In today’s briefing:
- Quiddity Mar25 Nikkei 225 Rebal: Likely 2 IN, 2 OUT, Again; Minimal Surprise Factor
- Impact on Korea Zinc’s Balance Sheet and Debt Ratios Post Massive Debt Raise Proposed by Choi Family
- Shinko Electric (6967 JP) Takeover – Still Buy Dips, and Ibiden (4062 JP)
- (Mostly) Asia-Pac M&A: Descente, Shin Kong Financial, T Gaia, Shinsegae E&C, MPHB, Pacific Smiles
- Last Week in Event SPACE: Shin Kong/Taishin, ASMPT, Korea Zinc/Young Poong Precision, Sigma Health
Quiddity Mar25 Nikkei 225 Rebal: Likely 2 IN, 2 OUT, Again; Minimal Surprise Factor
- The Sep24 Nikkei 225 Rebal was odd. They could have done 3. They did 2. For now, I see 2 IN and 2 OUT for the Mar25 Nikkei 225 Rebal.
- There is also a capping event for Fast Retailing which on mild outperformance could become a double-capping event.
- There is a bit of a tech bent to potential ADDs. Some Consumer Goods stocks need stock splits to get in. The Committee will regret not adding PPIH last time.
Impact on Korea Zinc’s Balance Sheet and Debt Ratios Post Massive Debt Raise Proposed by Choi Family
- We discuss the impact on the balance sheet and debt ratios of Korea Zinc’s efforts to conduct a massive debt increase to buyback and cancel shares.
- Although the Choi family may consider raising further debt to increase the tender offer price even further, we believe this could pose further balance sheet risk on Korea Zinc.
- We provide sensitivity analysis of higher debt on the interest coverage ratios of Korea Zinc.
Shinko Electric (6967 JP) Takeover – Still Buy Dips, and Ibiden (4062 JP)
- In August, Shinko Electric Industries (6967 JP) announced that the JIC consortium Tender Offer due to be launched by end-August would be delayed. Next update? January 2025.
- Everyone had expected a delay, but the stock fell. Then tech/AI fell out of bed, Ibiden crashed, China export restrictions noise/pushback caused further upset. But Ibiden and tech are rebounding.
- At 9% it was a raging buy;post-dip at 7% it was good. Now it’s 6+%. Still wide, still interesting, still stable but year-end path dependency… So I still like Ibiden.
(Mostly) Asia-Pac M&A: Descente, Shin Kong Financial, T Gaia, Shinsegae E&C, MPHB, Pacific Smiles
- I tally 44 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
- Three new deals discussed this week: T Gaia (3738 JP)‘s and Shinsegae E&C (034300 KS) Tender Offers, and MPHB (MPHB MK)‘s SCR. Plus ASMPT (522 HK) in the crosshairs. Again.
- Key updates took place on: Sigma Healthcare (SIG AU), Descente Ltd (8114 JP), Shin Kong Financial Holding (2888 TT), Pacific Smiles (PSQ AU), and Greatview Aseptic Packaging (468 HK).
Last Week in Event SPACE: Shin Kong/Taishin, ASMPT, Korea Zinc/Young Poong Precision, Sigma Health
- Taishin‘s bid clearly has governance/related party issues and a significant portion of the “non-Taishin” reps on the Shin Kong Board had issues. October 9th passage is not a done deal.
- KKR’s “bid” for ASMPT (522 HK) has all the hallmarks of the “approach” by PAG last year. Which came to nought. From a regulatory standpoint, it’s unlikely to get up.
- Never a dull moment for Korea Zinc (010130 KS). The Choi family makes Offers for KZ and Young Poong Precision (036560 KS) (YPP). Then MBK counters for both.
💡 Before it’s here, it’s on Smartkarma
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