In today’s briefing:
- Timing Stub Trade on Amorepacific Group with a Key Passive Inflow Event Coming Up
- HUUUGE Ushio (6925) Buyback
- Silver Lake And Genesis Duke It Out For St Barbara’s Flagship
- HSTECH Index Rebalance: Float & Capping Changes Lead to US$768m Two-Way Trade
- CK Asset Holdings/Civitas Social Housing: Recommended Offer
Timing Stub Trade on Amorepacific Group with a Key Passive Inflow Event Coming Up
- AmoreG has been closely moving relative to Amorepacific Corp (090430 KS) over the past few months, but starting from mid-April, it rapidly entered a downward diversion phase.
- It appears to have experienced greater sensitivity towards the recent tensions in Sino-Korean relations, possibly due to its higher price correlation with the Chinese market.
- The issue lies in the timing of entry aimed at reversion, and there may be one upcoming passive inflow event that we should pay attention to in this regard.
HUUUGE Ushio (6925) Buyback
- Ushio Inc (6925 JP) reported earnings on 11 May, with revenue +17.6% on the year, OP +21.4%, and NP +8.7% on the year. Div was unchanged at ¥50/share.
- Forecasts are for revenue +7.4%, OP -21.2%, and NP -27% (¥90.6/EPS). But importantly, the company also announced a HUUUUUGE Buyback.
- Buying ≦20mm shares (17.0%) spending ≦¥30bn from 29May2023 to 10May2024. That’s 13.3% at the 12 May close. How this will work is unknown. There’s less detail than one would want.
Silver Lake And Genesis Duke It Out For St Barbara’s Flagship
- After abandoning its reverse merger, St Barbara (SBM AU) confirmed it will sell its flagship Leonora gold project to Genesis Minerals (GMD AU) for $600mn (cash and GMD scrip).
- That transaction appeared all stitched up, until Silver Lake Resources (SLR AU) gatecrashed the party with a non-binding proposal for the Leonara asset. SBM’s board rejected the competing proposal.
- SLR has now tweaked terms to address SBM concerns. Back in SBM’s court. GMD has matching rights if SBM sides with SLR.
HSTECH Index Rebalance: Float & Capping Changes Lead to US$768m Two-Way Trade
- There are no constituent changes for the Hang Seng Tech Index (HSTECH INDEX) in June but there are some free float changes and a bunch of capping changes.
- Estimated one-way turnover is 3.2% leading to a one-way trade of HK$3bn (US$384m). There are 3 stocks with over 1 day of ADV to trade.
- Trip.com (9961 HK) has over 1x ADV to buy from Hang Seng Tech Index (HSTECH) trackers. The stock is also an add to the Hong Kong Hang Seng Index (HSI).
CK Asset Holdings/Civitas Social Housing: Recommended Offer
- Property developer/investor CK Asset Holdings made a 80p/share (+1.425p dividend) cash takeover offer for value-destroyer Civitas Social Housing REIT, implied equity value £485million, 44% premium and 26.7% discount to NAV.
- Before offer announcement, Civitas traded at 50% discount to NAV, 8.1% dividend yield (covered <1x). Although my fair value estimate (dividend discount model) is 83p, shareholders will likely cash in.
- Spread is 1.26%/3.91% (gross/annualised, assuming all payments by 11 September for simplicity). Readacross: Triple Point (SOHO LN), at 49% discount/NAV, 10.1% dividend yield (covered 0.92x), could also be a target.
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