In today’s briefing:
- NTT’s Really Big/Weird Stock Split Goes Ex- 29 June 2023. Now With D-Points!
- CFD Liquidation in Korea: Posco DX, Celltrion Siblings, and Potential Next Targets
- Poly Culture (3636 HK)’s Pre-Conditional Merger By Absorption
- Bain Capital/SoftwareOne: Room for a Better Offer
- StubWorld: Swire Sells US Coke Ops To Parent
- BBL/KBANK: Hitting a Wall
NTT’s Really Big/Weird Stock Split Goes Ex- 29 June 2023. Now With D-Points!
- NTT (Nippon Telegraph & Telephone) (9432 JP) is splitting its stock 25:1 on record date 30 June 2023. That means it goes ex- at the new price on 29 June.
- The day before, the stock is up nearly 5% on heavy volume. This is likely punters buying before it splits so one round lot will be <¥20,000 vs ~¥420,000 yesterday.
- But there is a new attraction for retail, somewhat un-noticed.
CFD Liquidation in Korea: Posco DX, Celltrion Siblings, and Potential Next Targets
- Yesterday and today, there have been observed cases in Korea that are suspected to be caused by a sudden drop in stock prices due to CFD liquidation trading.
- Yesterday it was Celltrion with its two siblings, and today it is Posco DX. I have found candidates that may have similar stock price movements.
- These candidates experienced a notable increase in their stock prices from late March to mid-April, and they have a relatively high margin transaction ratio.
Poly Culture (3636 HK)’s Pre-Conditional Merger By Absorption
- After shares were suspended on the 20 June, art and culture play Poly Culture Group Corp H (3636 HK) has announced a pre-conditional privatisation at HK$8.88 per H-share.
- This Offer, from SOE Poly Group, is by way of a Merger by Absorption, which incorporates a Scheme-like vote. There is no tendering condition.
- The premium to last close is 77.6%; and a 112.5% premium to the five-day closing average.
Bain Capital/SoftwareOne: Room for a Better Offer
- Bain Capital has made a CHF 18.5/share offer proposal for SoftwareONE Holding (SWON SW), 33% premium, CHF 2,933 million implied equity value, 9.8x EV/NTM EBITDA and 18.7 Fwd P/E.
- The offer is supported by founding shareholders (c.29.1% aggregate), who’d co-invest alongside Bain. SoftwareOne, in the middle of a turnaround, trades cheap vs. peers and my fair-value estimate (CHF 19.92/share).
- On IBES estimates, without significant cost-cutting, at CHF 20/share, Bain could achieve 18.6% IRR by year 6, thus could offer more. Gross spread is 3.7%. Considering prospects, I’d be long.
StubWorld: Swire Sells US Coke Ops To Parent
- Swire Pacific (19 HK) has announced it is selling its US Coca-Cola ops to its parent for HK$30.4bn (US$3.9bn). That’s 40% of its market cap.
- Preceding my comments on Swire 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%.
BBL/KBANK: Hitting a Wall
- Bangkok Bank Public (BBL TB) is trading very close to its historic highs versus Kasikornbank PCL (KBANK TB) and keeps hitting a wall at that level.
- The number of NVDRs issued on Bangkok Bank Public (BBL TB) has been rangebound while there has been a steady decrease for Kasikornbank PCL (KBANK TB).
- At current level, the risk/reward looks favourable to a short Bangkok Bank Public (BBL TB) / long Kasikornbank PCL (KBANK TB) position for the near to medium term.
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