In today’s briefing:
- Honda (7267 JP) – MAMMOTH New ¥1.1Trln Stock Buyback
- Henlius (2696 HK): Circ Out. 22nd Jan H-Class Meeting
- [Japan Activism] Exedy (7278) – Murakami-San Selling into the Buyback
- EQD | Nikkei Index Options Weekly – December 16 – 20
- EQD | Hong Kong Single Stock Options Weekly December 16 – 20
- EQD | Kospi Index Options Weekly – December 16 – 20
- VCredit (2003 HK): Ma Does Makes His Move. But Nothing To Shout About
- Goldlion Holdings (533 HK): Chairman’s Scheme Privatisation Is a Done Deal
- GA Pack (468 HK): The State of Play
- LG CNS IPO: Limited Float Pushes Back Passive Buying
Honda (7267 JP) – MAMMOTH New ¥1.1Trln Stock Buyback
- Today, along with the announcement of Memorandum of Understanding between Honda Motor (7267 JP), and Nissan Motor (7201 JP) to work towards negotiating a Joint Holding Company by June 2025…
- Honda cancelled their existing ¥100bn buyback, and initiated a truly mammoth NEW Buyback – up to 1.1 billion shares (23.7% of TSO), spending up to ¥1.1trln on market through Dec-2025.
- Assuming the stock pops, it is probably “only” worth 15-18%, but that’s still a LOT. At that rate it boosts BVPS by 8+% on its own, and EPS by 17%.
Henlius (2696 HK): Circ Out. 22nd Jan H-Class Meeting
- After Shanghai Henlius Biotech (2696 HK) secured NDRC approval on the 22nd Nov; fulfilled pre-cons on the 16th December, the Circular was dispatched last night, the 22nd December.
- The EGM/H-share class meeting will take place on the 22nd January, one day past my estimate. Settlement should be on ore around the 18th Feb, a week beyond my estimate.
- Trading at a gross/annualised spread off 2.9%/20.3%. Still attractive here.
[Japan Activism] Exedy (7278) – Murakami-San Selling into the Buyback
- Exedy Corp (7278 JP) announced a big buyback. Murakami-san did not sell the first pop. The shares fell. Exedy started buying back and the shares went up. Now Murakami’s selling.
- Today after the close, Murakami Group companies announced that City Index Elevens had started selling. They sold 1.25% of shares out in 6 trading days to 16 December.
- I expect they sold another 2% in the past week through today. Shares tanked today. This is not a good signal. And it comes earlier than I expected.
EQD | Nikkei Index Options Weekly – December 16 – 20
- All 5 trading days of the past week saw non-volatile price declines but with implied vols still ticking higher leaving historic vol and implied vol moving in opposite directions.
- Trading activity focused on Puts, 59.5% of all options trades were Puts last week
- Postions being covered into market weakness as seen from large decrease in open interest (60% of the decline was Puts).
EQD | Hong Kong Single Stock Options Weekly December 16 – 20
- Communication Services had 39% of single stock option volumes vs only 22% of the open interest highlighting short expiry / speculative nature of trading.
- Tencent and Baidu heading in opposite directions – Baidu vol on the inexpensive side vs Tencent vol.
- Xiaomi one of only 2 optionable names trading at 52-week high (Sunny optical being the other).
EQD | Kospi Index Options Weekly – December 16 – 20
- Kospi is now off 20% from its 52-week highs. Historic vols are picking up and implieds looking like good value given market dynamics.
- Hedging increased with broad based positioning in Puts across out-of-the-money strikes.
- Heavier volume in Puts with 53.2% of added open interest being Puts.
VCredit (2003 HK): Ma Does Makes His Move. But Nothing To Shout About
- When VCredit Holdings (2003 HK), a provider of consumer financial services in China, was suspended pursuant to the Takeovers Code, I expected an Offer from Ma Ting Hung, VCredit’s chairman.
- Well, we do have an Offer. Ma acquired 4.19% via two SPAs, lifting his stake to 44.04%. Stephen Liu (an ED) also acquired 1.43% via an SPA.
- As Ma, Liu, and other parties, are presumed to be acting in concert, an unconditional MGO is triggered. But at HK$1.80/share, a 9.09% discount to undisturbed.
Goldlion Holdings (533 HK): Chairman’s Scheme Privatisation Is a Done Deal
- On 17 December, Goldlion Holdings (533 HK) announced a scheme offer from Mr Tsang (Chairman/CEO) at HK$1.5232 per share, a 71.1% premium to the undisturbed price of HK$0.89 (20 November).
- The key condition is the scheme approved by at least 75% disinterested shareholders (<10% disinterested shareholders rejection). The shareholder with a blocking stake is a seller.
- The offer is reasonable compared to peer multiples and historical trading ranges. At the last close and for a late April payment, the gross/annualised spread is 7.3%/22.7%.
GA Pack (468 HK): The State of Play
- On 20 December, Shandong Xinjufeng Technology Packaging (301296 CH) satisfied the precondition for its Greatview Aseptic Packaging (468 HK) offer. The offer document will be despatched by 27 December.
- Analysing the EGM vote on 18 October suggests that the 50% minimum acceptance condition will be met if no competing management offer is made.
- Management will oppose the offer, but the last EGM protest votes suggest that many minorities will ignore management. At the last close, the gross/annualised spread was 2.3%/25.3%.
LG CNS IPO: Limited Float Pushes Back Passive Buying
- LG CNS (LGCNSZ KS) is looking to raise up to KRW 1,199bn (US$830m), valuing the company at KRW 6 trillion (US$4.15bn) at the top end of the IPO price range.
- As a member of the IT sector, inclusion in the KOSPI200 Index will only take place via Fast Entry (near impossible) or as a large-scale company.
- Inclusion in global indices could commence in September 2025 and will be easier if the identity of the pre-IPO minority shareholders is disclosed or if the strategic investors sell.
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