In today’s briefing:
- Riso Kyoiku (4714) Partial Tender (¥320/Sh) Followed by Third Party Dilution To Get Hulic to 51%
- Riso Kyoiku (4714 JP): Hulic (3003 JP)’s Partial Tender Offer
- Sep24 Nikkei 225 Rebal – Now 1 ADD, 1 DELETE; Fastie+TEL Still Where the Fun Is
- Azure Minerals (AZS AU): FIRB Approval Concerns Are Overdone
- Samsung Electronics: Block Deal Sale of 5.2 Million Shares by Lee Boo-Jin
- KOSDAQ150 Index Rebalance Preview: Potential Adds Still Outperforming
- STAR100 Index Rebalance Preview: 10 Changes as Potential Adds Outperform
- Special Changes in KOSDAQ 150: Deletion (NKMAX) + Addition (GI Innovation)
- SET50 Index Rebalance Preview: Three Potential Changes in June
- Naspers (NPN) X Prosus (PRX): Performance for Q1 2024, Gains Driven by Tencent, NAV Growth
Riso Kyoiku (4714) Partial Tender (¥320/Sh) Followed by Third Party Dilution To Get Hulic to 51%
- Today, cram school operator Riso Kyoiku (4714 JP) and 20% owner real estate developer Hulic Co Ltd (3003 JP) amended their Capital and Business Alliance agreement.
- Hulic will buy 25.5% of shares out in a Partial Offer at +43.5% vs last. Then post-tender, they will buy shares at last from the company to go to 51.%
- The founder will sell his 10%. The rest is interesting. It’s a high ROE high div stock. Some own it from higher. Pro-ration is tough to estimate. But we try.
Riso Kyoiku (4714 JP): Hulic (3003 JP)’s Partial Tender Offer
- Riso Kyoiku (4714 JP) announced a partial tender offer and third-party allotment with Hulic Co Ltd (3003 JP), the largest shareholder. Hulic aims to make Riso Kyoiku a consolidated subsidiary.
- The offer is for a maximum of 39.4 million shares (23.15% post-allotment ownership ratio) at JPY320 per share, a 46.8% premium to the undisturbed price (5 April).
- Irrevocable (from the founder and Chairman) represents a 9.26% post-allotment ownership ratio. The offer is light, but there is no minimum acceptance condition.
Sep24 Nikkei 225 Rebal – Now 1 ADD, 1 DELETE; Fastie+TEL Still Where the Fun Is
- The March 2024 rebal is done and dusted. When announced, there were 2 prospective DELETEs for Sep 2024. Now there is only one expected DELETE, Nippon Paper Industries (3863 JP).
- The one likely inclusion is therefore Ryohin Keikaku (7453 JP). But there is more fun afoot with Fast Retailing (9983 JP) and Tokyo Electron (8035 JP).
- The two stocks – of totally different sectors – interact somewhat, both in determining Nikkei 225 direction, and their relative potential selldowns.
Azure Minerals (AZS AU): FIRB Approval Concerns Are Overdone
- Azure Minerals (AZS AU) shareholders have overwhelmingly approved the dual-track bid from Sociedad Quimica y Minera de Chile (SQM US) and Hancock. The scheme offer is A$3.70 per share.
- The shares fell 7%, seemingly due to concerns about FIRB approval sparked by FIRB’s request for an extension on 3 April and today’s AFR article on China’s Australian lithium holdings.
- FIRB approval should be forthcoming due to Tianqi Lithium (9696 HK) small indirect interest in Andover, Lithium Power International (LPI AU) precedent, and SQM and Tianqi’s strained relationship.
Samsung Electronics: Block Deal Sale of 5.2 Million Shares by Lee Boo-Jin
- After the market close on 8 April, it was reported that Lee Boo-Jin will sell 5,247,140 shares of Samsung Electronics in a block deal (up to 443 billion won).
- The expected block deal sale price is 83,700 to 84,500 won per share, which represents a discount rate of up to 0.95% compared to the closing price on 8 April.
- We are positive on this block deal sale and on Samsung Electronics. We would take the deal.
KOSDAQ150 Index Rebalance Preview: Potential Adds Still Outperforming
- With nearly 85% of the review period complete, there could be 15 changes for the KOSDAQ 150 Index (KOSDQ150 INDEX) at the June rebalance.
- Prior to the June rebalance, C&C International (352480 KS) will replace CanariaBio (016790 KS) in the index following CanariaBio being listed as an Administrative Issue and an Investment Attention Issue.
- The potential adds have outperformed the potential deletes and the KOSDAQ 150 Index since the start of the review period. Lighten positions ahead of the end of the review period.
STAR100 Index Rebalance Preview: 10 Changes as Potential Adds Outperform
- The review period for the June rebalance ends 30 April. We expect the changes to be announced 31 May with the implementation taking place after the close on 14 June.
- We forecast 10 changes for the index, including migrations between the STAR 100 Index and the SSE STAR50 (STAR50 INDEX).
- Excluding the migrations, the potential adds have outperformed the potential deletes over the last few months and that could continue as we head to the end of the review period.
Special Changes in KOSDAQ 150: Deletion (NKMAX) + Addition (GI Innovation)
- On 8 April, the Korea Exchange announced special changes to KOSDAQ 150. NKMAX will be excluded from KOSDAQ 150 and it will be replaced by GI Innovation.
- NKMAX was designated as “administrative issue” and “investment attention issue” on 8 April 2024, which resulted in the Korea Exchange deciding to remove this stock from KOSDAQ 150.
- We believe that this inclusion of GI Innovation in KOSDAQ 150 is likely to further positively impact its share price.
SET50 Index Rebalance Preview: Three Potential Changes in June
- Nearing the halfway mark in the review period, we see 3 potential changes for the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) at the June rebalance.
- Passive trackers will need to buy between 1.2-4.5 days of ADV on the inclusions and sell 0.9-1.3 days of ADV on the deletions.
- Berli Jucker (BJC TB) continues to be a close add on liquidity while Gulf Energy Development (GULF TB) and Intouch Holdings (INTUCH TB) continue to be close deletes.
Naspers (NPN) X Prosus (PRX): Performance for Q1 2024, Gains Driven by Tencent, NAV Growth
- Naspers and Prosus outperformed the benchmark by a large margin, ending the quarter up 7.3% and 6.7%, respectively. The Capped SWIX finished the quarter down 2.3%.
- Tencent was up 3.5% in HKD and 6.5% in ZAR.
- Tencent currently makes up 74% of Prosus’ NAV, down 1 percentage point from 75% at the start of the year.
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