In today’s briefing:
- Nippon Yusen (9101) BIG Buyback Announced
- SF Holding (002352 CH): H-Share Listing & Index Implications
- Toshiba (6502 JP): Risk/Reward as 1Q Results and Tender Start Approach
- StubWorld: Takara Holdings Trading “Rich”
- Preparing for ATS Arrival in Korea: Strategies to Adapt to Changing Intraday Flow Patterns
- KT&G: First Shares Cancellation in 14 Years
- Overhang Concerns from Remaining Irum TNC Exchangeable Bonds Conversion on Ecopro BM Shares
- Tanzanian Reset And Indiana’s Arbitration
- EQD | NIFTY Index WEEKLY Correction May Be Ending
Nippon Yusen (9101) BIG Buyback Announced
- In March, NYK announced a new Mid-Term Management Plan discussed in Nippon Yusen – New MidTermPlan = New Shareholder Return Policy. They promised a full Shareholder Return Policy in May.
- There was limited new SRP discussion in the 9 May earnings announcement. The MTMP suggested ¥200bn over 2yrs. The (Japanese) earnings announcement did too. Then May ended.
- Now the Buyback Plan is out. ¥200bn over 9mos. That is different. This could move.
SF Holding (002352 CH): H-Share Listing & Index Implications
- S.F. Holding (002352 CH) could raise between HK$26-33bn (US$3.4-4.2bn) in its H-share listing depending on the H-shares discount and exercise of the overallotment option.
- The H-shares could get Fast Entry to certain indices and regular entry to others depending on the number of shares that are allotted to cornerstone and/or strategic investors.
- The H-shares will be added to Southbound Stock Connect following the end of the price stabilisation period. Inclusion in the Hang Seng Composite Index will come later.
Toshiba (6502 JP): Risk/Reward as 1Q Results and Tender Start Approach
- On 28 July, Toshiba Corp (6502 JP) disclosed that JIP delayed the tender start to “sometime in August 2023” vs the target “in the last ten days of July 2023.”
- Toshiba reports 1Q results on 7 August. A solid 1Q will undermine the Board’s recommendation of the offer in part on the premise that the IFA’s DCF valuation is unrealistic.
- The current low spread points to a done deal, partly due to shareholder fatigue. However, risks persist as the rerating of peers continues to chip away at the offer’s attractiveness.
StubWorld: Takara Holdings Trading “Rich”
- On an implied stub and simple ratio, Takara Holdings (2531 JP) is trading rich to 60.9%-held Takara Bio Inc (4974 JP).
- Preceding my comments on Takara are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
Preparing for ATS Arrival in Korea: Strategies to Adapt to Changing Intraday Flow Patterns
- Nextrade aims to secure the business permit within the next year’s second half. They intend to launch their services by the end of next year or early the following year.
- All eyes are focused on the proposal to be operational from 8:30 AM to 11:59 PM, with the afternoon call auction session running from 3:00 PM to 6:00 PM.
- It would be crucial to observe how the elongation of the time period for specific issues to be reflected in prices could potentially lead to changes in intraday flow patterns.
KT&G: First Shares Cancellation in 14 Years
- KT&G announced that it will buy back 3.47 million shares (2.5% of outstanding shares) and cancel them. This would be the first share cancellation for KT&G in 14 years.
- If the company’s DPS is 5,200 won for 2023 fiscal year, this would represent dividend yield of 6.2% at current prices.
- Although we have a positive view on KT&G’s share buyback and cancellation of 3.47 million shares, the company could do much more to improve its shareholder returns to its shareholders.
Overhang Concerns from Remaining Irum TNC Exchangeable Bonds Conversion on Ecopro BM Shares
- It has been reported in local media that investors in exchangeable bonds issued by Irum TNC converted about 0.24 million shares of EBs into Ecopro BM equity on 26 July.
- There are increasing concerns that the remaining EB could be released into the market in the coming months.
- After the poor 2Q 2023 results, we believe the consensus is likely to reduce sales and profit estimates of Ecopro BM from 2023 to 2025.
Tanzanian Reset And Indiana’s Arbitration
- Back in 2018, mini-exploration mining play – rare earths, gold, and base metals – Indiana Resources (IDA AU) had its Tanzanian retention licence revoked. With no compensation.
- Indiana pursued its claim through the World Bank-backed ICSID’s tribunal, which subsequently ordered the Tanzanian government to pay US$109.5mn in damages and costs, versus Indiana’s current market cap of US$21mn.
- Not surprisingly, the Tanzanian government is pushing back on the claim. The question is whether Indiana will ever get paid. And Indiana’s not the only company seeking revocation retribution.
EQD | NIFTY Index WEEKLY Correction May Be Ending
- The NIFTY Index has been falling for 2 weeks and is reaching mildly OVERSOLD territory. If this was a retracement during the main rally, it may be time to BUY.
- The Market Reversal Matrix’s shows a bullish pattern, the time+price combined probability of success for LONG trades from current prices, after 2 weeks down, is >66%.
- Price area to go LONG: 19400 to 18792, you can go LONG this week and also next week, if down (CC=-3).
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