In today’s briefing:
- Raysum (8890 JP): Hulic (3033 JP)’s Tender Offer a Done Deal
- K Bank IPO Preview
- China Banks; Challenged on Credit Quality Trends, with Selective Opportunities to Be Found
- HK Connect SOUTHBOUND Flows (To 13 Sep 2024); Weak Data, Weak Markets, but BABA and Banks!
- Quiddity Leaderboard HSCEI Dec 24: Two Changes Possible; US$265mn Capping Flows One-Way
- K-Bank’s IPO Details Out: Aggressive Pricing, but as a Crypto Play, It Might Surprise
Raysum (8890 JP): Hulic (3033 JP)’s Tender Offer a Done Deal
- Raysum Co Ltd (8890 JP) has recommended Hulic Co Ltd (3003 JP)’s tender offer at JPY5,913, a 94.2% premium to the last close price of JPY3,045.
- The tender offer runs from 17 September to 30 October (30 business days), with payment commencing from 7 November. The offer represents an all-time high.
- This is a done deal, as the irrevocable (Oasis) represents a 63.88% ownership ratio. With a knockout offer, the required 7.7% minority acceptance rate is easily achieved.
K Bank IPO Preview
- K Bank finally provided its IPO prospectus which includes more details of the IPO than what the company already announced about the IPO several days ago.
- Bankers used KakaoBank, SBI Sumishin Net Bank, and Bancorp Inc as comps. Average PBR of 2.56x was used to value K Bank.
- Some investors will question the inclusion of overseas comps including SBI Sumishin Net Bank and Bancorp in the valuation of K Bank.
China Banks; Challenged on Credit Quality Trends, with Selective Opportunities to Be Found
- In this China banks screen, we focus on the credit quality headwinds going forward and which are the better positioned banks to confront the challenge
- China bank shares’ PBV ratios have eroded over time, due to low growth and credit quality concerns; yet through our analysis of these bank, we see selective contrarian positive opportunities
- CCB is a core GEM bank buy for its deeply discounted valuations and strong balance sheet; Ping An Bank is the deep value contrarian pick; Minsheng is our fundamental sell
HK Connect SOUTHBOUND Flows (To 13 Sep 2024); Weak Data, Weak Markets, but BABA and Banks!
- SOUTHBOUND was a net buyer this week. Over five days, it was +HK$12.5bn on high gross volume, but all of that net buying was on Alibaba Group Holding (9988 HK).
- Alibaba Group Holding (9988 HK) became SOUTHBOUND-eligible on Tuesday, and mainland buyers bought US$2.1bn of BABA shares, more than total SOUTHBOUND net buys.
- Gross volumes were highest in months. This was a big week. Even bigger than just BABA. After BABA the story was banks buying.
Quiddity Leaderboard HSCEI Dec 24: Two Changes Possible; US$265mn Capping Flows One-Way
- The HSCEI serves as a benchmark to reflect the overall performance of the top 50 “Mainland China” securities listed in Hong Kong.
- In this insight, we take a look at the potential index changes and the resultant capping flows for HSCEI index rebal event in December 2024.
- At present, we see two ADDs/DELs based on the latest available data but the rankings can change until 30th September 2024.
K-Bank’s IPO Details Out: Aggressive Pricing, but as a Crypto Play, It Might Surprise
- Compared to its overseas peers, K-Bank’s high valuation still stands out due to a significant gap in net income size relative to market cap.
- The offering structure, with 50% secondary sales and weak lock-up commitments, means post-IPO float could spike to around 40%, making a stock price bump unlikely.
- K-Bank’s crypto-focused model might attract investors valuing it as a crypto play, potentially influencing IPO pricing and post-listing stock performance.
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