In today’s briefing:
- Renault & Nissan – Capital Manoeuvres In the Dark
- Hisense (921 HK/000921 CH) Nonsense
- Fast Retailing – FY23 Guidance Could Knock Some Sense into Market
- KOSPI200 Index Rebalance Preview: Few Changes, Big Impact
- SSE180 Index Rebalance Preview: Stock Connect & MSCI/FTSE Eligibility
- K Car Lockup – Small Stock with a Big Lockup – Money Recouped, Any Price Is a Good Price to Sell
- SAMG Entertainment IPO Preview
Renault & Nissan – Capital Manoeuvres In the Dark
- In April, a Bloomberg story said Renault SA (RNO FP) might sell shares in Nissan Motor (7201 JP) to support its investment in EVs. They might sell to Nissan, others.
- Renault shares popped hard, this two months after CEO Luca de Meo had said Renault might split, investing in and listing its EV business separately. But since then? Crickets.
- Over the weekend, we have news talks are coming to a head. My feeling? The results won’t be pretty – a messy agreement which inspires nobody, but probably still works.
Hisense (921 HK/000921 CH) Nonsense
- Back on the 21 October 2016, Hisense Home Appliances Group Co., Ltd. H (921 HK) announced it would invest RMB1.7bn of “idle” funds into wealth management products, or ~HK$1.43/share.
- Between 16 September 2022 and 8 October, Hisense announced it has invested HK$1.13bn of idle funds in wealth management products.
- Hisense reckons the investment is “beneficial for enhancing efficiency of use of idle self-owned funds“. But if truly idle, they should be returned to shareholders.
Fast Retailing – FY23 Guidance Could Knock Some Sense into Market
- Although we are not expecting a major miss for Fast Retailing (9983 JP) in FQ4, we believe FY23 guidance could be disappointing to prompt a substantial correction in FY23 consensus.
- China is continuously failing to live up to the company’s expectations and the only factors holding Uniqlo’s share price from breaking-down are the North America growth and the Yen depreciation.
- Those too are now under threat, with a looming recession and Fed rate hikes failing to curb inflation.
KOSPI200 Index Rebalance Preview: Few Changes, Big Impact
- 90% of the way through the review period of the Kospi 200 Index December rebalance, we see two potential changes to the index. There is another potential inclusion failing liquidity.
- This rebalance is expected to have the lowest turnover as compared to any of the Kospi 200 Index rebalances over the last few years. Partly lower markets, partly no IPOs.
- That said, passive trackers are estimated to need to trade over 10 days of ADV on one of the potential adds and both potential deletes.
SSE180 Index Rebalance Preview: Stock Connect & MSCI/FTSE Eligibility
- Nearing the end of the review period, we expect there will be 18 changes to the SSE180 Index in December. The first-order impact on the stocks is not large.
- Stocks that are not currently in Buy/Sell Stock Connect will be added to the list. That makes them eligible for inclusion in the MSCI and FTSE indices in February/March.
- We see 6 of the potential/close adds being added to the MSCI China Index in February and 8 of the potential/close adds being added to the FTSE All-World/All-Cap in March.
K Car Lockup – Small Stock with a Big Lockup – Money Recouped, Any Price Is a Good Price to Sell
- K Car completed its IPO in South Korea in Oct 21. It raised around US$300m after having downsized the offering and cut the asking price to below the IPO range.
- K Car is a used car marketplace and dealership operating in South Korea.
- In this note, we will talk about the recent updates and the upcoming lockup expiry.
SAMG Entertainment IPO Preview
- SAMG Entertainment is getting ready for an IPO on the KOSDAQ market. SAMG Entertainment is a leading children animation and digital contents focused entertainment company targeting young children.
- The IPO offering amount is from 37.8 billion won to 46.7 billion won. The book building for the institutional investors starts on 1 November.
- The company operates 42 Youtube channels including 15 domestic channels and 27 overseas channels. The total number of subscribers for these 42 Youtube channels exceeds 39 million.
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