In today’s briefing:
- Kansai Paint (4613) Announces Large Sale of Cross-Holdings – Buyback Here We Come
- Essity Mulls Holding In Vinda (3331 HK)
- Hokkoku Financial (7381) Earnings Report Delay But HUGE Buyback. Again.
- End of Mandatory Lock-Up Periods for 46 Companies in Korea in May 2023
- Deutsche Börse/Simcorp: Recommended Offer
Kansai Paint (4613) Announces Large Sale of Cross-Holdings – Buyback Here We Come
- Today after the close, Kansai Paint (4613 JP) announced it would sell 3 investment securities in the current quarter and would book a gain of “around ¥30bn.”
- As discussed in Kansai Paint (4613 JP) Secondary Offering & Buyback and All the Subsequent Flows, Toyota’s sale of KP shares meant KP could sell Toyota shares. Now they will.
- This is a set-up to another buyback, eventually to unwind more in-bound cross-holdings and to raise ROE.
Essity Mulls Holding In Vinda (3331 HK)
- Tissue-Maker Vinda International (3331 HK) closed down 6.4% yesterday, recovering from a 13.8% fall intra day.
- Vinda said its 1Q23 operating profit declined 85.4% to HK$65mn. Vinda also announced its controlling shareholder Essity (ESSITYB SS) will commence a strategic review of its 51.59% ownership.
- A long-term shareholder potentially seeking a possible divestment, shortly after a company announces poor results, is not a great look.
Hokkoku Financial (7381) Earnings Report Delay But HUGE Buyback. Again.
- Yesterday Hokkoku Financial Holdings (7381 JP) came out with an odd decision to delay earnings from 28 April to 8 May. Volume traded.
- Today, despite not reporting earnings, the Kanazawa-based regional bank announced a BIG buyback with subsequent share cancellation. This was not unexpected. They have an aggressive policy which started last year.
- Hokkoku Bank policy introduced last year is special. It has worked. They are pursuing it. Expect more policy action like this as banks report.
End of Mandatory Lock-Up Periods for 46 Companies in Korea in May 2023
- We discuss the end of the mandatory lock-up periods for 46 stocks in Korea in May 2023, among which 4 are in KOSPI and 42 are in KOSDAQ.
- These 46 stocks on average could be subject to further selling pressures in May and could underperform relative to the market.
- Among these 46 stocks, the top 6 market cap stocks include KG Mobility, Dongwon Industries, Hugel, Yunsung F&C, Enchem, and Jeio.
Deutsche Börse/Simcorp: Recommended Offer
- Deutsche Börse will offer for DKK 735/share for financial software developer SimCorp, 38.9% premium, 6.5x EV/Fwd Sales (in line with other transactions), and 30.3x EV/Fwd EBIT.
- DB offers a full price to grow in data&analytics: my EV/EBIT-based standalone fair value is DKK 629/share, plus (all) synergies taxed and capitalised of DKK 87/share results in DKK 716/share.
- That figure is still below the offer price, and although gross spread is 0.48%, I’d be long in case of a possible bid by private equity.
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