In today’s briefing:
- SK Telecom (017670 KS): Foreign Room Increase Has Implications
- Merger Arb Mondays (17 Jul) – Chindata, Eoflow, JSR, IMAX, Mason, Estia, Musgrave, Origin, InvoCare
- Weekly Deals Digest (16 Jul) – Socionext, Tryt, IMAX, Shougang Resources, Invocare, Musgrave
- Taiwan Dual-Listings Monitor: TSMC Premium Staying High Ahead of Earnings This Week; UMC at Par
- High Conviction Shift: Upbeat Quarter, Share Price Up More Than 39% YTD and There’s Further Upside
- Liquid Universe of European Ordinary and Preferred Shares: July‘23 Report
SK Telecom (017670 KS): Foreign Room Increase Has Implications
- Foreign investors have been selling SK Telecom (017670 KS) for over a year now. That has taken foreign room from near zero to close to 15% now.
- That could mean index inclusion for SK Telecom (017670 KS) with timing dependent on when the 15% foreign room threshold is crossed.
- SK Telecom (017670 KS) has performed in line with KT Corp (030200 KS) but trades at higher valuations on most parameters.
Merger Arb Mondays (17 Jul) – Chindata, Eoflow, JSR, IMAX, Mason, Estia, Musgrave, Origin, InvoCare
- We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
- Highest spreads 111 Inc (YI US), Chindata Group (CD US), ENM Holdings (128 HK), Estia Health (EHE AU), Poly Culture Group Corp H (3636 HK), Costa Group Holdings (CGC AU).
- Lowest spreads – Healius (HLS AU), Liontown Resources (LTR AU), Toyo Construction (1890 JP), Kenedix Residential Investment (3278 JP), Penguin International (PBS SP), Challenger Technologies (CHLG SP).
Weekly Deals Digest (16 Jul) – Socionext, Tryt, IMAX, Shougang Resources, Invocare, Musgrave
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments – Tryt Inc (9164 JP), Alibaba (ADR) (BABA US)‘s Cainiao & Cloud Intelligence Group, J&T Global Express (1936374D CH) IPOs & Socionext (6526 JP)‘s secondary placement.
- Event-Driven developments – Chindata Group (CD US), IMAX China Holding (1970 HK), Shougang Fushan Resources (639 HK), Invocare Ltd (IVC AU), Musgrave Minerals (MGV AU).
Taiwan Dual-Listings Monitor: TSMC Premium Staying High Ahead of Earnings This Week; UMC at Par
- TSMC: 9.9% premium, continues to stay above one standard deviation from historical median… Earnings coming this week.
- UMC: 0.0% ADR premium… Trading on par with local shares… Earnings next week.
- Chunghwa Telecom: -0.8% discount represents relatively deep discount vs. history.
High Conviction Shift: Upbeat Quarter, Share Price Up More Than 39% YTD and There’s Further Upside
- Shift reported 3QFY08/2023 results on Friday and the company’s revenues increased 34.2% YoY and OP more than doubled during the quarter. Both revenue and OP beat consensus estimates.
- Conclusion of unprofitable projects and expansion into upstream services have helped earnings to expand, and we expect full-year earnings to comfortably beat guidance and consensus estimates.
- Shift’s share price moved up by 19% following earnings announcement and has been up more than 39% YTD, and we would recommend holding on as there is further upside.
Liquid Universe of European Ordinary and Preferred Shares: July‘23 Report
- Since mid-June, spreads have generally widened across our liquid universe (10 have widened, 8 widened, 1 at same level).
- Recommended trades long ordinary / short preferred shares: Fuchs, Henkel, Schindler, SSAB Svenska Stal.
- Recommended trades long preferred / short ordinary shares: Carlsberg, Ericsson, Media-for-Europe, Sixt, VW, Grifols, Atlas Copco.
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