In today’s briefing:
- Arb Trading with Stock Rights in Korea: A Basic Guide Featuring LG Display Offering
- Whispir (WSP AU): Soprano & Pendula Jostle for Control
- Quiddity Leaderboard ASX Mar 24: Allkem, Newmont, Costa, and Many More
- STAR50 Index Rebalance Preview: Four High Impact Changes in March
- [Blue Lotus Sector Update]: Latest Developments in Short Video Point to Possibilities
- Key Beneficiaries of a Potential Viva Republica IPO in 2024
- The First Semi Micron to Guide 1Q24; Conservative Now but Likely Raise Later
Arb Trading with Stock Rights in Korea: A Basic Guide Featuring LG Display Offering
- Unlike typical Korean stock rights arbitrage, LG Display’s significant equity offering and active stock futures trading anticipate a spread opening, akin to the recent Hanwha Ocean scenario.
- In contrast to Hanwha Ocean, the absence of major sellers, like KDB, sets this event apart. LG Electronics, the major shareholder with a 37.9% stake, intends to participate.
- Despite differences from Hanwha Ocean, LG Display’s high retail shareholder presence implies a substantial likelihood of stock rights overhang, even without players like KDB.
Whispir (WSP AU): Soprano & Pendula Jostle for Control
- On the 6 November, cloud communication outfit Whispir (WSP AU) announced a A$0.46/share unconditional Offer, in cash, from mobile messaging software play Soprano Design.
- The Offer price was a 92% premium to Whispir’s recent private placement, and a 60% premium to the undisturbed price. Whispir rejected the Offer.
- Pendula subsequently emerged with a A$0.57/share NBIO. Soprano “countered” with A$0.52/share. Pendula upped its indicative Offer to A$0.60/share. An independent expert’s fair value is between A$0.486/share-A$0.565/share.
Quiddity Leaderboard ASX Mar 24: Allkem, Newmont, Costa, and Many More
- In this insight, we take a look at the potential index changes for ASX 300, 200, 100, 50, and 20 in the run-up to the March 2024 index review.
- I expect one change for ASX 20, one change for ASX 100, and four changes for ASX 200 during the March 2024 index rebal event.
- Separately, there could also be one intra-review change for ASX 200 in February 2024.
STAR50 Index Rebalance Preview: Four High Impact Changes in March
- The review period for the March rebalance ends 31 January. We expect the changes to be announced 23 February with the implementation taking place after the close on 8 March.
- We expect the index committee to continue using a 6-month minimum listing history resulting in four changes to the index.
- One way turnover is estimated at 3.3% resulting in a one-way trade of CNY 4,717m. The impact on the deletions will be much larger than that on the inclusions.
[Blue Lotus Sector Update]: Latest Developments in Short Video Point to Possibilities
- We view both Weixin Video Account (WVA) and Douyin China as secondary assets to their respective parents, which in our view, may lead to them forming…(TBC)
- However, rising competition in the short-play (短剧) market may put the two businesses in more direct confrontation, which may delay or diminish the chance for two to work together;
- We view Tencent as the likely winner in the continuing evolution of short video as it considers various options to maximize the value of WVA traffic.
Key Beneficiaries of a Potential Viva Republica IPO in 2024
- It was reported in numerous local media that Viva Republica has sent several RFPs to several large domestic securities companies to be underwriters of a potential IPO in 2024.
- Viva Republica is one of the largest Korean fintech companies. Market value of Viva Republica is estimated at more than 9 trillion won.
- E World, Hanwha Securities, Hana Financial, and Korea Electronic Certification Co are major public companies that should benefit from the listing of Viva Republica.
The First Semi Micron to Guide 1Q24; Conservative Now but Likely Raise Later
- Driven by stronger PC/networking DRAM sales, Micron reports 5% stronger 4Q23 sales, 10-13ppts q/q margin improvement and 34% y/y decline in MOI to 5.2 months;
- Micron guides 1Q24 sales growth 8-16% q/q and 38-49% y/y and gross margin of 12%, beating Bloomberg consensus estimates by 6ppts;
- Rooms to raise: 1. 1Q24 sales of 18% q/q likely; 2. Turning profits sooner than expected; 3. +Free cash flow in 2024; 4. HBM3E for GH200/H200 to improve mix, margin.
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