Spread. What’s Next?
- Hanwha Galleria’s tender offer, led by Kim Dong-sun, closed today with a subscription rate just over 80%, according to the local brokerage after market close.
- Retail investors in small caps like Hanwha Galleria often skip tender offers, hoping for price gains. Kim Dong-sun may try to buy the remaining 10-15% soon, possibly via open-market buys.
- Watch for signs that Kim Dong-sun might go for a second tender to take Galleria private. He might be aiming to avoid taxes and boost his stake’s value.
Puig Brands (PUIG SM): 50/50 Global Index Inclusion for Largest Spanish IPO Since 2015
- Puig Brands (PUIG SM) will be added in SXXP and SXXE at the close of 20 September 2024. Forecasted demand is ~1.6m shares, ~$36m and ~2.7 ADV.
- The security is at risk of failing the fcap threshold hence inclusion in November 2024 due to a recent price drop and a substantial portion of shares outstanding being unlisted.
- The company closely exceeds the minimum public voting rights and its inclusion is expected in December 2024. Forecasted demand is ~4.5m shares, ~$101m and ~7.5 ADV.
The Born Korea IPO Valuation Vs Recent M&A Valuation of Compose Coffee by Jollibee Foods
- In this insight, we compare the IPO valuation of The Born Korea (475560 KS) versus the recent M&A valuation of Compose Coffee by Jollibee Foods (JFC PM).
- Using the recent M&A multiples of Compose Coffee by Jollibee Foods suggests an attractive upside to The Born Korea (relative to the IPO price range).
- No other listed company in Korea has a restaurant business model that is consistently profitable, with strong balance sheet, and solid sales growth as The Born Korea.
Seiren (3569) | Synthetic Leather, Real Growth
- Activist investor, Oasis Management, recently disclosed that they had taken a significant 6.3% stake in the company
- I suspect that Oasis don’t need to be overly aggressive with this one. Given the fundamental outlook, we see the financial model delivering double digit earnings growth
- After a strong Q1 report, we expect an upward revision to guidance. The stock is cheap at <11x earnings. We see over 30% upside
Kim Dong-Sun Likely to Purchase More Shares of Hanwha Galleria Post Tender Offer
- The tender offer period for Hanwha Galleria ended on 11 September. Its share price closed down 7.4% but still up 8.2% from its price prior to the tender offer announcement.
- The local media accounts mentioned today that about 80-90% of the shares targeted in this tender offer have been filled.
- If 90% of the tender offer is successful, Kim Dong-Sun’s stake in the company will rise from 2.3% to 18.1%.
Trial Holdings IPO Lockup – Large Number of Small Holders Hold Around US$400m of Stock
- Trial Holdings (5882 JP) raised around US$259m in Mar 2024. Its IPO lockup is set to expire soon.
- TH operates a network of retail stores in Japan that offer one-stop shopping under its everyday low price (EDLP) model.
- In this note, we will talk about the lockup dynamics and possible placement.
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