In today’s briefing:
- Makino Milling (6135) – Trading Through Terms, May Need Investor Pushing
- A/H Premium Tracker (To 17 Jan 2025): AH Premia Fall Further, Lowest Avg Premium in 5yrs
- Last Week In Event SPACE: Shanghai Henlius, Malaysia Airports, Kokusai Electric, Smart Share
- Insignia Financial (IFL AU): CC Capital Bumps, Next Move Bain
- HK Connect SOUTHBOUND Flows (To 17 Jan 2025); Again Big Net Buying by SB, Again on Tech
- Quiddity Leaderboard CSI Medical Jun 25: 1-5x ADV to Trade; Sector-Neutral Rebal Trade Idea Inside
- GA Pack (468 HK): Shandong Xinjufeng’s Offer on the Cusp of Being Declared Unconditional
- Quiddity Leaderboard STAR 50/100 Mar 25: LONGs Up ~12% Vs SHORTs in a Month; More to Come
- (Mostly) Asia-Pac M&A: Jamco, AVJennings, Insignia Financial, Advanced Info Service/Thaicom
Makino Milling (6135) – Trading Through Terms, May Need Investor Pushing
- Nidec Corp (6594 JP) in late December proposed an unsolicited takeover of Makino Milling Machine Co (6135 JP), with a 3-month delay before launching a Tender Offer.
- Makino has asked for an extension to the start. Nidec has said no. Makino is going about this the wrong way. Makino needs to assume Nidec thought this through.
- Makino needs to open up the process to other bidders, and investors can help.
A/H Premium Tracker (To 17 Jan 2025): AH Premia Fall Further, Lowest Avg Premium in 5yrs
- AH Premia are lower over the last few weeks of holiday and this past week of heavy SOUTHBOUND buying on telcos, banks, brokers, insurers, tech, and airlines.
- The average AH Premium across all pairs is now the lowest it has been in five years.
- The VERY WIDE Tech spreads bifurcated. SMIC (981) and Shanghai Fudan Microelectric (1385) both continued strongly. China Rail Signal (3969) and Flat Glass (6865) widened again.
Last Week In Event SPACE: Shanghai Henlius, Malaysia Airports, Kokusai Electric, Smart Share
- LVC sits a blocking stake ahead of Shanghai Henlius Biotech (2696 HK)‘s shareholder vote on the 22nd Janaury. I’ve yet to see a solid rationality why they would block.
- Malaysia Airports Holdings (MAHB MK)extends the closing date to the 24th January. Shares held plus tendering is currently 86.18%. This is done.
- Kokusai Electric (6525 JP) was IPOed in September 2023. Lockup expiry is next week, and there is a likely large index event in ~10 weeks
Insignia Financial (IFL AU): CC Capital Bumps, Next Move Bain
- Insignia Financial (IFL AU) disclosed a revised non-binding privatisation offer from CC Capital at A$4.60, a 7.0% premium compared to its previous A$4.30 offer and Bain’s A$4.30 offer.
- While the revised CC Capital offer is attractive compared to historical trading ranges, there remains valuation headroom for Bain to engage in a bidding war.
- The presence of several substantial shareholders facilitates a bidding war. The board should provide both bidders with due diligence access to promote the auction.
HK Connect SOUTHBOUND Flows (To 17 Jan 2025); Again Big Net Buying by SB, Again on Tech
- SOUTHBOUND gross trading activity was again not stronger per day than the previous several weeks, but SB Net Buying was again BIG. Given the change in Tencent, remarkable even.
- The story was follow-through, but SMIC and Xiaomi were also big buys. This is shaping up to be a “let’s buy what US Persons cannot” moment.
- No sectors saw net selling through CCASS data five days to Weds. Top 10 activity was quite concentrated this week. Very few stray names.
Quiddity Leaderboard CSI Medical Jun 25: 1-5x ADV to Trade; Sector-Neutral Rebal Trade Idea Inside
- CSI Medical Service represents the top 50 largest and most-liquid stocks involved in medical devices, medical care, medical informatization, and other medical theme from the Shanghai, Shenzhen and Beijing Exchanges.
- In this insight, we take a look at the potential ADDs and DELs leading the race for the semiannual index rebal event in June 2025.
- We expect up to four ADDs and four DELs for the CSI Medical Service index during this index review event based on the latest available data.
GA Pack (468 HK): Shandong Xinjufeng’s Offer on the Cusp of Being Declared Unconditional
- Greatview Aseptic Packaging (468 HK)’s offer from Shandong Xinjufeng Technology Packaging (301296 CH) is HK$2.65 with a 50% minimum acceptance condition. The first closing date is 21 January.
- The Board has recommended that shareholders not accept. However, based on CCASS data, including acceptances, Shandong Xinjufeng’s shareholding was 46.41% of outstanding shares as of 17 January.
- Absent an unlikely competing offer, the offer is on the cusp of being declared unconditional. At the last close and 4 February payment, the gross/annualized spread is 3.1%/128%.
Quiddity Leaderboard STAR 50/100 Mar 25: LONGs Up ~12% Vs SHORTs in a Month; More to Come
- STAR 50 Index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
- STAR 100 index tracks the next 100 names (51st-150th ranks) and it represents the mid-cap segment of the STAR market.
- In this insight, we take a look at the potential ADDs/DELs for the STAR 50 and STAR 100 indices for the March 2025 index rebal event.
(Mostly) Asia-Pac M&A: Jamco, AVJennings, Insignia Financial, Advanced Info Service/Thaicom
- I tally 51 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. I’ve yet to see a solid rationality why they would block.
- One new deal was discussed this week: Bain’s Tender Offer for Jamco Corp (7408 JP). Ho Bee Land Ltd (HOBEE SP) also countered for AVJennings Ltd (AVJ AU).
- Key updates/news took place on: Insignia Financial (IFL AU), Lifestyle China (2136 HK), and Advanced Info Service (ADVANC TB)/Thaicom Pcl (THCOM TB).
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