In today’s briefing:
- Samsung Electronics: Local Market’s Bet on a Buyback
- Softbank Short Resistance
- Link’s Scheme Approved but Time Running Out for Satisfying Conditions Precedent
- Nearmap Enters a SID with Thoma Bravo at A$2.10
- SK Square: The Excessive NAV Valuation Gap Is Likely to Narrow
- Shanghai/Shenzhen Northbound Connect: Weekly Moves (22 August 2022)
- Shanghai/Shenzhen Southbound Connect: Weekly Moves (22 August 2022)
- Shift Up Corp – A Rising Unicorn in the Korean Game Industry
- IGA Works – Data Tech Marketing SaaS Unicorn in Korea
- Nearmap Inks Scheme With Thoma Bravo
Samsung Electronics: Local Market’s Bet on a Buyback
- The local market is betting that Samsung Electronics will announce an additional shareholder return measure. Special dividends or buyback? They lean towards a buyback.
- It is unlikely that it will be another pref-skewed buyback. The Lee family needs cash now, so preventing the dilution of voting shares becomes the top priority.
- Hence, we should not have high expectations for a further decline in the pref discount. Instead, we should consider designing a short position aimed at block sales.
Softbank Short Resistance
- Softbank (9982 JP) is knocking on 6,000 compelling resistance that sets up a short trade just under this barrier. 5,300 lower pattern support is the level to test/break.
- RSI is also building energy for a powerful breakout from the triangle/flat range with a bear spin.
- 6,000 is a stiff barrier and if it caps will set in motion a higher degree decline to retest the 4,200-macro support line.
Link’s Scheme Approved but Time Running Out for Satisfying Conditions Precedent
- Shareholders approved the scheme at the scheme meeting. However, Link Administration (LNK AU) shares declined due to the slow progress in satisfaction of conditions precedent.
- Key conditions precedent is ACCC, FIRB, UK’s FCA and Central Bank of Ireland approvals. The wording in the Chairman’s address on the conditions precedent is incrementally negative.
- The downside to a deal break remains low. At the last close, the potential upside to the offer (10.1%) outweighs the downside (-3.8% to our A$4.21 price target).
Nearmap Enters a SID with Thoma Bravo at A$2.10
- Nearmap Ltd (NEA AU) entered a scheme implementation deed (SID) with Thoma Bravo at A$2.10 per share, a 39.1% premium to the undisturbed price.
- The offer price is attractive. The key conditions are shareholders and regulatory (FIRB & US antitrust) approvals. The scheme meeting is in November.
- At last close and for the end of November payment, the gross and annualised spread to the offer is 1.4% and 5.2%, respectively.
SK Square: The Excessive NAV Valuation Gap Is Likely to Narrow
- After the disappointing withdrawal of two IPOs (SK Shieldus and One Store) in 2Q 2022, shares of SK Square are starting to recover in the past seven weeks.
- On a NAV basis, shares of SK Square are deeply undervalued. The current valuation reflects a NAV holdco discount of nearly 72.5%.
- If we assume a moderate 50% holdco discount, this would suggest a NAV of 74,677 won per share, which would be 81% higher than current price.
Shanghai/Shenzhen Northbound Connect: Weekly Moves (22 August 2022)
- Inside is a recap of movements in the last week relating to the Hong Kong Stock Exchange -Shanghai and Shenzhen Northbound Connect facilities, broken down by company and industry.
- Overall, net inflow over the past week was ~US$1.2bn, split between Shanghai (US$0.9bn) and Shenzhen (US$0.3bn).
- The largest inflows were into CATL (300750 CH) and Hundsun Technologies (600570 CH). The largest outflows were in TBEA Co Ltd A (600089 CH) and Tongwei Co Ltd (600438 CH).
Shanghai/Shenzhen Southbound Connect: Weekly Moves (22 August 2022)
- Inside is a recap of movements in the last week relating to the Shanghai and Shenzhen-Hong Kong Stock Connect facilities, broken down by company and industry.
- Overall, the net outflow over the past week was ~US$0.21bn, split (-US$0.24bn) for Shanghai and (+US$0.3bn) for Shenzhen.
- The largest inflows were into China International Marine (2039 HK) and Li Ning (2331 HK). The largest outflows were in Meituan (3690 HK)and Kuaishou Technology (1024 HK).
Shift Up Corp – A Rising Unicorn in the Korean Game Industry
- Shift Up is a game developer in Korea that recently reached the unicorn status.
- The company is expected to launch Goddess of Victory: Nikke mobile game and Eve console game on PS5 sometime in late 2022/early 2023.
- The CEO of Shift Up Kim Hyung-tae previously worked as an art director at NCsoft. Shift Up is expected to complete an IPO in 2023.
IGA Works – Data Tech Marketing SaaS Unicorn in Korea
- IGA Works is an data tech, digital marketing SaaS unicorn in Korea. It is getting ready for an IPO by the end of 2022.
- IGA Works is a data technology company that provides a complete set of platforms and services for digital transformation and data-driven marketing.
- Recent local media accounts have mentioned that the the corporate value of IGA Works could exceed 2 trillion won.
Nearmap Inks Scheme With Thoma Bravo
- It was a curious thing Nearmap Ltd (NEA AU) agreeing to pay Thoma Bravo up to US$3mn if a transaction agreement did not result. Unless negotiations were well advanced.
- Mapping technology outfit Nearmap’s board has now unanimously backed Thoma Bravo’s A$2.10/share Offer by way of a Scheme of Arrangement.
- This is a done deal and accordingly, trading tight to terms.
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