In today’s briefing:
- LG Energy Flow Crunch with Additional Passives: K200/MSCI Up-Weight & LIT Inclusion
- S&P/ASX Quiddity Leaderboard Dec 22: Couple of High-Impact Intra-Review Changes Possible
- Kito (6409) – KKR/Crosby Takeover Launches – High Premium in Weak Year, But Still Light to Value
- Sands China (1928 HK): Positives And Negatives
- Softbank Seeking A “Strategic Alliance” Between Samsung Electronics and ARM?
- EQD | ASX200(AS51 Index): Fundamentals Strong but Hedge Long with Options Whilst Asian Risks Persist
- Schneider Electric/Aveva: Recommended Minorities Buyout
- Hong Kong CEO & Director Dealings: 22nd Sept – Pharmaron Beijing, Joinn Labs, Glory Sun Financial
LG Energy Flow Crunch with Additional Passives: K200/MSCI Up-Weight & LIT Inclusion
- LG Energy’s locked shares approach 96-97% of SO. Now, we will see an additional passive flow equivalent to another 1% of SO: KOSPI 200/MSCI Standard up-weights and LIT inclusion.
- Each passive impact is also substantial. The MSCI up-weight alone will cause an impact equivalent to 2.44x ADTV. It would be 2.20x for the KOSPI 200 and 1.03x for LIT.
- For the KOSPI 200 December review, the event-driven flow will likely focus on up-weights, including LG Energy. For LIT, we should consider an aggressive LONG/SHORT with LG Chem.
S&P/ASX Quiddity Leaderboard Dec 22: Couple of High-Impact Intra-Review Changes Possible
- In this insight, we take a look at the potential index changes for S&P ASX 200, 100, 50, and 20 in the run up to the December 2022 Rebalance.
- Tassal (TGR AU) and Nearmap Ltd (NEA AU) could get deleted from ASX200 before the December Rebalance, triggering high-impact intra-review additions. There should be two changes in the Review itself.
- Pilbara Minerals (PLS AU) is close to becoming an ASX 50 ADD and Lendlease Group (LLC AU) is close to becoming an ASX 50 DEL in the December 2022 review.
Kito (6409) – KKR/Crosby Takeover Launches – High Premium in Weak Year, But Still Light to Value
- KKR-Owned Crosby got SAMR approval to buy Kito Corporation (6409 JP) several days ago apparently and has launched its deal. It will be a 21-day tender. Very quick.
- It was a strong premium, but still a light price, at announcement. And that was when USD/yen was lower. Since then, earnings and forecasts are way up. But price unchanged.
- What looked like a likely candidate for bump agitation has seen none (that I am aware of) so this is pretty straightforward.
Sands China (1928 HK): Positives And Negatives
- Macau gaming companies gained this week as Hong Kong is expected to ease Covid restrictions, with Macau expected to follow suit.
- Last week, the six incumbent Macau gaming operators submitted tenders for the gaming concessions, together with last-minute interloper, the Genting Group.
- Sands China (1928 HK) has borrowed heavily and also leads other Macau gaming plays in dividends paid out to shareholders. This may not be lost on Macau officials.
Softbank Seeking A “Strategic Alliance” Between Samsung Electronics and ARM?
- Softbank’s Masayoshi Son is seeking a “strategic alliance” between Samsung Electronics (005930 KS) and ARM.
- Masayoshi Son plans to visit South Korea next month to meet with Samsung’s Lee Jae-Yong to discuss a potential strategic alliance between Samsung and ARM.
- Although the exact details of the investment stake in ARM remain uncertain, the probabilities are rising that Samsung could spend billions of dollars to buy a minority stake in ARM
EQD | ASX200(AS51 Index): Fundamentals Strong but Hedge Long with Options Whilst Asian Risks Persist
- Australia’s economy is robust and will benefit from long term Asian Growth
- Short-Term risks are increasing and ASX200 will not be immune
- Hedge longs using short term options to avoid any short-term turbulence
Schneider Electric/Aveva: Recommended Minorities Buyout
- Schneider has agreed a 3,100p (+13p interim) cash offer for the remaining 40.86% of AVEVA (41% premium, 26.7x EV/Fwd EBIT, 30.5x Fwd P/E), which some dub opportunistic.
- The offer price is in line with average multiples for the last 5Y, and there’s execution risk in the model transition of AVEVA, but riches may lie ahead.
- Gross spread is +0.8% (+interim), the market expects a sweetening (no large shareholder has irrevocably undertaken to tender); the daily average GBP volume since 23 August has been c.£62 million.
Hong Kong CEO & Director Dealings: 22nd Sept – Pharmaron Beijing, Joinn Labs, Glory Sun Financial
- The data in this insight is collated from the “shareholding disclosure” link on the HKEx website.
- Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. However, such disclosures are by no means an absolute.
- These insights may also flag those companies where shares have been pledged. Stocks mentioned include Pharmaron Beijing (3759 HK), Joinn Laboratories (H) (6127 HK), and Glory Sun Financial Group (1282 HK).
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
