In today’s briefing:
- (Mostly) Asia-Pac M&A: TCM, BusinessOn Comm, Orora, Ramsay Health Care, Namoi Cotton, APM, CPMC
- HK Connect SOUTHBOUND Flows (To 16 Aug 2024); Big Net Buying On “Tiny” Overall Volume, ETFs Big
- PropertyGuru (PGRU US): EQT’s US$6.70 Offer Is A Done Deal
- HSCEI Index Rebalance: Three In-Line Changes, Two Big Surprises
- Mainland Connect NORTHBOUND Flows (To 16 Aug 2024): Banks Bought, Industry & Materials Sold
- Thoughts on Capturing the 7% Doosan Swap Spread
- Weekly Deals Digest (18 Aug) – JTower, Piolax, Fancl, China TCM, CPMC, PropertyGuru, Orora, WeRide
- Quiddity Leaderboard SSE50/180 Dec 24: SSE 50 Expected ADDs Vs DELs Trade Looks Interesting
- Last Week in Event SPACE: Aussie Tax Loss Basket, CK Infra, JTower, Porsche
- Peptron: Rights Offering of 120 Billion Won
(Mostly) Asia-Pac M&A: TCM, BusinessOn Comm, Orora, Ramsay Health Care, Namoi Cotton, APM, CPMC
- I tally 46 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal
- Two new deals were discussed this week: JTower (4485 JP) and BusinessOn Communication (138580 KS)‘s Tender Offers. Orora (ORA AU) approached by Lone Star. Ramsay Health Care (RHC AU) Offer also rumoured.
- Key updates took place on China Traditional Chinese Medicine (570 HK), Namoi Cotton Co Operative (NAM AU), APM Human Services (APM AU), and CPMC Holdings (906 HK).
HK Connect SOUTHBOUND Flows (To 16 Aug 2024); Big Net Buying On “Tiny” Overall Volume, ETFs Big
- SOUTHBOUND was again a net buyer, for HK$16.6bn this week (now 28wks in a row of net buying), on VERY LOW two-way volumes.
- Gross volumes were very low. Net volumes were decent. There were three ETFs in the top 5 SOUTHBOUND net buys this past week suggesting position unwinding.
- Top net buys other than the ETFs were China Mobile and Tencent (now 14 out of 15 days seeing net SOUTHBOUND buying)
PropertyGuru (PGRU US): EQT’s US$6.70 Offer Is A Done Deal
- PropertyGuru (PGRU US) entered into a definitive merger agreement with EQT (EQT SS) at US$6.70 per share, a 51.9% premium to the undisturbed price of US$4.41 (21 May).
- The shareholder vote is done (two-thirds voting threshold) due to TPG Inc (TPG US)/KKR & Co (KKR US)’s support and drag-along rights relating to REA Group Ltd (REA AU)’s shares.
- This is a clean deal as there is no dissenting condition or requirement for country antitrust approvals. At the last close and for end-of-year payment, the gross/annualised spread is 2.3%/6.4%.
HSCEI Index Rebalance: Three In-Line Changes, Two Big Surprises
- J&T Global Express (1519 HK) and New Oriental Education (9901 HK) will replace JD Logistics (2618 HK) and SenseTime (20 HK) in the HSCEI at the close on 6 September.
- The inclusion of J&T Global Express (1519 HK) is a big surprise and the stock could move higher over the next couple of weeks.
- The non-inclusion of PICC Property & Casualty H (2328 HK) is another surprise since we had the stock highly ranked in the universe.
Mainland Connect NORTHBOUND Flows (To 16 Aug 2024): Banks Bought, Industry & Materials Sold
- The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
- Last week saw NORTHBOUND net SELL RMB 5.0bn of A-shares. NORTHBOUND volumes were very, very low overall.
- HK large caps again outperformed Mainland large caps generally. Tech (HSTECH vs Star50 and ChiNext) saw even better HK outperformance.
Thoughts on Capturing the 7% Doosan Swap Spread
- Consider a two-phase strategy: go long on Bobcat spot and short futures until November 1. If Robotics’ price drops significantly, close the setup.
- If things go well, close the Bobcat futures short before November 1 and hold an unhedged Bobcat long until the listing date on November 25.
- Hold an unhedged long position during this trading suspension period because cancellation risk will be gone and Robotics may get stable inflows from MSCI inclusion.
Weekly Deals Digest (18 Aug) – JTower, Piolax, Fancl, China TCM, CPMC, PropertyGuru, Orora, WeRide
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments: WeRide (WRD US) aims to raise up to US$119 million through a Nasdaq IPO and US$321 million through a concurrent private placement.
- Event-Driven developments:China Traditional Chinese Medicine (570 HK), CPMC Holdings (906 HK), JTower (4485 JP), Piolax Inc (5988 JP), Fancl Corp (4921 JP), PropertyGuru (PGRU US).
Quiddity Leaderboard SSE50/180 Dec 24: SSE 50 Expected ADDs Vs DELs Trade Looks Interesting
- SSE 50 and SSE 180, respectively, aim to represent the performance of the 50 and 180 largest and most liquid A-share stocks listed on the Shanghai Stock Exchange.
- In this insight, we take a look at the names leading the race to become ADDs and DELs during the December 2024 index rebal event.
- Some of our index change expectations have changed since our last insight.
Last Week in Event SPACE: Aussie Tax Loss Basket, CK Infra, JTower, Porsche
- The Aussie Tax-Loss Selling Baskets worked very well on the sell side from 30 April through end-June 2024. What now? Unwind.
- CK Infrastructure Holdings (1038 HK) has now submitted an application for a secondary listing, not a dual-primary listing, on the London stock exchange. Admission expected on the 19th August.
- The right trade is to buy JTower (4485 JP) below terms. The really right trade is to already be an owner. IF you’re an arbitrageur, you know what to do.
Peptron: Rights Offering of 120 Billion Won
- On 16 August, Peptron (087010 KS) announced that it decided to increase capital through a rights offering worth about 120 billion won, involving 2.64 million shares (12.8% of outstanding shares).
- The expected rights offering price is 45,450 won, which is 22% lower than current price.
- We are negative on Peptron’s rights offering mainly due to much lower expected rights offering price, concerns about additional rights offering next 2-3 years, and continued lack of profitability.
💡 Before it’s here, it’s on Smartkarma
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