In today’s briefing:
- Sep24 Nikkei 225 Rebal Final Predictions – Fastie Capped, Still 1 ADD, 1 DELETE, 1 Dark Horse and ?s
- True Wind Raises Partial Offer for Sun Corp Further, Leaving an Interesting Back End
- Sun Corporation (6736 JP): Third’s Time a Charm for True Wind’s Final Offer
- Ola Electric IPO – RHD Updates: Strong Improvement in Financials
- End of Mandatory Lock-Up Periods for 41 Companies in Korea in August 2024
- Latest Update on Hanon Systems Stake Sale: Consider Long Short Setup on Hankook Tire & Hanon
- Rome Capital’s Alex Feng and Jason Quan making the case for Samsonite $1910.HK
- Slower E2Wheeler Sales with Lower Incentives: Ola Makes Lemonade when Market Throws Lemons
- TMON and WeMakePrice File for Court Receivership – Impact on the Korean E-Commerce and PG Sectors
- High Dividend Yield, Expansion Outside China, Listed HK Apparel/Footwear Stocks Screener
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Sep24 Nikkei 225 Rebal Final Predictions – Fastie Capped, Still 1 ADD, 1 DELETE, 1 Dark Horse and ?s
- The Sep 2024 Nikkei 225 Review base date is here. As before, I see one ADD, one DELETE, one capping, and one Very Dark Horse.
- The rules are clear, but not. This causes confusion. There may be unwritten rules keeping the Very Dark Horse out til next time.
- The Nikkei Index Team announced Fast Retailing (9983 JP) would be capped. I didn’t expect that now. That means $2.2bn+ of selling 30Sep and a reverse funding trade.
True Wind Raises Partial Offer for Sun Corp Further, Leaving an Interesting Back End
- On 10 June, Sun Corp subsidiary Cellebrite DI (CLBT US)‘s SPAC sponsor True Wind Capital launched a Tender Offer for 19% of SunCorp at a premium but discount to NAV.
- The price was too low. CLBT shares rose. They lifted the TOB price by 8% to ¥4750. Still too low. It was trading there. Now they have lifted to ¥5500.
- Now a 49% premium to undisturbed, 29.4% premium to all-time high prior to the first tender. Changes in terms means this could get done. More bullish than it looks.
Sun Corporation (6736 JP): Third’s Time a Charm for True Wind’s Final Offer
- True Wind has increased its partial offer for Sun Corp (6736 JP) to JPY5,500 and materially lowered the minimum number of shares to be purchased from 3.3m to 1.1m.
- True Wind’s previous two offers were a non-starter due to an unattractive price and an onerous minimum acceptance threshold. The final offer addresses both these issues.
- The offer will succeed due to the low minimum acceptance threshold and the 25% price uplift vs. the 19% value increase in the Cellebrite stake (since the offer announcement).
Ola Electric IPO – RHD Updates: Strong Improvement in Financials
- Ola Electric is a vertically integrated pure EV player in India with both technology and manufacturing capabilities for EVs and EV components (including battery packs, motors and vehicle frames).
- The company’s much awaited IPO is opening for subscription on Friday, and this insight focuses on new data points from the company’s latest Red Herring document (RHD).
- Our analysis shows that the company’s top line has continued to expand driven by volume while there has been significant reduction in operating losses in FY03/2024.
End of Mandatory Lock-Up Periods for 41 Companies in Korea in August 2024
- We discuss the end of the mandatory lock-up periods for 41 stocks in Korea in August 2024, among which 2 are in KOSPI and 39 are in KOSDAQ.
- These 41 stocks on average could be subject to further selling pressures in August and could underperform relative to the market.
- The top three market cap stocks including those of which at least 1% of outstanding shares could be sold in August include APR, Fadu, and Kuk Il Paper.
Latest Update on Hanon Systems Stake Sale: Consider Long Short Setup on Hankook Tire & Hanon
- Today’s news indicates Hankook Tire found contingent liabilities in Hanon Systems’ finances, meeting conditions to break the May agreement and putting the deal on indefinite hold.
- Hankook Tire plans to adjust the new share price first, then the existing share price, while Hahn & Co, unable to delay its exit, will likely accept it.
- With Hahn & Co likely to accept Hankook Tire’s price adjustment request, consider a long-short setup: Hankook Tire may benefit from positive momentum, while Hanon Systems faces negative dilution.
Rome Capital’s Alex Feng and Jason Quan making the case for Samsonite $1910.HK
- Samsonite is a global luggage leader with three major brands: Samsonite, Tumi, and American Tourister
- Despite challenges during COVID, Samsonite has successfully executed a turnaround by closing stores and improving sales and margins
- The stock is undervalued in Hong Kong, with plans for a secondary US or European listing in the near future, potentially offering a 100% upside opportunity.
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Slower E2Wheeler Sales with Lower Incentives: Ola Makes Lemonade when Market Throws Lemons
- India’s electric 2-wheeler sales nosedived after March 2024 as the government reduced incentives.
- The price gap between electric 2-wheelers and their ICE counterparts has widened significantly with lower incentives.
- Despite the overall slowdown, Ola Electric (1700674D IN) ‘s steep market share rise highlights its product prowess, competitive pricing capabilities, and strong brand.
TMON and WeMakePrice File for Court Receivership – Impact on the Korean E-Commerce and PG Sectors
- One of the biggest stories in the Korean e-commerce sector this week has been TMON and WeMakePrice filing for court receivership due to liquidity crisis.
- Singapore’s Qoo10 is the controlling shareholder of TMON and WeMakePrice. Young-Bae Ku is the largest shareholder of Qoo10 with a 42.77% stake, followed by KKR with a 25.65% stake.
- Competitors such as E-Mart and Coupang are most to benefit. PG companies such as KG Inicis and NHP KCP are negatively impacted.
High Dividend Yield, Expansion Outside China, Listed HK Apparel/Footwear Stocks Screener
- We compile a list of ten high-yielding/net cash or low-net debt stocks in HK’s apparel/footwear value chain. HK is a pariah for investors, and trailing dividend yields are approaching 6-20%.
- As in other insights, we don’t estimate future earnings for all companies, but we indicate if the company has quality by measuring long-term ROCE (average five years).
- By expanding outside of China, most of these companies have derisked themselves from the trade war ( to the extent they can) and are also ready for earnings inflection.