In today’s briefing:
- The Latest on the Rumors Surrounding the Death of Chung Mong-Koo of Hyundai Motor Group
- Another Block Deal Sale of Ecopro Materials
- Fancl (4921 JP): Kirin (2503 JP)’s Light JPY2,690 Tender Offer
- Fancl (4921) TOB – Kirin (2503) Does the Inevitable and Takes Out Minorities. Lightish But…
- Helios Techno Holding (6927) – RS Won’t Bid Higher, Market Sees Value
- FII’s High Short Positions on Indian Markets : Crisis or Opportunity
- Block Deal Sale of 3.6% Shares of Enchem
- EQD | Is the HSI Correction Going to Continue? (Yes, For 1-2 Weeks)
The Latest on the Rumors Surrounding the Death of Chung Mong-Koo of Hyundai Motor Group
- Early this morning, rumors spread that Hyundai’s honorary chairman Chung Mong-koo was hospitalized and died, causing stock prices to surge, but Hyundai denied this news.
- Control of Hyundai hinges on increasing the stake in Mobis. Chung Eui-sun aims to keep Mobis’s stock low, but Chung Mong-koo’s health complicates timing and strategy.
- Mobis’s trading point depends on Chung Mong-koo’s health. Three scenarios: he’s healthy, critically ill, or deceased. Current rumors’ price impacts are unlikely to subside soon.
Another Block Deal Sale of Ecopro Materials
- Shares of EcoPro Materials are down 16% today to 112,300 won, due to another block deal sale of by BRV Capital in the after hours trading on 13 June.
- After the second block deal sale on 14 June, BRV’s stake declined further from 21.2% to 18.2%.
- This block deal sale at a big discount is likely to raise overhang concerns about further block deal sales by BRV Capital in the coming months/years.
Fancl (4921 JP): Kirin (2503 JP)’s Light JPY2,690 Tender Offer
- Fancl Corp (4921 JP) recommended Kirin Holdings (2503 JP)’s tender offer of JPY2,690, a 42.7% premium to the undisturbed price.
- The timing looks opportunistic as Fancl’s shares are down 20% YTD. The offer period is from 17 June to 29 July.
- While the offer is attractive vs peer multiples, it is light vs historical trading ranges. Securing the required acceptance rate could prove challenging as the offer price is light.
Fancl (4921) TOB – Kirin (2503) Does the Inevitable and Takes Out Minorities. Lightish But…
- Kirin Holdings (2503 JP) bought a 33% stake from the founder and several others in August 2019. Five years later, they are coming back for the rest.
- The price here is ¥2,690/share which is a 42.7% premium from yesterday’s close. Kirin paid 20+% more in 2019. Earnings fell, but they paid 37x NTM. This is 32x.
- This is lightish… but… this should get done. Activism would be difficult. There are enough shareholders who should be OK getting out. This should trade tight.
Helios Techno Holding (6927) – RS Won’t Bid Higher, Market Sees Value
- Today at noon JST, Rs Technologies (3445 JP) released an announcement on TDNet, “Our policy regarding the tender offer for Helios Techno Holding Co., Ltd. shares”
- In it, they indicated that the price offered – ¥825/share – is a price which “fully returns to general shareholders the increased enterprise value that will result from [transaction] synergies.”
- They acknowledge the market price is trading higher than the TOB Price, but say they have no plans to raise the Tender Offer Price. So now what? It depends.
FII’s High Short Positions on Indian Markets : Crisis or Opportunity
- It is important for investors to not get swayed by popular narratives and instead look at the data and historical patterns to make informed decisions.
- While a large short position by FIIs may seem concerning, it could actually signal a potential opportunity for positive returns in the Nifty 50 index.
- By understanding the reasons behind this contrarian move and the historical trends, investors can navigate bet when FII’s short positions are high.
Block Deal Sale of 3.6% Shares of Enchem
- After the market close on 14 June, it was reported that Woori PE/other investors will be selling 705,384 shares of Enchem in a block deal, representing 3.6% of outstanding shares.
- The block deal discount rate ranges from 6.9% to 8.92%, resulting in potential block deal sale price of 270,500 won to 276,500 won.
- We would not subscribe to this block deal and we are concerned about the valuations of Enchem after a sharp share price appreciation this year.
EQD | Is the HSI Correction Going to Continue? (Yes, For 1-2 Weeks)
- The Hang Seng Index correction has restarted this week, after a brief 1-week bounce.
- The index may continue to downtrend for another 1-2 weeks, then a reversal should come and the uptrend should restart.
- Look at the price support area in the 17500-17000 range, because that is where my model indicates the highest chance of LONG reversal.
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