In today’s briefing:
- Shinko Electric (6967 JP): Tender State of Play
- Boral (BLD AU) Rejects Seven’s Offer
- SciClone Pharma (6600 HK): GL Capital Consortium Reload?
- Tencent (700 HK): Gross Margins, Cost Cutting Likely to Be Focus Going into Q4 FY23 Results
- SciClone Pharma (6600 HK): Privatisation Déjà Vu All over Again?
- Snow Peak: Cheap MBO
- Quiddity Leaderboard SET50 Jun 24: Reference Period Begins; Three Changes Likely; Some Trade Ideas
- JSE Mar24 Rebalance: Auction Analytics
- Orecorp (ORR AU): Well Played Perseus
- EQD | KOSPI 200 WEEKLY Bottom May Be Behind the Corner
Shinko Electric (6967 JP): Tender State of Play
- Shinko Electric Industries (6967 JP) pre-conditional tender offer from the JIC alliance is JPY5,920 per share. The gross spread has narrowed from a high of 10.4% to the current 4.2%.
- The narrowing spread can be attributed to the JSR Corp (4185 JP) tender launch, which suggests likely China SAMR approval, and Ibiden Co Ltd (4062 JP) giving up recent gains.
- Like JSR, we expect China SAMR to allow JIC to withdraw its Shinko merger control filing. There is a good chance the tender launches before the guided late August start.
Boral (BLD AU) Rejects Seven’s Offer
- Back on the 19 Feb, Seven Group Holdings (SVW AU) made a cash/scrip Offer for Boral Ltd (BLD AU) shares not owned, with certain tendering thresholds triggering more cash.
- Boral has now recommended shareholders to reject the Offer after the independent expert (Grant Samuel) concluded the Offer is neither fair nor reasonable, supporting the view of Boral’s board.
- Grant Samuel backed out a price range of $6.50-$7.13/share, versus SGH’s Offer of $5.96-$6.19/share; and up to $6.39/share including the conditional payments. SGH’s terms were best & final.
SciClone Pharma (6600 HK): GL Capital Consortium Reload?
- A little over a year ago, shareholders approved Sciclone Pharmaceuticals (6600 HK)‘s buyback, which lifted GL Capital’s holding to 31.63% from 28.09%, enabling creep provisions.
- After the share price gained 14% yesterday, SciClone was suspended pursuant to the Code on Takeovers and Mergers before trading commenced this morning. Mmm.
- GL Capital, together with CDH Investments, Ascendent Capital Partner, Ocean Falcon Limited, and Boying Investments Limited, took SciClone private in 2017. Time for another privatisation?
Tencent (700 HK): Gross Margins, Cost Cutting Likely to Be Focus Going into Q4 FY23 Results
- Tencent is due to release FY23 results tomorrow morning after the HK close. The earnings call is scheduled for 14:00 SAST.
- The market is expecting 1.8% QoQ revenue growth, 8.6% YoY. Strong QoQ revenue growth of 10% is expected for the advertising segment.
- QoQ revenue growth for the gaming sector is expected to decline by 4.9%. Domestic gaming revenue is expected to fall by 7.6%, international gaming revenue expected to increase by 9.6%.
SciClone Pharma (6600 HK): Privatisation Déjà Vu All over Again?
- After rising 14% on Monday, Sciclone Pharmaceuticals (6600 HK) entered a trading halt “pending the release of an announcement pursuant to the Code on Takeovers and Mergers.”
- SciClone US was listed on NASDAQ in March 1992 and was privatised in October 2017 by a GL Capital-led consortium. It was relisted on the HKEx on 3 March 2021.
- A GL Capital-led consortium will likely once again lead the privatisation. An offer price at or slightly above the IPO price (HK$18.80) would be sufficient to get the vote up.
Snow Peak: Cheap MBO
- Snow Peak agreement with Bain Capital to take the outdoor brand private next month seems to have been in the works for a couple of years.
- Although sales are expected to rebound this year to near record highs, Snow Peak insists the domestic camping boom is over and will look at long-term growth overseas instead.
- Even so, the MBO price looks cheap. Snow Peak is likely to see a rebound in domestic sales in FY2024 and its plans for overseas expansion are solid.
Quiddity Leaderboard SET50 Jun 24: Reference Period Begins; Three Changes Likely; Some Trade Ideas
- The SET50 index tracks the performance of the top 50 largest and most liquid names listed in the Stock Exchange of Thailand (SET).
- In this insight, we take a look at the potential ADDs/DELs for SET during the index rebal event in June 2024.
- The 3-month reference period used for average market cap rankings started on 1st March 2024 and as things stand, there could be three ADDs/DELs in June 2024.
JSE Mar24 Rebalance: Auction Analytics
- JSE indices were rebalanced in the closing auction on Friday.
- Turnover for the day on the JSE was R59.3bn, R44bn traded in the closing auction (74%).
- Turnover at the December rebalance was R60bn, where around half traded in the closing auction.
Orecorp (ORR AU): Well Played Perseus
- After Perseus (PRU AU) announced it had secured Tanzanian Fair Competition Commission approval, Orecorp (ORR AU) continued to sit on its hands as, technically, Silvercorp (SVM CN) terms were superior.
- PRU added 2% overnight bringing its stake to 22% vs SVM’s 21%. SVM said they won’t extend beyond the 22nd March. Something had to give.
- This morning, PRU bumped its all-cash Offer to A$0.575/share (from A$0.55/share), with 15.6% of shares out intending to accept. SVM have five business days to counter.
EQD | KOSPI 200 WEEKLY Bottom May Be Behind the Corner
- The KOSPI 200 INDEX is falling for the second week in a row, but the pullback is modest so far.
- This pullback is probably just another occasion to buy at better prices, however some more pullback may be in store between here and the end of the week.
- The support area where we think a LONG trade has good probability of success based on our models is between 356 and 350.
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