In today’s briefing:
- Kokusai Electric (6525 JP) IPO: Listing in October, TPX Inclusion in November, Global Indices Later
- SK Square: Updated NAV Analysis Amid Potential Sale of 11st to Alibaba
- Intage Holdings (4326 JP): NAVF Selldown and Proration for NTT’s Partial Offer
- A Proactive Long Short Basket Setup Targeting KOSPI Size Index’s Next Rebal
- KRX Plans to Introduce Float Market Cap & Extreme Price Increases to KOSPI 200 Screening
- Costa Backs Paine Schwartz’s Lower Bid
- Quiddity Leaderboard F100/250 Dec 23: Dechra, Network International, and Other Potential Changes
Kokusai Electric (6525 JP) IPO: Listing in October, TPX Inclusion in November, Global Indices Later
- Kokusai Electric (6525 JP)‘s listing has been approved by the JPX and the stock is expected to start trading on the Prime Market from 25 October.
- At the reported indicative IPO price of JPY 1890/share, Kokusai Electric (6525 JP) will be valued at JPY 435bn (US$2.94bn).
- The stock should be added to the TPX INDEX at the close on 29 November where trackers will need to buy over 14% of the stock issued in the IPO.
SK Square: Updated NAV Analysis Amid Potential Sale of 11st to Alibaba
- In this insight, we provide an updated valuation analysis of SK Square (402340 KS) amid a potential sale of 11st to Alibaba (ADR) (BABA US).
- Our NAV analysis of SK Square suggests NAV of 9.2 trillion won or NAV per share of 65,069 won, representing a 55% upside from current levels.
- If SK Square is able to sell its stake in 11st to Alibaba, the capital inflow from the sale could be used to raise dividends and complete more share buybacks.
Intage Holdings (4326 JP): NAVF Selldown and Proration for NTT’s Partial Offer
- Nippon Active Value Fund PLC (NAVF LN)’s jointly-held shareholding in Intage Holdings (4326 JP) has declined from 11.28% to 9.52% of outstanding shares (disclosed on 20 September).
- NAVF wants to take as much money off the table as possible as NTT (Nippon Telegraph & Telephone) (9432 JP)’s partial offer price represents an all-time high.
- Our revised minimum proration is 53.31%. NAVF’s action suggests that the minimum acceptance condition, which requires a 20% minority acceptance rate, should be satisfied.
A Proactive Long Short Basket Setup Targeting KOSPI Size Index’s Next Rebal
- We need to focus on the top 2 candidates among the Mid→Large candidates in the screening table mentioned above and the bottom 4 candidates among the Large→Mid candidates.
- Since they are relatively far from the borderline, there is a significant likelihood that their classification will change. So, flow trading timing on these candidates could be brought forward.
- Monitoring Doosan Robotics’s market cap potentially nearing ₩3T and keeping an eye on the listing date of Ecopro Materials, we should make changes to the Mid→Large candidates from early December.
KRX Plans to Introduce Float Market Cap & Extreme Price Increases to KOSPI 200 Screening
- In addition to full market cap and trading value, float-adjusted market cap will be added as a quantitative screening tool.
- Regarding extreme price increases, KRX plans to utilize the deviation between the average daily market capitalizations for two, three, and six months leading up to the screening base date.
- We should consider designing trading setups that target stocks with relatively low free-float rates and high price volatility in recent months.
Costa Backs Paine Schwartz’s Lower Bid
- On the 18 September, Costa Group Holdings (CGC AU) announced A$3.20/share best and final Offer from Paine Schwartz Partners (PSP) down from the A$3.50/share NBIO in July.
- Costa’s shares wobbled – would they, won’t they be supportive? A break price beyond the undisturbed price loomed. Vanguard kicked out a chunk of shares below A$3.
- This morning Costa and PSP entered into a Scheme Implementation Deed. The transaction is expected to close in 1Q24. Key conditions are Costa’s shareholder vote and FIRB/SAMR/EU approval.
Quiddity Leaderboard F100/250 Dec 23: Dechra, Network International, and Other Potential Changes
- In this insight, we take a look at the potential index changes for F100 and F250 in the run-up to the December 2023 Rebalance.
- There could be a couple of intra-review changes in the next 2-3 months but the intra-review replacement names could depend on the timing of these changes.
- Separately, I see one regular ADD and DELETE for F250 in December 2023 but many names are close to the border and index change expectations could change if prices fluctuate.
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